COUNCIL DIRECTIVE on pre-shipment inspections for exports from the Community
Date: 1994-10-05
Institutions: European Commission
Subjects: EU law, GATT, commercial law, international trade, legislation, liberalisation of trade, tariff negotiations, trade policy

COMVIISSION  OF  THE  EUROPEAN  COMMUNITIES 

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URUGUAY  ROUND 

IMPLEMENTING 

LEGISLATION 

(presented by the Coaalssion) 

1 

Parti 

Central Implementation Act 

EXPLANATORY  MEMORANDUM 

I 

Political  aspects 

1. 

Background 

The European  Community is one of the participating parties in the negotiations  making 
up  the  eighth  round  of  multilateral  trade  negotiations  held  under  the  auspices  of  the 
General Agreement  on Tariffs  and Trade (GATT).  The Uruguay Round negotiations, as 
they  were  known,  were  concluded  by the  Trade Negotiations  Committee  in  Geneva  on 
15 December  1993.  The  Final  Act  embodying  the  results  of  the  Uruguay  Round 
multilateral trade negotiations  (hereinafter  the Final Act) was formally  signed on behalf 
of the  Community  by the  President  of the Council, Mr Pangalos, and  Sir Leon  Brittan, 
Member of the  Commission,  in Marrakesh on  15 April. 

The  Commission  has officially  presented  the Council with a proposal  for  a decision  on 
the conclusion of the results of the Uruguay Round Trade Negotiations.1  The Council has 
yet to  act  on this point. 

Like  its  principal  trading  partners,  the  Community  gave  its  official  approval  for  the 
establishment  of  the  World  Trade  Organization  and  the  other  results  of  the  Uruguay 
Round  to  take  effect  at  multilateral  level  at  the  earliest  possible  opportunity,  i.e. 
1 January  1995. 

An implementation  conference  will be held in Geneva early in December to this end. 

The  Commission  is  convinced  that  any  further  delay  in  fulfilling  its  international 
obligations would be severely prejudicial  to the Community's international prestige and 
credibility. 

2. 

Grounds  for the proposed  approach 

The Commission considers it appropriate, as matters now stand, to implement  forthwith 
all the additions and amendments to Community  legislation required  by the Final  Act. 

Aside from  the Community's  formal  adoption of the results of the Uruguay Round  and, 
consequently, from  its accession to the World Trade-Organization as a founder  member, 
the prompt adoption of this decision by the Council would also allow the Community to 
honour  its commitments to  its international trading partners. 

Pending  lodging  of the Community's  official  instruments of acceptance with the World 
Trade  Organization,  the  current  state  of  affairs  in  GATT  would  thus  continue. 

COM(94)  143 final, 15.4.1994. 

1/ 

Irrespective  of  the  fulfilment  of  commitments  made  under  its  auspices,  the  General 
Agreement  has not been  submitted  for  ratification  by the parties. 

II 

Legislative  aspects 

Examination  of  the  Final  Act  shows  that  several  measures  it  contains  are  already 
adequately  covered  by existing Community  legislation. 

However,  other measures do require the Community either to adopt new legislative  acts 
or to amend  existing  Community law. 

This memorandum ssets out the reasons for the entry into force  of all the acts required to 
implement the results of the Uruguay Round and summarizes the main grounds justifying 
the acts listed  in the annex to the proposed  implementing  decision. 

In  addition,  each  of  the  acts  listed  in  the  annex  is  preceded  by  its  own  explanatory 
memorandum  giving  detailed  observations  on the act  concerned. 

1. 

Simultaneous  entry  into  force 

Mainly  at the  Community's  insistence, the Punta  Del Este Declaration,  which  launched 
the Uruguay Round trade negotiations, established the principle of globality as one of the 
"guiding principles of the negotiations". 

From  the  point  of  view  of the  Community's  objectives  it was thought  appropriate  that 
"the  launching, the  conduct  and the  implementation  of the  outcome  of the  negotiations 
shall be treated  as parts of a single undertaking".2 

The Council was regularly informed of progress and consistently underlined the point that 
the result  of the Uruguay  Rpund  should be a "comprehensive  and balanced  outcome". 

The  Commission  also  believes  that  only  a  global  assessment  will  allow  the  Uruguay 
Round's  contribution  to the Community  to be fairly judged. 

Most of the Community's partners in the negotiations have adopted procedures aimed at 
guaranteeing the  "globality" of the outcome. 

On  the  multilateral  front,  accession  to  the  World  Trade  Organization  is  subject  to 
acceptance in full  of the Final Act (see Agreement establishing the WTO, Articles XI and 
XII). 

Consideration  of these factors  led the Commission to propose at the Council meeting  of 
15 April  1994 that the implementing  legislation be presented  as a whole in the form  of 
a  single legislative  act. 

However,  in  order  to  facilitate  discussion  in  the  various  Council  committees,  the 
Commission  decided  on the  approach  outlined  here  in which  the political  unity  of  the 

GATT  document,  MIN. DEC of 20.9.1986, p. 2 and 3. 

^ 

outcome  is embodied  in legal  form  by the attached  decision  on  simultaneous  entry  into 
force. 

This decision lays down that all the acts required for the implementation of the results of 
the Uruguay  Round, which are listed in full  in its annex, will come into force  legally in 
the  Community  simultaneously  on  1 January  1995.  The entry  into  force  of  each  act  is 
therefore  subject  to  the  adoption  of  this  decision  simultaneously  implementing  all  the 
other acts. 

2. 

Commitments  on customs duties for  products not covered by the  agriculture 
offer 

The negotiations on customs duties in the Uruguay Round resulted in the deposit by the 
Community  of  a new schedule of tariff  concessions. 

The commitments entered into represent in total an average 30% reduction in the rate of 
customs duties applicable to imports from  other  GATT contracting parties. 

The  participating  parties  in the  Uruguay  Round  agreed  to  implement  the  first  stage  of 
reductions with effect  from  1 January  1995. 

Pursuant  to  Council  Regulation  (EEC)  No 2658/87  of  25 July  1987  the  tariff  to  be 
applied as from  1 January  of the following  year must be published by 31 October at the 
latest. It seems unlikely that procedural delays would allow adoption of the tariff resulting 
from  the Uruguay  Round by that  date, but publication of the pre-Uruguay  Round  tariff 
on the prescribed date would probably cause some confusion amongst businesses and lead 
to doubts inside and outside Europe  as to the Community's  determination to honour  its 
commitments  under the Uruguay  Round. 

To  avoid  giving  the  wrong  impression  and  damaging  the  Community's  prestige 
internationally, the Commission considers it appropriate to waive the obligation to publish 
and, instead, to publish the tariff fixed in the Uruguay Round by way of information  in 
the C series of the  Official  Journal  on the prescribed  date. 

The  decision  on tariffs  is a key element  and integral  part of the  overall  outcome  of the 
Uruguay  Round.  It  is  important,  therefore,  that  it  should  be  given  due  consideration 
along with the other results.  Likewise, the tariff  concessions granted by the  Community 
in  the  Uruguay  Round  should  take  effect  on  the  same  date  as the  other  commitments 
entered  into during the negotiations. 

3. 

Non-tariff  commitments 

The results of the Uruguay  Round multilateral trade negotiations also include  important 
non-tariff  provisions. 

(a)  Customs  valuation 

Leaving  aside  a  small  number  of  essentially  technical  amendments,  the  Agreement  on 
Implementation  of Article VII of the General Agreement  (Rules on Customs Valuation) 
was  further  clarified  in  two  Decisions  on  customs  valuation  formally  adopted  at  the 

c 

ministerial  meeting  in Marrakesh  on  15 April  1994 and  incorporated  into  the Final  Act 
embodying the results of the Uruguay  Round. 

The Decision  on Texts Relating to Minimum Values and Imports by  Sole Agents,  Sole 
Distributors  and  Sole Concessionnaires  is mainly addressed to developing  countries and 
requires no action on the Community's part. 

The Decision Regarding Cases where Customs Administrations Have Reason to Doubt the 
Truth  or Accuracy  of the Declared  Value, on the other hand, provides  added  protection 
for importers by stipulating that customs administrations must give reasons in writing  for 
doubting  the declared  value, and  giving importers a right of reply. 

These  safeguards  do not exist in  Community  law as it stands. As a result,  Commission 
Regulation No 2454/93  of 2 July  1993, laying  down provisions  for  the  implementation 
of the  Community  Customs Code, needs to be  amended. 

Since this is, however, a matter for  the Commission, no amendments need be tabled  for 
adoption by the  Council, so none are included in the Annexes to the Decision. 

(b) 

Preshipment  Inspection 

A  number  of  developing  countries  lacking  adequate  customs  facilities  have  given 
private-sector companies the task of verifying the price, quality and quantity of goods sent 
to  them.  This  practice,  with  private  firms  exercising  public  authority,  is  known  as 
preshipment  inspection'. 

Preshipment  inspection  was  included  in  discussions  on  non-tariff  matters  at  the 
Community's  suggestion. 

The Agreement incorporated  into the Final Act applies basic GATT tenets such as non 
discrimination and transparency to the practices of preshipment inspection companies. It 
spells  out in detail  a set of  obligations governing all aspects of preshipment  inspection, 
paying  special  attention  to  price  verification.  It  also  introduces  a  two-tier  dispute 
settlement system for private parties and Governments who are signatories to the GATT. 

Disputes  between  the  inspection  bodies  and  exporters  will  be  settled  by  binding 
arbitration.  Governments,  however,  will  be  fully  liable,  under  the  GATT  dispute 
settlement  procedure,  for  seeing  that  the  Agreement  on  Preshipment  Inspection  is 
complied  with. 

Community  law has no rules on preshipment  inspection, although it does exist in  some 
of the Member  States'  national  legislation. 

In view  of  the  nature  of  the  commitments  made  under  the Agreement  on  Preshipment 
Inspection in the Uruguay Round, the various national authorities should implement  the 
provisions, with a Council Directive to guide them. 

(c) 

Rules of Origin 

The  Community  entered  negotiations  with  no  specific  demands  of  its  own.  It  did, 
however,  successfully  push  for  the  principle  of  a  single  set  of  rules  of  origin  at 

international  level, along with the notion that the  last  substantial  transformation  should 
determine  origin.  The  criteria  listed  in Annex II  of  the  Agreement  on  Rules  of  Origin 
correspond to current Community practice and do not affect the Community's  preferential 
rules of  origin. 

Part IV  of  the  Agreement  on  Rules  of  Origin  sets  out  a  work  programme  for 
harmonization  entailing  further  negotiations under  the  GATT.  Work  will  be  started  as 
soon as the World Trade Organization is set up and is planned to last three years at this 
stage. 

The  major  changes to  Community  legislation  will  therefore  not  have  to  be  introduced 
until  1998 at the earliest.  In the meantime, there are the procedural  changes relating  to 
information  on origin, which come under implementing arrangements for the Community 
Customs Code. 

The implementing regulation is Commission legislation and is being amended in line with 
the results of the Uruguay  Round. It could be brought into force whenever  appropriate, 
and  does  not  need  to  be  included  among  the  proposals  presented  for  adoption  by  the 
Council. 

(d) 

Import  licences 

The Agreement  on Import Licensing  Procedures reached  in the Tokyo Round  has been 
revised, though the changes are mainly technical. 

On the  substantive  side, the  nature  of  trade-restricting  effects  is now  spelled  out.  The 
transparency clauses and the non-automatic licensing procedures have also been markedly 
improved. 

Upon  examination,  however, these  changes do not appear to entail  any amendments  to 
Community legislation  as it currently  stands. 

4. 

Textiles  and  clothing 

The  negotiations  on  bringing  textiles  and  clothing  under  the  GATT,  subject  to 
strengthened  rules and disciplines, was one of the major  issues of the Uruguay  Round. 

The  Agreement  finally  reached  and  incorporated  into  the  Final  Act  meets  the 
Community's  objectives  in this area via a twin process of  liberalization  and  integration 
spread over three distinct phases. 

Some  amendments  to  Council  Regulation  (EEC)  No 3030/93  of  12  October  1993  on 
common  rules  for  imports  of  certain  textile  products  from  third  countries  will  be 
necessary to implement the Agreement. The details and the logic behind the amendments 
are discussed  in the  specific  Explanatory  Memorandum  on textiles which is annexed  to 
the attached  Decision. 

5. 

Agriculture 

The hopes and  fears of the Uruguay Round, from  start to finish, were largely bound up 
with one issue - agriculture. 

The talks resulted  in a string  of provisions  on agriculture which  are  largely,  though  not 
exclusively,  contained  in the Agreement  on Agriculture  set out  in the Final  Act. 

The  Community's  commitments  in this  sector  will  require  a number  of  amendments  to 
Community  legislation and  certain transitional  measures. 

The  changes,  and  the  reasons  for  them,  are  detailed  in  a  specific  Explanatory 
Memorandum  annexed  to the  Decision. 

6. 

Rules  and  disciplines 

(a) 

Technical  barriers  to  trade 

The  new'Agreement  constitutes  a  major  revision  of  the  Code  that  emerged  from  the 
Tokyo Round. It generally has a clearer structure, stronger disciplines, and wider coverage 
in  respect  of  those  involved  in  standardization,  drafting  technical  regulations,  and 
evaluating  products'  conformity  with the  standards in  question. 

More specifically,  the new Agreement contains a Code of Practice setting out rules to be 
observed  in  establishing  voluntary  standards,  which  apply  to  both  public  and  private 
bodies. It also takes an important step towards striking a better balance between rights and 
obligations by applying  GATT disciplines to large local authorities. The introduction  of 
the  principle  of  proportionality  is  another  major  innovation,  as  is  the  inclusion  of 
production  processes  and methods in the  scope of the  agreement. 

The changes made to the Agreement on Technical Barriers to Trade during the Uruguay 
Round negotiations broadly reflect  the Community  approach to standardization  as it has 
emerged  from  work on the Single Market. No changes will therefore  need to be made to 
the  Community  legislation  currently  in force  to ensure compliance  with the  Agreement. 

(b) 

Trade-related  investment  measures 

The Uruguay Round Agreement on Trade-Related Investment Measures (TRIMs) clarifies 
the  GATT provisions  in this  area,  in that the contracting  parties undertake  not  to  apply 
any measures that are incompatible  with Articles 111(4) and  XI(1)  of the  GATT. There 
is an  illustrative,  i.e.  non-exhaustive,  list  of definitions  of the  measures  covered  by  the 
agreement. 

The  section  in  Article  III  on  breaches  of  national  treatment  obligations  defines  local 
content  and  limited  manufacturing  requirements,  while  the  section  in  Article  XI  on 
breaches of the obligation to abolish quantitative restrictions lists domestic sales, product 
mandating  and trade balancing  requirements. 

Article 5 of the TRIMs Agreement allows the industrialized countries a transitional period 
of two years to dismantle  measures covered by the Agreement.  However, this period  of 
grace will be granted only for measures of which GATT is notified  within 90 days of the 
creation  of the WTO. 

Community  legislation  is  unaffected  by  the  TRIMs  Agreement,  although  the  Member 
States are  advised  to take  note of the terms of the  agreement. 

S 

(c) 

Fair-trade  provisions 

The negotiations on dumping and  subsidies produced  far-reaching  changes to the  Codes 
that  emerged  from  the  Tokyo  Round.  In order  to  comply  with  its commitments  in  this 
area, the Community will have to adopt new legislation and amend Regulation (EEC) No 
2423/88  and Regulations  (EC) Nos  521/94 and 522/94. 

The reasons for the proposed changes are set out in detail in the sections on dumping and 
subsidies  in the annex to this decision. 

The  Uruguay  Round  negotiations  also  produced  a  new  agreement  specifically  on 
safeguards.  In  order  to  comply  with  its  commitments  in this field, the  Community  will 
have  to  adopt  a  new  regulation  and  repeal  Council  Regulation  (EC)  No  518/94  on 
common rules for  imports. The  grounds for  this conclusion  are  set out in the  annex. 

The  new  GATT  codes  and  the  changes  designed  to  streamline  and  rationalize  the 
Community's  decision-making  procedures  should  further  strengthen  our  hand  against 
illicit commercial practices and resulting damage to trade.  The procedures laid down in 
Council Regulation (EEC)  No 2641/84, as recently amended by Council Regulation (EC) 
No  522/94, accordingly  need to be tightened up. 

7. 

Services 

The Uruguay  Round produced two new developments in the field of international  trade 
in services. 

The  first  is  the  General  Agreement  on Trade  in  Services  (GATS), which  establishes  a 
binding framework regulating all measures covered by the agreement. Underpinning  the 
rules in question  are the  GATT principles of non-discrimination  and transparency. 

The GATS contains sectoral annexes on the movement of natural persons, air transport, 
telecommunications,  financial  services  and  maritime  transport,  which  adapt  the  GATS 
provisions to the  specific  features  of the sectors concerned. 

The  schedule  of  initial  liberalization  commitments,  which  spells  out  the  contracting 
parties'  commitments  as regards national  treatment  and/or market  access in all  services 
sectors, forms  an integral part of the obligations imposed by the GATS. 

The Community  approach in this area of negotiations was a function  of progress  in the 
creation of the Single Market, and consisted of translating its internal achievements in this 
field to the multilateral  stage. The commitments into which it has entered do not exceed 
the obligations  already  imposed by the creation of the  Single Market,  and  consequently 
do not entail  any changes to  current Community  legislation. 

8. 

Intellectual  property 

The  Community's  other  main  priority  for  the  Uruguay  Round  was  the  creation  of  an 
efficient  instrument to ensure that those intellectual property rights with implications for 
trade are genuinely  enforced. 

A 

The  Agreement  on Trade-Related  Aspects of Intellectual  Property  Rights  (TRIPs)  fully 
satisfies  this requirement,  in that  it contains provisions on the protection  of  intellectual 
property  rights that together  make up  a body  of  multilateral  rules designed to  promote 
international trade in products bearing such rights and to prevent the trade distortions and 
frictions  that  arise from  the lack  of adequate  and effective  protection. 

In  addition  to  the  general  provisions  and  basic  principles  governing  the  protection  of 
intellectual property rights, the TRIPs Agreement contains binding rules guaranteeing the 
existence,  scope  and  protection  of  copyright  and  associated  rights,  trade  marks, 
geographical indications, industrial models and designs, patents, and semi-conductor lay 
out  designs,  plus  rules  for  the  protection  of  business  secrets  and  the  control  of  anti 
competitive  licensing practices. 

There are also detailed provisions on implementation of the TRIPs Agreement by national 
authorities. These provisions cover border procedures, which must meet certain  specific 
requirements,  the  acquisition  and  retention  of  rights,  and  the  procedures  by  which  the 
holders of  such rights can ensure that they  are  enforced. 

The  obligations imposed  by the TRIPs Agreement  must be enforced  by the  contracting 
parties within one year of the creation of the WTO. 

In  order  to  honour  its  commitments,  the  Community  will  have  to  amend  its  current 
legislation in this area along the lines detailed in the annex, though compliance with some 
of the obligations will be the responsibility  of the Member  States. 

9. 

Plurilateral  agreements 

The Final Act of the Uruguay Round also contains the plurilateral agreements concluded 
under  GATT auspices. 

(a) 

Sectoral  agriculture  agreements 

The International Dairy Agreement and the International Bovine Meat Agreement  were 
not covered by the Uruguay Round negotiations. They appear in the Final Act unchanged 
from  their  Tokyo Round formats  of  1979. 

The incorporation  of plurilateral agreements into the WTO system, including its dispute 
settlement procedures, is binding for members^who are party to the agreements concerned. 

(b) 

Civil  aircraft 

When  the  Uruguay  Round  proper  was  concluded,  it  was  decided  to  prolong  the 
negotiations on the revision of the Agreement on Trade in Civil Aircraft by another year. 
Pending the expiry of that deadline in May  1995, the  1979 Agreement produced  by the 
Tokyo Round will remain in  force. 

Needless to  say, no changes in legislation  are necessary at this stage. 

(c) 

Public  procurement 

A new Agreement  on Government  Procurement  was successfully  concluded. 

8 

A-l 

The  main  outcome  of  the  negotiations  was  to  extend  the  scope  of  the  Agreement  to 
embrace procurement  of  supplies, works and services by national  and local  government 
agencies, and by public undertakings operating in the utility sectors (ports, airports, water, 
electricity  and  urban transport). 

Here  too,  the  Community  approach  was  conditioned  by  the  progress  achieved  in  the 
creation  of  the  Single  Market.  Consequently,  the  revision  of  the Agreement  on  Public 
Procurement  does not  entail  any major  changes to current  Community  legislation. 

However, the Community is engaged in a series of bilateral negotiations on entities to be 
subject  to  the  disciplines.  The  results  of  these  negotiations  will  be  submitted  to  the 
Council  for  adoption  on a case-by-case  basis, as the talks are concluded. 

It  is  possible  that  some  of  these  bilateral  agreements  will  entail  making  some  minor 
changes  to  the  legislation.  Given  that  parties  to  the  new  Agreement  on  Public 
Procurement will not be required to enforce  its provisions until  1  January  1996, and that 
the  bilateral  agreements  will  enter  into  force  on  the  same  date  or  even  later,  the 
Commission reserves the right if necessary to return to the implementation of the public 
procurement  aspects of the Uruguay  Round  at a later date. 

10.  Other  agreements 

Negotiations  for  the  Multilateral  Agreement  for  Steel  are  still  continuing  so no  text  is 
included  in the Final Act  and no  amendments to the legislation  are therefore  necessary 
for  the time being. 

i n. 

Procedural  aspects 

The Commission proposal to the Council for  a Decision concluding the Uruguay Round 
agreements recommends referral to Parliament under the assent procedure, since the Final 
Act,  by  virtue  of  the  Agreement  establishing  the  WTO,  provides  for  a  "specific 
institutional framework" within the meaning of the second subparagraph of Article 228(3) 
of the Union Treaty. 

In  any  case,  the  Uruguay  Round  agreements  undeniably  constitute  international 
agreements of significant importance for the Community within the terms of the Stuttgart 
Solemn  Declaration. 

In the interests of political and legislative consistency, therefore, it would also be sensible 
to submit to Parliament  for  its opinion the acts implementing the agreements. 

Since those acts are based on Article  113, however, that move is optional. 

When the package  of legislation is,sent to Parliament the attention of the House  should 
be  drawn  to  the  importance  of  enabling  the  Community  to  honour  its  international 
commitments  as  from  1 January next year. 

43/ 

COUNCIL DÉCISION 

10CM 
f 
of...  1994 

flfloe/Arn 
9 4/  0225CACC) 

bringing  into  force  simultaneously  the  acts  implementing  the  results  of  the  Uruguay 
Round  of multilateral  trade negotiations 

THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  establishing  the  European  Community,  and  in  particular 
Article  113 thereof, 

Having regard to the proposal from the  Commission, 

Having regard  to the opinion  of the European  Parliament, 

Whereas the several acts giving effect  to the results of the Uruguay Round should come 
into force  at the  same time; 

Whereas the said results should enter into force in the Community on the same day that 
the  Agreement  establishing  the  World  Trade  Organization  and  its  annexes  enters  into 
force  at multilateral  level; 

Whereas  it was  decided  at  the  conference  on  implementation  in  Geneva  in  [December 
1994] that the  said results should take effect  on  [1 January  1995], 

HAS DECIDED AS FOLLOWS: 

Article 1 

The acts giving effect  to the results of the Uruguay Round multilateral trade negotiations 
listed in the annex to this Decision shall enter into force on [1 January  1995], except for 
acts relating to agreements which specifically  provide for  a later date. 

Article 2 

This Decision  shall be published  in the  Official  Journal of the European  Communities. 
It  shall take effect  on the date of its publication. 

Done at Brussels, 

For the  Council 

The President 

10 

ANNEX 

A3 

Council  Decision  amending  the  Combined  Nomenclature  and  the  Common 
Customs  Tariff  in  the  light  of  the  results  of  the  Uruguay  Round. 

Council  Directive  on  Pre-Shipment  Inspections  for  Exports  from  the 
Community. 

Council  Regulation  amending  Council  Regulation  No  3030/93  on  common  rules 
for  imports  of  certain  textile  products  from  third  countries. 

Council  Regulation  on  the  adjustments  and  transitional  arrangements 
required  in  the  agricultural  sector  in order  to  implement  the  agreements 
concluded  during  the  Uruguay  Round  of  Multilateral  Trade  Negotiations. 

Parliament  and  Council  Regulation  amending  Council  Regulation  (EEC)  No 
1576/89  laying  down  general  rules  on  the  definition,  description  and 
presentation  of  spirit  drinks  and  Council  Regulation  (EEC)  No  1601/91 
laying  down  general  rules  on  the  definition,  description  and  presentation 
of  aromatized  wines,  aromatized  wine-based  drinks  and  aromatized  wine-
product  cocktails  following  the  Uruguay  Round  of  the  multilateral  trade 
negotiations. 

Council  Regulation  on  protection  against  dumped  imports  from  countries 
not  members  of  the  European  Community. 

Council  Regulation  on  protection  against  subsidized 
countries  not  members  of  the  European  Community. 

imports  from 

Council  Regulation  on  common  rules  for  imports,  repealing  Regulation  (EC) 
No  518/94. 

Council  Regulation  on  the  strengthening  of  the  common  commercial  policy, 
in  particular  with  regard  to  protection  against  illicit  commercial 
practices  and  adverse  trade  effects  suffered  by  Community  enterprises, 
and  to  the  exercise  of  the  Community's  rights  under  international  trade 
rules 

Council  Regulation  concerning  certain  measures  to  be  taken  to  implement 
the  Agreement  on  Trade-Related  Aspects  of  Intellectual  Property  Rights  in 
relation  to  certain  modifications  of  Council  Regulation  (EC)  No  40/94  on 
the  Community  trade  mark. 

Council  Decision  concerning  certain  measures  on  the  extension  of  the 
legal  protection  of  topographies  of  semiconductor  products  to  persons 
from  a  country  of  the World  Trade  Organisation. 

y'k 

Part 2 

Customs Tariff 

„1f 

Part3 

Preshipment Inspection 

^ 

COUNCIL  DIRECTIVE 
on  pre-shipment inspections  for exports from  the  Community 

94/  0226(ACC) 

The Council  of the European Union 

Having  regard  to  the  Treaty  establishing  the  European  Community,  and  in  particular 
Article  113  thereof, 

Having regard to the proposal from the Commission, 

Having regard to the opinion of the European Parliament; 

Whereas  a  number  of  developing  countries  have  recourse  to  so-called  pre-shipment 
inspection programmes in order to  ensure a proper distribution of limited foreign  currency. 
resources to importers and in order to  combat  such practices as over-invoicing  and  fraud; 
whereas these developing  countries  have  charged  private companies with this task,  which 
includes  a  check  on  quality,  as  well  as  price  of  the  goods  intended  for  export  to  the 
territory of these countries; 

Whereas the Community recognises the right of the developing countries to  have  recourse 
to  pre-shipment  inspection; whereas,  however,  pre-shipment  inspections  can  give  rise  to 
abusive interferences  in the price freely agreed between parties to  a contract  and to  other 
practices which form unnecessary obstacles to trade; 

Whereas the Uruguay Round final act,  signed on  15 April  1994 in Marrakech  (Morocco), 
establishes  an  agreement  on  pre-shipment  inspection  between  members  of  the  World 
Trade  Organisation  (WTO);  whereas  this  agreement  needs  to  be  put  into  effect  for  the 
Community; 

Whereas, in view of the maintenance of a common commercial  policy of the Community it 
is  necessary  that  the  Member  States  regulate  the  activities  of  pre-shipment  inspection 
entities along uniform lines; 

Whereas, to this end the Member States need to provide for a notification  of pre-shipment 
inspection  activities 

Whereas  there  is  good  reason  to  simplify  procedures  as  much  as  possible,  in  particular 
with  respect  to  the  review  of  prices; whereas  exemptions,  however,  are  not  foreseen  by 
the agreement  on pre-shipment inspection of the WTO and such exemptions  can thus only 
be applied with the agreement of the by pre-shipment inspection entities; 

Whereas  the  Member  State  should  institute  a  quick  and  effective  procedure  for  the 
settlement  of  disputes  between  exporters  and  pre-shipment  inspection  entities;  whereas 
such a procedure is foreseen by the agreement on pre-shipment inspection of the WTO; 

2 
Whereas  the  non-compliance  with  conditions  or non-observance  with  procedures  by  pre 
shipment  inspection  entities  should be  settled with the third countries  making use  of  such 
entities; 

Whereas Article  3  paragraph 3  of the agreement  on pre-shipment  inspection  of the  WTO 
provides for technical assistance to third countries; 

A\ 

HAS ADOPTED THIS DIRECTIVE: 

Article 1 

This  directive  applies  to  activities,  carried  out  on  the  customs  territory  of  the  European 
Community,  by pre-shipment  inspection  entity which,  for  the  account  of  governments  or 
public  entities  of  third  countries,  carry  out  controls  on  the  quality,  quantity  or  price  of 
goods  destined  for  exports  to  the  territory  of  these  third  countries  (pre-shipment 
inspection programmes). 

Article 2 

1.  Member  States shall make the activities of pre-shipment  inspection  entities  as  defined 
in Article  1 subject to  a procedure for prior notification under the conditions  set out in 
this directive. Modifications  in the way pre-shipment inspection entities carry out these 
activities shall also be notified prior to their implementation 

2.  This procedure shall be applied in a non-discriminatory manner 

Article 3 

The notification of activities mentioned in Article 2  shall cover the following  activities: 

a. 

b. 

physical  inspection  of  the  merchandise  before  it  is  exported  in  order  to  verify  the 
conformity  of the dispatch (quality,  quantity) with the  specifications  of the  contract 
and  the  respect  of  rules  and  standards  foreseen  by  the  importing  country  or 
recognised at the international level; 

verification  of  the  price,  and  where  applicable,  of  currency  exchange  rate,  on  the 
basis of the  contract between  the  exporter and the importer,  the  pro  forma  invoice 
and, where applicable, the application for import authorisation. 

3 
Article 4 

Ai 

With  a  view  to  facilitating  the  implementation  of  the  agreement  on  pre-shipment 
inspection of the WTO, Member States shall verify whether the notified  activities meet at 
least the following conditions: 

a.  when they notify their activities, the pre-shipment  entities shall communicate to the 
authorities  of  the  Member  State(s)  the  dispositions,  with  the  exception  of  the 
remuneration, of the contract agreed with the governments or public entities of third 
countries for the  account  of which the pre-shipment  inspection  programmes have 
been put in place. They shall subsequently communicate all modifications  regarding 
the conditions for control to these same authorities. The competent authorities of the 
Member States shall verify  that the dispositions of the contract  are not contrary to 
the conditions of this directive. 

b. 

Prior to any control, the pre-shipment inspection entity informs the exporter of the 
modalities of the inspection and the criteria that will be applied. 

The pre-shipment inspection entity shall carry out the appropriate controls in a time 
span that avoids unreasonable delays. They shall also, following  receipt of the  final 
documents and completion of the inspection, within five working days, either issue a 
Clean Report  of Findings or provide a detailed written  explanation  specifying  the 
reasons for non-issuance. In the latter case exporters shall be given the opportunity 
to  present  their  views  in  writing  and,  if  exporters  so  request,  arrange  for  re-
inspection at the earliest mutually convenient date. 

Pre-shipment inspection entities shall also undertake, whenever so requested by the 
exporter, prior to the date of physical inspection, a preliminary verification  of price 
and,  where  applicable,  of  currency  exchange  rate,  on  the  basis  of  the  contract 
between  exporter  and importer,  the pro forma  invoice  and, where  applicable, the 
application for import authorisation.  They shall, after a preliminary verification  has 
taken place, immediately inform exporters in writing either of their acceptance or of 
their detailed reasons for non-acceptance of the price and/or currency exchange rate. 

In order to avoid delays in payment, pre-shipment  inspection  entities  shall  send to 
exporters  or  to  designated  representatives  of  the  exporters  a  Clean  Report  of 
Findings as expeditiously as possible. They shall.also, in the event of a clerical error 
in  the  Clean  Report  of  Findings,  correct  the  error  and  forward  the  corrected 
information to the appropriate parties as expeditiously as possible. 

c. 

d. 

The pre-shipment inspections  shall  be carried  out  in a non-discriminatory  manner, 
and the procedures and criteria employed in the conduct of these activities shall be 
objective and applied on an equal basis to all exporters affected by such activities. 

Pre-shipment  inspection  entities  shall not request  exporters to  provide  information 
regarding manufacturing data related to patented, licensed or undisclosed processes, 
or to processes for which a patent is pending; unpublished technical data other than 
data necessary to  demonstrate  compliance with technical  regulations  or standards; 
internal pricing, including manufacturing  costs; profit  levels; the terms of contracts 
between  exporters  and  their  suppliers  unless  it  is  not  otherwise  possible  for  the 
entity to  conduct  the  inspection  in  question.  (In  such  cases,  the  entity  shall  only 
request the information necessary for this purpose). 

^\5 

In  general,  pre-shipment  inspection  entities  shall  treat  all  information  provided  by 
exporters as business confidential,  to  the extent that such information  is not  already 
published,  generally  available  to  third  parties,  or  otherwise  in  the  public  domain. 
Such  business  confidential  information  shall  be  shared  with  the  governments 
contracting  or  mandating  the  entity  only  to  the  extent  that  such  information  is 
customarily required for letters of credit  or other forms  or payment  or for  customs, 
import licensing or exchange control purposes. 

e. 

Pre-shipment  inspection  entities  shall  establish  procedures  to  receive,  consider  and 
render  decisions  concerning  grievances  raised  by  the  exporters.  These  procedures 
shall be developed  and maintained in accordance with the following  guidelines: 

i. 

pre-shipment  inspection  entities  shall  designate  one  or more  officials  who  shall 
be  available  during  normal  business  hours  in  each  city  or  port  in  which  they 
maintain a pre-shipment  inspection  an administrative  office  to  receive,  consider 
and render decisions on exporters' appeals or grievances; 

ii. 

exporters  shall  provide  in  writing  to  the  designated  official(s)  the  facts 
concerning the specific transaction in question, the nature of the grievance and a 
suggested  solution; 

iii.  the  designated  official(s)  shall  afford  sympathetic  consideration  to  exporters' 
grievances  and  shall  render  a  decision  as  soon  as  possible  after  receipt  of  the 
documentation referred to in sub-paragraph (ii). 

5 
Article 5 

OLD 

In  order  to  prevent  over-  and  under-invoicing  and fraud in  the  importing  third  country, 
Member States shall verify  that pre-shipment  inspection entities conduct  price verification1 
according to the following  conditions. 

a. 

b. 

c. 

pre-shipment  inspection  entities  shall only reject  a contract  price agreed  between  an 
exporter  and  an  importer  if  they  can  demonstrate  that  their  findings  of  an 
unsatisfactory  price  are based  on  a; verification  process  which  is  in conformity  with 
the criteria set out in sub-paragraphs (b) through (e), 

the pre-shipment  inspection entity shall base its price comparison  for the  verification 
of  the  export  price  on  the  price(s)  of  identical  or  similar  goods  offered  for  export 
from the  same country  of exportation  at or about the  same time,  under  competitive 
and  comparable  conditions  of  ^sale,  in  conformity  with  customary  commercial 
practices  and  net  of  any  applicable  standard  discounts.  Such  comparison  shall  be 
based on the following: 

i. 

ii. 

only  prices  providing  a  valid  basis  of  comparison  shall  be  used,  taking  into 
account  the relevant  economic  factors  pertaining to  the  country  of  importation 
and a country or countries used for price comparison; 

the pre-shipment inspection entity shall not rely upon the price of goods  offered 
for  export  to  different  countries  of importation to  arbitrarily  impose  the  lowest 
price upon the shipment; 

iii.  the pre-shipment  inspection  entity  shall take into  account  the  specific  elements 

listed in sub-paragraph (c); 

iv.  at any  stage  in the process  described  above, the pre-shipment  inspection  entity 

shall provide the exporter with an opportunity to explain the price; 

when  conducting  price  verification,  pre-shipment  inspection  entities  shall  make 
appropriate  allowances  for  the  terms  of  the  sales  contract  and  generally  applicable 
adjusting  factors  pertaining to  the transaction; these factors  shall include but not  be 
limited  to  the  commercial  level  and  quantity  of  the  sale,  delivery  periods  and 
conditions,  price  escalation  clauses,  quality  specifications,  special  design  features, 
special shipping or packing specifications,  order size, spot sales, seasonal  influences, 
licence  or  other  intellectual  property  fees,  and  services  rendered  as  part  of  the 
contract  if  these  are  not  customarily  invoiced  separately;  they  shall  also  include 
certain elements relating to the exporter's price, such as the contractual  relationship 
between the exporter and importer; 

1  It should be remembered that the obligations of user Members with respect to the services of pre 
shipment entities in connection with customs valuation shall be the obligation which they have accepted 
in GATT 1994 and the other Multilateral Trade Agreements included in Annex 1A of the WTO 
Agreement (footnote 4 of the agreement on pre-shipment inspection of the WTO). 

Ad 

d. 

the verification  of transportation  charges  shall relate only to  the agreed  price of  the 
mode of transport in the country of exportation as indicated in the sales contract; 

6 

e. 

the following  shall not be used for price verification purposes: 

i. 

ii. 

the  selling  price  in  the  country  of  importation  of  goods  produced  in  such 
country; 

the  price  off  goods  for  export  from  a  country  other  than  the  country  of 
exportation; 

iii.  the cost of production; 

iv.  arbitrary or fictitious prices or values. 

Article 6 

In  order  to  avoid  unnecessary  delays  for  exporters,  Member  States  shall  incite  pre 
shipment  inspection  entities  to  use  simplified  verification  procedures,  where  appropriate, 
in  particular  to  exclude  the  review  of  prices  in  certain  cases. 
In  establishing  these 
simplified procedures, however, account shall be taken of the obligation by Member  States 
and  pre-shipment  inspection  entities  to  carry  out  the  activity  in  a  non-discriminatory 
manner. 

Article 7 

If the pre-shipment  inspection  entity  does not  observe the conditions  set  out  in Articles  4 
and  5  of  this  Directive,  or  if the  entity  does  not  comply  with  the  procedures  set  out  in 
Article  9,  the  authorities  of  a  Member  State  shall  notify  the  Commission  and  the  other 
Member States  of such non-observance  or non-compliance  and may have  recourse  to  the 
procedure foreseen by Article 4 of Council Regulation2641/84 (EC)2. 

Article 8 

Member  States  shall  provide  third  countries,  if  requested,  technical  assistance  directed 
towards the achievement  of the objectives of the agreement on pre-shipment  inspection in 
the WTO mutually agreed terms, or how to do without them. 

2  OJL252of20.9.1984p.  1 

a^/ 

Article 9 

Member States shall encourage pre-shipment inspection entities and exporters mutually to 
resolve their disputes.  However,  two  working days after  submission  of the grievance in 
accordance  with the  provisions  of  paragraph  e  of  Article  4,  either  party  may  refer  the 
dispute to  independent  review  entity  as foreseen  by Article 4  of the  agreement  on pre 
shipment inspection of the World Trade Organisation (WTO).  The procedure  shall be as 
follows: 

a. 

b. 

c. 

d. 

an exporter or pre-shipment inspection entity wishing to raise a dispute shall contact 
the independent entity referred to above and request the formation  of a panel. The 
independent  entity  shall  be  responsible  for  establishing  a  panel.  This  panel  shall 
consist of three members. The members of the panel shall be chosen so as to avoid 
unnecessary costs and delays. The first member shall be chosen from section (i)  of 
the  hst  foreseen  in  the  WTO  agreement  on  pre-shipment  inspection  by  the  pre 
shipment inspection entity concerned, provided that this member is not affiliated  to 
that entity. The second member shall be chosen from section (ii) of the list foreseen 
in  the  WTO  agreement  on  pre-shipment  inspection  by  the  exporter  concerned, 
provided that this member is not affiliated  to that exporter. The third member shall 
be  chosen from section  (iii)  of  the  list  foreseen  in  the  WTO  agreement  on  pre 
shipment inspection by the independent entity referred to above. No objections shall 
be made to any independent trade expert drawn from section (iii) of the list foreseen 
in the WTO agreement on pre-shipment inspection; 

the independent trade expert drawn from section (iii) of the list foreseen in the WTO 
agreement on pre-shipment inspection shall serve as the chairman of the panel. The 
independent trade expert shall take the necessary decisions to ensure an expeditious 
settlement of the dispute by the  panel, for instance, whether the facts  of the  case 
require  the  panellists  to  meet  and,  if  so,  where  such  a  meeting  shall  take  place, 
taking into account the site of the inspection in question; 

if the parties of the dispute so agree, one independent trade expert could be selected 
from section  (iii)  of  the  list  foreseen  in  the  WTO  agreement  on  pre-shipment 
inspection by the independent  entity referred to in sub-paragraph (a) to review the 
dispute  in  question.  This  expert  shall  take  the  necessary  decisions  to  ensure  an 
expeditious settlement of the dispute, for instance taking into account the site of the 
inspection in question; 

the object of the review shall be to estabUsh whether, in the course of the inspection 
in  dispute,  the  parties  to  the  dispute  have  complied  with  the  provisions  of  this 
directive. The procedures shall be expeditious and provide the opportunity for both 
parties to present their views in person or in writing; 

8 

^ 

e. 

decisions  by a three-member  panel  shall be taken by majority vote.  The decision  on 
the  dispute  shall  be  rendered  within  eight  working  days  of  the  request  for 
independent  review  and  be  communicated  to  the  parties  of  the  dispute.  This  time-
limit  could be  extended  upon  agreement  by the parties to  the  dispute.  The  panel  or 
independent trade expert shall apportion the costs, based on the merits of the case; 

f. 

the decision of the panel shall be binding upon the pre-shipment inspection entity and 
the exporter which are parties to the dispute. 

Article  10 

This directive  shall  enter into  force  on  the  date  determined  bv the  decision  on  the  entry 
into force of the acts implementing the Results of the Uruguay Round 

They  will  inform  the  Commission  of  these  measures  or  any  modifications  thereof. 
Separately they will submit copies of these measures to the Secretariat of the WTO. 

The  measures  or  modifications  thereof  shall  not  be  enforced  before  they  have  been 
published. 

This directive is addressed to Member States. 

Article 11 

'ÀLf 

Part 4 

Textiles & clothing 

d£ 

Proposal for a Council Regulation amending 

COUNCIL REGULATION (EEC) No 3030/93 of 12 October 1993 

on common rules for imports of certain textile products from third countries 

2(o 

Explanatory Memorandum 

1. 
The present proposal amending Regulation 3030/93 on common rules for imports 
of textiles  is designed to ensure effective  implementation of the Agreement on Textiles 
and Clothing of the World Trade Organization. 

The  WTO  Agreement  on  Textiles  and  Clothing  necessitates  three  types  of 

2. 
changes to Regulation 3030/93: 

(i) 

the  safeguard  provisions  (Article  10)  have  to  be  brought  into  line  with 

those of the new WTO Agreement on Textiles and Clothing (Article 6); 

(ii) 

the Community quantitative limits contained in Annex V affecting imports 
from  members of the  WTO will  have to be adjusted at the beginning  of  each of the 3 
phases  of  the  WTO  Agreement  on  Textiles  and  Clothing  to  reflect  the  higher  annual 
quota  growth  rates  foreseen;  similarly  at  such time  as  the  European  Union  integrates 
products subject to quantitative limits such products should be deleted from Annex V; 

(iii) 

as and when certain of the third countries listed in Annex VIII  (flexibility 
provisions)  become  members  of  the  WTO, the  respective  "cap" on  cumulative  use  of 
flexibility  provisions  indicated  in  column  8  of the table will  have to  be  deleted  since 
Article 2 paragraph  16 of the WTO Agreement on Textiles and Clothing  stipulates that 
there shall be no limit to the "combined use of swing, carry over and carry forward". 

Since it is not clear at this  stage whether and when all the third countries listed  in the 
Annexes will become members of the WTO and thereby benefit from the Agreement on 
Textiles and Clothing, the Commission will adopt the necessary technical amendments to 
the  Annexes  to  Regulation  3030/93  referred  to  in  points  (ii)  and  (iii)  above  via  the 
Textiles Committee procedure laid down in Article 17 of the Regulation. 

To this end and for reasons of clarity it is proposed to delete the reference to the quota 
years 1993-1995 in Article 2 paragraph 1 of the Regulation since for WTO Members the 
quota increases will be automatic for the next 10 years. 

3.  With  regard  to  the  safeguard  clause,  it  is  proposed  to  maintain  the  existing 
language on the basket exit mechanism contained in the present paragraphs  1 and 2  of 
Article  10 of the Regulation and to add clauses corresponding to the new provisions of 
the WTO Agreement on Textiles and Clothing. The reason for this is that of the countries 
listed in Annex IX which are currently subject to the basket exit mechanism a number of 
important  suppliers  (eg  China,  Taïwan,  Vietnam,  ex  USSR)  will  probably  not  be 
members of the  WTO upon the date of  its entry into force  but join  in the near future. 
Therefore, it will be necessary to maintain the current safeguard mechanism to cover the 
interim  period.  The  Commission  proposes  two  parallel  safeguard  provisions  in  the 
Regulation and as and when each of the third countries listed in Annex IX benefits from 
the WTO Agreement on Textiles and Clothing, that country will be deleted from Annex 
IX via the Textiles Committee procedure (Article 17 of the Regulation). 

A> 

Proposal for a Council Regulation amending 

*94/  0 2 27 ( A c c} 

COUNCIL REGULATION (EEC) No 3030/93 of 12 October 1993 

on common rules for imports of certain textile products from third countries 

THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  establishing  the  European  Community  and  in  particular 
Article 113 thereof, 

Having regard to the proposal from the Commission, 

Having regard to the opinion of the European Parliament, 

Whereas  the  Community  has  signed  the  Final  act  of  the  Uruguay  Round  of  GATT 
negotiations setting up a World Trade Organization, (hereinafter referred to as the WTO); 

Whereas  it  is  necessary  to  amend  the  safeguard  provisions  laid  down  in  Regulation 
(EEC) No  3030/93  of  12 October  19931 on common rules for imports of certain textile 
products from third  countries,  as  last  amended  by  Commission  Regulation  (EC)  No. 
195/94  of  12 January  19942,  in  order to  bring  them  into  line  with the  new  safeguard 
provisions  contained  in the  WTO Agreement  on Textiles  and Clothing  with  regard to 
imports from WTO Members; 

Whereas the WTO Agreement on Textiles and Clothing also stipulates the annual growth 
rates which will be applied automatically to remaining Community quantitative limits on 
imports from WTO Members for a period of  10 years following  entry into force  of the 
WTO; whereas it is therefore appropriate that the Community quantitative limits foreseen 
in Annex V of Regulation (EEC) No 3030/93 on imports from WTO Members should be 
amended  at  each  stage  of  the  WTO  Agreement  on  Textiles  and  Clothing  via  the 
procedure foreseen  in Article  17 of the Regulation and paragraph  i  of Article  2  of the 
Regulation should be amended to that effect. 

1  OJ No L 275, 8.11.1993, p.l 
2  OJ No L 29, 2.2.1994, p. 1 

5Ï 

HAS ADOPTED THIS REGULATION 

Article 1 

Article  10 of Council Regulation (EEC) No 3030/93 is replaced by the following: 

"Article 10 
Safeguard measures 

1. 
Should  imports  into  the  Community  of  products  falling  within  any  given 
category, not subject to the quantitative limits set out in Annex V and originating in one 
of the  countries  listed  in  Annex  IX  exceed,  in relation  to the  preceding  calendar  year's 
total  imports  into  the  Community  of  products  in  the  same  category,  the  percentages 
indicated  in  the  Table  appearing  in  Annex  IX,  such  imports  may  be  made  subject  to 
quantitative limits under the conditions laid down in this Article. 

Paragraph  1 shall  not  apply  where  the  percentages  specified  therein  have  been 
2. 
reached as a result of a fall in total imports into the Community, and not as a result of an 
increase in exports of products originating in the supplier country concerned. 

3. 
Where  the  Commission,  upon  its  own  initiative  or  at  the  request  of  a  Member 
State, considers  that the  conditions  set out in paragraph  1 are fulfilled  and that  a  given 
category of products should be made subject to a quantitative limit: 

(a) 
it shall open consultations with the supplier country concerned in accordance with 
the  procedure  specified  in  Article  16 with  a view  to  reaching  an  arrangement  or joint 
conclusions on a suitable level of restriction for the category or products in question; 

(b) 
pending a mutually satisfactory  solution, the Commission shall, as a general rule, 
request  the  supplier  country  concerned  to  limit  exports  of the  products  in the  category 
concerned to the Community, for  a provisional period of three months from the date on 
which the request for consultations is made. Such provisional limit shall be established at 
25%  of  the  level  of  imports  during  the  previous  calender  year,  or  25%  of  the  level 
resulting  from  the  application  of  the  formula  set  out  in  paragraph  1, whichever  is  the 
higher; 

(c) 
it may, pending the outcome of the requested consultations, apply to the imports 
of the category of products in question quantitative limits identical to those requested  of 
the supplier  country pursuant to point (b). These measures shall be without prejudice  to 
the definitive arrangements to be made by the Community, taking into account the results 
of the consultations. 

(a) 

4. 
Should imports into the Community of textile products not subject to the 
quantitative  limits  set out in Annex V and  originating  in Bulgaria, the  Czech Republic, 
Hungary,  Poland,  Romania  or  the  Slovak  Republic  take  place  in  such  increased 
quantities,  or  under  such  conditions,  so  as  to  cause  serious  damage  or  actual  threat 
thereof,  to  the  Community's  production  of  like  or  directly  competitive  products,  such 
imports may be made subject to quantitative limits under the conditions laid down in the 
Additional Protocols with these countries. 

25 

(b) 

The provisions  of paragraph  3, shall  also apply  in such cases  except  that 
the provisional  limit referrred  to in paragraph 3 (b) shall be established  at 25%, at least, 
of the level of imports during the twelve-month period terminating two months, or where 
data  is  not  available  three  months,  preceding  the  month  in  which  the  request  for 
consultations is made. 

5. 
(a)  With  regard  to  products  not  subject  to  the  quantitative  limits  set  out  in 
Annex  V  and  originating  in  countries  which  are  Members  of  the  World  Trade 
Organization,  safeguard  action  may  be  taken  where  it  is  demonstrated  that  a  particular 
product  is  being  imported  into  the  Comunity  in  such  increased  quantities  as  to  cause 
serious  damage,  or  actual  threat thereof, to the domestic  industry  producing  like  and/or 
directly competitive products. Serious damage or actual threat thereof must demonstrably 
be caused  by  such  increased  quantities  in total  imports of that product  and not by  such 
other factors as technological changes or changes in consumer preference. 

(b)  In  making  a  determination  of  serious  damage,  or  actual  threat  thereof,  as 
referrred  to  in  paragraph  (a)  the  effect  of  those  imports  on  the  state  of  the  particular 
industry  shall  be examined,  as reflected  in changes  in such relevant  economic  variables 
as output, productivity, utilization of capacity, inventories, market share, exports, wages, 
employment, domestic prices, profits and investment. 

(c) 

The  third  country  or  countries,  Member(s)  of  the  World  Trade 
Organization  to  whom  serious  damage,  or  actual  threat  thereof,  as  referred  to  in 
paragraph  (a)  is  attributed,  shall  be  determined  on the  basis  of  a  sharp  and  substantial 
increase  in  imports,  actual  or  imminent  and  on  the  level  of  imports  as  compared  with 
imports from other sources, market share and import and domestic prices at a comparable 
stage of commercial transaction. 

6. 
Where  the  Commission,  upon  its  own  initiative  or  at  the  request  of  a  Member 
State,  considers  that  the  conditions  set  out  in  paragraph  5  are  fulfilled  and  that  the 
products in question should be made subject to a quantitative limit: 

it shall open consultations with the supplier country concerned in accordance with 
(a) 
the  procedure  specified  in  Article  16 with  a view  to  reaching  an  arrangement  or joint 
conclusions on a suitable level of restriction for the products in question; 

it  may,  pending  the  outcome  of  the  consultations  and  in  highly  unusual  and 
(b) 
critical  circumstances  where  delay  would  cause  damage  which  could  be  difficult  to 
repair,  impose  a  provisional  quantitative  limit  on  the  products  in  question.  Such 
provisional  limit  shall  not  be  lower  than  the  actual  level  of  imports  from  the  supplier 
country during the twelve-month period terminating two months proceding the month in 
which the request for consultations was made. 

(a)  Measures taken pursuant to paragraphs 3, 4 and 6 shall be the subject  of a 
7. 
Commission  communication  published  without  delay  in  the  Official  Journal  of  the 
European Communities. 

I o 

(b) 

The Commission shall refer urgent cases to the Committee provided for in 
Article  17 either at its own initiative or within five working days of receipt of a request 
from  a Member  State or States setting out the reasons for the urgency  and shall take a 
decision within five working days of the end of the Committee's deliberation. 

8. 
The consultations with the supplier country concerned which are provided for in 
paragraphs  3,  4  and  6  may  lead  to  an  arrangement  between  that  country  and  the 
Community, on the introduction and the level of quantitative limits. Such arrangements 
shall  stipulate  that the  quantitative  limits agreed be  administered  in accordance  with a 
double-checking system. 

Should  the  parties  be  unable  to  reach  a  satisfactory  solution  within  60  days 
9. 
following  notification  of  the  request  for  consultations,  the  Community  shall  have  the 
right to introduce a definitive quantitative limit at an annual level not lower than: 

(a) 
in the case of supplier countries listed in Annex IX, the level  resulting from the 
application of the formula set out in paragraph 1 or 106% of the level of imports reached 
during  the  calendar  year preceding  that in which  imports  exceeded  the  level  resulting 
from  the application of the formula set out in paragraph 1  and gave rise to the request for 
consultations, whichever is the higher. 

(b) 
in the  case  of  Bulgaria, the  Czech Republic,  Hungary,  Poland, Romania  or the 
Slovak  Republic,  110%  of  the  imports  for  the  twelve-month  period  tenninating  two 
months, or where data is not available three months, preceding the month in which the 
request for consultations is made. 

(c) 
in the case of supplier countries, members of the WTO, the actual level of imports 
from the  supplier  country  concerned  during  the  twelve-month  period  terminating  two 
months preceding the month in which the request for consultations was made. 

10. 
The  annual  level  of  the  quantitative  limits  established  in  accordance  with 
paragraphs 3 to 6 or 9 may not be less than the level of imports into the Community in 
1985 for Argentina, Brazil, Hong Kong, Pakistan, Peru, Sri Lanka and Uruguay, and in 
1986 for Bangladesh, India, Indonesia, Malaysia, Macao, Philippines,  Singapore, South 
Korea  and  Thailand,  of  products  of  the  same  category  and  originating  in  the  same 
supplier country. 

11. 
The quantitative limits established under this Article shall not apply to products 
which have already been dispatched to the Community provided that they were shipped 
from  the supplier country in which they originate for export to the Community before the 
date of notification of the request for consultations. 

u 

12.  Measures  taken  in  acordance  with the provisions  of paragraph  5 may  remain  in 
place: 

(a) 

for up to three years without extension, or 

(b) 

until the product is integrated into GATT 1994, whichever comes first. 

The  measures  provided  for  in  paragraphs  3,  4,  6  and  9  and  the  arrangements 
13. 
referred  to  in  paragraph  9  shall  be  adopted  and  implemented  in  accordance  with  the 
procedure laid down in Article 17." 

Article 2 

Article  2  paragraph  1  of  Council  Regulation  (EEC)  No.  3030/94  is  replaced  by  the 
following: 

"The importation in the Community of the textile products listed in Annex V originating 
in  one  of  the  supplier  countries  listed  in  that  Annex  shall  be  subject  to  the  annual 
quantitative limits laid down in that Annex". 

Article 3 

This Regulation  shall  enter  into  force  on date determined  by the  decision  of  entry  into 
force of the acts implementing the results of the Uruguay Round. 

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

Done at Brussels, 

For the Council 

l> 

Part5 

Agriculture 

V} 

I. INTRODUCTION 

EXPLANATORY  MEMORANDUM 

Several of the agreements which the Community  has negotiated under the 
Uruguay Round  (hereinafter referred to as the "GATT Agreements")(*) 
involve adapting  some of the legislation  implementing the common 
agricultural policy. These are in particular: 

-  the Agreement on Agriculture  (hereinafter referred to as the 

"Agreement"), 
the Agreement on the Application of Sanitary and Phytosanitary 
Measures, 
the Agreement on Safeguards, and 

-  the Agreement on Trade-Related Aspects of Intellectual Property Rights 

(hereinafter referred to as the "TRIPS Agreement"). 

As regards agriculture, these Agreements cover the following aspects: 

the internal support arrangements, 
the arrangements on trade with third countries, 
a system for the protection of designations of origin  (part of the 
TRIPS Agreement), 
arrangements concerning veterinary and plant health measures affecting 
international trade. 

The attached proposals for Regulations(2) contain the provisions 
necessary  for incorporating  into Community  law the rules referred to 
in the last three indents above. As regards the arrangements for 
internal  support, the Commission considers that specific provisions 
should not be introduced  into the market organizations. The relevant 
rules in the Agreement  should be taken into account when prices are 
fixed and aid measures are adopted  for future marketing years. 

In order to safeguard the possibility of the necessary measures being 
taken in trade relations with third countries vis-à-vis which the 
Commission has no obligations under the GATT Agreements, the "GATT" 
proposal provides a suitable legal basis. 

(1)  See proposal  for a Council Decision con the conclusion of the results 
of the Uruguay Round of the multilateral trade negotiations  (1986-94), 
COM(94) 143 final of 15 May 1994. 

(2)  there are two draft Regulations: one covering all the amendments based 

on Article 43 of the EC Treaty  (referred to as the "GATT" proposal) 
and one based on Articles 43 and 100a of the Treaty. 

^ 

These proposals do not cover the following: 

-  issues arising  from the GATT Agreements and affecting the 

preferential agreements concluded with third countries  (e.g. Lomé 
Convention) and the enlargement of the Community, which are still to 
be dealt with; 

- the agri-monetary  arrangements for the new system; these will be 
dealt with in the report on the agri-monetary  system which the 
Commission  is to present to the Council before the end of 1994. 

II.  TRADE ARRANGEMENTS 

A. General 

The GATT Agreements centre the trade arrangements on the following 
main points: 

- tarification, 
- access to the Community market, 
-  safeguard provisions, 
- the export  subsidy  system. 

The "GATT" proposal  is based on the following principles: 

- careful compliance with obligations under the GATT Agreements, 
- maximum flexibility  for management, 
-  full use of possibilities offered by the GATT Agreements, 
- as little change as possible to the organization of the markets in 

the various agricultural products. 

However, it has proved inevitable to make amendments to almost all the 
provisions  in the basic Regulations relating to trade with third 
countries. The abolition of variable levies not only entails 
abolishing the rules for their calculation but also calls for the 
articles relating thereto to be adapted. This also holds true for 
export refunds, which can only be granted subject to the quantitative 
and financial limits laid down in the Agreement. 

Nevertheless, this proposal largely confines' itself to  incorporating 
in the basic Regulations the main principles on the implementation of 
the GATT Agreements and entrusting the Commission with the task of 
implementing them  in line with the needs of the various sectors. This 
approach, which  is based  in particular on the heed to preserve 
sufficient  flexibility  for day-to-day management, takes account  in 
particular of the fact that most obligations to be met are defined 
precisely  in the Agreements. 

ir 

When making these amendments, the Commission has also held to the 
principle recognized  at the time of the consolidation of the 
Regulation on the market organization  for cereals  (Regulation  (EEC) 
No 1766/92) under the reform of the CAP and applied on several 
occasions since then, to the effect that competence for legislation 
should be shared between the Council and the Commission so as to 
result in two levels only: on the one hand the provisions adopted by 
the Council in accordance with the procedure laid down in 
Article 43(2) of the EC Treaty and, on the other, the detailed rules 
of application adopted by the Commission  in accordance with the 
Management Committee procedure. 

As regards the implementation of the GATT Agreements in legislation, 
the Commission has opted  for an approach by product group which 
preserves the traditional structure of the market organizations, as 
set out in particular  in the basic Regulations, and at the same time 
ensures the transparency of the solutions chosen. The "GATT" proposal 
accordingly consists in concise substantive provisions covering all 
product groups and comprising  in particular a legal basis for the 
adoption of the necessary transitional rules, the annexes to which 
contain the adjustments to be made for the various sectors. It also 
provides for the repeal of the regulations laying down general rules. 

B. Import arrangements 

1. Import charges  (tarification) 

The fundamental change introduced by the new import arrangements is 
the replacement of variable charges  (levies, compensatory amounts, 
etc.) and other types of non-tariff  import restrictions  (quantitative 
restrictions, voluntary restraint agreements, etc.) by stable, 
degressive tariffs. The introduction of such tariffs will be effected, 
in legal terms, by means of a suitable amendment to the Common Customs 
Tariff, the relevant figures being set out in the final schedules 
presented by the Community to the Director-General of GATT and forming 
a  legal part of the Agreement. In the basic Regulations, it will 
accordingly be sufficient to refer to the duties entered in the CCT. 

The replacement of variable charges by the CCT duties implies the 
repeal of all the rules which refer to their calculation, i.e. in 
particular all provisions on the fixing of threshold prices, reference 
prices, etc. and the rules laid down for the calculation of variable 
•charges applying to derived products. 

u 

Certain special points should be mentioned: 

(a) The "special safeguard provisions" 

These provisions allow a minimum  level of protection to be 
maintained  against the adverse effects on the market of the 
conversion of the former import restrictions  into customs duties 
("tarification"). They therefore only apply to products 
specifically  identified  in the final schedules. They must not be 
confused with the safeguard provisions traditionally  appearing in 
all the basic Regulations; in fact, they involve a system which is 
additional to the import duty and allow the latter to be  increased 
if certain conditions specified  in the Agreement are met. 
Accordingly, a specific article has been introduced, providing a 
suitable legal basis for making use, at the right time, of the 
possibilities afforded by this system. The extent to which the 
system will be used depends on the market conditions applying for 
the various products. 

(b) Standard safeguard provisions 

The standard  safeguard provisions appearing hitherto in the basic 
Regulations are maintained. However, the Agreement on Safeguards 
contains reinforced  all-sector arrangements specifying the 
conditions under which they may be applied. A reference to these 
rules has accordingly been included  in the articles in question, 
which have also been adapted to take account of the division of 
competence mentioned  in A. 

(c) Specific arrangements  for raw sugar for refining and molasses 

Tarification as provided  for in the Agreement  could result  in raw 
sugar for refining and molasses being subject to an import  charge 
which could  jeopardize supplies of such products to processing 
industries  in the Community. Accordingly, a special mechanism has 
been introduced to permit the application of the duty entered in 
the CCT to be suspended where the price recorded on the world 
market exceeds a certain level. 

*> 

(d) Special arrangements on prices applying 

For certain products  (e.g. some cereals and rice), the Agreement 
involves a level of protection, lower than that provided by the 
CCT, which  is dependent on import prices. Similarly, for certain 
fruit and vegetables, must and grape juice, the import charge 
depends on the entry price. In this respect, certain special rules 
or necessary derogations  from the CCT have been laid down, 
implementation  and details being left to the detailed rules of 
application, which will have to deal in particular with the thorny 
problem of controls. The present  system of minimum  import prices 
remains in force for dried grapes and processed  cherries until 
1 January  2000. 

(e) Management measures for beef and veal 

The Agreement's ban on quantitative  import restrictions requires 
the repeal of Council Regulation  (EEC) No 1157/92 of 28 April 
1992, which at present serves as a legal basis for the erga omnes 
limitation on imports of young bovine animals. As that measure is 
of special  importance for maintaining balance on the market for 
beef and veal  in the Community, the Commission will deal with the 
matter during the renegotiation of the Europe Agreements with 
certain East European countries. 

2. Access to the Community market 

In this context, the term  "market access" covers all the conditions 
under which  imports may take place at reduced or zero duty. A 
distinction should be made in principle between agreements concluded 
with certain third countries containing preferential  conditions 
granted by the Community, current access within the meaning of the 
Agreement  (which includes part of the abovementioned  agreements) and 
minimum access. 

In view of the high number of quotas in question and in order to 
ensure their implementation as effectively as possible, a uniform 
approach has been adopted  for all cases, whatever their history. For 
the sake of simplification and efficiency, this approach provides 
that, on the basis of the international agreements concluded by the 
Council or of autonomous acts of the latter and in accordance with the 
conditions stipulated therein, the opening and administration of 
•tariff quotas are to be carried out by the Commission  in accordance 
with the Management Committee procedure. A similar approach was 
adopted  for the administration of the quotas opened recently as a 
result of the Soya Panel  (Regulation  (EC) No 774/94). Naturally, this 
uniform procedural approach does not imply that the detailed rules 
will be the same for all product groups. 

M 

As regards the market organization  for bananas, the "GATT" proposal 
involves taking over the framework agreement with certain countries in 
Latin America. In accordance with the general approach  in Regulation 
(EEC) No 404/93, certain aspects of the allocation of tariff quotas 
are incorporated  in the Regulation. 

C. Export arrangements 

1. General 

The export arrangements resulting from the Agreement provide for a 
reduction  in forthcoming years in the subsidies which may be granted 
on agricultural products exported  from the Community as such or after 
processing. The reduction is to be made in accordance with rules 
concerning the sums granted for all such exports and the quantities of 
products exported as such(3). The arrangements must be applied in 
such a way as to permit verification of compliance with those limits 
for a period of 12 months, to commence in principle on 1 July 1995 
and, in the case of other products  (rice, wine, olive oil and sugar) 
at later dates. 

The Commission considers that compliance with  limits on the value of 
refunds may be monitored: 

- when refunds are fixed, 
- on the basis of advance fixing authorized by the Commission or of 

tenders accepted  in response to invitations to tender, 

- on the basis of information provided by the Member States on 
licences issued, refunds granted being compulsorily fixed in 
advance, and 

- on the basis of  information provided to the EAGGF relating to 

payments made by national bodies. Using such information, it should 
be possible to charge each payment made to the EAGGF financial year 
during which export  formalities were completed. 

As a result no other specific mechanisms need be introduced to ensure 
compliance with limits on value.. 

2. Compliance with limits on quantity 

As regards limits on quantity, the Agreement provides that compliance 
must be demonstrated  in terms of the quantities qualifying  for export 
•refunds for which export licences have been issued during the 
marketing year in question. 

(3)  Limits on quantity do not apply to non-Annex  II products. 

19 

(a) The aim of the "GATT" proposal  is to ensure monitoring of the 

quantities exported using export licences. Accordingly, such 
licences will become compulsory where products covered by a refund 
application are exported. This does not rule out the possibility 
that, for certain product groups where such arrangements already 
exist, export licences may also be required  for purposes of 
statistical monitoring of trade where export takes place without 
any refund being granted. It remains to be decided whether 
monitoring of the quantities exported will mean limiting the 
duration of validity of export licences to the curent marketing 
year or whether monitoring can be based on licences issued during 
the marketing year. The detailed rules for the application of the 
licence arrangements, and in particular the conditions 
specifically  relating to the issuing, term of validity and 
transferability  of licences, will be laid down, as at present, in 
accordance with the Management Committee procedure for the product 
group concerned. 

Clearly, compliance with limits on quantity under the Agreement 
calls for mechanisms to prevent any overrun. As the choice of 
measures to be taken depends on the specific situation and the 
requirements of the market  in each product, the "GATT" proposal 
does not dictate the methods to be used  for checking quantities 
available. 

(b) One possible option is to determine export refunds by  invitation 
to tender. Here too, the "GATT" proposal does not dictate the 
procedures to be adopted; refunds could also be fixed periodically 
as they are now. 

(c) It is the Commission's intention to select the approach which 

involves the least red tape and is best adapted to the specific 
situation of the product group concerned. This is why the "GATT" 
proposal lays down flexible legal bases which allow the most 
suitable solution to be sought for each product group, in 
particular to make maximum use of the latitude offered by the GATT 
Agreements and, where appropriate, for the arrangements to be 
amended  in the light of experience in applying them. This approach 
is, moreover, in line with the way the Commission has hitherto 
exercised the competence it has enjoyed under the arrangements in 
force to date. 

h 

(d) Some points should be mentioned: 

- there are exceptions  from the general arrangements: 

* for exports under food-aid operations, which are not subject 

to any  limits on quantity or value, 

* for agricultural products exported  in the form of goods not 
listed  in Annex II to the EC Treaty, such goods not being 
subject to any limit on quantity; 

-  it is necessary to limit the scope for speculation and to create 
a linkage with limits on value; accordingly, it is proposed to 
make advance fixing compulsory, including reference to the 
destination but allowing changes to another destination within 
the same geographical area at the same refund rate; 

-  for certain products, the Agreement  sets the quantities which 

may be exported with payment of refunds at a level which, in the 
light of experience gained, is unlikely to be exceeded. The 
Regulation takes account of this by making provision for the 
Commission, in accordance with the Management Committee 
procedure, to relax the constraints  laid down in this respect 
for the products concerned to the extent appropriate; 

- the pre-financing arrangements should be adapted at a later 
stage, in particular on account of negative experience in 
applying them and with a view to ruling out fraud when they are 
applied. 

D. Other provisions on trade 

1. The provisions on inward processing arrangements have been maintained 

without any substantial change. 

2. The articles oh the prohibition of measures having an effect 

equivalent to customs duties and quantitative restrictions and 
measures having an equivalent effect have been adapted to the new 
arrangements. 

3. The article on shortages in supply has been adapted to the extent 
necessary to take account of the abolition of threshold prices. 

VI 

III.  INCLUSION OF THE TRIPS AGREEMENT 

For the first time the GATT Agreements  lay down provisions on the 
protection of intellectual property rights. Under this heading there 
are specific provisions on the protection of designations of origin. 

The Community regulations  in force lay down rules on designations of 
origin  in several areas: 

-  for wine  (quality wine psr), 
- for spirituous beverages, and 
- more generally, for certain agricultural and food products  (in 

Regulation  (EEC) No 2081/92). 

All these Community regulations  (except those on wine) contain a 
reservation relating to international agreements concluded by the 
Community. Since the TRIPS agreement contains special arrangements on 
wine and spirit drinks, specific provisions must be incorporated  into 
the relevant regulations. As a result, when the various Community 
arrangements are applied, due account may be taken of the obligations 
and restrictions resulting  from the TRIPS Agreement. 

IV.  VETERINARY AND PLANT-HEALTH  LEGISLATION 

In the veterinary  and plant-health  fields, the provisions in force 
permit the rules in the relevant Agreement to be applied. However, 
Directive 77/93/EEC on protective measures against the  introduction 
into the Community of organisms harmful to plants or plant products 
must be amended to ensure uniform application of the arrangements with 
regard to third countries. 

V. 

ENTRY  INTO FORCE 

In accordance with the Commission's policy decision that the results 
of the Uruguay Round should be implemented  as a whole, the proposals 
refer to a Council decision on entry into force which will apply to 
all the sectors concerned. 

^ 

H i/ 

94/ 0228(CNS) 

Proposal for a 

COUNCIL REGULATION  (EC) No  . 

/94 

of 
Ul  . . . .. 

1994 
U 3t 

on the adjustments and transitional  arrangements required 
in the agriculture sector in order to implement the agreements concluded 
during the Uruguay Round of multilateral trade negotiations 

THE COUNCIL OF THE EUROPEAN UNION, 

Having regard to the Treaty establishing the European Community, and in 
particular Article 43 thereof, 

Having regard to Council Regulation  (EEC) No 805/68 of 27 June 1968 on the 
common organization of the market in beef and veal(^), as last amended by 
Regulation  (EC) No 1884/94(2), and in particular Article 7(2) thereof, 

Having regard to the proposal from the Commission, 

Having regard to the opinion of the European Parliament, 

Whereas the Community  has adopted a set of rules governing the common 
agricultural policy; 

Whereas, under the Uruguay Round of multilateral trade negotiations, the 
Community has negotiated various agreements  (hereinafter referred to as the 
"GATT agreements");, whereas several of those agreements concern agriculture, 
in particular the Agreement on Agriculture  (hereinafter referred to as "the 
Agreement"); whereas the concessions relating to domestic support can be 
complied with by setting prices and aid at a suitable level and specific 
provisions need not be laid down on this subject; whereas the Agreement  lays 
down a six—year timetable for the extension of access to the Community 
market  for agricultural products from third countries on the one hand and 
the gradual reduction  in support granted by the Community on exports of 
agricultural products on the other hand; whereas the agricultural 
legislation on trade with third countries should be adapted  accordingly; 

(1)  OJ No L 148, 28.6.1968, p.24, 
(2)  OJ No L 197, 27.7.1994, p.27, 

te 

Whereas, by converting all the measures restricting  imports of agricultural 
products into customs duties  (tarification) and by prohibiting the 
application of such measures in the future, the Agreement requires the 
abolition of variable import levies and of the other measures and import 
charges currently provided  for under the market organizations; whereas the 
rates of customs duty applicable to agricultural products in accordance with 
the Agreement are to be fixed in the common customs tariff; whereas, 
however, for certain product groups such as cereals, rice, wine and fruit 
and vegetables, the introduction of supplementary or other trade mechanisms 
that do not involve the collection of fixed customs duties calls for the 
adoption of rules providing  for derogations  in the basic Regulations; 
whereas, in addition, the measures to protect the Community market  against 
imports of dried grapes and processed cherries can, under the Agreement on 
Safeguards, be maintained  for a period of five years; whereas, moreover, in 
order to avert problems of supply to the Community market, the suspension of 
customs duties on certain  sugar products should be permitted; 

Whereas, in order to maintain a minimum level of protection against the 
adverse effects on the market as a result of tarification, the Agreement 
permits the application of additional customs duties under precisely defined 
conditions but only to products subject to tarification; whereas the 
corresponding provisions should accordingly be inserted  into the basic 
Regulations concerned; 

Whereas the Agreement provides for a series of tariff quotas under 
arrangements  for current and minimum access; whereas the conditions 
applicable to such quotas are spelled out in detail in the Agreement; 
whereas the Community has undertaken to open other tariff quotas for certain 
products under special arrangements; whereas, in view of the large number of 
quotas and in order to ensure that they are implemented  as effectively as 
possible, the Commission should be responsible for opening and  administering 
them using the management committee procedure; 

Whereas the amendments resulting  from the framework agreement on bananas 
concluded with certain countries in South America under the Uruguay Round 
should be incorporated  in Council Regulation  (EEC) No 404/93 of 13 February 
1993 on the common organization of the market in bananas^); 

(3)  OJ No L 47, 25.02.1993, p.l. 

Mt 

Whereas, since the Agreement on Safeguards lays down clear rules on the 
application of protective clauses as incorporated  in the market 
organizations, such clauses should be supplemented by a reference to the 
obligations  flowing  from international agreements; 

Whereas in its trading relations with third countries not subject to the 
GATT agreements the Community  is not bound by the constraints on access to 
the Community market arising therefrom; whereas, in order to ensure that the 
necessary measures may be taken where applicable with regard to products 
from such countries, the Commission should be given the relevant powers, to 
be exercised through the management committee procedure; 

Whereas, by virtue of the Agreement, the granting of export subsidies is 
limited henceforward to certain groups of agricultural products defined 
therein; whereas, in addition, it is subject to limits in terms of quantity 
and value; 

Whereas compliance with the limits in terms of value can be ensured  at the 
time when refunds are fixed and through monitoring of payments under the 
rules relating to the EAGGF; whereas monitoring may be facilitated by the 
compulsory  advance fixing of refunds, while allowing the possibility, in the 
case of differentiated refunds, of changing the specified  destination within 
the same geographical  area to which a single given rate of refund applies; 

Whereas monitoring of constraints in terms of quantity calls for the 
introduction of a reliable and effective system of monitoring; whereas, to 
that end, the granting of refunds should be made subject to an export 
licence; whereas refunds should be granted up to the limits available, 
depending on the particular situation of each product concerned; whereas 
exceptions to that rule can only be permitted  in the case of processed 
products not listed  in Annex  II to the Treaty, to which  limits in value do 
not apply, and in the case of food-aid operations, which are exempt from any 
limitation; whereas provision should be made for derogations  from strict 
compliance with management rules where exports benefiting  from refunds are 
not likely to exceed the limits in quantity .laid down; whereas monitoring of 
the quantities exported with refunds during the marketing years referred to 
in the Agreement can be carried out on the basis of export licences issued 
for each marketing year; 

tf 

Whereas compliance with the Agreement on Trade-Related Aspects of 
Intellectual Property Rights must also be ensured; whereas, to that end, the 
requisite stipulations must be inserted into Council Regulation  (EEC) 
No 822/87 of 16 March  1987 on the common organization of the market in 
wine(4),  as last amended by Regulation  (EEC) No  1891/94(5); 

Whereas, with regard to plant health, Council Directive 77/93/EEC of 
21 December  1976 on protective measures against the introduction  into the 
Member States of organisms harmful to plants or plant products and against 
their spread within the Community(6), as last amended by Directive 
94/13/EC^),  should be amended  in order to provide for uniform 
arrangements vis-à-vis third countries precluding quantitative restrictions 
or measures having equivalent effect; 

Whereas, in the wake of the amendments to the legislation on agriculture 
provided  for in this Regulation, many Council Regulations deriving  from the 
basic Regulations no longer serve any purpose; whereas, for the sake of 
legal clarity, they should be repealed; whereas certain provisions which 
have lapsed although they are not directly  connected with the GATT 
Agreements should also be repealed; 

Whereas the switchover  from the existing  arrangements to those resulting, 
from the GATT agreements may give rise to difficulties of adaptation which 
are not dealt with in this Regulation; whereas, in order to deal with that 
eventuality, a general provision should be included enabling the Commission 
to adopt the transitional measures necessary  for a certain period, 

HAS ADOPTED THIS REGULATION: 

Article 1 

This Regulation  lays down the adaptations and transitional measures 
required  in the agriculture sector in order to implement the agreements 
concluded during the Uruguay Round of multilateral trade negotiations. 

(4)  OJ No L 84, 27.03.1987, p.l. 
(5)  OJ No L 197, 30.07.1994, p.42 
(6)  OJ No L 26, 31.01.1977, p.20. 
(7)  OJ No L 92,  9.4.1994, p. 27. 

kh 

The adaptations referred to in Article 1 are set out in the Annexes hereto. 

Article 2 

Article 3 

1. Where transitional measures are necessary under the common agricultural 

policy  in order to facilitate the switchover  from the existing 
arrangements to those resulting  from the requirements of the agreements 
referred to in Article 1, such measures shall be adopted  in accordance 
with the procedure provided  for in Article 38 of Regulation No 136/66/EEC 
or, as appropriate, the corresponding Articles in the other Regulations 
on the common organization of agricultural markets, or in Regulation  (EC) 
No 3448/93. 

When such measures are adopted, account shall be taken of the special 
features of the various agricultural  sectors, having due regard to the 
obligations arising  from the agreements referred to in Article 1. 

2. The measures referred to in paragraph  1 may be adopted during a period 
expiring on 31 December  1997 and shall not apply beyond that date. The 
Council, acting by a qualified majority on a proposal  from the 
Commission, can extend that period. 

Article 4 

1. Where, in view of the special circumstances affecting an agricultural 
product, compliance with the requirements on export support under the 
agreements referred to in Article 1 can be assured by means having a 
lesser effect than those provided  for to that end, the Commission may, to 
the extent and for the period strictly necessary, exempt that product 
from the application of the provisions on export refunds covered by this 
Regulation. 

2. Without prejudice to the provisions of this Regulation, the Commission 

may take any measures necessary to protect the Community market  against 
imports of agricultural products from third countries towards which the 
Community has no binding obligations under the agreements referred to in 
Article 1. 

3. Measures pursuant to paragraphs  1 and 2 shall be- adopted  in accordance 

with the procedure provided  for in Article  3(1). 

'^ 

Article 5 

1. This Regulation  shall enter into force on a date determined by a decision 

on the entry  into force of the acts implementing the results of the 
Uruguay Round. 

2.  It shall apply  from 1 July 1995. 

However : 

(a)  Article 3 and Article 4(2) shall apply from 1 January 1995; 

(b)  the provisions laid down in the Annexes on import duties and 

additional  import duties which apply to products listed in 
Annex XIII and XVI for which an entry price is applicable before 
1 July  1995 shall apply as from the commencement during 1995 of the 
marketing year for the products concerned; 

(c)  the provisions on export refunds shall apply: 

- as from 1 September 1995 as regards Annexes II and XVI, 
- as from 1 October 1995 as regards Annex IV, 
- as from 1 November  1995 as regards Annex V; 

(d)  the provisions  laid down in Annex XV shall apply as from  [ 

]. 

(e)  the provisions laid down in Annex XVI, -1.2, shall apply as from 

1 January 1996. 

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

Done at 

For the Council 

tt-U5 

proposal  for a 

94/ 0229CC0D) 

PARLIAMENT AND COUNCIL REGULATION 

of 

1994 

amending Council Regulation  (EEC) No 1576/89  laying down 
general rules on the definition, description and presentation 
of spirit drinks and Council Regulation  (EEC) No 1601/91  laying 
down general rules on the definition, description and 
presentation of aromatized wines, aromatized  wine-based 
drinks and aromatized wine-product  cocktails  following the 
Uruguay Round of the multilateral trade  negotiations 

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION, 

Having regard to the Treaty establishing the European Community, and in 
particular Articles 43 and 100a thereof, 

Having regard to the proposal  from the Commission, 

Having regard to the opinion of the Economic and Social Committee, 

Acting  in accordance with the procedure referred to in Article 189b of the 
Treaty, 

Whereas Council Regulation  (EEC) No 1576/89 of 29 May  lgsg*1), as amended 
by Regulation  (EEC) No 3280/92(2), and Council Regulation  (EEC) No 1601/91 
of 10 June  1991(3),  as amended by Regulation  (EEC) No 3fi79/92<4), lay down 
general rules for the definition, description and presentation of spirit 
drinks, aromatized wines, aromatized wine-based drinks and aromatized wine-
product cocktails; whereas in order to take account  in the said Regulations 
of the obligations arising, in particular, from Articles 23 and 24 of the 
Agreement on Trade-Related Aspects of Intellectual Property Rights, which 
forms an integral part of the Agreement establishing the World Trade 
Organization, provision  should be made therein for the parties concerned to 
prevent, under certain* conditions, the unlawful use of geographical 
designations protected by a third country member of the World Trade 
Organization, 

(1)  OJ No L 160, 12.6.1989, p. 1. 
(2)  OJ No L 327, 13.11.1992, p. 3. 
(3)  OJ No L 149, 14.6.1991, p. 1. 
(4)  OJ No L 327, 13.11.1992, P. 1. 

S"< 

HAVE ADOPTED THE FOLLOWING REGULATION: 

Article 1 

1.  The following Article is inserted after Article 11 of Regulation  (EEC) 

No 1576/89: 

"Article 11a 

1. Member States shall adopt all measures necessary to permit those 

concerned to prevent, under the conditions  laid down in Articles 23 
and 24 of the Agreement on Trade-Related Aspects of  Intellectual 
Property Rights, the use within the Community of a geographical 
designation  identifying products covered by this Regulation  for 
products which do not originate in the place referred to by the 
geographical designation  in question, including  in cases where the 
actual origin of the product is indicated or where the geographical 
designation  is given in translation or accompanied  by expressions 
such as "like", "type", "style", "imitation" or other. 

For the purposes of this Article, "geographical designation" shall 
mean any  indication  identifying a product  as originating  in the 
territory of a third country which is a member of the World Trade 
Organization, or in a region or locality of that territory, where a 
quality, reputation or other specific characteristic of that product 
can essentially be attributed to that geographical origin. 

2. Paragraph  1 shall apply notwithstanding Article  11 of this 

Regulation and other provisions of Community  legislation  laying down 
rules for the description and presentation of products covered by 
this Regulation. 

3. Detailed rules for the application of this Article, where necessary, 

shall be adopted  in accordance with the procedure  laid down in 
Article  14." 

si 

2. 

The following Article is inserted  after Article  10 of Regulation  (EEC) 
No 1601/91: 

"Article 10a 

1. Member States shall adopt all measures necessary to permit those 

concerned  to prevent, under the conditions  laid down in Articles 23 
and 24 of the Agreement on Trade-Related Aspects of  Intellectual 
Property Rights, the use within the Community of a geographical 
designation  identifying products covered by this Regulation  for 
products which do not originate in the place referred to by the 
geographical designation  in question, including  in cases where the 
actual origin of the product  is indicated or where the geographical 
designation  is given in translation or accompanied  by expressions 
such as "like", "type", "style", "imitation" or other. 

For the purposes of this Article, "geographical designation" shall 
mean any indication  identifying a product as originating  in the 
territory of a third country which is a member of the World Trade 
Organization, or in a region or locality of that territory, where a 
quality, reputation or other specific characteristic of that product 
can essentially  be attributed  to that geographical origin. 

2. Paragraph  1 shall apply notwithstanding Article  10 of this 

Regulation and other provisions of Community  legislation  laying down 
rules for the description and presentation of products covered by 
this Regulation. 

3. Detailed  rules for the application of this Article, where necessary, 

shall be adopted  in accordance with the procedure  laid down in 
Article 13." 

Article 2 

1.  This Regulation shall enter into force on a date determined by a 

decision on the entry  into force of the acts implementing the results 
of the Uruguay Round. 

2. 

It shall apply from 1 January 1996. 

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

Done at 

For Parliament 

For the Council 

^JL. 

S3 

List of Annexes 

Cereals 

Rice 

Dried  fodder 

Sugar 

Oils and fats 

Flax and hemp 

Milk products 

Beef and veal 

Sheepmeat and goatmeat 

Pigmeat 

Poultrymeat 

Eggs', ovalbumin and  lactalbumin 

Fruit and vegetables 

Processed  fruit and vegetables 

Bananas 

Wine 

Tobacco 

Hops 

Flowers and live plants 

Seeds 

Miscellaneous  regulations 

Most remote regions 

Plant-health legislation 

ANNEX  I 

ANNEX  II 

ANNEX  III 

ANNEX  IV 

ANNEX V 

ANNEX VI 

ANNEX VII 

ANNEX VIII 

ANNEX  IX 

ANNEX X 

ANNEX XI 

ANNEX XII 

ANNEX XIII 

ANNEX XIV 

ANNEX XV 

ANNEX XVI 

ANNEX XVII 

ANNEX XVIII 

ANNEX XIX 

ANNEX XX 

ANNEX XXI 

ANNEX XXII 

ANNEX XXIII 

Çf 

ANNEX I 

CEREALS 

I.  Council Regulation  (EEC) No 1766/92 of 30 June 1992  (OJ No L 181, 

1.7.1992, p.21), as amended by Regulation  (EEC) No 1866/94 
(OJ No L 197, 30.7.1994, p.l). 

(1) Article 3(2) is deleted. 

(2) The following subparagraph  is added to Article  3(3):. 

"The intervention price valid  for maize and grain sorghum  in May shall 
remain valid  in July, August and September of the following marketing 
year." 

(3) The first sentence of the second subparagraph of Article 3(4) is 

replaced by the following: 

"The intervention price shall be subject to monthly  increases  for the 
whole or part of the marketing year." 

(4) The first and last indents of Article 5 are deleted. 

(5) Title II is replaced by the following: 

"Title II 

Article 9 

1.  Imports into the Community, or exports therefrom, of any of the 

products listed  in Article 1 shall be subject to presentation of an 
import or export licence. 

Licences shall be issued by the Member States to any applicant, 
irrespective of his place of establishment  in the Community and without 
prejudice to measures taken for the application of Articles  12 and 13. 

Import and export  licences shall be valid throughout the Community. 
Such licences shall be issued subject to the lodging of a security 
guaranteeing that the products are imported or exported during the term 
of validity of the licence; the security  shall be forfeited  in whole or 
in part if import or export is not carried out, or is only carried out 
partially, within that period. 

- 18 - 

K~r-

2.  The term of validity of licences and other detailed  rules for the 

application of this Article shall be adopted  in accordance with the 
procedure  laid down in Article 23. 

t 

Article 10 

1.  Unless this Regulation provides otherwise, the rates of duty  in the 

common customs tariff  shall apply to the products listed  in Article 1. 

2.  Notwithstanding paragraph 1, the import duty on products covered by 
CN codés ex 1001 other than meslin, 1002, 1003, ex 1005 other than 
hybrid  seed, and ex 1007 other than hybrid for sowing, shall be equal, 

products on importation and increased by 55%, minus the import price. 
However, that duty may not exceed the rate of duty  in the common 
customs tariff. 

, to the intervention price valid  for such 

3.  Detailed  rules for the application of this Article shall be adopted in 

accordance with the procedure laid down in Article 23. Such detailed 
rules shall cover in particular the measures necessary to determine and 
calculate  import prices and to verify their authenticity. 

Article 11 

1.  In order to prevent or counteract adverse effects on the market  in the 

Community which may result from imports of certain products listed in 
Article  1, imports of one or more of such products at the rate of duty 
laid down  in Article 10 may be subject to payment of an additional 
import duty under the conditions set out in Article 5 of the Agreement 
on Agriculture concluded  in accordance with Article 228 of the Treaty 
in the framework of the Uruguay Round of multilateral trade 
negotiations. 

2.  The Commission shall adopt detailed rules for the application of this 

Article  in accordance with the procedure laid down in Article 23. Such 
detailed  rules shall specify  in particular: 

(a) 

the products to which additional  import duties may be applied, 

(b) 

the criteria for triggering the application of paragraph  1 and 
in particular the calculation and determination of the various 
quantities and prices. 

- 19 - 

Article 12 

r 

. 

Tariff quotas  for the products listed  in Article 1 resulting  from 
agreements concluded  in accordance with Article 228 of the Treaty or 
from any other act of the Council pursuant to the Treaty shall be 
opened  and administered  in accordance with detailed rules adopted under 
the procedure  laid down in Article 23. Such detailed rules shall 
provide  for annual quotas, suitably phased over the year, to be opened 
and, where appropriate, for: 

(a) 

(b) 

(c) 

guarantees covering the nature, provenance and origin of the 
product, 

recognition of the document used  for verifying the guarantees 
referred to in  (a), and 

the conditions under which  import licences are issued and their 
term of validity. 

Article 13 

1.  To the extent necessary to enable the products  listed  in Article 1 to 
be exported without  further processing or in the form of goods listed 
in Annex  B on the basis of quotations or prices  for those products on 
the world market and within the limits resulting  from agreements 
concluded  in accordance with Article 228 of the Treaty, the difference 
between those quotations or prices and prices in the Community may be 
covered by export refunds. 

Export refunds on the products listed  in Article 1 in the form of goods 
listed  in Annex B may not be higher than those applicable to such 
products exported without  further processing. 

2.  Refunds shall be the same for the whole Community. They may vary 

according to destination. 

Refunds shall be fixed  in accordance with the procedure laid down in 
Article  23. 

Refunds may be fixed: 

(a) 

at regular intervals, 

(b) 

by invitation to tender. 

Refunds fixed at regular intervals may, where necessary, be adjusted in 
the intervenirig period by the Commission at the request of a Member 
State or its own initiative. 

3.  Refunds on products listed  in Article 1 and exported without  further 

processing  shall only be granted on application and on presentation of 
the relevant export licence. 

4.  The  refund  applicable  to  exports  of  products  listed  in Article  1 

exported  without  further  processing  shall  be  that  applicable  on  the  day 
of  application  for  the  licence  and,  in  the  case  of  a  differentiated 
-refund,  that  applicable  on the  same  day  for  the  destination  indicated 
on  the  licence. 

5.  Paragraphs  3 and  4 may  be made  to  apply  to  products  listed  in Article  1 

and  exported  in  the  form  of  goods  listed  in Annex  B  in  accordance  with 
the  procedure  laid  down  in Article  16 of  Regulation  (EC) No  3448/93. 

6.  Paragraphs  3 and  4 may  be waived  in the  case  of  products  listed  in 

Article  1 on which  refunds  are  paid  under  food-aid  operations,  in 
accordance  with  the  procedure  laid  down  in Article  23. 

7.  Save  as  otherwise  provided  in  accordance  with  the  procedure  laid  down 

in Article  23, the  refund  on products  listed  in Article  1(1)(a)  and  (b) 
in  accordance  with  paragraph  4  shall  be  adjusted,  during  the  period 
from  August  to  June  of  the  same marketing  year,  in  respect  of  each 
month  elapsing  prior  to  export, by  an  amount  equal  to  the  monthly 
increase  applicable  to  the  intervention  price  fixed.for  that  marketing 
year. 

A  corrective  amount  may  be  fixed  in  accordance  with  the  procedure  laid 
down  in Article  23. However,  the  Commission  may,  where  necessary,  alter 
corrective  amounts. 

The  first  and  second  subparagraphs  may  be  applied,  in whole  or  in part, 
to  products  listed  in Article  1(1)(c)  and  (d)  and  to  products  listed  in 
Article  1 and  exported  in  the  form  of  goods  listed  in Annex  B.  In  that 
case,  the  adjustment  referred  to  in the  first  subparagraph  shall  be 
corrected  by  applying  to  the monthly  increase  a  coefficient  expressing 
the  ratio  between  the  quantity  of  basic  product  and  the  quantity  of  the 
latter  contained  in  the  processed  product  exported  or  used  in the  goods 
exported. 

8.  In  so  far  as  is  necessary  to  take  account  of  the  features  of  production 
peculiar  to  certain  spirituous  beverages  obtained  from  cereals,  the 
criteria  for  granting  export  refunds  as provided  for  in paragraph  1 and 
the  procedures  for  verification  may  be  adapted  to  fit  this  particular 
situation. 

9.  Detailed  rules  for  the  application  of  this  Article  and  in  particular 

those  on  the  adaptation  provided  for  in paragraph  8  shall  be  adopted  in 
accordance  with  the  procedure  laid  down  in Article  23. Annex  B  shall  be 
amended  in  accordance  with  the  same  procedure. 

Article 14 

1.  To the extent necessary  for the proper working of the common 

organization of the market in cereals, the use of inward  processing 
arrangements may be prohibited  in whole or in part: 

-  in respect of products listed in Article  1 which are intended  for 
the manufacture of products listed  in Article  1(1)(c) and  (d), and 

in special cases, in respect of products listed  in Article  1 which 
are intended  for the manufacture of goods listed  in Annex B. 

2.  Measures adopted pursuant to this Article shall be decided on in 

accordance with the procedure  laid down in Article 23. 

Article 15 

1.  The general rules for the interpretation of the Combined  Nomenclature 

and the special rules for its application  shall apply to the tariff 
classification of products covered by this Regulation; the tariff 
nomenclature resulting  from the application of this Regulation shall be 
incorporated  in the common customs tariff. 

2.  Save as otherwise provided  for in this Regulation or pursuant to a-
provision thereof,, the following  shall be prohibited  in trade with 
third countries: 

the levying of any charge having equivalent effect to a customs 
duty, 

the application of any quantitative restriction or measure having 
equivalent effect. 

1  Article 16 

1.  Where the quotations or prices on the world market  for one or more of 

the products listed in Article 1 reach the level of Community prices 
and where that situation  is likely to continue and to deteriorate, 
thereby disturbing or threatening to disturb the Community market, 
appropriate measures may be taken. 

2.  Detailed rules for the application of this Article shall be adopted in 

accordance with the procedure laid down in Article 23. 

- 22 -

Article 17 

Si 

1.  If, by reason of an increase  in imports or exports, the Community 

market  in one or more of the products  listed  in Article  1 is affected 
by, or is threatened with, serious disturbance likely to jeopardize the 
achievement of the objectives set out in Article 39 of the Treaty, 
appropriate measures may be applied  in trade with third countries until 
such disturbance or threat of disturbance has ceased. 

2.  If the situation referred to in paragraph  1 arises, the Commission 

shall, at the request of a Member State or on its own initiative, 
decide upon the necessary measures; the Member States shall be notified 
of such measures, which shall be immediately applicable. If the 
Commission receives a request  from a Member State, it shall take a 
decision thereon within three working days following receipt of the 
request. 

3.  Measures decided upon by the Commission may be referred  to the Council 
by any Member State within three working days of the day on which they 
were notified. The Council shall meet without delay. It may, acting by 
a qualified majority, amend or annul the measure  in question. 

4.  The Commission  shall adopt detailed  rules for the application of this 

Article  in accordance with the procedure laid down in Article 23. . 

5.  This Article shall be applied having regard to the obligations arising 
from agreements concluded  in accordance with Article 228(2) of the 
Treaty." 

6.  The following  is added to Annex A: 

"CN code 

Description 

2306 

Oil-cake and other solid residues, whether or not 
ground or in the form of pellets, resulting  from the 
extraction of vegetable  fats or oils, other than 
those of headings 2304 and 2305 

2306 90 

- other: 

—  other 

2306 90 91 

—-  of germ of maize  " 

II.  Council Regulation  (EEC) No 2729/75 of 29 October  1975  (OJ No L 281, 

1.11.1975,  p.18). 

The terms "levy" and  "levies" are replaced by "duty" and "duties" 
respectively. 

- 23 -

ANNEX II 

RICE 

I.  Council Regulation  (EEC) No 1418/76 of 21 June 1976  (OJ No L 166, 

25.6.1976, p.l),  as last amended by Regulation  (EEC) No 1869/94 (OJ 
No L 197, 30.7.1994, p.7). 

(1) Article 4(5) is replaced by the following: 

"5. The following shall be determined  in accordance with the procedure 

provided  for in Article  27: 

a) after consultation with the Member States, the intervention  centres 

referred to in paragraph 4, 

b) the rate for converting husked rice into paddy rice, or vice versa, 

and 

c) processing  costs and the value of by-products to be taken  into 

consideration  for the application of paragraph 3." 

(2) Title II is replaced by the following: 

"Title II 

Trade with third,countries 

Article 10 

1.  Imports into the Community, or exports therefrom, of any of the 

products listed  in Article 1 shall be subject to presentation of an 
import or export licence. 

Licences shall be issued by the Member States to any applicant, 
irrespective of his place of establishment  in the Community and without 
prejudice to measures taken for the application of Articles 14 and 15. 

Import and export licences shall be valid throughout the Community. 
Such licences shall be issued subject to the lodging of a security 
guaranteeing that the products are imported or exported during the term 
of validity of the licence; the security  shall be forfeited  in whole or 
in part if import or export is not carried out, or is only carried out 
partially, within that period. 

- 24 

2.  The term of validity of  licences and other detailed  rules for the 

application of this Article shall be adopted  in accordance with the 
procedure  laid down in Article 27. 

Article 11 

1.  A subsidy may be fixed  for consignments to the French overseas 

department of Réunion of products falling within CN code 1006 
(excluding code 1006 10 10) which come from the Member States and are 
in one of the situations referred to in Article 9(2) of the Treaty. 

That subsidy shall be fixed, taking into account the supply 
requirements of the Réunion market, on the basis of the difference 
between the quotations or prices of the relevant products on the world 
market and the quotations or prices of those products on the Community 
market, and, if necessary the price of those products delivered to 
Réunion. 

The subsidy  shall be granted on application by the party concerned. 
The subsidy may be fixed, where appropriate, by tendering procedure. 
This tender shall  involve the subsidy amount. 

The subsidy  shall be fixed periodically  in accordance with the 
procedure  laid down  in Article 27.  However, where the need arises, the 
Commission may, at the request of a Member State or on its own 
initiative, alter the subsidy  in the interval. 

2. 

The rules on the financing of the common agricultural policy shall 
apply to the subsidy provided  for in paragraph 1. 

3.  The detailed rules for the application of this Article shall be adopted 

in accordance with the procedure laid down in Article 27. 

- 25 -

Article 12 

u 

1.  Unless this Regulation provides otherwise, the rates of duty  in the 

common customs tariff  shall apply to the products  listed  in Article 1. 

2.  Notwithstanding  paragraph  1, the import duty on: 

(a) 

husked rice covered by CN code 1006 20 shall be equal, 

rice and japonica rice respectively on importation  increased by 

to the intervention price valid  for indica 

- 80% in the case of indica rice and 

- 88% in the case of japonica rice, 

minus the import price; and 

(b) 

wholly milled rice covered by CN code NC 1006 30 shall be equal, 

time of importation plus a percentage to be calculated and minus 
the import price. 

to the intervention price at the 

However, that duty may not exceed the rate of duty  in the common 
customs tariff. 

The percentage referred to in b) shall be calculated by adjusting the 
respective percentages referred to in a) by reference to the conversion 
rate, processing costs and the value of by-products, and then adding an 
amount  for the protection of the industry. 

3.  Notwithstanding  paragraph 1: 

(a) 

(b) 

no duty shall be charged on imports of products falling within 
products covered by CN code 1006 10 10, CN 1006 20 or 
CN 1006 40 00 into the French overseas department of Réunion, 

the duty to be charged on imports of products falling within 
CN code 1006 30 into the French overseas department of Reunion 
shall be muliplied by a coefficient of 0,30. 

4.  Detailed rules for the application of this Article shall be adopted in 

accordance with the procedure laid down in Article 27. Such detailed 
rules shall in particular lay down the criteria  for distinguishing the 
types of imported rice referred to in paragraph 2, fix the amount for 
the protection of the industry and include the necessary provisions for 
determining and calculating  import prices and checking their 
authenticity. 

-  26  -

A r t i c le  13 

lo3 

1.  In order to prevent or counteract  adverse effects on the market  in the 

Community which may result from imports of certain products listed in 
Article 1, imports of one or more of such products at the rate of duty 
laid down in Article 12 may be subject to payment of an additional 
import duty under the conditions set out in Article 5 of the Agreement 
on Agriculture concluded  in accordance with Article 228 of the Treaty 
in the framework of the Uruguay Round of multilateral trade 
negotiations. 

2.  The Commission shall adopt detailed rules for the application of this 

Article in accordance with the procedure laid down in Article 27. Such 
detailed  rules shall specify  in particular: 

(a) 

the products to which additional  import duties may be applied, 

(b) 

the criteria  for triggering the application of paragraph  1 and 
in particular the calculation  and determination of the various 
quantities and prices. 

Article 14 

Tariff quotas for the products listed  in Article 1 resulting  from 
agreements concluded  in accordance with Article 228 of the Treaty or 
from any other act of the Council pursuant to the Treaty shall be 
opened  and administered  in accordance with detailed  rules established 
pursuant to Article 27. Such detailed rules shall provide  for annual 
quotas, suitably phased over the year, to be opened and, where 
appropriate, for: 

(a) 

(b) 

(c) 

guarantees covering the nature, provenance and origin of the 
product, 

recognition of the document used  for verifying the guarantees 
referred to in  (a), and 

the conditions under which  import licences are issued and their 
term of validity. 

Article 15 

1.  To the extent necessary to enable the products  listed  in Article 1 to 
be exported without  further processing or in the form of goods listed 
in Annex B on the basis of quotations or prices for those products on 
the world market and within the limits resulting  from agreements 
concluded  in accordance.with Article 228 of the Treaty, the difference 
between those quotations or prices and prices in the Community may be 
covered by export refunds. 

- 27 

Gt 

Export refunds on the products listed  in Article 1 in the form of goods 
listed  in Annex B may not be higher than those applicable to such 
products exported without  further processing. 

2.  Refunds shall be the same for the whole Community. They may vary 

according to destination. 

Refunds shall be fixed  in accordance with the procedure  laid down in 
Article 27. 

Refunds may be fixed: 

(a) 

at regular intervals, 

(b) 

by invitation to tender. 

Refunds  fixed at regular  intervals may, where necessary, be adjusted in 
the intervening period by the Commission at the request of a Member 
State or on its own initiative. 

When the amount of the refund is set, account shall be taken in 
particular of the need to establish a balance between the use of 
Community basic agricultural products for export as processed goods to 
third countries, and the use of products from these countries  admitted 
for inward processing. 

3.  Refunds on products  listed  in Article 1 and exported without  further 

processing  shall only be granted on application and on presentation of 
the relevant export licence. 

4.  The refund applicable to exports of products listed in Article 1 

exported without  further processing shall be that applicable on the day 
of application  for the licence and, in the case of a differentiated 
refund, that applicable on the same day for the destination  indicated 
on the licence. 

5.  Paragraphs  3 and 4 may be made to apply to products listed  in Article 1 

and exported  in the form of goods listed in Annex B in accordance with 
the procedure laid down in Article 16 of Regulation  (EC) No 3448/93. 

6.  Paragraphs 3 and 4 may be waived in the case of products listed in 

Article  1 on which refunds are paid under food-aid operations, in 
accordance with the procedure laid down in Article 27. 

7.  Save as otherwise provided  in accordance with the procedure laid down 

in Article 27, the refund on products listed  in Article l(l)(a) and  (b) 
in accordance with paragraph 4 shall be adjusted, during the period 
from October to July of the same marketing year, in respect of each 
month elapsing prior to export, by an amount equal to the monthly 
increase applicable to the intervention price fixed for that marketing 
year, adjusted according to the degree of processing using the 
applicable conversion rate. 

us 

A corrective amount may be fixed  in accordance with the procedure laid 
down  in Article 27. However, the Commission may, where necessary, alt,er 
corrective amounts. 

The first and second  subparagraphs may be applied, in whole or in part, 
to products  listed  in Article 1(1)(c) and to products listed in 
Article  1 and exported  in the form of goods listed  in Annex B. In that 
case, the adjustment referred to in the first subparagraph  shall be 
corrected by applying to the monthly  increase a coefficient  expressing 
the ratio between the quantity of basic product and the quantity of the 
latter contained  in the processed product exported or used  in the goods 
exported. 

8.  Detailed  rules for the application of this Article shall be adopted in 
accordance with the procedure laid down in Article 27. Annex B shall be 
amended  in accordance with the same procedure. 

Article 16 

1.  To the extent necessary  for the proper working of the common 

organization of the market  in rice, the use of inward  processing 
arrangements may be prohibited  in whole or in part in respect of 
products listed  in Article 1. 

2.  Measures adopted pursuant to this Article shall be decided on in 

accordance with the procedure  laid down  in Article 27. 

Article 17 

1.  The general  rules  for the interpretation of the Combined  Nomenclature 

and the special rules for its application shall apply to the tariff 
classification of products covered by this Regulation; the tariff 
nomenclature resulting  from the* application of this Regulation, 
including the definitions listed in Annex A, shall be incorporated  in 
the common customs tariff. 

2.  Save as otherwise^ provided  for in this Regulation or pursuant to a 

provision thereof, the following shall be prohibited: 

the. levying of any charge having equivalent effect to a customs 
duty, 

the application of any quantitative restriction on imports or 
measure having equivalent effect. 

- 29 -

Article 18 

Ok 

1.  Where the quotations or prices on the world market for one or more of 

the products listed  in Article 1(a) or  (b) reach the level of Community 
prices and where that situation is likely to continue and to 
deteriorate, thereby disturbing or threatening to disturb the Community 
market, appropriate measures may be taken. 

2.  Detailed rules for the application of this Article shall be adopted in 

accordance with the procedure laid down in Article 27. 

Article 19 

1.  If, by reason of an increase in imports or exports, the Community 

market in one or more of the products listed in Article 1 is affected 
by, or is threatened with, serious disturbance likely to jeopardize the 
achievement of the objectives set out in Article 39 of the Treaty, 
appropriate measures may be applied  in trade with third countries until 
such disturbance or threat of disturbance has ceased. 

2.  If the situation referred to in paragraph  1 arises, the Commission 

shall, at the request of a Member State or on its own initiative, 
decide upon the necessary measures; the Member States shall be notified 
of such measures, which shall be immediately  applicable. If the 
Commission receives a request  from a Member State, it shall take a 
decision thereon within three working days following receipt of the 
request. 

3.  Measures decided upon by the Commission may be referred to the Council 
by any Member State within three working days of the day on which they 
were notified. The Council shall meet without delay. It may, acting by 
a qualified majority, amend or annul the measure in question. 

4.  The Commission shall adopt detailed rules for the application of this 
Article in accordance with the procedure laid down in Article 27. 

5.  This Article shall be applied having regard to the obligations arising 

from agreements concluded  in accordance with Article 228(2) of the  v 
Treaty." 

II.  Council Regulation  (EEC) No 1423/76 of 21 June 1976  (OJ No L 166, 

25.6.1976, p.20). 

Article 3 is deleted. 

- 30 -

U 

III.  Council Regulation  (EEC) No 1428/76 of 21 June 1976  (OJ No L 166, 

25.6.1976, p.30). 

Council Regulation* (EEC) No 1431/76 of 21 June 1976  (OJ No L 166, 
25.6.1976, p.36). 

Council Regulation  (EEC) No 1432/76 of 21 June 1976  (OJ No L 166, 
25.6.1976, p.39). 

Council Regulation  (EEC) No 1433/76 of 21 June 1976  (OJ No L 166, 
25.6.1976, p.42). 

Council Regulation  (EEC) No 1263/78 of 12 June 1978  (OJ No L 156, 
14.6.1976, p.14). 

The above Regulations are repealed. 

- 31 -

ANNEX III 

DRIED FODDER 

Council Regulation  (EEC) No 117/78 of 22 May 1978  (OJ No L 142, 30.5.1978, 
p.2),  as last amended by Regulation  (EEC) No 3496/93  (OJ No L 319, 
21.12.1993, p.17) 

(1)  In Title II the following Article is inserted before Article 7: 

"Article 6a 

Unless this Regulation provides otherwise, the rates of duty in the common 
customs tariff shall apply to the products listed  in Article 1." 

(2)  Article 7(2) is replaced by the following: 

"Save as otherwise provided  for in this Regulation or pursuant to a 
provision thereof, the following shall be prohibited  in trade with third 
countries: 

the levying of any charge having equivalent effect to a customs 
duty, 

-  the application of any quantitative restriction or measure having 

equivalent effect". 

(3)  After Article 7 the following Article is inserted: 

"Article 7a 

Tariff quotas for the products listed  in Article  1 resulting from 
agreements concluded  in accordance with Article 228 of the Treaty or from 
any other act of the Council pursuant to the Treaty shall be opened and 
administered  in accordance with detailed rules adopted according to the 
procedure  laid down in Article 12. Such detailed  rules shall provide for 
annual quotas, suitably phased over the year, to be opened and, where 
appropriate, for: 

- 32 - 

/ n 
O "i 

(a) 

(b) 

(c) 

guarantees covering the nature, provenance and origin of the 
product, 

recognition of the document used  for verifying the guarantees 
referred  to in  (a), and 

the conditions under which  import licences are issued and their 
term of validity." 

(4)  Article 8 is replaced by the following: 

"Article 8 

1.  If, by reason of an increase in imports or exports, the Community • 

market  in one or more of the products listed  in Article 1 is affected 
by, or is threatened with, serious disturbance  likely to jeopardize the 
achievement of the objectives set out in Article 39 of the Treaty, 
appropriate measures may be applied  in trade with third countries until 
such disturbance or threat of disturbance has ceased. 

2.  If the situation referred to in paragraph  1 arises, the Commission 

shall, at the request of a Member State or on its own initiative, 
decide upon the necessary measures; the Member States shall be notified 
of such measures, which shall be immediately applicable. If the 
Commission  receives, a request from a Member State, it shall take a 
decision thereon within three working days following receipt of the 
request. 

3.  Measures decided upon by the Commission may be referred to the Council 
by any Member State within three working days of the day on which they 
were notified. The Council shall meet without delay. It•may, acting by 
a qualified majority, amend or annul the measure in question. 

4.  The Commission  shall adopt detailed rules for the application of this 
Article in accordance with the procedure laid down in Article 12. 

5.  This Article shall be applied  in compliance with the obligations 

arising  from agreements concluded  in accordance with Article 228(2) of 
the Treaty. •• 

- 33 -

ANNEX IV 

SUGAR 

1o 

I.  Council Regulation  (EEC) No 1785/81 of 30 June 1981  (OJ No L 177, 
1.7.1981,  p.4),  as last amended by Regulation  (EC) No 133/94 
(OJ No L 22, 27.1.1994, p.7). 

(1) Title II is replaced by the following: 

"Title II 

Trade with third countries 

Article 13 

1.  Imports into the Community, or exports therefrom, of any of the 

products listed  in Article  1(1)(a),  (b), (c), (d), (f), (g) and  (h) 
shall be subject to presentation'of an import or export licence. 

Licences shall be issued by the Member States to any applicant, 
irrespective of his place of establishment  in the Community and without 
prejudice to measures taken for the application of Articles 16 and. 17. 

Import and export  licences shall be valid throughout the Community. 
Such licences shall be issued subject to the lodging of a security 
guaranteeing that the products are imported or exported during the term 
of validity of the licence; the security shall be forfeited in whole or 
in part if import or export is not carried out, or is only carried out 
partially, within that period. 

2.  In accordance with the procedure laid down in Article 41: 

(a) 

(b) 

the scheme provided for by this Article may be extended to cover, 
the products listed in Article  1(1)(e), 

the term of validity of licences and other detailed rules for 
the application of this Article, which may lay down in 
particular a time limit for the issue of licences, shall be 
adopted. 

- 34 

Article 14 

V 

1.  Unless this Regulation provides otherwise, the rates of duty  in the 

common customs tariff  shall apply to the products listed  in Article 1. 

2.  Notwithstanding  paragraph  1, to ensure that the Community market is 

adequately  supplied with the products listed  in Article 1(1)(a) (raw 
sugar for refining  falling within CN codes 1701 11 10 and 1701 12 10) 
and Article 1(1)(c)  (molasses) by means of imports from third 
countries, the Commission may, in accordance with the procedure laid 
down  in Article 41, suspend in whole or in part the application of 
import duties on these products, and establish the arrangements  for any 
such suspension. 

Article 15 

1.  In order to prevent or counteract adverse effects on the market in the 

Community which may result from imports of certain  agricultural 
products, imports of one or more of such products at the rate of duty 
laid down in the common customs tariff may be subject to payment of an 
additional  import duty under the conditions set out in Article 5 of the 
Agreement on Agriculture concluded in accordance with Article 228 of 
the Treaty  in the framework of the Uruguay Round of multilateral trade 
negotiations. 

2.  The Commission  shall adopt detailed rules for the application of this 

Article  in accordance with the procedure laid down in Article 41. Such 
detailed  rules shall specify  in particular: 

(a) 

the products to which additional import duties may be applied, 

(b) 

the criteria  for triggering the application of paragraph  1 and 
in particular the calculation and determination of the various 
quantities and prices. 

n 

Article 16 

1.  Tariff quotas  for the products listed  in Article 1 resulting  from 

agreements concluded  in accordance with Article 228 of the Treaty or 
from any other act of the Council pursuant to the Treaty  shall be 
opened  and administered  in accordance with detailed rules adopted under 
the procedure  laid down in Article 41. Such detailed  rules shall 
provide for annual quotas, suitably phased over the year, to be opened 
and, where appropriate, for: 

(a) 

(b) 

(c) 

guarantees covering the nature, provenance and origin of the 
product, 

recognition of the document used  for verifying the guarantees 
referred to in  (a), and 

the conditions under which  import licences are issued and their 
term of validity. 

Article 17 

1.  To the extent necessary to enable the products  listed in 

Article  1(1)(a),  (c) and  (d)  to be exported without  further processing 
or in the form of goods listed in Annex  I, on the basis of quotations 
or prices on the world market  for those products listed in 
Article  1(1)(a) and  (c), and within the limits resulting  from 
agreements concluded  in accordance wit,h Article 228 of the Treaty, the 
difference between those quotations or prices and prices in the 
Community may be covered by export refunds. 

The export refund granted  for raw sugar may not exceed that granted for 
white sugar. 

2.  Provision may be made for export refunds in respect of the products 
listed  in Article  1(1)(f),  (g) and  (h) and exported without  further 
processing or in the form of goods mentioned  in Annex I. 

When determining the amount of the refund, for each 100 kg of dry 
matter particular account shall be taken of: 

(a) 

(b) 

the refund applicable to exports of products falling within 
subheading  1702 30 91 of the Combined Nomenclature, 

the refund applicable to exports of the products referred to in 
Article  1(1)(d), 

(C) 

the economic aspects of the planned exports. 

- 36 

11 

3.  The refund applicable to products listed  in Article  1 exported  in the 

form of good  listed  in Annex  I shall not be greater than that 
applicable to these products exported without  further processing. 

4.  When the amount of the refund  is set, account  shall be taken in 
particular of the need to establish.a balance between the use of 
Community basic agricultural products  for export as processed goods to 
third countries, and the use of products from these countries admitted 
for inward processing. 

Refunds shall be the same for the whole Community.  They may vary 
according  to destination. 

Refunds shall be fixed  in accordance with the procedure  laid down in 
Article 41.  Refunds may- be fixed: 

(a) 

at regular intervals, 

(b) 

by  invitation to tender. 

Refunds  fixed at regular intervals may, where necessary, be adjusted in 
the intervening  period by the Commission at the request of a Member 
State or on its own initiative. 

5.  Refunds on products  listed  in Article  1 and exported without  further 

processing  shall only be granted on application and on presentation of 
the relevant export licence. 

6.  The refund applicable to- exports of products  listed  in Article 1 

exported without  further processing  shall be that applicable on the day 
of application  for the licence and, in the case of a differentiated 
refund, that applicable on the same day for the destination  indicated 
on the licence. 

7.  Paragraphs 5 and 6 may be made to apply to products listed  in Article 1 
and exported  in the form of goods listed  in Annex  I, in accordance with 
the procedure  laid down in Article 16 of Regulation  (EC) No 3448/93. 

8.  Paragraphs 5 and 6 may be waived  in the case of products listed in 

Article  1 on which refunds are paid under food-aid operations, in 
accordance with the procedure laid down in Article 41. 

9.  Detailed  rules for the application of this Article and the amendment of 

Annex  I shall be adopted  in accordance with the procedure  laid down in 
•Article 41. 

- 37 -

Article 18 

^ 

1.  To the extent necessary  for the proper working of the common 

organization of the market in sugar, the use of inward processing 
arrangements may be prohibited  in whole or in part: 

in respect of products listed in Article 1(a) and  (d), and 

in special cases, in si^i&pjejg^t 1(of products listed  in Article  1(1) 
which are intended  for the manufacture of goods listed in Annex I. 

2.  Measures adopted pursuant to this Article shall be decided on in 

accordance with the procedure  laid down in Article 41. 

Article 19 

1.  The general rules for the interpretation of the Combined  Nomenclature 

and the special rules for its application shall apply to the tariff 
classification of products covered by this Regulation; the tariff 
nomenclature resulting  from the application of this Regulatiort shall be 
incorporated  in the common customs tariff. 

2.  Save as otherwise provided  for in this Regulation or pursuant to a 
provision thereof, the following shall be prohibited  in trade with 
third countries: 

(a) 

(b) 

the levying of any charge having equivalent effect to a customs 
duty, 

the application of any quantitative restriction or measure 
having equivalent effect. 

Article 20 

1.  Where the price of sugar on the world market exceeds the  intervention 

price, provision may be made to apply an export levy in respect of the 
sugar in question.  This levy must be applied when the cif price of 
white sugar or raw sugar is greater than the reference price. 

Save as otherwise provided  in accordance with the procedure  laid down 
in Article 41, the levy payable shall be that applicable on the date of 
export. 

2.  Where the cif price of white or raw sugar is greater than a reference 

price to be determined, a decision may be made to suspend the 
applicable import duty and/or grant an import subsidy  for the product 
in question. 

- 38 -

1C 

3.  The following shall be adopted  in accordance with the procedure  laid 

down in Article 41: 

(a) 

the detailed rules for establishing the cif prices referred to . 
in paragraph  2, 

(b) 

the reference price referred to in paragraphs 1 and 2, 

(c) 

the decisions referred to in-pa-r&qr^aphs 1 and 2, 

(d) 

the detailed rules for the application of this Article. 

In the case of the products referred to in Article  1(1)(b),  (c),  (d), 
(f),  (g) and  (h) provisions similar to those in paragraphs  1 and 2 and 
to the rules for their application may be adopted using the same 
procedure. 

4.  The levies stemming  from the application of this Article shall be fixed 

by the Commission. 

Article 21 

1.  If, by reason of an increase in imports or exports, the Community 

market  in one or more of the products listed  in Article 1 is affected 
by, or is threatened with, serious disturbance  likely to jeopardize the 
achievement of the objectives set out in Article 39 of the Treaty, 
appropriate measures may be applied in trade with third countries until 
such disturbance or threat of disturbance has ceased. 

2.  If the situation referred to in paragraph 1 arises, the Commission 

shall, at the request of a Member State or on its own initiative, 
decide upon the necessary measures; the Member States shall be notified 
of such measures, which shall be immediately applicable. If the 
Commission receives a request  from a Member State, it shall take a 
decision thereon within three working days following receipt of the 
request. 

3.  Measures decided upon by the Commission may be referred to the Council 
by any Member State within three working days of the day on which they 
were notified. The Council shall meet without delay. It may, acting by 
a qualified majority, amend or annul the measure in question. 

4.  The Commission shall adopt detailed rules for the application of this 
Article in accordance with the procedure laid down in Article 41. 

5.  This Article shall be applied having regard to the obligations arising 
from agreements concluded  in accordance with Article 228(2) of the 
Treaty." 

- 39 -

y, 

(2) Article 26 is amended  as follows: 

(a) In paragraph  1 the last sentence is replaced by: 

"Articles 8, 9,  17 and 20 shall not apply to such sugar and Articles 9, 
17 and 20 to such isoglucose and inulin sirop." 

(b) The reference to "Article 18" in paragraph 2 is replaced by a reference 

to "Article 20". 

(3) Article 35(1) is replaced by the following: 

"1. 

No import duty shall apply to imports of preferential  sugar." 

II.  Council Regulation  (EEC) No 431/68 of 9 April  1968  (OJ No L 89, 

10.4.1968, p.3) 

Article 2 is deleted. 

III. Council Regulation  (EEC) No 766/68 of 18 June 1968  (OJ No L 143, 

25.6.1968, p.6),  as last amended by Regulation  (EEC) No 1489/76  (OJ 
No L 167, 26.6.1976, p.13) 

Council Regulation  (EEC) No 770/68 of 18 June 1968  (OJ No L 143, 
25.6.1968, p.16) 

Council Regulation  (EEC) No 226/72 of 31 January  1972  (OJ No L 28, 
1.2.1972, p.3) 

Council Regulation  (EEC) No 608/72 of 23 March 1972  (OJ No L 75, 
28.3.1972, p.5) 

The above Regulations are repealed. 

- 40 -

ANNEX V 

OILS AND FATS 

11 

:.  Council Regulation No 136/66/EEC of 22 September  1966  (OJ No 172, 

30.9.1966, p.3025/66), as last amended by Regulation  (EC) No 3179/93 
(OJ No L 285, 20.11.1993, p.9). 

(1) Title I is replaced by the following: 

"Title I 

Trade 

Article 2 

1.  Imports into the Community, or exports therefrom, of any of the 

products  listed  in Article  1(2) shall be subject to presentation of an 
import or export licence. 

Licences shall be issued by the Member States to any applicant, 
irrespective of his place of establishment  in the Community and without 
prejudice to measures taken for the application of Articles 2c and 3. 

Import and export  licences shall be valid throughout the Community. 
Such licences shall be issued  subject to the lodging of a security 
guaranteeing that the products are imported or exported during the term 
of validity of the licence; the security shall be forfeited  in whole or 
in part if import or export  is not carried out, or is only carried out 
partially, within that period. 

2.  The term of validity of licences and other detailed rules for the 

application of this Article shall be adopted  in accordance with the 
procedure  laid down in Article 38. 

Article 2a 

Save where this Regulation provides otherwise, the rates of duty in the 
common customs tariff shall apply to the products listed in 
Article 1(2). 

Article 2b 

1.  In order to prevent or counteract adverse effects on the market in the 

Community which may result from imports of certain products listed in 
Article  1(2)(c),  (d) and  (e), imports of one or more of such products 
at the rate of duty laid down in the common customs tariff may be 
subject to payment of an additional  import duty under the conditions 
set out in Article 5 of the Agreement on Agriculture concluded in 
accordance with Article 228 of the Treaty  in the framework of the 
Uruguay Round of multilateral trade negotiations. 

u 

2.  The Commission shall adopt detailed rules for the application of this 

Article  in accordance with the procedure  laid down in Article 38. Such 
detailed  rules shall specify  in particular: 

(a) 

the products to which additional  import duties may be applied, 

(b) 

the criteria  for triggering the application of paragraph  1 and 
in particular the calculation and determination of the various 
quantities and prices. 

Article 2c 

1.  Tariff quotas for the products listed  in Article 1(2) resulting  from 
agreements concluded  in accordance with Article 228 of the Treaty or 
from any other act of the Council pursuant to the Treaty shall be 
opened and administered  in accordance with detailed rules adopted under 
the procedure laid down in Article 38. Such detailed rules shall 
provide for annual quotas, suitably phased over the year, to be opened 
and, where appropriate, for: 

(a) 

(b) 

(c) 

guarantees covering the nature, provenance and origin of the 
product, 

recognition of the document used  for verifying the guarantees 
referred to in  (a), and 

the conditions under which import  licences are issued and their 
term of validity. 

Article 3 

1.  To the extent necessary to enable the olive oil and oilseeds harvested 

in the Community to be exported on the basis of quotations or prices 
for those products on the world market and within the limits resulting 
from agreements concluded  in accordance with Article 228 of the Treaty, 
the difference between those quotations or prices and prices in the 
Community may be covered by export refunds. 

2.  Refunds shall be the same for the whole Community. They may vary 
. 

according to destination.• 

Refunds shall be fixed  in accordance w,ith the procedure  laid down in 
Article 38. 

Refunds may be fixed: 

(a) 

at regular intervals, 

(b) 

by invitation to tender. 

Refunds fixed at regular intervals may, where necessary, be adjusted in 
the intervening period by the Commission at the request of a Member 
State or on its own initiative. 

3.  Refunds shall only be granted on request and on presentation of the 

relevant export licence. 

- 42 - 

Zj G 

4.  The refund applicable to exports of products  listed  in paragraph 1 

shall be that applicable on the day of application  for the licence and, 
in the case of a differentiated refund, that applicable on the same day 
for the destination  indicated on the licence. 

5.  Paragraphs 3 and 4 may be waived  in the case of olive oil and oilseeds 
on which refunds are paid under food-aid operations, in accordance with 
the procedure  laid down in Article -3^;  • 

« 3 3 01 "5 

6.  Detailed rules for the application of this Article shall be adopted in 

accordance with the procedure laid down  in Article 38. 

Article 3a 

1.  The general rules for the interpretation of the Combined  Nomenclature 

and the special rules for its application  shall apply to the tariff 
classification of products covered by this Regulation; the tariff 
nomenclature resulting  from the application of this Regulation  shall be 
incorporated  in the common customs tariff. 

2.  Save as otherwise provided  for in this Regulation or pursuant to a 
provision thereof, the following shall be prohibited, in trade with 
third countries: 

the levying of any charge having equivalent effect to a customs 
duty, 

the application of any quantitative restriction or measure having 
equivalent effect. 

Article 3b 

1.  If, by reason of an increase in imports or exports, the Community 

market  in one or more of the products listed  in Article 1(2) is 
affected by, or is threatened with, serious disturbance  likely to 
jeopardize the achievement of the objectives set out in Article 39 of 
the Treaty, appropriate measures may be applied  in trade with third 
countries until such disturbance or threat of disturbance has ceased. 

2.  If the situation referred to in paragraph  1 arises, the Commission 

shall, at the request of a Member State or on its own initiative, 
decide upon the necessary measures; the Member States shall be notified 
of such measures, which shall be immediately applicable. If the 
Commission receives a request  from a Member State, it shall take a 
decision thereon within three working days following receipt of the 
request. 

3.  Measures decided upon by the Commission may be referred to the Council 
by any Member State within three working days of the day on which they 
were notified. The Council shall meet without delay. It may, acting by 
a qualified majority, amend or annul the measure in question. 

4.  The Commission shall adopt detailed rules for the application of this 
Article  in accordance with the procedure laid down in Article 38. 

5.  This Article shall be applied having regard to the obligations arising 
from agreements concluded  in accordance with Article 228(2) of the 
Treaty." 

(2)  Article 4(1) is replaced by the following: 

"1. A production target price, an intervention price and a representative 

market price for olive oil shall be fixed each year for the Community. 

However, when during the marketing year the factors which are used to 
determine the representative market price for olive oil undergo a 
change which, on the basis of the criterion to be established under the 
procedure  laid down in Article 38, may be considered  as substantial, a 
decision may be taken under the said procedure to adjust the 
representative market price during the marketing year. 

In such cases, the level of consumption aid referred to in 
Article  11(5) and  (6) may be adjusted  in accordance with the same 
procedure." 

(3)  Articles 9, 14, 15, 16, 17, 18 and 19 are deleted. 

(4)  Article 20 is replaced by the following: 

"Article 20 

1.  Where olive oil is exported to third countries and world prices are 

higher than the Community price, a levy to cover the difference may be 
charged. 

2.  The general rules for the application of this Article shall be adopted 

in accordance with the procedure laid down in Article 38." 

(5)  Article 20a is replaced by the following: 

"Article 20a 

Olive oil used for the manufacture of preserved  foods shall benefit 
from a system of production refunds. 

The general rules for the application of this Article and the list of 
preserved  foods in question shall be adopted  in accordance with the 
procedure  laid down in Article  38." 

(6)  Articles 20c and 28 are deleted. 

- 44 - 

9 

II.  Regulation  (EEC) No 142/67 of 21 June 1967  (OJ No L 125,' 26.6.1967, 

p.2461/67), as last amended by Regulation  (EEC) No 2429/72 
(OJ No L 264, 23.11.1972, p.l.) 

Regulation  (EEC) No 143/67 of 21 June 1967  (OJ No L 125, 26.6.1967, 
p.2463/67), as last amended by Regulation  (EEC) No 2077/71 
(OJ No L 220, 30.9.1971, p.l.) 

Regulation  (EEC) No 19/69 of 20 December 1968  (OJ No L 3, 7.1.1969, 
p.2),  as last amended by Regulation  (EEC) No 2429/72  (OJ No L 264, 
23.11.1972, p.l.) 

Regulation  (EEC) No 2596/69 of 18 December  1969  (OJ No L 324, 
27.12.1969, p.12) 

Regulation  (EEC) No 1076/71 of 25 May 1971  (OJ No L 116, 28.5.1971, 
p.2) 

Regulation  (EEC) No 443/72 of 29 February  1972  (OJ No L 54, 3.3.1972, 
p.3),  as last amended by Regulation  (EEC) No 2560/77  (OJ No L 303, 
28.11.1977, p.l.) 

Regulation  (EEC) No 1569/72 of 20 July  1972  (OJ No L 167, 25.7.1972, 
p.9),  as last amended by Regulation  (EEC) No 2206/90  (OJ No L 201, 
31.1.1990, p.11.) 

Regulation  (EEC) No 2751/78 of 23 November  1978  (OJ No L 331, 
28.11.1978, p.5) 

Regulation  (EEC) No 591/79 of 26 March 1979  (OJ No L 78, 30^3.1979, 
p.2),  as last amended by Regulation  (EEC) No 2903/89  (OJ No L 280, 
29.9.1989, p.3.) 

Regulation  (EEC) No 1594/83 of 14 June 1983  (OJ No L 163, 22.6.1983, 
p.44),  as last amended by Regulation  (EEC) No 1321/90  (OJ No L 132, 
23.5.1990, p.15.) 

- 4 5- 

Q a 

Regulation  (EEC) No 1491/85 of 23 May  1985  (OJ No L 151, 10.6.1985, 
p.15),  as last amended by Regulation  (EEC) No 1724/91  (OJ No L 162, 
26.6.1991, p.35.) 

Regulation  (EEC) No 2194/85 of 25 July  1985  (OJ No L 204, 2.8.1985, 
p.7),  as last amended by Regulation  (EEC) No 1725/91  (OJ No L 162, 
26.6.1991, p.37.) 

Regulation  (EEC) No 1650/86 of 26 May 1986  (OJ No L 145, 30.5.1986, 
p.8). 

The above Regulations are repealed. 

-  46 -

ANNEX VI 

FLAX AND HEMP 

s? 

I.  Council Regulation  (EEC) No 1308/70 of 29 June 1970  (OJ No L 146, 

4.7.1970, p.l), as last amended by Regulation  (EEC) No 1557/93  (OJ No 
L  154, 25.6.1993, p.26). 

Articles 7 and 8 are replaced by the following: 

"Article 7 

Save as otherwise provided  for in this Regulation or pursuant to a 
provision thereof, the following shall be prohibited  in trade with third 
countries: 

the levying of any charge having equivalent effect to a customs duty, 

- 

the application of any quantitative restriction or measure having 
equivalent effect. 

Article 8 

1.  The importation of raw hemp falling within CN code 5302 10 00 is 

permitted only  if the product meets the conditions laid down in 
Article 4(1). 

2.  The importation of hemp seed falling within CN code 1207 99 10 is 
permitted  only if the seed offers the guarantees  laid down in 
Article 4(1). 

3.  The importation of hemp seed, not broken, falling within CN code 

1207 99 91 is permitted only if it undergoes a check guaranteeing that 
the seed will be used other than for sowing. 

4.  Detailed  rules for the application of this Article shall be adopted in 

accordance with the procedure laid down in Article 12. 

Article 8a 

1.  If, by reason of an increase in imports or exports, the Community 

market  in one or more of the products  listed  in Article 1 is affected 
by, or is threatened with, serious disturbance likely to jeopardize the 
achievement of the objectives set out in Article 39 of the Treaty, 
appropriate measures may be applied  in trade with third countries until 
such disturbance or threat of disturbance has ceased. 

- 47 -

iy 

2.  If the situation referred to in paragraph  1 arises, the Commission 

shall, at the request of a Member State or on its own initiative, 
decide upon the necessary measures; the Member States shall be notified 
of such measures, which shall be immediately  applicable. If the 
Commission receives a request  from a Member State, it shall take a 
decision thereon within three working days following receipt of the 
request. 

3.  Measures decided upon by the Commission may be referred to the Council 
by any Member State within three working days of the day on which they 
were notified. The Council shall meet without delay. It may, acting by 
a qualified majority, amend or annul the measure  in question. 

4.  The Commission shall adopt detailed rules for the application of this 
Article in accordance with the procedure  laid down in Article 12. 

5.  This Article shall be applied having regard to the obligations  arising 
from agreements concluded  in accordance with Article 228(2) of the 
Treaty." 

II.  Council Regulation  (EEC) No 1054/72 of 18 May  1972  (OJ No L 120, 

25.5.1972, p.l). 

The above Regulation  is repealed. 

- 48 -

ANNEX VII 

MILK PRODUCTS 

fc 

I.  Council Regulation  (EEC) No 804/68 of 27 June 1968  (OJ No L  148, 

28.6.1968, p.13), as last amended by Regulation  (EC) No 1880/94  (OJ No 
L  197, 30.7.1994, p.21). 

(1)  Article 4 is deleted. 

(2)  Title III is replaced by the following: 

"Title III 

Trade with third  countries 

Article 13 

1.  Imports into the Community of any of the products listed  in Article 1 

shall be subject to the presentation of an import licence. Exports from 
the Community of any such products may be made subject to presentation 
of an export licence. 

2.  Licences shall be issued by Member States to any applicant, 

irrespective of his place of establishment  in the Community  and without 
prejudice to the measures taken for the application of Articles 16 
and 17. 

Import and export  licences shall be valid throughout the Community. 
Such licences shall be issued subject to the lodging of a security 
guaranteeing that the products are imported or exported during the term 
of validity of the licence; the security  shall be forfeited  in whole or 
in part  if import or export is not carried out, or is only carried out 
partially, within that period. 

3.  The following shall be adopted  in accordance with the procedure laid 

down in Article 30: 

(a) 

the list of products in respect of which import and export 
licences are required, 

(b) 

the term of validity of the licences, and 

(c) 

the other detailed rules for the application of this Article. 

- 49 -

Article 14 

Unless this Regulation provides otherwise, the rates of duty in the common 
customs tariff shall apply to the products  listed  in Article 1. 

Article 15 

1.  In order to prevent or counteract adverse effects on the market  in the 

Community which may result from imports of certain products  listed in 
Article 1, imports of one or more of such products at the rate of duty 
laid down in the common customs tariff may be subject to payment of an 
additional  import duty under the conditions set out in Article 5 of the 
Agreement on Agriculture concluded  in accordance with Article 228 of 
the Treaty  in the framework of the Uruguay Round of multilateral  trade 
negotiations. 

2.  The Commission shall adopt detailed rules for the application of this 

Article in accordance with the procedure laid down in Article 30. Such 
detailed  rules shall specify  in particular: 

(a) 

the products to which additional  import duties may be applied, 

(b) 

the criteria  for triggering the application of paragraph  1 and 
in particular the calculation and determination of the various 
quantities and prices. 

Article 16 

Tariff quotas for the products listed  in Article  1 resulting  from 
agreements concluded  in accordance with Article 228 of the Treaty or from 
any other act of the Council pursuant to the Treaty shall be opened and 
administered  in accordance with detailed rules adopted under the procedure 
laid down in Article 30. Such detailed rules shall provide for annual 
quotas, suitably phased over the year, to be opened and, where appropriate, 
for: 

(a) guarantees covering the nature, provenance and origin of the product, 

(b) recognition of the document used  for verifying the guarantees referred 

to in  (a), and 

(c) the conditions under which import licences are issued and their term of 

validity. 

- 50 

Article 17 

1.  To the extent necessary to enable the products listed  in Article 1 to 
be exported without  further processing or  in the form of goods listed 
in the Annex if they are products listed  in Article 1(a), (b),  (c), 
(d),  (e) and  (g), on the basis of prices  for those products on the 
world market and within the limits resulting  from agreements concluded 
in accordance with Article 228 of the Treaty, the difference between 
those prices and prices in the Community may be covered by export 
refunds. 

Export refunds on the products listed in Article 1 in the form of goods 
listed  in the Annex may not be higher than those applicable to such 
products exported without  further processing. 

2.  Refunds shall be the same for the whole Community. They may vary 

according to destination. 

Refunds shall be fixed in accordance with the procedure laid down in 
Article  30. 

Refunds may be fixed: 

(a) 

at regular intervals, 

(b) 

by invitation to tender. 

Refunds fixed at regular  intervals may, where necessary, be adjusted in 
the intervening period by the Commission at the request of a Member 
State or on its own initiative. 

When the refund  is.being fixed particular account shall be taken of the 
need to establish a balance between the use of Community basic products 
in the manufacture of processed goods to third countries and the use of 
products from these countries admitted  for processing. 

3.  Refunds on products listed  in Article 1 and exported without further 

processing shall only be granted on application and on presentation of 
the relevant export licence. 

- 51 -

u 

4.  The refund  applicable to exports of products  listed  in Article 1 

exported without  further processing  shall be that applicable on the day 
of application  for the licence and, in the case of a differentiated 
refund, that applicable on the same day  for the destination  indicated 
on the licence. 

5.  Paragraphs 3 and 4 may be made to apply to products listed  in Article 1 
and exported  in the form of goods listed  in the Annex in accordance 
with the procedure  laid down in Article 16 of Regulation  (EC) 
No 3448/93. 

6.  Paragraphs 3 and 4 may be waived  in the case of products listed in 

Article 1 on which refunds are paid under  food-aid operations, in 
accordance with the procedure laid down in Article 30. 

7.  Detailed  rules for the application of this Article shall be adopted in 

accordance with the procedure  laid down in Article 30. 

Article 18 

To the extent necessary  for the proper working of the common organization 
of the market  in milk and milk products the Commission may  in special 
cases,  in accordance with the procedure laid down in Article 30, prohibit 
in whole or in part the use of inward processing  arrangements,in respect of 
products listed  in Article  1 which are intended  for the manufacture of 
products  listed  in that Article or of goods listed  in the Annex. 

Article 19 

1.  The general rules for the interpretation of the combined  nomenclature 

and tfhe special rules for its application shall apply to the tariff 
classification of products covered by this Regulation; the tariff 
nomenclature resulting  from the application of this Regulation shall be 
incorporated  in the common customs tariff. 

2.  Save as otherwise provided  for in this Regulation or pursuant to a 
provision thereof, the following shall be prohibited  in trade with 
third countries: 

-  the levying of any charge having equivalent effect to a customs 

duty, 

the application of any quantitative restriction or measure having 
equivalent effect. 

- 52 -

Article 20 

ri 

1.  Where the quotations or prices on the world market  for one or more of 

the products  listed  in Article 1 reach the level of Community prices 
and where that situation  is likely to continue and to deteriorate, 
thereby disturbing  or threatening to disturb the Community market, 
appropriate measures may be taken. 

2.  Detailed rules for the application of this Article shall be adopted in 

accordance with the procedure laid down in Article 30. 

Article 21 

1.  If, by reason of an increase in imports or exports, the Community 

market  in one or more of the products  listed  in Article  1 is affected 
by, or is threatened with, serious disturbance  likely to jeopardize the 
achievement of the objectives set out  in Article 39 of the Treaty, 
appropriate measures may be applied  in trade with third countries until 
such disturbance or threat of disturbance has ceased. 

2.  If the situation referred to in paragraph  1 arises, the Commission 

shall, at the request of a Member State or on its own initiative, 
decide upon the necessary measures; the Member States shall be notified 
of such measures, which shall be immediately applicable. If the 
Commission receives a request from a Member State, it shall take a 
decision thereon within three working days following receipt of the 
request. 

3.  Measures decided  upon by the Commission may be referred to the Council 
by any Member State within three working days of the day on which they 
were notified. The Council shall meet without delay. It may, acting by 
a qualified majority, amend or annul the measure in question. 

4.  The Commission shall adopt detailed rules for the application of this 
Article in accordance with the procedure  laid down in Article 30. 

5.  This Article shall be applied having regard to the obligations arising 
from agreements concluded  in accordance with Article 228(2) of the 
Treaty." 

II.  Council Regulation  (EEC) No 876/68 of 28 June 1968  (OJ No L 155, 

3.7.1968, p.l), as last amended by Regulation  (EEC) No 1344/86 
(OJ No L 119, 8.5.1986,  p.36). 

Council Regulation  (EEC) No 2115/71 of 28 September  1971  (OJ No L 222, 
2.10.1971,  p.5). 

Council Regulation  (EEC) No 2180/71 of 12 October 1971  (OJ No L 231, 
14.10.1971, p.l). 

- 53 - 

q 

Council Regulation  (EEC) No 1603/74 of 25 June 1974  (OJ No L 172, 
27.6.1974,  p.9). 

Council Regulation  (EEC) No 2915/79 of 18 December  1979  (OJ No L 329, 
24.12.1979, p.l), as last amended by Regulation  (EEC) No 3798/91 
(OJ No L 357, 28.12.1991, p.3). 

The above Regulations are repealed. 

- 54 -

ANNEX VIII 

BEEF AND VEAL 

<\l 

I.  Council Regulation  (EEC) No 805/68 of 27 June 1968  (OJ No L 148, 

28.6.1968, p.24), as last amended by Regulation  (EC) No 1884/94 
(OJ No L 197, 30.7.1994, p.27). 

(1) Article 3 is deleted. 

(2) Title II is replaced by the following: 

"Title II 

Trade with third countries 

Article 9 

1.  Imports  into the Community of any of the products  listed in 

Article  1(1)(a) shall be subject to presentation of an import licence. 

Imports  into the Community of any of the products listed in 
Article  1(1)(b) and exports from the Community of products listed in 
Article 1(1)(a) and  (b) may be subject to presentation of an import or 
export licence. 

Licences shall be issued by the Member States to any applicant, 
irrespective of his place of establishment  in the Community and without 
prejudice to measures taken for the application of Articles 12 and 13. 

Import and export  licences shall be valid throughout the Community. 
Such licences shall be issued subject to the lodging of a security 
guaranteeing that the products are imported or exported during the term 
of validity of the licence; the security shall be forfeited  in whole or 
in part if import or export is not carried out, or is only carried out 
partially, within that period. 

- 55 -

n 

2.  The term of validity of licences and other detailed  rules for the 

application of this Article shall be adopted  in accordance with the 
procedure  laid down  in Article 27. 

Article 10 

Unless this Regulation provides otherwise, the rates of duty  in the 
common customs tariff  shall apply to the products  listed  in Article 1. 

Article 11 

1.  In order to prevent or counteract adverse effects on the market  in the 

Community which may result from imports of certain  agricultural 
products listed  in Article 1, imports of one or more of such products 
at the rate of duty  laid down in the common customs tariff may be 
subject to payment of an additional  import duty under the conditions 
set out in Article 5 of the Agreement on Agriculture concluded in 
accordance with Article 228 of the Treaty  in the framework of the 
Uruguay Round of multilateral  trade negotiations. 

2.  The Commission  shall adopt detailed  rules for the application of this 

Article in accordance with the procedure laid down in Article 27. Such 
detailed rules shall specify  in particular: 

(a) 

the products to which additional  import duties may be applied, 

(b) 

the criteria  for triggering the application of paragraph 1 and 
in particular the calculation and determination of the various 
quantities and prices. 

Article 12 

Tariff quotas  for the products listed  in Article 1 resulting  from 
agreements concluded  in accordance with Article 228 of the Treaty or from 
any other act of the Council pursuant to the Treaty shall be opened and 
administered  in accordance with detailed rules adopted under the procedure 
laid down in Article 27. Such detailed  rules shall provide for annual 
quotas, suitably phased over the year, to be opened and, where appropriate, 
for: 

(a) guarantees covering the nature, provenance and origin of the product, 

(b) recognition of the document used  for verifying the guarantees referred 

to in  (a), and 

(c) the conditions under which import licences are issued and their term of 

validity. 

Article 13 

1.  To the extent necessary  to enable the products listed  in Article  1 to 

be exported on the basis of quotations or prices for. those products on 
the world market and within the limits resulting  from agreements 
concluded  in accordance with Article 228 of the Treaty, the difference 
between those quotations or prices and prices in the Community may be 
covered by export refunds. 

2.  Refunds shall be the same for the whole Community. They may vary 

according to destination. 

Refunds shall be fixed in accordance with the procedure  laid down in 
Article 27. 

Refunds may be fixed: 

(a) 

at regular intervals, 

(b) 

by invitation to tender. 

- 57 - 

O.LI 
I 
I 

Refunds  fixed at regular  intervals may, where necessary, be adjusted  in 
the intervening period by the Commission at the request of a Member 
State or on its own initiative. 

3.  When the amount of the refund  is set, account shall be taken in 
particular of the need to establish a balance between the use of 
Community basic agricultural products for export as processed goods to 
third countries and the use of products from these countries admitted 
for inward processing. 

4.  Refunds shall be granted only on application and on presentation of the 

relevant export licence. 

5.  The refund applicable to exports of products listed  in Article 1 

exported  shall be that applicable on the day of application  for the 
licence and, in the case of a differentiated refund, that applicable on 
the same day for the destination  indicated on the licence. 

6.  Paragraphs 3 and 4 may be waived  in the case of products listed in 

Article 1 on which refunds are paid under  food-aid operations, in 
accordance with the procedure laid down  in Article  27. 

7.  Detailed  rules for the application of this Article shall be adopted in 

accordance with the procedure  laid down  in Article 27. 

Article 14 

To the extent necessary  for the proper working of the common organization 
of the market in beef and veal, the Commission, acting in accordance with 
the procedure  laid down in Article 27, may prohibit the use of inward or 
outward processing arrangements in whole or in part for the products listed 
in Article 1. 

Article 15 

The general rules for the interpretation of the Combined  Nomenclature 
and the detailed  rules for its application  shall apply to the tariff 
classification of products covered  by this Regulation; the tariff 
nomenclature resulting  from the application of this Regulation  shall be 
incorporated  in the common customs tariff. 

Save as otherwise provided  for in this Regulation or pursuant to a 
provision thereof, the following  shall be prohibited  in trade with 
third countries: 

-  the levying of any charge having equivalent effect to a customs 

duty, 

-  the application of any quantitative restriction or measure having 

equivalent effect. 

Article 16 

If, by reason of an increase in imports or exports, the Community 
market  in one or more of the products listed  in Article  1 is affected 
by, or is threatened with, serious disturbance  likely to jeopardize the 
achievement of the objectives set out in Article 39 of the Treaty, 
appropriate measures may be applied  in trade with third countries until 
such disturbance or threat of disturbance has ceased. 

If the situation referred to in paragraph 1 arises, the Commission 
shall, at the request of a Member State or on its own initiative, 
decide upon the necessary measures; the Member States shall be notified 
of such measures, which shall be immediately applicable. If the 
Commission receives a request  from a Member State, it shall take a 
decision thereon within three working days following receipt of the 
request. 

- 59 -

% 

3.  Measures decided  upon by the Commission may be referred  to the Council 
by any Member State within three working days of the day on which they 
were notified. The Council shall meet without delay. It may, acting by 
a qualified majority, amend or annul the measure in question. 

4.  The Commission  shall adopt detailed  rules for the application of this 
Article in accordance with the procedure  laid down in Article 27. 

5.  This Article shall be applied having regard to the obligations arising 
from agreements concluded  in accordance with Article 228(2) of the 
Treaty." 

(3)  Article 22a  is amended  as follows: 

(a) 

paragraph  2 is deleted. 

(b) 

paragraph  3 becomes paragraph 2. 

II.  Council Regulation  (EEC) No 98/69 of  16 January  1969  (OJ No L 14, 

21.1.1969, p.2),  as amended by Regulation  (EEC) No 429/77  (OJ No L 61, 
5.3.1977, p.18) 

Article  1 is replaced by the following: 

"Article 1 

1.  Disposal of the products held by intervention agencies may be 

undertaken only: 

(a) 

where the products are intended  for a particular use, or 

(b) 

where the products are intended  for export, or 

(c) 

in the case of disposal without a specific destination, if no 
risk of disturbance of the market results, having regard  in 
particular to the level of average market prices for adult 
bovine animals in the Community and in the Member States, as 
recorded  in accordance with Regulation  (EEC) No 1982/87, or 

-  60 -

S3 

(d) 

where  removal  from  storage  is  necessary  for  technical  reasons. 

In  the  cases  referred  to  in paragraph  1(a)  and  (b), special  conditions 
may  be  laid  down  to  ensure  that  the  products  are  not  used  for  a  purpose 
other  than  that  for  which  they  were  intended  and  to  take- account  of  the 
particular  requirements  of  such  sales. 

To  ensure  that  the  obligations  entered  into  are  fulfilled,  such 
conditions  may  include  the  provision  of  a  security which  shall  be 
forfeited  in whole  or  in part  if the  said  obligations  are  not  or  are 
only  partially  fulfilled." 

III.  Council  Regulation  (EEC)  No  885/68  of  28  June  1968  (OJ  No  L  156, 

4.7.1968,  p . 2 ),  as  last  amended  by  Regulation  (EEC)  No  427/77 
(OJ  No  L  61, 5.3.1977,  p.16) 

Council  Regulation  (EEC) No  1157/92  of  28 April  1992  (OJ No  L  122, 
7.5.1992,  p.4) 

The  above  Regulations  are  repealed. 

-  61 

-

ANNEX IX 

SHEEPMEAT AND GOATMEAT 

11 

I.  Council Regulation  (EEC) No 3013/89 of 25 September  1989  (OJ No L 289, 
7.10.1989, p.l), as last amended by Regulation  (EC) No 1886/94  (OJ No L 
197, 30.7.1994, p.30). 

Title II is replaced by the following: 

"Title II 

Trade with third countries 

Article 9 

1.  Imports into the Community, or exports therefrom, of any of the 

products  listed  in Article  1 may be subject to presentation of an 
import or export licence. 

Licences shall be issued by the Member States to any applicant, 
irrespective of. his place of establishment  in the Community and without 
prejudice to measures taken for the application of Article 12. 

Import and export  licences shall be valid throughout the Community. The 
issuing of such licences may be subject to the lodging of a security 
guaranteeing  that the products are imported or exported during the term 
of validity of the licence; the security shall be forfeited  in whole or 
in part if import or export  is not carried out, or is only carried out 
partially, within that period. 

2.  The term of validity of licences and other detailed rules for the 

application of this Article shall be adopted in accordance with the 
procedure  laid down in Article 30. 

- 62 -

Article 10 

T] 

Unless this Regulation provides otherwise, the rates of duty in the 
common customs tariff  shall apply to the products listed  in Article 1 

Article 11 

1.  In order to prevent or counteract adverse effects on the market  in the 

Community which may result from imports of certain products listed in 
Article 1, imports of one or more of such products at the rate of duty 
laid down in the common customs tariff may be subject to payment of an 
additional  import duty under the conditions set out in Article 5 of the 
Agreement on Agriculture concluded  in accordance with Article 228 of 
the Treaty  in the framework of the Uruguay Round of multilateral trade 
negotiations. 

2.  The Commission  shall adopt detailed rules for the application of this 

Article in accordance with the procedure laid down in Article 30. Such 
detailed  rules shall specify  in particular: 

(a) 

the products to which additional  import duties may be applied, 

(b) 

the criteria  for triggering the application of paragraph  1 and 
in particular the calculation and determination of the various 
quantities and prices. 

Article 12 

Tariff quotas for the products listed  in Article 1 resulting from 
agreements concluded  in accordance with Article 228 of the Treaty or 
from any other act of the Council pursuant to the Treaty shall be 
opened and administered  in accordance with detailed rules adopted under 
the procedure  laid down in Article 30. Such detailed rules shall 
provide  for annual quotas, suitably phased over the year, to be opened 
and, where appropriate, for: 

(a) 

guarantees covering the nature, provenance and origin of the 
product, 

- 63 -

\oo 

(b) 

(c) 

recognition of the document used  for verifying the guarantees 
referred to in  (a), and 

the conditions under which import  licences are issued and their 
term of validity. 

Article 13 

1.  To the extent necessary  for the proper working of the common 

organization of the market in sheepmeat and goatmeat, the use of inward 
or outward  processing  arrangements may be prohibited  in whole or in 
part for the products listed  in Article 1. 

2.  Measures adopted pursuant to this Article shall be decided on in 

accordance with the procedure  laid down  in Article 23. 

Article 14 

1.  The general rules for the interpretation of the Combined  Nomenclature 

and the detailed rules for its application  shall apply to the tariff 
classification of products covered by this Regulation; the tariff 
nomenclature resulting  from the application of this Regulation  shall be 
incorporated  in the common customs tariff. 

2.  Save as otherwise provided  for in this Regulation or pursuant to a 
provision thereof, the following  shall be prohibited  in trade with 
third countries: 

-  the levying of any charge having equivalent effect to a customs 

duty, 

the application of any quantitative restriction or measure having 
equivalent effect. 

- 64 -

Article 15 

1.  If, by reason of an increase in imports or exports, the Community 

market  in one or more of the products listed  in Article  1 is affected 
by, or is threatened with, serious disturbance  likely to jeopardize the 
achievement of the objectives set out  in Article 39 of the Treaty, 
appropriate measures may be applied  in trade with third countries until 
such disturbance or threat of disturbance has ceased. 

2.  If the situation referred to in paragraph 1 arises, the Commission 

shall, at the request of a Member State or on its own initiative, 
decide upon the necessary measures; the Member States shall be notified 
of such measures, which shall be immediately  applicable. If the 
Commission receives a request from a Member State, it shall take a 
decision thereon within three working days following receipt of the 
request. 

3.  Measures decided upon by the Commission may be referred to the Council 
by any Member State within three working days of the day on which they 
were notified. The Council shall meet without delay. It may, acting by 
a qualified majority, amend or annul the measure  in question. 

4.  The Commission  shall adopt detailed  rules  for the application of this 
Article  in accordance with the procedure  laid down in Article 30. 

5.  This Article shall be applied having regard to the obligations arising 
from agreements concluded  in accordance with Article 228(2) of the 
Treaty." 

II.  Council Regulation  (EEC) No 2641/80 of 14 October  1980  (OJ No L 275, 
18.10.1980, p.2),  as last amended by Regulation  (EEC) No 3890/92 
(OJ No L 391, 31.12.1992, p.51) 

Council Regulation  (EEC) No 2642/80 of 14 October  1980  (OJ No L 275, 
18.10.1980, p.4),  as last amended by Regulation  (EEC) No 3939/87 
(OJ No L 373, 31.12.1987, p.l) 

- 65 - 

J  „ 

Council Regulation  (EEC) No 3643/85 of 19 December  1985  (OJ No L 348, 
24.12.1985, p.2),  as last amended by Regulation  (EEC) No 3890/92 
(OJ No L 391, 31.12.1992, p.51) 

The above Regulations are repealed. 

- 66 -

ANNEX X 

PIGMEAT 

Council Regulation  (EEC) No 2759/75 of 29 October 1975  (OJ No L 282, 
1.11.1975, p.l), as last amended by Regulation  (EEC) No 1249/89 
(OJ No L 129, 11.5.1989, p.12). 

(1) The second subparagraph of Article 4(1) is replaced by the following: 

"The basic price shall be fixed taking account, in particular, of the 
need to fix this price at a level which contributes towards  stabilizing 
market prices without, however, leading to the formation of  structural 
surpluses in the Community." 

(2) Article 5(2) is replaced by the following: 

"For products of standard quality other than pig carcases, buying-in 
prices shall be derived  from the buying-in price for pig carcases on 
the basis of the ratio existing between the commercial value of these 
products to the commercial value of pig carcases." 

(3) The following point is added to Article 5(4): 

"(d)  fixing the coefficient expressing the ratio referred to in 

paragraph  2." 

(4) Title II is replaced by the following: 

"Title II 

Trade with third countries 

Article 8 

1.  Imports into the Community, or exports therefrom, of any of the 

products listed  in Article 1(1) may be subject to presentation of an 
import or export licence. 

Licences shall be issued by the Member States to any applicant, 
irrespective of his place of establishment in the Community  and without 
prejudice to measures taken for the application of Articles 11 and 13. 

Import and export licences shall be valid throughout the Community. 
Such licences shall be issued subject to the lodging of a security 
guaranteeing that the products are imported or exported during the term 
of validity of the licence; the security  shall be forfeited  in whole or 
in part if import or export is not carried out, or is only carried out 
partially, within that period. 

2.  The term of validity of licences and other detailed rules for the 

application of this Article shall be adopted  in accordance with the 
procedure  laid down in Article 24. 

- 67 -

Article 9 

An 

1.  Unless this Regulation provides otherwise, the rates of duty  in the 

common customs tariff  shall apply to the products listed in 
Article 1(1). 

Article 10 

1.  In order to prevent or counteract adverse effects on the market  in the 

Community which may result from imports of certain products  listed in 
Article  1(1), imports of one or more of such products at the rate of 
duty  laid down in the common customs tariff may be subject to payment 
of an additional  import duty under the conditions set out in Article 5 
of the Agreement on Agriculture concluded  in accordance with 
Article 228 of the Treaty in the framework of the Uruguay Round of 
multilateral trade negotiations. 

2.  The Commission  shall adopt detailed rules for the application of this 

Article  in accordance with the procedure  laid down  in Article 24. Such 
detailed  rules shall  specify  in particular: 

(a) 

the products to which additional  import duties may be applied, 

(b) 

the criteria  for triggering the application of paragraph  1 and 
in particular the calculation and determination of the various 
quantities and prices. 

Article 11 

Tariff quotas for the products listed  in Article  1(1) resulting  from 
agreements concluded  in accordance with Article 228 of the Treaty or 
from any other act of the Council pursuant to the Treaty  shall be 
opened  and administered  in accordance with detailed rules adopted under 
the procedure  laid down in Article 24. Such detailed  rules shall 
provide for annual quotas, suitably phased over the year, to be opened 
and, where appropriate, for: 

(a) 

(b) 

(c) 

guarantees covering the nature, provenance and origin of the 
product, 

recognition of the document used  for verifying the guarantees 
referred to in  (a), and 

the conditions under which  import  licences are issued and their 
term of validity. 

Article 12 

Where prices on the Community market rise significantly and where that 
situation  is likely to continue, thereby disturbing or threatening to 
disturb that market, appropriate measures may be taken. 

Detailed rules for the application of this Article shall be adopted in 
accordance with the procedure laid down in Article  24. 

-  68 -

Article  13 

1.  To  the  extent  necessary  to  enable  the products  listed  in Article  1(1) 

to  be  exported  on  the  basis  of  quotations  or  prices  for  those  products 
on  the world  market  and  within  the  limits  resulting  from  agreements 
concluded  in  accordance  with  Article  228  of  the  Treaty,  the  difference 
between  those  quotations  or  prices  and  prices  in the  Community  may  be 
covered  by  export  refunds. 

2.  Refunds  shall  be  the  same  for  the whole  Community.  They  may  vary 

according  to  destination. 

Refunds  shall  be  fixed  in  accordance  with  the  procedure  laid  down  in 
Article  24. 

Refunds  may  be  fixed: 

(a) 

at  regular  intervals, 

(b) 

by  invitation  to  tender. 

Refunds  fixed  at  regular  intervals  may,  where  necessary,  be  adjusted  in 
the  intervening  period  by  the  Commission  at  the  request  of  a  Member 
State  or  on  its  own  initiative. 

3.  When  the  amount  of  the  refund  is  set,  account  shall  be  taken  in 

particular  of  the  need  to  establish  a balance  between  the  use  of 
Community  basic  agricultural  products  for  export  as processed  goods  to 
third  countries,  and  the  use  of  products  from  these  countries  admitted 
for  inward  processing. 

4.  Refunds  shall  only  be  granted  on  application  and  on  presentation  of  the 

relevant  export  licence. 

5.  The  refund  applicable  to  exports  of  products  listed  in Article  1(1) 

shall  be  that  applicable  on  the  day  of  application  for  the  licence  and, 
in  the  case  of  a differentiated  refund,  that  applicable  on  the  same  day 
for  the  destination  indicated  on  the  licence. 

6.  Paragraphs  4 and  5 may  be waived  in the  case  of  products  listed  in 

Article  1(1) on which  refunds  are paid  under  food-aid  operations,  in 
accordance  with  the  procedure  laid  down  in Article 24. 

7.  Detailed  rules  for  the  application  of  this Article  shall  be  adopted  in 

accordance  with  the  procedure  laid  down  in Article  24. 

Article  14 

1.  To  the  extent  necessary  for  the  proper  working  of  the  common 

organization  of  the market  in  pigmeat,  the  use  of inward  processing 
arrangements  may  be  prohibited  in whole  or  in part  in respect  of 
products  listed  in Article  1(1) which  are  intended  for  the  manufacture 
of  products  listed  in  that  same  paragraph. 

2.  Measures  adopted  pursuant  to  this  Article  shall  be  decided  on  in 

accordance  with  the  procedure  laid  down  in Article  24. 

-  JS  -

Article 15 

1.  The general rules for the interpretation of the Combined  Nomenclature 

and the special rules for its application  shall apply to the 
classification of products covered by this Regulation; the tariff 
nomenclature resulting  from the application of this Regulation shall be 
incorporated  in the common customs tariff. 

2.  Save as otherwise provided  for in this Regulation or pursuant to a 
provision thereof, the following shall be prohibited  in trade with 
third countries: 

-  the levying of any charge having equivalent effect to a customs 

duty, 

-  the application of any quantitative restriction or measure having 

equivalent effect. 

Article 16 

1.  If, by reason of an increase  in imports or exports, the Community 

market in one or more of the products listed  in Article 1(1) is 
affected by, or is threatened with, serious disturbance  likely to 
jeopardize the achievement of the objectives set out  in Article 39 of 
the Treaty, appropriate measures may be applied  in trade with third 
countries until such disturbance or threat of disturbance has ceased. 

2.  If the situation referred to in paragraph 1 arises, the Commission 

shall, at the request of a Member State or on its own initiative, 
decide upon the necessary measures; the Member States shall be notified 
of such measures, which shall be immediately applicable. If the 
Commission receives a request from a Member State, it shall take a 
decision thereon within three working days following receipt of the 
request. 

» 

3.  Measures decided upon by the Commission may be referred to the Council 
by any Member State within three working days of the day on which they 
were notified. The Council shall meet without delay. It may, acting by 
a qualified majority, amend or annul the measure in question. 

4.  The Commission sl>all adopt detailed rules for the application of this 
Article in accordance with the procedure laid down in Article 24. 

5.  This Article shall be applied having regard to the obligations arising 

.from agreements concluded  in accordance with Article 228 of the 
Treaty." 

II.  Council Regulation  (EEC) No 2764/75 of 29 October  1975  (OJ No L 282, 

1.11.1975, p.21), as last amended by Regulation  (EEC) No 4160/87  (OJ No 
L 392, 31.12.1987, p. 46) 

Council Regulation  (EEC) No 2765/75 of 29 October  1975  (OJ No L 282, 
1.11.1975, p. 23) 

Council Regulation  (EEC)' No 2766/75 of 29 October  1975  (OJ No L 282, 
1.11.1975, p. 25), as last amended by Regulation  (EEC) No 3906/87  (OJ 
No L 370, 30.12.1987, p. 11) 

- 70 -

ÀO'l 

Council Regulation  (EEC) No 2768/75 of 29 October  1975  (OJ No L 282, 
1.11.1975, p. 39) 

Council Regulation  (EEC) No 2769/75 of 29 October  1975  (OJ No L 282, 
1.11.1975, p. 43) 

The above Regulations are repealed. 

- 71 -

ANNEX XI 

POULTRYMEAT 

AQ% 

I.  Council Regulation  (EEC) No 2777/75 of 29 October  1975  (OJ No L 282, 
1.11.1975,  p.77), as last amended by Regulation  (EEC) No 1574/93 
(OJ No L 52, 24.6.1993, p.l). 

(1) Articles  3 to 11 are replaced by the following: 

"Tùrticle 3 

1.  Imports  into the Community, or exports therefrom, of any of the 

products  listed  in Article 1(1) may be subject to presentation of an 
import or export licence. 

Licences shall be issued by tlVe Member States to any applicant, 
irrespective of his place of establishment in the Community  and without 
prejudice to measures taken for the application of Articles 6 and 8. 

Import and export licences shall be valid throughout the Community. 
Such  licences shall be issued subject to the lodging of a security 
guaranteeing that the products are imported or exported during the term 
of validity of the licence; the security  shall be forfeited  in whole or 
in part  if import or export is not carried out, or is only carried out 
partially, within that period. 

2.  The term of validity of licences and pther detailed  rules for the 

application of this Article shall be adopted  in accordance with the 
procedure  laid down in Article 17. 

i 

Article 4 

Unless this Regulation pr<5videFs otherwise, the rates of duty  in the 
common customs tariff shall apply to the products listed in 
Article 1(1) . 

r i°'  ~~'~'' 

Article 5 

1.  In order to prevent or counteract adverse effects on the market  in the 

Community which may result from imports of certain products listed in 
Article 1(1), imports of one or more of such products at the rate of 
duty laid down in the common customs tariff may be subject to payment 
of an additional import duty under the conditions set out in Article 5 
of the Agreement on Agriculture concluded  in accordance with 
Article 228 of the Treaty in the framework of the Uruguay Round of 
multilateral trade negotiations. 

2.  The Commission  shall adopt detailed  rules for the application of this 

Article  in accordance with the procedure  laid down in Article 17. Such 
detailed  rules shall specify in particular: 

(a) 

the products to which additional  import duties may be applied, 

(b) 

the criteria  for triggering the application of paragraph  1 and 
in particular the calculation and determination of the various 
quantities and prices. 

- 7 2- 

A r t i c le  6 

y{Qo 

Tariff quotas  for the products listed  in Article  1(1) resulting  from 
agreements concluded  in accordance with Article 228 of the Treaty or from 
any other act of the Council pursuant to the Treaty shall be opened and 
administered  in accordance with detailed rules adopted under the procedure 
laid down in Article  17. Such detailed rules shall provide  for annual 
quotas, suitably phased over the year, to be opened and, where appropriate, 
for: 

(a) guarantees covering the nature, provenance and origin of the product, 

(b) recognition of the document used for verifying the guarantees referred 

to in  (a), and 

(c) the conditions under which  import licences are issued  and their term of 

validity. 

Article 7 

Where prices on the Community market rise significantly and where that 
situation  is likely to continue, thereby disturbing or threatening to 
disturb that market, appropriate measures may be taken. 

Detailed  rules  for the application of this Article shall be adopted in 
accordance with the procedure laid down in Article 17 

Article 8 

1.  To the extent necessary to enable the products listed  in Article 1(1) 
to be exported on the basis of prices for those products on the world 
market and within the limits resulting  from agreements concluded in 
accordance with Article 228 of the Treaty, the difference between those 
prices and prices  in the Community ma,y, be_.covered by export refunds. 

2.  Refunds shall be the same for the whole Community. They may vary 

according to destination. 

Refunds shall be fixed in accordance with the procedure laid down in 
Article 17. 

Refunds may be fixed: 

(a) 

at regular intervals, 

(b) 

by invitation to tender. 

/ 

Refunds fixed at regular intervals may, where necessary, be adjusted in 
the intervening period by the Commission at the request of a Member 
State or on its own initiative. 

3.  When the amount of the refund  is set, account shall be taken in 
particular of the need to establish a balance between the use of 
Community basic agricultural products for export as processed goods to 
third countries, and the use of products  from those countries admitted 
for inward processing. 

4.  Refunds shall only be granted on application and on presentation of the 

relevant export  licence. 

- 73 - 

i 40 

5.  The refund applicable to exports of products listed in Article  1(1) 

shall be that applicable on the day of application  for the licence and, 
in the case of a differentiated refund, that applicable on the same day 
for the destination  indicated on the licence. 

6.  Paragraphs 4 and 5 may be waived  in the case of products listed in 

Article 1(1) on which refunds are paid under food-aid operations, in 
accordance with the procedure laid down in Article 17. 

7.  Detailed rules for the applàcafc&on of this Article shall be adopted in 

accordance with the procedure laid down in Article 17. 

Article 9 

To the extent necessary  for the proper working of the common organization 
of the market  in poultrymeat, the use of inward processing arrangements may 
be prohibited  in whole or in part in respect of products listed in 
Article 1 which are intended  for the manufacture of products listed in 
Article 1(1). 

Measures adopted pursuant to this Article shall be decided on in accordance 
with the procedure  laid down  in Article 17. 

Article 10 

1.  The general rules for the interpretation of the Combined Nomenclature 

and the special rules for its application shall apply to the 
classification of products covered by this Regulation; the tariff 
nomenclature resulting  from the application of this Regulation shall be 
incorporated  in the common customs tariff. 

2.  Save as otherwise provided  for in this Regulation or pursuant to a 
provision thereof, the following shall be prohibited  in trade with 
third countries: 

-  the levying of any charge having equivalent effect to a customs 

duty, 

the application of any quantitative restriction or measure having 
equivalent effect. 

Article 11 

1.  If, by reason of an increase in imports or exports, the Community 
•market in one or more of the products listed in Article 1(1) is 

affected by, or is threatened with, serious disturbance likely to 
jeopardize the achievement of the objectives set out in Article 39 of 
the Treaty, appropriate measures may be applied  in trade with third 
countries until such disturbance or threat of disturbance has ceased. 

2.  If the situation referred to in paragraph 1 arises, the Commission 

shall, at the request of a Member State or on its own initiative, 
decide upon the necessary measures; the Member States shall be notified 
of such measures, which shall be immediately applicable. If the 
Commission receives a request from a Member State, it shall take a 
decision thereon within three working days following receipt of the 
request. 

3.  Measures decided upon by the Commission may be referred  to the Council 
by any Member State within three working days of the day on which they 
were notified. The Council  shall meet without delay. It may, acting by 
a qualified majority, amend or annul the measure in question. 

4.  The Commission  shall adopt detailed  rules for the application of this 
Article  in accordance with the procedure laid down in Article 17. 

5.  This Article shall be applied having regard to the obligations arising 
from agreements concluded  in accordance! «yqt h Article 228(2) of the 
Treaty. " 

=  r- .••;..-

(2) Article 12 is deleted. 

II.  Council Regulation  (EEC) No 2778/75 of 29 October  1975  (OJ No L 282, 

1.11.1975,  p.84), as last amended by Regulation  (EEC) No 3714/92  (OJ No 
L 378, 23.12.1992,  p.23). 

Council Regulation  (EEC) No 2779/75 of 29 October  1975  (OJ No L 282, 
1.11.1975,  p.90). 

Council Regulation  (EEC) No 2780/75 of 29 October  1975  (OJ No L 282, 
1.11.1975,  p.94). 

The above Regulations are repealed. 

- 

75  -  - 

J  A  -

ANNEX XII 

EGGS, 
OVALBUMIN AND LACTALBUMIN 

Council Regulation  (EEC) No 2771/75 of 29 October  1975  (OJ No L 282, 
1.11.1975, p.49), as last amended by Regulation  (EEC) No 1574/93 
(OJ No L 152, 24.6.1993,  p.l). 

(1)  Articles 3 to 11  (inclusive) are replaced by the following: 

"Article 3 

1.  Imports into the Community, or exports therefrom, of any of the 

products  listed  in Article 1(1) shall be subject to presentation of an 
import or export licence. 

Licences shall be issued by the Member States to any applicant, 
irrespective of his place of establishment  in the Community  and without 
prejudice to measures taken for the application of Articles 6 and 8. 

Import and export  licences shall be valid throughout the Community. 
Such licences shall be issued  subject to the lodging of a security 
guaranteeing  that the products are imported or exported during the term 
of validity of the licence; the security  shall be forfeited  in whole or 
in part if import or export  is not carried out, or is only carried out 
partially, within that period. 

2.  The term of validity of licences and other detailed rules for the 

application of this Article shall be adopted  in accordance with the 
procedure  laid down  in Article  17. 

Article 4 

Unless this Regulation provides otherwise, the rates of duty in the common 
customs tariff shall apply to the products listed in Article 1(1). 

Article 5 

1.  In order to prevent or counteract adverse effects on the market  in the 

Community which may  result from imports of certain products listed in 
Article 1(1), imports of one or more of such products at the rate of 
duty  laid down in the common customs tariff may be subject to payment 
pf an additional  import duty under the conditions set out in Article 5 
of the Agreement on Agriculture concluded  in accordance with 
Article 228 of the Treaty  in the framework of the Uruguay Round of 
multilateral trade negotiations. 

- 76 - 

A Vi 

2.  The Commission  shall adopt detailed  rules for the application of this 

Article in accordance with the procedure  laid down in Article 17. Such 
detailed  rules shall specify  in particular: 

(a) 

the products to which additional  import duties, may be applied, 

(b) 

the criteria  for triggering the application of paragraph  1 and 
in particular the calculation and determination of the various 
quantities and prices. 

* 

Article 6 

Tariff quotas for the products listed  in Article 1(1) resulting  from 
agreements concluded  in accordance with Article 228 of the Treaty or from 
any other act of the Council pursuant to the Treaty shall be opened and 
administered  in accordance with detailed rules adopted under the procedure 
laid down in Article 17. Such detailed  rules shall provide for annual 
quotas, suitably phased over the year, to be opened and, where appropriate, 
for: 

(a) guarantees covering the nature, provenance  and origin of the product, 

(b) recognition of the document used  for verifying the guarantees referred 

to in  (a), and 
(c) 

the conditions under which  import  licences are issued  and their 
term of validity. 

Article 7 

Where prices on the Community market rise significantly and where that 
situation  is likely to continue, thereby disturbing or threatening to 
disturb that market, appropriate measures may be taken. 

Detailed rules for the application of this Article shall be adopted in 
accordance with the procedure laid down in Article 17. 

Article 8 

1.  To the extent necessary to enable the products listed  in Article 1(1) 
to be exported without further processing or in the form of goods 
listed  in Annex  I on the basis of quotations or prices for those 
products on the world market and within the limits resulting from 
agreements concluded  in accordance with Article 228 of the Treaty, the 
difference between those quotations or prices and prices  in the 
Community may be covered by export refunds. 

- 77 -

4-H 

2.  Refunds shall be the same for the whole Community. They may vary 

according to destination. 

Refunds shall be fixed in accordance with the procedure laid down in 
Article 17. 

Refunds may be fixed: 

(a) 

at regular intervals, 

(b) 

by  invitation to tender. 

• 

Refunds fixed at regular intervals may, where necessary, be adjusted in 
the intervening period by the Commission at the request of a Member 
State or on its own initiative. 

3.  When the amount of the refund  is set, account shall be taken in 

particular of the need to establish a balance between the use of basic 
Community  agricultural products for export as processed  goods to third 
countries, and the use of basic agricultural products from these 
countries admitted  for inward processing. 

4.  Refunds on products listed in Article 1(1) and exported without  further 

processing  shall only be granted on application and on presentation of 
the relevant export licence. 

5.  The refund  applicable to exports of products listed  in Article 1(1) 

exported without further processing  shall be that applicable on the day 
of application  for the licence and, in the case of a differentiated 
refund, that applicable on the same day  for the destination  indicated 
on the licence. 

6.  Paragraphs 4 and 5 may be made to apply to products listed in 

Article  1(1) and exported  in the form of goods listed  in Annex I in 
accordance with the procedure laid down in Article 16 of Regulation 
(EC) No 3448/93. 

7.  Paragraphs 4 and 5 may be waived  in the case of products listed in 

Article  1(1) on which refunds are paid under food-aid operations, in 
accordance with the procedure laid down in Article 17. 

8.  Detailed  rules for the application of this Article shall be adopted in 

accordance with the procedure laid down in Article 17. Annex I shall be 
amended  in accordance with the same procedure. 

Article 9 

1.  To the extent necessary  for the proper working of the common 

organization of the market in eggs, the use of inward processing 
arrangements may be prohibited  in whole or in part: 

in respect of products listed in Article 1(1) which are intended for 
the manufacture of products listed  in Article  1(1)(b), and 

-  in special cases, in respect of products listed  in Article 1(1) 

which are intended  for the manufacture of goods listed  in Annex I. 

78 - 

*  /*  ;— 
^  » b . 

2.  Measures adopted pursuant to this Article shall be decided on in 

accordance with the procedure laid down  in Article 17. 

Article 10 

1.  The general rules for the interpretation of the Combined  Nomenclature 

and the special rules for its application shall apply to the 
classification of products covered by this Regulation; the tariff 
nomenclature resulting  from the application of this Regulation shall be 
incorporated  in the common customs tariff. 

2.  Save as otherwise provided  for in this Regulation or pursuant to a 
provision thereof, the following shall be prohibited  in trade with 
third countries: 

-  the levying of any charge having equivalent effect to a customs 

duty, 

the application of any quantitative restriction or measure having 
equivalent effect. 

Article 11 

1.  If, by reason of an increase in imports or exports, the Community 

market  in one or more of the products listed  in Article 1(1) is 
affected by, or is threatened with, serious disturbance  likely to 
jeopardize the achievement of the objectives set out in Article 39 of 
the Treaty, appropriate measures may be applied  in trade with third 
countries until such disturbance or threat of disturbance has ceased. 

2.  If the situation referred to in paragraph  1 arises, the Commission 

shall, at the request of a Member State or on its own initiative, 
decide upon the necessary measures; the Member States shall be notified 
of such measures, which shall be immediately applicable. If the 
Commission receives a request  from a Member State, it shall take a 
decision thereon within three working days following receipt of the 
request. 

3.  Measures decided upon by the Commission may be referred to the Council 
by any Member State within three working days of the day on which they 
were notified. The Council shall meet without delay. It may, acting by 
a qualified majority, amend or annul the measure in question. 

4.  The Commission shall adopt detailed rules for the application of this 
.Article in accordance with the procedure laid down in Article 17. 

5.  This Article shall be applied having regard to the obligations arising 
from agreements concluded  in accordance with Article 228(2) of the 
Treaty." 

(2)  Article  12 is deleted. 

- 79 -

A  Ab 

II.  Council Regulation  (EEC) No 2783/75 of 29 October  1975  (OJ No L 282, 

1.11.1975,  p.104), as last amended by Regulation  (EEC) No 4001/87 
(OJ No L 377, 31.12.1987, p.44). 

(1)  The introductory  sentence in Article 1 is replaced by the following: 

"Unless this Regulation provides otherwise, the rates of duty  in the 
common customs tariff  shall apply to the following products:" 

(2)  Article 2 is replaced by the following: 

"Article 2 

1.  Imports  into the Community, or exports therefrom, of any of the 

products listed in Article 1 shall be subject to presentation of an 
import or export licence. 

Licences  shall be issued by the Member States to any applicant, 
irrespective of his place of establishment  in the Community and without 
prejudice to measures taken for the application of Article 4. 

Import and export  licences shall be valid throughout the Community. 
Such  licences shall be issued subject to the lodging of a security 
guaranteeing  that the products are imported or exported during the term 
of validity of the licence; the security shall be forfeited  in whole or 
in part  if import or export  is not carried out, or is only carried out 
partially, within that period. 

2.  The term of validity of  licences and other detailed  rules for the 

application of this Article shall be adopted  in accordance with the 
procedure  laid down  in Article 17 of Regulation  (EEC) No 2771/75.". 

- 80 -

À a 

(3)  Article 3 is replaced by the following: 

"Article 3 

1.  In order to prevent or counteract adverse effects on the market  in the 

Community which may result from imports of certain products listed in 
Article  1, imports of one or more of such products at the rate of duty 
laid down in the common customs tariff may be subject to payment of an 
additional  import duty under the conditions set out in Article 5 of the 
Agreement on Agriculture concluded  in accordance with Article 228 of 
the Treaty  in the framework of the Uruguay Round of multilateral trade 
negotiations. 

2.  The Commission  shall adopt detailed rules for the application of this . 
Article  in accordance with the procedure laid down in Article 17 of 
Regulation  (EEC) No 2771/75. Such detailed rules shall specify in 
particular: 

(a) 

the products to which additional  import duties may be applied, 

(b) 

the criteria  for triggering the application of paragraph  1 and 
in particular  the calculation and determination of the various 
quantities and prices." 

(4)  Article 4 is replaced by the following: 

"Article 4 

Tariff quotas for the products listed in Article 1 resulting  from 
agreements concluded  in accordance with Article 228 of the Treaty or from 
any other act of the Council pursuant to the Treaty shall be opened and 
administered  in accordance with detailed, rules adopted under the procedure 
laid down in Article 17 of Regulation  (EEC) No 2771/75. Such detailed rules 
shall provide for annual quotas, suitably phased over the year, to be 
opened and, where appropriate, for: 

(a) guarantees covering the nature, provenance and origin of the product, 

(b) recognition of the document used for verifying the guarantees referred 

to in  (a), and 

(c) the conditions under which import licences are issued and their term of 

validity." 

-8 1- 

A  Al 

(5)  Article 5 is replaced by the following: 

"Article 5 

Where prices on the Community market rise significantly and where that 
situation  is likely to continue, thereby disturbing or threatening to 
disturb that market, appropriate measures may be taken. 

Detailed  rules for the application of this Article shall be adopted in 
accordance with the procedure  laid down in Article  17 of Regulation  (EEC) 
No 2771/75." 

(6)  Article 7 is replaced by the following: 

"Article 7 

To the extent necessary  for the proper working of the common organization 
of the market  in eggs and this Regulation, the use of inward processing 
arrangements may be prohibited  in whole or in part in respect of products 
listed  in Article 1 which are intended  for the manufacture of products 
listed in that same Article. 

Measures adopted pursuant to this Article shall be decided on in accordance 
with the procedure laid down in Article 17 of Regulation  (EEC) No 2771/75." 

(7)  Article 8 is replaced by thé following: 

"Article 8 

1.  The general rules for the interpretation of the Combined  Nomenclature 

and the special rules for its application shall apply to the 
classification of products covered by this Regulation; the tariff 
nomenclature resulting  from the application of this Regulation shall be 
incorporated  in the common customs tariff. 

2.  Save as otherwise provided  for in this Regulation or pursuant to a 
provision thereof, the following shall be prohibited  in trade with 
third countries: 

-  the levying of any charge having equivalent effect to a customs 

duty, 

-  the application of any quantitative restriction or measure having 

equivalent effect." 

III. Council Regulation  (EEC) No 2773/75 of 29 October 1975  (OJ No L 282, 
1.11.1975, p.64), as last amended by Regulation  (EEC) No 4155/87 
(OJ No L 392, 31.12.1987, p.29) 

Council Regulation  (EEC) No 2774/75 of 29 October  1975  (OJ No L 282, 
1.11.1975, p.68) 

Council Regulation  (EEC) No 2775/75 of 1 October  1975  (OJ No L 282, 
1.11.1975, p.72) 

The above Regulations are repealed. 

-  82 

-

ANNEX  X I II 

FRUIT AND VEGETABLES 

/ Ml 

Council Regulation  (EEC) No 1035/72 of 18 May 1972  (OJ No L  118, 
20.5.1972, p.l), as last amended by Regulation  (EC) No 3669/93 
(OJ No L 338, 31.12.1993, p.26) 

Title IV is replaced by the following: 

"Title IV 

Trade with third countries 

Article 22 

1.  Imports into the Community, or exports therefrom, of any of the 

products  listed  in Article 1(2) shall be subject to presentation of an 
import or export licence. 

Licences shall be issued by the Member States to any applicant, 
irrespective of his place of establishment  in the Community  and without 
prejudice to measures taken for the application of Articles 25 and 26. 

Import and export licences shall be valid throughout the Community. 
Such licences shall be issued subject to the lodging of a security 
guaranteeing that the products are imported or exported during the term 
of validity of the licence; excep.in cases of force majeure, the 
security shall be forfeited  in whole or in part if import or export is 
not carried out, or is only carried out partially, within that period. 

2.  The term of validity of licences and other detailed rules for the 

application of this Article shall be adopted  in accordance with the 
procedure laid down in Article 33. 

Article 23 

1.  Unless this Regulation provides otherwise, the rates of duty in the 

common Customs tariff shall apply to the products listed in 
Article  1(2). 

2.  Detailed rules for the application of this Article shall be adopted in 

accordance with the procedure laid down in Article 33.  Such detailed 
.rules shall cover in particular the measures necessary to check on 
import prices. 

A r t i c le  24 

42o 

1.  In order to prevent or counteract adverse effects on the market  in the 

Community which may result from imports of certain products  listed in 
Article 1(2), imports of one or more of such products at the rate of 
duty laid down in the common customs tariff may be subject to payment 
of an additional  import duty under the conditions set out in Article 5 
of the Agreement on Agriculture concluded  in accordance with 
Article 228 of the Treaty  in the framework of the Uruguay Round of 
multilateral trade negotiations. 

2.  The Commission shall adopt detailed rules for the application of this 

Article in accordance with the procedure laid down in Article 33. Such 
detailed rules shall specify  in particular: 

(a) 

the products to which additional  import duties may be applied, 

(b) 

the criteria  for triggering  the application of paragraph  1 and 
in particular the calculation and determination of the various 
quantities and prices. 

Article 25 

Tariff quotas for the products listed  in Article 1(2) resulting  from 
agreements concluded  in accordance with Article 228 of the Treaty or 
from any other act of the Council pursuant to the Treaty shall be 
opened and administered  in accordance with detailed rules adopted under 
the procedure laid down in Article 33. Such detailed rules shall 
provide for annual quotas, suitably phased over the year, to be opened 
and, where appropriate, for: 

(a) 

(b) 

(c) 

guarantees covering the nature, provenance and origin of the 
product, 

recognition of the document used for verifying the guarantees 
referred to in  (a), and 

the conditions under which  import licences are issued and their 
term of validity. 

/ 

Article 26 

1.  To the extent necessary to enable the products listed  in Article 1(2) 

to be exported on the basis of the prices of these products in 
•international trade and within the limits resulting from agreements 
concluded in accordance with Article 228 of the Treaty, the difference 
between those prices and.prices in the Community may be covered by 
export refunds. 

2.  Refunds shall be the same for the whole Community. They may vary 

according to destination. 

Refunds shall be fixed,in accordance with the procedure laid down in 
Article 33. 

Refunds may be fixed: 

(a) 
(b) 

at regular intervals, 
by invitation to tender. 

> 

' 

' 

' 

' ' 

- 8 4- 

J, £ i 

Refunds fixed at regular intervals may, where necessary, be adjusted in 
the intervening period by the Commission at the request of a Member 
State or on its own initiative. 

3.  The refund  shall be granted only on request and on presentation of the 

relevant export licence. 

4.  The refund applicable to exports of products  listed  in Article 1(2) 

shall be that applicable on the day of application for the licence and, 
in the case of a differentiated refund, that applicable on the same day 
for the destination  indicated on the licence. 

5.  Paragraphs 3 and 4 may be waived  in the case of products listed in 

Article  1(2) on which refunds are paid under food-aid operations, in 
accordance with the procedure laid down in Article  33. 

6.  Detailed  rules for the application of this Article shall be adopted in 

accordance with the procedure laid down in Article 33. 

Article 27 

1.  Save as otherwise provided  for in this Regulation or pursuant to a 

provision thereof, the following  shall be prohibited when importing the 
products  listed  in Article 1(2) from third countries: 

-  the levying of any charge having equivalent effect to a customs 

duty, 

-  the application of any quantitative restriction or measure having 

equivalent effect. 

2.  The general rules for the interpretation of the Combined  Nomenclature 

and the special rules for its application shall apply to the 
classification of products covered by this Regulation; the tariff 
nomenclature resulting from the application of this Regulation shall be 
incorporated  in the common customs tariff. 

1.  Appropriate measures may be taken when trading with third countries: 

Article 28 

if, by reason of an increase in imports or exports, the Community 
market in one or more of the products  listed in Article 1(2) is 
affected by, or is threatened with, serious disturbance likely to 
jeopardize the achievement of the objectives set out in Article 39 
of the Treaty, 

or if, in the case of the products listed  in Annex Ilia, the 
withdrawal or buying-in operations undertaken pursuant to 
Articles 18 and 19 involve significant quantities. 

-  85  - 

lit 

Such measures may be applied only until, depending on the case, the 
disturbance or threat of disturbance has ceased or the quantities 
withdrawn or bought in have diminished  appreciably. 

2.  If the situation referred to in paragraph  1 arises, the Commission 

shall, at the request of a Member State or on its own initiative, 
decide upon the necessary measures; the Member States shall be notified 
of such measures, which shall be immediately applicable. If the 
Commission receives a request from a Member State, it shall take a 
decision thereon within three working days following receipt of the 
request. 

3.  Measures decided upon by the Commission may be referred to the Council 
by any Member State within three working days of the day on which they 
were notified. The Council shall meet without delay. It may, acting by 
a qualified majority, amend or annul the measure in question. 

4.  The Commission shall adopt detailed rules for the application of this 
Article  in accordance with the procedure  laid down in Article 33. 

5.  This Article shall be applied having regard to the obligations arising 
from agreements concluded in accordance with Article 228(2) of the 
Treaty." 

-  86 - 

423 

II.  Council Regulation  (EEC) No 2518/69 of 9 December  1969  (OJ No L 318, 

18.12.1969, p.17),  as last amended by Regulation  (EEC) No 2455/72 
(OJ No L 266, 14.11.1972, p.7) 

Council Regulation  (EEC) No 2707/72 of 19 December  1972  (OJ No L 291, 
28.12.1972, p.3) 

Council Regulation  (EEC) No 1200/88 of 28 April 1988  (OJ No L 115, 
3.5.1988, p.7),  as last amended by Regulation  (EEC) No 3821/90 
(OJ No L 366, 29.12.1990, p.45) 

The above Regulations are repealed. 

::r.'.i-;j 

nil 

"  8?  ~ 

ANNEX XIV 

PROCESSED FRUIT AND VEGETABLES 

A2-H 

I.  Council Regulation  (EEC) No 426/86 of 24 February  1986  (OJ No L 49, 
27.2.1986, p.l), as last amended by Regulation  (EC) No 1490/94 
(OJ No L 161, 29.6.1994, p.13). 

(1)  Title II is replaced by èhé'following: 

">noo  sri J 

"Title II 

Trade with third countries 

Article 9 

1.  Imports into the Community, or exports therefrom, of any of the 

products  listed  in Article 1(1) may be subject to presentation of an 
import or export  licence. 

Licences shall be issued by the Member States to any applicant, 
irrespective of his place of establishment  in the Community and without 
prejudice to measures taken for the application of Articles 12 and 15. 

Import and export licences shall be valid throughout the Community. The 
issue of such licences may be subject to the lodging of a security 
guaranteeing  that the products are imported or exported during the term 
of validity of the licence;'"excep.in cases of force majeure, the 
security shall be forfeited in whole or in part if import or export is 
not carried out, or is only carried out partially, within that period. 

T  erf:*  o" 

2.  The term of validity of licences and other detailed rules for the 

application of this Article shall be adopted  in accordance with the 
procedure laid down in Article 22. 

Article 10 

1.  Unless this Regulation provides otherwise, the rates of duty  in the 

common customs tariff shall apply to the products listed in 
Article 1(1). 

2.  A minimum  import price for the 1995, 1996, 1997, 1998 and 1999 

marketing years shall be fixed for the products listed in Part B of 
Annex  I. The minimum  import price shall be determined having regard in 
particular to: 

-  the free-at-frontier prices on import into the Community, 
-  the prices obtaining on world markets, 
-  the situation on the internal Community market, 

the trend of trade with third countries. 

Where the minimum  import price is not observed, a countervailing  charge 
in addition to customs duty shall be imposed, based on the prices of 
the main supplier third countries. 

3.  Minimum  import prices and other detailed  rules for the application of 

this Article shall be adopted  in accordance with the procedure provided 
for in Article 22. 

Article 11 

1.  In order to prevent or counteract adverse effects on the market in the 

Community which may result  from imports of certain products listed in 
Article 1(1), imports of one or more of such products at the rate of 
duty laid down  in the common customs tariff may be subject to payment 
of an additional  import duty under the conditions set out in Article 5 
of the Agreement on Agriculture concluded  in accordance with 
Article 228 of the Treaty in the framework of the Uruguay Round of 
multilateral trade negotiations. 

2.  The Commission shall adopt detailed rules for the application of this 

Article  in accordance with the procedure  laid down in Article 22. Such 
detailed  rules shall specify  in particular: 

(a) 

the products to which additional  import duties may be applied, 

(b) 

the criteria  for triggering the application of paragraph  1 and 
in particular the calculation and determination of the various 
quantities and prices. 

Article 12 

Tariff quotas for the products listed in Article 1(2) resulting from 
agreements concluded  in accordance with .Article 228 of the Treaty or from 
any other act of the Council pursuant to 'the Treaty shall be opened and 
administered  in accordance with detailed rules adopted under the procedure 
laid down in Article 22. Such detailed rules shall provide for annual 
quotas, suitably phased over the year, to be opened and, where appropriate, 
for: 

(a) guarantees covering the nature, provenance and origin of the product, 

(b) recognition of the document used for verifying the guarantees referred 

to in  (a), and 

(c) the conditions under which import licences are issued and their term of 

validity. 

To the extent necessary to enable the export of: 

Article 13 

(a) the products not containing added sugar listed  in Article 1(1), 

- 89 - 

\Uo 

(b) -  white sugar and raw sugar falling within heading 1701, 

-  glucose and glucose syrup falling within subheadings  1702 30 51, 

1702 30 59, 1702 30 91, 1702 30 99 and 1702 40 90, 

-  isoglucose falling within subheadings 1702 30 10, 1702 40 10, 

1702 60 10 and 1702 90 30, and 
beet and cane syrup.falling within subheading  1702 90 90, 

used  in the products listed  in Article  1(1)(b), 

on the basis of prices for those products on the world market and 
within the limits resultâligsfrrbm agreements concluded  in accordance 
with Article 228 of the Treaty, the difference between those prices and 
prices in the Communityjuta^i^e covered by export refunds. 

Article 14 

1.  Refunds shall be the same for the whole Community. They may vary 

according to destination. 

Refunds shall be fixed  in accordance with the procedure laid down in 
Article 22. 

Refunds may be fixed: 

(a) 

at regular  intervals, 

(b) 

by  invitation to tender. 

Refunds fixed at regular4iintecv>als may, where necessary, be adjusted in 
the intervening period by the Commission at the request of a Member 
State or on its own initiative. 

2.  The refund referred to in Article 13(b) shall be equal: 

in the case of raw sugar, white sugar and beet and cane syrup, to 
the amount of refund for export of these products unprocessed  as 
fixed in accordance with Article 19 of Council Regulation  (EEC) 
No 1785/81 of 30 June 1981 on the common organization of the markets 
in the sugar sector and with the provisions adopted for its 
application, 

-  in the case of isoglucose, to the amount of the refund  for export 
of this product unprocessed  as fixed in accordance with Article 19 
of Regulation  (EEC) No 1785/81 and with the provisions adopted  for 
its application, 

-  in the case of glucose and glucose syrup, to the amount of the 

refund  for export of these products unprocessed as fixed for each of 
these products in accordance with Article 16 of Council Regulation 
(EEC) No 1766/92 of 30 June 1992 on the common organization of the 
market in cereals and with the provisions adopted  for its 
application. 

- 90 - 

/J  1  ^ 

3.  To qualify  for the refund referred to in Article  13(b), the products 
listed  in Article 1(1)(b) must, on export,  be accompanied by a 
declaration  from the applicant  indicating the amounts of raw sugar, 
white sugar and beet and cane sugar, isoglucose, glucose and glucose 
syrup used  in their manufacture. 

The accuracy of the declaration referred to in the first  subparagraph 
shall be subject to checks by the competent authorities of the Member 
State concerned. 

4.  Where the refund referred to in ArtiTcleprl&Kb) is not sufficient to 
permit exports of the products listed in Article  1(1)(b),  the 
provisions laid down for the refund refeapired to in Article  13(a) shall 
apply to those products instead of those laid down in Article  13(b). 

••'....„' 

i  o i 

5.  Refunds shall only be granted on request and on presentation of the 

relevant export licence. 

6.  The refund  shall be that applicable on the day of application  for the 

licence and, in the case of a differentiated refund, that applicable on 
the same day for the destination indicated on the licence. 

7.  Paragraphs 5 and 6 may be waived  in the case of the refunds referred to 

in Article 13(b) and products listed  in Article  1(1) on which refunds 
are paid under  food-aid operations, in accordance with the procedure 
laid down  in Article 22. 

8.  Detailed  rules for the application of this Article shall be adopted in 

accordance with the procedure laid down in Article 22. 

* 

:0  art!  '{-• 

Article 15 

1.  To the extent necessary  for the proper working of the common 

organizations of the market  in cereals, sugar and fruit and vegetables, 
the use of inward processing arrangements may, in special cases, be 
prohibited  in whole or in part in respect of: 

products listed in Article  13(b), and 

-  fruit and vegetables 

intended  for the manufacture of products listed  in Article  1(1) 

2.  Measures adopted pursuant to this Article shall be decided on in 

•accordance with the procedure laid down in Article 22. 

Article 16 

1.  The general rules for the interpretation of the Combined  Nomenclature 

and the special rules for its application shall apply to the 
classification of products covered by this Regulation; the tariff 
nomenclature resulting from the application of this Regulation shall be 
incorporated  in the common customs tariff. 

- 91 -

y, 

2.  Save as otherwise provided  for in this Regulation or pursuant to a 
provision thereof, the following  shall be prohibited with regard to 
imports from third countries: 

the levying of any charge having equivalent effect to a customs 
duty, 

the application of any quantitative restriction or measure having 
equivalent effect. 

Article 17 

1.  If, by reason of an increase in imports or exports, the Community 

market  in one or more of the products listed  in Article 1(1) is 
affected by, or is threatened with, serious disturbance  likely to 
jeopardize the achievement of the objectives  set out  in Article  39 of 
the Treaty, appropriate measures may be applied  in trade with third 
countries until such disturbance or threat of disturbance has ceased. 

2.  If the situation referred to in paragraph  1 arises, the Commission 

shall, at the request of a Member State or on its own initiative, 
decide upon the necessary measures; the Member States shall be notified 
of such measures, which shall be immediately applicable. If the 
Commission receives a request  from a Member State, it shall take a 
decision thereon within three working days following receipt of the 
request. 

3.  Measures decided upon by the Commission may be referred to the Council 
by any Member State within three working days of the day on which they 
were notified. The Council shall meet without delay. It may, acting by 
a qualified majority, amend or annul the measure in question. 

4.  The Commission shalr adopt detailed rules for the application of this 
Article  in accordance with the procedure laid down in Article  22. 

5.  This Article shall be applied having regard to the obligations arising 
from agreements concluded  in accordance with Article 228(2) of the 
Treaty." 

- 92 - 

A^ 

(2)  Annexes  II, III and IV are deleted. 

II.  Council Regulation  (EEC) No 518/77 of 14 March  1977  (OJ No L 73, 

21.3.1977,  p.22). 

Council Regulation  (EEC) No 519/77 of 14 March  1977  (OJ No L 73, 
21.3.1977,  p.24). 

Council Regulation  (EEC) No 520/77 of 14 March 1977  (OJ No L 73, 
21.3.1977, p.26). 

Council Regulation  (EEC) No 521/77 of 14 March 1977  (OJ No L 73, 
21.3.1977, p.28). 

Council Regulation  (EEC) No 1796/81 of 30 June 1981  (OJ No L 183, 
4.7.1981), as last amended by Regulation  (EEC) No 1122/92  (OJ No L 117, 
1.5.1992, p. 98). 

Council Regulation  (EEC) No 2089/85 of 23 July  1985  (OJ No L 197, 
27.7.1985, p. 10). 

Council Regulation  (EEC) No 3225/88 of 17 October 1988  (OJ No L 288, 
21.10.1988, p. 11). 

Council Regulation  (EEC) No 1201/88 of 28 April 1988  (OJ No L 115, 
3.5.1988, p. 9 ), as last amended by Regulation  (EEC) No 2781/90  (OJ No 
L 265, 28.9.1990, p. 3 ). 

The above Regulations are repealed. 

- 93 -

ANNEX XV 

BANANAS 

1 3O 

Council Regulation  (EEC) No 404/93 of 13 February  1993  (OJ No L 47, 
25.2.1993, p.l), as last amended by Regulation  (EC) No 3518/93  (OJ No L 320, 
22.12.1993, p. 15). 

(1)  Article  15 is replaced by the following: 

"Article 15 

1.  Unless this Regulation provides otherwise, the rates of duty in the 

common customs tariff  shall apply to the products listed in 
Article 1(2). 

2.  In order to prevent or counteract adverse effects on the market  in the 

Community which may result from imports of certain products listed in 
Article  1(2),  imports of one or more of such products at the rate of 
duty  laid down in the common customs tariff may be subject to payment 
of an additional  import duty within the limits set out  in Article 5 of 
the Agreement on Agriculture concluded  in accordance with Article 228 
of the Treaty in the framework of the Uruguay Round of multilateral 
trade negotiations. 

2.  The Commission shall adopt detailed rules for the application of 

paragraph 2 in accordance with the procedure laid down in Article 27. 
Such detailed  rules shall specify in particular: 

(a) 

the products to which additional  import duties may be applied, 

(b) 

the criteria  for. triggering the application of paragraph 2 and 
in particular the calculation and determination of the various 
.quantities and prices." 

(2).  The following Article is inserted: 

"Article 15a 

Articles 15a to 20 inclusive of this Title shall apply only to fresh 
products  falling within CN code ex 0803, excluding plantains. 

For the purposes of this Title: 

1.  'traditional imports from ACP States' means the quantities of bananas 

set out in the Annex exported by each ACP State which has traditionally 
exported bananas to the Community; such bananas shall be referred to as 
'traditional ACP bananas'; 

- 94 - 

A * . 
A ÎA 

2.  'non-traditional  imports from ACP States* means the quantities of 

bananas exported by the ACP States which exceed the quantity defined at 
1 above; such bananas shall be referred to as  'non-traditional ACP 
bananas'; 

3.  "imports from non-ACP third countries' means quantities exported by 

other third countries; such bananas shall be referred to as  'third-
country bananas'; 

4.  'Community bananas' means bananas produced  in the Community; 

5.  'to market' and  'marketing' mean placing on the market, not  including 

making the product available to the final consumer." 

(3)  Article 18 is replaced by the following: 

"Article 18 

1.  A tariff quota of 2.2 million tonnes  (net weight) shall be opened each 
year  for  imports of third-country bananas and non-traditional ACP 
bananas. 

Within the framework of the tariff quota, imports of third-country 
bananas shall be subject to a levy of ECU 75 per tonne and imports of 
non-traditional ACP bananas shall be subject to a zero duty. 

For 1994, the tariff quota shall be 2.1 million tonnes  (net weight). 

Where Community demand determined on the basis of the supply balance 
referred to in Article 16 increases, the volume of the quota shall be 
increased  in consequence, in accordance with the procedure laid down in 
Article 27. Any such adjustment shall be made before 30 November 
preceding the marketing year concerned. 

2.  By derogation  from Article  15(1), non-traditional AÇP bananas  imported 
outside the tariff quota referred to in paragraph  1 of this Article 
shall be subject to a customs duty per tonne equal to the duty referred 
to in Article 15(1) less ECU 100. 

3.  The quantities of third-country bananas and non-traditional ACP bananas 

re-exported  from the Community shall not be charged to the quota 
referred to in paragraph 1. 

4.  The amounts referred to in this Article shall be converted  into 

national currency at the rate applicable to the products concerned in 
connection with the common customs tariff." 

- 95 -

All 

(4)  The following  indents, are added to Article  20: 

"- measures guaranteeing  the provenance and origin of bananas  imported 

within the tariff quota provided  for in Article  18(1), 

- measures necessary to fulfil obligations arising  from agreements 
concluded by the Community  in accordance with Article 228 of the 
Treaty." 

(5)  Article 23 is replaced by the following: 

"Article 22 

The general rules for the interpretation of the Combined  Nomenclature 
and the special rules for its application, shall apply to the 
classification of products covered by this Regulation; the tariff 
nomenclature resulting  from the application of this Regulation shall be 
incorporated  in the common customs tariff." 

(6)  Article 23 is replaced by the following: 

"Article 23 

1.  If, by reason of an increase in imports or exports, the Community 

market  in one or more of the products listed in Article 1 is affected 
by, or is threatened with, serious disturbance  likely likely to 
jeopardize the achievement of the objectives set out in Article 39 of 
the Treaty, appropriate measures may be taken in trade with third 
countries until such disturbance or threat of disturbance has ceased. 

2.  If the situation referred to in paragraph  1 arises, the Commission 

shall, at the request of a Member State or on its own initiative, 
decide upon the necessary measures; the Member States shall be notified 
of such measures, which shall be immediately applicable. If the 
Commission receives a request from a Member State, it shall take a 
decision thereon within three working days following receipt of the 
request. 

3.  Measures decided upon by the Commission may be referred to the Council 
by any Member State within three working days of the day on which they 
were notified. The Council shall meet without delay. It may, acting by 
a qualified majority, amend or annul the measure in question. 

4.  Detailed rules for the application of this Article shall be adopted in 

accordance with the procedure laid down in Article  27. 

5.  This Article shall be applied having regard to the obligations arising 

from international agreements concluded  in accordance with 
Article 228(2) of the Treaty." 

- 96 -

ANNEX XVI 

WINE 

^1 33 

I.  Council Regulation  (EEC) No 822/87 of 16 March  1987  (OJ No L 84, 

27.3.1987, p.l), as last amended by Regulation  (EEC) No 1891/94 
(OJ No L 197, 30.7.1994, p.42). 

(1)  Title IV is replaced by the following: 

"Title IV 

Trade with third countries 

Article 52 

1.  Imports into the Community of any of the products listed in 

Article 1(2)(a) and  (b) shall be subject to presentation of an import 
licence. Imports into the Community of any other products listed in 
Article 1^2) and exports from the Community of any products listed in 
Article  1(2) may be subject to presentation of an export licence. 

2.  Licences shall be issued by Member States to any applicant, 

irrespective of his place of establishment  in the Community and without 
prejudice to measures taken for the application of Articles 55 and 56. 

Licences shall be valid throughout the Community. 

Such licences shall be issued subject to the lodging of a security 
guaranteeing that the products are imported or exported during the term 
of validity of the licence; the security  shall be forfeited in whole or 
in part if import or export is not carried out, or is only carried out 
partially, within that period. 

3.  The following shall be adopted  in accordance with the procedure laid 

down in Article 83: 

(a) 

(b) 

the list of products in respect of which export licences are 
required, 

the term of validity of the licences and other detailed rules 
for the application of this Article. 

- 97 -

Article 53 

/ Î 3 </ 

1.  Unless this Regulation provides otherwise, the rates of duty  in the 

common customs tariff shall apply to the products listed  in Article 1. 

2.  The detailed rules for the application of this Article shall be adopted 
in accordance with the procedure laid down  in Article 83. Such detailed 
rules shall include the provisions necessary  for the verification of 
import prices. 

Article 54 

1.  In order to prevent or counteract adverse effects on the market in the 

Community which may result from imports of certain  agricultural 
products, imports of one or more such products at the rate of duty laid 
down in the common customs tariff may be subject to payment of an 
additional  import duty under the conditions set out in Article 5 of the 
Agreement on Agriculture concluded in accordance with Article 228 of 
the Treaty in the framework of the Uruguay Round of multilateral trade 
hegotiations. 

2.  The Commission shall adopt detailed rules for the application of this 

Article in accordance with the procedure  laid down in Article 83. Such 
detailed rules shall specify  in particular: 

(a) 

the products to which additional  import duties may be applied, 

(b) 

the criteria for triggering the application of paragraph  1 and 
in particular the calculation and determination of the various 
quantities and prices. 

98 -

Article 55 

1 3 s~ 

Tariff quotas for the products listed  in Article 1 resulting from 
agreements concluded  in accordance with Article 228 of the Treaty or from 
any other act of the Council pursuant to the Treaty shall be opened and 
administered  in accordance with detailed  rules adopted under the procedure 
laid down in Article 83. Such detailed  rules shall provide for annual 
quotas, suitably phased over the year, to be opened and, where appropriate, 
for: 

(a) guarantees covering the nature, provenance and origin of the product, 

(b) recognition of the document used for verifying the guarantees referred 

to in  (a), and 

(c) the conditions under which import licences are issued and their term of 

validity. 

"9-~ 

Article 56 

4% 

1.  To the extent necessary  to enable the export of: 

(a) 

products listed in Article 1(2), 

(b) 

sugars falling within Combined Nomenclature code 1701, glucose 
and glucose syrup falling within CN subheadings  1702 30 91, 1702 
30 99, 1702 40 90 and 1702 90 50, including  in the form of 
products falling within subheadings 1702 30 51 and 1702 30 59, 
incorporated  into the products falling within subheadings 2009 
60 11, 2009 60 71, 2009 60 79 and 2204 30 99, 

on the basis of prices for those products on the world market and 
within the limits resulting from agreements concluded  in accordance 
with Article 228 of the Treaty, the difference between those prices and 
prices  in the Community may be covered by export refunds. 

2.  Refunds shall be the same for the^whole Community. They may vary 

according to destination. 

The refunds referred to in paragraph  1(a) shall be fixed  in accordance 
with the procedure  laid down in Article 83. They may be fixed: 

(a) 

at regular intervals, 

(b) 

by invitation to tender. 

Refunds  fixed at regular intervals may, where necessary, be adjusted in 
the intervening period by the Commission at the request of a Member 
State or on its own initiative. 

-  100 - 

/\  n  1 
y\ 

3.  The amount of the refund referred  to in paragraph  1(b) shall be: 

in the case of raw sugar and white sugar, to the amount of refund 
for export of these products unprocessed  as fixed  in accordance with 
Article 19 of Council Regulation  (EEC) No 1785/81 of 30 June 1981 on 
the common organization of the markets  in the sugar sector and with 
the provisions adopted  for its application, 

-  in the case of glucose and glucose syrup, to the amount of the 

refund  for export of these products unprocessed  as fixed  for each of 
these products in accordance with Article 17 of Council Regulation 
(EEC) No 1766/92 of 30 June 1992 on the common organization of the 
market  in cereals and with the provisions adopted  for its 
application. 

4.  To qualify  for the refund referred to in paragraph  1(b), processed 
products must, on export, be accompanied by a declaration  from the 
applicant  indicating the amounts of raw sugar, white sugar, glucose and 
glucose syrup used  in their manufacture. 

The accuracy of this declaration  shall be subject to checks by the 
competent  authorities of the Member State concerned. 

5.  Refunds shall only be granted on application and on presentation of the 

relevant export licence. 

6.  The refund  applicable to exports of products  listed  in Article 1 shall 

be that applicable on the day of application  for the licence and, in 
the case of a differentiated refund, that applicable on the same day 
for the destination  indicated on the licence. 

7.  Paragraphs 4 and 5 may be waived  in the case of products listed in 

Article  1 on which refunds are paid under food-aid operations, in 
accordance with the procedure laid down in Article 83. 

8.  Detailed  rules for the application of this Article shall be adopted in 

accordance with the procedure laid down in Article  83. 

Article 57 

1.  To the extent necessary  for the proper working of the common 

organization of the market in wine the use of inward processing 
arrangements may be prohibited .wholly or partially  in respect of all or 
some of the products listed  in Article 1(2). 

2.  The measures taken pursuant to this Article shall be adopted in 

accordance with the procedure laid down in Article 83. 

-  101 - 

„ ^ ,-

Article 58 

1.  The general rules for the interpretation of the Combined  Nomenclature 

and the special rules for its application  shall apply to the 
classification of products covered by this Regulation; the tariff 
nomenclature resulting  from the application of this Regulation shall be 
incorporated  in the common customs tariff. 

2.  Save as otherwise provided  for in this Regulation or pursuant to a 

provision thereof, the following shall be prohibited: 

the levying of any charge having equivalent effect to a customs 
duty, 

-  the application of any quantitative restriction or measure having 

equivalent effect. 

Article 59 

1.  The import of the products referred to in Article 1.(2) to which alcohol 
has been added, with the exception of those products equivalent to 
products originating  in the Community  in respect of which such an 
admixture is permitted p-ujr^uant to Article 25(1) and  (2), shall be 
prohibited. 

, ,: .., 

2.  Detailed  rules for the application of this Article, and in particular 

the conditions  for the equivalence of products, shall be adopted in 
accordance with the procedure laid down in Article 83. 

Article 60 

1.  If, by reason of an increase in imports or exports, the Community 

market  in one or more of the products listed  in Article 1(2) is 
affected by, or is threatened with, serious disturbance likely to 
jeopardize the achievement of the objectives set out in Article 39 of  t 
the Treaty, appropriate measures may be applied  in trade with third 
countries until such disturbance or threat of disturbance has ceased. 

In order to assess whether the situation justifies the application of 
such measures, the following must be taken into account: 

(a) 

the quantities  in respect of which import licences have been 
issued or applied for and the figures given in the forecast 
supply balance; 

(b) 

where appropriate, the scale of the intervention. 

- 102 

AZ°i 

2.  If the situation referred to in paragraph  1 arises, the Commission 

shall, at the request of a Member State or on its own initiative, 
decide upon the necessary measures; the Member States shall be notified 
of such measures, which shall be immediately applicable. If the 
Commission receives a request  from a Member State, it shall take a 
decision thereon within three working days following receipt of the 
request. 

3.  Measures decided upon by the Commission may be referred to the Council 
by any Member State within three working days of the day on which they 
were notified. The Council shall meet without delay. It may, acting by 
a qualified majority, amend or annul the measure in question. 

4.  The Commission shall adopt detailed rules for the application of this 
Article in accordance with the procedure laid down in Article 83. 

5.  This Article shall be applied having regard to the obligations arising 
from agreements concluded  in accordance with Article 228(2) of the 
Treaty. 

Article 61 

1.  Imported wine intended  for direct human consumption and described with 

the aid of a geographical ascription^hta^iie~ eligible, with regard to 
its marketing  in the Community and with the proviso that reciprocity 
exists, for the control and protection arrangements referred to in 
Article 16 of Regulation  (EEC) No 823/87-i fcir quality wines produced in 
specified regions. 

2.  The provision  laid down in paragraph  1 shall be implemented by means of 

agreements with  interested third countries to be negotiated and 
concluded  in accordance with the procedure laid down in Article 113 of 
the Treaty. 

3.  Detailed rules for the application of this Article shall be adopted in 

accordance with the procedure laid down in Article 83." 

(2)  The following  is inserted after Article 72: 

"Article 72a 

1.  The Member States shall take all necessary measures to enable 

interested parties to prevent, on the terms stipulated  in Articles 23 
and 24 of the Agreement on Tirade-related Aspects of  Intellectual 
Property Rights, the use in the Community of a geographical  indication 
attached to the products referred to in Article 1(2)(b) for products 
not originating  in the place indicated by the geographical  indication 
in question, even where the true origin of the goods is indicated or 
the geographical  indication is used in translation or accompanied by 
expressions such as "kind", "type", "style", "imitation" or the like. 

For the purposes of this Article, "geographical  indications" is taken 
to, mean indications which identify a product as originating  in the 
territory of a third country which is a member of the World Trade 
Organization or in a region or locality within that territory, in cases 
where a certain quality, reputation or other given characteristic of 
the product may be attributed essentially to that geographic place of 
origin. 

2.  Paragraph  1 shall apply notwithstanding other specific provisions in 
Community  legislation  laying down rules for the designation and 

-  103 - 

,  , 

presentation of the products referred to in Article  1(2)(b). 

3.  Detailed  rules for the application of this Article shall be adopted in 

accordance with the procedure  laid down  in Article 83." 

(3)  Annex VII  is deleted. 

- 104 

>H1 

II.  Council Regulation  (EEC) No 344/79 of 5 February  1979  (OJ No L 54, 

5.3.1979, p.67) 

Council Regulation  (EEC) No 345/79 of 5 February  1979  (OJ No L 54, 
5.3.1979, p.69), as amended by Regulation  (EEC) No 2009/81 
(OJ No L 195, 18.7.1981, p.6) 

The above Regulations are repealed. 

- 105 -

ANNEX XVII 

TOBACCO 

AHl 

Council Regulation  (EEC) No 2075/92 of 30 June 1992  (OJ No L 215, 30.7.1992, 
p.70) 

Title IV is replaced by the following: 

"Title IV 

Trade with third  countries 

Article 15 

Unless this Regulation provides otherwise, the rates of duty in the common 
customs tariff  shall apply to the products  listed  in Article 1. 

Article 16 

Tariff quotas  for the products listed  in Article 1 resulting  from 
agreements concluded  in accordance with Article 228 of the Treaty or from 
any other act of the Council!qataisiEant to the Treaty shall be opened and 
administered  in accordance with detailed rules adopted under the procedure 
laid down in Article 23. Such detailed rules shall provide for annual 
quotas, suitably phased over the year, to be opened and, where appropriate, 
for: 

(a) guarantees covering the nature, provenance and origin of the product, 

(b) recognition of the document used for verifying the guarantees referred 

to in  (a), and 

(c) the conditions under which import licences are issued and their terra of 

validity. 

Article 16a 

» 

-

1.  The general rules for the interpretation of the Combined Nomenclature 

and the special rules for its application shall apply to the tariff 
classification of products covered by this Regulation. -

/jH1 

2.  Save as otherwise provided  for in this Regulation or pursuant  to a 
provision thereof, the following  shall be prohibited  in trade with 
third countries: 

(a) 

(b) 

the levying of any charge having equivalent effect to a customs 
duty, 

the application of any quantitative restriction or measure 
having equivalent effect. 

Article 16c 

1.  If, by reason of an increase in imports or exports, the Community 

market  in one or more of the products listed  in Article 1 is affected 
by, or is threatened with, serious disturbance likely to jeopardize the 
achievement of the objectives set out in Article 39 of the Treaty, 
appropriate measures may be applied  in trade with third countries until 
such disturbance or threat of disturbance has ceased. 

2.  If the situation referred to in paragraph  1 arises, the Commission 

shall, at the request of a Member State or on its own initiative, 
decide upon the necessary measures; the Member States shall be notified 
of such measures, which shall be imraadabafcply applicable. If the 
Commission receives a request from a Member State, it shall take a 
decision thereon within three working days! following receipt of the 
request. 

-v-:.-+ 

3.  Measures decided upon by the Commission may be referred to the Council 
by any Member State within three working days of the day on which they 
were notified. The Council shall meet without delay. It may, acting by 
a qualified majority, amend or annul the measure in question. 

4.  The Commission shall adopt detailed rules for the application of this 
Article in accordance with the procedure laid down in Article 23. 

5.  This Article shall be applied having regard to the obligations arising 
from agreements concluded in accordance with Article 228(2) of the 
Treaty." 

-  107 -• 

,  ANNEX XVIII 

HOPS 

A H 4 

Council Regulation  (EEC) No 1696/71 of 26 July 1971  (OJ No L 175, 4.8.1971, 
p.l),  as last amended by Regulation  (EEC) No 3124/92  (OJ No L 313, 
30.10.1992, p.l) 

Title V is replaced by the following: 

"Title V 

Trade with third countries 

Article 14 

Unless this Regulation provides otherwise, the rates of duty in the common 
customs tariff  shall apply to the products listed  in Article 1. 

Article 15 

Tariff quotas  for the products  listed  in Article 1 resulting  from 
agreements concluded  in accordance with Article 228 of the Treaty or from 
any other act of the Council pursuant to the Treaty shall be opened and 
administered  in accordance with detailed rules adopted under the procedure 
laid down in Article 20. Such detailed rules shall provide for annual 
quotas, suitably phased over the year, to be opened and, where appropriate, 
for: 

(a) guarantees covering the nature, provenance and origin of the product, 

(b) recognition of the document used for verifying the guarantees referred 

to in  (a), and 

(c) the conditions under which  import licences are issued and their term of 

validity. 

108  - 

^ -K 

Article 15a 

1.  The general rules for the interpretation of the Combined  Nomenclature 

and the special rules for its application shall apply to the tariff 
classification of products covered by this Regulation. 

2.  Save as otherwise provided  for in this Regulation or pursuant to a 

provision thereof, the following shall be prohibited: 

the levying of any charge having equivalent effect to a customs 
duty, 

the application of any quantitative restriction or measure 
having equivalent effect. 

Article 15c 

1.  If, by reason of an increase in imports or exports, the Community 

market  in one or more of the products listed  in Article 1 is affected 
by, or is threatened with, serious disturbance  likely to jeopardize the 
achievement of the objectives set out in Article 39 of the Treaty, 
appropriate measures may be applied  in trade with third countries until 
such disturbance or threat of disturbance has ceased. 

2.  If the situation referred to in paragraph  1 arises, the Commission 

shall, at the request of a Member State or on its own initiative, 
decide upon the necessary measures; the Member States'shall be notified 
of such measures, which shall be immediately applicable. If the 
Commission receives a request from a Member State, it shall take a 
decision thereon within three working days following receipt of the 
request. 

3.  Measures decided upon by the Commission may be referred to the Council 
by any Member State within three working days of the day on which they 
were notified. The Council shall meet without delay. It may, acting by 
a qualified majority, amend or annul the measure in question. 

4.  The Commission  shall adopt detailed rules for the application of this 
Article in accordance with the procedure laid down in Article 20. 

5.  This Article shall be applied having regard to the obligations arising 
from agreements concluded  in accordance with Article 228(2) of the 
Treaty." 

- 109 - 

ANNEX XIX 

A  H(n 

LIVE TREES AND OTHER PLANTS, BULBS, ROOTS AND THE LIKE, 
CUT FLOWERS AND ORNAMENTAL FOLIAGE 

I.  Council Regulation  (EEC). No 234/68 of 27 February  1968  (OJ No L 55, 
2.3.1968, p.l), as last amended by Regulation  (EEC) No 3336/92 
(OJ No L 336, 20.11.1992,  p.l). 

Articles 8, 9 and 10 are replaced by the following: 

"Article 8 

1.  Imports into the Community of any of the products listed  in Article 1 

may be subject to presentation of an import licence. 

Licences shall be issued by the Member States to any applicant, 
irrespective of his place of establishment  in the Community. 

Import licences shall be valid throughout the Community. Such licences 
shall be issued subject to the lodging of a security guaranteeing that 
the products are imported during the term of validity of the licence; 
the security  shall be forfeited  in whole or in part if import is not 
carried out, or. is only carried out partially, within that period. 

2.  The term of validity of licences and other detailed  rules for the 

application of this Article shall be adopted  in accordance with the 
procedure  laid down in Article 14. 

i 

Article 9 

Unless this Regulation provides otherwise, the rates of duty in the common 
customs tariff shall apply to the products listed  in Article 1. 

Article 10 

Tariff quotas for the products listed in Article 1 resulting from 
agreements concluded  in accordance with Article 228 of the Treaty or from 
any other act of the Council pursuant to the Treaty shall be opened and 
administered  in accordance with detailed rules adopted under the procedure 
laid down in Article 14, Such detailed rules shall provide for annual 
quotas, suitably phased over the year, to be opened and, where appropriate, 
for: 

-  110 -

AHl 

(a) guarantees covering the nature, provenance and origin of the product, 

(b) recognition of the document used for verifying the guarantees referred 

to in  (a), and 

(c) the conditions under which import licences are issued and their term of 

validity. 

Article 10a 

1.  The general rules for the interpretation of the Combined  Nomenclature 

and the special rules for its application shall apply to the tariff 
classification of products covered by this Regulation; the tariff 
nomenclature resulting  from the application of this Regulation shall be 
incorporated  in the common customs tariff. 

2.  Save as otherwise provided  for in this Regulation or pursuant to a 
provision thereof, the following shall be prohibited  in trade with 
third countries: 

the levying of any charge having equivalent effect to a customs 
duty, 

the application of any quantitative restriction or measure having 
equivalent effect. 

Article 10b 

1.  If, by reason of an increase in imports or exports, the Community 

market  in one or more of the products listed  in Article 1 is affected 
by, or is threatened with, serious disturbance likely to jeopardize the 
achievement of the objectives set out in Article 39 of the Treaty, 
appropriate measures may be applied in trade with third countries until 
such disturbance or threat of disturbance has ceased. 

2.  If the situation referred to in paragraph  1 arises, the Commission 

shall, at the request of a Member State or on its own initiative, 
decide upon the necessary measures; the Member States shall be notified 
of such measures, which shall be immediately applicable. If the 
Commission receives a request from a Member State, it shall take a 
decision thereon within three working days following receipt of the 
request. 

3.  Measures decided upon by the Commission may be referred to the Council 
by any Member State within three working days of the day on which they 
were notified. The Council shall meet without delay. It may, acting by ' 
a qualified majority, amend or annul the measure in question. 

Ill -

n 

4.  The Commission  shall adopt detailed rules for the application of this 
Article in accordance with the procedure laid down in Article 14. 

5.  This Article shall be applied having regard to the obligations  arising 
from agreements concluded  in accordance with Article 228(2) of the 
Treaty." 

II.  Council Regulation  (EEC) No 3290/75 of 16 December 1975  (OJ No L 326, 

18.12.1975,  p.4). 

The above Regulation  is repealed. 

- 112  - 

ANNEX XX 

SEEDS 

AH °) 

I.  Council Regulation  (EEC) No 2358/71 of 26 October  1971  (OJ No L 246, 
5.11.1971, p.l), as last amended by Regulation  (EC) No 3375/93  (OJ No 
L 303, 10.12.1993, p.9). 

(1)  Articles 5, 6 and 7 are replaced by the following: 

"Article 5 

1.  Unless this Regulation provides otherwise, the rates of duty in the 

common customs tariff shall apply to the products listed in Article 1. 

2.  The general rules for the interpretation of the Combined  Nomenclature 

and the special rules for its application  shall apply to the 
classification of products covered by this Regulation; the tariff 
nomenclature resulting  from the application of this Regulation  shall be 
incorporated  in the common customs tariff. 

Article 6 

Tariff quotas for the products listed  in Article 1 resulting  from 
agreements concluded  in accordance with Article 228 of the Treaty or from 
any other act of the Council pursuant to the Treaty shall be opened and 
administered  in accordance with detailed  rules adopted under the procedure 
laid down in Article 11. Such detailed rules shall provide for annual 
quotas, suitably phased over the year, to be opened and, where appropriate, 
for: 

(a) guarantees covering the nature, provenance and origin of the product, 

(b) recognition of the document used  for verifying the guarantees referred 

to in  (a), and 

(c) the conditions under which  import licences are issued and their term of 

validity. 

-  113 -

Article 7 

ACQ 

Save as otherwise provided  for in this Regulation or pursuant to a 
provision thereof, the following  shall be prohibited  in trade with third 
countries: 

- 

the levying of any charge having equivalent effect to a customs duty, 

- 

the application of any quantitative restriction or measure having 
equivalent effect. 

Article 7a 

1.  If, by reason of an increase in imports or exports, the Community 

market  in one or more of the products  listed  in Article 1 is affected 
by, or is threatened with, serious disturbance  likely to jeopardize the 
achievement of the objectives set out in Article 39 of the Treaty, 
appropriate measures may be applied  in trade with third countries until 
such disturbance or threat of disturbance has ceased. 

2.  If the situation referred  to in paragraph  1 arises, the Commission 

shall, at the request of a Member. State or on its own initiative, 
decide upon the necessary measures; the Member States shall be notified 
of such measures, which shall be immediately  applicable. If the 
Commission receives a request from a Member State, it shall take a 
decision thereon within three working days following receipt of the 
request. 

3.  Measures decided upon by the Commission may be referred to the Council 
by any Member State within three working days of the day on which they 
were notified. The Council shall meet without delay. It may, acting by 
a qualified majority, amend or annul the measure in question. 

4.  The Commission shall adopt detailed rules for the application of this 
Article in accordance with the procedure  laid down in Article 11. 

5.  This Article shall be applied having regard to the obligations arising 
from agreements concluded  in accordance with Article 228(2) of the 
Treaty." 

(2)  Article 8a is deleted. 

II.  Council Regulation  (EEC) No 1578/72 of 20 July 1972  (OJ No L 168, 

.26.7.1972, p.l), as amended by Regulation  (EEC) No 1984/86 
(OJ No L 171, 28.6.1986, p.3). 

The above Regulation  is repealed. 

4&L 

ANNEX XXI 

MISCELLANEOUS REGULATIONS 

I. Council Regulation  (EEC) No 827/68 of 28 June 1968  (OJ No L 151, 

30.6.1968, p.16),  as last amended by Regulation  (EEC) No 794/94 
(OJ No L 92, 9.4.1994,  p.15). 

(1)  Articles 2 and 3 are replaced by the following: 

"Article 2 

1. Unless this Regulation provides otherwise, the rates of duty  in the 

common customs tariff  shall apply to the products  listed  in the Annex. 

2. The general  rules for the interpretation of the Combined  Nomenclature 

and the special rules for its application  shall apply to the 
classification of products covered by this Regulation; the tariff 
nomenclature resulting  from the application of this Regulation  shall 
be incorporated  in the common customs tariff. 

3. Save as otherwise provided  for in this Regulation or pursuant to a 
provision thereof, and subject to the obligations arising  from 
international  agreements concerning the products  listed  in the Annex, 
the following  shall be prohibited  in trade with third countries: 

- the levying of any charge having equivalent effect to a customs 

duty, 

- the application of any quantitative restriction or measure having 

equivalent effect. 

Article 3 

Tariff quotas  for the products  listed  in the Annex resulting  from 
agreements concluded  in accordance with Article 228 of the Treaty or from 
any other act of the Council pursuant to the Treaty  shall be opened and 
administered  in accordance with detailed  rules adopted under the 
procedure  laid down  in Article 14. Such detailed  rules shall provide for 
annual quotas, suitably phased over the year, to be opened  and, where 
appropriate, for: 

AS su 

(a)  guarantees covering the nature, provenance and origin of the 

product, 

(b)  recognition of the document used  for verifying the guarantees 

referred to in  (a), and 

(c)  the conditions under which  import licences are issued and their term 

of validity. 

Article 3a 

1. If, by reason of an increase in imports or exports, the Community 

market  in one or more of the products listed  in the Annex  is affected 
by, or is threatened with, serious disturbance likely to  jeopardize 
the achievement of the objectives set out in Article 39 of the Treaty, 
appropriate measures may be applied  in trade with third  countries 
until such disturbance or threat of disturbance has ceased. 

2.  If the situation referred to in paragraph  1 arises, the Commission 

shall, at the request of a Member State or on its own initiative, 
decide upon the necessary measures; the Member States shall be 
notified of such measures, which shall be immediately  applicable. If 
the Commission receives a request  from a Member State, it shall take a 
decision thereon within three working days following receipt of the 
request. 

3. Measures decided upon by the Commission may be referred to the Council 
by any Member State within three working days of the day on which they 
were notified. The Council shall meet without delay. It may, acting by 
a qualified majority, amend or annul the measure  in question. 

4. The Commission  shall adopt detailed rules for the application of this 

Article in accordance with the procedure laid down  in Article 6. 

5. This Article shall be applied having regard to the obligations arising 
from agreements concluded  in accordance with Article 228(2) of the 
Treaty." 

(2)  Article 6 is replaced by the following: 

"Article 6 

Where reference  is made to this Article, mesures shall be adopted  in 
accordance with the procedures  laid down in Article 38 of Regulation 
No 136/66/EEC and the corresponding  articles of the other regulations on 
the common organizations of agricultural markets." 

II. 

Council  Regulation  (EEC) No  234/79  of  5 February  1979  (OJ  No  L 34, 
9.2.1979,  p . 2 ),  as  last  amended  by  Regulation  (EEC)  No  3209/89 
(OJ  No  L  312,  27.10.1989,  p . 5 ). 

Article  2(2)  is  deleted. 

- 117 -

ANNEX XXII 

THE MOST REMOTE REGIONS 

^S"f 

I.  Council Regulation  (EEC) No 3763/91 of 16 December  1991  (OJ No L 356, 
24.12.1991, p.l), as amended by Regulation  (EEC) No 3714/92  (OJ No 
L 378, 23.12.1992, p.23). 

Article 2(2) is amended as follows: 

(a) 

In the first subparagraph, the part of the sentence which reads: 
"The levies fixed pursuant to Article 13(1) of Council 
Regulation  (EEC) No 2727/75 of 29 October 1975 on the common 
organization of the market  in cereals" is replaced by: 

"The import duties provided  for in the common customs tariff". 

(b) 

In the second subparagraph, the words  "the levy  (exemption)" are 
replaced  by  "(exemption  from) import duty". 

II.  Council Regulation  (EEC) No 1600/92 of 15 June 1992  (OJ No L 173, 
27.6.1992, p.l), as amended by Regulation  (EEC) No 3714/92  (OJ No 
L 378, 23.12.1992, p.23). 

(1)  In Article 3(1), the words  "Levies and/or" are deleted. 

(2)  In Article  5(1)(a), the words "and/or levies referred to in Article 9 

of Council Regulation  (EEC) No 805/68 on the common organization of the 
market  in beef and veal" are deleted. 

III. Council Regulation  (EEC) No 1601/92 of 15 June 1992  (OJ No L 173, 

27.6.1992, p.13),  as amended by Regulation  (EEC) No 3714/92  (OJ No L 
378, 23.12.1992, p.23). 

(1)  In Article 3(1), the words "Levies and/or" are deleted. 

(2)  In Article  5(1)(a), the words "and/or levies referred to in Article 9 

of Council Regulation  (EEC) No 805/68" are deleted. 

-  118 -

ANNEX XXIII 

PLANT HEALTH LEGISLATION 

Council Directive 77/93/EEC of 21 December  1977  (OJ No L 26, 31.1.1977, 
p.20), as last amended by Directive 94/13/EC  (OJ No L 92, 9.4.1994,  p.27). 

In Article  14(1),  the introductory part of the first subparagraph  is 
replaced by the following: 

"In accordance with the procedure laid down in Article 16 or, in cases of 
emergency, in accordance with that  laid down in Article 17, provision shall 
be made for derogations:". 

.4 re-

Part 6 

Commercial defence 

-'M 

Commercial defence: 

Anti-dumping 

As? 

Proposal for a 

Council Regulation (EC) 

on protection against dumped imports from countries not members of the European Community 

-"•-  ?Mm  9b 

Aï °) 

Explanatory Memorandum 

A. 

Introduction 

The Uruguay Round trade negotiations, concluded in 1994, have led to a new agreement on anti-dumping 
which requires to be implemented into Community legislation in order that, as agreed at Marrakech, it can 
come into effect on 1 January 1995. 

The new Agreement, namely, the Agreement on Implementation of Article VI of the General Agreement 
on Tariffs and Trade 1994 (the Agreement), contains new arid detailed rules on almost every aspect of anti 
dumping and in view of the extent of the changes and to ensure an adequate and transparent 
implementation of the new rules, it is considered necessary to transpose the language of the Agreement 
into Community legislation to the extent possible and for this purpose the Agreement, rather than the 
existing Community legislation, Regulation (EC) No 2423/88*, has been taken as the basis for the 
proposed legislation. 

Additions to the Agreement are few and they have, for the most part, been restricted to: clarifications 
where the Agreement is unclear; incorporation of existing provisions on EU's rather unique procedures and 
decision-making, amended to take account of Court judgements; and the amendment or incorporation of 
EU specific rules on issues, such as negligible import volumes, absorption, circumvention and Community 
interest, on which the Agreement is silent, imprecise or where it merely gives an indication of minima. 

The Agreement sets tougher standards for the imposition of anti-dumping measures with its new and 
detailed rules on the calculation of dumping, its increased procedural requirements for initiation and 
subsequent investigation, its restrictions on the imposition of provisional duties and the restriction on the 
application of duty absorption rules. Its implementation into Community legislation will, of course, 
produce the same result. 

Moreover, the adoption of these new rules, would at the same time, achieve one of the key objectives set 
by the Community at the outset of these negotiations, i.e., to improve legal certainty through greater 
precision, to extend transparency and to increase the right of parties. 

In the same vein, some of the new rules, such as on negligible import volumes and Community interest, 
should further reinforce this effect of transparency and legal certainty. Community industries would have a 
clear idea of the minimum level of import volumes required both for complaints and final action. 
Moreover, all interested parties would be made aware of their rights and obligations with regard to the 
Community interest aspects of these cases, in that a structured framework would be provided for the 
provision and treatment of information by the authorities. 

Another key objective in the Uruguay round negotiations was that measures, once taken, should be more 
effectively enforced and the suggested amendments on retroactivity, absorption and circumvention are 
aimed at achieving this objective. In this regard, it should be noted that these enforcement provisions are 
not new concepts since they are specifically provided for in existing EU legislation and the amendments 
proposed are simply to make them more workable and/or more compatible with GATT rules. 

It should be noted that the proposed text does not include rules on subsidies as this matter shall be dealt 
with in a separate proposal. 

OJ No L 209,2.9.1988, p.l 

B. 

T he  m a in  c h a n g es 

This section details the main areas where the transposition  of the text of the Agreement  into  Community 
legislation  involves changes or clarifications  to that text. 

Aùa 

1. 

a) 

Start-up  costs 

The problem 

This new Code ( Article 2.2.1.1) provides for an allowance for the exporter in a start-up situation which, 
unfortunately,  it does not define, e.g. it does not give any guidance on whether start-up refers to a new 
product or a new factory,  or both, or give any guidance with regard to the length of the start-up phase. In 
considering this problem, it has to be borne in mind that the Agreement already provides for costs, be they 
high or low, to be allocated in accordance with normal accounting principles, which means that, even 
without a specific  start-up allowance, high start-up costs would still be allocated over a reasonable number 
of years. Therefore, the situation for which an adjustment has to be made is the low production  volume 
which may prevail during start-up and which may give rise to abnormally high unit costs. 

b) 

The solution 

As can be seen in Article 2.5.2 of the proposal, the existence of a start-up situation can be  defined 
relatively easily by providing for it to include all situations where there is significant  investment and new 
production facilities  and this would cover both new products or new factories. 

However, it is a lot more difficult  to define the length of a start-up period. Consideration has been given to 
specifying  a normal sales quantity or setting a precise duration for the length of a start-up phase, e.g. 6 
months. Such specific definitions  would, however, be controversial and could take no account of 
differences  between products and industries. It also has to be borne in mind that the rules on start-up 
cannot be defined  in isolation from  the other Code rules and, in this respect, account has to be taken of the 
fact that the Agreement states that the normal period for cost recovery for a product is  12 months. 
Logically, therefore, a start-up phase can only constitute a part of that period of cost recovery and this is 
made clear in the proposed text. While the above suggestion leaves a certain imprecision, the alternatives 
are even less palatable. Moreover, it would permit some flexibility to cater for situations which differ  from 
product to product and industry to industry. 

2. 

a) 

Normal  value  for  non-market  economy  countries 

The problem 

The problem here is that with the introduction of time limits, it may not always be possible, in the 
restricted time available, to find a suitable market economy analogue country which is willing to 
cooperate. Under the wording of the existing legislation, such circumstances would require the use of 
Community prices and costs, a situation which should be avoided except in exceptional circumstances. 
Consequently, provision has to be made to permit the use of other reasonable methods in such situations. 
Moreover, as the choice of analogue country is sometimes a matter of controversy, the proposal provides 
for the exporters to be consulted before a final  selection is made. 

b) 

The solution 

In Article 2.7 of the proposed text, provision is made for normal value to be based "on any reasonable 
basis" and this would permit the application of methods other than Community prices and costs. 
At the same time, the proposed text would require that exporters are given  10 days to comment on the 
choice of analogue country. Also, mention  is made of time limits and, for the choice of analogue country, 
preference  may be given to a country subject to the same investigation though it would, of course, have to 
fulfil  the "reasonable" criteria. 

AUl 

3. 

a) 

Fair  comparison 

The  problem 

In existing Community  legislation, level of trade is dealt with under the section dealing with the 
establishment of prices (Article 2.3), rather than under fair comparison as is the case in the Agreement. 
Moreover, as "quantities" are also dealt with in the Agreement under "fair comparison" it is difficult  for the 
EU to continue to deal with the related factors, namely discounts and rebates, under the  above-mentioned 
Article 2.3. 

b) 

The  solution 

In order to keep strict consistency with the Agreement it is proposed to cater for level of trade under the 
heading "fair  comparison" (Article 2.10) in the draft text. In the same manner, it appears necessary to treat 
discounts and rebates, alongside quantities, under the same heading. 
Furthermore, with the new emphasis on level of trade adjustments,  it is no longer rational to grant an 
adjustment  for a fixed  overhead like salesmen salaries outside the context of a level of trade adjustment.  It 
is, therefore, proposed to give this adjustment  under level of trade, in accordance with the Agreement. 

4. 

a) 

Conclusion  of  investigations 

The problem 

The Agreement (Article 5.10) provides that investigations should normally be concluded within  12 months 
which conflicts with the  15 months which is envisaged for EU investigations next year 

b) 

The solution 

It is proposed to incorporate the provisions of the Agreement into EU legislation (Article 6.9). This shall 
permit complex cases to be completed in  18 months as set out in the Agreement but, of course, provisional 
duties would still have to be applied within 9 months. 

5. 

a) 

Violation  or withdrawal  of  undertakings 

The problem 

Over the years, there have been continual problems on what to do in cases where exporters have violated 
or withdrawn undertakings. In such circumstances, it is considered that the Community should be entitled 
to impose definitive  duties based on the findings of the previous investigation, otherwise an exporter which 
is violating its undertaking could end up in a more advantageous position than its rivals which may be 
faithfully applying the undertakings. Moreover, carrying out a completely new investigation  based on new 
facts is a time-consuming affair  which should only be carried where the circumstances justify  it. Violation 
does not appear to be one of these circumstances. 

b) 

The solution 

The new provisions set out in article 8.9 and 8.10 of the draft text would permit the imposition of  definitive 
duties in cases of proven violation or withdrawal though, of course, the exporter's rights would be 
safeguarded in that he would be entitled to a ask for a review if the circumstances with regard to dumping 
or injury have changed. Moreover, the change in measures would not generate a new 5 year  "sunset" 
period. Where violation  is only suspected, the remedy is a provisional duty while the matter is under 
investigation. 

dd'x 

6. 

a) 

Negligible volume of imports 

The problem 

The Agreement ( Article 5.8 ) fixes negligible import volumes below which action could not normally be 
taken, i.e., where the dumped imports are less than 3% of total imports and where those less than 3% 
collectively account for more than 7%. These minima are set in relation to volume of imports rather than 
in relation to consumption which is the usual Commumty practice. 

b) 

The solution 

Simply to transpose the Agreement provision into EU legislation 

7. 

a) 

Retroactivity 

The problem 

The retroactivity provisions in the Agreement (Article 10.4) need to be defined to deal with situations 
where importers, in order to avoid the impact of provisional duties, import a substantial quantity just prior 
to the imposition of such duties. The Agreement requires the investigating authority to show a "history of 
dumping" or "awareness" of dumping and "massive" imports before action can be taken. This problem 
also exists in the existing Code but because of the imprecise nature of these terms, and the fact that 
customs have had no means of imposing duties retroactively because the goods were not marked on entry, 
it was not possible to use the provisions. 

b) 

The solution 

It is proposed (Article 10.4 of proposal) that a history of dumping could be considered to be established 
where it has been taking place over an extended period and "awareness" would be established where the 
margins alleged or found are high. The requirement "massive" would be achieved where, in addition to 
the level of the dumped imports during the investigation period, there was a further substantial increase in 
imports just prior to the imposition of provisional duties. Thus, both combined would satisfy the 
requirement of the term "massive" in the Agreement. 

8. 

a) 

Refund  of anti-dumping  duties 

The problem 

The Community's calculations for refund claims, concerning importers which are related to exporters, have 
to be changed to reflect the Agreement provisions on "duty as a cost" as set out in its Article 9.3.3. 

To grasp the full implications of the change it should be recalled that, in any dumping calculation, export 
prices between related parties are deemed to be unreliable because of the relationship. Thus, it is necessary 
to re-construct a reliable export price and this is done by taking the first independent price charged by the 
related importer in the Community and deducting from it the costs and profit of the related importer, a 
process which gives a reliable Community frontier export price. 

The implications of the above for related importers in refund claims is that, as clearly specified in existing 
EU legislation, an anti-dumping duty is one of the costs which must be deducted to arrive at a reliable 
export price and, therefore, a related importer has to do more than just reflect the cost of the duty in its 
resale price to obtain a refund. It would also, for example, have to reduce normal values or in fact increase 
its resale prices by more than the level of the duty. This is equivalent to the treatment given to independent 
importers, who need to do more than just pay the duty before they can obtain a refund. 

The Agreement, however, restricts the application of "duty as a cost" by stating that this principle cannot  -• 
apply where resale prices and subsequent selling prices in the Community have increased to reflect the cost 
of the duty. 

b) 

The solution 

The simple solution is to incorporate the Agreement provision into Community legislation. The Agreement 
provision has been added at the end of Article 11 in the proposed text so that the restrictions placed on its 
use by GATT would be extended to all cases where export prices may have to be reconstructed, e.g. in 
reviews. 

9. 

a) 

Absorption of anti-dumping duties 

The problem 

The existing Community legislation (Article 13.11) has provisions to deal with cases where duties do not 
have any price effects on the goods subject to measures. These provisions have been criticised because 
they appear to permit the imposition of additional duties because duties have not led to price increases and 
without a new calculation of dumping being made. In fact, their underlying rationale is that the lack of a 
price increase must mean that the exporter is bearing the cost of the duty, an occurrence which 
automatically increases the margin of dumping. 

b) 

The solution 

The draft text includes a radical re-draft in Article 12 of the absorption provisions and they now 
specifically require a re-assessment of export prices and a new calculation of dumping margins, where 
measures have had no impact on the prices of the goods subject to duty. In contrast to the existing 
provisions they also permit an investigation to take account of changes in the normal values where 
evidence of this is produced by the exporter. 

In common with the refund provisions, duties cannot, in contrast to the position now, be treated as a cost 
incurred between importation and resale in cases of a re-construction of export prices, where measures 
have impacted on prices or where there is legitimate reason why prices have not increased following the 
measures. 

The new provisions may be slightly less wide-ranging than those set out in Article 13.11 of existing 
legislation but they can now be considered safe in that they are compatible with GATT. 

10. 

Circumvention 

a) 

The problem 

Circumvention can occur in several forms ranging from assembly operations, in the importing country or 
in third countries, to more direct instances of duty avoidance, such as wrong origin declarations, imports of 
knockdown kits and slightly altered products, etc. The Community has encountered all these forms of 
circumvention in the recent past, e.g. cameras, bicycles and compact discs and, as such, there appears to be 
an immediate problem which requires attention. 

At present, however, our existing circumvention legislation (Article 13.10), which only deals with 
assembly operations in the Community, has been criticised by a GATT panel. Moreover, origin rules are 
proving increasingly inadequate to deal even with cases of blatant circumvention, such as is apparently 
occurring, or has occurred, in the above-mentioned cases. Also, the result of the Uruguay does not give any 
guidance. Negotiations in this area failed and there is nothing in the Agreement, though Marrakech 
produced a Ministerial Declaration on this subject which appears, for the first time, to permit individual 
Members to deal with problem unilaterally, pending a multilateral solution via 

the GATT Anti-Dumping Committee. In this respect, the Community has always made it clear that its 
acceptance of the above-mentioned panel report was conditional on a satisfactory solution in the Uruguay 
Round, a condition that has not been realised. 

b) 

The solution 

New circumvention provisions are set out in Article 13 of the proposal. The classic circumvention 
provisions, i.e. assembly in the importing country or a third country, are to the degree possible, modelled 
on the importing country provision set out in the "Dunkel Draft" of December 1991, which was later 
dropped in the last days of the negotiations in December 1993, while the rules set out for other forms of 
circumvention have been inspired by concepts set out in customs law. 

(i) 

Classic circumvention 

The proposal maintains the existing Community rules on the percentage of parts which must 
originate in the exporting country before action can be taken, i.e. at least 60% as compared to 
70% in the Dunkel Draft. These levels equate to those set out in Community legislation and there 
seems little reason to change them as they have proved workable for all parties concerned when 
they have been applied. Moreover, it would be unwise to lower the percentages given that this 
would undermine the EU's negotiating position in Geneva, when the problem of circumvention 
comes up for negotiation. 

Some of the more burdensome and, in some cases, illogical conditions contained in the Dunkel 
Draft, including an additional dumping test, have been omitted. The aim is to combat the 
circumvention of existing measures quickly and not to carry out lengthy de novo investigations of 
dumping and injury. However, the proposal maintains the "Dunkel" provision that measures may 
only be extended where their remedial effects are being undermined and this will ensure that these 
provisions are only used in truly deserving cases. 

(ii) 

Other  forms  of  circumvention 

The proposed draft would also permit action to be taken against other forms of circumvention 
which, nowadays, are probably more important than classic circumvention  in terms of 
undermining measures. This would allow quick investigation of changes in the pattern of trade 
which coincide with anti-dumping investigations, to check whether such practices have been set 
up to circumvent measures. In the same way as for classic circumvention, an injury test would be 
undertaken and no measures could be applied unless it was shown that the remedial effects  of the 
measures were being undermined. This is a very important restriction which would limit the use 
of this provision. 

The provisions may appear wide-ranging, in that investigations can be opened following  distinct 
changes in the pattern of trade which coincide with anti-dumping action. It should be noted, 
however, that measures could only be imposed under narrowly defined  circumstances, with the 
underlying rationale stemming from the Customs Code, which does not grant legal recognition to 
acts whose only economic justification  is to avoid payment of duties. It could be argued that these 
problems should be dealt with by customs authorities but this would not be practical or  effective 
for three reasons; 

(i) customs do not appear to have the means, or the necessary legal provisions, to carry these 
investigations, certainly not as quickly as would be necessary; (ii) the circumvention  provisions 
would need to cover undertakings which are outside the remit of customs; and most, importantly 
(iii) these provisions require injury  investigations to be carried out and this can only be done by 
the anti-dumping services of the Commission. 

Provisions to deal with these other forms of circumvention are important for another reason. They 
are almost always practised via third countries and, unless effective  measures are taken to deal 
with them, there will always be an incentive for investment to go to these other third countries 
rather than the Community. 

(iii) 

How these provisions will operate  in  practice 

A circumvention  investigation  can only be opened following receipt of a complaint by the 
Community  industry and appraisement would be withheld, or imports would be registered, 
pending the outcome of the investigation which would be completed within a time limit of 9 
months. 

The withholding of appraisement, or registration of imports, which is a mechanism under which 
neither cash deposits or guaranties are collected but the imports are recorded, is necessary in order 
to be able to impose and collect duties at the Community frontier,  in accordance with the panel 
report, should circumvention  be  found. 

The proposals have been deliberately left open with regard to certain aspects of product coverage, 
both for  initiation and the imposition of measures as it considered that questions relating to 
product or country coverage can only be addressed on a case-by-case basis. In any event, once a 
circumvention  investigation  is initiated, the proposal envisages a flexible certificate system under 
which certain products, parts or exporters could be exempted from the scope of the  investigation, 
from the moment it becomes clear that they should be so exempted. These certificates could easily 
be obtained by traders from the authorities in order to avoid payment of duties. In fact, this type 
of certificate  system is not new to customs as they operate them in other areas and they are 
considered  indispensable here to be able to comply with the findings of the GATT panel. 

y\bk; 

11. 

Suspension  of anti-dumping  measures 

a) 

The problem 

There are times during the application of measures where market conditions may indicate that such 
measures are temporarily inappropriate, yet at the moment there is no way of dealing with this problem 
short of lifting the measures altogether, and this is something that cannot easily be done at present if it is 
suspected that the lack of injury is only temporary. 

b) 

The solution 

Provide specifically for such an eventuality in the legislation and this is done in its Article 14.4. The ability 
to place measures in suspension, which would only take place after consultation of the Community 
industry, would be of great value and would mean that duties are only collected where necessary. The 
suspension would be fora limited period and measures could be re-instated swiftly should the need arise. 

12.  Withholding of appraisement (Registration of imports) 

a) 

The problem 

This concept of withholding of appraisement is one of the important innovations introduced by the 
Agreement in its Article 7. It is a mechanism under which imports would not be subject to either cash 
deposit or guarantee but they would be recorded by customs until a decision was taken on the matter which 
led to such withholding, e.g. investigations for new exporters, retroactivity and circumvention. The 
mechanics of the system would be identical to those used for provisional measures, except that importers 
would be in a better position because they would not pay cash or have to give guarantees on importation. 
Customs may well have some reservations about not being able to require guarantees but that is not a 
sufficient  reason not to apply a concept which is now firmly embedded in the Agreement and which is 
considered absolutely essential for circumvention. 

b) 

The solution 

The solution is simple and it is to cater for a system of withholding of appraisement as set out in Article 
14.5 of the proposal.  Note that the term "withholding of appraisement" has been substituted by the more 
understandable term "registration of imports" in the text. 

13. 

Community  interest 

The proposal contains an Article 21 which would formalise the way in which the Community interest is to 
be taken into account in anti-dumping investigations. This would have the advantage that it would permit 
the examination of this aspect to be carried out within a structured framework which is considered to be 
absolutely essential when time limits come into operation. 

Paragraph 1 of the above-mentioned Article sets out the principles relating to Community interest and an 
attempt has been made to highlight the two basic interests which have to be taken into account, i.e. the 
need, on the one hand, to eliminate injurious dumping and restore effective competition and, on the other 
hand, to grant certain rights to users and consumers. This will, for the first time, give users and consumers 
a comprehensive set of rights, under which they will be entitled to provide information, to see information 
provided by other parties and to comment on it, to haye their information taken into account and presented 
to Member States, and to have proper disclosure rights for both provisional and definitive measures. 

However, when rights are obtained, obligations inevitably also arise and these are inherent in the time 
limits within which all parties have to work and in the fact that information presented has to be 
substantiated to a sufficient degree. 

C. 

Conclusion 

In order to implement the 1994 Anti-Dumping agreement as concluded as a result of the Uruguay Round 
of multilateral trade negotiations, and to take account of the issues set out in section B above, the 
Commission submits to the Council. 

a proposal to replace the Community's basic anti-dumping legislation. 

10 

/uy 

Proposal for implementation of Uruguay Round results 
on Anti-Dumping 

Regulation 

[Underlining indicates text which differs from new Agreement or existing legislation] 

Council Regulation (EC) No 

94/  o2ao(ACO 

A^5 

on  protection  against  dumped  imports  from  countries  not  members  of the  European 
Community 

The Council of the European  Union, 

Having regard to the Treaty establishing the European Community, and in particular Article  113 thereof, 

Having regard to the Regulations establishing the common organisation of agricultural markets and the 
Regulations adopted under Article 235 of the Treaty applicable to goods manufactured from agricultural 
products, and in particular the provisions of those Regulations which allow for derogation from the 
general principle that protective measures at frontiers may be replaced solely by the measures provided 
for in those Regulations, 

Having regard to the proposal from the Commission, 

Having regard to the opinion of the European parliament, 

Whereas, by Regulation (EC) No 2423/88 (*), as amended by Regulation (EC) No 521/94(2) and 
Regulation (EC) No 522/94 (3 ), the Council adopted common rules for protection against dumped or 
subsidised imports from  countries which are not members of the European Economic Community; 

Whereas, these rules were adopted in accordance with existing international obligations, in particular 
those arising from Article VI of the General Agreement on Tariffs  and Trade, from the Agreement on 
Implementation of Article VI of the GATT (1979 Anti-Dumping Code) and from the Agreement on 
Interpretation and Application of Articles VI, XVI and XXIII of the GATT (Code on Subsidies and 
Countervailing Duties); 

Whereas, the multilateral trade negotiations concluded in  1994 have led to new Agreements on the 
implementation of Article VI of GATT and it is therefore appropriate to amend the Community rules in 
the light of these new Agreements; whereas it is also desirable, in the light of the different  nature of the 
new rules for dumping and subsidies, to have separate Community rules in these two areas and, 
consequently, the new rules on protection against subsidies and countervailing duties are dealt with in a 
separate Regulation; 

Whereas, in applying these rules it is essential, in order to maintain the balance of rights and obligations 
which the GATT Agreement establishes, that the Community takes account of their interpretation by the 
Community's major trading partners; 

Whereas, the new agreement on dumping, namely, the Agreement on Implementation of Article VI of 
the General Agreement on Tariffs  and Trade  1994 (1994 Anti-Dumping Agreement), contains new and 
detailed rules, in particular, with regard to the calculation of dumping, procedures for initiation and the 
subsequent investigation, including the establishment and treatment of the facts, the imposition of 
provisional measures, the imposition and collection of anti-dumping duties, the duration and review of 
anti-dumping measures and the public disclosure of information  relating to anti-dumping investigations; 
whereas, in view of the extent of the changes and to ensure an adequate and transparent  implementation 
of the new rules, it is appropriate to transpose the language of the new agreements into Community 
legislation to the extent possible; 

(]) OJ No L 209, 2.8.1988, p. 1. 
H  OJ No L 66, 10.3.1994, p. 7. 
(3)OJNoL66,  10.3.1994, p. 10. 

A\o 

Whereas, it is desirable to lay down clear and detailed rules on the calculation of normal value, in 
particular that in all cases it should be based on representative sales in the ordinary course of trade in the 
exporting country; whereas, it is expedient to define the circumstances in which domestic sales may be 
considered to be made at a loss and disregarded and that recourse may be made to remaining sales or 
constructed value or sales to a third country; whereas it is also desirable to provide for a proper 
allocation of costs, including in start-up situations, where it is also appropriate to lay down guidance on 
the definition of start-up and the extent and method of allocation; whereas it is also necessary, when 
constructing normal value, to indicate the methodology that shall be applied to determine the amounts for 
selling, general and administrative costs and the profit that shall be included in such value. 

Whereas, when determining normal value for non-market economy countries, it appears prudent to set 
out rules of procedure for choosing the appropriate market economy third country that shall be used for 
such purpose and, where it is not possible to find a suitable third country, to provide that normal value 
may be established on any reasonable basis. 

Whereas, it is expedient to define the export price and to enumerate the adjustments which shall be made 
in those cases where a reconstruction of this price from the first open-market price is deemed necessary; 

Whereas, for the purpose of ensuring a fair comparison between export price and normal value, it is 
advisable to list the factors which may affect prices and price comparability and to lay down specific 
rules on when and how the adjustments shall be made, including the fact that any duplication of 
adjustments has to be avoided; whereas, it is also necessary to provide that comparison may be made 
using average prices though individual export prices may be compared to an average normal value where 
the former vary by customer, region or time period; 

Whereas, it is desirable to lay down clear and detailed guidance on the factors which may be relevant for 
the determination of whether the dumped imports have caused material injury or are threatening to cause 
injury;  whereas,  in  demonstrating  that  the  volume  and  price  levels  of  the  imports  concerned  are 
responsible for injury sustained by a Community industry, attention should be given to the effect of other 
factors and in particular existing market conditions in the Community. 

Whereas, it is advisable to define the term "Community industry" and provide that parties related to 
exporters may be excluded from such industry and to define the term "related"; whereas, it is also 
necessary to provide for anti-dumping action to be taken on behalf of producers in a region of the 
Commumty and to lay down guidelines on the definition of such a region. 

Whereas, it is necessary to set down who may lodge an anti-dumping complaint, including the extent to 
wiiich it should be supported by the Community  industry, and the information on dumping, injury and 
causality which such complaint should contain; whereas, it is also expedient to  specify  the procedures 
with regard to the rejection of complaints or the initiation of proceedings. 

Whereas, it is necessary to lav down how interested parties shall be given notice of the information 
which the authorities require, ample opportunity to present all relevant evidence and a full opportunity 
for the defence of their interests: whereas, it is also desirable to set out clearly the rules and procedures 
to be followed during the investigation, in particular that interested parties have to make themselves 
known, present their views and submit information within specified time limits, if such views and 
information are to be taken into account; whereas, it is also appropriate to set out the conditions under 
which an interested party may have access to, and comment on, information presented by other interested 
parties; whereas, there should also be cooperation between the Member States and the Commission with 
regard to the collection of information. 

A-\l 

Whereas, it is necessary to lay down the conditions under which provisional duties may be imposed, 
including that they may not be imposed sooner than 60 days from initiation and no later than 9 months 
from initiation; whereas, for administrative reasons, it is also necessary to provide that such duties may 
in all cases be imposed by the Commission either directly for a nine month period or in two stages of six 
and three months. 

Whereas, it is necessary to specify procedures for the acceptance of undertakings which eliminate the 
dumping and injury instead of the imposition of provisional or definitive duties; whereas, it is also 
appropriate to lay down the consequences of violation or withdrawal of undertakings and that 
provisional duties may be imposed in cases of suspected violation or where further  investigation is 
necessary to complete the findings; whereas, in accepting undertakings, care should be taken that the 
proposed undertakings, and their enforcement, do not lead to anti-competitive behaviour. 

Whereas, in order to reflect the provisions of the Agreement, it is necessary to provide for the 
termination of cases, with or without measures, normally within twelve months, and in no case later than 
eighteen months, from the initiation of the investigation; whereas, investigations or proceedings should 
be terminated where the dumping is de-minimis or the injury is negligible and it is appropriate to define 
these terms; whereas, where measures are to be imposed, it is necessary to provide for the termination of 
investigations and to lay down that measures should be less than the margin of dumping if such lesser 
amount would remove the injury, as well as to specify the method of calculating the level of measures in 
cases of sampling. 

Whereas, it is necessary to provide for the retroactive collection of provisional duties as deemed 
appropriate and to define the circumstances which may trigger the retroactive application of duties to 
avoid the undermining of the definitive measures to be applied; whereas it is also necessary to provide 
that duties may be applied retroactively in cases of violation or withdrawal of undertakings. 

Whereas, it is necessary to provide that measures shall lapse after five years unless a review 
investigation indicates that they should be maintained; whereas, it is also necessary to provide, in cases 
where sufficient  evidence is submitted of changed circumstances, for interim reviews or for 
investigations to determine whether refunds of anti-dumping duties are warranted; whereas it is also 
appropriate to lay down that in any re-calculation of dumping which necessitates a reconstruction of 
export prices, duties shall not be treated as a cost mcurred between importation and resale where the said 
duty is being reflected  in the prices of the products subject to measures in the Community. 

Whereas, it is necessary to specifically provide for the re-assessment of export prices and dumping 
margins where the duty is being absorbed by the exporter through a form of compensatory arrangement 
and the measures are not being reflected in the prices of the products subject to measures in the 
Community. 

Whereas, the  1994 Anti-Dumping Agreement does not contain provisions with regard to the 
circumvention of anti-dumping measures, though a separate GATT Ministerial Decision recognises 
circumvention as a problem and has referred it to the GATT Anti-dumping Committee for resolution; 
whereas given the failure of the multilateral negotiations so far and pending the outcome of the referral to 
the GATT Anti-Dumping Committee, it is necessary to introduce new provisions into Community 
legislation to deal with practices, including simple assembly in the Community or a third country, which 
have as their main aim the circumvention of anti-dumping measures. 

Whereas, it is expedient to pennit the suspension of anti-dumping measures where there is a temporary 
change in market conditions which make the continued imposition of such measures temporarily 
inappropriate. 

A '} X» 

WTiereas, it is necessary to provide that imports under investigation may be made subject to registration 
upon importation to enable measures to be subsequently applied against such imports. 

Whereas, to ensure a proper enforcement of measures, it is necessary that Member States monitor and 
report to the Commission the import trade of products subject to investigation and subject to measures 
and the amount of duties collected under this regulation. 

Whereas, it is necessary to provide for consultations of an Advisory Committee at regular and specified 
stages of the investigation; whereas, the comrnittee shall consist of representatives of Member States 
with a representative of the Commission as chairman. 

Whereas, it is expedient to provide for verification visits to check information submitted on dumping and 
injury, though such visits should be dependent on proper replies to questionnaires being received. 

Whereas, it is essential to provide for sampling in cases where the number of parties or transactions are 
large in order to permit a timely completion of investigations. 

Whereas, it is necessary to provide that for parties who do not cooperate satisfactorily other information 
may be used to estabhsh findings and such information may be less favourable to the party than if it had 
cooperated. 

Whereas, provision should be made for the treatment of confidential  information so that business secrets 
are not divulged. 

Whereas, it is essential that provision is made for the proper disclosure of the essential facts and 
considerations to parties which qualify for such treatment and that such disclosure is made, with due 
regard to the decision-making process in the Community, within a time period which permits parties to 
détend their interests. 

Whereas, it is prudent to provide for an administrative system under which arguments can be presented 
in relation to whether measures are in the Community interest, including the consumer interest, and to 
lay down the time periods within which such information has to be presented as well as the disclosure 
rights  of the parties concerned. 

Whereas, it is imperative to link the implementation of time limits for the lodging of complaints, the 
initiation of proceedings and the imposition of provisional duties to the establishment of the necessary 
administrative structure within the Commission's services; whereas, the Council, therefore, should 
specify,  in a decision to be adopted by qualified majority no later than 1 April  1995, when these time 
limits shall apply. 

Has Adopted This Regulation: 

A"j  "> 

Article 1 

Principles 
1.1 
in the Community causes injury. 

An anti-dumping duty may be applied to any dumped product whose release for free circulation 

A product is to be considered as being dumped if its export price to the Community is less than a 

1.2 
comparable price for the like product, in the ordinary course of trade, as established for the exporting 
country. 

The exporting country shall normally be the country of origin. However, it may be an 
1.3 
intermediate country, except where, for example, the products are merely trans-shipped through that 
country, or the products concerned are not produced in that country, or there is no comparable price for 
them in that country. 

For the purpose of this Regulation, the term "like product" shall be interpreted to mean a product 
1.4 
which is identical, i.e., alike in all respects to the product under consideration, or in the absence of such a 
product, another product which although not alike in all respects, has characteristics closely resembling 
those of the product under consideration. 

Article 2 

Determination  of dumping 

A. 

Normal  value 

The normal value shall normally be based on the prices paid or payable, in the ordinary course 

2.1 
of trade, bv independent customers in the exporting country. 

2.1.1 
Where the producer or exporter in the exporting country neither produces nor sells the 
like product the normal value may be established on the basis of prices of other sellers or producers. 

Prices between parties which appear to be associated or to have a compensatory 

2.1.2 
arrangement with each other may be considered as being in the ordinary course of trade and may be 
used to establish normal value only if it is determined that they are not affected  by the relationship. 

2.2 
Sales of the like product destined for domestic consumption, shall normally be used to determine 
normal value if such sales volume constitute 5 per cent or more of the sales volume of the product under 
consideration to the Community. However, a lower volume of sales may be used when, for example, the 
prices charged are considered representative for die market concerned. 

2.3  When there are no or insufficient  sales of the like product in the ordinary course of trade, or 
where because of the particular market situation such sales do not permit a proper comparison, the 
normal value of the like product shall be calculated on the basis of the cost of production in the country 
of origin plus a reasonable amount for selling, general and administrative costs and for profits, or based 
on the export prices, in the ordinary course of trade, to an appropriate third country, provided that these 
prices are representative. 

Sales of the like product in the domestic market of the exporting country, or export sales to a 

2.4 
third country, at prices below per unit (fixed and variable) costs of production plus selling, general and 
administrative costs may be treated as not being in the ordinary course of trade by reason of price and 
may be disregarded in determining normal value only if it is determined that such sales are made within 
an extended period of time in substantial quantities, and are at prices which do not provide for the 
recovery of all costs within a reasonable period of  time. 

If prices which are below costs at the time of sale are above weighted average costs for 

2.4.1 
the period of investigation, such prices shall be considered to provide for recovery of costs within a 
reasonable period of time. 

The extended period of time should normally be one year but shall in no case be less 

2.4.2 
than six months and sales below per unit cost shall be considered to be made in substantial quantities 
within such a period when it is established that die weighted average selling price is below the 
weighted average unit cost, or that the volume of sales below unit cost is not less than 20 per cent of 
sales being used to determine normal value. 

For the purpose of Article 2, Section A, costs shall normally be calculated on the basis of 

2.5 
records kept by the party under investigation, provided that such records are in accordance with the 
generally accepted accounting principles of the country concerned and it is shown that the records 
reasonably reflect the costs associated with the production and sale of the product under consideration. 

•A  A\ 

Consideration  shall be given to evidence submitted on the proper allocation of costs, 

2.5.1 
provided that it is shown that such allocations have been historically utilised. In the absence of a more 
appropriate method, preference shall be given to the allocation of costs on the basis of turnover. 
Unless already reflected  in the cost allocations under this paragraph, costs shall be adjusted 
appropriately for those non-recurring items of cost which benefit future  and/or current production. 

Where the costs for part of the period for cost recovery are affected  bv the use of new 

2.5.2 
production facilities requiring substantial additional investment and bv low capacity utilisation rates, 
which are the result of start-up operations which take place within or during part of the investigation 
period, the average costs for the start-up phase shall be those applicable, under the above-mentioned 
allocation rules, at the end of such a phase, and shall be included at that level, for the period 
concerned, in the weighted average costs referred to in paragraph 4.1. The length of a start-up phase 
shall be determined in relation to the circumstances of the producer or exporter concerned, but shall 
not exceed an appropriate initial portion of the period for cost recovery. For this adjustment to costs 
applicable during the investigation period, information  relating to a start-up phase which extends 
beyond that period shall be taken into account in so far as it is submitted prior to verification  visits 
and within three months of the initiation of the investigation. 

2.6 
For the purpose of Article 2, Section A, the amounts for selling, general and administrative costs 
and for profits shall be based on actual data pertaining to production and sales, in the ordinary course of 
trade, of the hke product, by the exporter or producer under investigation. When such amounts cannot be 
determined on this basis, the amounts may be determined, on the basis  of: 

the weighted average of the actual amounts determined for other exporters or producers  subject 

(i) 
to investigation in respect of production and sales of the like product, or individual types thereof, in 
the domestic market of the country of origin; 

(ii)  the actual amounts applicable to production and sales, in the ordinary course of trade, of the 
same general category of products for the exporter or producer in question in the domestic market of 
the country of origin; 

(iii)  any other reasonable method, provided that the amount for profit so established shall not exceed 
the profit normally realised by other exporters or producers on sales of products of the same general 
category in the domestic market of the country of origin. 

Al H 

In the case of imports from non-market economy countries and, in particular, those to which 

2.7 
Regulation  (EC) No 519/94^ applies, normal value shall be determined on the basis of the price or 
constructed value in a market economy third country, or the price from such a third country to other 
countries, including the Community, or where these are not possible, on any other reasonable basis. 
including the price actually paid or payable in the Community for the like product, duly adjusted,  if 
necessary, to include a reasonable profit margin. 

For the purpose of this paragraph, an appropriate market economy third country shall 
2.7.1 
be selected in a not unreasonable manner, with due account taken of any reliable information  made 
available at the time of selection. Account shall also be taken of time lunits and, where appropriate, a 
market economy third country which is subject to the same investigation shall be used. 

2.7.2 
economy third country envisaged and shall be given  10 days to comment. 

The parties to the investigation shall be informed shortly after  initiation of the market 

(4) OJ No L 67,  10.3.1994, p. 89. 

B. 

Export  price 

The export price shall be the price actually paid or payable for the product when sold from the 

2.8 
exporting country to the Community. 

In cases where there is no export price or where it appears that the export price is unreliable 

2.9 
because of association or a compensatory arrangement between the exporter and the importer or a third 
party, the export price may be constructed on the basis of the price at which the imported products are 
first resold to an independent buyer, or if the products are not resold to an independent buyer, or not 
resold in the condition as imported, on any reasonable basis. 

AA\ 

' 

In these cases, adjustment  for all costs, including duties and taxes, incurred between 

2.9.1 
importation and resale, and for profits accruing, shall be made to establish a reliable export price, at 
the Community frontier level. 

The costs for which adjustment  shall be made include those normally bome by an 

2.9.2 
importer but paid by any party, either in or outside the Community, which appears to be associated or 
to have a compensatory arrangement with the importer or exporter, including: usual transport, 
insurance, handling, loading and ancillary costs; customs duties, any anti-dumping duties, and other 
taxes payable in the importing country by reason of the importation or sale of the goods; and a 
reasonable margin for selling, general and administrative costs and profit. 

10 

C. 

Comparison 

n ? 

2.10  A fair comparison shall be made between the export price and the normal value. This 
comparison shall be made at the same level of trade and in respect of sales made at as nearly as possible 
the same time and with due account taken of other differences.  Where the normal value and the export 
price as established are not on such a comparable basis due allowance, in the form of adjustments,  shall 
be made in each case, on its merits, for differences  in factors which are claimed, and demonstrated to 
affect prices and, therefore, price comparability. Any duplication when making adjustments  shall be 
avoided, in particular in relation to discounts, rebates, quantities and level of trade. When the specified 
conditions are met, the factors for which adjustments  can be made are listed hereafter: 

(a)  Physical  characteristics 

An adjustment  shall be made for differences  in the physical characteristics of the product concerned. 
The amount of the adjustment  shall correspond to a reasonable estimate of the market value of the 
difference. 

(b)  Import  charges and indirect  taxes 

An adjustment  shall be made to normal value for an amount corresponding to any import charges or 
indirect taxes borne by the like product and by materials physically incorporated therein, when 
destined for consumption in the exporting country and not collected or refunded  in respect of the 
product exported to the Community. 

(c)  Discounts,  rebates and  quantities 

An adjustment  shall be made for differences  in discounts and rebates, including those given for 
differences  in quantities, if these are properly quantified and are directly linked to the sales under 
consideration. An adjustment may also be made for deferred discounts and rebates if the claim is 
based on consistent practice in prior periods, including compliance with the conditions required to 
qualify for the discount or rebates. 

(d)  Level  of  trade 

An adjustment  for differences  in levels of trade shall be granted where, in relation to the distribution 
chain in both markets, it is shown that the export price, including a constructed export price, is at a 
different  level of trade to the normal value and the difference has affected  price comparability which 
is demonstrated bv consistent and distinct differences  in functions and prices of the seller for the 
different  levels of trade in the domestic market of the exporting country. The amount of the 
adjustment  shall be based on the market value of the difference. 

(e)  Transport, insurance,  handling,  loading, and ancillary  costs 

An adjustment  shall be made for differences  in the directly related costs incurred for conveying the 
product concerned from the premises of the exporter to an independent buyer, where such costs are 
included in the prices charged. These costs comprise transport, insurance, handling, loading and 
ancillary costs. 

11 

(f)  Packing: 

' 

An adjustment  shall be made for differences  in the respective, directly related costs of the packing for 
the product concerned. 

(g)  Credit 

An adjustment  shall be made for differences  in the cost of any credit granted for the sales under 
consideration, provided that it is a factor taken into account in the determination of the prices 
charged. 

(h)  After-sales  costs 

An adjustment  shall be made for differences  in the direct costs of providing warranties, guarantees, 
technical assistance and services, as provided for bv law and/or in the sales contract. 

(i)  Commissions 

An adjustment  shall be made for differences  in commissions paid in respect of the sales under 
consideration. 

(j)  Currency  conversions 

When the price comparison requires a conversion of currencies, such conversion should be made 
using the rate of exchange on the date of sale, provided that when a sale of foreign currency on 
forward markets is directly linked to the export sale involved, the rate of exchange in the forward  sale 
shall be used. Normally, the date of sale should be the date of invoice but the date of contract, 
purchase order or order confirmation, may be used if these more appropriately establish the material 
terms of sale. Fluctuations in exchange rates shall be ignored and exporters shall be granted 60 days 
to reflect a sustained movement in exchange rates during the period of investigation. 

12 

~ 
D. 

. 

. 
~ 
Dumping margin 

A~bo 

2.11 
Subject to the releyant prpyisietis governing fair comparison, the existence of margins of 
dumping during the investigation period.shall normally be established on the basis of a comparison of a 
weighted average normal value with a weighted average of prices of all export transactions to the 
Cornrniuirtv or by a comparison of individual normal vaines and individual export prices to the 
Community on a transaction to transaction basis. However, a normal value established on a weighted 
average basis may be compared to prices of all individual export transactions to the Community, if there 
is a pattern of export prices which differ significantly among different purchasers, regions or time 
periods and the methods specified m foe first sentence of this paragraph would not reflect the full degree 
of dumping being practised. This paragraph shall not preclude the use of sampling in accordance with 
Article 17. 

2.12  The dumping margin shall be the amount by which the normal value exceeds the export price. 
Where dumping margins vary, a weighted average dumping margin may be established. 

13 

Article 3 

, 

A » 'l 

Determination  of  Injury 

Under this Regulation, the term "injury" shall, unless otherwise specified, be taken to mean 
3.1 
material injury to the Community industry, threat of material injury to the Community industry or 
material retardation of the establishment of such an industry and shall be interpreted in accordance with 
the provisions of this Article. 

A determination of injury shall be based on positive evidence and involve an objective 

3.2 
examination of both (a) the volume of the dumped imports and the effect  of the dumped imports on 
prices in the Community market for like products, and (b) the consequent impact of these imports on the 
Community industry. 

3.3  With regard to the volume of the dumped imports, consideration shall be given as to whether 
there has been a significant  increase in dumped imports, either in absolute terms or relative to production 
or consumption in the Community. With regard to the effect of the dumped imports on prices, 
consideration shall be given as to whether there has been a significant price undercutting by the dumped 
imports as compared with the price of a like product of the Community industry, or whether the effect  of 
such imports is otherwise to depress prices to a significant degree or prevent price increases, which 
otherwise would have occurred, to a significant degree. No one or several of these factors can necessarily 
give decisive guidance. 

3.4  Where imports of a product from more than one country are simultaneously subject to anti 
dumping investigations, the effects  of such imports shall be cumulatively assessed only if it is determined 
that (a) the margin of dumping established in relation to the imports from each country is more than de 
minimis as defined  in Article 9.3 and that the volume of imports from each country is not negligible and 
(b) a cumulative assessment of the effects  of the imports is appropriate in light of the conditions of 
competition between imported products and the conditions of compétition between the imported products 
and the like Community product. 

The examination of the impact of the dumped imports on the Community industry concerned 

3.5 
shall include an evaluation of all relevant economic factors and indices having a bearing on the state of 
the industry including: the fact that an industry is still in the process of recovering from the effects  of 
past dumping or subsidisation, the magnitude of the actual margin of dumping, actual and potential 
decline in sales, profits, output, market share, productivity, return on investments, utilisation of capacity; 
factors affecting  Community prices; actual and potential negative effects on cash flow, inventories, 
employment, wages, growth, ability to raise capital or investments. This list is not exhaustive, nor can 
one or several of these factors necessarily give decisive guidance. 

It must be demonstrated, from  all the relevant evidence presented in relation to paragraph 2. that 

3.6 
the dumped imports are causing injury within the meaning of this Regulation. Specifically, this shall 
entail a demonstration that the volume and/or price levels identified under paragraph 3 are responsible 
for an impact on the Community industry as provided for in paragraph 5. and that this impact exists to a 
degree which enables it to be classified  as material. 

14 

Known factors other than the dumped imports, which at the same time are injuring the 
3.7 
Community industry shall also be examined to ensure that injury caused by these other factors  is not 
attributed to the dumped imports under paragraph 6. Factors which may be considered in this respect 
include, inter alia, the volume and prices of imports not sold at dumping prices, contraction in demand or 
changes in the patterns of consumption, trade restrictive practices of and competition between the foreign 
and Community producers, developments in technology and the export performance and productivity of 
the Community industry. 

A  Y ) 
'  '  "^ 

The effect of the dumped imports shall be assessed in relation to the production  of the 
3.8 
Community industry of the like product when available data permit the separate identification  of that 
production on the basis of such criteria as the production process, producers' sales and profits. If such 
separate identification  of that production is not possible, the effects  of the dumped imports shall be 
assessed by the examination of the production of the narrowest group or range of products, which 
includes the like product, for which the necessary information can be provided. 

3.9 
A determination of a threat of material injury shall be based on facts and not merely on 
allegation, conjecture or remote possibility. The change in circumstances which would create a situation 
in which the dumping would cause injury must be clearly foreseen and imminent. 

3.9.1 
consideration should be given to, inter aha, such factors as: 

In making a determination regarding the existence of a threat of material  injury, 

(i) a significant rate of increase of dumped imports into the Community market indicating the 
likelihood of substantially increased imports; 

sufficient freely disposable or an imminent, substantial increase in capacity of  the 

(ii) 
exporter indicating the likelihood of substantially increased dumped exports to the Community, 
taking into account the availability of other export markets to absorb any additional exports; 

(iii) 
whether imports are entering at prices that would, to a significant degree, depress prices 
or prevent price increases which otherwise would have occurred, and would likely increase demand 
for further  imports; and 

(îv) 

inventories of the product being investigated. 

No one of the factors listed above by itself can necessarily give decisive guidance but 

3.9.2 
the totality of the factors considered must lead to the conclusion that further dumped exports are 
imminent and that, unless protective action is taken, material injury would occur. 

15 

Article 4 

Definition  of Community  industry 

Ah 

For the purposes of this Regulation, the term " the Community industry" shall be interpreted as 

4.1 
referring to the Community producers as a whole of the like products or to those of them whose 
collective output of the products constitutes a major proportion,  as defined in Article 5.4. of the total 
Community production of those products, except that 

(i)  when producers are related to the exporters or importers or are themselves importers of the 
allegedly dumped product, the term "the Community industry" may be interpreted as referring to the 
rest of the producers; 

in exceptional circumstances the territory of the Community may, for the production in question, 

(ii) 
be divided into two or more competitive markets and the producers within each market may be 
regarded as a separate industry if (a) the producers within such market sell all or almost all of their 
production of the product in question in that market, and (b) the demand in that market is not to any 
substantial degree supplied by producers of the product in question located elsewhere in the 
Community. In such circumstances, injury may be found to exist even where a major portion of the 
total Community industry is not injured, provided there is a concentration of dumped imports into 
such an isolated market and provided further that the dumped imports are causing injury to the 
producers of all or almost all of the production within such market. 

For the purpose of paragraph  1, producers shall be considered to be related to exporters or 

4.2 
importers only if (a) one of them directly or mdirectly controls the other: or (b) both of them are directly 
or indirectly controlled by a third person; or (c) together they directly or indirectly control a third person, 
provided that there are grounds for behevmg or suspecting that the effect  of the relationship is such as to 
cause the producer concerned to behave differently from non-related producers. For the purpose of this 
paragraph, one shall be deemed to control another when the former is legally or operationally in a 
position to exercise restraint or direction over the latter. 

4.3  Where the Community industry has been interpreted as referring to the producers in a certain 
region, the exporters shall be given an opportunity to offer undertakings pursuant to Article 8 in respect 
of the region concerned. If an adequate undertaking is not offered promptly or the situations set out in 
Article 8.9 and Article 8.10 apply, a provisional or definitive duty may be imposed in respect of the 
Community as a whole. In such cases, the duties may, if practicable, be limited to specific products or 
exporters. 

4.4 

The provisions of Article 3.8 shall be applicable to this Article. 

16 

Article 5 

Initiation  of proceedings 

1 

Except  as  provided  for  in  Article  5.6,  an  investigation  to  determine the  existence,  degree  and 
5.1 
effect  of any alleged dumping shall be initiated upon a written complaint by any natural or  legal person, 
or any association not having legal personality, acting on behalf of the Community industry. 

5.1.1 
The complaint  may be submitted to the  Commission,  or  a  Member  State, which  shall 
forward  it to the Commission. The Commission  shall send Member States a copy of any complaint  it 
receives.  The  complaint  shall  be deemed to have  been lodged  on  the  first  working  day  following 
its delivery to the  Commission  by registered mail  or the issuing  of an acknowledgement  of  receipt 
by the  Commission. 

5.1.2 
Where, in the absence of any complaint, a  Member  State  is in possession  of  sufficient 
evidence  of  dumping  and  of  injury  resulting  therefrom  for  the  Community  industry,  it  shall 
immediately communicate such evidence to the Commission. 

A complaint under paragraph  1 shall include evidence of dumping, injury and à causal link 

5.2 
between the allegedly dumped imports and the alleged injury. The complaint shall contain such 
information  as is reasonably available to the complainant on the following: 

(i) 
identity of the complainant and a description of the volume and value of the Community 
production of the like product by the complainant. Wfaere a written complaint is made on behalf of 
the Community industry, the complaint shall identify the industry on behalf of which the complaint is 
made by a list of all known Community producers of the like product (or associations of Community 
producers of the hke product) and, to the extent possible, a description of the volume and value of 
Community production of the like product accounted for by such producers; 

(ii)  a complete description of the allegedly dumped product, the names of the country or countries of 
origin or export in question, the identity of each known exporter or foreign producer and a list of 
known persons importing the product in question; 

(iii)  information  on prices at which the product in question is sold when destined for consumption in 
the domestic markets of the country or countries of origin or export (or, where appropriate, 
information on the prices at which the product is sold from the country or countries of origin or 
export to a third country or countries or on the constructed value of the product) and information  on 
export prices or, where appropriate, on the prices at which the product is first resold to an 
independent buyer in the Community; 

(iv)  information  on the evolution of the volume of the allegedly dumped imports, the effect  of these 
imports on prices of the like product on the Community market and the consequent impact of the 
imports on the Community industry, as demonstrated by relevant factors and indices having a bearing 
on the state of the Community industry, such as those listed in Article 3.3 and 3.5. 

5.3 
The Commission shall, to the degree possible, examine the accuracy and adequacy of the 
evidence provided in the complaint to determine whether there is sufficient  evidence to justify  the 
initiation of an investigation. 

17 

A ;\f 

An investigation shall not be initiated pursuant to paragraph  I unless it has been determined, on 

5.4 
the basis of an examination of the degree of support for, or opposition to, the complaint expressed by 
Community producers of the like product, that the complaint has been made by or on behalf of the 
Community industry. The complaint shall be considered to have been made "by or on behalf of the 
Community industry" if it is supported by those Community producers whose collective output 
constitutes more than 50 per cent of the total production of the like product produced by that portion of 
the Community industry expressing either support for or opposition to the complaint. However, no 
investigation shall be initiated when Community producers expressly supporting the complaint account 
for less than 25 per cent of total production of the like product produced by the Community industry. 

5.5 
The authorities shall avoid, unless a decision has been made to initiate an investigation, any 
publicising of the complaint for the initiation of an investigation. However, after receipt of a properly 
documented complaint and before proceeding to initiate an investigation, the government of the exporting 
country concerned shall be notified. 

5.6 
If  in  special  circumstances,  it  is  decided to  initiate  an  investigation  without  having  received  a 
written complaint by or on behalf of the Community industry for the initiation of such investigation, this 
shall  be done on the basis  of  sufficient  evidence of dumping,  injury  and  a  causal  link,  as  described  in 
paragraph 2, to justify the initiation of an investigation. 

5.7 
The  evidence  of  both  dumping  and  injury  shall  be  considered  simultaneously  in  the  decision 
whether  or  not  to  initiate  an  investigation.  A  complaint  shall  be  rejected  where  there  is  insufficient 
evidence of either dumping or of injury to justify  proceeding with the  case. In this  respect, the  imports 
concerned  shall normally be regarded  as negligible  if the volume of dumped  imports  from  a  particular 
country  accounts  for  less  than  3  per  cent  of  imports  of  the  like  product  in  the  Community  unless 
countries  which  individually  account  for  less than  3 per cent of the  imports  of the  like  product  in  the 
Community  collectively  account  for  more  than  7  per  cent  of  imports  of  the  like  product  in  the 
Community. 

The complaint  may be withdrawn  prior to initiation, in which  case it shall  be considered  not  to 

5.8 
have been lodged. 

5.9  Where,  after  consultation,  it  is  apparent  that  there  is  sufficient  evidence  to justify  initiating 
proceedings  the  Commission  shall  initiate  proceedings  within  one  month  of  the  lodging  of  the 
complaint  and publish a notice in the Official  Joumal of the European  Communities. Where  insufficient 
evidence has been presented, the complainant  shall, after consultation, be so informed  within  one  month 
of the date on which the complaint  is lodged with the  Commission. 

5.10  The notice of initiation of the proceedings shall announce the initiation of an investigation. 
indicate the product and countries concerned, give a summary of the information  received, and provide 
that all relevant information  is to be communicated to the Commission; it shall state the periods  within 
which interested parties may make themselves known, present their views in writing and  submit 
information,  if such  views and  information  are to be taken into account  during  the investigation;  it 
shall  also state the period  within  which  interested parties may apply to be heard by the Commission in 
accordance with Article  6.5. 

18 

The Commission shall advise the exporters and importers known to it to be concemed, as well as 

5.11 
representatives of the exporting country and the complainants, of the initiation of the proceedings and, 
with due regard to the protection of confidential  information, provide the full text of the written 
complaint received under Article 5.1 to the known exporters, and to the authorities of the exporting 
country and make it available, upon request, to other interested parties involved. Where the number of 
exporters involved is particularly high, the full text of the written complaint should instead be provided 
only to the authorities of the exporting country or to the relevant trade association. 

5.12  An anti-dumping investigation shall not hinder the procedures of customs clearance. 

A% 

19 

Aï 

Article 6 

The  investigation 

Information  and  procedure 
A. 
6.1 
Following the initiation of the proceedings, the Commission, acting in co-operation with the 
Member States, shall commence an investigation at Community level. Such investigation shall cover 
both dumping and injury and these shall be investigated simultaneously. For the purpose of a 
representative finding, an investigation period shall be selected which, in the case of dumping shall, 
normally, cover a period of not less than six months immediately prior to the initiation of the 
proceedings. Information  relating to a period subsequent to the investigation period shall, normally, not 
be taken into account. 

Parties receiving questionnaires used in an anti-dumping investigation shall be given at least 

6.2 
thirty days for reply. The time-limit for exporters shall be counted from the date of receipt of the 
questionnaire, which for this purpose shall be deemed to have been received one week from the day on 
which it was sent to the exporter or transmitted to the appropriate diplomatic representative of the 
exporting country. An extension to the thirty day period may be granted, taking due account of the time 
limits of the investigation and provided the party gives a good reason, in terms of its particular 
circumstances, for such extension. 

The Commission may request Member States to supply information and Member States shall 

6.3 
take whatever steps are necessary in order to give effect to such requests. They shall send to the 
Commission the information  requested together with the results of all inspections, checks or 
investigations carried out. Where this information  is of general interest or where its transmission has 
been requested by a Member State, the Commission shall forward it to the Member States, provided it is 
not confidential, in which case a non-confidential summary shall be forwarded. 

The Commission may request Member States to carry out all necessary checks and inspections, 

6.4 
particularly amongst importers, traders and Community producers, and to carry out investigations in 
third countries, provided the firms concerned give their consent and the government of the country in 
question has been officially  notified and raises no objection. Member States shall take whatever steps are 
necessary in order to give effect to such requests from the Commission; Officials  of the Commission 
shall be authorised, if the Commission or a Member State so requests, to assist the officials  of Member 
States in carrying out their duties. 

The interested parties, which have made themselves known in accordance with Article 5.10. may 

6.5 
be heard if they have, within the period prescribed in the notice published in the Official  Journal of the 
European Communities, made a written request for a hearing showing that they are an interested party 
likely to be affected  by the result of the proceedings and that there are particular reasons why they 
should be heard. 

Opportunities shall, on request, be provided for the importers, exporters, representatives of the 

6.6 
government of the exporting country and the complainants, which have made themselves known in 
accordance with Article 5.10. to meet those parties with adverse interests, so that opposing views may be 
presented and rebuttal arguments offered.  Provision of such opportunities must take account of the need 
to preserve confidentiality and of the convenience to the parties. There shall be no obligation on any 
party to attend a meeting, and failure to do so shall not be prejudicial to that party's case. Oral 
information provided under this paragraph  shall be taken into account in so far as it is subsequently 
reproduced in writing. 

20 

$Mù 

The complainants,  importers, exporters,  users and consumer  organisations, 

6.7 
made  themselves  known  in accordance with Article  5.10, as well as the representatives 01 
country may, upon written request, inspect all information made available by any party to 
investigation, as distinct from internal documents prepared by the authorities of the C 
Member States, which is relevant to the presentation of their cases and not confidential w^hltô 
meaning of Article  19, and that it is used in the investigation. Such parties may respond to 
information  and their comments should be taken into consideration, to the extent that they are^* 
sufficiently  substantiated in the response. 

Except in the circumstances provided for in Article  18, the information  supplied by ; 

6.8 
parties and upon which findings are based, shall be examined for accuracy to the degree j 

Investigations shall, except in special circumstances, be concluded within one year; \ 

6.9 
case more than  18 months, after their initiation. 

m 

AM 

»Xi 

<»  Mi 

!Ai 

l 

21 

Artîffef 

measures 

7.1  ^Provisional measures may be applied if proceedings have been initiated in accordance with the 
provisions of Article 5, a public notice has been given to that effect and interested parties have been 
given fHJpcfoate opportunities to submit information and make comments in accordance with Article 5.10. 
a proviiional affirmative determination has been made of dumping and consequent injury to the 
CofOfl|ijpgÇY industry, and the Community interest calls for intervention to prevent such injury. The 

measures shall be imposed no sooner than 60 days from the initiation of the  proceedings 
* {JKfff nine months from the initiation of the proceedings. 

amount of the provisional anti-dumping duty shall not exceed the margin of dumping as 
established but it should be less than the margin, if such lesser duty would be adequate to 

Itijury to the Community industry. 

ional measures shall take the form of a security and the release of the products concemed 
tion in the Community shall be conditional upon the provision of such security. 

ommission shall take provisional action after consultation or, in cases of extreme urgency, 
the Member States. In this latter case, consultations shall take place  10 days, at the 

notification to the Member States of the action taken by the Commission. 

Wry 

'fi 

a Member State requests immediate intervention by the Commission and the conditions of 

the Commission shall within a maximum of five working days of receipt of the 

whether a provisional anti-dumping duty should be imposed. 

rÈomrrussion shall forthwith inform the Council and the Member States of any decision 
pjts Article. The Council, acting by a qualified majority, may decide differently. 

al duties may be imposed for six months and extended for a further three months or 
for  nine months. However, they may only be extended, or imposed for a ninfr 
erq exporters representing a significant percentage of the trade involved so request or 

upon notification bvthe Commission. 

CWk: 

22 

A% 

Article 8 

Undertakings 
8.1 
Investigations may be terminated without the imposition of provisional or definitive duties upon 
receipt of satisfactory voluntary undertakings from any exporter to revise its prices or to cease exports to 
the area in question at dumped prices so that the Commission, after consultation, is satisfied that the 
injurious effect  of the dumping is eliminated. Price increases under such undertakings shall not be higher 
than necessary to eliminate the margin of dumping and they should be less than the margin of dumping if 
such increases would be adequate to remove the injury to the Community industry. 

Undertakings may be suggested by the Commission, but no exporter shall be obliged to enter 
8.2 
into such an undertaking. The fact that exporters do not offer  such undertakings, or do not accept an 
invitation to do so, shall in no way prejudice the consideration of the case. However, it may be 
determined that a threat of injury is more likely to be realised if the dumped imports continue. 
Undertakings shall not be sought or accepted from exporters unless a provisional  affirmative 
determination of dumping and injury caused by such dumping has been made. Save in exceptional 
circumstances, undertakings may not be offered  later than the end of the period during which 
representations may be made under Article 20.5. 

Undertakings offered need not be accepted if their acceptance is considered impractical,  for 

8.3 
example, if the number of actual or potential exporters is too great, or for other reasons, including 
reasons of general policy. The exporter concerned may be provided with the basis on which it is intended 
to propose the rejection of the offer of an undertaking and may be given an opportunity to make 
comments thereon. The reasons for rejection shall be set out in the definitive decision. 

Parties which offer  an undertaking shall be required to provide a non-confidential version of 

8.4 
such undertaking, so that it may be made available to interested parties to the investigation. 

Where undertakings are, after consultation, accepted and there is no objection raised within the 

8.5 
Advisory Committee, the investigation shall be terminated. In all other cases, the Commission shall 
submit to the Council forthwith a report on the results of the consultation, together with a proposal that 
the investigation be terminated. The investigation shall stand terminated if, within one month, the 
Council, acting by a qualified majority, has not decided otherwise. 

If the undertakings are accepted, the investigation of dumping and injury  shall normally be 

8.6 
completed. In such a case, if a negative determination of dumping or injury  is made, the undertaking 
shall automatically lapse, except in cases where such a determination is due in large part to the existence 
of an undertaking. In such cases the authorities may require that an undertaking be maintained for a 
reasonable period. In the event that an affirmative  determination of dumping and injury is made, the 
undertaking, shall continue consistent with its terms and the provisions of this Regulation. 

The Commission shall require any exporter from which an undertaking has been accepted to 

8.7 
provide, periodically, information  relevant to the fulfilment  of such undertaking, and to permit 
verification  of pertinent data. Non-compliance with such requirements shall be construed as a violation 
of the undertaking. 

23 

Acy 

8.8  Where undertakings are accepted from certain exporters during the course of an investigation, 
they shall, for the purpose of Article  11. be deemed to take effect from the date on which the 
investigation is concluded for the exporting country. 

In case of violation or withdrawal of undertakings bv any party, a definitive duty shall be 
8.9 
imposed in accordance with Article 9. on the basis of the facts established within the context of the 
investigation which led to the undertaking, provided that such investigation was concluded with a final 
determination on dumping and injury and the exporter concerned, except in the case of withdrawal of 
undertakings bv the exporter, has been given an opportunity to comment. 

8.10  A provisional duty may, after consultation, be imposed in accordance with Article 7 on the basis 
of the best information  available, where there is reason to believe that an undertaking is being violated, 
or in case of violation or withdrawal of undertaking where the investigation which led to the undertaking 
was not concluded. 

24 

'"  < 

.  Ac)x 

Article 9 

Termination  without measures; imposition  of definitive  duties 

9.1  Where the complaint is withdrawn, proceedings may be terminated unless such termination 
would not be in the Community interest. 

* 

9.2  WTiere, after  consultation, protective measures are unnecessary and there is no objection  raised 
within the Advisory Committee, the investigation or proceedings shall be terminated. In all other cases, 
the Commission shall submit to the Council forthwith a report on the results of the consultation, together 
with a proposal that the proceedings be terminated. The proceedings shall stand terminated if, within one 
month, the Council, acting by a qualified  majority,  has not decided otherwise. 

For proceedings initiated under Article 5.9. injury shall normally be regarded as negligible where 

9.3 
the imports concerned represent less than the volumes set out in Article 5 7. For the same proceedings, 
there shall be immediate termination where it is determined that the margin of dumping is less than 2 per 
cent, expressed as a percentage of the export price, provided that it is only the investigation that shall be 
terminated where the margin is below 2% for individual exporters and they shall remain subject to the 
proceedings and may be re-investigated in any subsequent review carried out for the country concerned 
under Article  11. 

9.4  Where the facts as finally established show that there is dumping and injury caused thereby, and 
the Community interest calls for intervention in accordance with Article 21. a definitive anti-dumping 
duty shall be imposed by the Council, acting by simple majority on a proposal submitted by the 
Commission after consultation of the Advisory Committee. Where provisional duties are in force, a 
proposal for definitive action shall be submitted to the Council not later than one month before the expiry 
of such duties. The amount of the anti-dumping duty shall not exceed the margin of dumping established 
but it should be less than the margin if such lesser duty would be adequate to remove the injury to the 
Community industry. 

An anti-dumping duty shall be imposed in the appropriate amounts in each case, on a non 

9.5 
discriminatory basis on imports of a product from all sources found to be dumped and causing  injury, 
except as to imports from those sources from which undertakings under the terms of this Regulation 
have been accepted. The Regulation shall specify the duty for each supplier or, if that is impracticable 
and in the cases referred to in Article 2.7. the supplying country concerned. 

9.6  When the Commission has limited its examination in accordance with Article  17, any anti 
dumping duty applied to imports from exporters or producers which have made themselves known in 
accordance with Article  17 but were not included in the examination shall not exceed the weighted 
average margin of dumping established for die parties in the sample. For the purpose of this paragraph, 
the Commission shall disregard any zero and de minimis margins, and margins established under the 
circumstances referred to in Article  18. The authorities shall apply individual duties or normal values to 
imports from any exporter or producer which is granted individual treatment  as provided for in Article 
17. 

25 

A ^ 

Article 10 

Retroactivity 
10.1 
enter free circulation after the time when the decision taken under Article 7.1 and Article 9.5, 
respectively enters into force, subject to the exceptions set out in this Regulation. 

Provisional measures and definitive anti-dumping duties shall only be applied to products which 

10.2  Where a provisional duty has been applied and the facts as finally established show that there is 
dumping and injury, the Council shall decide, irrespective of whether a definitive anti-dumping duty is to 
be imposed, what proportion of the provisional duty is to be definitively collected. For this purpose, 
'injury' shall not include material retardation of the estabhshment of a Community industry, nor threat of 
material injury, except where it is found that this would, in the absence of provisional measures, have 
developed into material injury.  In all other cases involving such threat or retardation, any provisional 
amounts shall be released and definitive duties can only be imposed from the date that a final 
detennination of threat or material retardation is made. 

10.3 
If the definitive anti-dumping duty is higher than the provisional duty, the difference  shall not be 
collected. If the definitive duty is lower than the provisional duty, the duty shall be recalculated. Where a 
final determination is negative, the provisional duty shall not be confirmed. 

10.4  A definitive anti-dumping duty may be levied on products which were entered for consumption  . 
not more than 90 days prior to the date of application of provisional measures but not prior to the 
initiation of the investigation, provided that imports have been registered in accordance with Article 
14.5, the Commission has provided the importers concemed with an opportunity to comment, and that: 

there is, for the product in question, a history of dumping over an extended period, or the 
(i) 
importer was aware of the dumping or the importer should have been aware of the dumpmg. in terms 
of the extent of the dumping and injury alleged or found; and 

in addition to the level of imports which caused injury during the investigation period, there is a 

(ii) 
further substantial rise in imports which, in the light of its timing and volume and other 
circumstances, is likely to seriously undermine the remedial effect  of the definitive anti-dumping duty 
to be applied. 

10.5 
In cases of violation or withdrawal of undertakings, definitive duties may be levied in 
accordance with this Regulation on goods entered for free circulation not more than ninety days  before 
the application of provisional measures, provided that imports have been registered in accordance with 
Article  14.5, and that any such retroactive assessment shall not apply to imports entered before the 
violation or withdrawal of the undertaking. 

26 

Article 11 

Duration, reviews and  refunds 

V) h 

11.1  An anti-dumping measure shall remain in force only as long as and to the extent necessary to 
counteract dumping which is causing  injury. 

11.2  A definitive anti-dumping measure shall expire five years from its imposition or five years from 
the date of the conclusion of the most recent review which has covered both dumping and injury unless it 
is determined in a review that the expiry would be likely to lead to a continuation or recurrence of 
dumping and injury.  Such an expiry review shall be initiated on the initiative of the Commission, or upon 
request made by or on behalf of Community producers and the measure shall remain in force pending the 
outcome of such review. 

An expiry review shall be initiated where the request contains sufficient  evidence that 

11.2.1 
the removal of the measures would be likely to result in a continuation or recurrence of dumping and 
injury. Such a likelihood may, for example, be indicated bv evidence of continued dumping and  injury 
or evidence that the removal of injury is partly or solely due to the existence of measures or evidence 
that the circumstances of the exporters, or market conditions, are such that thev would indicate the 
likelihood of further  injurious  dumping. 

In carrying out investigations under this paragraph, the exporters, importers, the 

11.2.2 
representatives of the exporting country and the Community producers shall be provided with the 
opportunity to amplify, rebut or comment on the matters set out in the review request and conclusions 
shall be reached with due account taken of all relevant and duly supported evidence presented in 
relation to the question of whether the removal of measures would be likely, or unlikely, to lead to the 
continuation or recurrence of dumping and injury. 

Under this paragraph, a notice of impending expiry shall be published in the  Official 

11.2.3 
Journal of the European Communities at an appropriate time in the final year of the period of 
application of the measures as defined in this paragraph. Thereafter, the Community producers shall, 
no later than three months before the end of the five year period, be entitled to lodge a review request 
in accordance with paragraph  2.1. A notice announcing the actual expiry of measures under this 
paragraph shall also be published. 

11.3  The need for the continued imposition of measures may also be reviewed, where warranted on 
the initiative of the Commission or at the request of a Member State or, provided that a  reasonable 
period of time of at least  1  year has elapsed since the imposition of the definitive measure, upon a 
request, by any exporter or importer or bv the Community producers, which contains sufficient  evidence 
substantiating the need for such an interim review. 

An interim review shall be initiated where the request contains sufficient  evidence that 

11.3.1 
the continued imposition of the measure is no longer necessary to offset  dumping and/or the  injury 
would be unlikely to continue or recur if the measure were removed or varied, or that the existing 
measure is not, or is no longer, sufficient to counteract dumping which is causing  injury. 

In carrying out investigations under this paragraph, the Commission may, inter alia, 

11.3.2 
consider whether the circumstances with regard to dumping and injury have changed significantly, or 
whether existing measures are achieving the intended results in removing the injury previously 
established in accordance with Article 3 of this Regulation. In these respects, account shall be taken 
of all relevant and duly supported evidence in the final determination. 

27 

A% 

11.4  A review shall also be carried out for the purpose of determining individual margins of dumping 
for new exporters in the exporting country in question which have not exported the product during the 
period of investigation on which the measures were based. 

The review shall be initiated where a new exporter or producer can show that it is not 

11.4.1 
related to any of the exporters or producers in the exporting country which are subject to the anti 
dumping measures on the product, and where they have actually exported to the Community 
following the above-mentioned investigation period, or where they can demonstrate that they have 
entered into a an irrevocable contractual obligation to export a significant quantity to the Community. 

A review for a new exporter shall be initiated, and carried out on an accelerated basis, 

11.4.2 
after consultation of the Advisory Committee and Community producers have been given an 
opportunity to comment. The Commission Regulation initiating a review shall repeal the duty in force 
with regard to the new exporter concerned, bv amending the Regulation which imposed the duty, and 
making imports subject to registration in accordance with Article 14.5 in order to ensure that, should 
the review result in a determination of dumping in respect of such an exporter, anti-dumping duties 
can be levied retroactively to the date of the initiation of the review. 

11.4.3 
the provisions of Article 9.6. 

The provisions of this paragraph shall not apply where duties have been imposed under 

11.5 
The relevant provisions of this Regulation with regard to procedures and the conduct of 
investigations, excluding those relating to time limits, shall apply to any review carried out under 
paragraphs 2. 3 and 4. Any such review shall be carried out expeditiously and shall normally be 
concluded within twelve months of the date of initiation of the  review. 

11.6  Reviews under this Article shall be initiated by the Commission after consultation of the 
Advisory Committee. Where warranted by reviews, measures shall be repealed or maintained under 
paragraph 2. or repealed, maintained or amended under paragraphs 3 and 4. by the Community 
institution responsible for their introduction. Where measures are repealed for mdividual exporters, but 
not for the country as a whole, such exporters shall remain subject to the proceedings and may, 
automatically, be re-investigated in any subsequent review carried out for that country under this Article. 

11.7  Where a review of measures under paragraph 3 is in progress at the end of the period of 
application of measures as defined in paragraph 2. such review shall also cover the circumstances set out 
in paragraph 2. 

28 

11.8  Notwithstanding paragraph  2. an importer may request reimbursement of duties collected where 
it is shown that the dumping margin, on the basis of which duties were paid, has been eliminated, or 
reduced to a level which is below the level of the duty in force. 

A% 

11.8.1 
In order to request a refund of anti-dumping duties, the importer shall submit an 
application to the Commission. The application shall be submitted via the Member State in the 
territory of which the products were released for free circulation and within six months of the date on 
which the amount of the definitive duties to be levied was duly determined by the competent 
authorities or of the date on which a decision was made definitively to collect the amounts secured by 
way of provisional duty. Member States shall forward the request to the Commission  forthwith. 

An application for refund shall only be considered to be duly supported by evidence 

11.8.2 
where it contains precise information  on the amount of refund  of anti-dumping duties claimed and all 
customs documentation relating to the calculation and payment of such amount. It shall also include 
evidence, for a representative period, on normal values and export prices to the Community for the 
exporter or producer to which the duty applies. In cases where the importer is not associated to the 
exporter or producer concerned and such information is not immediately available, or the exporter or 
producer is unwilling to release it to the importer, the application shall contain a statement from the 
exporter or producer that the dumping margin has been reduced or eliminated, as specified in this 
Article, and that the relevant supporting evidence shall be provided to the Commission. Where such 
evidence is not forthcoming from the exporter or producer, within a reasonable period of time, the 
application shall be rejected. 

The Commission shall, after consultation of the Advisory Committee, decide whether 

11.8.3 
and to what extent the application should be granted or it may decide at any time to initiate an interim 
review and the information and findings from such review, carried out in accordance with the 
provisions applicable for such reviews, shall be used to determine whether and to what extent a 
refund  is justified.  Refunds  of duties shall normally take place within  12 months, and in no case more 
than  18 months after the date on which a request for a refund, duly supported by evidence, has been 
made by an importer of the product subject to the anti-dumping duty. The payment of any  refund 
authorised should normally be made by Member States within 90 days of the above-mentioned 
decision. 

In all review or refund  investigations carried out under this Article, the Commission shall apply, 

11.9 
in so far as circumstances have not changed, the same methodology as in the investigation which led to 
the duty, with due account taken of the provisions set out in Articled, and in particular Section D 
thereof, and the provisions of Article  17 of this Regulation. 

In any investigation carried out under this Article, the Commission shall examine the reliability 
11.10 
of export prices in accordance with Article 2. However, where it is decided to construct the export price 
in accordance with Article 2.9, it shall calculate the export price with no deduction for the amount of 
anti-dumping duties paid when conclusive evidence is provided that the duty is duly reflected  in resale 
prices and the subsequent selling prices in the Community. 

29 

Article  12 

A3) 

f 

12.1  Where the Community industry submits sufficient  information  showing that measures have led 
to no movement, or insufficient  movement, in resale prices or subsequent selling prices in the 
Community, the investigation may, after  consultation, be re-opened to examine whether the measure has 
had effects  on the above-mentioned prices. 

12.2  During an investigation under this Article, exporters, importers and Community producers shall 
be provided with an opportunityto clarify the situation with regard to resale prices and subsequent 
selling prices and if it is concluded that the measure should have led to movements in such prices, in 
order to remove the injury previously established in accordance with Article 3. export prices shall be re 
assessed in accordance with Article 2. and dumping margins shall be re-calculated to take account of the 
re-assessed export prices. Where it is considered that a lack of movement in the prices in the Community 
is due to a fall in export prices, which occurred prior to or following the imposition of measures, 
dumping margins may be re-calculated to take account of such lower export prices. 

12.3  WTiere a re-investigation under this Article shows increased dumping, the measures in force shall 
be amended bv the Council, by simple majority on a proposal from the Commission, in accordance with 
the new findings on export prices. 

The relevant provisions of Article 5 and Article 6 shall apply to any review carried out under 

12.4 
this Article, except that such review shall be carried out expeditiously and shall normally be concluded 
within six months of the date of initiation of the re-investigation. 

12.5  Alleged changes in normal value shall only be taken into account under this Article where 
complete information  on revised normal values, duly substantiated bv evidence, is made available to the 
Commission within the time limits set out in the notice of initiation of an investigation. Where an 
investigation involves a re-examination of normal values, imports may be made subject to registration in 
accordance with Article  14.5 pending the outcome of the investigation. 

30 

A r t i c l ed 

Circumvention 

^ 

13.1  Anti-dumping duties imposed under this Regulation may be extended to apply to imports from 
third countries of like products, or parts thereof, when circumvention of the measures in force is taking 
place. Circumvention shall be defined as a change in the pattern of trade between third countries and the 
Community which stems from a practice, process or work for which there is insufficient  due cause or 
economic justification, other than the imposition of the duty, and there is evidence that the remedial 
effects  of the duty are being undennined. in terms of the prices and/or quantities of the assembled like 
product. 

13.2  An assembly operation in the Community or a third country shall be considered to circumvent 
the measures in force where: 

the operation started or substantially increased since, or just prior to. the initiation of the anti 

(i) 
dumping investigation and the parts concerned are from the country subject to measures: and 

(ii)  the parts constitute 60% or more of the total value of the parts of the assembled product  except 
that in no case shall circumvention be considered to be taking place where the value added to the 
parts brought in. during the assembly or completion operation, is greater than 25% of the 
manufacturing  cost: and 

(iii)  the remedial effects  of the duty are being undermined, in terms of the prices and/or quantities of 
the assembled like product. 

Investigations shall be initiated under this Article where the request contains sufficient  evidence 

13.3 
on the factors set out in paragraph  1. Initiations shall be made, after consultation of the Advisory 
Committee, bv Commission Regulation which shall also instruct the customs authorities to make imports 
subject to registration in accordance with Article  14.5 or to request guarantees. Investigations shall be 
carried out bv the Commission, which may be assisted bv customs authorities, and shall be concluded 
within nine months. When the facts, as finally ascertained, justify the extension of measures, this shall 
be done bv the Council, acting bv simple majority and on a proposal from the Commission, from the date 
that registration was imposed under Article  14.5 or guarantees were requested. The relevant procedural 
provisions of this Regulation with regard to initiations and the conduct of investigations shall apply 
under this Article. 

13.4 
Products shall not be subject to registration under Article 14.5 or measures where they are 
accompanied bv a customs certificate declaring that the importation of the goods does not constitute 
circumvention. Tliese certificates may be issued to importers, upon written application, bv the authorities 
following authorisation bv a decision of die Commission after consultation of the Advisory Committee 
or the decision of the Council imposing measures and they shall remain valid for the period, and under 
the conditions, set down therein. 

13.5  Nothing in this Article shall preclude the normal application of the provisions in force 
concerning customs duties. 

31 

Article 14 

General  provisions 

Provisional  or definitive  anti-dumping  duties  shall  be  imposed  by  Regulation,  and  collected  by 
14.1 
Member  States  in  the  form,  at the  rate  specified  and  according  to  the  other  criteria  laid  down  in  the 
Regulation imposing such duties. Such duties shall also be collected independently of the customs duties, 
taxes and other charges normally imposed on imports. No product shall be subject to both anti-dumping 
and  countervailing  duties  for  the  purpose  of  dealing  with  one  and  the  same  situation  arising  from 
dumping or from export subsidisation. 

14.2  Regulations imposing provisional or definitive anti-dumping duties, or Regulations or Decisions 
accepting undertakings or terminating investigations or proceedings, shall be published in the  Official 
Journal of the European Communities. Such Regulations or Decisions shall contain, in particular, and 
with due regard to the protection of confidential  information, the names of the exporters, if practical, or 
countries involved, a description of the product and a summary of the material facts and considerations 
relevant to the dumping and injury detenrtinations. In each case, a copy of the Regulation or Decision 
shall be sent to known interested parties. The provisions of this paragraph  shall apply mutatis mutandis 
to reviews. 

Special provisions, in particular with regard to the common definition  of the concept of origin, as 
. 

14.3 
contained in Council Regulation (EEC) No 2913/92 of  12 October  1992. may be adopted in. or under. 
this Regulation. 

14.4 
In the Community interest, measures imposed under this Regulation may, after consultation  of 
the Advisory Cornmittee. be suspended bv a decision of the Commission for a period of up to one year 
because of a change in market conditions in the Community which makes the application of such 
measures temporarily inappropriate, provided that the Community industry has been given an 
opportunity to comment. The suspension may be extended for a further period if the Council so decides, 
by simple majority, on a proposal from the Commission. Measures may, at any time and  after 
consultation, be re-instated if the reason for suspension is no longer applicable. 

The Commission may, after  consultation of the Advisory Committee, direct the customs 

14.5 
authorities to take the appropriate steps to register imports, so that measures may subsequently be 
applied against these imports from the date of such registration. Imports may be made subject to 
registration following a request from the Community industry which contains sufficient  evidence to 
justify  such action. Registration shall be introduced bv Regulation which shall specify the purpose of the 
action and, if appropriate, the estimated amount of possible future liability. Imports may not be made 
subject to registration for a period longer than nine months. 

14.6  Member states shall report to the Commission, on a monthly basis, the import trade of products 
subject to investigation and subject to measures, and the amount of duties collected under this 
Regulation. 

32 

Article  15 

Consultations 

15.1  Any consultations provided for in this Regulation shall take place within an  Advisory 
Cornmittee, which shall consist of representatives of each Member State, with a representative of the 
Commission as chairman. Consultations shall be held immediately on request by a Member State or on 
the initiative of the Commission and in any event within a timeframe  which  allows the time  limits  set 
by this Regulation  to be respected. 

The Committee shall meet when convened by its chairman. He shall provide the Member States, 

15.2 
as promptly as possible, with all relevant  information. 

15.3  Where necessary, consultation may be in writing only; in such case the Commission shall notify 
the Member States and shall specify a period within which they shall be entitled to express their opinions 
or to request an oral consultation which  the chairman  shall arrange, provided  that such  oral 
consultation  can  be held  within  a timeframe  which allows the time  limits set by this Regulation  to 
be respected. 

15.4  Consultation  shall in particular cover: 

(i) 

the existence of dumping and the methods of establishing the dumping margin; 

(ii)  the existence and extent of injury; 

(iii)  the causal link between the dumped imports and injury; 

(iv)  the measures which, in the circumstances, are appropriate to prevent or remedy the  injury 
caused by dumping and the ways and means for putting such measures into  effect. 

33 

Article 16 

Verification  visits 

The Commission  shall, where it considers it appropriate, carry out visits to examine the records 

16.1 
of importers, exporters, traders, agents, producers, trade associations and organisations, to  verify 
information  provided on dumping and injury.  In the absence of a proper and timely reply, a verification 
visit may not be carried out. 

The Commission may carry out investigations in third countries as required, provided it obtains 

16.2 
the agreement of the firms concemed, it notifies the representatives of the government of the country in 
question and the latter does not object to the investigation. As soon as the agreement of the firms 
concemed has been obtained the Commission should notify the authorities of the exporting country of the 
names and addresses of the firms to be visited and the dates agreed. 

The firms concemed shall be advised of the nature of the information to be verified  during 

16.3 
verification  visits and of any further  information which needs to be provided during such visits, though 
this should not preclude requests to be made during the verification  for further details to be provided in 
the light of information  obtained. 

In investigations carried out under this paragraph, the Commission shall be assisted by  officials 

16.4 
of those Member States who so request. 

34 

Articled 

Sampling 

olo£s 

In cases where the number of complainants, exporters or importers, types of product or 

17.1 
transactions is large, the investigation may be limited to a reasonable number of parties, products or 
transactions bv using samples which are statistically valid on the basis of information available at the 
time of the selection, or to the largest representative volume of production, sales or exports which can 
reasonably be investigated within the time available. 

17.2  The final selection of parties, types of products or transactions made under these sampling 
provisions shall rest with the Commission, though preference shall be given to choosing a sample in 
consultation with, and with the consent of, die parties concemed, provided such parties make themselves 
known and make sufficient information available, within three weeks of initiation, to enable a 
representative sample to be chosen. 

In cases where the examination has been limited in accordance with this Article, an individual 
17.3 
margin of dumping shall, nevertheless, be calculated for any exporter or producer not initially selected 
who submits the necessary information within the time limits provided for in this Regulation, except 
where the number of exporters or producers is so large that mdividual examinations would be unduly 
burdensome and prevent the timely completion of the investigation. 

17.4  Where it is decided to sample and there is a degree of non-co-operation bv some or all of the 
parties selected which is likely to materially affect the outcome of the mvestigation. a new sample may 
be selected. However, if a material degree of non-co-operation persists or there is insufficient time to 
select a new sample, the relevant provisions of Article 18 shall apply. 

35 

Article  18 

Non-co-operation 

oie  r> 

In cases in which any interested party refuses  access to, or otherwise does not provide, necessary 

18.1 
information  within  the time limits as provided for  in this Regulation,  or significantly  impedes the 
investigation, provisional or final findings, affirmative  or negative, may be made on the basis of the facts 
available. Where it is found that any interested party has supplied false or misleading information,  the 
information  shall  be disregarded and use may be made of facts  available. Interested parties should be 
made aware of the consequences of non-co-operation. 

18.2  A lack of a computerised response shall not be deemed to constitute non-co-operation, provided 
that the interested party shows that presenting the response as requested would result in an unreasonable 
extra burden or unreasonable additional cost. 

18.3  Where the information  presented by an interested party may not be ideal in all respects it should 
not be disregarded, provided that any deficiencies are not such as to cause undue difficulty  in arriving at 
a reasonably accurate finding and provided the information  is appropriately submitted in timely  fashion, 
it is verifiable and the party has acted to the best of its ability. 

If evidence or information  is not accepted, the supplying party should be informed  forthwith  of 

18.4 
the reasons therefor and should be granted an opportunity to provide further  explanations within the time. 
limit specified.  If the explanations are considered unsatisfactory, the reasons for rejection of such 
evidence or information  should be disclosed and given in any published findings. 

If determinations, including those with respect to normal value, are based on the provisions of 

18.5 
paragraph  1  of this Article, including the information  supplied in the complaint, it should, where 
practicable and with due regard to the time limits of the mvestigation. be checked by reference to 
information from other independent sources which may be available, such as published price lists, 
official  import statistics and customs returns, or information  obtained from other interested parties 
during the investigation. 

18.6 
If an interested party does not cooperate, or only cooperates partially, and thus relevant 
information  is being withheld, the result could be less favourable to thé party than if it had cooperated. 

36 

Article  19 

Confidentiality 

2 »^ 
' 

19.1  Any information which is by nature confidential, (for example, because its disclosure would be 
of significant  competitive advantage to a competitor or because its disclosure would have a  significantly 
adverse effect  upon a person supplying the information  or upon a person from whom he acquired the 
information) or which is provided on a confidential basis by parties to an investigation shall, upon good 
cause shown, be treated as such by the authorities. 

19.2 
Interested parties providing confidential  information  shall be required to furnish  non-confidential 
summaries thereof. These summaries shall be in sufficient  detail to permit a reasonable understanding of 
the substance of the information  submitted in confidence. In exceptional circumstances, such parties may 
indicate that such information  is not susceptible of summary. In such exceptional circumstances, a 
statement of the reasons why summarisation  is not possible must be provided. 

If it is considered that a request for œrifidentiality is not warranted and if the supplier of the 

19.3 
information  is either unwilling to make the information  available or to authorise its disclosure in 
generalised or summary form, such information  may be disregarded unless,it can be satisfactorily  -
demonstrated from appropriate sources that the information  is correct. Requests for  confidentiality 
should not be arbitrarily  rejected, 

This Article shall not preclude the disclosure of general information  by the Community 

19.4 
authorities and in particular of the reasons on which decisions taken pursuant to this Regulation are 
based, or disclosure of the evidence relied on by the Community authorities in so far as necessary to 
explain those reasons in court proceedings. Such disclosure must take into account the legitimate interest 
of the parties concerned that their business secrets should not be divulged. 

The Council, the Commission and Member States, or the officials  of any of these, shall not 

19.5 
reveal any information  received pursuant to this Regulation for which confidential treatment has been 
requested by its supplier, without specific permission from the supplier.  Exchanges of  information 
between the Commission and Member States or any information  relating to consultations made pursuant 
to Article  15 or any internal documents prepared by the authorities of the Community or its Member 
States shall not be divulged except as specifically provided for in this Regulation. 

Information  received pursuant to this Regulation shall be used only for the purpose for which it 

19.6 
was requested. 

37 

Article20 

Disclosure 

" ^^ 

The complainants, importers, exporters and representatives of the exporting country may request 

20.1 
disclosure of the details underlying the essential facts and considerations, on the basis of which 
provisional measures have been imposed. Requests for such disclosure shall be made in writing 
immediately following the imposition of provisional measures and the disclosure shall be made in writing 
as soon as possible thereafter. 

The parties mentioned in paragraph  1, may request final disclosure of the essential facts and 

20.2 
considerations, on the basis of which it is intended to recommend the imposition of definitive measures, 
or the termination of an investigation or proceedings without the imposition of measures, with particular 
attention being paid to the disclosure of any facts or considerations which are different from those used 
for any provisional measures. 

20.3  Requests for final disclosure, as defined in paragraph 2, shall be addressed to the Commission in 
writing and be received, in cases where a provisional duty has been applied, not later than one month 
after publication of the imposition of that duty. Where a provisional duty has not been applied, parties 
shall be provided with an opportunity to request final disclosure within time limits set by the 
Commission. 

Final disclosure shall be given in writing. It shall be made, with due regard paid to the protection 

20.4 
of confidential  information, as soon as possible and, normally, not later than one month prior to a 
definitive decision or the submission by the Commission of any proposal for final action pursuant to 
Article 9. Where the Commission is not in a position to disclose certain facts or considerations at that 
time, these shall be disclosed as soon as possible thereafter.  Disclosure shall not prejudice any 
subsequent decision which may be taken bv the Commission or the Council but where such decision is 
based on any different  facts and considerations, these shall be disclosed as soon as possible. 

Representations made after final disclosure is given shall be taken into consideration only if 

20.5 
received within a period to be set by the Commission in each case, which shall be at least  10 days, due 
consideration being given to the urgency of the matter. 

38 

3  c 
j. 
<*^ 

Article 21 

Community  interest 

21.1  Under this Regulation, a determination  as to whether the Community interest calls for 
intervention shall be based on an appreciation of all the various interests taken as a whole, including the 
interests of the domestic industry and users and consumers, and a determination under this Article shall 
only be made where all parties have been given the opportunity to make their views known under 
paragraph 2. In such an examination, the need to eliminate the trade distorting effects  of injurious 
dumping and to restore effective  competition shall be given special consideration. Measures, as 
determined on the basis of the dumping and injury found, may not be applied, where the authorities, on 
the basis of all the information  submitted, can clearly conclude that it is not in the Community interest to 
apply such measures. 

In order to provide a sound basis on which the authorities can take account of all views and 

21.2 
information  in the decision on whether, or not, the imposition of measures is in the Communitv interest, 
the complainants, importers, representative users and representative consumer organisations may, within 
the time limits specified in the notice of initiation of the anti-dumping investigation, make themselves 
known and provide information to the Commission. Such information, or appropriate summaries thereof, 
shall be made available to the other parties specified in this Article, and they shall be entitled to respond 
to such  information. 

The parties which have acted in conformity with paragraph 2 may request a hearing. Such 

21.3 
requests may be granted when they are submitted within the time limits set in paragraph 2. and when 
they set out the particular reasons, in terms of the Communitv interest why the parties should be heard. 

The parties which have acted in conformity with paragraph 2. may provide comments on the 

21.4 
application of any provisional duties imposed. Such comments shall be received within one month of the 
application of such measures if they are to be taken into account and they, or appropriate summaries 
thereof, shall be made available to other parties who shall be entitled to respond to such comments. 

The Commission shall examine the information which is properly submitted, and the extent to 

21.5 
which it is representative, and the results of such analysis, together with an opinion on its merits, shall be 
transmitted to the Advisory Committee. The balance of views expressed in the Committee shall be taken 
into account bv the Commission in any proposal made under Article 9. 

21.6 
The parties which have acted in conformity with paragraph 2. may request the facts and 
considerations on which final decisions are likely to be taken to be made available to them. Such 
information  shall be made available to the extent possible and without prejudice to any subsequent 
decision taken bv the Commission or the Council. 

21.7  Under this Article, information  shall only be taken into account where it is supported bv actual 
evidence which substantiates its validity. 

39 

Article 22 

Final  provisions 

This Regulation shall not preclude the application  of: 

any special rules laid down in agreements concluded between the Community and third 

(i) 
countries; 

(ii) 
the Community Regulations in the agricultural  sector and of Regulation (EEC) No  1059/69 (^J. 
(EEC) No 2730/75 (6); and (EEC) No 2783/75 (7); this Regulation shall operate by way of  complement 
to those Regulations and in derogation from any provisions thereof which preclude the application of 
anti-dumping duties; 

(iii) 

special measures, provided that such action does not run counter to obligations under the GATT. 

Article 23 

Repeal of existing legislation 

Regulation (EC) No 2423/88, as amended by Regulation (EC) No 521 and Regulation (EC) No 522, is 
hereby repealed. References to the repealed Regulation shall be construed as references to this 
Regulation. 

Article 24 

Entry into force 

This Regulation shall enter into force on the date determined by the decision on the entry into force of the 
acts implementing the results of the Uruguay Round. It shall apply to proceedings already initiated. 
However, the references to time limits for the initiation of proceedings and the imposition of provisional 
duties, shall only apply after  a date which the Council shall specify  in a Decision to be adopted by a 
qualified majority no later than  1 April  1995 on the basis of a Commission proposal to be submitted to 
the Council once the necessary budgetary resources have been made available. 

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

Done at Brussels, 

5 
6 
7 

O J N oL  141,12.06.1969, p.  1. 
OJ No L 281,01.11.1975, p. 20. 
OJNoL282,01.11.1975,p.  104. 

40 

•2o? 

Commercial defence 

Subsidies 

Explanatory  memorandum 

%s 

A. 

INTRODUCTION 

The Uruguay Round trade negotiations, concluded in  1994, have led to the new 
Agreement on Subsidies and Countervailing Measures ("The  Subsidies 
Agreement") which, as regards countervailing measures, is required to be 
implemented  into Community  legislation in order that, as agreed at Marrakech, it 
can come into effect  on  1  January  1995. 

The Subsidies Agreement contains new and detailed rules on subsidies and 
countervailing duty investigations, and  in view of the extent of the changes and 
to ensure an adequate and transparent implementation of the new rules, it is 
considered necessary to transpose the language of the Subsidies Agreement into 
Community  legislation to the extent possible and for this purpose the Agreement, 
rather than the existing Community legislation, Regulation (EC) No 2423/88], has 
been taken as the basis for the proposed  legislation. 

Additions to the Subsidies Agreement have been, for the most part, been restricted 
to : clarifications  where the Agreement is unclear; incorporation  of existing 
provisions on the EU's rather unique procedures and decision-making, amended to 
take account of Court judgements; and the amendment or incorporation of EU 
specific rules on issues such as negligible import volumes, sampling, non-
corporation, circumvention and Community interest, on which the Agreement is 
silent, imprecise or where it merely gives an indication of minima.  On several 
issues, more detailed provisions from the new anti-dumping regulation are used in 
this regulation, where there is no conflict with the provisions of the  Subsidies 
Agreement. 

OJ No L 209, 2.9.1988, p. 1. 

2i< 

The Subsidies Agreement sets new standards for the imposition of countervailing 
measures with its new and detailed rules on the definition of a subsidy, 
countervailability  and calculation, its increased procedural requirements  for 
initiation and subsequent investigation and its restrictions on the imposition of 
provisional duties.  Its implementation into Community legislation will, of course, 
produce the same result.  Moreover, the adoption of these new rules would,at the 
same time, improve legal certainty through greater precision, extend transparency 
and increase the rights of parties. 

In the same vein, some of the new rules, such as on negligible import volumes 
and Community interest, should further reinforce this effect  of transparency and 
legal certainty.  Community industries would have a clear idea of the minimum 
level of import volumes required both for complaints and final  action.  Moreover, 
all interested parties would be made aware of their rights and obligations with 
regard to the Community interest aspects of these cases, in that a structured 
framework  would be provided for the provision and treatment of information  by 
the authorities. 

Furthermore, it is important that measures, once taken, should be effective,  and in 

this regard a new provision on circumvention has been added. 

Finally, it will be noted that this draft countervailing duty regulation is, for the 
first time, entirely separate from the proposed legislation on anti-dumping.  This 
development is justified  by the far more detailed nature of the new Subsidies 
Agreement, the increasingly distinct procedures with regard to CVD and anti 
dumping investigations, and the consequent need to give the CVD instrument 
greater autonomy. 

Sli 

B.  MAIN FEATURES OF DRAFT COUNTERVAILING  DUTY 

REGULATION 

1. 

Definition  of a subsidy (Article 2) 

The definition  of a subsidy reproduces literally that contained in the Subsidies 
Agreement, that is, a financial contribution by public authorities and a benefit  to 
enterprises which is derived from  such financial contribution. 

2. 

Notion of a countervailable subsidy (Article 3) 

The conditions for countervailability  (or non-countervailability, as the case may 
be) also reproduce those of the Subsidies Agreement concerning specificity  of 
subsidies and the green list, as well as the so-called "green box" contained in the 
Agreement on Agriculture. 

3. 

Calculation of the amount of a countervailable subsidy (Article 4) 

The provision on calculation of the amount of a countervailable subsidy espouses 
the principle of "benefit to the recipient".  This approach is now permitted by 
Article 14 of the Subsidies Agreement, and will enhance the possibility of the 
Community using countervailing duty actions compared to the "cost to the 
government" approach.  The "benefit to the recipient" approach is more in line 
with the methodology employed in state aid cases in the Community. 

1 * V L-

4. 

Injury and Community industry (Articles 5 and 6) 

These provisions closely follow those of the Subsidies Agreement. 

5. 

Initiation of proceedings  (Article 7) 

In addition to the basic criteria for initiating countervailing duty proceedings, 
Paragraphs 5-7 also set out the conditions under which investigations can be 
opened with regard to non-countervailable types of subsidy in order to determine 
whether the criteria for non-countervailability have been met. 

6. 

Conclusion  of investigations  (Article 8) 

The Subsidies Agreement provides that investigations should normally be 
concluded within  12 months, which conflicts with the  13 months envisaged  for 
EU investigations from  1995 onwards. 

It is proposed to incorporate the provisions of the Agreement into this regulation 

(Article 8.9), although provisional duties would still have to be applied with 9 

months (Article 9.1). 

7. 

Undertakings (Article 10) 

(a) 

In countervailing duty investigations, undertakings may be. accepted  from 

Governments or exporters. 

m 

(b) 

Over the years, there have been continual  problems on what to do in cases where 
exporters have violated  or withdrawn  undertakings.  In such circumstances, it is 
considered  that  the Community  should be entitled to impose definitive  duties based 
on the findings  of the previous investigation, otherwise an exporter which is 
violating  its undertaking  could  end up in a more advantageous position than its 
rivals which may be faithfully  applying the undertakings.  Moreover,  carrying out a 
completely new investigation  based  on new facts is a time-consuming  affair  which 
should  only be undertaken  where the circumstances justify  it.  Violation does not 
appear to be one of these circumstances. 

The new provisions set out  in Articles  10.9 and  10.10 of the draft  text  would 
permit the imposition  of definitive  duties in cases of proven violation  or 
withdrawal  though,  of course, the exporter's rights would be safeguarded  in that 
he would be entitled to ask for  a review if the circumstances with regard  to 
subsidization  or injury  have changed.  Moreover, the change in measures would 
not generate a new  5 year  "sunset" period.  Where violation is only suspected, the 
remedy is a provisional  duty while the matter is under investigation. 

8. 

Negligible  import volumes  and  de minimis subsidy (Article 11). 

(a) 

This Regulation takes over the negligible import volumes for developing  countries 
set out in the Subsidies Agreement.  It also takes over the provision of the 
Agreement  that  a subsidy amount  of less than  1% ad-valorem is de minimis. 

, ^M 

(b) 

It is proposed  not to define  developing countries for the purpose of this 
Regulation.. 

9. 

Reviews and  refunds  (Article  13) 

(a) 

(b) 

The provisions on reviews and refunds  are broadly in line with those of the anti 
dumping regulation, with one exception. 

As regards accelerated  reviews for new exporters (Section C), the Subsidies 
Agreement  is far less explicit than the Anti-Dumping Agreement  on the question 
of new exporters.  Article  19.3 states only that : 

"Any exporter whose exports are subject to a definitive countervailing duty but 
who was not actually  investigated for  reasons other than a refusal  to co-operate, 
shall  be entitled  to an expedited review in order that the investigating  authorities 
promptly  establish an individual  countervailing duty rate for  that exporter. " 

IK 

There is no equivalent to the anti-dumping provisions which stipulate that the 
exporter must not have exported to the Community during the investigation 
period and must not be related to other exporters; neither is it stated that duties 
must not be collected during the review period. 

In these circumstances, it is proposed to maintain a text based on the  Subsidies 
Agreement. 

10. 

Circumvention  (Article 14) 

Anti-circumvention  measures are not mentioned in the Subsidies Agreement, and 
the appropriateness of measures against the circumvention of countervailing 
duties has to be evaluated on the basis of certain specified  conditions.  It should 
also be considered that the circumvention of countervailing duties, which result 
from a subsidy granted by a Government, by exporters, is a particular situation, 
which needs to be analysed in its proper context. 

Therefore, the anti-circumvention provision of this regulation emphasises the 
possibility of taking measures to prevent circumvention of countervailing duties 
through practices, either assembly in third countries or the Community, for which 
there is insufficient  due cause or economic justification  other than the imposition 
of the duty.  If the remedial effects  of duties are undermined, measures may be 
taken, provided that  the imported like product and/or parts still benefit from a 
countervailable  subsidy. 

This provision provides a solid safeguard  against circumvention of countervailing 

duties, and enables the Community to ensure that measures remain  effective. 

The procedural part of the Article is in line with the anti-dumping regulation. 

2^ 

11. 

Sampling (Article 18) 

There are no specific provisions on sampling in the Subsidies Agreement. 
However, it is desirable to establish rules for sampling in countervailing duty 
cases, since the same problems of large numbers of exporters and importers which 
arise in anti-dumping  investigations may also arise in countervailing duty 
proceedings.  Therefore  it is proposed to transpose the anti-dumping  regulation's 
provisions on sampling into the countervailing duty regulation. 

12. 

Non-co-operation  (Article 19) 

Article  12.7 of the Subsidies Agreement only contains the following  brief 
reference to this issue : 

"In cases in which any interested Member or interested party  refuses access to, or 
otherwise does not provide,  necessary information within a reasonable period  or 
significantly  impedes the investigation, preliminary and final  determinations, 
affirmative  or negative, may be made on the basis of the facts  available. " 

The same provision exists in the Anti-Dumping Agreement, but is supplemented 

by Annex II to that Agreement, which does not appear in the Subsidies 

Agreement. 

As regards the countervailing duty regulation, it is proposed to take over the anti 
dumping regulation's provisions on non-co-operation, given that these do not 
conflict  with Subsidy Agreement's provision, but simply expand on it, and are 
aimed at greater transparency and predictability of the Community's actions on 
this issue. 

m 

13. 

Confidentiality  (Article 20) 

Provisions on confidentiality  are based on the provisions of the  Subsidies 
Agreement, which are slightly different  from those of the Anti-Dumping 
Agreement because of the direct involvement of Governments in countervailing 
duty proceedings, and therefore  of the presence, in the record of an investigation, 
of government confidential,  as well as business confidential,  information.  In 
particular, it will be specified  that details of all bilateral consultations with 
Governments under the Subsidies Agreement are  confidential. 

14. 

Simultaneous imposition of anti-dumping and countervailing duties (Article 
15.1) 

The basic provision of GATT Article VI:5 is included in the CVD regulation. 

15. 

Relationship between countervailing duty measures and  multilateral 
remedies (Article 23) 

A provision has been inserted to permit withdrawal of countervailing duties in 
cases in which a multilateral  subsidy action has been carried out (Panel) and 
measures other than countervailing duties have been taken as a consequence of 
such action (since countervailing duty investigations and GATT panels can be 
carried out in parallel, but only one type of remedy is allowed under the  Subsidies 
Agreement). 

«MS 

16. 

Other 

It should be noted that the provisions on suspension of measures and registration 
of imports  (Article  15) and Community interest (Article 22), are in line with the 
anti-dumping provisions, as are most of the procedural rules in this regulation 
which are not specifically  referred to in this section. 

C. 

CONCLUSION 

In order to implement the 1994 Agreement on Subsidies and  Countervailing 
Measures as concluded as a result of the Uruguay Round of multilateral trade 
negotiations, and to take account of the issues set out above, the Commission 
submits to the Council 

a proposal to replace the Community's basic countervailing duty legislation. 

10 

l'\c) 

PROPOSAL FOR : 

COUNCIL REGULATION (EC) N° 

/94 
on protection against subsidised imports 

9 4/  0231 (ACC) 

from countries not members of the European  Community. 

The Council of the European Union 

Having  regard  to  the  Treaty  establishing  the  European  Community,  and  in  particular 
Article  113 thereof, 

Having  regard  to the  Regulations  establishing  the common  organisation  of  agricultural 
markets  and  the  Regulations  adopted  under  Article  235  of  the  Treaty  applicable  to 
goods manufactured  from  agricultural products, and in particular the provisions of those 
Regulations  which  allow  for  derogation  from  the  general  principle  that  protective 
measures  at  frontiers  may  be  replaced  solely  by  the  measures  provided  for  in  those 
Regulations, 

Having regard to the proposal from the Commission, 

Having regard to the opinion of the European Parliament, 

Whereas,  by  Regulation  (EEC)  N°  2423/880)  ,  as  amended  by  Regulation (EC) N° 
521/94(2)  and  Regulation  (EC)  N°  522/94(3)  the  Council  adopted  common  rules  for 
protection against dumped  or subsidised imports from countries which are not members 
of the European Economic Community; 

0)  O.J. L209, 2.8.1988,  c J. 
(2)O.J.L66,  16.3.1994, p. 7 
(3)O.J. L66,  16.3.1994, p. 10 

CA-xÀ-^s 

Whereas, these rules were adopted in accordance with existing international  obligations, 
in  particular  those  arising  from  Article  VI  of  the  General  Agreement  on  Tariffs  and 
Trade  ("the  GATT"),  from  the  Agreement  on  Implementation  of  Article  VI  of  the 
GATT ("the  1979 Anti-Dumping  Code") and from  the Agreement  on Interpretation  and 
Application of Articles VI, XVI and XXIII of the GATT ("the  1979 Subsidies Code"); 

Whereas, the conclusion of the Uruguay Round of multilateral trade negotiations has led 
to the establishment of the World Trade Organisation ("the WTO"); 

Whereas, Annex  1A to  the  Agreement  establishing  the  WTO  ("the  WTO  Agreement") 
contains,  inter  alia,  the  General  Agreement  on  Tariffs  and  Trade  1994  ("the  GATT 
1994"),  an  Agreement  on  Agriculture  ("the  Agreement  on  Agriculture"),  a  new 
Agreement  on  implementation  of  Article  VI  of  the  GATT  1,994  ("the  Anti-Dumping 
Agreement"),  and  a  new  Agreement  on  Subsidies  and  Countervailing  Measures  ("the 
Subsidies Agreement"); 

Whereas,  in order  to  reach  greater  transparency  and  effectiveness  in the  application  by 
the Community  of the rules laid down in respectively the Anti-Dumping Agreement  and 
the  Subsidies  Agreement,  it  is considered  necessary  to  adopt  two  separate  Regulations 
which will  lay  down  in  sufficient  detail the requirements  for  the application  of  each  of 
these commercial defence  instruments; 

Whereas,  it  is  therefore  appropriate  to  amend  Community  rules  governing  the 
application  of  countervailing  measures  in  the  light  of  the  new  multilateral  rules,  inter 
alia  with  regard  to  the  procedures  for  initiation  of  proceedings  and  the  conduct  of 
subsequent  investigations,  including  the  establishment  and  treatment  of  the  facts,  the 
application  of  provisional  measures,  the  imposition  and  collection  of  countervailing 
duties, the duration  and review of countervailing measures, and the public disclosure  of 
information  relating to countervailing investigations; 

1  1 

Whereas,  in  view  of  the  extent  of  the  changes  brought  about  by  the  new  Agreements 
and  to  ensure  an  adequate  and  transparent  implementation  of  the  new  rules,  it  is 
appropriate  to  transpose  the'  language  of  the  new  Agreements  into  Community 
legislation to the extent possible; 

Whereas,  furthermore  it  seems  advisable  to explain, in adequate  detail, when  a  subsidy 
shall  be  deemed  to  exist,  according  to  which  principles  it  shall  be  countervailable  (in 
particular  whether  the  subsidy  has  been  granted  specifically),  and  according  to  which 
criteria the amount of the countervailable  subsidy shall be calculated; 

Whereas,  it  is  clear  that  in  determining  the  existence  of  a  subsidy  it  is  necessary  to 
demonstrate  that there has been  a financial  contribution by a government  or any  public 
authority  within  the territory  of a country, or that there has been any  form  of income or 
price  support  in  the  sense  of  Article  XVI  of  the  GATT  1994,  and  that  a  benefit  has 
thereby been conferred  to the recipient enterprise; 

Whereas,  it  is  necessary  to  explain  in  sufficient  detail  which  kind  of  subsidies  are  not 

countervailable  and  which  procedure  shall  be  followed  if  during  an  investigation  it  is 

determined that an investigated enterprise has received non-countervailable  subsidies; 

Whereas,  the  Subsidies  Agreement  states  that  the  provisions  concerning  non-
countervailable  subsidies shall cease to apply five years after the date of entry into  force 
of the WTO Agreement,  unless they are extended by mutual agreement of the  Members 
of  the  WTO,  and  that  it  may  therefore  be  necessary  to  amend  this  Regulation 
accordingly, if the validity of those provisions is not so extended; 

Whereas,  the  measures  listed  in  Annex  2  to  the  Agreement  on  Agriculture  are  non-
countervailable, to the extent provided  for in that Agreement; 

HZ 

Whereas,  it  is  desirable  to  lay  down  clear  and  detailed  guidance  on  the  factors  which 
may  be  relevant  for  the  determination  of  whether  the  subsidised  imports  have  caused 
material injury  or are threatening to cause injury; and whereas, in demonstrating that the 
volume and price levels of the imports concerned are responsible for  injury  sustained by 
a  Community  industry,  attention  should  be  given  to  the  effect  of  other  factors  and  in 
particular existing market conditions in the Community; 

Whereas,  it  is  advisable  to  define  the  term  "Community  industry"  and  provide  that 
parties related  to  exporters may be excluded  from  such industry  and to define  the  term 
"related"; and whereas it is also necessary to provide for countervailing duty action to be 
taken with regard to producers in a region of the Community and to lay down guidelines 
on the definition  of such a region; 

Whereas,  it  is necessary  to  set  down  who  may  lodge  a countervailing  duty  complaint, 
including  the  extent  to  which  it  sholilfi $fc supported  by the  Community  industry,  and 
the information  on countervailable  subsidies, injury and causality which such complaint 
should contain; and whereas it is also expedient to specify  the procedures with regard to 
the rejection  of complaints or the initiation of proceedings; 

Whereas, it is necessary to lay down how interested parties shall be given notice of the 
information  which  the  authorities  require,  ample  opportunity  to  present  all  relevant 
evidence  and  a  full  opportunity  for  the  defence  of  their  interests;  whereas,  it  is  also 
desirable  to  set  out  clearly  the  rules  and  procedures  to  be  followed  during  the 
investigation,  in  particular  that  interested  parties  have  to  make  themselves  known, 
present  their  views  and  submit  information  within  specified  time  limits,  if  such  views 
and  information  are to  be  taken  into  account;  and  whereas  it  is  also  appropriate  to  set 
out the conditions under which an interested party may have access to, and comment on, 
information  presented  by  other  interested  parties;  whereas  there  should  also  be 
cooperation  between  the  Member  States  and  the  Commission  with  regard  to  the 
collection of  information; 

22 

Whereas, it is necessary to lay down the conditions under which provisional  duties may 

be imposed, including that they may not be imposed sooner than 60 days from  initiation 

and  no  later  than  9  months  from  initiation;  whereas,  such  duties  may  in  all  cases  be 

imposed by the Commission only for a four month period; 

Whereas, it is necessary to specify  procedures for the acceptance of undertakings  which 
eliminate  or offset  the countervailable  subsidies and injury  instead  of the imposition  of 
provisional  or  definitive  duties;  whereas  it  is  also  appropriate  to  lay  down  the 
consequences  of  violation  or  withdrawal  of  undertakings  and  that  provisional  duties 
may  be  imposed  in  cases  of  suspected  violation  or  where  further  investigation  is 
necessary  to  complete  the  findings;  whereas, in accepting  undertakings,  care  should  be 
taken  that  the  proposed  undertakings,  and  their  enforcement,  do  not  lead  to  anti 
competitive  behaviour; 

Whereas, in order to reflect the provisions of tlie Subsidies Agreement, it is necessary to 
provide  for  the  termination  of  cases,  without  or  without  measures,  normally  within 
twelve  months,  and  in  no  case  later  than  eighteen  months  from  the  initiation  of  the 
investigation;  whereas, an investigation  should be terminated  in case the amount of the 
subsidy  is  found  to  be  de  minimis  or  if,  particularly  in  case  of  imports  originating  in 
developing countries, the volume of subsidised imports or the injury  is negligible, and it 
is appropriate to define  these criteria;  whereas, where measures are to be imposed, it is 
necessary to provide for the termination of investigations and to lay down that measures 
should be less than the amount of countervailable subsidies if such lesser amount would 
remove the injury,  as well as to specify  the method of calculating the level of measures 
in cases of sampling; 

20 

Whereas, it is necessary to provide for the retroactive collection of provisional  duties as 
deemed  appropriate  and  to  define  the  circumstances  which  may  trigger  the  retroactive 
application  of duties to avoid the undermining  of the definitive  measures to be  applied; 
whereas  it is also necessary to provide  that duties may be applied  retroactively  in  cases 
of violation or withdrawal of undertakings; 

Whereas,  it  is  necessary  to  provide  that  measures  shall  lapse  after  five  years  unless  a 
review  investigation  indicates  that  they  should  be  maintained;  whereas,  it  is  also 
necessary  to  provide,  in  cases  where  sufficient  evidence  is  submitted  of  changed 
circumstances, for  interim reviews or for  investigations to determine whether refunds  of 
countervailing duties are warranted; 

Whereas, even though the Subsidies Agreement does not contain provisions  concerning 
circumvention  of countervailing  measures, the possibility  of such circumvention  exists, 
in  terms  similar,  albeit  not  identical,  to  the  circumvention  of  anti-dumping  measures; 
whereas it appears therefore  appropriate to enact an anti-circumvention provision in this 
Regulation; 

Whereas,  it  is  expedient  to  permit  the  suspension  of  countervailing  measures  where 
there is a temporary  change in market conditions which make the continued  imposition 
of such measures temporarily  inappropriate; 

Whereas,  it  is  necessary  to  provide  that  imports  under  investigation  may  be  made 

subject  to  registration  upon  importation  to  enable measures to be  subsequently  applied 

against such imports; 

Whereas,  to  ensure  a  proper  enforcement  of  measures,  it  is  necessary  that  Member 

States  monitor  and  report  to  the  Commission  the  import  trade  of  products  subject  to 

investigation  and  subject  to  measures  and  the  amount  of  duties  collected  under  this 

regulation; 

tzç 

Whereas,  it  is  necessary  to  provide  for  consultations  of  an  Advisory  Committee  at 
regular and  specified  stages of the investigation; whereas the committee  shall consist of 
representatives of Member  States with a representative of the Commission as chairman; 

Whereas, it is expedient to provide for verification  visits to check information  submitted 
on  countervailable  subsidies  and  injury,  though  such  visits  should  be  dependent  on 
proper replies to questionnaires being received; 

Whereas, it is essential  to provide  for  sampling  in cases where the number  of parties or 
transactions are large in order to permit a timely completion of investigations; 

Whereas,  it  is necessary  to  provide  that  for  parties  who  do not  cooperate  satisfactorily 
other  information  may  be  used  to  establish findings and  such  information  may  be  less 
favourable to the party than if it had cooperated; 

Whereas, provision  should be made for the treatment of confidential  information  so that 
business or governmental  secrets are not divulged; 

Whereas, it is essential  that provision  is made for the proper  disclosure  of the  essential 
facts  and  considerations  to  parties  which  qualify  for  such  treatment  and  that  such 
disclosure  is made, with  due regard  to the decision-making  process  in the  Community, 
within a time period which permits parties to defend their interests; 

Whereas,  it  is prudent  to  provide  for  an administrative  system  under  which  arguments 

can  be  presented  in  relation  to  whether  measures  are  in  the  Community  interest, 

including  the  interests  of  consumers,  and  to  lay  down  the  time  periods  within  which 

such  information  has  to  be  presented  as  well  as  the  disclosure  rights  of  the  parties 

concerned; 

4% 

Whereas,  it  is  imperative  to  link  the  implementation  of time  limits  for the  lodging  of 
complaints, the initiation of proceedings and the imposition of provisional duties to the 
establishment  of  the  necessary  administrative  structure  within  the  Commission's 
services; whereas the Council, therefore, should specify,  in a decision to be adopted by 
qualified majority no later than 1  April  1995, when these time limits shall apply; 

Whereas, in applying the rules of the Subsidies Agreement it is essential, in order to 

maintain the balance of rights and obligations which this Agreement sought to establish, 

that the Community take account of their interpretation by the Community's major 

trading partners, as reflected in legislation or established practice, 

HAS ADOPTED THIS REGULATION : 

21*3-

Article 1 

Principles 

This  Regulation  lays  down  provisions  for  protection  against  subsidised  imports 
1. 
from  countries not members of the European Community. A countervailing duty may be 
imposed for the purpose of offsetting  any subsidy granted, directly or indirectly, for  the 
manufacture,  production,  export  or  transport  of  any  product  whose  release  for  free 
circulation in the Community causes  injury. 

For the purpose  of this Regulation,  a product  is considered  as being  subsidised  if 
2. 
it  benefits  from  a  countervailable  subsidy  as  defined  in  Articles  2  and  3  of  this 
Regulation. 

3. 
Such  subsidy  may  be  granted  by the  Government  of the country  of  origin  of  the 
imported  product,  or  by  the  Government  of  an  intermediate  country  from  which  the 
product is exported to the Community, known for the purpose of this Regulation as "the 
country of export". 

4.  Notwithstanding  the  above,  where  products  are  not  directly  imported  from  the 
country of origin but are exported  to the Community from an intermediate country, the 
provisions of this Regulation shall be fully  applicable and the transaction or transactions 
shall,  where  appropriate,  be  regarded  as  having  taken  place  between  the  country  of 
origin and the Community. 

5. 

For the purpose  of this Regulation  the term  "like product"  shall be  interpreted  to 

mean  a  product  which  is  identical,  i.e.  alike  in  all  respects  to  the  product  under 

consideration,  or in the  absence of such a product, another product which  although  not 

alike  in  all  respects, has  characteristics  closely  resembling  those  of  the  product  under 

consideration. 

1  1  \ 

Article 2 

Definition  of a subsidy 

A subsidy shall be deemed to exist if: 

1. 

(a) 
there is a financial contribution by a government  or any public body  within 
the  territory  of  the  country  of  origin  or  export  (hereinafter  referred  to  as 
"government"), i.e. where: 

(i) 

a government practice involves a direct transfer  of funds  (e.g., grants, loans, 
and  equity  infusion),  potential  direct  transfers  of  funds  or  liabilities  (e.g., 
loan guarantees); 

(ii)  government revenue that is otherwise due, is foregone  or not collected  (e.g., 
fiscal  incentives  such  as  tax  credits);  in  this  regard,  the  exemption  of  an 
exported  product  from  duties  or  taxes  borne  by  the  like  product  when 
destined  for  domestic consumption, or the remission  of such duties or taxes 
in  amount  not  in  excess  of  those  which  have  been  accrued,  shall  not  be 
deemed  to  be  a  subsidy,  provided  that  such  an  exemption  is  granted  in 
accordance with the provisions of Annexes I-III to this Regulation; 

(iii)  a  government  provides  goods  or  services  other  than  general  infrastructure, 

or purchases goods; 

(iv)  a government 

' 

' 

-

makes payments to a funding  mechanism, or 
entrusts or directs a private body to carry  out one or more of the  type 
of  functions  illustrated  in  (i) to  (iii)  above  which  would  normally  be 
vested in the government, and 

10 

2-1S. 

the  practice,  in  no  real  sense,  differs  from  practices  normally  followed  by 
governments; 

or 

there  is any  form  of income  or price  support  in the  sense  of Article XVI  of 

(b) 
the GATT 1994, 

and 

2. 

a benefit  is thereby  conferred. 

11 

2^ 

Article 3 

Countervailability of subsidies 

A.  PRINCIPLE 

Subsidies as defined by Article-2 shall be subject to countervailing measures only 

1. 
if they are specific, as defined in Paragraphs 2 to 4 below. 

B.  SPECIFICITY 

2. 
In order to determine whether a subsidy, as defined  in Article 2 above is  specific 
to an enterprise or industry or group of enterprises or industries (hereinafter  referred  to 
as "certain enterprises") within the jurisdiction of the granting authority, the  following 
principles shall apply: 

(a)  Where  the  granting  authority,  or  the  legislation  pursuant  to  which  the 
granting authority  operates, explicitly  limits access to a subsidy  to  certain 
enterprises, such subsidy shall be specific. 

(b)  Where  the  granting  authority,  or  the  legislation  pursuant  to  which  the 
granting  authority  operates,  establishes  objective  criteria  or  conditions 
governing the eligibility for, and the amount of,  a subsidy, specificity  shall 
not exist, provided that the eligibility is automatic and that such criteria and 
conditions are strictly adhered to. 

For the purpose of this Article, objective criteria or conditions mean criteria 
or conditions which are neutral, which do not favour certain enterprises over 
others, and which are economic in nature and horizontal in application, such 
as number of employees or size of enterprise. 

12 

lyi 

The  criteria  or conditions  must be clearly  spelled  out  in  law,  regulation,  or 
other official  document, so as to be capable of  verification. 

(c) 

If,  notwithstanding  any  appearance  of  non-specificity  resulting  from  the 
application  of the principles  laid down  in subparagraphs  (a) and  (b) above, 
there  are  reasons  to  believe  that  the  subsidy  may  in  fact  be  specific,  other 
factors may be considered.  Such factors are: use of a subsidy programme by 
a  limited  number  of  certain  enterprises,  predominant  use  by  certain 
enterprises,  the  granting  of  disproportionately  large  amounts  of  subsidy  to 
certain  enterprises,  and  the  manner  in which  discretion  has  been  exercised 
by the  granting  authority  in the  decision  to  grant  a subsidy.  In this  regard, 
information  on  the  frequency  with  which  applications  for  a  subsidy  are 
refused  or  approved  and  the reasons  for  such decisions  shall,  in  particular, 
be considered. 

In  applying  this  provision,  account  shall  be  taken  of  the  extent  of 
diversification  of economic  activities within the jurisdiction  of the  granting 
authority,  as  well  as  of  the  length  of  time  during  which  the  subsidy 
programme has been in operation. 

3.  A  subsidy  which  is  limited  to  certain  enterprises  located  within  a  designated 
geographical  region  within  the jurisdiction  of  the  granting  authority  shall  be  specific. 
The  setting  or  change  of  generally  applicable  tax  rates  by  all  levels  of  government 
entitled  to  do  so  shall  not  be  deemed  to  be  a specific  subsidy  for  the  purposes  of  this 
Regulation. 

4. 

Irrespective of the provisions of paragraphs 2 and 3 above, the following  subsidies 

shall be deemed to be specific: 

(a)  Subsidies  contingent,  in  law or  in fact,  whether  solely  or  as  one  of  several 
other  conditions,  upon  export  performance,  including  those  illustrated  in 
Annex I to this Regulation. 

13 

l^ 

Subsidies  shall  be  considered  to  be  contingent  in  fact  upon  export 
performance  when  the  facts  demonstrate  that  the  granting  of  a  subsidy, 
without having been made legally contingent upon export performance,  is in 
fact  tied  to  actual  or  anticipated  exportation  or  export  earnings.  The  mere 
fact  that a subsidy  is accorded to enterprises which export  shall  not  for  that 
reason  alone  be  considered  to  be  an  export  subsidy  within  the  meaning  of 
this provision. 

(b)  Subsidies  contingent,  whether  solely  or  as  one  of  several  other  conditions, 

upon the use of domestic over imported goods. 

5.  Any  determination  of  specificity  under  the  provisions  of  this  Article  shall  be 
clearly substantiated on the basis of positive evidence. 

C.  NON-COUNTERVAILABLE  SUBSIDIES 

6. 

The following  subsidies shall not be subjected to countervailing measures: 

(a)  Subsidies  which  are not  specific  within the meaning  of paragraphs  2 and  3 

of this Article; 

(b)  Subsidies  which  are  specific,  within  the  meaning  of paragraphs  2  and  3 of 

this Article, but  which  meet the  conditions  provided  for  in paragraphs  7,  8 

or 9 below. 

(c)  The  element  of  subsidy  which  may  exist  in  any  of  the  measures  listed  in 

Annex IV to this Regulation. 

14 

B^ 

Subsidies  for  research  activities  conducted  by  firms  or  by  higher  education  or 
7. 
research  establishments  on  a  contract  basis  with  firms  shall  not  be  subject  to 
countervailing  measures, if the subsidies cover not more than 75 per cent of the costs of 
industrial  research  or  50 per  cent  of the  costs  of pre-competitive  development  activity, 
and provided that such subsidies are limited exclusively to: 

(i) 

personnel  costs  (researchers,  technicians  and  other  supporting  staff  employed 
exclusively  in the research activity); 

(ii) 

costs  of  instruments,  equipment,  land  and  buildings  used  exclusively  and 
permanently  (except  when  disposed  of  on  a  commercial  basis)  for  the  research 
activity; 

(iii)  costs  of  consultancy  and  equivalent  services  used  exclusively  for  the  research 

activity, including bought-in research, technical knowledge, patents, etc.; 

(iv)  additional overhead costs incurred directly as a result of the research activity; 

(v)  other  running  costs  (such  as  those  of  materials,  supplies  and  the  like),  incurred 

directly as a result of the research activity. 

For the purpose of this paragraph: 

(a)  The  allowable  levels  of non-countervailable  subsidy  referred  to  in this  paragraph 
shall  be  established  by  reference  to  the  total  eligible  costs  incurred  over  the 
duration of an individual  project. 

In case of programmes which span both "industrial research" and  "pre-competitive 
development  activity",  the  allowable  level  of  non-countervailable  subsidy  shall 
not  exceed  the  simple  average  of  the  allowable  levels  of  non-countervailable 
subsidy  applicable  to  the  above  two  categories,  calculated  on  the  basis  of  all 
eligible costs as set forth in items (i)-(v) of this paragraph. 

15 

XVLl 

(b)  The  term  "industrial  research"  means  planned  search  or  critical  investigation 
aimed  at  discovery  of  new  knowledge,  with  the  objective  that  such  knowledge 
may  be useful  in  developing  new products, processes  or  services, or  in  bringing 
about a significant improvement to existing products, processes or services. 

(c)  The  term  "pre-competitive  development  activity"  means  the  translation  of 
industrial  research findings into a plan, blueprint  or design  for  new, modified  or 
improved  products,  procteEsesH or  services  whether  intended  for  sale  or  use, 
including  the  creation  ofm;  first  prototype  which  would  not  be  capable  of 
commercial  use. It may  further  include the conceptual  formulation  and design  of 
products,  processes  or  services  alternatives  and  initial  demonstration  or  pilot 
projects,  provided  that  these  same  projects  cannot  be  converted  or.used  for 
industrial  application  or  commercial  exploitation.  It  does  not  include  routine  or 
periodic alterations to existing products, production lines, manufacturing  process, 
services,  and  other  on-going  operations  even  though  those  alterations  may 
represent improvements.  The provisions of this paragraph shall not apply to civil 
aircraft  (as defined  in the  1979 Agreement on Trade in Civil Aircraft,  as amended, 
or in any later Agreement amending or replacing such Agreement). 

8. 
Subsidies  to  disadvantaged  regions  within  the  territory  of  the  country  of  origin 
and/or  export,  given  pursuant  to  a  general  framework  of  regional  development,  and 
which  would  be  non-specific  if  the  criteria  laid  down  in  paragraphs  2  and  3  of  this 
Article  were  applied  to  each  eligible  region  concerned,  shall  not  be  subject  to 
countervailing measures provided that: 

(i) 

each  disadvantaged  region  is  a  clearly  designated  contiguous  geographical  area 
with a definable economic and administrative identity; 

16 

&\ 

(ii) 

the  region  is  considered  as  disadvantaged  on  the  basis  of  neutral  and  objective 
criteria,  indicating  that  the  region's  difficulties  arise out  of more than  temporary 
circumstances; such criteria must be clearly spelled out in law, regulation, or other 
official  document, so as to be capable of verification; 

(iii) 

the criteria include a measurement of economic development which shall be based 
on at least one of the following  factors: 

one of either income per capita or hou^iold income per capita, or GDP per 
capita, which must not be above 85 per cent of the average for the territory 
of the country of origin or export concerned; 

unemployment  rate, which must be at least  110 per cent of the average  for 
the territory of the country of origin or export concerned; 

as  measured  over  a  three-year  period:  such  measurement,  however,  may  be  a 
composite one and may include other factors. 

For the purpose of this paragraph : 

(a)  A  "general  framework  of  regional  development"  means  that  regional  subsidy 
programmes are part of an internally consistent and generally applicable  regional 
development  policy  and  that  regional  development  subsidies  are  not  granted  in 
isolated  geographical  points  having  no,  or  virtually  no  influence  on  the 
development of a region. 

(b) 

"Neutral and objective criteria" means criteria which do not favour certain regions 
beyond what is appropriate for the elimination or reduction of regional  disparities 
within the framework of the regional development policy. In this regard, regional 
subsidy programmes shall include ceilings on the amount of subsidy which can be 
to 
granted 

17 

ïtto 

each  subsidised  project.  Such  ceilings  must  be  differentiated  according  to  the 
different  levels of development of eligible regions and must be expressed in terms 
of  investment  costs  or  the  cost  of  job  creation.  Within  such  ceilings,  the 
distribution  of  subsidy  shall  be  sufficiently  broad  and  even  to  avoid  the 
predominant  use  of  a  subsidy  by,  or  the  granting  of  disproportionately  large 
amounts of subsidy to, certain enterprises. This sub-paragraph  shall be applied  in 
the light of the criteria set out in paragraphs 2 and 3 of this Article. 

9. 
Subsidies  to  promote  adaptation  of  existing  facilities  to  new  environmental 
requirements imposed by law ancj/or regulations which result in greater constraints and 
financial burden on firms, shall not be subject to countervailing measures, provided that 
the subsidy: 

(i) 

is a one-time non-recurring measure; and 

(ii) 

is limited to 20 per cent of the cost of adaptation; and 

(iii)  does  not  cover  the  cost  of  replacing  and  operating  the  subsidised  investment, 

which must be fully borne by firms; and 

(iv) 

is directly  linked to  and proportionate to a firm's planned  reduction  of nuisances 
and pollution,  and does not cover any manufacturing  cost  savings which may  be 
achieved; and 

(v) 

is  available  to  all  firms  which  can  adopt  the  new  equipment  and/or  production 

processes. 

For the purpose  of this paragraph the term  "existing  facilities"  means  facilities  having 
been  in  operation  for  at  least  two  years  at  the  time  when  new  environmental 
requirements are imposed. 

18 

13} 

Article 4 

Calculation of the amount of the countervailable subsidy 

A. PRINCIPLE 

The amount of countervailable  subsidies, for the purpose of this Regulation,  shall 
1. 
be calculated  in terms  of the benefit  conferred  to the recipient  which  is found  to  exist 
during the investigation period for subsidisation. Normally this period shall be the most 
recent  accounting  year  of  the  beneficiary,  but  may  be  any  other  period  of  at  least  six 
months prior to the initiation  of the investigation  for which reliable financial and other 
relevant data are available. 

B. CALCULATION OF BENEFIT TO THE RECIPIENT 

2.  As  regards  the  calculation  of  benefit  to  the  recipient,  the  following  rules  shall 
apply: 

(a)  Government provision of equity capital shall not be considered as conferring 
a  benefit,  unless  the  investment  can  be  regarded  as  inconsistent  with  the 
usual  investment  practice  (including  for  the  provision  of  risk  capital)  of 
private investors in the territory of the country of origin and/or export. 

.(b)  A  loan  by  a  government  shall  not  be  considered  as  conferring  a  benefit, 
unless there  is a difference  between the amount that the firm receiving  the 
loan pays  on the government  loan and the amount that the firm would  pay 
for  a comparable  commercial  loan which the firm could  actually  obtain on 
the market. In this case the benefit  shall be the difference  between the two 
amounts. 

19 

2M 

(c)  A loan  guarantee  by  a  government  shall  not be considered  as conferring  a 
benefit,  unless  there  is  a  difference  between  the  amount  that  the  firm 
receiving  the  guarantee  pays  on  a  loan  guaranteed  by  the  government  and 
the  amount  that  the  firm  would  pay  for  a  comparable  commercial  loan 
absent  the  government  guarantee.  In  this  case  the  benefit  shall  be  the 
difference  between these two amounts adjusted for any differences  in fees. 

(d)  The provision  of goods or services or purchases of goods by a government 
shall not be considered as-conferring  a benefit  unless the provision  is made 
for  less than adequate remuneration, or the purchase is made for  more than 
adequate remuneration.  The  adequacy  of remuneration  shall  be  determined 
in  relation  to  prevailing  market  conditions  for  the  good  or  service  in 
question  in the  country  of  provision  or purchase  (including  price,  quality, 
availability,  marketability,  transportation  and  other  conditions  of  purchase 
or sale). 

C. GENERAL PROVISIONS ON CALCULATION 

The  amount  of  countervailable  subsidies  shall  be  determined  according  to  the 

3. 
following  provisions 

(a)  The amount of the countervailable  subsidies shall be determined per unit of 

the subsidised product exported to the Community. 

(b) 

In  establishing  this  amount  the  following  elements  may  be  deducted  from 
the total subsidy: 

(i) 

any  application  fee,  or  other  costs  necessarily  incurred  in  order  to 
qualify  for, or to obtain, the subsidy; 

20 

Xà5 

(ii)  export  taxes,  duties  or  other  charges  levied  on  the  export  of  the 

product to the Community specifically intended to offset the subsidy. 

Where an interested party claims a deduction, it must prove that the claim is 
justified. 

(c)  Where  the  subsidy 

is  not  granted  by  reference 
transported, 

the  quantities 
to 
manufactured,  produced,  exported  ?or 
the  amount  of 
countervailable  subsidy  shall  be  determined  by  allocating  the  value  of  the 
total subsidy, as appropriate, over the level of production, sales or exports of 
the products concerned during the investigation period for  subsidisation. 

(d)  Where the subsidy  can be linked to the acquisition or future  acquisition  of 
fixed  assets, the  amount  of  the  countervailable  subsidy  shall  be  calculated 
by  spreading  the  subsidy  across  a  period  which  reflects  the  normal 
depreciation  of  such  assets  in  the  industry  concerned.  The  amount  so 
calculated  which  is  attributable  to  the  investigation  period,  inoiuding  that 
which  derives  from  fixed  assets  acquired  before  this  period,  shall  be 
allocated as described in sub-paragraph 3(c). 

Where  the  assets  are  non-depreciating,  the  subsidy  shall  be  valued  as  an 
interest-free  loan, and be treated  in accordance with paragraph  2(b) of  this 
Article. 

(e)  Where  a  subsidy  cannot  be  linked  to  the  acquisition  of  fixed  assets,  the 
amount  of  the  benefit  received  during  the  investigation  period  shall  in 
principle  be  attributed  to  this  period,  and  allocated  as  described  in  sub 
paragraph 3(c), unless special circumstances arise justifying  attribution over 
a different  period. 

21 

llfC 

Article 5 

Determination of Injury 

1.  Under  this  Regulation,  the  term  "injury"  shall,  unless  otherwise  specified,  be 
taken to mean material injury to the Community industry, threat of material injury to the 
Community  industry  or  material  retardation  of  the  establishment  of  such  an  industry, 
and shall be interpreted in accordance with the provisions of this Article. 

2.  A  determination  of  injury  shall  be  based  on  positive  evidence  and  involve  an 
objective examination of both (a) the volume of the subsidised imports and the effect  of 
the subsidised imports on prices in the Community market for like products, and (b) the 
consequent impact of these imports on the Community industry. 

3.  With regard to the volume of the subsidised imports, consideration  shall be given 
as  to  whether  there  has  been  a  significant  increase  in  subsidised  imports,  either  in 
absolute-terms or relative to production or consumption in the Community. With regard 
to  the  effect  of  the  subsidised  imports  on  prices,  consideration  shall  be  given  as  to 
whether  there  has  been  a  significant  price  undercutting  by  the  subsidised  imports  as 
compared  with the price  of  a like product  of the  Community,  or whether  the  effect  of 
such  imports  is  otherwise  to  depress  prices  to  a  significant  degree  or  prevent  price 
increases,  which  otherwise  would  have  occurred,  to  a  significant  degree.  No  one  or 
several of these factors can necessarily give decisive guidance. 

4.  Where  imports  of  a  product  from  more  than  one  country  are  simultaneously 
subject  to  countervailing  duty  investigations,  the  effects  of  such  imports  shall  be 
cumulatively  assessed  only  if  it  is  determined  that  (1)  the  amount  of  countervailable 
relation 
subsidies 

established 

in 

22 

M 

to the imports  from  each country  is more than de minimis as defined  in paragraph  3 of 
Article  11 and that the volume of imports from  each country is not negligible and (2) a 
cumulative  assessment  of  the  effects  of  the  imports  is  appropriate  in  light  of  the 
conditions of competition between imported products and the conditions of competition 
between the imported products and the like Community product. 

5. 
The  examination  of  the  impact  of  the  subsidised  imports  on  the  Community 
industry  concerned  shall  include  an  evaluation  of  all  relevant  economic  factors  and 
indices having a bearing on the state of the industry, including: the fact that an industry 
is still in the process of recovering from the effects  of past subsidisation or dumping, the 
magnitude  of  the  amount  of  countervailable  subsidies,  actual  and  potential  decline  in 
sales,  profits,  output,  market  share,  productivity,  return  on  investments,  utilisation  of 
capacity;  factors  affecting  Community  prices;  actual  and potential  negative  effects  on 
cash  flow,  inventories,  employment,  wages,  growth,  ability  to  raise  capital  or 
investments and, in the case of agriculture, whether there has been an increased  burden 
on Government  support programmes. This list is not exhaustive, nor can one or several 
of these factors necessarily give decisive guidance. 

6. 
It  must  be  demonstrated,  from  all  the relevant  evidence presented  in  relation  to 
paragraph  2, that  the  subsidised  imports  are causing  injury  within the  meaning  of  this 
Regulation.  Specifically,  this  shall entail a demonstration that the volume  and/or price 
levels  identified  under  paragraph  3  are  responsible  for  an  impact  on  the  Community 
industry  as provided  for  in paragraph  5, and that this impact  exists to  a degree  which 
enables it to be classified  as material. 

7.  Known  factors  other  than  the  subsidised  imports  which  at  the  same  time  are 
injuring the Community industry shall also be examined to ensure that injury  caused by 
these other factors is not attributed to the subsidised imports under paragraph 6. Factors 
which  may  be  considered  in this  respect  include,  inter  alia, the  volume  and  prices  of 
non-subsidised 
imports,  contraction  in  demand  or  changes  in  the  patterns  of 
consumption,  trade  restrictive  practices  of  and  competition  between  the  foreign  and 
Community  producers,  developments  in  technology  and  the  export  performance  and 
productivity of the Community industry. 

23 

l i p. 

The effect  of the subsidised imports shall be assessed in relation to the production 
8. 
of the Community  industry  of the like product when available data permit the  separate 
identification  of that production on the basis of such criteria as the production process, 
producers'  sales  and  profits.  If  such  separate  identification  of  that  production  is  not 
possible, the  effects  of the  subsidised  imports  shall be assessed  by the  examination  of 
the  production  of  the  narrowest  group  or  range  of  products,  which  includes  the  like 
product, for which the necessary information can be provided. 

9.  A  determination  of  a  threat  of  material  injury  shall  be  based  on  facts  and  not 
merely  on  allegation,  conjecture  or  remote  possibility.  The  change  in  circumstances 
which would create a situation in which the subsidy would cause injury  must be clearly 
foreseen and imminent. 

In making  a determination  regarding  the existence of a threat  of material  injury, 

10. 
consideration should be given to, inter alia, such factors as: 

(i) 

the nature of the subsidy or subsidies in question and the trade effects  likely 
to arise  therefrom; 

(ii) 

a  significant  rate  of  increase  of  subsidised  imports  into  the  Community 
market indicating the likelihood of substantially increased imports; 

(iii)  sufficient  freely  disposable  or an imminent, substantial  increase in capacity 
of  the  exporter 
increased 
subsidised  exports  to  the  Community  market,  taking  into  account  the 
availability of other export markets to absorb any additional exports; 

indicating  the  likelihood  of  substantially 

(iv)  whether  imports  are entering  at prices that would,  to  a  significant  degree, 
depress  prices  or  prevent  price  increases  which  otherwise  would  have 
occurred, and would likely increase demand for further imports; and 

24 

ilfi 

(v) 

inventories of the product being investigated. 

11.  No one of the factors  listed above by itself can necessarily give decisive guidance 
but  the  totality  of  the  factors  considered  must  lead  to  the  conclusion  that  further 
subsidised  exports  are  imminent  and  that,  unless  protective  action  is  taken,  material 
injury would occur. 

25 

2-1,3 

Article 6 

Definition  of Community  Industry 

For  the  purposes  of  this  Regulation,  the  term  "Community  industry"  shall  be 
1. 
interpreted as referring to the Community producers as a whole of the like product or to 
those of them whose collective output of the products constitutes a major proportion, as 
defined  in  paragraph  8  of  Article  7,  of  the  total  Community  production  of  those 
products, except that 

(i)  when  producers  are related  to the exporters  or importers  or are  themselves 
importers  of  the  allegedly  subsidised  product,  the  term  "the  Community 
industry" may be interpreted as referring to the rest of the producers; 

(ii) 

in  exceptional  circumstances  the  territory  of  the  Community  may,  for  the 
production  in  question,  be  divided  into  two  or  more  competitive  markets 
and  the  producers  within  each  market  may  be  regarded  as  a  separate 
industry if (a) the producers within such market sell all or almost all of their 
production of the product in question in that market, and (b) the demand in 
that  market  is  not  to  any  substantial  degree  supplied  by  producers  of  the 
product  in  question  located  elsewhere  in  the  Community.  In  such 
circumstances, injury  may be found to exist even where a major  proportion 
of  the  total  Community  industry  is  not  injured,  provided  there  is  a 
concentration  of  subsidised  imports  into  such  an  isolated  market  and 
provided  further  that  the  subsidised  imports  are  causing  injury  to  the 
producers of all or almost all of the production within such market. 

For  the  purpose  of  paragraph  1, producers  shall  be  considered  to  be  related  to 
2. 
exporters or importers only if (a) one of them directly or indirectly controls the other; or 
(b) both  of them  are directly  or indirectly  controlled  by a third person; or  (c) together 
they  directly  or  indirectly  control  a  third  person,  provided  that  there  are  grounds  for 
suspecting 
or 
believing 

26 

2^ 

that the effect  of the relationship  is such as to cause the producer  concerned to  behave 
differently  from  non-related  producers. For the purpose of this paragraph,  one  shall  be 
deemed  to  control  another  when the former  is legally  or operationally  in a position  to 
exercise restraint or direction over the latter. 

3.  Where the Community  industry has been interpreted as referring  to the producers 
in a certain region, the exporters or the Government  granting  countervailable  subsidies 
shall be given an opportunity to offer  undertakings pursuant to Article  10 in respect of 
the  region  concerned.  If  an  adequate  undertaking  is  not  offered  promptly  or  the 
situations set out in paragraphs 9 and  10 of Article  10 apply, a provisional  or  definitive 
countervailing  duty  may be imposed  in respect  of the Community  as a whole. In  such 
cases the duties may, if practicable, be limited to specific products or exporters. 

4. 

The provisions of paragraph 8 of Article 5 shall apply to this Article. 

27 

2-l/A-

Article 7 

Initiation of proceedings 

1. 
Except  as  provided  for  in  paragraph  10  of  this  Article,  an  investigation  to 
determine the existence, degree and effect  of any alleged subsidy shall be initiated upon 
a written complaint  by any natural  or legal person, or any association not having  legal 
personality, acting on behalf of the Community industry. 

(i)  The  complaint  may  be  submitted  to  the  Commission,  or  a  Member  State, 
which  shall  forward  it  to  the  Commission.  The  Commission  shall  send 
Member  States a copy of any complaint it receives. The complaint  shall be 
deemed to have been lodged on the first working day following  its delivery 
to the Commission by registered mail or the issuing of an acknowledgement 
of receipt by the Commission. 

(ii)  Where, in the absence of any complaint, a Member State is in possession of 
sufficient  evidence of subsidisation and of injury resulting therefrom  for the 
Community  industry,  it  shall  immediately  communicate  such  evidence  to 
the Commission. 

2.  A complaint under paragraph  1 shall include sufficient  evidence  of the  existence 
of countervailable subsidies (including, if possible, of their amount), injury  and a causal 
link  between  the  allegedly  subsidised  imports  and  the  alleged  injury.  The  complaint 
shall  contain  such  information  as  is  reasonably  available  to  the  complainant  on  the 
following: 

(i) 

identity of the complainant and a description of the volume and value of the 
Community  production  of  the  like  product  by  the  complainant.  Where  a 
written  complaint  is  made  on  behalf  of  the  Community  industry,  the 
complaint  shall  identify  the  industry  on behalf  of  which  the  complaint  is 
all 
made 

list 

by 

of 

a 

28 

m, 

known  Community  producers  of  the  like  product  (or  associations  of 
Community  producers  of  the  like  product)  and,  to  the  extent  possible,  a 
description  of the volume  and  value  of  Community  production  of  the  like 
product accounted for by such producers; 

(ii) 

a complete description of the allegedly subsidised product, the names of the 
country or countries of origin and/or export in question, the identity of each 
known  exporter  or foreign  producer  and a list of known persons  importing 
the product in question; 

(iii)  evidence with regard to the existence, amount, nature and  countervailability 

of the subsidies in question; 

(iv) 

information  on  the  evolution  of  the  volume  of  the  allegedly  subsidised 
imports,  the  effect  of  these  imports  on  prices  of  the  like  product  in  the 
Community  market  and  the  consequent  impact  of  the  imports  on  the 
Community  industry,  as  demonstrated  by  relevant  factors  and  indices 
having  a  bearing  on  the  state  of  the  Community  industry,  such  as  those 
listed in paragraphs 3 and 5 of Article 5. 

3. 
The Commission shall, to the degree possible, examine the accuracy and adequacy 
of  the  evidence  provided  in  the  complaint  to  determine  whether  there  is  sufficient 
evidence to justify the initiation of an investigation. 

4.  An investigation may be initiated in order to determine whether or not the alleged 
subsidies  are  specific  within  the  meaning  of  paragraphs  2  and  3  of  Article  3  of  this 
Regulation. 

5.  An investigation may also be initiated in respect of subsidies  non-countervailable 
according to paragraphs 7, 8 or 9 of Article 3 in order to determine whether or not the 
conditions laid down in those paragraphs have been met. 

29 

Ll<> 

6. 
If a subsidy  is granted pursuant to a subsidy programme which has been  notified 
in  advance  of  its  implementation  to  the  WTO  Committee  on  Subsidies  and 
Countervailing Measures in accordance with the provisions of Article 8 of the Subsidies 
Agreement,  and  in  respect  of  which  the  Committee  has  failed  to  determine  that  the 
relevant  conditions  laid  down  in  Article  8 of the  Subsidies  Agreement  have  not  been 
met,  an  investigation  shall  not  be  initiated  in respect  of a subsidy  granted  pursuant  to 
such a programme, unless a violation of Article 8 of the Subsidies Agreement has been 
ascertained  by the  competent  WTO Dispute  Settlement  Body  or through  arbitration  as 
provided in paragraph 5 of Article 8 of the Subsidies Agreement. 

7.  An investigation may also be initiated in respect of measures of the type listed in 
Annex  IV to  this  Regulation,  to  the  extent  that they  contain  an  element  of  subsidy  as 
defined  by  Article  2,  in  order  to  determine  whether  the  measures  in  question  fully 
conform to the provisions of Annex IV. 

8.  An investigation  shall not be initiated pursuant to paragraph  1 unless it has been 
determined,  on the basis of an examination  of the degree of support  for,  or  opposition 
to,  the  complaint  expressed  by  Community  producers  of  the  like  product,  that  the 
complaint  has  been  made  by  or  on behalf  of the  Community  industry.  The  complaint 
shall be considered to have been made "by or on behalf of the Community industry" if it 
is supported  by  those  Community  producers  whose collective  output  constitutes  more 
than 50 per cent of the total production of the like product produced by that portion of 
the  Community  industry  expressing  either  support  for  or  opposition  to  the  complaint. 
However,  no  investigation  shall  be  initiated  when  Community  producers  expressly 
supporting the complaint account for less than 25 per cent of total production of the like 
product produced by the Community industry. 

30 

^u 

9. 
The  Commission  shall  avoid,  unless  a  decision  has  been  made  to  initiate  an 
investigation,  any  publicising  of  the  complaint  for  the  initiation  of  an  investigation. 
However,  as  soon  as  possible  after  the  receipt  of  a  properly  documented  complaint 
under  this  Article,  and  in  any  event  before  the  initiation  of  an  investigation,  the 
Commission  shall  notify  the  Government  of  the  country  of  origin  and/or  export 
concerned,  and  this  Government  shall  be  invited  for  consultations  with  the  aim  of 
clarifying  the situation  as to matters referred  to in Paragraph  2 above  and arriving  at a 
mutually agreed solution. 

10. 
If  in  special  circumstances,  the  Commission  decides  to  initiate  an  investigation 
without having received a written complaint by or on behalf of the Community  industry 
for  the  initiation  of  such  investigation,  this  shall  be  done  on  the  basis  of  sufficient 
evidence  of  the  existence  of  countervailable  subsidies,  injury  and  causal  link,  as 
described in paragraph 2, to justify  the initiation of an investigation. 

11.  The  evidence  of both  subsidies  and  injury  shall be considered  simultaneously  in 
the  decision  whether  or  not  to  initiate  an  investigation.  A  complaint  shall  be  rejected 
where  there  is  insufficient  evidence  of  either  countervailable  subsidies  or  of  injury  to 
justify  proceeding with the case. 

12.  The  complaint  may  be  withdrawn  prior  to  initiation,  in  which  case  it  shall  be 
considered not have been lodged. 

13.  Where, after  consultation, it is apparent that there is sufficient  evidence to justify 
initiating  proceedings  the  Commission  shall  initiate proceedings  within  one  month  of 
the  lodging  of  the  complaint  and  publish  a  notice  in  the  Official  Journal  of  the 
European  Communities.  Where 
the 
complainant  shall, after  consultation,  be  so informed  within  one month  of the  date  on 
which the complaint is lodged with the Commission. 

insufficient  evidence  has  been  presented, 

31 

2l<5 

14.  The  notice  of  initiation  of  the  proceeding  shall  announce  the  initiation  of  an 
investigation,  indicate  the  product  and  countries  concerned,  give  a  summary  of  the 
information received and provide that all relevant information is to be communicated to 
the  Commission;  it  shall  state  the  periods  within  which  interested  parties  may make 
themselves known, present their views in writing and submit information, if such views 
and information are to be taken into account during the investigation; it shall also state 
the period within which interested parties may apply to be heard by the Commission in 
accordance with paragraph 5 of Article 8. 

15.  The  Commission  shall  advise  the  exporters  and  importers  known  to  it  to  be 
concerned,  as well  as the  Government  of the country of  origin and/or export and the 
complainants, of the initiation of the proceedings and, with due regard to the protection 
of confidential  information, provide the full text of the written complaint received under 
paragraph  1 to  the  known  exporters,  and to  the  authorities  of  the  country  of  origin 
and/or export, and make it available, upon request, to other interested parties involved. 
Where the number of exporters involved is particularly high, the full text of the written 
complaint  should  instead be prov»8©# $nly  to the authorities of the  country  of  origin 
and/or export or to the relevant tradeassociation. 

16.  A  countervailing  duty  investigation  shall  not hinder the  procedures  of  customs 
clearance. 

32 

^yi 

Article 8 

The investigation: information and procedure 

Following  the  initiation  of  the  proceedings,  the  Commission,  acting  in  co 
1. 
operation  with  the  Member  States,  shall  commence  an  investigation  at  Community 
level.  Such  investigation  shall  cover  both  subsidisation  and  injury  and  these  shall  be 
the  purpose  of  a  representative  finding,  an 
investigated  simultaneously.  For 
investigation period shall be selected which, in the case of subsidisation, shall normally 
cover  the  investigation  period  provided  for  in  paragraph  1 of  Article  4.  Information 
relating to a period  subsequent to the investigation period shall, normally, not be taken 
into account. 

2. 
Parties receiving  questionnaires  used  in a countervailing  duty  investigation  shall 
be given at least thirty days for reply. The time4imit for exporters shall be counted from 
the date of receipt of the questionnaire, which for this purpose shall be deemed to have 
been  received  one  week  from  the  day  on^whâfflai  it  was  sent  to  the  respondent  or 
transmitted  to the appropriate  diplomatic representative of the country  of origin and/or 
export. An extension to the thirty day period may be granted, taking due account of the 
time limits of the investigation and provided the party gives a good reason, in terms of 
its particular circumstances, for such extension. 

3. 
The Commission may request Member States to supply information,  and Member 
States shall take whatever  steps are necessary  in order to give effect  to  such requests. 
They  shall send to the Commission the information  requested together with the results 
of  all  inspections,  checks  or  investigations  carried  out.  Where  this  information  is  of 
general  interest  or  where  its transmission  has  been requested  by  a Member  State, the 
Commission  shall  forward  it to the  Member  States, provided  it  is  not  confidential,  in 
which case a non-confidential  summary shall be forwarded. 

33 

3S1 

4. 
The  Commission  may  request  Member  States  to  carry  out  all  necessary  checks 
and inspections, particularly amongst importers, traders and Community producers, and 
to  carry  out  investigations  in  third  countries, provided  the  firms  concerned  give  their 
consent and the government of the country  in question has been officially  notified  and 
raises no  objection.  Member  States  shall take whatever  steps are necessary  in order  to 
give effect  to such requests from the Commission. Officials  of the Commission shall be 
authorised,  if the  Commission  or a Member  State  so requests, to assist the  officials  of 
Member States in carrying out their duties. 

The  interested  parties,  which  have  made  themselves  known  in  accordance  with 
5. 
paragraph  14 of Article 7, may be heard if they have, within the period prescribed in the 
notice published  in the  Official Journal of the European Communities, made a written 
request  for  a hearing  showing that they  are an interested  party  likely to be affected  by 
the result  of  the  proceedings  and that there  are particular  reasons  why  they  should  be 
heard. 

6.  Opportunities  shall, on request,  be provided  for  the importers,  exporters  and  the 
complainants, which have made themselves known in accordance with paragraph  14 of 
Article  7,  and  the  Government  of  the country  of  origin  and/or  export,  to  meet  those 
parties  with  adverse  interests,  so  that  opposing  views  may  be  presented  and  rebuttal 
arguments  offered.  Provision  of  such  opportunities  must  take  account  of  the  need  to 
preserve  confidentiality  and  of  the  convenience  to  the  parties.  There  shall  be  no 
obligation on any party to attend a meeting, and failure to do so shall not be prejudicial 
to that party's case. Oral information  provided under this Paragraph  shall be taken  into 
account by the Commission in so far as it is subsequently reproduced in writing. 

7. 
The  complainants,  the  Government  of  the  country  of  origin  and/or  export, 
importers,  exporters,  users  and  consumer  organisations,  which have  made  themselves 
known in accordance with paragraph  14 of Article 7, may, upon written request, inspect 
all information  made available to the  Commission by any party to an investigation,  as 
internal 
from 
distinct 

34 

^>ï 

documents  prepared  by  the  authorities  of  the  Community  or  its  Member  States, 
provided  that  it is relevant  to the  defence  of their  interests  and not  confidential  within 
the  meaning  of  Article  20,  and  that  it  is  used  in  the  investigation.  Such  parties  may 
respond to such information  and their comments may be taken into consideration, to the 
extent that they are sufficiently  substantiated in the response. 

8. 
Except  in  circumstances  provided  for  in Article  19, the  information  supplied  by 
interested parties and upon which findings are based, shall be examined  for  accuracy to 
the degree possible. 

Investigations shall, except in special circumstances, be concluded within one 

9. 
year, and in no case more than 18 months, after their initiation. 

10.  Throughout the investigation, the Commission shall afford  the Government of the 
country of origin and/or export a reasonable opportunity to continue consultations, with 
a view to clarifying  the factual  situation and arriving at a mutually agreed solution. 

35 

2i"i 

Article 9 

Provisional  measures 

Provisional  measures  may  be  applied  if  proceedings  have  been  initiated  in 
1. 
accordance with the provisions of Article 7, a public notice has been given to that  effect 
and interested parties have been given adequate opportunities to submit information  and 
make comments in accordance with paragraph  14 of Article 7, a provisional  affirmative 
determination  has  been  made  that  the  imported  product  benefits  from  countervailable 
subsidies  and  of  consequent  injury  to  the  Community  industry,  and  the  Community 
interest calls for  intervention to prevent  such injury.  The provisional  measures shall be 
imposed no sooner than 60 days from the initiation of the proceedings but no later than 
nine months from the initiation of the proceedings. 

2. 
The  amount  of  the  provisional  countervailing  duty  shall  not  exceed  the  total 
amount  of  countervailable  subsidies  as provisionally  established  but  it  should  be  less 
than  this  amount,  if  such  lesser  duty  would  be  adequate  to  remove  the  injury  to  the 
Community industry. 

Provisional  measures  shall  take  the  form  of  a  security  and  the  release  of  the 
3. 
products concerned for free circulation in the Community shall be conditional upon the 
provision of such security. 

4. 
The  Commission  shall  take  provisional  action  after  consultation  or,  in  cases  of 
extreme  urgency,  after  informing  the  Member  States. In this  latter  case,  consultations 
shall  take  place  10  days,  at  the  latest,  after  notification  to  the  Member  States  of  the 
action taken by the Commission. 

5.  Where  à Member  State requests immediate intervention by the  Commission  and 
the  conditions  of  paragraph  1 of  Article  9  are  met,  the  Commission  shall,  within  a 
maximum  of five working  days of receipt of the request, decide whether  a provisional 
countervailing duty should be imposed. 

36 

^ 

6. 
The Commission shall forthwith inform the Council and the Member States of any 
decision taken under this Article. The Council, acting by qualified  majority, may decide 
differently. 

Provisional countervailing duties shall have a maximum period of validity of four 

7. 
months. 

,iJOW  y'JiJ 

37 

2sr 

Article 10 

Undertakings 

Investigations  may  be  terminated!  without  the  imposition  of  provisional  or 

1. 
definitive duties upon acceptance of satisfactory  voluntary undertakings under which 

(i) 

the Government of the country of origin and/or export agrees to eliminate or 
limit the subsidy or take other measures concerning its effects; or 

(ii) 

any exporter undertakes to revise its prices or to cease exports to the area in 
question  as long as such  exports benefit  from  countervailable  subsidies,  so 
that the Commission, after  consultation, is satisfied  that the injurious  effect 
of the subsidies is eliminated. Price increases under such undertakings  shall 
not  be  higher  than  necessary  to  offset  the  amount  of  countervailable 
subsidies, and should be less than the amount of countervailable subsidies if 
such  increases  would  be  adequate  to  remove the  injury  to  the  Community 
industry. 

2.  Undertakings  may  be  suggested  by  the  Commission,  but  no  Government  or 
exporter  shall be obliged to enter into such an undertaking. The fact  that  Governments 
or exporters do not offer  such undertakings, or do not accept an invitation to do so, shall 
in no way prejudice the consideration of the case. However, it may be determined that a 
threat  of  injury  is  more  likely  to  be  realised  if  the  subsidised  imports  continue. 
Undertakings  shall  not be  sought  or accepted from Governments  or exporters  unless  a 
provisional  affirmative  determination  of  subsidisation  and  injury  caused  by  such 
subsidisation  has been made. Save in exceptional  circumstances, undertakings  may not 
be offered  later than the end of the period during which representations  may  be  made 
under Paragraph 5 of Article 21. 

38 

ls(j 

3.  Undertakings  offered  need  not  be  accepted  if  their  acceptance  is  considered 
impractical, for  example, if the number  of actual  or potential  exporters  is too  great,  or 
for  other  reasons,  including  reasons  of  general  policy.  The  exporter  and/or  the 
Government of the country of origin and/or export concerned may be provided with the 
basis on which it is intended to propose the rejection  of the offer  of an undertaking  and 
may be given an opportunity to make comments thereon. The reasons for rejection  shall 
be set out in the definitive decision. 

4. 
Parties which offer  an undertaking shall be required to provide a  non-confidential 
version of such undertaking, so that it may be made available to interested parties to the 
investigation. 

5.  Where  undertakings  are,  after  consultation,  accepted,  and  there  is  no  objection 
raised within the Advisory Committee, the investigation shall be terminated. In all other 
cases, the  Commission  shall  submit to the Council forthwith  a report  on the results  of 
the  consultation,  together  with  a  proposal  that  the  proceedings  be  terminated.  The 
proceedings shall stand terminated if, within one month, the Council, acting by qualified 
majority, has not decided otherwise. 

If the undertakings are accepted, the investigation of subsidisation and injury  shall 
6. 
normally  be completed.  In  such  a case, if a negative determination  of subsidisation  or 
injury  is made, the undertaking  shall automatically  lapse except in cases where such a 
determination  is due in large part to the existence of an undertaking. In such cases, the 
authorities  may  require  that  an undertaking  be maintained  for  a reasonable period.  In 
the  event  that  an  affirmative  determination  of  subsidisation  and  injury  is  made,  the 
undertaking  shall  continue  consistent  with  its  terms  and  the  provisions  of  this 
Regulation. 

7. 
The  Commission  shall  require  any  Government  or  exporter  from  whom 
undertakings  have  been  accepted  to  provide,  periodically,  information  relevant  to  the 
fulfilment  of  such  undertaking,  and  to  permit  verification  of  pertinent  data.  Non 
compliance with such requirements shall be construed as a violation of the undertaking. 

39 

<ZÏ\ 

8.  Where undertakings  are accepted from certain exporters during the course of an 
investigation, they shall, for the purpose of Article  13, deemed to take effect from the 
date on which the investigation is concluded for the country of origin and/or export. 

9. 
In case of violation or withdrawal of undertakings by any party , a definitive duty 
shall  be  imposed  in accordance  with  Article  11,  on the basis  of  the  facts  established 
within the context of the investigation which led to the undertaking, provided that such 
investigation was concluded with a final determination on subsidisation and injury, and 
the  exporter  concerned,  or  the  Government  of  the  country  of  origin  and/or  export, 
except in the case of withdrawal of undertakings by the exporter or such Government, 
has been given an opportunity to comment. 

10.  A provisional duty may, after consultation, be imposed in accordance with Article 
9 on the basis of the best information available, where there is reason to believe that an 
undertaking  is  being  violated,  or  in  case  of  violation  or withdrawal  of  undertakings 
where the investigation which led to the undertaking was not concluded. 

40 

a il 

Article 11 

Termination  without  measures  and  imposition  of definitive  duties 

1.  Where the complaint  is be withdrawn,  proceedings may be terminated  unless such 
termination would not be in the Community interest. 

2.  Where,  after  consultation,  protective  measures  are  unnecessary  and  there  is  no 
objection raised within the Advisory Committee, the investigation or proceedings shall be 
terminated.  In  all  other  cases, the  Commission  shall  submit  to  the  Council  forthwith  a 
report on the results of the consultation, together with a proposal that the proceedings be 
terminated.  The  proceedings  shall  stand  terminated  if,  within  one  month,  the  Council, 
acting by a qualified  majority, has not decided otherwise. 

3. 
Subject  to  and  in  accordance  with  the  provisions  of  paragraphs  4  and  5  below, 
there shall be immediate termination  of the proceedings  where  it  is determined  that  the 
amount  of  countervailable  subsidies  is  de  minimis,  or  where  the  volume  of  subsidised 
imports, actual or potential, or the injury,  is negligible. 

4.  With  regard  to  investigations  concerning  imports from developing  countries,  the 
volume of subsidised imports shall be considered negligible if it represents less than 4 per 
cent  of  the  total  imports  of  the  like  product  in  the  Community,  unless  imports  from 
developing  countries whose individual  shares  of total  imports  represent  less than  4  per 
cent collectively account for more than 9 per cent of the total imports of the like product 
in the Community. 

41 

&3 

5. 
For the  same investigations, the amount  of the countervailable  subsidies  shall be 
considered  to be de minimis if such  amount  is less than  1 per  cent ad valorem, except 
that 

(a) 

(b) 

as regards investigations  concerning  imports from  developing  countries the 
de minimis threshold shall be 2% ad valorem; and 
for  those  developing  countries  Members  of the WTO referred  to  in  Annex 
VII  of  the  Subsidies  Agreement  as  well  as  for  developing  countries 
Members of the WTO which have completely eliminated export subsidies as 
defined  in  paragraph  4(a)  of  Article  3  of  this  Regulation,  the  de  minimis 
subsidy  threshold  shall  be  3 per cent ad valorem; where the  application  of 
this provision depends on the elimination of export subsidies, it shall  apply 
from the date that the elimination of export subsidies is notified  to the WTO 
Committee  on  Subsidies  and  Countervailing  Measures,  and  for  so  long  as 
export  subsidies  are not  granted  by the developing  country  concerned;  this 
provision  shall  expire  eight  years from the  date  of  entry  into  force  of  the 
WTO Agreement; 

provided  that it  is only the  investigation  that  shall be terminated  where the  amount  of 
the  countervailable  subsidies  is  below  the  relevant  de  minimis  level  for  individual 
exporters and they shall remain subject to the proceedings and may be re-investigated in 
any subsequent review carried out for the country concerned under Article  13. 

6.  Where  the  facts  as  finally  established  show  the  existence  of  countervailable 
subsidies  and  injury  caused thereby,  and the Community  interest calls for  intervention 
in accordance with Article 22, a definitive  countervailing duty shall be imposed by the 
Council,  acting  by  simple  majority  on  a proposal  submitted  by  the  Commission  after 
consultation of the Advisory  Committee, unless the subsidy or subsidies are withdrawn 
or  it  has  been  demonstrated  that  the  subsidies  no  longer  confer  any  benefit  to  the 
exporters  involved.  Where  provisional  duties  are  in  force,  a  proposal  for  definitive 
action  shall  be  submitted  to the  Council  not  later than one month before  the expiry  of 
such  duties.  The  amount  of  the  countervailing  duty  shall  not  exceed  the  amount  of 
countervailable  subsidies  from  which  the  exporters  have  been  found  to  benefit, 
established  under  this  Regulation,  but  should  be  less  than  the  total  amount  of 
countervailable subsidies, if such lesser duty would be adequate to remove the injury  to 
the Community industry. 

42 

•2&L 

7.  A countervailing  duty  shall be  imposed  in the appropriate  amounts  in each case, 
on a non-discriminatory  basis, on imports of a product from  all sources found to  benefit 
from  countervailable  subsidies  and  causing  injury,  except  as  to  imports  from  those 
sources from which undertakings under the terms of this Regulation have been accepted. 
The Regulation  shall  specify  the duty  for  each supplier, or, if that is impracticable, the 
supplying country concerned. 

8.  When the Commission has limited its examination in accordance with Article  18, 
any  countervailing  duty  applied  to  imports  from  exporters  or  producers  which  have 
made  themselves  known  in  accordance  with  Article  18 but  were  not  included  in  the 
examination shall not exceed the weighted average amount of countervailable  subsidies 
established  for  the  parties  in  the  sample.  For  the  purpose  of  this  paragraph,  the 
Commission  shall  disregard  any  zero  and  de  minimis  amounts  of  countervailable 
subsidies, and amounts of countervailable subsidies established under the circumstances 
referred  to  in Article  19. The  authorities  shall  apply  individual  duties to  imports from 
any  exporter  or  producer  which  is  granted  individual  treatment,  as  provided  for  in 
Article 18. 

43 

%à-

Article 12 

Retroactivity 

Provisional measures and definitive  countervailing duties shall only be applied to 
1. 
products  which  enter  for  consumption  after  the  time  when  the  decision  taken under 
Paragraph  1 of Article 9 and Paragraph 7 of Article  11, respectively, enters into force, 
subject to the exceptions set out in this Regulation. 

2.  Where  a provisional  duty  has  been  applied  and the  facts  as finally established 
show  the  existence  of  countervailable  subsidies  and injury, the  Council  shall  decide, 
irrespective  of  whether  a  definitive  countervailing  duty  is  to  be  imposed,  what 
proportion  of  the  provisional  duty  is  to  be  definitively  collected.  For  this  purpose, 
'injury'  shall  not  include  material  retardation  of  the  establishment  of  a  Community 
industry, nor threat of material  injury, except where it is found that this would, in the 
absence of provisional measures, have developed into material injury. In all other cases 
involving  such  threat  or  retardation,  any  provisional  amounts  shall  be  released  and 
definitive  duties can only be imposed from the date that a final determination of threat 
or material retardation is made. 

3. 
If  the  definitive  countervailing  duty  is  higher  than  the  provisional  duty,  the 
difference shall not be collected. If the definitive duty is lower than the provisional duty, 
the duty shall be recalculated.  Where a final deterrnination is negative, the provisional 
duty shall not be confirmed. 

44 

JJe'cà/ 

4.  A  definitive  countervailing  duty  may  be  levied  on products  which  were  entered 
for  consumption  not  more than  90 days prior  to the date of application  of  provisional 
measures  but  not prior  to  the  initiation  of  the  investigation,  provided  that  the  imports 
have  been  registered  in  accordance  with  paragraph  5  of  Article  15,  the  importers 
concerned have been given an opportunity to comment by the Commission, and that it is 
found that: 

(i) 

there  exist  critical  circumstances  where  for  the  subsidised  product  in 
question injury  which is difficult  to repair is caused by massive imports in a 
relatively  short  period  of  a  product  benefiting  from  countervailable 
subsidies under the terms of this Regulation; and, 

(ii)  where  it  is deemed  necessary, in order to preclude  the recurrence  of  such 
.injury, to assess countervailing duties retroactively on those imports. 

5. 
In  cases  of  violation  or  withdrawal  of  undertakings,  definitive  duties  may  be 
levied  in accordance with this Regulation  on goods entered  for  consumption  not more 
than  ninety  days  before  the  application  of  provisional  measures,  provided  than  the 
imports have been registered in accordance with paragraph 5 of Article  15, and that any 
such retroactive  assessment  shall  not  apply  to  imports  entered  before  the  violation  or 
withdrawal of the undertaking. 

45 

%-b 

Article 13 

Duration, reviews and  refunds 

1.  A countervailing  measure  shall remain  in force  only as long as and to the  extent 
necessary to counteract the countervailable subsidies which are causing  injury. 

A.  Expiry  reviews 

2.  A definitive  countervailing measure shall expire five years from  its imposition  or 
five years from the date of the most recent review which has covered both subsidisation 
and injury,  unless it is determined in a review that the expiry would be likely to lead to 
continuation  or recurrence  of  subsidisation  and  injury.  Such an expiry  review  shall  be 
initiated on the initiative of the Commission, or upon a request made by or on behalf of 
the Community producers and the measure shall remain in force pending the outcome of 
such review. 

3.  An expiry review shall by initiated where the request contains sufficient  evidence 
that the removal of measures would be likely to result in a continuation or recurrence of 
subsidisation and injury.  Such a likelihood may, for  example, be indicated by evidence 
of continued subsidisation and injury  or evidence that the removal of injury  is partly or 
solely  due  to  the  existence  of  measures  or  evidence  that  the  circumstances  of  the 
exporters,  or  market  conditions,  are  such  that  they  would  indicate  the  likelihood  of 
further  injurious  subsidisation. 

4. 
In  carrying  out  investigations  under  this  section,  the  exporters,  importers,  the 
Government  of  the  country  of  origin  and/or  export  and  the  complainants  shall  be 
provided with* the opportunity to amplify, rebut or comment on the matters set out in the 
review request and conclusions  shall be reached with due account taken of all relevant 
and  duly  supported  evidence  presented  in  relation  to  the  question  of  whether  the 
removal  of  measures  would  be  likely,  or  unlikely,  to  lead  to  the  continuation  or 
recurrence of subsidisation and injury. 

46 

>u 

5.  Under this section, a notice of impending expiry shall be published  in the Official 
Journal  of  the  European  Communities  at  an  appropriate  time  as  defined  in  this 
paragraph in the final year of the period of application  of the measures. Thereafter,  the 
Community  producers  shall, no later than three months before  the end  of the five year 
period, be entitled  to  lodge  a review  request  in accordance  with paragraph  3. A notice 
announcing the actual expiry of measures under this section shall also be published. 

B. 

Interim  reviews 

6. 
The need  for  the continued  imposition  of measures may also be reviewed, where 
warranted  on the  initiative  of the  Commission  or at the request  of  a Member  State  or, 
provided  that  a  reasonable  period  of  time  of  at  least  1 year  has  elapsed  since  the 
imposition  of  the  definitive  measure,  upon  a request  by  any  exporter,  importer  or  the 
Community  producers or the Government  of the country of origin and/or export which 
contains sufficient  evidence substantiating the need for such an interim review. 

7.  An interim review shall be initiated where the request contains sufficient  evidence 
that  the  continued  imposition  of  the  measure  is  no  longer  necessary  to  offset  the 
countervailable  subsidy  and/or the  injury  would be unlikely  to  continue  or recur  if the 
measure  were removed  or  varied,  or that  the  existing  measure  is  not,  or  is no  longer, 
sufficient  to counteract the countervailable subsidy which is causing  injury. 

8.  Where countervailing duties have been imposed in accordance with paragraph 7 of 
Article  11,  an  interim  review  shall  be  initiated  if  the  Community  producers  provide 
sufficient  evidence that the duties have led to no movement or insufficient  movement of 
resale prices of the imported product  in the Community. If the investigation proves the 
allegations  to  be  correct,  countervailing  duties  may  be  increased  to  achieve  the  price 
increase required  to remove  injury,  although the  increased  duty  level  shall  not  exceed 
the amount of the countervailable subsidies. 

47 

2Jtf 

In carrying out investigations under this section, the Commission may, inter alia, 

9. 
consider whether the circumstances with regard to subsidisation and injury have 
changed significantly,  or whether existing measures are achieving the intended results in 
removing the injury previously established in accordance with Article 5 of this 
Regulation. In these respects, account shall be taken of all relevant and duly supported 
evidence in the final determination. 

C.  Accelerated reviews 

10.  Any  exporter  whose  exports  are  subject  to  a  definitive  countervailing  duty  but 
who was not individually investigated during the original investigation for reasons other 
than a refusal  to co-operate with the Commission, shall be entitled, upon request, to an 
accelerated  review  in  order  that  the  Commission  promptly  establish  an  individual 
countervailing  duty  rate  for  that  exporter. 
Such  a  review  shall  be  initiated  after 
consultation of the Advisory  Committee and Community producers have been given an 
opportunity to comment. 

D.  General provisions on reviews 

11.  The relevant provisions of Article 7 and Article 8, excluding those relating to time 
limits, shall apply to any review carried out under sections A, B and C of this Article. 
Any  such  review  shall  be  carried  out  expeditiously  and  shall  normally  be  concluded 
within twelve months of the date of initiation of the review. 

12.  Reviews under this Article shall be initiated by the Commission after  consultation 
of the Advisory Committee. Where warranted by reviews, measures shall be repealed or 
maintained  under  section A, or repealed, maintained or amended under sections B and 
C, by the Community institution responsible for their introduction. Where measures are 
repealed  for  individual  exporters,  but  not  for  the  country  as  a  whole,  such  exporters 
shall  remain  subject  to  the proceedings  and may be re-investigated  in  any  subsequent 
review carried out for that country under this Article. 

48 

<3k>G 

13.  Where a review of measures under section B is in progress at the end of the period 
of  application  of  measures  as  defined  in  section  A,  the  measures  shall  also  be 
investigated under the provisions of section A. 

E.  Refunds 

14.  Notwithstanding  section  A,  an  importer  may  request  reimbursement  of  duties 
collected where it is shown that the amount of countervailable subsidies, on the basis of 
which duties were paid, has been eliminated,  or reduced to a level  which  is below the 
level of the duty in force. 

In order to request a refund  of countervailing  duties, the importer shall submit an 
15. 
application to the Commission. The application shall be submitted via the Member State 
in the territory  of which the products  were released  for free circulation  and within  six 
months of the date on which the amount of the definitive  duties to be levied was duly 
determined  by the  competent  authorities  or of the date on which  a decision was made 
definitively  to collect the amounts  secured by way of provisional  duty. Member  States 
shall forward the request to the Commission  forthwith. 

16.  An  application  for  refund  shall  only  be  considered  to  be  duly  supported  by 
evidence  where  it  contains  precise  information  on  the  amount  of  refund  of 
countervailing duties claimed and all customs documentation relating to the calculation 
and payment of such amount. It shall also include evidence, for a representative period, 
on the  amount  of  countervailable  subsidies  for  the  exporter  or producer  to  which  the 
duty applies. In cases where the importer  is not associated to the exporter  or producer 
such 
concerned 

and 

49 

XG^ 

information  is  not  immediately  available  or  the  exporter  or  producer  is  unwilling  to 
release it to the importer, the application  shall contain a statement from  the exporter or 
producer that the amount of countervailable subsidies has been reduced or eliminated, as 
specified  in this Article, and that the relevant  supporting  evidence  shall be provided  to 
the  Commission.  It  shall  be  understood  that  where  such  evidence  is  not  forthcoming 
from  the exporter or producer, within a reasonable period of time, the application  shall 
be rejected. 

17.  The  Commission  shall,  after  consultation  of  the  Advisory  Committee,  decide 
whether  and  to  what  extent  the  application  should  be  granted  or  it  may  decide  at  any 
time to  initiate  an  interim  review  and  the  information  and findings from such  review, 
carried out in accordance with the provisions applicable for such reviews, shall be used 
to  determine  whether  and  to  what  extent  a refund  is justified.  Refunds  of  duties  shall 
normally  take  place  within  12 months,  and  in no  case more than  18 months  after  the 
date on which a request for a refund,  duly supported by evidence, has been made by an 
importer  of the product  subject  to the  countervailing  duty. The payment  of any  refund 
authorised  should  normally  be  made  by  Member  States within  90  days  of  the  above-
noted decision. 

F. 

Final provision 

18. 
In  all  review  or  refund  investigations  carried  out  under  this  Article,  the 
Commission  shall  apply,  in  so  far  as  circumstances  have  not  changed,  the  same 
methodology as in the investigation which led to the duty, with due account taken of the 
provisions set out in Article 4 and Article 18 of this Regulation. 

50 

OfoS 

Article 14 

Circumvention 

1.  Countervailing duties imposed under this Regulation may be extended to apply to 
imports from third countries of like products, or parts thereof, when circumvention of 
the measures in force is taking place.  Circumvention shall be defined  as a change in the 
pattern of trade between third countries and the Community which stems from a 
practice, process or work for which there is insufficient  due cause or economic 
justification, other than the imposition of the duty, and there is evidence that the 
remedial effects  of the duty are being undermined, in terms of the prices and/or 
quantities of the assembled like product, and the imported like product and/or parts 
thereof still benefit from the subsidy. 

2. 
Investigations shall be initiated under this Article where the request contains 
sufficient  evidence on the factors  set out in paragraph  1.  Initiations shall be made, after 
consultation of the Advisory Committee, by Commission Regulation which shall also 
instruct the customs authorities to make imports subject to registration in accordance 
with Paragraph 5 of Article  15 or request guarantees..  Investigations shall be carried out 
by the Commission, which may be assisted by customs authorities, and shall be 
concluded within nine months.  When the facts, as finally ascertained, justify  the 
extension of measures, this shall be done by the Council, acting by simple majority and 
on a proposal from the Commission, from the date that registration was imposed under 
Paragraph 5 of Article  15 or guarantees were requested.  The relevant procedural 
provisions of this Regulation with regard to initiations and the conduct of investigations 
shall apply under this Article. 

Products shall not be subject to registration under Paragraph 5 of Article  15 or 

3. 
measures where they are accompanied by a customs certificate declaring that the 
importation of the goods does not constitute circumvention.  These certificates may be 
issued to importers, upon written application, by the authorities following  authorisation 
by a decision of the Commission after consultation of the Advisory Committee or the 
decision of the Council imposing measures and they shall remain valid for the period, 
and under the conditions, set down therein. 

51 

Ate 

4.  Nothing  in this Article  shall preclude the normal application of the provisions in 
force concerning customs duties. 

52 

•A 

Article 15 

General  provisions 

1. 
Provisional  or  definitive  countervailing  duties  shall  be  imposed  by  Regulation, 
and collected  by Member  States in the form,  at the rate specified  and according to  the 
other criteria  laid  down  in the Regulation  imposing  such duties. Such duties  shall  also 
be  collected  independently  of  the  customs  duties,  taxes  and  other  charges  normally 
imposed  on  imports.  No  product  shall  be  subject  to  both  anti-dumping  and 
countervailing  duties  to  compensate  for  the  same  situation  arising  from  dumping  or 
export subsidisation. 

imposing  provisional  or  definitive  countervailing  duties,  or 
2.  Regulations 
Regulations  or  Decisions  accepting  undertakings  or  terminating  investigations  or 
proceedings,  shall  be published  in the  Official Journal of the European Communities. 
Such Regulations  or Decisions  shall  contain,  in particular,  and  with  due regard  to  the 
protection  of  confidential  information  the  names  of  the  exporters,  if  practical,  or 
countries  involved,  a  description  of  the  product  and  a  summary  the  facts  and 
considerations  relevant  to  the  countervailable  subsidies  and  injury  determinations.  In 
each  case,  a  copy  of  the  Regulation  or  Decision  shall  be  sent  to  known  interested 
parties. The provisions of this paragraph shall apply mutatis mutandis to reviews. 

3. 
Special  provisions,  in  particular  with  regard  to  the  common  definition  of  the 
concept of origin, as contained in Council Regulation (EEC) No 2913/92 of  12 October 
1992, may be adopted in, or under, this Regulation. 

4. 
In  the  Community  interest,  measures  imposed  under  this  Regulation  may,  after 
consultation of the Advisory Committee, be suspended by a decision of the Commission 
for  a  period  of  up  to  one  year  because  of  a  change  in  market  conditions  in  the 
which 
Community 

53 

•*u 

makes  the  application  of  such  measures  temporarily  inappropriate,  provided  that  the 
Community  industry  has been  given  an  opportunity  to comment.  The  suspension  may 
be  extended  for  a  further  period  if  the  Council  so  decides,  by  simple  majority,  on  a 
proposal from the Commission. Measures may, at any time and after  consultation, be re 
instated if the reason for suspension is no longer applicable. 

5. 
The Commission may, after  consultation of the Advisory Committee, direct the 
customs authorities to take the appropriate steps to register imports, so that measures 
may subsequently be applied against these imports from the date of such registration. 
Imports may be made subject to registration following a request from the Community 
industry which contains sufficient  evidence to justify  such action.  Registration shall be 
introduced by Regulation which shall specify the purpose of the action and, if 
appropriate, the estimated amount of possible future liability.  Imports may not be made 
subject to registration for a period longer than nine months. 

6.  Member  States  shall  report  to  the  Commission,  on  a  monthly  basis,  the  import 
trade  of  products  subject  to  investigation  and  subject  to  measures,  and  the  amount  of 
duties collected under this Regulation. 

54 

k\b 

Article 16 

Consultations 

1.  Any  consultations  provided  for  in  this  Regulation  shall  take  place  within  an 
Advisory Committee, which shall consist of representatives of each Member State, with 
a  representative  of  the  Commission  as  chairman.  Consultations  shall  be  held 
immediately  on request by a Member  State or on the initiative of the Commission, and 
in any event within a time frame  which allows the time limits set by this Regulation to 
be respected. 

The  Committee  shall meet when convened  by its chairman.  He shall provide  the 

2. 
Member States, as promptly as possible, with all relevant information. 

3.  Where  necessary,  consultation  may  be  in  writing  only;  in  such  case  the 
Commission  shall  notify  the  Member  States  and  shall  specify  a  period  within  which 
they shall be entitled to express their opinions or to request an oral consultation, which 
the  chairman  shall  arrange, provided  that  such  oral  consultation  can  be  held  within  a 
time frame which allows the time limits set by this Regulation to be respected. 

4. 

Consultation shall in particular cover: 

(i) 

the  existence  of  countervailable  subsidies  and the  methods  of  establishing 
their amount; 

(ii) 

the existence and extent of injury; 

55 

J.}* 

(iii) 

the causal link between the subsidised or dumped imports and injury; 

(iv) 

the  measures  which,  in  the  circumstances,  are  appropriate  to  prevent  or 
remedy  the  injury  caused  by the  countervailable  subsidies  or the  dumping 
and the ways and means for putting such measures into  effect. 

56 

^ 

Article 17 

Verification visits 

1. 
The  Commission  shall,  where  it  considers  it  appropriate,  carry  out  visits  to 
examine  the  records  of  importers,  exporters,  traders,  agents,  producers,  trade 
associations  and  organisations,  to  verify  information  provided  on  subsidisation  and 
injury.  In  the  absence  of  a  proper  and  timely  reply,  a  verification  visit  may  not  be 
carried out. 

2. 
The  Commission  may  carry  out  investigations  in  third  countries  as  required, 
provided  it obtains the agreement of the firms concerned, it notifies  the  representatives 
of  the  government  of  the  country  in  question  and  the  latter  does  not  object  to  the 
investigation.  As  soon  as the  agreement  of the firms concerned  has been  obtained  the 
Commission  should  notify  the authorities  of the country of origin and/or export of the 
names and addresses of the firms to be visited and the dates agreed. 

3. 
The  firms  concerned  shall  be  advised  on  the  nature  of  the  information  to  be 
verified  during  verification  visits  and  of  any  further  information  which  needs  to  be 
provided during such visits, though this should not preclude requests to be made during 
the verification  for further details to be provided in the light of information  obtained. 

In  investigations  carried  out  under  this  paragraph,  the  Commission  shall  be 

4. 
assisted by officials  of those Member States who so request. 

57 

2qS 

Article 18 

Sampling 

1. 
In  cases  where  the  number  of  complainants,  exporters  or  importers,  types  of 
product or transactions is large, the investigation may be limited to a reasonable number 
of parties, products or transactions by using samples which are statistically valid on the 
basis  of  information  available  to  it  at  the  time  of  the  selection,  or  to  the  largest 
representative  volume  of  the  production,  sales  or  exports  which  can  reasonably  be 
investigated within the time limit available. 

2. 
The final selection of parties, types of products or transactions made under  these 
sampling provisions shall rest with the Commission, though preference  shall be given to 
choosing a sample in consultation with, and with the consent of,  the parties  concerned, 
provided  such  parties  make  themselves  known  and  make  sufficient 
information 
available,  within  three  weeks  of  initiation,  to  enable  a  representative  sample  to  be 
chosen. 

In cases where the examination has been limited  in accordance with this Article, 
3. 
an individual  amount of countervailable  subsidisation  shall, nevertheless, be  calculated 
for  any  exporter  or  producer  not  initially  selected  who  submits  the  necessary 
information  within  the  time  limits  provided  for  in  this  Regulation,  except  where  the 
number  of  exporters  or  producers  is  so  large  that  individual  examinations  would  be 
unduly burdensome and prevent the timely completion of the investigation. 

4.  Where it is decided to sample and there is a degree of non-co-operation  by  some 
or  all  of  the  parties  selected  which  is  likely  to  materially  affect  the  outcome  of  the 
investigation, a new sample may be selected. However, if a material degree of non-co 
operation  persists  or  there  is  insufficient  time  to  select  a  new  sample,  the  relevant 
provisions of Article 19 shall apply. 

58 

1* 

Article 19 

Non-co-operation 

In  cases  in  which  any  interested  party  refuses  access  to,  or  otherwise  does  not 
1. 
provide, necessary information  within the time limits as provided for in this Regulation, 
or  significantly  impedes  the  investigation,  preliminary  or final findings, affirmative  or 
negative, may be made on the basis of the facts available. Where the it is found that any 
interested  party  has  supplied  false  or  misleading  information,  the  information  shall  be 
disregarded  and  use  may  be  made  of  the  facts  available.  Interested  parties  should  be 
made aware of the consequences of non-co-operation. 

2.  A  lack  of  a  computerised  response  shall  not  be  deemed  to  constitute  non-co 
operation  provided  that  the  interested  party  shows  that  presenting  the  response  as 
requested would result in an unreasonable extra burden or unreasonable additional cost. 

3.  Where  the  information  presented  by  an  interested  party  may  not  be  ideal  in  all 
respects it  should  not be disregarded, provided that any deficiencies  are not  such as to 
cause  undue  difficulty  in  arriving  at  a  reasonably  accurate  finding  and  provided  the 
information  is  appropriately  submitted  in timely  fashion,  it  is verifiable  and  the  party 
has acted to the best of its ability. 

4. 
If evidence or information  is not accepted, the supplying party should be informed 
forthwith  of the reasons thereof and have an opportunity to provide further  explanations 
within  the  time  limit  specified.  If  the  explanations  are  considered  unsatisfactory,  the 
reasons for  rejection  of  such evidence  or information  should be disclosed  and given in 
any published findings. 

59 

2^Ar 

5. 
If determinations, including those with respect to the  amount of  countervailable 
subsidies  ,  are  based  on  the  provisions  of  paragraph  1 of  this  Article,  including  the 
information supplied in the complaint, it should, where practicable and with due regard 
to  the  time  limits  of  the  investigation,  be  checked  by  reference  to  information from 
other independent sources which may be available, such as published price lists, official 
import  statistics  and  customs  returns,  or  information  obtained from other  interested 
parties during the investigation. 

6. 
If an interested party does not co-operate, or only co-operates partially, and thus 
relevant information  is being withheld, the result could be less favourable to the party 
than if it had co-operated. 

60 

l-)l 

Article 20 

Confidentiality 

1.  Any  information  which  is  by  nature  confidential,  (for  example,  because  its 
disclosure would be of significant  competitive advantage to a competitor or because its 
disclosure  would  have  a  significantly  adverse  effect  upon  a  person  supplying  the 
information  or  upon  a  person  from  whom  he  acquired  the  information)  or  which  is 
provided  on a confidential  basis by parties  to  an investigation  shall, upon  good  cause 
shown, be treated as such by the authorities. 

2. 
Interested  parties providing  confidential  information  shall  be  required  to  furnish 
non-confidential  summaries  thereof.  These  summaries  shall  be  in  sufficient  detail  to 
permit  a  reasonable  understanding  of  the  substance  of  the  information  submitted  in 
confidence.  In  exceptional  circumstances,  such  parties  may  indicate  that  such 
information  is  not  susceptible  of  summary.  In  such  exceptional  circumstances,  a 
statement of the reasons why summarisation is not possible must be provided. 

If  it  is  considered  that  a  request  for  confidentiality  is  not  warranted  and  if  the 
3. 
supplier  of the  information  is either unwilling to make the information  available  or to 
authorise  its  disclosure  in  generalised  or  summary  form,  such  information  may  be 
disregarded  unless  it  can  be  satisfactorily  demonstrated  from  appropriate  sources  that 
the information is correct. Requests for confidentiality  should not be arbitrarily rejected. 

This  Article  shall  not  preclude  the  disclosure  of  general  information  by  the 
4. 
Community  authorities  and  in  particular  of  the  reasons  on  which  decisions  taken 
pursuant  to  this  Regulation  are  based,  or  disclosure  of  the  evidence  relied  on  by  the 
Community  authorities  is  so  far  as  necessary  to  explain  those  reasons  in  court 
proceedings. Such disclosure must take into account the legitimate interest of the parties 
concerned that their business or Governmental secrets should not be divulged. 

61 

=2:p 

5. 
The  Council, the  Commission  and  the Member  States, or the  officials  of  any  of 
these,  shall  not  reveal  any  information  received  pursuant to this  Regulation  for  which 
confidential  treatment  has  been  requested  by  its  supplier,  without  specific  permission 
from  the  supplier.  Exchanges  of  information  between  the  Commission  and  Member 
States,  any  information  relating  to  consultations  made  pursuant  to  Article  16  or 
consultations described in Paragraph 9 of Article 7 and Paragraph  10 of Article 8, or any 
internal documents prepared by the authorities of the Community or its Member  States, 
shall be not be divulged except as specifically provided for in this Regulation. 

Information  received  pursuant  to  this  Regulation  shall  be  used  only  for  the 

6. 
purpose for which it was requested. 

62 

n 

Article 21 

Disclosure 

The  complainants,  importers,  exporters  and  representatives  of  the  country  or 
1. 
origin and/or export may request disclosure  of the details underlying the essential  facts 
and  considerations,  on  the  basis  of  which  provisional  measures  have  been  imposed. 
Requests  for  such  disclosure  shall  be  made  in  writing  immediately  following  the 
imposition of provisional  measures and the disclosure shall be made in writing  as soon 
as possible  thereafter. 

2. 
The parties mentioned in paragraph  1, may request final  disclosure of the essential 
facts  and  considerations,  on  the  basis  of  which  it  is  intended  to  recommend  the 
imposition of definitive  measures, or the termination of an investigation or proceedings 
without  the  imposition  of  measures,  with  particular  attention  being  paid  to  the 
disclosure  of  any  facts  or  considerations  which  are  different  from  those  used  for  any 
provisional measures. 

Requests  for final disclosure, as defined  in paragraph 2, shall be addressed to the 
3. 
Commission  in  writing  and  be  received,  in  cases  where  a provisional  duty  has  been 
applied, not later than one month after publication of the imposition of that duty. Where 
a provisional duty has not been applied, parties shall be provided with an opportunity to 
request final disclosure within time limits set by the Commission. 

Final disclosure shall be given in writing. It shall be made, with due regard paid to 
4. 
the protection  of business  or Governmental  secrets, as soon as possible, and  normally, 
not  later  than  one  month  prior  to  a  definitive  decision  or  the  submission  by  the 
Commission  of  any  proposal  for  final  action  pursuant  to  Article  11.  Where  the 
Commission  is not  in a position to disclose certain facts  or considerations  at that time, 
these shall be disclosed as soon as possible thereafter.  Disclosure shall not prejudice any 
subsequent decision which may be taken by the Commission or the Council, but where 
such decision is based on any different  facts and considerations, these shall be disclosed 
as soon as possible. 

63 

l ï\ 

5.  Representations  made  after  final  disclosure  is  given  shall  be  taken  into 
consideration only if received within a period to be set by the Commission in each case, 
which  shall  be  at least  10 days, due  consideration  being  given to the  urgency  of the 
matter. 

64 

£$X 

Article 22 

Community interest 

1.  Under this Regulation, a determination as to whether the Community interest calls 
for  intervention  shall be based on an appreciation of all the various interests taken  as a 
whole, including the interests of the domestic industry  and users and consumers, and a 
determination  under this Article  shall  only  be made where all parties have  been  given 
the opportunity to make their views known under paragraph 2. In such an examination, 
the need to eliminate the trade distorting effects  of injurious  subsidisation and to restore 
effective  competition  shall be given special  consideration.  Measures, as determined  on 
the basis of subsidization and injury found, may not be applied where the authorities, on 
the  basis  of  all  the  information  submitted,  can  safely  conclude  that  it  is  not  in  the 
Community interest to apply such measures. 

In order to provide a sound basis on which the authorities can take account of all 
2. 
views and information  in the decision on whether, or not, the imposition of measures is 
in  the  Community  interest,  the  complainants,  importers,  representative  users  and 
representative consumer organisations may, within the time limits specified  in the notice 
of  initiation  of  the  countervailing  duty  investigation,  make  themselves  known  and 
provide  information  to  the  Commission.  Such  information,  or  appropriate  summaries 
thereof,  shall  be  made  available  to the  other parties  specified  in this Article,  and  they 
shall be entitled to respond to such information. 

The  parties  which  have  acted  in  conformity  with  paragraph  2  may  request  a 
3. 
hearing. Such requests shall be made in writing, within the time limits set in paragraph 
2, and shall set out the particular reasons, in terms of the Community interest, why they 
should be heard. 

65 

Xîb 

4. 
The  parties  which  have  acted  in  conformity  with  paragraph  2  may  provide 
comments  on the  application  of  any provisional  duties  imposed.  Such  comments  shall 
be received within one month of the application of such measures if they are to be taken 
into  account  and  they,  or  appropriate  summaries  thereof,  shall  be  made  available  to 
other parties who shall be entitled to respond to such comments. 

5. 
The Commission  shall examine the information  which is properly  submitted,  and 
the extent to which it is representative, and the results of such analysis, together with an 
opinion  on its merits, shall be transmitted  to the Advisory  Committee. The balance  of 
views expressed in the Committee shall be taken into account by the Commission in any 
proposal made under Article  11. 

6. 
The  parties  which  have  acted  in  conformity  with  paragraph  2,  may  request  the 
facts  and  considerations  on  which  final  decisions  are  likely  to  be  taken  to  be  made 
available to them.  Such information  shall be made available to the  extent possible  and 
without prejudice to any subsequent decision taken by the Commission or the Council. 

7.  Under  this  Article,  information  shall  only  be  taken  into  account  where  it  is 
supported by actual evidence which substantiates its validity. 

66 

Mlf 

Article 23 

Relationships between countervailing duty measures and multilateral remedies 

If  an  imported  product  is  made  subject  to  any  countermeasures  imposed  following 
recourse  to  the  dispute  settlement  procedures  of  the  Subsidies  Agreement,  and  such 
measures are appropriate  to remove the injury  caused by the countervailable  subsidies, 
any  countervailing  duty  imposed  with  regard  to  that  product  shall  immediately  be 
suspended, or repealed, as appropriate. 

Article 24 

Final provisions 

This Regulation shall not preclude the application  of: 

(i) 

any special rules laid down in agreements concluded between the Community and 
third countries; 

(ii) 

the Community Regulations in the agricultural sector and of Regulation (EEC) No 
1059/69W , (EEC) No 2730/750) ; and (EEC) No 2783/75(6) ; this Regulation shall 
operate by way of  complement to those Regulations and in derogation from any 
provisions 
the  application  of  anti-dumping  or 
countervailing duties; 

thereof  which  preclude 

(iii)  special  measures,  provided  that  such  action  does  not  run  counter  to  obligations 

under the GATT. 

<4)OJNoL  141, 12.06.1969, p.  1. 
<5) OJNo L 281, 01.11.1975, p. 20. 
<6)OJ No L 282, 01.11.1975, p. 104. 

67 

^ Si" 

Article 25 

Repeal of existing legislation 

Regulation  (EEC)  No  2423/88,  as  amended  by  Regulation  (EC)  No  521/94  and 
Regulation  (EC) No  522/94, is hereby repealed. References  to the repealed  Regulation 
shall be construed as references to this Regulation. 

Article 26 

Entry into force 

This Regulation  shall  enter into  force  on the date determined  by a  decision  governing 
the entry into force  of the acts implementing the results of the Uruguay Round. It shall 
apply  to  proceedings  already  initiated.  However,  the  references  to  time  limits  for  the 
initiation of proceedings and the imposition of provisional duties shall only apply after  a 
date which the Council shall specify  in a Decision to be adopted by a qualified  majority 
no later than  1  April  1995 on the basis of a Commission proposal to be submitted to the 
Council once the necessary budgetary resources have been made available. 

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

Done at Brussels, 

68 

ANNEX I 

ILLUSTRATIVE LIST OF EXPORT SUBSIDIES 

(a)  The  provision  by  governments  of  direct  subsidies  to  a  firm  or  an  industry 
contingent upon export performance. 

(b)  Currency  retention  schemes  or  any  similar  practices  which  involve  a  bonus  on 
exports. 

Internal transport and freight charges on export shipments, provided  or mandated 

(c) 
by governments, on terms more favourable than for domestic shipments. 

(d)  The  provision  by  governments  or  their  agencies  either  directly  or  indirectly 
through  government-mandated  schemes, of  imported  or domestic products  or  services 
for  use  in  the  production  of  exported  goods,  on  terms  or  conditions  more  favourable 
than  for  provision  of  like  or  directly  competitive  products  or  services  for  use  in  the 
production of goods for domestic consumption, if (in the case of products) such terms or 
conditions are more favourably  than those commercially availableO) on world  markets 
to their exporters. 

0)  The term "commercially available" means that the choice between domestic and imported products is 
unrestricted and depends only on commercial considerations. 

> 

(e)  The full  or partial exemption, remission, or deferral  specifically  related to exports, 
of direct taxes(^) or social welfare  charges paid or payable by industrial  or  commercial 
enterprises^3). 

(f)  The  allowance  of  special  deductions  directly  related  to  exports  or  export 
performance,  over  and  above  those  granted  in  respect  of  production  for  domestic 
consumption, in the calculation of the base on which direct taxes are charged. 

(g)  The  exemption  or  remission,  in  respect  of  the  production  and  distribution  of 
in  excess  of  those  levied  in  respect  of  the 
exported  products,  of  indirect  taxes(2) 
production and distribution of like products when sold for domestic consumption. 

(h)  The exemption, remission  or deferral  of prior-stage cumulative  indirect taxes  (2) 
on  goods  or  services  used  in  the  production  of  exported  products  in  excess  of  the 
exemption, remission  or deferral  of like prior-stage cumulative indirect taxes on  goods 
or services used in the production of like products when sold for domestic consumption; 
provided,  however,  that  prior-stage  cumulative  indirect  taxes  may  be  exempted, 
remitted or deferred  on exported products even when not exempted, remitted or deferred 
on  like  products  when  sold  for  domestic  consumption,  if  the  prior-stage  cumulative 
indirect taxes are levied  on inputs that  are consumed  in the production  of the  exported 
product  (making  normal  allowance  for  waste)(4)  .  This  item  shall  be  interpreted  in 

(2) For the purpose of this Regulation and its annexes: 

The term "direct taxes" shall mean tax on wages, profits, interests, rents, royalties, and all other 

forms of income, and taxes on the ownership of real property; 

The term "import charges" shall mean tariffs, duties, and other fiscal charges not elsewhere 

enumerated that are levied on imports; 

The term "indirect taxes" shall mean sales, excise, turnover, value added, franchise, stamp, 

transfer,  inventory and equipment taxes, border taxes and all taxes other than direct taxes and import 
charges; 

"Prior-stage" indirect taxes are those levied on goods or services used directly or indirectly in 

making the product; 

"Cumulative" indirect taxes are multi-staged taxes levied where there is no mechanism  for 
subsequent crediting of the tax if the goods or services subject to tax at one stage of production are used 
in a succeeding state of production; 

"Remission" of taxes includes the refund  or rebate of taxes; 
"Remission of drawback" includes the full or partial exemption or deferral of import charges. 

<3) Deferral  may not amount to an export subsidy where, for example, appropriate interest charges are 
collected. 
(4) Paragraph (h) does not apply to value-added tax systems and border-tax adjustment  in lieu thereof; the 
problem of the excessive remission of value-added taxes is exclusively covered by paragraph (g). 

70 

11 g. 

accordance  with  the  guidelines  on  consumption  of  inputs  in  the  production  process 
contained in Annex II. 

(i)  The  remission  or  drawback  of  import  charges(2)  in  excess  of  those  levied  on 
imported  inputs  that  are consumed  in the production  of the  exported  product  (making 
normal allowance for waste); provided , however, that in particular cases a firm may use 
a  quantity  of  home  market  inputs  equal  to,  and  having  the  same  quality  and 
characteristics  as, the imported  inputs  as a substitute  for  them  in order to benefit  from 
this provision if the import and the corresponding export operations both occur within a 
reasonable  time  period,  not  to  exceed  two  years.  This  item  shall  be  interpreted  in 
accordance  with  the  guidelines  on  consumption  of  inputs  in  the  production  process 
contained  in Annex II and the guidelines in the determination  of substitution  drawback 
systems as export subsidies contained in Annex III. 

(j)  The provision by governments (or special institutions controlled by  governments) 
of  export  credit  guarantee  or  insurance  programmes,  of  insurance  or  guarantee 
programmes  against  increases  in  the  cost  of  exported  products  or  of  exchange  risk 
programmes,  at premium  rates  which  are  inadequate  to  cover  the  long-term  operating 
costs and losses of the programmes. 

(2)  See previous reference. 

71 

Ztb 

(k)  The  grant  by  governments  (or  special  institutions  controlled  by  and/or  acting 
under the authority of governments)  of export credits at rates below those which they 
actually have to pay for the funds so employed (or would have to pay if they borrowed 
on international capital markets in order to obtain funds of the same maturity and other 
credit terms and denominated in the same currency at the export credit), or the payment 
by  them  of  all  or part  of  the  costs  incurred  by  exporters  or financial institutions  in 
obtaining credits, in so far as they are used to secure a material advantage in the field of 
export credit terms. 

Provided,  however,  that  if  a  Member  of  the  WTO  is  a  party  to  an  international 
undertaking  on official  export credits to which at least twelve  original  such Members 
are parties as of 1 January 1979 (or a successor undertaking which has been adopted by 
those  original  Members), or if  in practice a Member of the WTO applied the interest 
rates  provisions  of  the  relevant  undertaking,  an  export  credit  practice  which  is  in 
conformity with those provisions shall not be considered an export subsidy. 

(1)  Any other charge on the public account constituting an export subsidy in the sense 
of Article XVI of GATT 1994. 

72 

15 o 

ANNEX II 

GUIDELINES ON CONSUMPTION OF INPUTS IN THE PRODUCTION 
PROCESS*5) 

I 

1. 
Indirect  tax  rebate  schemes  can  allow  for  exemption,  remission  or  deferral  of 
prior-stage  cumulative  indirect  taxes  levied  on  inputs  that  are  consumed  in  the 
production  of  the  exported  product  (making  normal  allowance  for  waste).  Similarly, 
drawback schemes can allow for the remission or drawback of import charges levied on 
inputs  that  are  consumed  in  the  production  of  the  exported  product  (making  normal 
allowance for waste). 

2. 
The Illustrative  List of Export  Subsidies in Annex I makes reference  to the term 
"inputs that are consumed  in the production  of the exported product"  in paragraphs  (h) 
and (i). Pursuant to paragraph  (h), indirect tax rebate schemes can constitute an export 
subsidy to the extent that they result in exemption , remission or deferral  of prior-stage 
cumulative indirect taxes in excess of the amount of such taxes actually levied on inputs 
that are consumed  in the production of the exported product. Pursuant to paragraph (i), 
drawback  schemes  can  constitute  an  export  subsidy  to the  extent  that  they  result  in  a 
remission  or  drawback  of  import  charges  in  excess of those  actually  levied  on  inputs 
that are consumed  in the production of the exported product. Both paragraphs  stipulate 
that  normal  allowance  for  waste  must  be  made  in findings regarding  consumption  of 
inputs  in  the  production  of  the  exported  product.  Paragraph  (i)  also  provides  for 
substitution, where appropriate. 

(5)  Inputs consumed in the production processes are inputs physically incorporated, energy, fuels and oil 
used in the production process and catalysts which are consumed in the course of their use to obtain the 
exported product. 

^ 

II 

3. 
In  examining  whether  inputs  are  consumed  in  the  production  of  the  exported 
product, as part of a countervailing  duty investigation, the Commission shall normally 
proceed on the following basis: 

4.  Where  it  is  alleged  that  an  indirect  tax  rebate  scheme,  or  a  drawback  scheme, 
conveys  a  subsidy  by  reason  of  over-rebate  or  excess  drawback  of  indirect  taxes  or 
import  charges  on  inputs  consumed  in  the  production  of  the  exported  product,  the 
Commission  shall  normally first determine  whether  the  government  of  the  exporting 
country  has  in place  and applies  a  system  or procedure  to  confirm  which  inputs are 
consumed in the production of the exported product and in what amounts. Where such a 
system or procedure is determined to be applied, the Commission  shall normally then 
examine  the  system  or  procedure  to  see  whether  it  is  reasonable,  effective  for  the 
purpose intended, and based on generally accepted commercial practices in the country 
of  export.  The  Commission  may  deem  it  necessary  to  carry  out,  in  accordance  with 
paragraph 2  of  Article  17,  certain practical  tests  in order to  verify  information  or to 
satisfy itself that the system or procedure is being effectively applied. 

5.  Where there is no such system or procedure, where it is not reasonable, or where it 
is instituted and considered reasonable but is found not to be applied or not be applied 
effectively,  a further examination by the exporting country based on the actual inputs 
involved will normally need to be carried out in the context of determining whether an 
excess payment occurred. If the Commission deems it necessary, a further examination 
may be carried out in accordance with paragraph 4. 

6.  The  Commission  shall  normally  treat  inputs  as physically  incorporated  if  such 
inputs  are  used  in  the  production  process  and  are  physically  present  in  the  product 
exported. An input need not be present in the final product in the same form in which it 
entered the production process. 

74 

7. 
In determining the amount of a particular input that is consumed in the production 
of the  exported  product,  a  "normal  allowance  for  waste"  shall  normally  be  taken  into 
account, and such waste shall normally be treated as consumed in the production of the 
exported  product.  The term  "waste" refers  to that portion  of a given  input which  does 
not  serve  an  independent  function  in  the  production  process,  is  not  consumed  in  the 
production  of  the  exported  product  (for  reasons  such  as  inefficiencies)  and  is  not 
recovered, used or sold by the same manufacturer. 

8. 
The  Commission's  determination  of  whether  the  claimed  allowance  for  waste  is 
"normal"  shall  normally  take  into  account  the  production  process,  the  average 
experience  of  the  industry  in  the  country  of  export,  and  other  technical  factors,  as 
appropriate. The Commission  shall bear in mind that an important  question  is whether 
the authorities in the exporting country have reasonably calculated the amount of waste, 
when such an amount is intended to be included in the tax or duty rebate or remission. 

75 

153 

ANNEX III 

GUIDELINES IN THE DETERMINATION OF SUBSTITUTION 
DRAWBACK SYSTEMS AS EXPORT SUBSIDIES 

I 

1.  Drawback  systems  can  allow  for  the  refund  or drawback  of  import  charges  on 
inputs which are consumed in the production process of another product and where the 
export  of  this  latter  product  contains  domestic  inputs  having  the  same  quality  and 
characteristics as those submitted for the imported inputs. Pursuant to paragraph (i)  of 
the Illustrative List of Export Subsidies in Annex I, substitution drawback systems can 
constitute an export subsidy to the extent that they result in an excess drawback of the 
import  charges  levied  initially  on  the  imported  inputs  for  which  drawback  is  being 
claimed. 

II 

In examining  any substitution drawback  system as part of a countervailing duty 
2. 
investigation pursuant to this Regulation, the Commission shall normally proceed on the 
following basis: 

3. 
Paragraph (i)  of the  Illustrative  List  stipulates that home  market inputs may be 
substituted for imported inputs in the production of a product for export provided such 
inputs are equal  in quantity to,  and have  the  same quality  and characteristics  as, the 
imported inputs being substituted. The existence of a verification system or procedure is 
important  because  it  enables the  government  of  the  exporting  country  to  ensure and 
demonstrate that the quantity on inputs for which drawback is claimed does not exceed 
the  quantity  of  similar  products  exported,  in  whatever  form,  and  that  there  is  not 
drawback of import charges in excess of those originally levied on the imported inputs 
in question. 

23 H 

4.  Where  it  is  alleged  that  a  substitution  drawback  system  conveys  a  subsidy,  the 
Commission  shall  normally  first  proceed  to  determine  whether  the  government  of  the 
exporting  country  has  in place  and  applies  a verification  system  or procedure.  Where 
such a system or procedure is determined to be applied, the Commission shall normally 
then  examine the  verification  procedures  to  see whether they  are reasonable,  effective 
for the purpose  intended,  and based  on generally  accepted  commercial  practices  in the 
country of export. To the extent that the procedures are determined to meet this test and 
are  effectively  applied,  no  subsidy  will  be  presumed  to  exist.  It  may  be  deemed 
necessary by the Commission to carry out, in accordance with paragraph 2 of Article 17, 
certain  practical  tests  in  order  to  verify  information  or  to  satisfy  itself  that  the 
verification procedures are being effectively  applied. 

5.  Where  there  are  no  verification  procedures,  where  they  are  not  reasonable,  or 
where such procedures are instituted  and considered reasonable but are found  not to be 
actually  applied  or  not  be  applied  effectively,  there  may  be  a  subsidy.  In  such  cases, 
further  examination by the exporting country based on the actual transactions  involved 
would need to be carried out to determinate whether an excess payment occurred. If the 
Commission  deems  it  necessary,  a  further  examination  would  be  carried  out  in 
accordance with paragraph 4. 

6. 
The  existence  of  a  substitution  drawback  provision  under  which  exporters  are 
allowed to select particular import shipments on which drawback is claimed should not 
of itself be considered to convey a subsidy. 

7.  An  excess  drawback  of  import  charges  in  the  sense  of  paragraph  (i)  would  be 
deemed  to  exist  where  governments  paid  interest  on any monies refunded  under  their 
drawback schemes, to the extent of the interest actually paid or payable. 

77 

2A 

ANNEX IV 

(This Annex reproduces Annex 2 to the Agreement on Agriculture. Any terms or 
expression which are not explained herein or which are not self-explanatory  are to be 
interpreted in the context of that Agreement) 

DOMESTIC SUPPORT : THE BASIS OF EXEMPTION 
FROM THE REDUCTION  COMMITMENTS 

1.  Domestic support measures for which exemption from the reduction commitments 
is  claimed  shall  meet  the  fundamental  requirement  that  they  have  no,  or  at  most 
minimal, trade-distorting effects  of effects  on production. Accordingly, all measures  for 
which exemption is claimed shall conform to the following basic criteria: 

(a) 

the  support  in  question  shall  be  provided  through  a  publicly-funded 
government  programme  (including  government  revenue  foregone)  not 
involving transfers from consumers; and, 

(b) 

the support in question shall not have the effect  of providing price support to 
producers; 

plus policy-specific  criteria and conditions as set out below. 

2AL 

Government Service Programmes 

2.  General  Services 

Policies in this category  involve expenditures (or revenue foregone)  in relation to 
programmes  which  provide  services  or  benefits  to  agriculture  or  the  rural 
community.  They  shall  not  involve  direct  payments  to  producers  or  processors. 
Such programmes, which include but are not restricted to the following  list, shall 
meet  the  general  criteria  in  paragraph  1  above  and  policy-specific  conditions 
where set out below: 

(a) 

including  general 

research, 
in  connection  with 
environmental  programmes, and research programmes relating  to  particular 
products; 

research,  research 

(b)  pest  and  disease  control,  including  general  and  product-specific  pest  and 
disease  control  measures,  such  as  early-warning  systems,  quarantine  and 
eradication; 

(c) 

training services, including both general and specific training facilities; 

(d) 

extension  and  advisory  services,  including  the  provision  of  means  to 
facilitate  the transfer  of information  and the results of research to producers 
and consumers; 

(e) 

inspection services, including general inspection services and the inspection 
of particular products for health, safety, grading or standardization purposes; 

(f)  marketing and promotion services, including market information, advice and 
promotion  relating  to  particular  products  but  excluding  expenditure  for 
unspecified  purposes  that  could  be  used  by  sellers  to  reduce  their  selling 
price or confer a direct economic benefit to purchasers; and 

79 

(g) 

infrastructural  services,  including:  electricity  reticulation,  roads  and  other 
means of transport,  market  and port facilities, water supply  facilities,  dams 
and  drainage  schemes,  and 
infrastructural  works  associated  with 
environmental programmes. In all cases the expenditure shall be directed to 
the  provision  or  construction  of  capital  works  only,  and  shall  exclude  the 
subsidized  provision  of  on-farm  facilities  other than  for  the  reticulation  of 
generally available public utilities. It shall not include subsidies to inputs or 
operating costs, or preferential user charges. 

3. 

Public stockholding for food security purposes*6) 

Expenditures (or revenue foregone) in relation to the accumulation and holding of 
stocks  of  products  which  form  an  integral  part  of  a  food  security  programme 
identified  in  national  legislation.  This  may  include  government  aid  to  private 
storage of products as part of such a programme. 

F.q  rri (A> 

The  volume  and  accumulation  of  such  stocks  shall  correspond  to  predetermined 
targets  related  solely  to  food  security.  The  process  of  stock  accumulation  and 
disposal  shall be financially transparent. Food purchases by the government  shall 
be  made  at  current  market  prices  and  sales  from  food  security  stocks  shall  be 
made at no less than the current domestic market price for the product and quality 
in question. 

4.  Domestic food aid*7) 

Expenditures  (or revenue  foregone)  in relation to the provision  of domestic  food 
aid to sections of the population in need. 

(6) For the purpose of paragraph 3 of this Annex, governmental stockholding programmes for  food 
security purposes in developing countries whose operation is transparent and conducted in accordance 
with officially  published objective criteria or guidelines shall be considered to be in conformity with the 
provisions of this paragraph, including programmes under which stocks of foodstuffs  for food security 
purposes are acquired and released at administered prices, provided that the difference  between the 
acquisition price and the external reference price is accounted for in the AMS. 
(7)  For the purposes of paragraphs 3 and 4 of this Annex, the provision of foodstuffs  at subsidized prices 
with the objective of meeting food requirements of urban and rural poor in developing countries on a 
regular basis at reasonable prices shall be considered to be in conformity with the provisions of this 
paragraph. 

80 

•is 2 

Eligibility to receive the food aid shall be subject to clearly-defined  criteria related 
to nutritional  objectives.  Such aid shall be in the form  of direct provision  of  food 
to  those  concerned  or the provision  of means to  allow eligible  recipients  to  buy 
food  either  at market  or  a  subsidized  prices. Food  purchases  by  the  government 
shall be made at current market prices and the financing and administration of the 
aid shall be transparent. 

Direct payments to producers 

Support  provided  through  direct  payments  (or  revenue  foregone,  including 
payments in kind) to producers for which exemption from reduction commitments 
is claimed  shall meet the basic criteria set out in paragraph  1 above, plus  specific 
criteria  applying to individual  types of direct payment  as set out in paragraphs  6 
through  13 below. Where exemption from reduction is claimed for any existing or 
new type of direct payment other than those specified  in paragraphs 6 through  13, 
it shall conform to criteria (b) through (e) in paragraph 6, in addition to the general 
criteria set out in paragraph 1. 

Decoupled income support 

(a)  Eligibility for such payments shall be determined by clearly-defined  criteria 
such as income, status as a producer or landowner, factor use or production 
level in a defined and fixed base period. 

(b)  The amount of  such payments  in any given year shall not be related  to, or 
based  on,  the  type  or  volume  of  production  (including  livestock  units) 
undertaken by the producer in any year after the base period. 

(c)  The amount of  such payments  in any given year shall not be related  to, or 
based  on, the prices, domestic  or international, applying to  any  production 
undertaken in any year after the base period. 

81 

253 

(d)  The amount of such payments in any given years shall not be related to, or 
based  on,  the  factors  of  production  employed  in  any  year  after  the  base 
period. 

(e)  No production shall be required in order to receive such payments. 

7.  Government  financial  participation  in  income  insurance  and  income  safety-net 
programmes 

(a)  Eligibility  for  such payments shall be determined by an income loss, taking 
into  account  only  income  derived  from  agriculture,  which  exceeds  30  per 
cent  of  average  gross  income  or  the  equivalent  in  net  income  terms 
(excluding  any  payments  from  the  same  or  similar  schemes)  in  the 
preceding  three-year  period  or a three-year  average based  on the preceding 
five-year period,  excluding the highest  and the lowest  entry. Any  producer 
meeting this condition shall be eligible to receive the payments. 

(b)  The amount of such payments shall compensate for less than 70 per cent of 
the  producer's  income  loss  in  the  year  the  producer  becomes  eligible  to 
receive this assistance. 

(c)  The amount of any such payments shall relate solely to income; it shall not 
relate  to  the  type  or  volume  of  production  (including  livestock  units) 
undertaken  by  the  producer;  or  to  the  prices,  domestic  or  international, 
applying to such production; or to the factors of production employed. 

(d)  Where a producer receives in the same year payments under this paragraph 
arid  under  paragraph  8  (relief  from  natural  disasters),  the  total  of  such 
payments shall be less than 100 per cent of the producer's total loss. 

82 

Payments (made either directly  or by way of a government financial  participation 

8. 
in crop insurance schemes) for relief from natural disasters 

(a)  Eligibility for such payments shall arise only following  a formal  recognition 
by  government  authorities  that  a natural  or like  disaster  (including  disease 
outbreaks,  pest  infestations,  nuclear  accidents,  and  war  on  the  territory  of 
the  Member  concerned)  has  occurred  or  is  occurring;  and  shall  be 
determined by a production loss which exceeds 30 per cent of the average of 
production  in the preceding three-year period  or a three-year  average based 
on  the  preceding  five  year  period,  excluding  the  highest  and  the  lowest 
entry. 

(b)  Payments  made  following  a  disaster  shall  be  applied  only  in  respect  of 
losses  of  income,  livestock  (including  payments  in  connection  with  the 
veterinary treatment of animals), land or other production factors  due to the 

.  .. 

. 

. 

•<•!•* u n 

natural disaster m question. 

(c)  Payments shall compensate for not more than the total cost of replacing such 
losses  and  shall  not  require  or  specify  the  type  or  quantity  of  future 
production. 

(d)  Payments  made  during  a  disaster  shall  not  exceed  the  level  required  to 

prevent or alleviate further  loss as defined in criterion (b) above. 

(e)  Where a producer receives in the same year payments under this paragraph 
and  under  paragraph  7(income 
safety-net 
programmes), the total of  such payments shall be less than  100 per cent of 
the producer's total loss. 

insurance  and 

income 

83 

âo-1 

Structural  adjustment  assistance  provided 

9. 
programmes 

through  producer  retirement 

(a)  Eligibility  for  such  payments  shall  be  determined  by  reference  to  clearly 
defined  criteria  in  programmes  designed  to  facilitate  the  retirement  of 
persons engaged in marketable agricultural production, or their movement to 
non-agricultural activities. 

(b)  Payments  shall  be  conditional  upon the total  and permanent  retirement  of 

the recipients from marketable agricultural production. 

10.  Structural  adjustment  assistance  provided 
programmes. 

through  resource  retirement 

(a)  Eligibility  for  such  payments  shall  be  determined  by  reference  to  clearly 
defined criteria in programmes designed to remove land or other resources, 
including livestock, from marketable agricultural production. 

(b)  Payments shall be conditional upon the retirement of land from marketable 
agricultural  production  for  a minimum  of  three  years,  and  in  the  case  of 
livestock on its slaughter or definitive permanent disposal. 

' 

(c)  Payments  shall  not require or specify  any alternative use for  such land or 
other  resources  which  involves  the  production  of  marketable  agricultural 
products. 

(d)  Payments shall not be related to either type or quantity of production or to 
the  prices,  domestic  or  international,  applying  to  production  undertaken 
using the land or other resources remaining in production. 

84 

So> 

11.  Structural adjustment  assistance provided through investment aids 

(a)  Eligibility  for  such  payments  shall  be  determined  by  reference  to  clearly-
defined  criteria  in government  programmes  designed  to  assist the financial 
or  physical  restructuring  of  a  producer's  operations  in  response  to 
objectively  demonstrated  structural  disadvantages.  Eligibility  for  such 
programmes may also be based on a clearly-defined  government programme 
for the reprivatization of agricultural land. 

(b)  The amount  of such payments  in any given year  shall not be related  to, or 
based  on,  the  type  or  volume  of  production  (including  livestock  units) 
undertaken  by the producer  in any year after  the base period  other than  as 
provided for under criterion (e) below. 

(c)  The amount  of  such payments  in any given year  shall not be related  to, or 
based  on, the prices, domestic  or international,  applying to  any  production 
undertaken in any year after the base period. 

(d)  The payments  shall  be  given  only  for  the period  of time necessary  for  the 

realisation of the investment in respect of which they are provided. 

(e)  The  payments  shall  not  mandate  or  in  any  way  designate  the  agricultural 
products  to  be  produced  by  the  recipients  except  to  require  them  not  to 
produce a particular product. 

(f)  The payments shall be limited to the amount required to compensate for the 

structural disadvantage. 

85 

•3^3 

12.  Payments under environmental programmes 

(a)  Eligibility for such payments shall be determined as part of a clearly-defined 
government environmental or conservation programme and be dependent on 
the  fulfilment  of  specific  conditions  under  the  government  programme, 
including conditions related to production methods or inputs. 

(b)  The amount of payment shall be limited to the extra costs or loss of income 

involved in complying with the government programme. 

13.  Payments under regional assistance programmes 

(a)  Eligibility for  such payments shall be limited to producers in disadvantaged 
regions.  Each  such  region  must  be  a  clearly  designated  contiguous 
geographical  area  with  a  definable  economic  and  administrative  identity, 
considered  as  disadvantaged  on  the  basis  of  neutral  and  objective  criteria 
clearly  spelt  out  in  a  law  or  regulation  and  indicating  that  the  region's 
difficulties  arise out of more than temporary circumstances. 

(b)  The  amount  of  such payments  in any given year shall  not be related  to, or 
based  on,  the  type  or  volume  of  production  (including  livestock  units) 
undertaken  by the producer  in  any year  after  the base period  other  than  to 
reduce that production. 

(c)  The  amount  of  such payments  in any given year shall  not be  related  to, or 
based  on, the prices, domestic  or international, applying to  any  production 
undertaken in any year after the base period. 

(d)  Payments  shall  be  available  only  to  producers  in  eligible  regions,  but 

generally available to all producers within such regions. 

86 

i*>L| 

(e)  Where related to production factors, payments shall be made at a degressive 

rate above a threshold level of the factor concerned. 

(f)  The payments  shall be limited to the extra costs of loss of income  involved 

in undertaking agricultural production in the prescribed area. 

87 

'^cl 

Commercial defence: 

Safeguards 

%  (o 

Explanatory  memorandum 

The Uruguay  Round Safeguards  Agreement clarifies  and strengthens the disciplines of 
GATT  1994, specifically  those regarding the implementation of Article XIX. 

The Agreement restores multilateral control over safeguards  and requires the elimination of 
any measures which escape such control. 

Safeguard  measures may be applied only  in the circumstances and in the manner  specified  in 
the Agreement.  As a result,  all grey area measures, i.e.  arrangements  for  limiting  imports 
or exports, orderly-marketing  arrangements  or other similar arrangements,  will be 
prohibited  and must be eliminated. 

The only exception made is for the EC-Japan arrangement relating to certain types of motor 
vehicle, which expires on 31 December  1999. 

In the Community's  case, adherence to the obligations stemming from  the  Safeguards 
Agreement entails denouncing all grey-area measures by the deadline given in the 
Agreement  (180 days following  the entry  into force of the Agreement Establishing  the 
MTO) and reviewing  or amending (where necessary) the common rules for  imports 
established by Council Regulation (EC) No 518/94, particularly  in connection with 
safeguards. 

The attached draft  Regulation is the product of such a review. 

It should be pointed out, however,  that Community legislation already contains precise  rules 
that often  go beyond the more general provisions of the Safeguards  Agreement.  This is the 
case, for  example, with the strict investigation deadlines and the more detailed list of  factors 
to be considered  in determining  serious injury  and the causal link between such injury  and 
imports. 

The main amendments to Council Regulation (EC) No 518/94 are therefore as follows: 

(a) 

Incorporation  of  definitions 

Definitions  of the terms  "threat of serious injury",  "serious injury"  and  "Community 
producers". 

Article 5(3); Agreement on Safeguards Article 4(1) 

(b) 

Causal  link: other  factors 

The Article dealing with the factors to be considered in an investigation will have 
added to it an extra paragraph on determining the presence of a causal link. 

Article 10(1) (d); Agreement on Safeguards Article 4(2) 

% 

\ 

(c) 

Rights of the interested  parties 

Explicitly  expressed  right of reply to other parties'  arguments  for  the interested 
parties. 

End of Article  6(2); Agreement on Safeguards Article 3(1) 

(d) 

Taking  of provisional  safeguard  measures  in critical  circumstances 

Adoption of the Safeguards  Agreement's clauses on provisional  measures 
(conditions,  duration and nature). 

Article  8; Agreement on Safeguards Article 6 

(e) 

Quota  levels 

Explicit provision on the setting of a quota at a level,  in principle,  no lower  than 
average imports over the last three representative years. 

Article  16(2) (b); Agreement on Safeguards Article 5(1) 

(f) 

Allocation of quotas among supplier countries 

Arrangements  for  allocating quotas among supplier countries are now  included 
(agreement,  share of previous imports, modulation). 

Article  16(3); Agreement on Safeguards Article 5(2) 

(g) 

Duration of safeguard  measures 

No safeguard  measure may now remain in force  for  longer than four  years unless 
extended  after  a further  investigation.  The extension may not be for  longer than  four 
years. 

Article  20; Agreement on Safeguards Article  7(1) to 7(3) 

(h) 

Progressive  liberalization and mid-term review 

Any measure applying for  longer than one year will have to be liberalized  at regular 
intervals and any measure applying for  longer than three years will be subject to a 
mid-term review. 

Articles  20(4) and  21 (1); Agreement on Safeguards Article 7(4) 

(i) 

Reimposition of safeguard  measures 

There can now be no reimposition of safeguard  measures on a particular product  for 
at least two years from  the expiry  of the previous such measure. 

Article  22; Agreement on Safeguards Article  7(5) and 7(6) 

(j) 

Developing  countries 

Adoption of the Safeguards  Agreement's provisions prohibiting  the imposition of 
safeguard  measures on products from  developing country WTO Members if  imports 
of those products are below a certain level. 

Article  19; Agreement on Safeguards Article 9(1) 

COUNCIL REGULATION  (EC) No  .../94 

9 4/  0232(ACC) 

on  common  rules  for  imports  and  repealing Regulation  (EC) No 518/94 

of 

1994 

THE  COUNCIL  OF THE EUROPEAN  UNION, 

Having regard to the Treaty establishing the European Community,  and in particular 
Article  113 thereof, 

Having regard to the instruments establishing common organization of agricultural  markets 
and the instruments concerning processed agricultural products, in particular  insofar  as 
they provide for  derogation from  the general principle that quantitative restrictions or 
measures having equivalent effect  may be replaced solely by the measures provided  for  in 
the said  instruments, 

Having regard to the proposal from the  Commission, 

Having regard to the opinion of the European Parliament, 

Whereas the common commercial policy should be based on uniform  principles;  whereas 
Council Regulation (EC) No 518/941 of 7 March  1994 on common rules for  imports and 
repealing Regulation (EEC) No 288/822 is an important part of  the policy; 

Whereas due account was taken when Regulation (EC) No 518/94 was adopted of the 
Community's  international obligations, particularly those deriving from  Article XIX of the 
General Agreement on Tariffs  and Trade (GATT); 

Whereas the completion of the Uruguay Round has led to the foundation  of the World 
Trade Organization (WTO); whereas  Annex  1A to the Agreement establishing the WTO 
contains inter alia  the General Agreement on Tariffs  and Trade  1994 (GATT  1994) and an 
Agreement on  Safeguards; 

Whereas the Agreement on Safeguards  meets the need to clarify  and reinforce  the 
disciplines of GATT  1994, and specifically  those of Article XIX; whereas that Agreement 
requires the elimination of safeguard  measures which escape those rules,  such as voluntary 
export restraints,  orderly  marketing arrangements and any other similar  import or export 
arrangements; 

OJL67,  10.3.1994, p.77. 
' 
2 
OJL  35, 9.2.1982, p.l. 
REG518/518fin-e  (version  définitive) 

5o9 

2 

Whereas in the light of these new multilateral rules the common rules for imports should 
be made clearer and if necessary amended, particularly where the application of safeguard 
measures is concerned; 

Whereas the starting point for the common rules for imports is liberalization of imports, 
namely the absence of any quantitative restrictions; 

Whereas the Commission should be informed by the Member States of any danger created 
by trends in imports which might call for Community surveillance or the application of 
safeguard measures; 

Whereas in such instances the Commission should examine the terms and conditions under 
which imports occur, the trend in imports, the various aspects of the economic and trade 
situations and, where appropriate, the measures to be applied; 

Whereas if Community surveillance is applied, release for free circulation of the products 
concerned should be made subject to presentation of an import document meeting uniform 
criteria; whereas that document should, on simple application by the  importer, be 
endorsed by the authorities of the Member States within a certain period but without the 
importer thereby acquiring any right to import; whereas the document should therefore be 
valid only during such period as the import rules remain  unchanged; 

Whereas the Member States and the Commission should exchange the information resulting 
from Community surveillance as fully as possible; 

Whereas it falls to the Commission and the Council to adopt the safeguard measures 
required by the interests of the Community; whereas those interests should be considered 
as a whole and should in particular encompass the interest of Community producers, users 
and consumers; 

Whereas safeguard measures against a Member of the WTO may be considered only if the 
product in question is imported into the Community in such greatly increased quantities 
and on such terms or conditions as to cause, or threaten to cause, serious injury to 
Community producers of  like or directly competing products, unless international 
obligations permit derogation from this rule; 

3 
Whereas the terms  "serious injury",  "threat of serious injury" and "Community producers" 
should be defined and more precise criteria for determining injury be established; 

Whereas an investigation must precede the application of any safeguard measure,  subject to 
the reservation that the Commission be allowed in urgent cases to apply provisional 
measures; 

Whereas there should be more detailed provisions on the opening of investigations, the 
checks and inspections required, access by exporter countries and interested parties to the 
information gathered, hearings for the parties involved and the opportunities for those 
parties to submit their views; 

Whereas the provisions on investigations introduced by this Regulation are without 
prejudice to Community or national rules concerning professional  secrecy; 

Whereas it is also necessary to set time limits for the initiation of investigations and for 
determinations as to whether or not measures are appropriate, with a view to ensuring that 
such determinations are made quickly,  in order to increase legal  certainty for the economic 
operators concerned; 

Whereas in cases in which safeguard measures take the form of a quota the level of the 
latter should be set in principle no lower than the average level of imports over a 
representative period of at least three years; 

Whereas in cases in which a quota is allocated among supplier countries each country's 
quota may be determined by agreement with the countries themselves or by taking as a 
reference the level of imports over a representative period; whereas derogations from these 
rules should nevertheless be possible where there is a disproportionate increase in imports, 
provided that due consultation under the auspices of the WTO Committee on Safeguards 
takes place; " 

Whereas the maximum duration of safeguard measures should be determined and specific 
provisions regarding extension, progressive liberalization and reviews of such measures be 
laid down; 

Whereas the circumstances in which products originating in a developing country Member 
of the WTO should be exempt from safeguard measures should be established; 

AA 

4 

Whereas  surveillance or safeguard  measures confined  to one or more regions of the 
Community  may prove more suitable than measures applying to the whole Community; 
whereas, however,  such measures should be authorized only exceptionally  and where no 
alternative exists; whereas  it is necessary to ensure that such measures are temporary  and 
cause the minimum of disruption to the operation of the internal market; 

Whereas  in the interests of uniformity  in rules for  imports, the formalities  to be carried  out 
by importers  should be simplified  and made identical regardless of the place where the 
goods clear customs; whereas  it is therefore  desirable to provide  that any  formalities 
should be carried  out using forms  corresponding  to the specimen annexed to the 
Regulation; 

Whereas import documents issued  in connection with Community  surveillance  measures 
should be valid throughout the Community  irrespective of the Member  State of issue; 

Whereas the textile products covered by Regulation (EC) No 517/94 of 7 March  1994 on 
common rules for  imports of textile products from certain third countries not covered by 
bilateral agreements, protocols or other arrangements or by other specific  Community 
import rules are subject to special treatment at Community and international  level; whereas 
they should therefore  be completely  excluded from the scope of this Regulation; 

Whereas the provisions  of this Regulation are applicable without prejudice to Articles 77, 
81,  244, 249 and 280 of the Act of Accession of Spain and Portugal; 

Whereas Regulation  (EC) No 518/94 should consequently be repealed, 

HAS ADOPTED  THIS  REGULATION: 

M.X 

5 

TITLE I 
General  principles 

Article 1 

1. 

This Regulation applies to imports of products covered by the Treaty  originating  in 
third countries, except  for: 

textile products covered by Regulation (EC) No 517/94, 
the products originating  in certain third countries listed  in Regulation  (EC) 
No 519/94 on common rules for  imports from certain third countries, 

2. 

The products referred  to in paragraph  1 shall be freely  imported  into the 
Community  and accordingly,  without prejudice to the safeguard  measures  which 
may be taken under Title V,  shall not be subject to any quantitative  restrictions. 

TITLE II 
Community  information and consultation procedure 

Article 2 

The Commission shall be informed  by the Member States should trends  in imports  appear 
to call for  surveillance or safeguard  measures. This information  shall contain the evidence 
available,  as determined  on the basis of the criteria laid down in Article  10.  The 
Commission shall immediately pass this information  on to all the Member States. 

Article 3 

Consultations may be held either at the request of a Member State or on the initiative of the 
Commission.  They  shall take place within eight working days of the Commission receiving 
the information  provided for  in Article 2 and,  in any event, before the introduction of any 
Community  surveillance or safeguard  measure. 

Article 4 

H3 

6 

1. 

2. 

Consultation shall take place within an advisory committee, hereinafter  called  'the 
Committee', made up of representatives of each Member State with a representative 
of the Commission as chairman. 

The Committee shall meet when convened by its chairman. He shall provide the 
Member States with all relevant information as promptly as possible, . 

3. 

Consultations shall cover in particular: 

terms and conditions of import, import trends and the various aspects of the 
economic and trade situation with regard to the product in question; 

the measures, if any, to be taken. 

4. 

Consultations may be conducted in writing if necessary. The Commission shall in 
this event inform the Member States, which may express their opinion or request 
oral consultations within a period of five to eight working days, to be decided by 
the Commission. 

TITLE m 
Community investigation procedure 

Article 5 

1.  Without prejudice to Article 8, the Community investigation procedure shall be 

implemented before any safeguard measure is applied. 

2. 

Using as a basis the factors described in Article 10, the investigation shall seek to 
determine whether imports of the product in question are causing or threatening to 
cause serious injury to the Community producers concerned. 

3. 

The following definitions shall apply: 

(a) 

"serious injury" means a significant overall impairment in the position of 
Community producers, 

M-V 

(b) 

"threat of serious injury" means serious injury that is clearly imminent; 

(c) 

"Community producers" means the producers as a whole of the like or 
directly competing products operating within the territory of the 
Community, or those whose collective output of the like or directly 
competing products constitutes a major proportion of the total Community 
production of those products. 

Article 6 

1.  Where after consultations referred to in Article 3, it is apparent to the Commission 
that there is sufficient  evidence to justify the initiation of an investigation, the 
Commission shall: 

(a) 

initiate an investigation within one month of receipt of information from a 
Member State and publish a notice in the Official Journal of the European 
Communities',  such notice shall give a summary of the information received, 
and stipulate that all  relevant information is to be communicated to the 
Commission; it shall state the period within which interested parties may 
make known their views in writing and submit information,  if such views and 
information are to be taken into account during the  investigation; it shall also 
state the period within which interested parties may apply to be heard orally 
by the Commission in accordance with paragraph 4; 

(b)  commence the investigation, acting in cooperation with the Member States. 

2. 

The Commission shall seek all information it deems to be necessary and, where it 
considers it appropriate, after consulting the Committee, endeavour to check this 
information with importers, traders, agents, producers, trade associations and 
organizations. 

The Commission shall be assisted in this task by staff of the Member State on 
whose territory these checks are being carried out, provided that Member State so 
wishes. 

Interested parties which have come forward under paragraph (l)(a) and 
representatives of the exporting country may, upon written request, inspect all 
information made available to the Commission in connection with the investigation 
other than internal documents prepared by the authorities of the Community or its 
Member States, provided that that information is relevant to the presentation of 
their case and not confidential  within the meaning of Article 9,  and that it is used by 
the Commission  in the investigation. 

MS 

3. 

4. 

Interested parties which have come forward may communicate their views on the -
information in question to the Commission; those views may be taken into 
consideration where they are backed by sufficient evidence. 

The Member States shall supply the Commission, at its request and following 
procedures laid down by it, with the information at their disposal on developments 
in the market of the product being investigated. 

The Commission may hear the interested parties. Such parties must be heard where 
they have made a written application within the period laid down in the notice 
published in the Official Journal of the European  Communities,  showing that they 
are actually  likely to be affected by the outcome of the investigation and that there 
are special reasons for them to be heard orally. 

5.  When information is not supplied within the time limits set by this Regulation or by 
the Commission under this Regulation, or the investigation is significantly  impeded, 
findings may be made on the basis of the facts available. Where the Commission 
finds  that any interested party or third party has supplied it which false or 
misleading information,  it shall disregard the information and may make use of 
facts available. 

6.  Where it appears to the Commission, after the consultation referred to in Article 3, 

that there is insufficient  evidence to justify  an investigation, it shall inform the 
Member States of its decision within one month of receipt of the information  from 
the Member States. 

Article 7 

1. 

At the end of the investigation, the Commission shall submit a report on the results 
to the Committee. 

2.  Where the Commission considers, within nine months of the initiation of the 

investigation, that no Community surveillance or safeguard measures are necessary, 
the investigation shall be terminated within a month, the Committee having first 
been consulted.  The decision to terminate the investigation,  stating the main 
conclusions of the investigation and a summary of the reasons therefor,  shall be 
published in the Official Journal of the European  Communities. 

3. 

If the Commission considers that Community surveillance or safeguard  measures 
are necessary,  it shall take the necessary decisions in accordance with Titles IV and 
V, no later than nine months from  the initiation of the investigation.  In exceptional 
circumstances,  this time limit may be extended by a further  maximum period  of two 
months; the Commission shall then publish a notice in the Official Journal of the 
European Communities setting forth the duration of the extension and a summary of 
the  reasons  therefor. 

9 

Article 8 

1. 

The provisions of this Title shall not preclude the use, at any time, of  surveillance 
measures  in accordance with Articles  11 to  15 or provisional  safeguard  measures  in 
accordance with Articles  16,  17 and 18. 

Provisional  safeguard  measures shall be applied: 

in critical circumstances where delay would cause damage which it would be 
difficult  to repair,  making immediate action necessary; 

where a preliminary determination provides clear evidence that increased 
imports have caused or are threatening to cause serious  injury. 

2. 

3. 

4. 

5. 

The duration of such measures shall not exceed 200 days. 

Provisional safeguard  measures should take the form of an increase in the existing 
level of customs duty (whether the latter is zero or higher) if such action is likely to 
prevent or repair the serious  injury. 

The Commission shall immediately conduct whatever investigation measures  are 
still necessary. 

Should the provisional  safeguard  measures be repealed because no serious injury  or 
threat of serious injury  exists, the customs duties collected as a result of the 
provisional measures shall be automatically  refunded  as soon as possible.  The 
procedure laid down in Article 235 et seq of Council Regulation (EEC) No 2913/92 
of  12 October  1992 shall apply. 

Article 9 

A\ 

10 

1. 

Information received pursuant to this Regulation shall be used only for the purpose 
for which it was requested. 

2. 

(a) 

Neither the Council, nor the Commission, nor the Member States, nor the 
officials  of any of these shall reveal any information of a confidential nature 
received pursuant to this Regulation, or any information provided on a 
confidential  basis without specific permission from the supplier of such 
information. 

(b) 

Each request for confidentiality  shall state the reasons why the information 
is confidential. 

However, if it appears that a request for confidentiality  is unjustified and if 
the supplier of the information wishes neither to make it public nor to 
authorize its disclosure in general terms or in the form of a summary, the 
information concerned may  be disregarded. 

3. 

4. 

Information shall in any case be considered to be confidential  if its disclosure is 
likely to have a significantly adverse effect upon the supplier or the source of such 
information. 

The preceding paragraphs shall not preclude reference by the Community 
authorities to general information and in particular to reasons on which decisions 
taken under this Regulation are based. The said authorities shall, however, take into 
account the legitimate interest of the legal and natural persons concerned that their 
business secrets should not be divulged. 

Article 10 

1. 

Examination of the trend of imports, of the conditions in which they take place and 
of serious injury or threat of serious injury to Community producers resulting from 
such imports shall cover in particular the following factors: 

(a) 

the volume of imports, in particular where there has been a significant 
increase, either in absolute terms or relative to production or consumption in 
the Community; 

Mi 

H 

(b) 

the price of the imports, in particular where there has been a significant 
price undercutting as compared with the price of a like product in the 
Community; 

(c) 

the consequent impact on the Community producers as indicated by trends in 
certain economic factors such as: 

production, 
capacity utilization, 
stocks, 
sales, 
market share, 
prices (i.e.  depression of prices or prevention of price increases 
which would normally have occurred), 
profits, 
return on capital employed, 
cash flow, 
employment. 

(d) 

factors other than trends in imports which are causing or may have caused 
injury to the Community producers concerned. 

2.  Where a threat of serious injury is alleged, the Commission shall also examine 

whether it is clearly foreseeable that a particular situation is likely to develop into 
actual injury. In this regard account may be taken of factors such as: 

(a) 
(b) 

the rate of increase of the exports to the Community; 
export capacity in the country of origin or export, as it stands or is likely to 
be in the foreseeable future, and the likelihood that that capacity will be used 

*  to export to the Community. 

12 

TITLE IV 
Surveillance 

Article 11 

1.  Where the trend in imports of a product originating in a third country covered by 
this Regulation threatens to cause injury to Community producers, and where the 
interests of the  Community so require, import of that product may be subject, as 
appropriate, to: 

2. 

3. 

1. 

(a) 

(b) 

retrospective Community surveillance carried out in accordance with the 
provisions laid down in the decision referred to in paragraph 2, 
or 
prior Community surveillance carried out in accordance with Article 12. 

The decision to impose surveillance shall be taken by the Commission according to 
the procedure laid down in Article  16 (5) and (6). 

The surveillance measures shall have a limited period of validity. Unless otherwise 
provided, they shall cease to be valid at the end of the second six-month period 
following the six months in which the measures were introduced. 

Article 12 

Products under prior Community surveillance may be put into free circulation only 
on production of an import document. Such document shall be endorsed by the 
competent authority designated by Member States, free of charge, for any  quantity 
requested and within a maximum of five working days of receipt by the national 
competent authority of a declaration by any Community importer, regardless of his 
place of business in the Community. This declaration shall be deemed to have been 
received by the national competent authority no later than three working days after 
submission, unless it is proven otherwise. 

2. 

The import document and the declaration by the importer shall be made out on a 
form corresponding to the model in the Annex. 

^0 

13 

Additional  information  to that provided for  in the aforementioned  form may be 
required.  Such information  shall be specified  in the decision to impose surveillance. 

The import document shall be valid throughout the Community,  regardless of the 
Member State of issue. 

A finding that the unit price at which the transaction is effected  exceeds that 
indicated  in the import document by less than 5  % or that the total value or quantity 
of the products presented for  import exceeds the value or quantity given in the 
import document by less than 5  % shall not preclude the release for  free  circulation 
of the product in question. The Commission,  having heard the opinions expressed 
in the Committee and taking account of the nature of the products and other  special 
features  of the transactions concerned, may fix a different  percentage,  which, 
however,  should not normally exceed  10 %. 

Import documents may be used only for  such time as arrangements for  liberalization 
of imports remain in force  in respect of the transactions concerned.  Such import 
documents may not in any event be used beyond the expiry  of a period which shall 
be laid down at the same time and by means of the same procedure as the 
imposition of surveillance, and shall take account of the nature of the products and 
other special features  of the transactions. 

Where the decision taken under Article  11 so requires, the origin of products under 
Community  surveillance must be proved by a certificate  of origin. This paragraph 
shall not affect  other provisions concerning the production of any such  certificate. 

Where the product under prior Community  surveillance is subject to regional 
safeguard  measures in a Member State, the import authorization granted by that 
Member State may replace the import document. 

3. 

4. 

5. 

6. 

7. 

Article 11 

Where import of a product has not been made subject to prior Community  surveillance 
within eight working days of the end of consultations, the Commission,  in accordance with 
Article  18, may introduce surveillance confined  to imports into one or more regions of the 
Community. 

, 

Article 14 

b*l 

14 

1. 

Products under regional surveillance may be put into free circulation in the region 
concerned only on production of an import document. Such document shall be 
endorsed by the competent authority designated by the Member State(s) concerned, 
free of charge, for any quantity requested and within a maximum of five working 
days of receipt by the national competent authority of a declaration by any 
Community importer, regardless of his place of business in the Community. This 
declaration shall be deemed to have been received by the national competent 
authority no later than three working days after submission, unless it is proven 
otherwise. Import documents may be used only for such time as arrangements for 
imports remain liberalized in respect of the transactions concerned. 

2. 

The import document and the declaration by the importer shall be made out on a 
form corresponding to the model in the Annex. 

Additional information to that provided in the aforementioned form may be 
required. Such particulars shall be specified in the decision to impose surveillance. 

Article 15 

1. 

Member States shall communicate to the Commission within the first ten days of 
each month in the case of Commumty or regional surveillance : 
(a) 

in the case of prior surveillance, details of the sums of money (calculated 
on the basis of cif prices) and quantities of goods in respect of which import 
documents were issued or endorsed during the preceding period; 
in every case, details of imports during the period preceding the period 
referred to in subparagraph (a). 

(b) 

The information supplied by Member States shall be broken down by product and 
by country. 

Different provisions may be laid down at the same time and by the same procedure 
as the surveillance arrangements. 

2.  Where the nature of the products or special circumstances so require, the 

Commission may, at the request of a Member State or on its own initiative, amend 
the timetables for submitting this information. 

3. 

The Commission shall inform the Member States accordingly. 

3ix 

15 

TITLE V 
Safeguard measures 

Article 16 

Where a product is imported into the Community in such greatly increased 
quantities and/or on such terms or conditions as to cause, or threaten to cause, 
serious injury to Community producers, the Commission, in order to safeguard the 
interests of the Community, may, acting at the request of a Member State or on its 
own initiative: 

(a) 

(b) 

limit the period of validity of import documents within the meaning of 
Article  12 to be endorsed after the entry into force of this measure; 
alter the import rules for the product in question by making its release for 
free circulation conditional on production of an import authorization, the 
granting of which shall be governed by such provisions and subject to such 
limits as the  Commission shall lay down. 

The measures referred to in (a) and (b) shall take effect immediately. 

(a)  When establishing a quota, account shall be taken in particular of: 

the desirability of maintaining, as far as possible, traditional trade 
flows, 
the volume of goods exported under contracts concluded on normal 
terms and conditions before the entry into force of a safeguard 
measure within the meaning of this Title, where such contracts have 
been notified to the Commission by the Member State  concerned, 
the need to avoid jeopardizing achievement of the aim pursued in 
establishing the quota. 

(b) 

(a) 

The quota shall not be set lower than the average level of imports over the 
last three representative years for which statistics are available unless a 
different  level is necessary to prevent or remedy serious injury. 

In cases in which a quota is allocated among supplier countries,  allocation 
may be agreed with those of them having a substantial interest in supplying 
the product concerned for import into the Community. 

lib 

16 

Failing this, the quota shall be allocated among the supplier countries in 
proportion to their share of imports into the Community of the product 
concerned during a previous representative period, due account being taken 
of any specific  factors which may have affected  or may be affecting  the trade 
in the product. 

(b) 

Provided that its obligation to see that consultations are conducted under the 
auspices of the WTO Committee on Safeguards  is not disregarded, the 
Community may nevertheless depart from this method of allocation if 
imports originating in one or more supplier countries have increased in 
disproportionate percentage in relation to the total increase of imports of the 
product concerned over a previous representative period. 

4. 

(a) 

The measures referred to in this Article shall apply to every product which 
is put into free circulation after their entry into force.  In accordance with 
Article  18 they may be confined to one or more regions of the Community. 

(b) 

However,  such measures shall not prevent the release for free circulation of 
products already on their way to the Community provided that the 
destination of such products cannot be changed and that those products 
which, under Articles  11 and 12, may  be put into free circulation only on 
production of an import document are in fact accompanied by such a 
document. 

5.  Where intervention by the Commission has been requested by a Member State, the 
Commission shall take a decision within a maximum of five working days of receipt 
of such a request. 

6. 

7. 

Any decision taken by the Commission under this Article shall be commumcated to 
the Council and to the Member States. Any Member State may, within one month 
following the day of such communication, refer the decision to the Council. 

If a Member State refers the Commission's decision to the Council, the Council, 
acting by a qualified majority, may confirm,  amend or revoke that decision. 

If,  within three months of the referral of the matter to the Council, the Council has 
not taken a decision, the decision taken by the Commission shall be deemed 
revoked. 

Article 17 

17 

Where the interests of the Community  so require, the Council, acting by a  qualified 
majority  on a proposal from the Commission drawn up in accordance with the terms of 
Title III, may adopt appropriate measures to prevent a product being imported  into the 
Community  in such greatly  increased quantities and/or on such terms or conditions as to 
cause, or threaten to cause, serious injury  to Community producers of like or directly 
competing products. 

Article  16 (2), (3) and (4) shall apply. 

Article 18 

Where it emerges, primarily  on the basis of the factors  referred  to in Article  10,  that the 
conditions laid down for the adoption of measures under Articles  11 and  16 are met in one 
or more regions of the Community,  the Commission,  after  having examined  alternative 
solutions, may exceptionally  authorize the application of surveillance or  safeguard 
measures limited to the region(s) concerned  if it considers that such measures applied at 
that level are more appropriate than measures applied throughout the Community. 

These measures must be temporary  and must disrupt the operation of the internal market as 
little as possible. 

The measures shall be adopted  in accordance with the provisions laid down in Articles  11 
and  16 respectively. 

Article 19 

No safeguard  measure may be applied to a product originating in a developing country 
Member of the WTO as long as that country's  share of Community  imports of the product 
concerned does not exceed 3%,  provided that developing country Members with less than a 
3%  import share collectively  account for not more than 9% of total Community  imports of 
the product  concerned. 

Article 20 

l>a.r 

18 

1. 

The duration of safeguard measures must be limited to the period of time necessary 
to prevent or remedy serious injury and to facilitate adjustment on the part of 
Community producers.  The period should not exceed four years, including the 
duration of any provisional measure. 

2. 

Such initial period may be extended, except in the case of the measures referred to 
in Article  16(3)(b), provided it is determined that: 

the safeguard measure continues to be necessary to prevent or remedy 
serious injury, 
and there is evidence that Community producers are adjusting. 

3. 

4. 

Extensions shall be adopted in accordance with the terms of Title III and using the 
same procedures as the initial measures.  A measures so extended shall not be no 
more restrictive than it was at the end of the initial period. 

If the duration of the measure exceeds one year, the measure must be progressively 
liberalized at regular intervals during the period of application, including the period 
of extension. 

5. 

The total period of application of a safeguard measure shall not exceed eight years. 

Article 21 

1.  While any surveillance or safeguard measure applied in accordance with Titles IV 
and V is in operation, consultations shall be held within the Committee, either at 
the request of a Member State or on the initiative of the Commission.  If the 
duration of a safeguard measure exceeds three years, the Commission shall seek 
such consultations no later than the mid-point of the period of application of that 
measure. 

The  purpose of such consultations shall be: 
(a) 
(b) 

to examine the effects  of the measure; 
to determine whether and in what manner it is appropriate to accelerate the 
pace of liberalization; 
to ascertain whether its application is still necessary. 

(c) 

19 
2.  Where, as a result of the consultations referred to in paragraph 1, the Commission 
considers that any surveillance or safeguard measure referred to in Articles  11, 13, 
16,  17 and 18 should be revoked or amended, it shall proceed as follows: 

î>2£ 

(a) 

where the measure was enacted by the Council, the Commission shall 
propose to the Council that it be revoked or amended. The Council shall act 
by a qualified majority. 

(b) 

in all other cases, the Commission shall amend or revoke Community 
safeguard and surveillance measures. 

Where the decision relates to regional surveillance measures, it shall apply from the 
sixth day following  that of its publication in the Official Journal of the European 
Communities. 

Article 22 

1.  Where imports of a product have already been subject to a safeguard measure no 

further such measure shall be applied to that product until a period equal to the 
duration of the previous measure has elapsed.  Such period shall not be less than 
two years. 

2. 

Notwithstanding paragraph 1, a safeguard measure of  180 days or less may be 
reimposed for a product if: 

(a) 

(b) 

at least one year has elapsed since the date of introduction of a safeguard 
measure on the import of that product, and 
such a safeguard measure has not been applied to the same product more 
than twice in the five-year period immediately preceding the date of 
introduction of the measure. 

20 

TITLE VI 

Final  provisions 

Article 23 

Where the interests of the Community  so require, the Council, acting by a  qualified 
majority  on a proposal from  the Commission,  may adopt appropriate measures to allow the 
rights and obligations of the Community  or of all its Member States, in particular  those 
relating to trade in commodities, to be exercised  and fulfilled  at international  level. 

Article 24 

1 

This Regulation shall not preclude the fulfilment  of obligations arising from  special 
rules contained in agreements concluded between the Community  and third 
countries. 

2. 

(a)  Without prejudice  to other Community provisions, this Regulation shall not 

preclude the adoption or application by Member States: 
(i) 

of prohibitions, quantitative restrictions or surveillance measures  on 
grounds of public morality, public policy or public security; the 
protection of health and life of humans, animals or plants, the 
protection of national treasures possessing  artistic, historic or 
archaeological  value, or the protection of industrial and commercial 
property; 

(ii) 
(iii) 

of special formalities  concerning foreign exchange; 
of formalities  introduced pursuant to international agreements in 

accordance with the Treaty. 

(b) 

The Member States shall inform the Commission of the measures or 
formalities  they intend to introduce or amend in accordance with this 
paragraph.  In the event of extreme urgency, the national measures or 
formalities  in question shall be communicated to the Commission 
immediately upon their adoption. 

Article 25 

21 

1. 

2. 

This Regulation shall be without prejudice  to the operation of the instruments 
establishing  the common organization of agricultural markets or of Community  or 
national administrative provisions derived therefrom  or of the specific  instruments 
applicable to goods resulting from  the processing of agricultural products;  it shall 
operate by way of complement to those instruments. 

However,  in the case of products covered by the instruments referred  to in 
paragraph  1, Articles  11 to  15 and 22 shall not apply to those in respect of which 
the Community  rules on trade with third countries require the production of a 
licence or  other import document. 

Articles  16,  18 and 21 to 24 shall not apply to those products  in respect of which 
such rules provide for the application of quantitative import restrictions. 

Article 26 

Until 31 December  1995, Spain and Portugal may maintain the quantitative restrictions on 
agricultural products referred  to in Articles 77, 81, 244, 249 and 280 of the Act of 
Accession. 

Article 27 

Regulation (EC) No 518/94 is hereby repealed. References  to the repealed Regulation shall 
be understood as referring  to this Regulation. 

Article 28 

This Regulation shall enter into force  on a date determined by a decision on the entry  into 
force  of the acts implementing the results of the Uruguay  Round. 

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

^2.3 

List  of  particulars  to  be  given  in  the  boxes  of  the  surveillance  document 

ANNEX 

SURVEILLANCE  DOCUMENT 

1.  Applicant 

(name,  full  address,  country) 

2.  Registration  No 

3.  Consignor  (name,  address,  country) 

4.  Competent  authorities  of  issue 

(name  and  address) 

5.  Declarant  (name  and  address) 

6.  Last  day  of  validity 

7.  Country  of  origin 

8.  Country  of  consignment 

9.  Proposed  place  and  date  of  importation 

10.  Reference  to  Regulation  (EC)  which  imposed  surveillance 

11.  Description  of  goods,  marks  and  numbers,  number  and  kind  of  packages 

12.  Goods  code  (CN) 

13.  Gross  mass  (kg) 

14.  N et  mass  (kg) 

15.  Additional  units 

16.  cif  value  EC  frontier  in  ecu 

17.  Further  particulars 

18.  Certification  by  the  applicant: 

I,  the  undersigned,  certify  that  the  information  provided  in  this  application  is  true  and  given  in  good 
faith. 

Date  and  place 

(signature) 

(stamp) 

19.  Stamp  of  the  competent  authorities 

Date 

(signature) 

(stamp) 

Original  for  the  applicant 

Copy  for  the  competent  authorities 

EUROPEAN  COMMUNITIES 

SURVEILLANCE  DOCUMENT 

13>O 

1.  Applicant  (name,  full  address,  country) 

2.  Registration  No 

3.  Consignor  (name,  address,  country) 

4.  Competent  authorities  of  issue  (name  and  address) 

S.  Declarant  (name  and  address) 

6.  Last  day  of  validity 

x o 

7.  Country  of  origin 

8.  Country  of  consignment 

• 9.  Proposed  place  and  date  of  importation 

10.  Reference  to  Regulation  (EC)  which  imposed  surveillance 

11.  Description  of  goods,  marks  and  numbers,  number  and  kind  of  packages 

12.  Goods  code  (CN) 

13.  Gross  mass  (kg) 

14.  Net  mass  (kg) 

15.  Additional  units 

16.  cif  value  EC  frontier  in  ecu 

17.  Further  particulars 

18.  Certification  by  the  applicant : 

I.  undersigned,  certify  that  the  information  provided  in  this  application  is  true  and  given  in  good  faith 

19.  Stamp  of  the  competent  authorities 

Place  and  date 

(signature) 

Date: 

(stamp) 

(signature) 

(stamp) 

EUROPEAN  COMMUNITIES 

SURVEILLANCE  DOCUMENT 

1.  Applicant  (name, full  address, country] 

2.  Registration  No 

3>% 

3. Consignor  (name, address, country) 

4. Competent  authorities  of  issue  (name  and address) 

5.  Declarant  (name  and address) 

6. Last  day  of  validity 

9.  Proposed  place  and date  of  importation 

10. Reference  to  Regulation  (EC) which  imposed  surveillance 

7. Country  of  origin 

8. Country of  consignment 

11.  Description  of  goods,  marks  and  numbers, number  and  kind  of  packages 

12. Goods code  (CN) 

13. Gross  mass (kg) 

14. Net  mass (kg) 

15. Additional  units 

16. cif  value  EC frontier  in  ecu 

17.  Further  particulars 

18.  Certification  by  the  applicant: 

I.  undersigned, certify  that  the  information  provided  in  this  application  is  true  and  given  in  good  faith 

19.  Stamp  of  the  competent  authorities 

Place  and  date 

(signature) 

Date: 

(stamp) 

(signature) 

(stamp) 

Si  2/ 

Commercial defence: 

New Instrument 

%^3 

EXPLANATORY  MEMORANDUM 

This  proposal  amends  Regulation  2641/84  on  the  strengthening  of  the  common 
commercial  policy  with  regard  in  particular  to  protection  against  illicit  commercial 
practices.  The  Council  has  already  amended this Regulation  (with Regulation  522/94) 
in order to  strengthen the link between this instrument of commercial  defence  and the 
improved  dispute  settlement mechanism  of the WTO.  This purpose has been achieved 
at the procedural  level:  resort to Regulation 2641/84  (as already amended) will  enable 
Community  industries  and  Member  States  to  activate  the  Community  institutions 
(Commission  and  Council)  for  the  purpose  of  WTO  dispute  settlement  with  all  the 
necessary  guarantees of transparency and due process,  and subject to the control of the 
Court of Justice. 

This new proposal  is aimed at pursuing this process further,  by making the instrument 
better  adapted  to  the  changed  nature  of  WTO  dispute  settlement  (including,  but  not 
limited  to,  its  applicability  to  the  GATS1  and  TRIPs  Agreements).  In particular,  the 
proposed  amendments  are  aimed  at  dealing  with  problems  created  by  third  country 
illicit  commercial  practices  for  Community  exporters  on  foreign  markets.  A  brief 
explanation  of  the  rationale  for  the  proposed  changes  follows  below,  together  with a 
table  summarising  the  possibilities  of  action  which  would  exist  under  this  proposed 
Regulation if it were adopted. 

No  change  is  being  proposed  to  the  decision-making  procedures  resulting  from  the 
amendments already adopted in 1994, except for re-grouping the relevant provisions in 
a more  logical  order.  Thus,  this proposal  would not result in any modification  of  the 
respective roles of the Community institutions involved (Commission and Council) and 
of the majority required for the Council to decide on these matters. 

1.  Reg.  2641/84  is  currently  based  on two  "tracks"  : the first gives  a Community 
industry  the  right  to  complain  against  foreign  "illicit  practices"  if  it  suffers 
material  injury;  the  second  gives  Member  States  the  right  to  prompt  the 
Commumty  to  act  in all  cases  (including,  but not limited to,  illicit  practices)  in 
which the Community has rights under international rules. 

2. 

1 

The  second  "track"  (i.e.  referral  of  a  matter  by  one  or  more  Member  States 
invoking  the  defense  of  the  Community's  international  rights)  appears  now 
satisfactory,  after  the  1994  amendments.  Any  further  changes  should  only  be 

In  particular,  the  notion  of  "providers  of  services"  has  been  introduced  within  the  concept  of 
"Community industry", to take into account the new rules of the GATS 

^ 

envisaged  after  its  effectiveness  has  been  tested  in  practice  (which  will  only 
happen  after  the WTO has  entered  into  force).  The  first  "track"  (complaint  by  a 
Community  industry  against  an  "illicit  practice"),  instead,  continues  to  suffer 
from  serious  shortcomings,  and  the  renewed  interest  that  many  sectors  of 
European  industry  are  showing  for  the  WTO  and  the  new  rules  has  highlighted 
these shortcomings. 

The  first  problem  lies  with  the  concepts  of  "Community  industry"  and  of 
"material  injury".  These  were  borrowed  from  existing  commercial  defence 
instruments,  and  it  continues  to  make  sense  to  use  them  in  the  context  of  any 
instrument  of protection  of the  Community's  domestic  market,  even though  they 
are stricter than what WTO/GATT requires from us. However,  most GATT rules 
are  based  on  a  test  of  "adverse  effects  on  trade"  which  often  does  not  coincide 
with  "injury":  in  general,  GATT  employs  the  concept  of  "nullification  or 
impairment"  of  benefits,  which  is  even  presumed  (and  the  presumption  is 
practically  irrefutable)  in cases  of violation of GATT rules.  Some agreements  go 
even further:  the new  Subsidies  Agreement,  for  instance,  expressly  provides  that 
"material  injury"  is only one of three possible types of  "adverse effects  on trade", 
the  other  ones  being  "nullification  or  impairment"  in  the  general  GATT  sense, 
and  "serious  prejudice"  to  a  country's  interests  (cf.  Article  5  new  Subsidies 
Agreement). 

Furthermore,  if  we  consider  the  effect  of  foreign  trade  practices  on  Community 
exports  to  third  countries  (whether  to  the  country  applying  or  maintaining  the 
practices  in  question  or  to  another  country),  as  opposed  to  imports  into  the 
Community,  very  rarely  the  whole  of  a  Community  industry  (or  a  major 
proportion  thereof)  is  concerned.  Yet,  this  does  not  make  the  practices  in 
question  any  less  objectionable  or  even  illicit.  Moreover,  the  effect  of  trade 
barriers  is  often  first  and  foremost  to  prevent  trade  from  taking  place  (by 
discouraging potential exporters), even before  a trade distortion takes place. 

In  these  circumstances,  it  makes  sense  to  add  a  "third  track",  under  which 
Community exporters could prompt the Community to react against  objectionable 
or  illicit  foreign  trade  practice  that  affect  them  in  third  country  markets,  while 
leaving  untouched  the  existing  "tracks"  (the  first  one,  notwithstanding  its  strict 
limitations,  could  still  be  useful  for  Commumty  industries,  as  regards  the 
Community's  domestic  market;  the  second  "track"  contains",  of  course,  the 
general  "right of action" for Member States). 

The objective  of  this exercice  is not to create an easier  way way  of  applying  the 
instrument,  but  a  different  one,  better  suited  to  a  market  opening  strategy  in 
favour  of  our  exporters.  Thus,  the  question  is  not  to  relax  the  conditions  for 
standing  of  the  complainant  and  for  the trade  effects  suffered,  but  to  adapt  them 
to  an  instrument  for  the  opemng  of  third  country  market  (as  opposed  to  yet 
another  instrument  for  the  defence  of  the  Community  market,  which  does  not 
appear appropriate  in this context). 

3. 

4. 

5. 

6. 

1.3S-

Thus,  while  "Community  enterprises", even individually,  should have the right to 
lodge a complaint under this new third  "track",  they would have to show that the 
reasons  for  the  Community  to  act  go  beyond  the  narrow  advantage  that  the 
complaining firm(s) could draw from  the Community's  international  action. 

Moreover,  the  concept  of  "material  injury"  can  only  be  replaced  (in  respect  of 
Community  exports)  with  another  concept which also has  in-built  limitations,  so 
that not just  any kind  of effects  would justify  the Community's  intervention.  The 
solution  proposed  here  is  to  introduce  the  notion  of  "adverse  trade  effects", 
which  is  strictly  linked  to  how  these  effects  are  (or  will)  be  defined  through  the 
WTO  (including  through  dispute  settlement  cases),  in  order  to  offer  a  sufficient 
guarantee  against  "open-ended"  actions.  A requirement  of  "material  impact"  has 
also  been  added,  to  enable  the  Community  institutions  to  weed  out  frivolous 
actions,  and  to  concentrate  on  actions  which  benefit  the  Community  and/or 
Member States beyond the advantages they would bring to the complainant. 

The  considerations  set  out  in  points  6  through  8  above,  together  with  the 
Community's  traditional  and well-founded  position that market opening  and  trade 
liberalisation  must  be  pursued  within  the  context  of  the  multilateral  trading 
system  (as  well  as  with  the  need  to  differentiate  this  instrument,  in  terms  of 
international 
in  favour  of 
legality,  from  section  301)  strongly  militate 
strengthening  even  further  the  link  between  this  commercial  policy  instrument 
and international  (essentially WTO) trade rules and dispute  settlement. 

TABLE 

Actions possible under the proposed commercial practices Regulation 

22 September  1994 

Complainant 

Practice complained  of 

Effects  to be shown 

Market where the  effects 
take place 

1st track 
(complaint Art. 3) 

Community industry 
(or major proportion  thereof) 
it now includes providers of services, 
as well as producers of goods 

illicit practices 
(includes violations of 
GATT/WTO rules) 

material injury 

Community  market or a third 
country  market 

2nd  track 
(referral  Art. 4) 

Member States 

exercise of the Community's 
international rights 
(includes any commercial 
practice by a third country) 

only those necessary for the action 
being requested 
(e.g. "nullification  or impairment" or 
other adverse trade effects  in GATT 
"non-violation" cases) 

Community  market  or a third 
country  market 

3rd  track 
(complaint Art. 3bis) 

Community enterprises 

any commercial practice 
by a third country 

(it includes a fortiori the Community 
industry as a whole) 
whether producers of goods 
or providers of services 

adverse trade  effects 

market  of a third  country 

the 

international  rules 
(defined  by 
being invoked: in GATT/WTO terms it 
includes  both  "violation"  and  "non 
violation" cases) 
includes  a  requirement  of  "material 
impact" on the Community 

(including that of the country 
applying or maintaining the 
practice complained  of) 

0^ 

~X\ 

ANNEX 

Description of the changes Article by Article 

Article  1: Aims 

The notion of  "adverse trade effects"  resulting from any commercial practice has been 
introduced,  alongside  those  of  "injury"  resulting  from  an  illicit  commercial  practice 
and  of  "exercise  of  Community's  rights".  The  notion  of  "adverse  trade  effects"  is 
defined later on, in Article 2. 

Article 2:  Definitions 

1. 

2. 

3. 

4. 

The notion of  "providers of services" has been introduced within the concept of 
"Community industry", to take into account the new rules of the GATS. 

The concept of  "regional injury" (paragraph 4  (b)) has been reduced to the case 
of imports into a region of the Community because,  apart from the fact that the 
case  of  injury  caused  to  a  "regional exporting  industry"  is  at best  marginal,  it 
would in any event be taken care of by the new "track". 

The  notion  of  adverse  trade  effects"  is  defined  (in  paragraph  5),  and  strictly 
linked  to  a  "right  of  action"  under  international  trade  law  (essentially  WTO, 
therefore)  in respect of trade in goods and/or services.  The fact that the  effects 
complained  of  must  be  "typified"  under  international  rules  offers  a  sufficient 
guarantee  against  "open-ended" actions,  and can therefore  permit  this  right  to 
complain  to  encompass  both  "violation"  cases  ("illicit  practices")  and  "non 
violation"  cases  (trade  practices  which  are  not  "illicit"  but  which  can 
nevertheless be attacked through GATT/WTO dispute settlement on the basis of 
their trade effects: a typical example are domestic subsidies). 

The  notion  also  includes  a  requirement  of  "material  impact",  which  would 
enable  the  Community  institutions  to  weed  out,  frivolous  actions,  and  to 
concentrate  on  actions  which  benefit  the  Community  and/or  Member  States 
beyond the advantages they would bring to the complainant. 

The notion of  "Community  enterprises",  as those  who have  a right to  lodge a 
complaint under this  "third track" when they have suffered from "adverse trade 
effects",  has  been  introduced  (in  paragraph  6).  The  actual  language  of  this 
provision  may  need  to  be  reviewed  in consultation  with the  Legal  Service,  to 
make  sure that it is consistent with the same concept as used  in other  areas  of 
Community law. 

Article 3: Complaint 

This Article has been split,  in fact,  into three separate provisions : 

Article  3 confirms  the right  of a Community  industry  to complain against  illicit 
practices which have caused it to suffer  material injury  ("first  track"). 

Article  3bis  introduces  the  right  of  Community  enterprises  to  complain  when 
they  have  suffered  from  adverse trade effects  in the two cases mentioned  above 
("third track"). 

Article 3ter lays down the procedures to be followed  in respect of either of such 
complaints  when  they  are  lodged  with  the  Commission.  The  provision  on  the 
deadline for  a decision on whether to open an examination procedure  or not has 
been  moved  here  (from  the  end  of  Article  6),  and  amended  to  shorten  the 
deadline  to 45  days  in all cases,  except  where  the complainant  itself  prefers  to 
integrate  the  complaint  with  more  information  rather  than  risk  a  negative 
decision. 

Article 4: Referral by a Member State 

1. 

2. 

3. 

This  Article  maintains  the  general  right  of  complaint  for  Member  States  in  all 
circumstances  ("second  track") and clarifies  that it includes the case of  "adverse 
trade  effects". 

It  further  clarifies  that  Member  States  must  only  supply  "sufficient"  evidence 
(since  this  is  a  pre-initiation  stage  of  the  procedure),  and  that  such  evidence 
must  refer  to  all  the  elements  of  the  referral:  the  commercial  practice 
complained  of  (whether  or  not  it  is  an  illicit  one)  and  any  resulting  effects 
which  may  be  necessary  to  allege  in  an  international  action,  e.g.  under  WTO 
dispute settlement procedures. 

Finally,  a  provision  introducing  a  firm  45  days  deadline  (modelled  on  that 
provided  for  complaints by the Community  industry  or Commumty  enterprises) 
has  been  added,  to  guarantee  Member  States  prompt  examination  of  their 
requests. 

Article 5: Consultation procedure (unchanged^ 

Article 6Î  Community examination procedure 

Paragraph  8  has  been  deleted,  and  corresponding  provisions  have  been  inserted  in 
Articles 3 ter and 4. 

, 

-llî 

Article 7: Confidentiality  (unchanged) 

Article 8: Evidence 

1. 

2. 

3. 

4. 

The  existing  provisions  of  the  Article  have  been  amended  to  conform  to  the 
changes described above. 

The  meaning  of  "adverse  trade  effects",  in  terms  of  the  economic  impact  of  a 
foreign  trade practice,  is further  clarified  (in paragraph 4). 

,  The link between adverse trade effects  and a GATT/WTO  right of action is also 
further  clarified,  in terms  of  evidence  which  has  to  be  provided  by  the  parties 
and  examined  by  the  Commission  (in  paragraph  5).  In  particular, 
this 
provisions  is meant  to  ensure  that  when no evidence  of  adverse  trade  effects  is 
necessary  for  an  international  action  (eTg.  in  a  GATT/WTO  "violation"  case, 
where 
to  consolidated  GATT 
"jurisprudence"),  the  Commission  can  take  this  into  account  when  evaluating 
the evidence, either at the stage of a complaint/referral,  or of the  investigation. 

are  presumed  according 

such  effects 

The  non-exhaustive  nature  of  any  evidentiary  requirements  listed  in this  Article 
has been further  clarified  (in paragraph  6).  The  formula  employed  comes  from 
the provisions on injury  in AD and CVD (under both the existing Codes and the 
New Agreements). 

5. 

The title has been changed to reflect  the above; 

Article 9: Termination of the procedure 

1. 

Paragraph  2(a) has been  amended  to make  it clear  that  this  type  of  termination 
of  the  procedure  does  not  require  any  Community  action.  The  reference  to 
Article  11  was  confusing  because,  in  fact,  Article  11  provided  for  the 
application of Article  12 to decisions under Article 9, paragraph 2(a). 

2. 

The amendment to paragraph 2(c) is purely stylistical. 

Article  10: Adoption of commercial policy measures 

1. 

2. 

A reference  to the  "third track"  has been included  (paragraph 1). 

A  link between the measures  that the  Commission  would  eventually  propose  to 
the  Council  (if  necessary)  and  those  which  can  be  authorised  by  the  WTO 
dispute  settlement  body  ("DSB")  in  case  of  non-implementation  of  a  panel's 
report has been made more explicit (in paragraph 2). 

\  ^o 

Article  11: Decision-making  procedures 

The  text  of  this  Article  is that  which  results  from  Regulation  522/94,  and  the  changes 
proposed  here  are meant to clarify  the language,  but not to modify  the  substance  of  the 
1994 amendment.  The title of the Article has also been modified  for  the same reason. 

Article  12: Committee  procedure 

A title has been introduced  for  case of reference  to this Article.  (The same has been 
done for  Articles  13 and 14). 

Article  13: General  provisions 

Beside  the  introduction  of  a  title,  a  provision  has  been  added  repealing  the  original 
Regulation 2641/84 and its  1994 amendment  (Reg. 522/94) and replacing  them entirely 
with this new Regulation. 

Article 14: Entry into force 

The  formula  employed  here  has  been  suggested  by  the  Legal  Service  for  all  the 
elements of the U.R.  Implementing package. 

un 

Proposal for a 

9 4/  0233(ACC) 

Council Regulation (EC) No. ( ) 

on  the  strengthening  of  the  common  commercial  policy,  in  particular  with  regard  to  protection 

against  illicit  commercial  practices  and  adverse  trade  effects  suffered  by  Community  enterprises, 

and to the exercise of the Community's rights under international trade rules; 

THE COUNCIL OF THE EUROPEAN UNION, 

Having regard to the Treaty establishing the European Community, and in particular Article 113 thereof, 

Having  regard to  the  rules  establishing  the  common  organisation  of  agricultural  markets  and the  rules 

adopted under Article 235 of the Treaty, applicable to goods processed from agricultural products, and in 

particular  those  provisions  thereof,  which  allow  for  derogation  from  the  general  principle  that  any 

quantitative  restriction  or  measure  having  equivalent  effect  may  be  replaced  solely  by  the  measures 

provided for in those instruments, 

Having regard to the proposal from the Commission, 

Having regard to the opinion of the European Parliament, 

Whereas the  common  commercial  policy  must be  based  on uniform  principles,  notably  with  regard to 

commercial defence; 

Whereas  Council  Regulation  (EC)  No  (  )  on  protection  against  dumped  imports  from  countries  not 

members of the European Community, Council Regulation (EC) No  ( )  on protection against subsidised 

imports from countries not members of the European Community, Council Regulation (EC) No 518/94 on 

common rules for imports, and Council Regulation (EC) No  519/94 on common rules for  imports from 

certain  third  countries  constitute  important  components  of  the  Community's  system  of  commercial 

defence; 

Whereas  such  instruments  are based  on  common  concepts,  notably  the  injury  caused  to  a  Community 

industry, and this concept appears appropriate in the context of any instrument of legitimate protection of 

the Community's domestic market; 

Whereas  the  Council  Regulation  (EEC)  No  2641/84  had  provided  the  Community  with  procedures 

enabling it : 

to respond to any illicit commercial practice with a view to removing the injury  resulting 

therefrom,  and 

to ensure full  exercise of the Community's rights with regard to the commercial practices 

of third countries; 

Whereas, following  conclusion of the Uruguay Round Multilateral Trade Negotiations and the perspective 

creation  of a World Trade Organisation  ("WTO") which  lays down new and improved procedures for the 

settlement  of trade disputes among countries Members of the WTO, Council Regulation  (EC) No  522/94 

had made it clear that the procedures  laid down  in Regulation  2641/94 were the most  appropriate  for  the 

Community  industry  and  for  Member  States  to  prompt  Community  action  under  the  WTO  dispute 

settlement mechanism  in order to respond to illicit commercial practices and/or to ensure  full  exercise of 

the Community's rights (as appropriate); 

Whereas  the  experience  in  the  application  of  Regulation  2641/84  has  shown  that  the  concepts  of 

Community  industry and of injury  appear inadequate to enable the Community, its Member States and its 

enterprises to react to commercial  practices  (whether  or not  illicit) of third  countries when the effects  of 

such practices are felt on the market of any third country not member of the European Community (which 

may be the market of the country applying or maintaining the practice in question pr the market of another 

country); 

Whereas the  Uruguay  Round  Agreement  establishing  the  WTO ("WTO  Agreement")  not  only  improves 

and develops international rules concerning trade in goods, but establishes a General Agreement on Trade 

m  Services  ("GATS")  and  an  Agreement  on  Trade-Related  Intellectual  property  matters  ("TRIPs 

Agreement"),  and  that  such  Agreements  also  fall  within  the  scope  of  the  WTO  dispute  settlement 

mechanism; 

Whereas  for  those  reasons  it  appears  appropriate  to  maintain  and  improve  the  procedures  laid  down  in 

Regulation 2641/84, as amended by Regulation 522/94; 

Whereas in this context protection  in relation to the Community's domestic market  should continue to be 

granted to a Community industry suffering from material injury caused by illicit commercial practices; 

'^.ï 

Whereas  it  is  nevertheless  appropriate  to  clarify  that  a  Community  industry  can  also  be  comprised  of 

providers of services, as well as producers of goods; 

Whereas  Member  States  should  continue  to  have  access  to  these  procedures  in  respect  of  all  matters 

concerning commercial  policy and the trade practices (whether or not  illicit) of third countries, in order to 

ensure full  exercise of the Community's rights; 

Whereas it is desirable to provide the Community with the means to operate effectively  in the direction  of 

further  trade liberalisation through the application  of international trade rules, in particular those laid down 

in the Annexes to the WTO Agreement; 

Whereas,  to  this  end,  it  is  advisable  to  provide  Community  enterprises  with  the  means  to  react  to  trade 

practices  which  prevent  them  (wholly  or  partially)  from  trading  with  countries  outside  the  Community, 

provided  that  such  practices  give  rise  to  the  Community's  right  to  action  under  applicable  international 

trade rules; 

Whereas it appears therefore  appropriate to further  amend Regulation 2641/84 accordingly; 

Whereas it is also appropriate to confirm  that the Community must act in compliance with its international 

obligations  and,  where  such  obligations  result  from  agreements,  maintain  the  balance  of  rights  and 

obligations which it is the purpose of those agreements to establish; 

Whereas it is also appropriate to confirm  that any measures taken under the procedures in question  should 

also be in conformity  with the Community's international obligations, as well as being without prejudice to 

other measures in cases not covered by this Regulation which might be adopted directly pursuant to Article 

113 of the Treaty; 

Whereas  it  should  be  confirmed  that,  for  the  purposes  of  implementing  this  Regulation,  there  should  be 

close  co-operation  between  the  Member  States  and  the  Commission,  in  particular  through  consultations 

within the advisory committee, as well as through the information  of the Committee established by Article 

113 of the Treaty; 

Whereas  the  rules  of  procedures  to  be  followed  during  the  examination  procedure  provided  for  in  this 

Regulation  should also be confirmed,  in particular as regards the rights and obligations of the Community 

authorities and the parties involved,  and the conditions under which  interested parties may have access to 

information  and  may  ask  to  be  informed  of  the  essential  facts  and  considerations  resulting  from  the 

examination procedure; 

"M 

Whereas  in  acting  under  this  Regulation  the  Community  has  to  bear  in  mind  the  need  for  rapid  and 

effective  action, through the application  of the decision-making procedures provided for in the Regulation; 

HAS ADOPTED THIS REGULATION : 

Article 1 

Aims 

This  Regulation  establishes  procedures  in the  matter  of  commercial  policy  which,  subject  to  compliance 

with existing international obligations and procedures, are aimed at: 

(a) 

responding to any illicit commercial practice with a view to removing the injury resulting  therefrom; 

(b) 

responding  to  any  commercial  practice  (whether  or not  illicit)  with  a view to  removing  the  adverse 

trade effects  resulting  therefrom; 

(c)  ensuring  full  exercise  of  the  Community's  rights  with  regard  to  the  commercial  practices  of  third 

countries. 

7/ shall be applied in particular to the initiation and subsequent conduct and termination  of international 

dispute settlement procedures in the area of common commercial policy. 

Article 2 

Definitions 

1.  For  the  purposes  of  this  Regulation,  illicit  commercial  practices  shall  be  any  international  trade 

practice  attributable to third  countries which  are  incompatible with  international  law or with the  generally 

accepted rules. 

2. 

For the purposes of this Regulation, the Community's rights shall be those international trade rights of 

which it may avail itself either under international law or under generally accepted rules. 

^ 

3. 

For  the  purposes  of  this  Regulation,  injury  shall  be  any  material  injury  caused  or  threatened  to 

Community industry. 

4.  The  term  'Community  industry'  shall  be  taken  to  mean  all  Community  producers  or  providers, 

respectively: 

of  products  or  services  identical  or  similar  to  the  product  or  service  which  is  the  subject  of  illicit 

practices or 

of products  or services competing directly with that product or service, or 

who  are  consumers  or  processors  of the  product  or  consumers  or  users  of the  service  which  is  the 

subject of illicit practices, 

or  all  those  producers  or  providers  whose  combined  output  constitutes  a  major  proportion  of  total 

Community production of the products or services in question; however: 

(a)  when producers  or providers  are related to the exporters or importers or are themselves  importers of 

the product or service alleged to be the subject of illicit practices, the term 'Community industry' may 

be interpreted as referring to the rest of the producers or providers; 

(b) 

in  particular  circumstances,  the  producers  or  providers  within  a  region  of  the  Community  may  be 

regarded  as the Community industry if their collective output constitutes the major  proportion  of the 

output  of the product  or  service  in question in the Member  State or Member  State within  which the 

region  is located provided that where the illicit practice  concerns imports  into the Community,  their 

effect  is concentrated in that Member State or those Member States. 

5. 

For the purposes of this Regulation, adverse trade effects shall be those 

which  are felt,  in respect  of a product  or service, on the market of any country non  Member  of the 

European Community, and 

which  could  give  rise  to  actions  under  relevant  international  rules, whether  as  a result  of  an  illicit 

commercial practice or otherwise, 

and  which  have  a  material  impact,  actual  or potential,  on  the  economy  of  the  Community  or  of  a 

region of the Community, or on a sector of economic activity therein. 

Adverse  trade  effects  shall  also  include  cases  where  trade  flows,  concerning  a  product  or  service,  are 

prevented,  impeded  or  diverted  as  a  result  of  any  commercial  practice,  as  well  as  cases  where  any 

commercial  practice  has  materially  affected  the  supply  or  inputs  (e.g.  parts  and  components  or  raw 

materials) to Community enterprises. Adverse trade effects  shall also include threat of such  effects. 

2 V6 

6.  The  term  "Community  enterprise"  shall  be  taken  to  mean  any  natural  or  legal  person  having  an 

established  presence  within  the  Community  for  the  purpose  of  carrying  out  an  economic  activity 

concerning the production of goods or the provision of services. 

Article 3 

Complaint on behalf of the. Community  industry 

1.  Any  natural  or  legal  person,  or  any  association  not  having  legal  personality,  acting  on  behalf  of  a 

Community  industry which  considers  that  it has suffered  injury  as a result  of  illicit  commercial  practices 

may lodge a written complaint. 

2.  The complaint must contain sufficient  evidence of the existence of illicit commercial practices and the 

injury resulting therefrom.  Evidence of injury must be given on the basis of the factors  indicated  in Article 

8. 

Article 3 bis 

Complaint on behalf of Community enterprises 

1.  Any  Community  enterprise, or  any  association, having or not  legal personality,  acting  on behalf  of 

one  or  more  Community  enterprises,  which  considers  that  such  Community  enterprises  have  been 

materially  affected  by  adverse  trade  effects  within  the  meaning  of  paragraph  5  of  Article  2  of  this 

Regulation, may lodge a written complaint. 

2.  The complaint must contain sufficient  evidence of the existence of commercial practices (whether or 

not illicit) and of adverse trade effects, resulting therefrom. Evidence of adverse trade effects  must be given 

on the basis of the factors indicated in Article 8. 

-o i\uio 

^> 

Article 3 ter 

Complaint  procedures 

1.  The complaint  shall be submitted to the Commission, which shall send a copy thereof to the Member 

States. 

2 

The  complaint  may  be  withdrawn,  in  which  case  the  procedure  may  be  terminated  unless  such 

termination would not be in the interests of the Community. 

3.  Where it becomes apparent  after  consultation that the complaint does not provide sufficient  evidence 

to justify  initiating an investigation, then the complainant shall be so informed. 

4.  The  Commission  shall  take  a  decision  as  soon  as  possible  on  the  opening  of  a  Community 

examination procedure  following  any complaint made in accordance with Articles 3 or 3 bis; the decision 

shall normally be taken within 45 days of the lodging of the complaint; this period may be suspended at the 

request,  or  with  the  agreement,  of  the  complainant,  in  order  to  allow  the  provision  of  complementary 

information  which may be needed to fully  assess the validity of the complainant's case. 

Article 4 

Referral by a Member State 

1.  Any Member State may ask the Commission to initiate the procedures referred to in Article 1. 

2. 

It shall supply the Commission  with sufficient  evidence to support its request, as regards  commercial 

practices of third countries  and, where appropriate, of any effects  resulting therefrom.  Where evidence  of 

injury  or  of  adverse  trade  effects  is  appropriate,  it must be given  on the  basis  of the  factors  indicated  in 

Article 8. 

3.  The Commission shall notify the other Member States of the requests without delay. 

4.  Where  it becomes  apparent  after  consultation that the request does not provide sufficient  evidence to 

justify  initiating an investigation, then the Member State shall be so informed. 

A't 

5.  The  Commission  shall  take  a  decision  as  soon  as  possible  on  the  opening  of  a  Community 

examination  procedure  following  any referral  by a Member  State made  in  accordance  with  Article  4; the 

decision shall normally be taken within 45 days of the referral; this period may be suspended at the request, 

or  with  the  agreement,  of  the  referring  Member  State,  in  order  to  allow  the  provision  of  complementary 

information  which may be needed to fully  assess the validity of the case presented by the referring  Member 

State. 

Article 5 

Consultation  procedure 

1.  For  the  purpose  of  consultations  pursuant  to  this  Regulation,  an  advisory  committee,  hereinafter 

referred  to  as 'the Committee',  is hereby set up and shall  consist  of representatives  of each Member  State, 

with a representative of the Commission as chairman. 

2.  Consultations  shall  be  initiated  at  the  request  of  a  Member  State  or  on  the  initiative  of  the 

Commission.  The  chairman  of the  Committee  shall  provide  the  Member  States,  as promptly  as possible, 

with  all  relevant  information  in  his  possession.  He shall also  inform the Article  113 Special Committee 

thereof. 

3.  The Committee shall meet when convened by its chairman. 

4.  Where necessary, consultations may be in writing. In such case the Commission shall notify  in writing 

the Member  States who, within a period of eight working days from such notification,  shall be entitled to 

express their opinions in writing or to request oral consultations. 

Article 6 

Community examination  procedure 

1.  Where, after  consultation,  it is apparent to the Commission that there  is sufficient  evidence  to justify 

initiating  an  examination  procedure  and  that  it  is  necessary  in  the  interest  of  the  Community,  the 

Commission shall act as follows: 

\if,5 

(a) 

it shall  announce the  initiation  of an examination  procedure  in the Official Journal  of the European 

Communities; such announcement shall indicate the product and countries concerned, give a summary 

of the  information  received,  and  provide  that  all relevant  information  is to  be  communicated  to  the 

Commission;  it shall state the period within which  interested parties may apply to be heard orally by 

the Commission in accordance with paragraph 5; 

l£® 

10 

(b) 

it shall so officially  notify  the representatives  of the country or countries which are the subject  of the 

procedure, with whom, where appropriate, consultations may be held; 

(c) 

it shall conduct the examination at Community level, acting in co-operation with the Member States. 

2. 

(a) 

If necessary, and notably in cases of allegations of illicit commercial practices, the Commission 

shall seek all the information  it deems necessary and attempt to check this  information  with the 

importers,  traders,  agents,  producers,  trade  associations  and  organisations,  provided  that  the 

undertakings or organisations concerned give their consent. 

(b)  . Where necessary, the Commission shall carry out investigations in the territory of third countries, 

provided that the governments of the countries concerned have been officially  notified  and raise 

no objection within a reasonable period. 

(c)  The Commission shall be assisted in its investigation by officials  of the Member  State in whose 

territory the checks are carried out, provided that the Member State in question so requests. 

3.  Member  States  shall  supply  the  Commission,  upon  request,  with  all  information  necessary  for  the 

examination, in accordance with the detailed arrangements laid down by the Commission. 

4. 

(a)  The complainants  and the exporters  and  importers  concerned,  as well  as the representatives  of 

the principal exporting or importing country or countries concerned, may inspect all  information 

made available to the Commission except for  internal documents for the use of the Commission 

and  the  administrations,  provided  that  such  information  is  relevant  to  the  protection  of  their 

interests  and  not  confidential  within  the  meaning  of  Article  7  and  that  it  is  used  by  the 

Commission  in  its  examination  procedure.  The  persons  concerned  shall  address  a  reasoned 

request in writing to the Commission, indicating the information  required. 

(b)  The  complainants  and  the  exporters  and  importers  concerned  and  the  representatives  of  the 

principal  exporting of importing country or countries concerned  may ask to be  informed  of the 

principal facts and considerations resulting from the examination procedure. 

5.  The  Commission  may hear  the parties  concerned.  It  shall  hear  them  if they have, within  the  period 

prescribed  in the notice published  in the  Official Journal  of the European Communities, made  a  written 

request for a hearing showing that they are a party primarily concerned by the result of the procedure. 

11 

6. 

Furthermore, the Commission shall, on request, give the parties primarily concerned an opportunity to 

meet,  so that  opposing  views may be  presented  and  any rebuttal  argument  put  forward.  In providing  this 

opportunity  the  Commission  shall  take  account  of  the  wishes  of  the  parties  and  of  the  need  to  preserve 

confidentiality.  There shall be no obligation on any party to attend a meeting and failure  to do so shall not 

be prejudicial to that party's case. 

7.  When the information  requested by the Commission  is not supplied within a reasonable time or where 

the investigation  is significantly  impeded, findings may be made on the basis of the facts available. 

8.  When  it  has  concluded  its  examination  the  Commission  shall  report  to  the  Committee.  The  report 

should normally be presented within five months of the announcement of initiation of the procedure, unless 

the complexity of the examination  is such that the Commission extends the period to seven months. 

Article 7 

Confidentiality 

1. 

Information  received pursuant to this Regulation  shall be used only for  the purpose  for  which it was 

requested. 

2. 

(a)  Neither the Council, nor the Commission, nor Member  States, nor the officials  of any of these, 

shall reveal any information  of a confidential  nature received pursuant to this Regulation, or any 

information  provided  on  a  confidential  basis  by  a party to  an  examination  procedure,  without 

specific permission from the party submitting such  information. 

(b)  Each  request  for  confidential  treatment  shall  indicate why the  information  is  confidential  and 

shall  be  accompanied  by  a non-confidential  summary  of the  information  or  a  statement  of the 

reasons why the inforrnation  in not susceptible of such summary. 

3. 

Information  will  normally  be  considered  to  be  confidential  if  its  disclosure  is  likely  to  have  a 

significantly  adverse effect  upon the supplier or the source of such  information. 

4.  However,  if it appears that  a request  for  confidentiality  is not warranted  and  if the supplier  is either 

unwilling to make the information public or to authorise its disclosure in generalised or summary form, the 

information  in question may be disregarded. 

kx 

12 

5.  This Article shall not preclude the disclosure of general information by the Community authorities and 

in particular of the reasons on which decisions taken pursuant to this Regulation are based. Such disclosure 

must take into account the legitimate interest of the parties concerned that their business secrets should not 

be divulged. 

Article 8 

Evidence 

1.  An examination of injury shall involve in particular the following  factors: 

(a) 

the volume  of Community  imports or exports concerned, notably where there has been a  significant 

increase or decrease, either in absolute terms or relative to production  or consumption on the, market 

in question; 

(b) 

the prices of the Community industry's competitors, in particular  in order to determine whether there 

has been, either in the Community or on third  country markets, significant  undercutting of the prices 

of the Community industry; 

(c) 

the  consequent  impact  on  the  Community  industry  and  as  indicated  by  trends  in  certain  economic 

factors such as: 

production, 

utilisation of capacity, 

stocks, 

sales, 

market share, 

prices (that is, depression of prices or prevention of price increases which would normally have 

occurred), 

profits, 

- 

return on capital, 

investment, 

employment. 

/ 

^ 

13 

2.  Where  a  threat  of  injury  is  alleged,  the  Commission  shall  also  examine  whether  it  is  clearly 

foreseeable that a particular situation is likely to develop into actual injury. In this regard, account may also 

be taken of factors such as: 

(a) 

the rate of increase of exports to the market where the competition with Community products is taking 

place; 

(b)  export capacity in the country of origin or export, which is already in existence or will be operational 

in the foreseeable  future,  and the likelihood that the exports resulting from that capacity will be to the 

market referred to in point (a). 

3. 

Injury  caused  by  other  factors  which,  either  individually  or  in  combination,  are  also  adversely 

affecting  Community industry must not be attributed to the practices under consideration. 

4.  Where  adverse  trade  effects  within  the meaning  of paragraph  5 of Article  2  of this  Regulation  are 

alleged,  the  Commission  shall  examine  the  impact  of  such  adverse  effects,  actual  or  potential,  on  the 

economy of the Community or of a region of the Community, or on a sector of economic activity therein. 

To  this  effect,  the  Commission  may  take  into  account,  where  relevant,  factors  of  the  type  listed  in 

paragraphs  1  and  2  above,  as  well  as  the  impact  on  the  current  and  future  competitiveness  of  the 

Community and of its Member States, including in terms of technological advance. 

5.  The  Commission  shall  also,  in  examining  evidence  of  adverse  trade  effects,  have  regard  to  the 

provisions,  principles  or  practice  which  govern  the  right  of  action  under  relevant  international  rules 

referred to in paragraph 5 of Article 2 of this Regulation. 

6.  The Commission  shall further  examine  any other relevant evidence  contained  in the complaint  or  in 

the referral.  In this respect, the list of factors and the indications given jn paragraphs 1 to 5 above are not 

exhaustive, nor can one or several of such factors  and indications necessarily give decisive guidance as to 

the existence of injury or of adverse trade effects. 

Article 9 

Termination of the procedure 

1.  When  it is found  as a result of the examination procedure that the interests of the Community do not 

require any action to be taken, the procedure shall be terminated in accordance with Article  12. 

3-</ 

14 

2. 

(a)  When, after an examination procedure, the third country or countries concerned take(s) measures 

which  are  considered  satisfactory,  and  therefore  no  action  by  the  Community  is  required,  the 

procedure may also be terminated in accordance with the provisions of Article 12. 

(b)  The  Commission  shall  supervise  the  application  of  these  measures,  where  appropriate  on  the 

basis  of  information  supplied  at  intervals,  which  it  may  request  from  the  third  countries 

concerned and check as necessary. 

(c)  Where  the  measures  taken  by  the  third  country  or  countries  concerned  have  been  rescinded, 

suspended  or improperly  implemented  or where the Commission  has grounds for  believing this 

to be the case or, finally, where a request for  information  made by the Commission as provided 

for  by  point  (b)  has  not  been  granted,  the  Commission  shall  inform  the  Member  States,  and 

where necessary and justified  by the results of the investigation  and the new facts  available any 

measures shall be taken in accordance with paragraph 3 of Article  11. 

Article 10 

Adoption of commercial policy measures 

1.  Unless the factual  and legal situation is such that an examination procedure may not be required, 

where it is found as a result of the examination procedure, that action is necessary in the interests of the 

Community in order to: 

(a) 

respond to any illicit commercial practice with the aim of removing the injury resulting therefrom;  or 

(b)  ensure the removal of adverse trade effects  suffered  by Community enterprises; or 

(c)  ensure  full  exercise  of  the  Community's  rights  with  regard  to  the  commercial  practices  of  third 

countries. 

the appropriate measures shall be determined in accordance with the procedure set out in Article  11. 

3£T 

15 

2.  Where  the  Community's  international  obligations  require  the  prior  discharge  of  an  international 

procedure for  consultation  or for the settlement of disputes, the measures referred  to  in paragraph  3  shall 

only  be  decided  on  after  that  procedure  has  been  terminated,  and  taking  account  of  the  results  of  the 

procedure. In particular,  where  the Community  has requested  an international  dispute settlement  body  to 

indicate  and  authorize  the  measures  which  are  appropriate  for  the  implementation  of  the  results  of  an 

international  dispute  settlement  procedure,  the  Community  commercial  policy  measures  which  may  be 

needed  in  consequence  of  such  authorization  shall  be  compatible  with  those  recommended  by  such 

international dispute settlement body. 

\t 

3.  Any  commercial  policy  measures  may  be  taken  which  are  compatible  with  existing  international 

obligations and procedures, notably: 

(a)  suspension or withdrawal of any concession resulting from commercial policy negotiations; 

(b) 

the raising of existing customs duties or the introduction of any other charge on imports; 

(c) 

the  introduction  of  quantitative  restrictions  or  any  other  measures  modifying  import  or  export 

conditions or otherwise affecting  trade with the third country concerned. 

4.  The corresponding decisions shall state the reasons on which they are based and shall be published in 

the  Official  Journal  of  the  European  Communities. Publication  shall  also  be  deemed  to  constitute 
.

•- 

• 

• 

i 

' 

-

.

.

.
notification to the countries and parties primarily concerned. 

' 

Article 11 

, 

Decision-makingprocedures 

1.  The decisions referred to in paragraphs  1 and 2(a) of Article 9 shall be adopted in accordance with 

the provisions of Article 12. 

2.  Where  the  Community follows formal  international consultation  or  dispute settlement procedures, 

decisions relating to the initiation, conductor termination of such procedures shall be taken in accordance 

with Article! 2. 

3.  Where the Community,  having acted in accordance with paragraph 2 of Article 10  of this Regulation, 

has to take a decision on the measures of commercial policy to be adopted under paragraph 2(c) of Article 

9 or under Article  10, thé Council shall act, in accordance with Article  113 of the Treaty, by a qualified 

majority,  not later than 30 working days after receiving the proposal. 

^ 

16 

Article 12 

Committee procedure 

Should reference  be made to the procedure provided for  in this Article, the matter shall be brought  before 

the Committee by its chairman. 

The  Commission  representative  shall  submit  to  the  Committee  a  draft  of  the  decision  to  be  taken.  The 

Committee shall discuss the matter within a period to be fixed by the chairman, depending on the urgency 

of the matter. 

The Commission  shall adopt a decision which it shall communicate to the Member States and which shall 

apply after a period of 10 days if during this period no Member State has referred the matter to the Council. 

The  Council  may,  at  the  request  of  a  Member  State  and  acting  by  a  qualified  majority  revise  the 

Commission's decision. 

The Commission's decision shall apply after a period of 30 days if the Council has not given a ruling within 

this period, calculated from the day on which the matter was referred to the Council. 

Article 13 

General previsions 

1.  This Regulation  shall not  apply  in cases covered by other existing rules in the common commercial 

policy field. It shall operate by way of complement to the: 

rules establishing the common organisation of agricultural markets and their implementing provisions; 

*> 

17 

specific rules adopted under Article 235 of the Treaty, applicable to goods processed from agricultural 

products. 

It shall be without prejudice to other measures which may be taken pursuant to Article  113 of the Treaty. 

2.  Regulation  (EEC)  No.  2641/84,  as  amended  by  Regulation  (EC)  No.  522/94  is  hereby  repealed. 

References to the repealed Regulation shall be construed as references to this Regulation. 

Article 14 

Entry into force 

1.  This Regulation  shall enter into force  on the date determined  by a decision governing the entry  into 

force of the acts implementing the results of the Uruguay Round. 

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

1st 

Part 7 

Intellectual property 

iiA 

TRIPs MODIFICATIONS IN COMMUNITY LAW 

**>(>: 

EXPLANATORY  MEMORANDUM 
FOR  TRIPs MODIFICATIONS IN  COMMUNITY  LAW 

I. 

INTRODUCTION 

The  Agreement  on  Trade-Related  Aspects  of  Intellectual  Property  Rights  (TRIPs) 
concluded  within  the  framework  of  the  Uruguay  Round  negotiations  contains  provisions 
on  the  protection  of  intellectual  property  rights,  in  particular  with  the  purpose  of 
establishing  international  disciplines  in  this  area  in  order  to  promote  international  trade 
and  to  prevent  trade  distortions  due  to  the  lack  of  adequate  and  effective  intellectual 
property  protection. 

The TRIPs  Agreement,  in addition  to establishing  general  provisions  and basic  principles 
on  the  protection  of  intellectual  property  rights,  provides  for  standards  concerning  the 
availability,  scope  and use of intellectual  property  rights, notably: 

copyright  and related  rights; 
trademarks; 
geographical  indications; 
industrial  designs; 
patents; 
layout-designs  (topographies)  of integrated  circuits; 
protection  of undisclosed  information;  and 
contains  also provisions  on the control  of  anti-competitive  practices  in  contractual 
licences. 

These  standards  are  to  be  enforced  domestically  on  the  basis  of  detailed  provisions, 
including  special  requirements 
the  acquisition  and 
maintenance  of intellectual property  rights  and related civel and criminal law  procedures. 

to  border  measures; 

related 

This  proposal  for  a  Council  Regulation  contains  proposals  to  amend  those  Community 
acts  which  have  to be  modified  in  order  to  implement  in  Community  law  the  provisions 
of  the  TRIPs  Agreement.  Reference  is  also  made  in  this  Explanatory  Memorandum  to 
current  proposals  of  Community  acts  submitted  by 
the 
Council/Parliament which would  also have to be amended  in order to bring them  into  line 
with the requirements  of the TRIPs  Agreement. 

the  Commission 

to 

The  present  proposal  does  not  concern  those  areas  of  current  Member  State  legislation 
which  would  have  to  be  amended  to  implement  the  TRIPs  Agreement.  In  this  respect, 
consultations  between  Member  States  and  the  Commission  seem  necessary  in  order  to 
ensure  that  such  modifications  of  Member  State  legislation  be  undertaken  against  the 
background  of  a  common  analysis  of  the  implication  and  interpretation  of  the  TRIPs 
Agreement. 

T>H 

II. 

TRADEMARKS 

Legislation:  Council Regulation  (EC) 40/94 of  20 December 1993 on the Community 

Trademark1. 

Article  5  of  Council  Regulation  40/94  defines  the  "Persons  who  can  be  proprietors  of 
Community Trademarks".  This Article, which  notably refers to the Paris Convention  for 
the  Protection  of Industrial Property,  implements  in paragraph  1, subparagraphs  (a) and 
(b),  the  principle  of national  treatment  as  regards  nationals  and  domiciliaries of  a  State 
party to this Convention. 

Nevertheless,  Article  5,  paragraph  1,  subparagraph  (d),  of  this  Regulation  basically 
subjects  the granting of national  treatment  to  nationals  of  States  not  parties to  the  Paris 
Convention  to the requirement  of reciprocal  national  treatment  in their country  of origin 
for  nationals of the Member  States.  Art. 29, paragraph  5, of this Regulation,  concerning 
the right of priority, contains  a  similar  requirement  in  relation  to filings made  in  a  State 
which is not a party to the Paris Convention.. 

In  order  to  comply  with  the  national  treatment  obligation  in  Article  3  of  the  TRIPs 
Agreement,  these  provisions  should  be  modified  to  ensure  that  nationals  of  all  WTO 
Members, even if the Member in question is not a party to the Paris Convention, receive a 
treatment  no  less  favourable  than  that  accorded  to  nationals  of  Community  Member 
States. 

III.  GEOGRAPHICAL INDICATIONS 

Insofar  as the protection  of geographical  indications  for  wines and  spirits as foreseen  in 
Article 23 TRIPs is concerned, the relevant amendments to Council Regulation  822/87 of 
16 March  1987, Council Regulation  1601/91  of  10 June  1991, both  of them concerning 
wines,  and  Council  Regulation  1576/89  of  29  May  1989  concerning  spirit  drinks,  are 
dealt with in the part on agriculture. 

IV. 

LAYOUT-DESIGNS OF INTEGRATED  CIRCUITS 

Legislation:  Council  Directive  87/54/EEC  of  16  December  1986  on  the  Legal 
Protection of Topographies of Semiconductor Products2. 

Articles  35 to  38 of the  TRIPs  Agreement  set  out  the  obligations  of WTO  Members in 
relation  to  the  protection  of  layout-designs  (topographies)  of  integrated  circuits. 
In 
accordance with these Articles, the Community  should  ensure that  nationals  of  all  other 
WTO Members benefit  from  such  protection.  The  Commission  proposes  to  extend  the 
protection of topographies of integrated  circuits, as required by the TRIPs Agreement, to 
nationals of all WTO Members. 

1 OJL  1L  14.1.1994 
2OJ  L24.  27.1.1987 

ZGL 

V. 

PROPOSED COMMUNITY  LEGISLATION 

In addition to amending existing Community legislation in order to bring it in line with the 
TRIPs Agreement, the Commission will need to ensure that current Community proposals 
in the  diferent fields of intellectual  property rights protection  are in  conformity  with  the 
TRIPs Agreement. 

V 

•}É>3 

PROPOSAL  FOR  A  COUNCIL  REGULATION  (EC)  No 

/94 

of 

1994 

9 4/  0234(CNS) 

amending  Council  Regulation  (EC) No 40/94 of 20 December  1993 
on the Community  trademark  for the implementation  of the agreements  concluded 
in the framework  of the Uruguay  Round 

THE COUNCIL  OF THE EUROPEAN  UNION 

Having  regard  to  the  Treaty  establishing  the  European  Community  and  in  particular 
Article 235  thereof, 

Having regard  to the proposal by  the  Commission, 

Having regard  to the opinion  of the European  Parliament, 

Whereas  the  Agreement  establishing  the  World  Trade  Organization  (hereinafter,  the 
WTO  Agreement)  was  signed  on  behalf  of  the  Community;  whereas  the  Agreement  on 
Trade-Related  Aspects  of 
the  TRIPs 
Agreement),  annexed  to  the  WTO  Agreement,  contains  detailed  provisions  on  the 
is  the  establishment  of 
protection  of 
international  disciplines  in  this  area  in  order  to  promote  international  trade  and  prevent 
trade  distortions  and  friction  due  to  the  lack  of  adequate  and  effective 
intellectual 
property  protection; 

intellectual  property  rights  whose  purpose 

Intellectual  Property  Rights 

(hereinafter, 

Whereas  in  order  to  ensure  that  all  relevant  Community  legislation  is  in  full  compliance 
with  the  TRIPs  Agreement,  the  Community  must  take  certain  measures  in  relation  to 
current  Community  acts  on  the  protection  of  intellectual  property  rights;  whereas  these 
measures  entail  in  some  respects  the  amendment  or  modification  of  Community  acts; 
whereas these measures  also entail  complementing  current community  acts; 

Whereas  Council  Regulation  (EC)  40/94  of  20  December  1993  creates  the  Community 
Trademark1; whereas  Article  5 of Council  Regulation  40/94 defines  the  "Persons  who  can 
be  proprietors  of  Community  Trademarks"  by  referring  notably  to  the  Paris  Convention 
for  the  Protection  of  Industrial  Property  and  requires  reciprocal  national  treatment  fron* 
countries  which  are not parties  to the  Paris  Convention;  whereas  Article  29  of  Regulation 
40/94, concerning  the right  of  priority,  also  needs  to be  amended  in this  respect;  whereas 
in  order  to  comply  with  the  national  treatment  obligation  in  Article  3  of  the  TRIPs 
Agreement,  these  provisions  should  be  modified  to  ensure  that  nationals  of  all  WTO 
Members, even  if  the  Member  in  question  is  not  a party  to  the  Paris  Convention,  receive 

1 OJL  11, 14.1.1994, p.  1 

g:\raithra\public\ip\940726b 

TJtL/ 

a  treatment  no  less  favourable  than  that  accorded  to  nationals  of  Community  Member 
States. 

HAS ADOPTED THIS REGULATION 

Article 1 

Article 5 of Council Regulation  (EC) No 40/94 of 20 December  1993 on the Community 
trade mark, paragraph  1, subparagraph (b), is replaced by the following text: 

"(b)  nationals  of  other  States  which  are parties  to  the  Paris  Convention  for  the 
protection  of industrial property, hereinafter  referred  to as "the Paris Convention'/, 
or to the Agreement establishing the World Trade Organisation;". 

Article 2 

Article 5 of Council Regulation  (EC) No 40/94 of 20 December  1993 on the Community 
trade mark, paragraph  1, subparagraph (d), is replaced by the following text: 

"(d)  nationals, other  than  those referred  to under  subparagraph  (c), of  any  State 
which  is  not  party  to  the  Paris  convention  or  to  the  Agreement  establishing  the 
World Trade Organisation and which, according to published  findings, accords to 
nationals  of  all  the  Member  States  the  same  protection  for  trade  marks  as  it 
accords to its own nationals and, if nationals of the Member States are required to 
prove  registration  in  the  country  of  origin,  recognises  the  registration  of 
Community trade marks as such proof.". 

Article  29  of  Council  Regulation  (EC)  No  40/94  of  20  December  1993  on  the 
Community trade mark, paragraph  1, is replaced by the following text: 

Article 3 
~- 

• urnrnr  • 

• " 

" 1.  A person who has duly filed an application for a trademark in or for any State 
party  to the Paris Convention  or to the Agreement  establishing  the World  Trade 
Organisation,  or  his  successors  in  title,  shall  enjoy,  for  the  purpose  of  filing  a 
Community trade mark application for the same trade mark in respect of goods or 
services  which  are  identical  with  or  contained  within  those  for  which  the 
application  has been filed,  a right of priority  during  a period  of  six  months  from 
the date of filing of the first application". 

Article 4 

Article  29^ of  Council  Regulation  (EC)  No  40/94  of  20  December  1993  on  die 
Community trade mark, paragraph 5, is replaced by the following text: 

"5.  If  the  first  filing  has been  made in  a State which  is  not  a party  to  the  Pari * 
Convention  or  to  the  Agreement  establishing  the  World  Trade  Organisât iou, 
paragraphs  1 to 4 shall  apply  only  in so far  as that State, according  to pu!> ;  !v .i 

g:\raithra\public\ip\940726b 

} «• 

findings,  grants,  on  the  basis  of  the  first  filing  made  at  the  Office  and  subject  to 
conditions  equivalent  to  those  laid  down  in  this  Regulation,  a  right  of  priority 
having equivalent  effect". 

Article  5 

This regulation  shall enter into force  on the date determined  by the decision  on the 

1. 
entry into force of the acts implementing the results of the Uruguay  Round. 

2. 

It shall be applicable  as of  1  January  1996. 

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

Done in Brussels, __ 

1994 

For the  Council 
The  President 

i.nmu,m<' 

g:\raithra\public\ip\940726b 

~f~ 

~l<4> 

PROPOSAL FOR A COUNCIL DECISION 

on the extension of the legal protection of topographies of semiconductor products 
to persons from a Member of the World Trade Organisation 

THE COUNCIL OF THE EUROPEAN UNION 

Having regard to the Treaty establishing the European Community, 

Having  regard  to  Council  Directive  87/54/EEC  of  16  December  1986  on  the  legal 
protection  of  topographies  of  semiconductor  products,  and  in  particular  Article  3(7) 
thereof, 

Having regard to the proposal from the Commission, 

Whereas  the  Agreement  establishing  the World  Trade  Organization  (hereinafter,  WTO) 
was  signed  on  behalf  of  the  Community;  whereas  the  Agreement  on  Trade-Related 
Aspects  of  Intellectual  Property  Rights  (hereinafter,  the TRIPs  Agreement),  annexed  to 
the Agreement  establishing  the WTO, contains  detailed  provisions  on the protection  of 
intellectual property rights whose purpose is the establishment of international disciplines 
in  this  area  in  order  to  promote  international  trade  and  prevent  trade  distortions  and 
friction due to the lack of adequate and effective  intellectual property protection; 

Whereas in order to ensure that all relevant Community  legislation  is in full  compliance 
with  the  TRIPs  Agreement;  the  Community  must  take  certain  measures  in  relation  to 
current Community  acts on the protection  of intellectual  property  rights;  whereas  these 
measures  entail  in  some  respects  the  amendment  or  modification  of  Community  acts; 
whereas these measures also entail complementing current community acts; 

Whereas  Council  Directive  87/54/EEC  of  16  December  1986  concerns  the  legal 
protection  of topographies  of  semiconductor products1; whereas Articles 35 to 38 of  the 
TRIPs Agreement  set out the obligations of WTO Members in relation  to the protection 
of  layout-designs  (topographies)  of  integrated  circuits;  whereas  iri  accordance  with 
Article  1,  paragraph  3,  and  Article  3  of  the  TRIPs  Agreement,  the  Community  must 
ensure that nationals of  all other WTO Members benefit  from  such protection  and  from 
the  application  of  national  treatment;  whereas  it  is  therefore  necessary  to  extend  the 
protection  under  Directive  87/54/EEC  to  nationals  of  WTO  Members,  without  any 
reciprocity  requirement;  whereas  it  is  adequate  to  use  the  procedure  of  Article  3, 
paragraph 7, of the Directive to this end; 

g:Vaithni\public\ip\94<)726d 

1 OJN°L24, 27.1.1987, p. 36 

? 

3<4 

HAS ADOPTED THIS DECISION 

Article 1 

Member  States  shall  extend  the  legal  protection  for  topographies  of  semiconductor 
products provided for under Directive 87/54/EEC as follows: 

(a) 

(b) 

natural  persons  who  are  nationals  of,  or  are  domiciled  in  the  territory  of,  a 
Member of the Agreement establishing the WTO, shall be treated as nationals of a 
Member State; 

legal entities which or natural persons who have a real and effective  establishment 
for  the  creation  of  topographies  or  the  production  of  integrated  circuits  in  the 
territory  of a Member of the Agreement establishing the WTO shall be treated as 
legal  entities  or  natural  persons  having  a  real  and  effective  industrial  or 
commercial establishment in the territory of a Member State. 

Article 2 

This Decision shall enter into force on the date determined by the decision on the 

1. 
entry into force of the acts implementing the results of the Uruguay Round. 

2. 

It shall be applicable as of  1  January 1996. 

Decisions  90/510/EEC2  and  93/17/EEC3  are.  abrogated,  as  of  the  date  of 
3. 
application  of  the  present I Decision,  in  so  far  as  they  concern  the  extension  of  the 
protection  under  Directive  87/54/EEC  to  countries  or  territories  Members  of  the 
Agreement establishing the WTO. 

This Decision is addressed to the Member States. 

Article 3 

Done in Brussels, 

:-19.94 

For the Council 
The President 

2 OJ L N° 285,  17.10.1990, p. 29 
3O J N °L  II,  19.1.1993, p. 22 

ISSN 0254-1475 

COM(94) 414 final 

DOCUMENTS 

EN 

06  11 02 

Catalogue number : CB-CO-94-451-EN-C 

ISBN 92-77-80974-4 

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