Proposal for a COUNCIL DECISION on the conclusion of the Agreements in the form of an exchange of letters between the European Community and, on the one hand, Barbados, Belize, the Republic of the Congo, Fiji, the Cooperative Republic of Guyana the Republic of the Ivory Coast, Jamaica, the Republic of Kenya, the Republic of Madagascar, the Republic of Malawi, Mauritius, the Republic of Surinam, St. Christopher and Nevis, the Kingdom of Swaziland, the United Republic of Tanzania, Trinidad and Tobago, the Republic of Uganda, the Republic of Zambia, the Republic of Zimbabwe, and on the other hand, the Republic of India on the supply of raw cane sugar to be refined
Date: 1995-07-03
Institutions: European Commission
Subjects: ACP countries, India, agreement (EU), cane sugar, import, tariff quota

COMMISSION  OF THE EUROPEAN  COMMUNITIES 

Brussels, 03.07.1995 

COM(95)  307iinal 

95/0172  (ACC) 

Proposal for a 

C O U N C IL  DECISION 

On the conclusion of the Agreements in the form of an exchange 

of letters between the European Community and, 

on the one hand, Barbados, Belize, 

the Republic of the Congo, Fiji, the Cooperative Republic of 

Guyana, the Republic of the Ivory Coast, Jamaica, the Republic 

of Kenya, the Republic of Madagascar, the Republic of Malawi, 

Mauritius, the Republic of Surinam, St. Christopher and Nevis, 

the Kingdom of Swaziland, the United Republic of Tanzania, 

Trinidad and Tobago, the Republic of Uganda, the Republic of Zambia 

the Republic of Zimbabwe, and on the other hand, the Republic of India 

on the supply of raw cane sugar to be refined. 

(presented by the Commission) 

•% 

EXPLANATORY  MEMORANDUM 

1.  Article  37  together  with  Article  16 of  Council  Regulation  No  1785/81, 

as  last  amended  by  Council  Regulation  (EEC)  No  1101/95,  provide  for 

agreements with the ACP states referred to  in Protocol No 8 annexed to 

the fourth ACP-EEC Convention and India and other states on the opening 

of  a tariff  quota  at  a reduced  rate  of  duty  for  raw cane  sugar  to be 

refined. 

By  this  agreement  it  is  aimed  at  ensuring  adequate  supplies  to  the 

Community  refineries  in  conformity  with  the  presumed  maximum  needs 

fixed by the said Article 37. 

2.  In conducting  the  negotiations  on  access  to this  tariff  quota, it was 

considered  appropriate to try to reach an agreement first with  the ACP 

countries  and  India  which  have  supplied  the  EC  market  on  a  regular 

basis.  As  a  result,  the  Commission  has,  in  conformity  with  the 

Negotiating Directives adopted by the Council on 10 May  1995, concluded 

negotiations with the ACP states referred to and India. 

3.  It  is agreed  by  the  negotiating  parties  to  approve  the results  of  the 

negotiations in the form of an exchange of letters. 

The  Commission  therefore  proposes  that  the  Council  adopt  the  proposal 

for  a decision  on  the  conclusion  of  the  agreements  in  the  form  of  an 

exchange of letters as set out in Annex 1 and 2. 

4.  However, negotiations on other agreements shall be conducted with other 

exporting countries to the EC for access to the tariff quota. 

5.  At  the  end  of  these  negotiations,  the  preference,  if  any,  granted  to 

the  ACP  countries  compared  with  the  other  exporting  countries  will 

have  to  be  notified  to  the WTO,  in  conformity  with  the  provisions  of 

the waiver granted for the Lomé IV Convention. 

6.  Financial impact 

The financial consequences are set out in Annex 3 

s4 

PROPOSAL FOR A 

COUNCIL DECISION 

On the conclusion of the Agreements in the form of an exchange 

of letters between the European Community and, 

on the one hand, Barbados, Belize, 

the Republic of the Congo, Fiji, the Cooperative Republic of 

Guyana, the Republic of the ivory Coast, Jamaica, the Republic 

of Kenya, the Republic of Madagascar, the Republic of Malawi, 

Mauritius, the Republic of Surinam, St. Christopher and Nevis, 

the Kingdom of Swaziland, the United Republic of Tanzania, 

Trinidad and Tobago, the Republic of Uganda, the Republic of Zambia 

the Republic of Zimbabwe, and on the other hand, the Republic of India 

on the supply of raw cane sugar to be refined. 

(presented by the Commission) 

THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  establishing  the  European  Community,  and  in 

particular Article  113 and Article 228 paragraph 2 thereof, 

Having regard to the proposal from the Commission, 

whereas  negotiations  with  the  ACP  States  Party  to  Protocol  n°  8  on  ACP 

sugar  annexed  to the  fourth Lomé Convention  and  India have  taken  place  in 

order  to define  the conditions  under which  imports  of raw cane  sugar  from 

those countries under the additional quota will take place; 

Whereas Article 16 of Council Regulation  (EEC) Nol785/81 as last amended by 

Council  Regulation  (EEC) No  1101/95 provides  that tariff  quotas  resulting 

from  agreements  concluded  in  the  framework  of  the  Uruguay  Round  of 

multinational  trade  negotiation  shall  be  opened  and  administered  in 

accordance  with  detailed  rules  adopted  under  the  procedure  laid  down  in 

Article 41; 

whereas Article  37(3) states that a shortfall to fill the maximum needs of 

the community refineries shall be covered by importing special preferential 

sugar at a special rate of duty under agreements with states referred to in 

Article 33 and other States; 

whereas the said negotiations have resulted in agreements which are subject 

to confirmation by the Governments of the ACP States concerned, on the one 

hand, and India, on the other hand, and by the Community; 

Whereas it is appropriate to open such a tariff quota for raw cane sugar to 

be  refined  for  maintaining  the  current  access  for  ACP  States  parties  to 

Protocol  N°  8  to  the  Fourth  Lomé  convention,  India  and  other  third 

countries. 

Whereas it is appropriate to approve the Agreements in the form of exchange 

of letters between the European Community and, on the one hand, the states 

referred  to in the Protocol and, on the other hand, the Republic  of  India 

on the supply of raw cane sugar to be refined; 

HAS DECIDED AS FOLLOWS: 

Article 1 

The  Agreements  in  the  form  of  exchange  of  letters  between  the  European 

Community  and,  on  the  one  hand,  Barbados,  Belize,  the  Republic  of  the 

Congo, Fiji, the Cooperative Republic of Guyana, the Republic  of the Ivory 

Coast,  Jamaica,  the  Republic  of  Kenya,  the  Republic  of  Madagascar,  the 

Republic of Malawi, Mauritius, the Republic of Surinam, St. Christopher and 

Nevis, the Kingdom of Swaziland, the United Republic of Tanzania, Trinidad 

and Tobago, the Republic, of Uganda, the Republic of Zambia, the Republic of 

Zimbabwe and, on the other hand, the Republic of India on the supply of raw 

cane sugar to be refined are hereby approved on behalf of the Community. 

The text of the Agreements is attached to this Decision. 

Article 2 

The President  of  the Council  is hereby  authorized  to designate  the  person 

empowered to sign the Agreements referred to in Article  1 in order to bind 

the Community. 

Article 3 

This  Decision  will  be  published  in  the  Official  Journal  of  the  European 

Communities. 

Done at Brussels 

For the council 

A N N EX 

AGREEMENT 

IN  THE  FORM  OF  EXCHANGE  OF  LETTERS  BETWEEN  THE  EUROPEAN  COMMUNITY  AND, 

BARBADOS, BELIZE, THE REPUBLIC OF THE CONGO, FIJI, THE COOPERATIVE  REPUBLIC 

OF GUYANA,  THE REPUBLIC OF THE IVORY COAST, JAMAICA,  THE REPUBLIC OF KENYA, 

THE REPUBLIC OF MADAGASCAR,  THE REPUBLIC OF MALAWI, MAURITIUS, THE REPUBLIC 

OF SURINAM,  ST. CHRISTOPHER AND NEVIS, THE KINGDOM OF SWAZILAND, THE UNITED 

REPUBLIC  OF  TANZANIA,  TRINIDAD  AND  TOBAGO,  THE  REPUBLIC  OF  UGANDA,  THE 

REPUBLIC OF ZAMBIA AND THE REPUBLIC OF ZIMBABWE  ON THE SUPPLY OF RAW  SUGAR 

TO BE REFINED. 

Letter No 1 

"The  representatives  of  the  ACP  States  and  the  European  Community  have 

agreed as follows: 

1.  For the period  1 July  1995 to 30 June 2001 

The European Community  undertakes to open annually a special tariff 

quota for the import of raw cane sugar for refining which originate 

in  the  ACP  States,  on  the  basis  of  the  needs  determined  by  the 

Commission  in accordance with paragraph 3, 

The  ACP  states  undertake  to  supply  the  said  quantities  under  the 

conditions  fixed by this agreement and by the measures taken by the 

Commission  for  the  application  of  this  agreement  within  the 

framework  of  the  management  of  the  common  organization  of  the 

markets in the sugar sector. 

2.  The  European  Commission  and  the  ACP  states  shall  establish  the 

cooperation  procedures  necessary  to  enable  the  two  parties  to  this 

agreement to meet the commitments entered into. 

3.  The  import needs of  raw sugar  for refining  under this  agreement  shall 

be established by marketing year on the basis of a Community  forward 

estimate taking account of: 

the  provisions  of  Council  Regulation  (EC)  No  1101/95,  amending 

.  Regulation  (EEC) No 1785/81, concerning the system of  preferential 

imports, and in particular Article 37 thereof, 

the quantities which will be offered within the framework of other 

agreements  with  other  third  countries  and  which  will  actually  be 

imported. 

4.  The Commission  shall establish a first estimate of the total needs for 

imports of raw sugar for refining at the latest on 30 May preceding the 

marketing year concerned. 

The Commission shall fix at the same time the quantities to cover, as a 

first  instalment,  the  import  needs  of  the  Community's  refineries  for 

the longest practical period and at least 8 months, broken down between 

the tariff quotas opened within the framework of other agreements with 

other third countries and the ACP special quota. 

The  ACP  States  shall  notify  their  final  export  potential  to  the 

Commission at the latest on  1 February, before a second regular  fixing 

shall be make for the further instalment to be covered by imports under 

the special ACP quota. 

/ 

5.  The  special  reduced  rate  of  duty  shall  be  fixed  for  the  1995/96  -

2000/2001  marketing  years  at  6,9  Ecu  per  100  kgs  raw  sugar  of  the 

standard quality. 

The  importers  and  refiners  which  want  to  participate  in  this  special 

reduced duty system must pay a minimum purchase price which is equal to 

the guaranteed price  for raw sugar reduced by the adjustment  aid  fixed 

for the marketing  year  concerned  in accordance  with  the  provisions  of 

Article 36 of Regulation  (EEC) No 1785/81 mentioned under 3. 

It  is  agreed  that  if  the  adjustment  aid  is  increased  or  reduced  by 

comparison with its existing  level of  1.20 Ecu per  100 kgs raw sugar a 

converse  adjustment  will  be  made  in  the  reduced  levy,  so  that  the 

change  in  the  adjustment  aid  does  not  affect  the  net  receipts  of  the 

ACP suppliers. 

It  is  further  agreed  that  the  level  of  the  reduced  levy  will  be 

reconsidered if 

a.  the  level  of  the  guaranteed  price  established  in  accordance  with 

the provision of  Protocol No  8 annexed  to the  4th Lomé  convention 

is reduced  by  comparison with the price  applicable  in the  1994/95 

delivery period or 

b.  the  level  of  the world  market  price  increases  to  the  point  where 

the  objective  of  providing  an  incentive  to  supply  the  Community 

would be put at risk. 

6.  The  ACP  States  shall  undertake  collectively  to  implement  between 

themselves procedures  for the  allocation of  the quantities  under  this 

special ACP quota  in order to ensure the appropriate  supplying  of  the 

refineries. 

7.  Before  1 January  2001, the  two  parties  to  this  agreement  shall  open 

discussions on its possible continuation»"* 

I  should be  obliged  if  you would  acknowledge receipt  of  this  letter  and 

confirm that this letter and your reply constitute an Agreement between the 

Governments of the above mentioned ACP States and the Community. 

Please accept, sir,, the assurance of ray highest consideration. 

For the council of the European union 

S 

* 

Sir, 

Letter No 2 

I  have  the  honour  to  acknowledge  receipt  of  your  letter  of  today  which 

reads as follows: 

I  have  the  honour  to confirm  the  agreement  of  the Governments  of  the ACP 

States referred to in this letter with the foregoing. 

Please accept, sir, the assurance of my highest consideration. 

For the Governments 

A N N EX  2 

in the  form of  an exchange  of  letters between  the  European  Community  and 

the Republic of India on the supply of raw sugar to be refined 

Letter N" 1 

INDIA SPECIAL PREFERENTIAL 

"The  representatives  of  India  and  the  European  Community  have  agreed  as 

follows : 

1.  For the period 1 July 1995 to 30 June 2001 

-  The European Community undertakes to open annually a special tariff 

quota for the import of raw cane sugar for refining which originate 

in India, on the basis of the needs determined by the Commission in 

accordance with paragraph 3, 

^ io 

In the event of an import need being established,  India  undertakes 

to  supply  10,000 tonnes  (WSE) under  this  special  tariff  quota  and 

under  the  conditions  fixed  by  this  agreement  and  by  the  measures 

taken  by  the  Commission  for  the  application  of  this  agreement 

within  the  framework  of  the management  of  the  common  organization 

of  the markets  in the  sugar  sector. Nothing  in this  indent  should 

prevent  the community offering to India the possiblility  to supply 

more  than  10,000  tonnes  in the  event  of  a  shortfall  in  the  total 

supplies obtained under other agreements. 

2.  The  European  Commission  and  India  shall  establish  the  cooperation 

procedures  necessary  to  enable  the  two  parties  to  this  agreement  to 

meet the comitments entered into. 

3.  The  import  needs  of  raw sugar  for refining  under  this  agreement  shall 

be  established  by  marketing  year  on  the  basis  of  a  Community  forward 

estimate taking account of : 

the  provisions  of  Council  Regulation  (EC)  N°  1101/95,  amending 

Regulation  (EEC) N°  1785/81, concerning  the  system of  preferential 

imports, and in particular Article 37 thereof, 

the quantities which will be offered within the framework  of other 

agreements  with  other  third  countries  and  which  will  actually  be 

imported. 

4.  The  special  reduced  rate  of  duty  shall  be  fixed  for  the  1995/96  -

2000/2001  marketing  years  at  6,9  Ecu  per  100  kgs  raw  sugar  of  the 

standard quality. 

- /« 

The  importers  and refiners which want  to participate  in  this  special 

reduced duty system must pay a minimum purchase price which is equal to 

the guaranteed price  for raw sugar reduced by the adjustment  aid  fixed 

for the marketing  year concerned  in accordance with  the  provisions  of 

Article 36 of Regulation  (EEC) N*  1785/81 mentioned under 3. 

It  is  agreed  that  if  the  adjustment  aid  is  increased  or  reduced  by 

comparison with its existing level of 1.20 Ecu per  100 kgs raw  sugar a 

converse  adjustment  will  be  made  in  the  reduced  levy,  GO  that  the 

change  in  the  adjustment  aid  does  not  affect  the  net receipts  of  the 

India suppliers. 

It  is  further  agreed  that  the  level  of  the  reduced  levy  will  be 

reconsidered if 

(a) the  level  of  the  guaranteed  price  established  in  accordance  with 

the  agreement  between  the  Community  and  India  on  raw  sugar  i3 

reduced  by  comparison  with  the  price  applicable  in  the  1994/95 

delivery period or 

(b) the  level  of  the world  market  price  increases  to  the  point  where 

the  objective  of  providing  an  incentive  to  supply  the  community 

would be put at risk. 

5.  Before  1  January  2001,  the  two  parties  to  this  agreement  shall  open 

discussions on its possible continuation." 

I  should  be  obliged  if  you  would  acknowledge  receipt  of  this  letter  and 

confirm that this letter and your reply constitute an Agreement between the 

Government of India and the community. 

Please accept, sir, the assurance of my highest consideration. 

For the Council of the 

European Union 

/v 

Letter N° 2 

Sir, 

I  have  the  honour  to  acknowledge  receipt  of  your  letter  of  today  which 

reads as follows : 

I  have  the  honour  to  confirm  the  agreement  of  my  Government  with  the 

foregoing. 

Please accept, sir, the assurance of my highest consideration. 

For the Government of 

the Republic of India. 

\i 

FINANCIAL STATEMENT 

I Date 

1. BUDGET HEADING  :  Receipts  : 1000 

Expenditure  : Bl-110(PDB 95) 

APPROBIATIONS  Ecu 

946,5 Million 
Ecu 1 235,0 Million 

2. TITLE 

Council  Decision  on  the  conclusion  of  an  Agreement  in  the  form  of  an 
exchange  of  letters between the European Economic Community  and, on the one 
hand,  Barbados,  Belize,  the  People's  Republic  of  the  Congo,  Fiji,  the 
Cooperative Republic of Guyana, the Republic  of Côte d'Ivoire, Jamaica, the 
Republic  of  Kenya,  the  Democratic  Republic  of  Madagascar,  the  Republic  of 
Malawi,  Mauritius,  Saint  Christopher  and  Nevis, the  Republic  of  Suriname, 
the  Kingdom  of  Swaziland, the  United  Republic  of  Tanzania, the  Republic  of 
Trinidad and Tobago, the Republic of Uganda, the Republic  of Zambia and the 
Republic of Zimbabwe and, on the other hand, India on the supply of raw cane 
sugar for refining. 

3. LEGAL BASIS 

Article  113 of Treaty. 

4. AIMS OF PROJECT  : Granting  of  a  reduced  rate  of  customs  duty  to  the  ACP  states  and 
India  for  an  import  quota  opened  for  the  period  1.7.1995  to 
30.6.2001. 

5. FINANCIAL  IMPLICATIONS 

PERIOD OF 
12 MONTHS 

CURRENT FINANCIAL 

FOLLOWING FINANCIAL 

YEAR  (1995) 

YEAR  (199 5) 

5.0 EXPENDITURE 

- Charged to the EC budget 

(Refund) 

5.1 RECEIPTS 

- onw resources or the EC 
(levies/customs duties) 

5.0.1 ESTIMATED  EXPENDITURE 
5.1.1 ESTIMATED RECEIPTS 

5.2.  METHOD OF CALCULATION 

See attached Annex 

148,8 

—. 

21,1 

1997 

152,0 
21,6 

1998 

152,0 
21,6 

1999 

152,0 
21,6 

2000 

152,0 
21,6 

6.0  CAN  THE  PROJECT  BE  FINANCED  FROM APPROBIATIONS  ENTERED  IN  THE  RELEVANT  CHAPTER  OF 

THE  CURRENT BUDGET ? 

YES/Sûr 

6.1. CAN THE PROJECT BE FINANCED BY TRANSFER BETWEEN CHAPTERS OF THE CURRENT BUDGET ?__. 

6.2. IS A SUPPLEMENTARY BUDGET BE NECESSARY ? 

6.3. WILL FUTURE BUDGET APPROBAIATIONS BE NECESSARY ? 

OBSERVATIONS 

yM 

YES/*t£ 

*S5/NO 

YES/HB: 

RECEIPTS 

ANNEX TO THE FINANCIAL STATEMENT 

The quantities  concerned  by the agreement  are  : 320.000 tonnes of white  sugar, equal to 
348.000 tonnes of raw sugar  (coefficient  0,92). 

aiie normal rates of customs duties are those foreseen in the URUGUAY ROUND agreement. The 
reduced  duty  rate  is  69 Ecu/t. Own resources of the Community  correspond  to  90 % of  the 
aseduced receipts. 

BUDGETARY YEAR 

1996 

1997 

1998 

1999 

2000 

2001 

Quantity  (1000 t) 
Full rate  (ECU/t) 
Reduced rate  (ECU/t) 
Normal receipts(ECU million) 
*' 
Reduced receipts 
Reduced own resources " 
" 
Receipts forgone 

348,0 
409,8 
69,0 
142,6 
24,0 
21,6 
106,7 

348,0 
395,7 
69,0 
137,7 
24,0 
21,6 
102,3 

348,0 
381,5 
69,0 
132,8 
24,0 
21,6 
97,9 

348,0 
367,3 
69,0 
127,8 
24,0 
21,6 
93,4 

348,0 
353,2 
69,0 
122,9 
24,0 
21,6 
89,0 

348,0 
339,0 
69,0 
118,0 
24,0 
21,6 
84,6 

The assumption has been made that the receipts will occur after a delay of  6 months  from 
the date of the agreement. 

EXPENDITURE 

The imports  lead to the re-exportation  of  an equivalent quantity  of  sugar  (from  1996/97 
the  refund  rate  apparing  in  the  financial  appreciation  of  the  sugar  market  reform  has 
been used). 

BUDGETARY YEAR 

1996 

1997 

1998 

1999 

2000 

2001 

Quantity  (1000 t) 
(ECU/t) 
Refund 
Cost  (ECU million) 

320,0 
465,0 
148,8 

320,0 
475,0 
152,0 

320,0 
475,0 
152,0 

320,0 
475,0 
152,0 

320,0 
475,0 
152,0 

320,0 
475,0 
152,0 

IC 

BSN0234-I47S 

COM(95) 307  final 

DOCUMENTS 

EN 

11  03  02 

Catalogue number  :  CB-CO-95-338-EN-C 

TSBN 92-77-91107-7 

Office for Official  Publications of the Euiopean Communiôes 

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^