Proposal for a Council Decision on a Community position on an amendment to Protocol 4 on the definition of the concept of 'originating products' and methods of administrative cooperation set out in the Europe Agreement between the European Communities and Bulgaria
Date: 1998-07-17
Institutions: European Commission
Subjects: Bulgaria, administrative cooperation, agreement (EU), originating product, protocol to an agreement

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels,  17.07.1998 
COM(1998) 389 final 

98/ 0254 
98/0255 
98/ 0256 
98/ 0257 
98/ 0258 
98/ 0259 
98/ 0260 
98/0261 
98/0262 
98/ 0263 

(ACC) 
(ACQ 
(ACC) 
(ACC) 
(ACC) 
(ACC) 
(ACC) 
(ACC) 
(ACC) 
(ACC) 

Proposals for 
COUNCIL DECISIONS 
on a Community position on an amendment to Protocol 4 on the definition  of the concept of "originating 
products" and methods of administrative cooperation set out in the Europe Agreement between the European 
Communities and Bulgaria, the Czech Republic, Poland, Hungary, the Slovak Republic and Romania 

,.w 

Proposals for 
COUNCIL DECISIONS 
on a Community position on an amendment to Protocol 3 on the definition  of the concept of "originating 
products" and methods of administrative cooperation set out in the Europe Agreement between the European 
Communities and the Republic of Estonia, the Republic of Latvia and the Republic of Lithuania 

Proposal for a 
COUNCIL DECISION 
on a Community position on an amendment to Protocol 4 on the definition  of the concept of "originating 
products" and methods of administrative cooperation set out in the Interim Agreement on trade and trade-
related matters between the European Communities and the Republic of Slovenia 

Draft 
DECISION N°  .../ OF THE EC-SWITZERLAND JOINT COMMITTEE 
amending Protocol 3 to the Agreement between the European Economic Community and the Swiss 
Confederation  concerning the definition  of the concept of "originating products" and methods of administrative 
cooperation 

'• 

Draft 
DECISION N°  .../ OF THE EC-NORWAY JOINT COMMITTEE 
amending Protocol 3 to the Agreement between the European Economic Community and the Kingdom of 
Norway concerning the definition  of the concept of "originating products" and methods of administrative 
cooperation 

Draft 
DECISION N°  .../ OF THE EC-ICELAND JOINT COMMITTEE 
amending Protocol 3 to the Agreement between the European Economic Community and the Republic of 
Iceland concerning the definition  of the concept of "originating products" and methods of administrative 
cooperation 

-.". i 

m.-f 

Draft 
DECISION N°  .../ OF THE EEA JOINT COMMITTEE No  .. 
amending Protocol 4 to the EEA Agreement on rules of origin 

Drafts  common position of the Community  -

(presented by the Commission) 

EXPLANATORY  MEMORANDUM 

1. 

GENERAL 

1.1 

The  rules  of  origin  are  essential  to  the  correct  functioning  of  the  free  trade 

agreements between the Community and its trading partners. 

1.2 

The  European  Council  meeting  in Essen  in December  1994 drew attention  to  the 

fact  that variations  in the origin rules  included  in the  different  agreements  signed 

by  the  Community  constituted  a  barrier  to  trade.  Therefore  it  initiated  a 

programme  aimed  at  applying  identical  origin  rules  and  thereby  putting  trade 

between  the  Community,  the  CEECs,  the  Baltic  States,  the  EFTA  and  the  EEA 

countries  on the  same  footing.  It  also  decided  that  other  countries  in  a  situation 

similar  to  those  mentioned  above  could  be  similarly  integrated  into  the  system 

when the time came,. 

1.3 

Between  1  January and  1 July  1997 the text of the protocols on the rules of origin 

annexed  to  the  agreements  the  Community  has  concluded  with  the  countries 

mentioned  at  1.2  above and with  Slovenia was replaced  by a standard text  which 

also  provides  that  all  those  countries  can  apply  arrangements  for  cumulation  of 

working  and  processing  in  trade  with  each  other.  This  created  a  vast  zone  in 

which  "originating  products"  could  move  around  and  obtain  preferential  tariff 

treatment. 

1.4 

The  origin  rules  are  not  immutable.  They  must  be  adaptable  to  the  political  and 

economic requirements  of the free  trade area in which they apply.  Some  changes 

have,  therefore,  already  been  deemed  necessary  to  the  rules  which  entered  into 

force in 1997. 

2. 

AMENDMENTS  TO  THE  RULES  OF  ORIGIN  IN  THE  EU-CEECS,  EU-

BALTIC STATES, EU-EFTA, EU-SLOVENIA AND EEA AGREEMENTS 

2.1 

The  EC/Turkey  Association  Council  meeting  of 29 April  1997  granted  Turkey's 

request  be  integrated  into  the  above  system  of  standardised  rules  of  origin. 

However,  for  the present,  that  integration  will  only  apply to industrial  goods,  i.e. 

products  not  covered  by  Annex  II  to  the  Treaty.  The  attached  texts  have  been 

completed as a consequence. 

A 

2.2 

Amongst  other  things, the  standard  origin  rules  provide,  that imtil, 3^ .December 

1998  flat  rates  may  be  used  where  drawback  is  prohibited  or  exemptions  from 

customs duty are granted.  Recently Bulgaria and Hungary asked for this option to 

be  prolonged  for  a  further  two  years.  This  will  not  give  rise  to  any  economic 

difficulties  for  the  Community. 

It  is  there§?re  proposed  to  grant  that  request 

which  only  concerns  the  agreements  with  the  CEECs,  the  Baltic  States  and 

Slovenia. 

2.3 

Since the entry into force  of the standard protocol on rules of origin some Articles 

have  given rise to difficulties  of interpretation  or application.  Such is the case of 

Articles  3  and  4  for  which  new  wording  is  proposed.  That  amendment  has  no 

impact  on determining  whether  or not a given  product  has originating  status, but 

only  concerns  the matter  of how  to  determine  which  country  should  be  taken  as 

the  country  of  origin.  That  amendment  has  no  impact  on  preferential  treatment 

for  most  sectors 

In  those  cases  where  preferential  treatment  is  distinguished 

according to the country of origin the economic consequences  for the Community 

are  negligible  compared  with the  total  number  of  transactions.  That  amendment 

represents  an  administrative  simplification  important  both  to  administrations  and 

economic operators. 

2.4 

As  a  preliminary  response  to  the  Community's  undertaking  on  trade  with  the 

successor  republics  to  the  former  Yugoslavia  it  is  proposed  that  the  principle  of 

territoriality provided  for  in Article  12 of the EEA  Agreement  be extended  to the 

CEECs, the Baltic States and Slovenia. 

2.5 

A  few  technical  amendments  to  Annexes  I  and  II  to  the  protocols  are  also 

proposed.  Those  amendments  concern  products  whose  raw  materials  are  in  short 

supply in the trade zone. 

3. 

CONCLUSION 

The  purpose  of  the  annexed  14  proposals  is  to  improve  the  functioning  of  the 

common system of origin rules.  They should be taken as a single package.  If the 

current  arrangements  allowing  cumulation  of  working  and  processing  are  to 

remain in force, it is essential that they enter  into force  at the same time, i.e. on 1 

January  1999. 

3 

The  Commission  therefore  calls  on  the  Council  to  draw  up  a  common position  for 

presentation  to the committees provided  for  in each of  the agreements. 

M 

Proposal for a 

98/0254  (ACQ 

COUNCIL DECISION 

on a Community  position  on an amendment to Protocol 4 

on the definition  of the concept of "originating products" 

and  methods of administrative cooperation  set out in 

the Europe Agreement between the 

European  Communities  and Bulgaria 

THE COUNCIL OF THE EUROPEAN UNION, 

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

Having regard to  Article  2(1)  of the  Council  and  Commission  Decision  of  19  December 
1994 on the conclusion  of the Europe Agreement  establishing  an association  between  the 
European  Communities  and  their  Member  States,  of  the  one  part,  and  Bulgaria,  of  the 
other part, 

Having regard to the Commission proposal, 

Whereas  Article  38  of  Protocol  4  to  the  said  Europe  Agreement  provides  that  the 
Association Council may amend the provisions of the Protocol, 

HAS DECIDED: 

The position to be  adopted  by the  Community  within the  Association  Council  created  by 
virtue  of  Article  105  of  the  Europe  Agreement  establishing  an  association  between  the 
European  Communities  and  their  Member  States,  of  the  one  part,  and  Bulgaria,  of  the 
other part, on an amendment to Protocol  4 on the definition  of the concept  of "originating 
products"  and methods  of  administrative  cooperation  set  out  in the  Agreement  shall  be 
based on the draft  Association  Council decision annexed to this Decision. 

Done at Brussels, 

For the Council 
The President 

b 

EUROPE  AGREEMENT 

establishing  an  association  between  the European  Communities  and  their  Member 

States, of the one part,  and 

the Republic of Bulgaria, of the other  part 

DRAFT 

Decision No . . . / ..  of the Association  Council 

o f . .. 

amending Protocol  4 on the definition  of the concept  of "originating products" and 
methods  of administrative  cooperation 

THE ASSOCIATION  COUNCIL, 

Having regard to the Europe Agreement  establishing an association between the European 
Communities  and  their Member  States,  of  the  one  part,  and  Bulgaria,  of  the  other  part, 
signed in Brussels on 8 march  1993 and in particular Article 38 of Protocol 4 thereof, 

Whereas the definition  of the term "originating  products" needs to  be amended  to  ensure 
the  proper  operation  of  the  extended  system  of  cumulation  which  permits  the  use  of 
materials originating  in the European  Community,  Poland, Hungary,  the  Czech  Republic, 
the  Slovak  Republic,  Bulgaria,  Romania,  Latvia,  Lithuania,  Estonia,  Slovenia,  the 
European  Economic  Area  (hereinafter  referred  to  as  the  EEA),  Iceland,  Norway  and 
Switzerland; 

Whereas  it  would  seem  advisable  to  maintain  in  operation  until  31  December  2000  the 
system of flat  rate charges provided  for  in Article  15 in connection with the prohibition  of 
drawback and exemption from  customs duty; 

Whereas, in view  of the  particular  arrangement  on  industrial  products  obtaining  between 
the Community and Turkey, it would  also be appropriate to extend the cumulation system 
to  such products originating in Turkey; 

Whereas  to  facilitate  trade  and  simplify  administrative  tasks  it  would  be  desirable  to 
amend the wording of Articles 3, 4 and  12; 

Whereas,  to  take  account  of  changes  in  processing  techniques  and  shortages  of  certain 
raw  materials,  some  corrections  must  be  made  to  the  list  of  working  and  processing 
requirements  which  non-originating  materials  have  to  fulfil  to  qualify  for  originating 
status, 

HAS DECIDED AS FOLLOWS: 

Article 1 

Protocol  4  on  the  definition  of  the  concept  of  "originating  products"  and  methods  of 
administrative cooperation  is hereby amended as follows: 

G 

1. 

Article  l(i) shall be replaced by: 

"(i) 

'added  value'  shall  be taken  to  be  the  ex-works  price  minus  the customs 
value  of  each  of  the  materials  incorporated  which  originate  in  the  other 
countries referred to in Articles 3 and 4 or, where the customs value is not 
known  or  cannot  be  ascertained,  the  first  price  verifiably  paid  for  the 
products in the Community or Bulgaria." 

2. 

Articles 3 and 4 shall be replaced by: 

Article 3 

Cumulation in the European  Community 

1.  Without  prejudice  to  the  provisions  of  Article  2  paragraph  1,  products  shall  be 
considered  as  originating  in  the  Community  if  such  products  are  obtained  there, 
incorporating  materials  originating  in  the  Community,  Bulgaria,  Poland,  Hungary,  the 
Czech  Republic,  the  Slovak  Republic,  Romania,  Lithuania,  Latvia,  Estonia,  Slovenia, 
Iceland,  Norway,  Switzerland  (including  Liechtenstein)1  or  Turkey2  in  accordance  with 
the provisions  of the Protocol  on rules of origin annexed to the Agreements between the 
Community and each of these countries, provided that the working  or processing carried 
out  in the  Community goes beyond  that referred  to  in Article  7  of this Protocol.  It shall 
not be necessary that such materials have undergone sufficient  working or processing. 

2. Where the working or processing carried out in the Community does not go beyond the 
operations referred to in Article 7, the product obtained  shall be considered as originating 
in  the  Community  only  where  the  value  added  there  is  greater  than  the  value  of  the 
materials used originating in any one of the other countries referred to in paragraph  1.  If 
this is not so, the product obtained shall be considered as originating in the country which 
accounts  for  the  highest  value  of  originating  materials  used  in  the  manufacture  in  the 
Community. 

3.  Products,  originating  in one of the countries referred  to  in paragraph  1, which do not 
undergo any working or processing in the Community,  retain their origin if exported into 
one of these countries. 

4.  The  cumulation  provided  for  in  this  Article  may  only  be  applied  to  materials  and 
products  which  have  acquired  originating  status  by  an  application  of  rules  of  origin 
identical to those given in this Protocol. 

The Community shall provide Bulgaria, through the European Commission with details of 
the Agreements  and their corresponding  rules of origin, which are applied with the other 
countries  referred  to  in  paragraph  1.  The  European  Commission  shall  publish  in  the 
Official  Journal  of  the  European  Communities  (C  Series)  the  date  on  which  the 
cumulation,  provided  for  in  this  Article  may  be  applied  by  those  countries  listed  in 
paragraph  1 which have fulfilled the necessary requirements. 

i 

The Principality  of Liechtenstein  has a customs union with Switzerland,  and is a Contracting  Party to 
the Agreement  on the European Economic  Area. 

Cumulation  as provided for  in this Article  does not  apply  to materials  originating  in  Turkey  which 
are mentioned  in the list at Annex  V to this Protocol. 

) 

Article 4 

Cumulation in Bulgaria 

1.  Without  prejudice  to  the  provisions  of  Article  2  paragraph  2,  products  shall  be 
considered  as  originating  in  Bulgaria  if  such  products  are  obtained  there,  incorporating 
materials  originating  in the Community,  Bulgaria,  Poland, Hungary,  the  Czech Republic, 
the  Slovak  Republic,  Romania,  Lithuania,  Latvia,  Estonia,  Slovenia,  Iceland,  Norway, 
Switzerland  (including  Liechtenstein)1  or  Turkey2  in  accordance  with  the  provisions  of 
the Protocol on rules of origin annexed to the Agreements between Bulgaria and each of 
these  countries,  provided  that  the  working  or  processing  carried  out  in  Bulgaria  goes 
beyond  that  referred  to  in Article  7  of  this Protocol.  It  shall  not  be  necessary  that  such 
materials have undergone sufficient  working or processing. 

2.  Where  the  working  or  processing  carried  out  in  Bulgaria  does  not  go  beyond  the 
operations referred to in Article 7, the product obtained shall be considered as originating 
in Bulgaria  only  where  the  value  added  there  is  greater  than  the  value  of  the  materials 
used originating in any one of the other countries referred to in paragraph  1. If this is not 
so, the product obtained  shall be considered  as originating in the country which accounts 
for the highest value of originating materials used in the manufacture in Bulgaria. 

3.  Products,  originating  in one  of the countries referred to  in paragraph  1, which do not 
undergo any working or processing in Bulgaria, retain their origin if exported into one of 
these countries. 

4.  The  cumulation  provided  for  in  this  Article  may  only  be. applied  to  materials  and 
products  which  have  acquired  originating  status  by  an  application  of  rules  of  origin 
identical to those given in this Protocol. 

Bulgaria shall provide the Community,  through the European Commission with details of 
the Agreements  and their corresponding  rules of origin, which are applied with the other 
countries  referred  to  in  paragraph  1.  The  European  Commission  shall  publish  in  the 
Official  Journal  of  the  European  Communities  (C  Series)  the  date  on  which  the 
cumulation,  provided  for  in  this  Article  may  be  applied  by  those  countries  listed  in 
paragraph 1  which have fulfilled  the necessary requirements. 

3. 

Article  12 shall be replaced by the following: 

"1.  Except as provided for in Article 2(1 )(c), Articles 3 and 4 and paragraph 3  of 
this  Article,  the  conditions  for  acquiring  originating  status  set  out  in Title II 
must continue to be fulfilled  at all times in the Community or Bulgaria. 

2.  Except as provided for in Articles 3 and 4, where originating goods exported 
from  the  Community  or  Bulgaria  to  another  country  return,  they  must  be 

i 

The Principality  of Liechtenstein  has a customs union with Switzerland,  and is a Contracting Party  to 
the Agreement  on the European  Economic  Area. 

2  Cumulation  as provided for  in  this Article  does not  apply  to materials  originating  in  Turkey  which 

are mentioned  in the list at Annex  V to this Protocol. 

7 

considered as non-originating, unless it can be demonstrated to -tbe.satisfaction 
of the customs authorities that: 

(a) 

the returning goods are the same as those that were exported; and 

(b) 

they have  not undergone  any operation beyond that necessary  to  preserve 
them in good condition while in that country or while being exported. 

3.  The acquisition of originating  status in accordance with the conditions set out 
in  Title  II  shall  not  be  affected  by  working  or  processing  done  outside  the 
Community  or  Bulgaria  on  materials  exported  from  the  Community  or 
Bulgaria and subsequently reimported there, provided: 

(a) 

the  said  materials  are  wholly  obtained  in  the  Community  or  Bulgaria  or 
have undergone working  or processing  beyond  the  insufficient  operations 
listed in Article 7 prior to being exported; and 

(b) 

it can be demonstrated to the satisfaction of the customs authorities that: 

i) 

ii) 

the reimported goods have been obtained by working or processing 
the exported materials; and 

the total  added  value  acquired  outside the  Community  or Bulgaria 
by applying  the  provisions  of this Article  does  not  exceed  10% of 
the ex-works price of the end product for which originating status is 
claimed. 

4.  For  the  purposes  of  paragraph  3,  the  conditions  for  acquiring  originating 
status set out in Title II shall not apply to working or processing done outside 
the Community or Bulgaria.  But where, in the list in Annex II, a rule setting a 
maximum value for all the non-originating materials incorporated is applied in 
determining  the  originating  status  of  the  end  product,  the  total  value  of  the 
non-originating  materials incorporated in the territory of the party concerned, 
taken together with the total  added value acquired outside the Community or 
Bulgaria by applying the provisions of this Article, shall not exceed the stated 
percentage. 

5.  For  the  purposes  of  applying  the  provisions  of  paragraphs  3  and  4,  "total 
added value" shall be taken to  mean all  costs  arising  outside  the  Community 
or Bulgaria, including the value of the materials incorporated there. 

6.  The provisions of paragraphs 3 and 4 shall not apply to products which do not 
fulfil  the conditions  set  out in the list in Annex II or which can be considered 
sufficiently  worked or processed only if the general values fixed in Article 6(2) 
are applied. 

7.  The  provisions  of  paragraphs  3  and  4  shall  not  apply  to  products  coming 

under Chapters 50 to 63 of the Harmonised System. 

8.  Any  working  or  processing  of  the  kind  covered  by  the  provisions  of  this 
Article and done outside  the Community or Bulgaria shall be done under the 
outward processing arrangements, or similar arrangements." 

1 

4. 

5. 

6. 

7. 

8. 

9. 

In Articles  13,  14,  15,  17, 21, 27,  30  and 32 the phrase "referred<t€t.in-Article 4" 
shall be replaced by "referred to in Articles 3 and 4". 

In  the  last  paragraph  of  Article  15(6)  the  date  "31  December  1998"  shall  be 
replaced by "31 December 2000". 

In Article 26 the reference "C2/CP3" shall be replaced by "CN22/CN23". 

In  Annex  I,  Note  5.2,  "current  conducting  filaments"  shall  be  added  between 
"artificial  man-made  filaments"  and  "synthetic  man-made  staple  fibres  of 
polypropylene". 

In Annex I, Note 5.2 the fifth example ("A carpet with tufts . ..  are met") shall be 
deleted. 

In Annex II, between the rules for HS  headings 2202  and 2208  the following rule 
shall be inserted: 

HS 
Heading 
No 

(1) 

2207 

Description of product 

Working or processing of non-originating materials that 
confers originating status 

(2) 

(3) 

or 

(4) 

Undenatured ethyl 
alcohol of an alcoholic 
strength by volume of 
80% vol or higher; 
etiiyl alcohol and other 
spirits, denatured, of any 
strength. 

Manufacture: 

- using materials not classified 
in headings 2207 or 2208 

/Ù 

10. 

In Annex II, the rule for Chapter 57 shall be replaced by: 

Chapter 
57 

Carpets and other textile 
floor  coverings: 

- Of needleloom felt 

Manufacture from ( 1 ) : 
- natural  fibres 
or 
- chemical materials or textile pulp 

However: 
- polypropylene filament of 

heading 5402, 

- polypropylene fibres of heading 

5503 or 5506, 

- polypropylene filament tow of 
heading 5501, of which the 
denomination in all cases of a 
single filament or fibre is less 
than 9 decitex, may be used 
provided their value does not 
exceed 40% of the ex-works 
price of the product 

- jute fabric may be used as 

backing 

Manufacture  from(l): 
- natural fibres not carded or 

combed or otherwise processed 
for spinning, 

or 
- chemical materials or textile pulp 

Manufacture  from(l): 
- coir or jute yarn(a), 
- synthetic or artificial filament yarn 
- natural fibres, or 
- man-made staple fibres not 

carded or combed or otherwise 
processed for spinning 

But jute fabric may be used as 
backing 

Of other felt 

Other 

(a)  The use of jute yarn is authorised from  1.7.2000. 

// 

11. 

In Annex II, the rule for HS heading 7006 shall be replaced by: 

7006 

Glass of headings 7003, 
7004 or 7005, bent, 
edgeworked,  engraved, 
drilled, enamelled or 
otherwise worked, but 
not framed  or fitted  with 
other materials : 
- glass plate substrate 

coated with  dielectric 
thin film, semi 
conductor grade, in 
accordance with 
SEMII standards1 

- other 

Manufacture  from  materials 
(substrates) of heading 7006 

Manufacture  from  materials 
of heading 7001 

12. 

In Annex II, the rule for HS heading 7601 shall be replaced by: 

7601 

Unwrought  aluminium 

Manufacture  in which: 
-  all the materials used are 

classified  within a heading 
other than that of the 
product; and 

-  the value of all the 

materials used does not 
exceed  50 % of the ex-
works price of the product 

or 
Manufacture  by thermal or 
electrolytic treatment  from 
unalloyed aluminium  or 
waste and scrap of 
aluminium 

13. 

The following  is added after  Annex IV: 

"Annex V 

List of products originating in Turkey 
to which the provisions of Articles 3 and 4 do not apply, 
listed in the order of HS Chapters and Headings 

Chapter 1 

SEMII- Semiconductor  Equipment  and Materials  Institute  Incorporated. 

JJL 

Chapter 2 

Chapter 3 

0401 to 0402 

ex 0403 - 

0404 to 0410 

0504 

0511 

Chapter 6 

0701 to 0709 

ex 0710 - 
ex 0 7 1 1- 

0712 to 0714 

Chapter 8 

Buttermilk,  curdled  milk  and cream,  yoghurt,  képhir and  other  fermented 
or  acidified  milk  and  cream,  whether  or  not  concentrated  or  containing 
added  sugar or other sweetening  matter or flavoured  or containing  added 
fruit or cocoa 

Vegetables (uncooked or cooked by steaming or boiling in water), frozen 
Vegetables,  except  sweet  corn  of  heading  0711  90  30,  provisionally 
preserved  (for  example,  by sulphur dioxide  gas,  in brine,  in sulphur water 
or  in  other  preservative  solutions),  but  unsuitable  in  that  state  for 
immediate consumption 

ex Chapter 9 -  Coffee, tea, and spices, excluding maté of heading 0903 

Chapter 10 

Chapter 11 

Chapter 12 

ex  1302- 

Pectin 

1501tol514 

ex  1515 - 

ex  1516- 

ex  1517 and 
ex  1518 - 

ex  1522- 

Chapter 16 

1701 

ex  1702- 

Other fixed vegetable  fats  and oils  (excluding jojoba  oil  and its  fractions) 
and their fractions, whether or not refined, but not chemically modified 

Animal  or  vegetable  fats  and  oils  and  their  fractions,  partly  or  wholly 
hydrogenated,  inter-esterified,  re-esterified  or  elaidinised,  whether  or  not 
refined, but not further prepared, excluding hydrogenated  castor oil known 
as 'opal-wax' 

Margarines, imitation lard and other prepared edible fats 

Residues  resulting  from  the  treatment  of  fatty  substances  or  animal  or 
vegetable waxes, excluding degras 

Other  sugars,  including  chemically  pure  lactose,  maltose,  glucose  and 
fructose,  in  solid  form;  sugar  syrups  not  containing  added  flavouring  or 
colouring  matter;  artificial  honey,  whether  or  not  mixed  with  natural 
honey;  caramel  excluding  that  of  headings  1702  11  00,  1702  30  51, 
1702 30 59,  1702 50 00 and 1702 90 10 

n 

1703 

1801 and  1802 

ex  1902- 

ex 2 0 0 1- 

Pasta,  stuffed,  containing  more  than  20%  by  weight  offish,  crustaceans, 
molluscs  or other  aquatic  invertebrates,  sausages  and  the  like or  meat  and 
meat offal  of any kind, including fats of all kinds 

Cucumbers  and  gherkins,  onions,  mango  chutney,  fruit  of  the  genus 
Capsicum  other  than  sweet  peppers  or  pimentos,  mushrooms  and  olives, 
prepared or preserved by vinegar or acetic acid 

2002 and 2003 

ex 2004 - 

ex 2005 - 

Other vegetables prepared  or preserved  otherwise than by vinegar or acetic 
acid,  frozen,  other  than  products  of  heading  2006,  excluding  potatoes  in 
the form of flour  or meal and flakes  of sweet corn 

Other vegetables prepared  or preserved otherwise than by vinegar or acetic 
acid,  not  frozen,  other  than  products  of  heading  2006,  excluding  potato 
and sweet corn  products 

2006 and 2007 

ex 2008 - 

2009 

Fruits,  nuts  and  other  edible  parts  of  plants,  otherwise  prepared  or 
preserved,  whether  or  not  containing  added  sugar  or  other  sweetening 
matter  or  spirit,  not  elsewhere  specified  or  included,  excluding  peanut 
butter,  palm hearts, maize, yams, sweet potatoes and similar edible parts of 
plants containing  5% or  more by weight  of  starch,  vine leaves, hop  shoots 
and other similar edible parts of plants 

ex 2106 - 

Flavoured  and coloured  sugars, syrups and molasses 

Undenatured  ethyl  alcohol  of an  alcoholic  strength  by volume  of 80% vol 
or higher obtained from  agricultural produce listed here 

Undenatured  ethyl  alcohol  of an alcoholic  strength  by volume of less than 
80% vol obtained  from  agricultural  produce listed here. 

2204 

2206 

ex 2207 - 

ex 2208 - 

2209 

Chapter 23 

2401 

4501 

5301 and 5302 

h 

That Decision shall enter into force on  1  January 1999. 

Article 2 

Done at 

For the Association Council 
The President 

IS 

FINANCIAL STATEMENT 

1. 

2. 

3. 

Budget heading: 

Chapter  12, Article 120 

Legal basis: 

Article 113 of the Treaty 

Titles of the agreements in question: 

Proposal for an amendment to the definition of the concept of "originating 
products" and the methods of administrative cooperation set out in Protocol 4 to 
the different  Europe Agreements between the EC and the CEECs, the Baltic 
States and Slovenia and the Agreement on the European Economic Area, and in 
Protocol 3 to the free trade agreements between the EEC and the EFTA countries 

4. 

Purpose: 

To allow Central and Eastern European countries to continue applying flat rates 
where drawback is prohibited or exemption from customs duties is granted. 

To extend the system to industrial products originating in Turkey and simplify or 
correct certain rules, particularly those on determining which country is to be 
considered the originating country. 

5. 

Financial implications: 

As, for the purposes of industrial products, Turkey is already in a customs union 
with the Community and these products are therefore already zero rated when 
imported into the Community, and as the purpose of the amendments is essentially 
to facilitate trade or simplify administrative tasks, this proposal would not seem to 
have any major financial implications. 

/& 

Proposal for a 

COUNCIL  DECISION 

98/ 0255 (ACC) 

on a Community  position on an amendment to Protocol 4 

on the definition  of the concept of "originating products" 

and methods of administrative cooperation set out in 

the Europe Agreement between the 

European Communities and the Czech Republic 

THE COUNCIL OF THE EUROPEAN UNION, 

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

Having regard  to  Article  2(1)  of the  Council  and  Commission  Decision  of  19 December 
1994 on the conclusion  of the Europe Agreement  establishing  an association  between  the 
European Communities and their Member  States, of the one part,  and Czech Republic,  of 
the other part, 

Having regard to the Commission proposal, 

Whereas  Article  38  of  Protocol  4  to  the  said  Europe  Agreement  provides  that  the 
Association Council may amend the provisions of the Protocol, 

HAS DECIDED: 

The position  to be  adopted  by the  Community within the Association  Council  created  by 
virtue  of  Article  104  of  the  Europe  Agreement  establishing  an  association  between  the 
European Communities and their Member States, of the one part, and the Czech Republic, 
of  the  other  part,  on  an  amendment  to  Protocol  4  on  the  definition  of  the  concept  of 
"originating  products"  and  methods  of  administrative  cooperation  set  out  in  the 
Agreement  shall  be  based  on  the  draft  Association  Council  decision  annexed  to  this 
Decision. 

Done at Brussels, 

For the Council 
The President 

n-

EUROPE  AGREEMENT 

establishing an association  between the European  Communities  and their Member 

States, of the one part, and 

the Czech Republic, of the other part 

DRAFT 

Decision No 

/ ..  of the Association  Council 

o f . .. 

amending Protocol 4 on the definition  of the concept of "originating products" and 
methods of administrative  cooperation 

THE ASSOCIATION  COUNCIL, 

Having regard to the Europe Agreement  establishing an association between the European 
Communities  and  their  Member  States,  of  the  one  part,  and  the  Czech  Republic,  of  the 
other part,  signed in Brussels on 4 October  1993 and in particular  Article 38 of Protocol 4 
thereof, 

Whereas the definition  of the term  "originating  products"  needs to  be amended  to  ensure 
the  proper  operation  of  the  extended  system  of  cumulation  which  permits  the  use  of 
materials  originating  in the European  Community,  Poland,  Hungary,  the  Czech Republic, 
the  Slovak  Republic,  Bulgaria,  Romania,  Latvia,  Lithuania,  Estonia,  Slovenia,  the 
European  Economic  Area  (hereinafter  referred  to  as  the  EEA),  Iceland,  Norway  and 
Switzerland; 

Whereas  it  would  seem  advisable  to  maintain  in  operation  until  31  December  2000  the 
system of flat rate charges provided  for  in Article  15 in connection  with the prohibition  of 
drawback and exemption from  customs duty; 

Whereas,  in view  of the  particular  arrangement  on  industrial  products  obtaining  between 
the Community and Turkey, it would  also be appropriate to extend the cumulation system 
to such products originating in Turkey; 

Whereas  to  facilitate  trade  and  simplify  administrative  tasks  it  would  be  desirable  to 
amend the wording of Articles 3, 4 and  12; 

Whereas,  to  take  account  of  changes  in  processing  techniques  and  shortages  of  certain 
raw  materials,  some  corrections  must  be  made  to  the  list  of  working  and  processing 
requirements  which  non-originating  materials  have  to  fulfil  to  qualify  for  originating 
status, 

HAS DECIDED AS FOLLOWS : 

Article 1 

Protocol  4  on  the  definition  of  the  concept  of  "originating  products"  and  methods  of 
administrative cooperation is hereby amended  as follows: 

19 

1. 

Article  l(i) shall be replaced by: 

"(i) 

'added value'  shall  be taken to  be  the  ex-works  price  minus the  customs 
value  of  each  of  the  materials  incorporated  which  originate  in  the  other 
countries referred to in Articles 3 and 4 or, where the customs value is not 
known  or  cannot  be  ascertained,  the  first  price  verifiably  paid  for  the 
products in the Community or the Cz,^ph Republic." 

2. 

Articles 3 and 4 shall be replaced by: 

Article 3 

Cumulation in the European  Community 

1.  Without  prejudice  to  the  provisions  of  Article  2  paragraph  1,  products  shall  be 
considered  as  originating  in  the  Community  if  such  products  are  obtained  there, 
incorporating  materials  originating  in  the  Community,  Bulgaria,  Poland,  Hungary,  the 
Czech  Republic,  the  Slovak  Republic,  Romania,  Lithuania,  Latvia,  Estonia,  Slovenia, 
Iceland,  Norway,  Switzerland  (including  Liechtenstein)1  or  Turkey2  in  accordance  with 
the provisions of the Protocol  on rules of origin annexed to the Agreements between the 
Community  and each of these countries, provided that the working  or processing  carried 
out  in the Community goes beyond that referred to  in Article 7  of this Protocol.  It shall 
not be necessary that such materials have undergone sufficient working or processing. 

2. Where the working or processing carried out in the Community does not go beyond the 
operations referred to in Article 7, the product obtained shall be considered as originating 
in  the  Community  only  where  the  value  added  there  is  greater  than  the  value  of  the 
materials used originating in any one of the other countries referred to in paragraph  1.  If 
this is not so, the product obtained shall be considered as originating in the country which 
accounts  for  the  highest  value  of  originating  materials  used  in  the  manufacture  in  the 
Community. 

3.  Products,  originating  in one of the countries referred to  in paragraph  1, which  do not 
undergo any working or processing in the Community,  retain their origin if exported into 
one of these countries. 

4.  The  cumulation  provided  for  in  this  Article  may  only  be  applied  to  materials  and 
products  which  have  acquired  originating  status  by  an  application  of  rules  of  origin 
identical to those given in this Protocol. 

The  Community  shall  provide  the  Czech  Republic,  through  the  European  Commission 
with details of the Agreements and their corresponding rules of origin, which are applied 
with  the  other  countries  referred  to  in  paragraph  1.  The  European  Commission  shall 
publish in the Official  Journal of the European Communities (C Series) the date on which 
the  cumulation,  provided  for  in this  Article  may be  applied  by  those  countries  listed in 
paragraph  1  which have fulfilled  the necessary requirements. 

1 

The Principality  of Liechtenstein  has a customs union with Switzerland,  and is a Contracting  Party  to 
the Agreement  on the European Economic  Area. 

2  Cumulation  as provided for  in  this Article  does not  apply  to materials  originating  in  Turkey  which 

are mentioned  in the list at Annex  V to this Protocol. 

K 

Article 4 

Cumulation  in the Czech Republic 

1.  Without  prejudice  to  the  provisions  of  Article  2  paragraph  2,  products  shall  be 
considered  as  originating  in  the  Czech  Republic  if  such  products  are  obtained  there, 
incorporating  materials  originating  in  the  Community,  Bulgaria,  Poland,  Hungary,  the 
Czech  Republic,  the  Slovak  Republic,  Romania,  Lithuania,  Latvia,  Estonia,  Slovenia, 
Iceland,  Norway,  Switzerland  (including  Liechtenstein)1  or  Turkey2  in accordance  with 
the provisions of the Protocol  on rules of origin annexed to the Agreements between the 
Czech  Republic  and  each  of  these  countries,  provided  that  the  working  or  processing 
carried  out  in  the  Czech  Republic  goes  beyond  that  referred  to  in  Article  7  of  this 
Protocol.  It shall not be necessary that  such materials have undergone  sufficient  working 
or processing. 

2. Where the working or processing carried out in the Czech Republic does not go beyond 
the  operations  referred  to  in  Article  7,  the  product  obtained  shall  be  considered  as 
originating  in the  Czech  Republic  only  where  the  value  added  there  is  greater  than the 
value  of  the  materials  used  originating  in  any  one  of  the  other  countries  referred  to  in 
paragraph 1. If this is not so, the product obtained shall be considered as originating in the 
country  which  accounts  for  the  highest  value  of  originating  materials  used  in  the 
manufacture in the Czech Republic. 

3.  Products,  originating  in one  of the  countries  referred  to  in paragraph  1, which do not 
undergo any working or processing  in the Czech Republic,  retain their origin if exported 
into one of these countries. 

4.  The  cumulation  provided  for  in  this  Article  may  only  be  applied  to  materials  and 
products  which  have  acquired  originating  status  by  an  application  of  rules  of  origin 
identical to those given in this Protocol. 

The  Czech  Republic  shall  provide  the  Community,  through  the  European  Commission 
with details of the Agreements  and their corresponding  rules of origin, which are applied 
with  the  other  countries  referred  to  in  paragraph  1.  The  European  Commission  shall 
publish in the Official  Journal of the European Communities (C Series) the date on which 
the  cumulation,  provided  for  in  this  Article  may be  applied  by  those  countries  listed  in 
paragraph 1  which have fulfilled  the necessary requirements. 

3. 

Article  12 shall be replaced by the following: 

"1.  Except as provided for in Article 2(1 )(c),  Articles 3 and 4 and paragraph 3  of 
this Article,  the  conditions  for  acquiring  originating  status  set  out  in Title II 
must  continue  to  be  fulfilled  at  all  times  in  the  Community  or  the  Czech 
Republic. 

1 

The Principality  of Liechtenstein  has a customs  union with Switzerland,  and is a Contracting Party  to 
the Agreement  on the European  Economic  Area. 

2  Cumulation  as provided  for  in  this Article  does  not  apply  to materials  originating  in  Turkey  which 

are mentioned  in the list at Annex  V to this  Protocol. 

o &> 

2.  Except  as provided for in Articles 3 and 4,  where originating goods  exported 
from  the  Community  or the  Czech  Republic  to  another  country  return, they 
must  be  considered  as  non-originating,  unless  it  can be  demonstrated  to  the 
satisfaction of the customs authorities that: 

(a) 

the returning goods are the same as those that were exported; and 

(b) 

they have not  undergone  any operatron beyond  that necessary  to  preserve 
them in good condition while in that country or while being exported. 

3.  The acquisition of originating status in accordance with the conditions set out 
in Title  II  shall  not  be  affected  by  working  or  processing  done  outside  the 
Community or the Czech Republic on materials exported from the Community 
or the Czech Republic and subsequently reimported there, provided: 

(a) 

the  said  materials  are  wholly  obtained  in  the  Community  or  the  Czech 
Republic or have undergone working or processing beyond the  insufficient 
operations listed in Article 7 prior to being exported; and 

(b) 

it can be demonstrated to the satisfaction of the customs authorities that: 

i) 

ii) 

the reimported goods have been obtained by working or processing 
the exported materials; and 

the total added value acquired outside the Community or the Czech 
Republic by applying the provisions of this Article does not  exceed 
10% of the ex-works price of the end product for which originating 
status is claimed. 

4.  For  the  purposes  of  paragraph  3,  the  conditions  for  acquiring  originating 
status set out in Title II shall not apply to working or processing done outside 
the Community  or the Czech Republic.  But where,  in the list in Annex II, a 
rule  setting  a  maximum  value  for  all  the  non-originating  materials 
incorporated  is  applied  in  determining  the  originating  status  of  the  end 
product,  the  total  value  of  the  non-originating  materials  incorporated  in  the 
territory  of  the  party  concerned,  taken  together  with  the  total  added  value 
acquired outside the Community or Bulgaria by applying the provisions of this 
Article, shall not exceed the stated percentage. 

5.  For  the  purposes  of  applying  the  provisions  of  paragraphs *3  and  4,  "total 
added value" shall be taken to  mean all  costs  arising  outside  the  Community 
or the Czech Republic, including the value of the materials incorporated there. 

6.  The provisions of paragraphs 3 and 4 shall not apply to products which do not 
fulfil  the conditions set out in the list in Annex II or which can be considered 
sufficiently  worked or processed only if the general values fixed in Article 6(2) 
are applied. 

7.  The  provisions  of  paragraphs  3  and  4  shall  not  apply  to  products  coming 

under Chapters 50 to 63 of the Harmonised System. 

8.  Any  working  or  processing  of  the  kind  covered  by  the  provisions  of  this 
Article and done outside the Community or the Czech Republic shall be done 
under the outward processing arrangements, or similar arrangements." 

*.( 

4. 

5. 

6. 

7. 

8. 

9. 

In Articles  13,  14,  15,  17, 21, 27,  30 and 32 the phrase "referred* to4n-Article 4" 
shall be replaced by "referred to in Articles 3 and 4". 

In  the  last  paragraph  of  Article  15(6)  the  date  "31  December  1998"  shall  be 
replaced by "31 December 2000". 

In Article 26 the reference "C2/CP3" shall be replaced by "CN22/CN23". 

In  Annex  I,  Note  5.2,  "current  conducting filaments" shall  be  added  between 
"artificial  man-made  filaments"  and  "synthetic  man-made  staple  fibres  of 
polypropylene". 

In Annex I, Note 5.2 the fifth example ("A carpet with tufts  . ..  are met.") shall be 
deleted. 

In Annex II, between the rules for HS headings 2202  and 2208  the following rule 
shall be inserted: 

HS 
Heading 
No 

(1) 

2207 

Description of product 

Working or processing of non-originating materials that 
confers originating status 

(2) 

(3) 

or 

(4) 

Undenatured ethyl 
alcohol of an alcoholic 
strength by volume of 
80% vol or higher; 
ethyl alcohol and other 
spirits, denatured, of any 
strength. 

Manufacture: 

- using materials not classified 
in headings 2207 or 2208 

fy 

10. 

In Annex II, the rule for Chapter 57 shall be replaced by: 

Chapter 
57 

Carpets and other textile 
floor coverings: 

- Of needleloom felt 

Manufacture from (1): 
- natural fibres 
or 
- chemical materials or texUle pulp 

However: 
- polypropylene filament of 

heading 5402, 

- polypropylene fibres of heading 

5503 or 5506, 

- polypropylene filament tow of 
heading 5501, of which the 
denomination in all cases of a 
single filament or fibre is less 
than 9 decitex, may be used 
provided their value does not 
exceed 40% of the ex-works 
price of die product 

- jute fabric may be used as 

backing 

Manufacture from( 1 ) : 
- natural fibres not carded or 

combed or otherwise processed 
for spinning, 

or 
- chemical materials or textile pulp 

Manufacture from(l): 
-coir or jute yarn(a), 
- synthetic or artificial filament yam 
- natural fibres, or 
- man-made staple fibres not 

carded or combed or otherwise 
processed for spinning 

But jute fabric  may be used as 
backing 

Of other felt 

OUier 

(a)  The use of jute yam is authorised from  1.7.2000. 

31 

11. 

In Annex II, the rule for HS heading 7006 shall be replaced by: 

7006 

Glass of headings 7003, 
7004 or 7005, bent, 
edgeworked,  engraved, 
drilled, enamelled or 
otherwise worked, but 
not framed  or fitted  with 
other materials: 
- glass plate substrate 

coated with  dielectric 
thin film, semi 
conductor grade, in 
accordance with 
SEMII standards1 

- other 

Manufacture  from  materials 
(substrates) of heading 7006 

Manufacture  from  materials 
of heading 7001 

12. 

In Annex II, the rule for HS heading 7601 shall be replaced by: 

7601 

Unwrought  aluminium 

Manufacture  in which: 
-  all the materials used are 

classified  within a heading 
other than that of the 
product; and 

-  the value of all the 

materials used does not 
exceed 50 % of the ex-
works price of the product 

or 
Manufacture  by thermal or 
electrolytic treatment  from 
unalloyed  aluminium  or 
waste and scrap of 
aluminium 

13. 

The following  is added after Annex IV: 

"Annex V 

List of products originating in Turkey 
to which the provisions of Articles 3 and 4 do not apply, 
listed in the order of HS Chapters and Headings 

Chapter 1 

SEMII- Semiconductor Equipment  and Materials Institute  Incorporated. 

o&f 

Chapter 2 

Chapter 3 

0401 to 0402 

ex 0403 - 

0404 to 0410 

0504 

0511 

Chapter 6 

0701 to 0709 

ex 0710 - 
ex 0 7 1 1- 

0712 to 0714 

Chapter 8 

Buttermilk,  curdled  milk  and cream, yoghurt,  képhir and other  fermented 
or  acidified  milk  and  cream,  whether  or  not  concentrated  or  containing 
added  sugar or other sweetening  matter or flavoured or containing  added 
fruit or cocoa 

Vegetables (uncooked or cooked by steaming or boiling in water), frozen 
Vegetables,  except  sweet  corn  of  heading  0711  90  30,  provisionally 
preserved  (for  example,  by sulphur dioxide  gas,  in brine,  in sulphur water 
or  in  other  preservative  solutions),  but  unsuitable  in  that  state  for 
immediate consumption 

ex Chapter 9 -  Coffee,  tea, and spices, excluding maté of heading 0903 

Chapter 10 

Chapter 11 

Chapter 12 

ex 1302 - 

Pectin 

1501tol514 

ex 1515 - 

ex 1516- 

ex  1517 and 
ex 1518 - 

ex  1522- 

Chapter 16 

1701 

ex  1702- 

Other fixed vegetable  fats  and oils  (excluding jojoba  oil  and its  fractions) 
and their fractions, whether or not refined, but not chemically modified 

Animal  or  vegetable  fats  and  oils  and  their  fractions,  partly  or  wholly 
hydrogenated,  inter-esterified,  re-esterified  or  elaidinised,  whether  or  not 
refined, but not further prepared, excluding hydrogenated castor oil known 
as 'opal-wax' 

Margarines, imitation lard and other prepared edible fats 

Residues  resulting  from  the  treatment  of  fatty  substances  or  animal  or 
vegetable waxes, excluding degras 

Other  sugars,  including  chemically  pure  lactose,  maltose,  glucose  and 
fructose,  in solid  form;  sugar  syrups  not  containing  added  flavouring  or 
colouring  matter;  artificial  honey,  whether  or  not  mixed  with  natural 
honey;  caramel  excluding  that  of  headings  1702  11  00,  1702  30  51, 
1702 30 59,  1702 50 00 and 1702 90 10 

o?< 

1703 

1801 and 1802 

ex  1902- 

ex 2 0 0 1- 

Pasta,  stuffed,  containing  more  than  20% by  weight  offish,  crustaceans, 
molluscs or other aquatic  invertebrates,  sausages  and the  like or meat and 
meat offal of any kind, including fats of all kinds 

Cucumbers  and  gherkins,  onions,  mango  chutney,  fruit  of  the  genus 
Capsicum  other  than  sweet  peppers  or  pimentos,  mushrooms  and  olives, 
prepared or preserved by vinegar or acetic acid 

2002 and 2003 

ex 2004 - 

ex 2005 - 

Other vegetables prepared or preserved otherwise than by vinegar or acetic 
acid,  frozen,  other  than  products  of  heading  2006,  excluding  potatoes in 
the form of flour or meal and flakes of sweet corn 

Other vegetables prepared or preserved otherwise than by vinegar or acetic 
acid,  not  frozen,  other  than  products  of  heading  2006,  excluding  potato 
and sweet corn products 

2006 and 2007 

ex 2008 - 

2009 

Fruits,  nuts  and  other  edible  parts  of  plants,  otherwise  prepared  or 
preserved,  whether  or  not  containing  added  sugar  or  other  sweetening 
matter  or  spirit,  not  elsewhere  specified  or  included,  excluding  peanut 
butter, palm hearts, maize, yams, sweet potatoes and similar edible parts of 
plants containing 5% or more by weight  of starch, vine leaves, hop shoots 
and other similar edible parts of plants 

ex 2106 - 

Flavoured and coloured sugars, syrups and molasses 

Undenatured  ethyl  alcohol  of an alcoholic  strength by volume  of  80% vol 
or higher obtained from agricultural produce listed here 

Undenatured ethyl alcohol  of an alcoholic  strength by volume of less than 
80% vol obtained from agricultural produce listed here. 

2204 

2206 

ex 2207 - 

ex 2208 - 

2209 

Chapter 23 

2401 

4501 

5301 and 5302 

da 

That Decision shall enter into force on  1  January 1999. 

Article 2 

Done at 

For the Association Council 
The President 

^ 

FINANCIAL STATEMENT 

1. 

2. 

3. 

Budget heading: 

Chapter  12, Article 120 

Legal basis: 

Article 113 of the Treaty 

Titles of the agreements in question: 

Proposal for an amendment to the definition of the concept of "originating 
products" and the methods of administrative cooperation set out in Protocol 4 to 
the different  Europe Agreements between the EC and the CEECs, the Baltic 
States and Slovenia and the Agreement on the European Economic Area, and in 
Protocol 3 to the free trade agreements between the EEC and the EFTA countries 

4. 

Purpose: 

To allow Central and Eastern European countries to continue applying flat rates 
where drawback is prohibited or exemption from customs duties is granted. 

To extend the system to industrial products originating in Turkey and simplify or 
correct certain rules, particularly those on determining which country is to be 
considered the originating country. 

5. 

Financial implications: 

As, for the purposes of industrial products, Turkey is already in a customs union 
with the Community and these products are therefore already zero rated when 
imported into the Community, and as the purpose of the amendments is essentially 
to facilitate trade or simplify administrative tasks, this proposal would not seem to 
have any major financial implications. 

M 

Proposai for a 

98/0256  (ACQ 

COUNCIL  DECISION 

on a Community  position  on an amendment  to Protocol 4 

on the definition  of the concept  of "originating  products'9 

and  methods  of administrative  cooperation  set out in 

the Europe Agreement between  the 

European  Communities  and Poland 

THE COUNCIL OF THE EUROPEAN  UNION, 

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

Having  regard  to  Article 2(1)  of the  Council  and  Commission  Decision  of  13  December 
1993 on the conclusion  of the Europe Agreement  establishing  an association  between  the 
European  Communities  and  their  Member  States,  of  the  one  part,  and  the  Republic  of 
Poland, of the other part, 

Having regard to the Commission  proposal, 

Whereas  Article  38  of  Protocol  4  to  the  said  Europe  Agreement  provides  that  the 
Association Council may amend the provisions of the Protocol, 

HAS DECIDED: 

The position  to be adopted  by the  Community  within the Association  Council  created  by 
virtue  of  Article  102  of  the  Europe  Agreement  establishing  an  association  between  the 
European  Communities  and  their  Member  States,  of  the  one  part,  and  the  Republic  of 
Poland, of the other part, on an amendment to Protocol 4 on the definition  of the  concept 
of  "originating  products"  and  methods  of  administrative  cooperation  set  out  in  the 
Agreement  shall  be  based  on  the  draft  Association  Council  decision  annexed  to  this 
Decision. 

Done at Brussels, 

For the Council 
The President 

£<7 

EUROPE  AGREEMENT 

establishing  an association  between the European Communities  and their Member 

States, of the one part, and 

the Republic of Poland, of the other part 

DRAFT 

Decision No . . . / ..  of the Association  Council 

o f . .. 

amending Protocol  4 on the definition  of the concept of "originating products" and 
methods of administrative  cooperation 

THE ASSOCIATION  COUNCIL, 

Having regard to the Europe Agreement establishing an association between the European 
Communities and their Member States, of the one part,  and the Republic of Poland, of the 
other  part,  signed  in  Brussels  on  16  December  1991  and  in  particular  Article  38  of 
Protocol 4 thereof, 

Whereas the definition  of the term "originating  products"  needs to be  amended  to  ensure 
the  proper  operation  of  the  extended  system  of  cumulation  which  permits  the  use  of 
materials  originating  in the European  Community,  Poland,  Hungary,  the  Czech Republic, 
the  Slovak  Republic,  Bulgaria,  Romania,  Latvia,  Lithuania,  Estonia,  Slovenia,  the 
European  Economic  Area  (hereinafter  referred  to  as  the  EEA),  Iceland,  Norway  and 
Switzerland; 

Whereas  it  would  seem  advisable  to  maintain  in  operation  until  31  December  2000  the 
system of flat rate charges provided for  in Article  15 in connection  with the prohibition of 
drawback and exemption from  customs duty; 

Whereas,  in view  of the  particular  arrangement  on  industrial  products  obtaining  between 
the Community  and Turkey, it would also be appropriate to extend  the cumulation system 
to such products originating in Turkey; 

Whereas  to  facilitate  trade  and  simplify  administrative  tasks  it  would  be  desirable  to 
amend the wording of Articles 3, 4 and  12; 

Whereas,  to  take  account  of  changes  in  processing  techniques  and  shortages  of  certain 
raw  materials,  some  corrections  must  be  made  to  the  list  of  working  and  processing 
requirements  which  non-originating  materials  have  to  fulfil  to  qualify  for  originating 
status, 

HAS DECIDED  AS FOLLOWS: 

Article 1 

Protocol  4  on  the  definition  of  the  concept  of  "originating  products"  and  methods  of 
administrative cooperation  is hereby amended as follows: 

So 

1. 

Article  l(i)  shall be replaced by: 

"(i) 

* added  value'  shall  be  taken  to  be  the  ex-works  price  minus the  customs 
value  of  each  of  the  materials  incorporated  which  originate  in  the  other 
countries referred to in Articles 3 and 4 or, where the customs value is not 
known  or  cannot  be  ascertained,  the  first  price  verifiably  paid  for  the 
products in the Community or Poland." 

2. 

Articles 3 and 4 shall be replaced by: 

Article 3 

Cumulation  in the European Community 

1.  Without  prejudice  to  the  provisions  of  Article  2  paragraph  1,  products  shall  be 
considered  as  originating  in  the  Community  if  such  products  are  obtained  there, 
incorporating  materials  originating  in  the  Community,  Bulgaria,  Poland,  Hungary,  the 
Czech  Republic,  the  Slovak  Republic,  Romania,  Lithuania,  Latvia,  Estonia,  Slovenia, 
Iceland,  Norway,  Switzerland  (including  Liechtenstein)1  or  Turkey2  in  accordance  with 
the provisions of the Protocol  on rules of origin annexed to the Agreements between the 
Community  and each of these countries, provided that the working  or processing  carried 
out  in the Community goes  beyond  that referred  to  in Article  7  of  this Protocol.  It shall 
not be necessary that such materials have undergone sufficient  working or processing. 

2. Where the working or processing carried out in the Community does not go beyond the 
operations referred to in Article 7,  the product obtained shall be considered as originating 
in  the  Community  only  where  the  value  added  there  is  greater  than  the  value  of  the 
materials used originating in any one of the other countries referred to in paragraph  1.  If 
this is not so, the product obtained shall be considered as originating in the country which 
accounts  for  the  highest  value  of  originating  materials  used  in  the  manufacture  in  the 
Community. 

3.  Products,  originating  in one  of the  countries referred to  in paragraph  1, which do not 
undergo any working or processing in the Community, retain their origin if exported into 
one of these countries. 

4.  The  cumulation  provided  for  in  this  Article  may  only  be  applied  to  materials  and 
products  which  have  acquired  originating  status  by  an  application  of  rules  of  origin 
identical to those given in this Protocol. 

The Community  shall  provide Poland,  through the European Commission  with  details  of 
the Agreements  and their corresponding  rules of origin, which are applied with the other 
countries  referred  to  in  paragraph  1.  The  European  Commission  shall  publish  in  the 
Official  Journal  of  the  European  Communities  (C  Series)  the  date  on  which  the 
cumulation,  provided  for  in  this  Article  may  be  applied  by  those  countries  listed  in 
paragraph 1 which have fulfilled  the necessary requirements. 

1  The Principality  of Liechtenstein has a customs union with Switzerland,  and is a Contracting  Party  to 

the Agreement  on the European Economic Area. 

2  Cumulation as provided  for  in this Article  does not apply  to materials  originating  in  Turkey which 

are mentioned  in the list at Annex V to this Protocol. 

3/ 

Article 4 

Cumulation  in  Poland 

1.  Without  prejudice  to  the  provisions  of  Article  2  paragraph  2,  products  shall  be 
considered  as  originating  in Bulgaria  if  such  products  are  obtained  there,  incorporating 
materials  originating  in the Community,  Bulgaria,  Poland, Hungary,  the Czech Republic, 
the  Slovak  Republic,  Romania,  Lithuania,  Latvia,  Estonia,  Slovenia,  Iceland,  Norway, 
Switzerland  (including  Liechtenstein)1  or  Turkey2  in  accordance  with  the  provisions  of 
the Protocol  on  rules of  origin  annexed  to the  Agreements  between Poland  and each  of 
these  countries,  provided  that  the  working  or  processing  carried  out  in  Poland  goes 
beyond  that  referred  to  in Article  7  of  this Protocol.  It  shall  not  be  necessary  that  such 
materials have undergone sufficient  working or processing. 

2.  Where  the  working  or  processing  carried  out  in  Poland  does  not  go  beyond  the 
operations referred to in Article 7, the product obtained shall be considered as originating 
in Poland only where the value added there is greater than the value of the materials used 
originating  in any one of the other countries referred  to in paragraph  1. If this is not so, 
the product obtained shall be considered  as originating in the country which accounts for 
the highest value of originating materials used in the manufacture in Poland. 

3.  Products,  originating  in one of the countries  referred to in paragraph  1, which do not 
undergo  any working  or processing  in Poland,  retain their origin if exported  into  one  of 
these countries. 

4.  The  cumulation  provided  for  in  this  Article  may  only  be. applied  to  materials  and 
products  which  have  acquired  originating  status  by  an  application  of  rules  of  origin 
identical to those given in this Protocol. 

Poland  shall  provide the  Community,  through  the  European  Commission  with  details  of 
the Agreements and their corresponding  rules of origin, which are applied with the other 
countries  referred  to  in  paragraph  1.  The  European  Commission  shall  publish  in  the 
Official  Journal  of  the  European  Communities  (C  Series)  the  date  on  which  the 
cumulation,  provided  for  in  this  Article  may  be  applied  by  those  countries  listed  in 
paragraph 1 which have fulfilled the necessary requirements. 

3. 

Article  12 shall be replaced by the following: 

"1.  Except as provided for in Article 2(1 )(c), Articles 3 and 4 and paragraph 3  of 
this Article,  the conditions  for  acquiring originating  status set  out  in Title II 
must continue to be fulfilled  at all times in the Community or Poland. 

2.  Except as provided for in Articles 3 and 4, where originating goods exported 
from  the  Community  or  Poland  to  another  country  return,  they  must  be 

1  The Principality of Liechtenstein has a customs union with Switzerland, and is a Contracting Party to 

the Agreement on the European Economic Area. 

2  Cumulation as provided for  in this Article does not apply to materials originating in Turkey which 

are mentioned in the list at Annex V to this Protocol. 

3C 

considered  as non-originating,  unless it can be demonstrated to the. satisfaction 
of the customs authorities that: 

(a) 

the returning goods are the same as those that were exported; and 

(b) 

they  have  not  undergone  any operation  beyond  that  necessary  to  preserve 
them in good condition while in that country or while being exported. 

3.  The acquisition  of originating  status  in accordance with the conditions  set out 
in  Title  II  shall  not  be  affected  by  working  or  processing  done  outside  the 
Community  or  Poland  on  materials  exported  from  the  Community  or  Poland 
and subsequently reimported there, provided: 

(a) 

the said materials are wholly obtained  in the Community  or Poland  or have 
undergone  working  or  processing  beyond  the  insufficient  operations  listed 
in Article 7 prior to being exported; and 

(b) 

it can be demonstrated  to the satisfaction  of the customs authorities that: 

i) 

ii) 

the reimported  goods have been  obtained  by working or processing 
the exported  materials; and 

the total  added value acquired  outside the Community or Poland by 
applying the  provisions  of this  Article  does  not  exceed  10% of the 
ex-works  price  of  the  end  product  for  which  originating  status  is 
claimed. 

4.  For  the  purposes  of  paragraph  3,  the  conditions  for  acquiring  originating 
status set out  in Title II shall not apply to working or processing  done  outside 
the Community  or Poland.  But where,  in the list  in Annex II, a rule  setting a 
maximum value for  all the non-originating  materials incorporated  is applied in 
determining  the  originating  status  of  the  end  product,  the  total  value  of  the 
non-originating  materials  incorporated  in the territory  of the party  concerned, 
taken together  with the total  added  value  acquired  outside the Community  or 
Poland  by  applying  the  provisions  of  this  Article,  shall  not  exceed  the  stated 
percentage. 

5.  For  the  purposes  of  applying  the  provisions  of  paragraphs  3  and  4,  "total 
added  value"  shall  be taken  to  mean  all  costs  arising  outside  the  Community 
or Poland,  including the value of the materials incorporated there. 

6.  The provisions of paragraphs 3 and 4 shall not apply to products which do not 
fulfil  the conditions  set  out  in the  list  in Annex II  or which  can be  considered 
sufficiently  worked  or processed  only if the general values fixed in Article 6(2) 
are applied. 

7.  The  provisions  of  paragraphs  3  and  4  shall  not  apply  to  products  coming 

under Chapters 50 to 63 of the Harmonised  System. 

8.  Any  working  or  processing  of  the  kind  covered  by  the  provisions  of  this 
Article  and  done  outside  the  Community  or  Poland  shall  be  done  under  the 
outward  processing arrangements, or similar arrangements." 

33 

4. 

5. 

6. 

7. 

8. 

9. 

In Articles  13,  14,  15,  17, 21, 27, 30  and 32 the phrase "referred 4Q .in* Article 4" 
shall be replaced by "referred to in Articles 3 and 4". 

v  * 

In  the  last  paragraph  of  Article  15(6)  the  date  "31  December  1998"  shall  be 
replaced by "31 December 2000". 

In Article 26 the reference "C2/CP3" shall be replaced by "CN22/CN23". 

In  Annex  I,  Note  5.2,  "current  conducting filaments" shall  be  added  between 
"artificial  man-made  filaments"  and  "synthetic  man-made  staple  fibres  of 
polypropylene". 

In Annex I, Note 5.2 the fifth example ("A carpet with tufts  . ..  are met.") shall be 
deleted. 

In Annex II, between the rules for HS  headings 2202  and 2208  the following rule 
shall be inserted: 

HS 
Heading 
No 

(1) 

2207 

Description of product 

Working or processing of non-originating materials that 
confers originating status 

(2) 

(3) 

'  or 

(4) 

Undenatured ethyl 
alcohol of an alcoholic 
strength by volume of 
80% vol or higher; 
ethyl alcohol and other 
spirits, denatured, of any 
strength. 

Manufacture: 

- using materials not classified 
in headings 2207 or 2208 

J^r 

10. 

In Annex II, the rule for Chapter 57 shall be replaced by: 

Chapter 
57 

Carpets and other textile 
floor  coverings: 

- Of needleloom  felt 

Manufacture  from  (1): 
- natural  fibres 
or 
- chemical  materials or textile pulp 

However: 
- polypropylene filament of 

heading 5402, 

- polypropylene fibres of heading 

5503 or 5506, 

- polypropylene filament tow of 
heading 5501, of which the 
denomination  in all cases of a 
single filament or fibre is less 
than  9 decitex, may be used 
provided their value does not 
exceed 40% of the ex-works 
price of the product 

- jute fabric  may be used  as 

backing 

Manufacture  from(l): 
- natural fibres  not carded or 

combed or otherwise processed 
for  spinning, 

or 
- chemical  materials or textile pulp 

Manufacture  from(l): 
- coir or jute yarn(a), 
- syndietic or artificial  filament  yam 
- natural fibres, or 
- man-made staple fibres  not 

carded or combed or otherwise 
processed for  spinning 

But jute fabric  may  be used  as 
backing 

Of other  felt 

OUier 

*a'  The use of jute yam  is authorised  from  1.7.2000. 

-T> 

11. 

In Annex II, the rule for HS heading 7006 shall be replaced by: 

7006 

Glass of headings 7003, 
7004 or 7005, bent, 
edgeworked, engraved, 
drilled, enamelled or 
otherwise worked, but 
not framed  or fitted  with 
other materials : 
- glass plate substrate 

coated with dielectric 
thin film, semi 
conductor  grade,in 
accordance with 
SEMII standards1 

- other 

Manufacture  from  materials 
(substrates) of heading 7006 

Manufacture  from  materials 
of heading 7001 

12. 

In Annex II, the rule for HS heading 7601 shall be replaced by: 

7601 

Unwrought  aluminium 

Manufacture  in which: 
-  all the materials used are 

classified  within a heading 
other than that of the 
product; and 

-  the value of all the 

materials used does not 
exceed 50 % of the ex-
works price of the product 

or 
Manufacture  by thermal or 
electrolytic treatment  from 
unalloyed aluminium  or 
waste and scrap of 
aluminium 

13. 

The following  is added after Annex IV: 

"Annex V 

List of products originating in Turkey 
to which the provisions of Articles 3 and 4 do not apply, 
listed in the order of HS Chapters and Headings 

Chapter 1 

SEMIl- Semiconductor  Equipment  and Materials  Institute  Incorporated. 

3C 

Chapter 2 

Chapter 3 

0401 to 0402 

ex 0403 - 

0404 to 0410 

0504 

0511 

Chapter 6 

0701 to 0709 

ex 0710 - 
ex 0 7 1 1- 

0712 to 0714 

Chapter 8 

Buttermilk,  curdled  milk  and  cream,  yoghurt,  képhir  and  other  fermented 
or  acidified  milk  and  cream,  whether  or  not  concentrated  or  containing 
added  sugar  or  other  sweetening  matter or  flavoured  or  containing  added 
fruit  or cocoa 

Vegetables (uncooked  or cooked by steaming or boiling in water),  frozen 
Vegetables,  except  sweet  corn  of  heading  0711  90  30,  provisionally 
preserved  (for  example,  by  sulphur  dioxide  gas,  in brine,  in  sulphur  water 
or  in  other  preservative  solutions),  but  unsuitable  in  that  state  for 
immediate consumption 

ex Chapter 9 -  Coffee,  tea, and spices, excluding maté of heading 0903 

Chapter 10 

Chapter 11 

Chapter 12 

ex  1302 - 

Pectin 

1501tpl514 

ex  1515 - 

ex  1516- 

ex  1517 and 
ex  1518 - 

ex  1522- 

Chapter  16 

1701 

ex  1702- 

Other fixed vegetable  fats  and  oils  (excluding jojoba  oil  and  its  fractions) 
and their fractions,  whether or not refined, but not chemically  modified 

Animal  or  vegetable  fats  and  oils  and  their  fractions,  partly  or  wholly 
hydrogenated,  inter-esterified,  re-esterified  or  elaidinised,  whether  or  not 
refined,  but not further  prepared,  excluding hydrogenated  castor  oil known 
as 'opal-wax' 

Margarines, imitation lard and other prepared  edible fats 

Residues  resulting  from  the  treatment  of  fatty  substances  or  animal  or 
vegetable waxes, excluding degras 

Other  sugars,  including  chemically  pure  lactose,  maltose,  glucose  and 
fructose,  in  solid  form;  sugar  syrups  not  containing  added  flavouring  or 
colouring  matter;  artificial  honey,  whether  or  not  mixed  with  natural 
honey;  caramel  excluding  that  of  headings  1702  11  00,  1702  30  51, 
1702 30 59,  1702 50 00 and  1702 90 10 

3?-

1703 

1801 and 1802 

ex  1902 - 

ex 2 0 0 1- 

Pasta,  stuffed,  containing  more than 20% by  weight  of fish, crustaceans, 
molluscs or other aquatic invertebrates,  sausages  and the like or meat and 
meat offal of any kind, including fats of all kinds 

Cucumbers  and  gherkins,  onions,  mango  chutney,  fruit  of  the  genus 
Capsicum  other  than  sweet  peppers  or  pimentos,  mushrooms  and  olives, 
prepared or preserved by vinegar or acetic acid 

2002 and 2003 

ex 2004 - 

ex 2005 - 

Other vegetables prepared or preserved otherwise than by vinegar or acetic 
acid,  frozen,  other  than  products  of  heading  2006,  excluding  potatoes in 
the form of flour or meal and flakes of sweet corn 

Other vegetables prepared or preserved otherwise than by vinegar or acetic 
acid,  not  frozen,  other  than  products  of  heading  2006,  excluding  potato 
and sweet corn products 

2006 and 2007 

ex 2008 - 

2009 

Fruits,  nuts  and  other  edible  parts  of  plants,  otherwise  prepared  or 
preserved,  whether  or  not  containing  added  sugar  or  other  sweetening 
matter  or  spirit,  not  elsewhere  specified  or  included,  excluding  peanut 
butter, palm hearts, maize, yams, sweet potatoes and similar edible parts of 
plants containing  5% or more by weight of starch, vine leaves, hop shoots 
and other similar edible parts of plants 

ex 2106 - 

Flavoured and coloured sugars, syrups and molasses 

Undenatured  ethyl alcohol  of an alcoholic  strength by volume of 80% vol 
or higher obtained from agricultural produce listed here 

Undenatured  ethyl alcohol  of an alcoholic  strength by volume  of less than 
80% vol obtained from agricultural produce listed here. 

2204 

2206 

ex 2207 - 

ex 2208 - 

2209 

Chapter 23 

2401 

4501 

5301 and 5302 

3? 

That Decision shall enter into force on 1  January 1999. 

Article 2 

Done at 

For the Association Council 
The President 

31 

FINANCIAL  STATEMENT 

1- 

Budget heading: 

Chapter  12, Article  120 

2. 

3. 

Legal basis: 

Article  113 of the Treaty 

Titles of the agreements in question: 

Proposal for an amendment to the definition of the concept of "originating 
products" and the methods of administrative cooperation set out in Protocol 4 to 
the different Europe Agreements between the EC and the CEECs, the Baltic 
States and Slovenia and the Agreement on the European Economic Area, and in 
Protocol 3 to the free trade agreements between the EEC and the EFTA countries 

4. 

Purpose: 

To allow Central and Eastern European countries to continue applying flat rates 
where drawback is prohibited or exemption from customs duties is granted. 

To extend the system to industrial products originating in Turkey and simplify or 
correct certain rules, particularly those on determining which country is to be 
considered the originating country. 

5. 

Financial implications: 

As, for the purposes of industrial products, Turkey is already in a customs union 
with the Community and these products are therefore already zero rated when 
imported into the Community, and as the purpose of the amendments is essentially 
to facilitate trade or simplify administrative tasks, this proposal would not seem to 
have any major financial implications. 

Hà 

Proposal for a 

98/0257 (ACC) 

COUNCIL DECISION 

on a Community position on an amendment to Protocol 3 

on the definition of the concept of "originating products" 

and methods of administrative cooperation set out in 

the Europe Agreement between the 

European Communities and the Republic of Estonia 

THE COUNCIL OF THE EUROPEAN UNION, 

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

Having regard to Article 2(1) of the Council and Commission Decision of  19 December 
1997 on the conclusion of the Europe Agreement establishing an association between the 
European  Communities  and  their  Member  States,  of  the  one  part,  and  Estonia,  of  the 
other part, 

Having regard to the Commission proposal, 

Whereas  Article  38  of  Protocol  3  to  the  said  Europe  Agreement  provides  that  the 
Association Council may amend the provisions of the Protocol, 

HAS DECIDED: 

The position to be adopted by the Community within the Association Council created by 
virtue  of Article  109 of the Europe  Agreement  establishing  an association  between  the 
European  Communities  and their Member  States,  of the  one  part,  and  the  Republic of 
Estonia, of the other part, on an amendment to Protocol 3 on the definition of the concept 
of  "originating  products"  and  methods  of  administrative  cooperation  set  out  in  the 
Agreement  shall  be  based  on  the  draft  Association  Council  decision  annexed  to  this 
Decision. 

Done at Brussels, 

For the Council 
The President 

<* 

EUROPE  AGREEMENT 

establishing an association between the European  Communities  and their Member 

States, of the one part, and 

the Republic of Estonia, of the other part 

DRAFT 

Decision No . . . / ..  of the Association  Council 

o f . .. 

amending Protocol 3 on the definition  of the concept of "originating products" and 
methods of administrative  cooperation 

THE ASSOCIATION  COUNCIL, 

Having regard to the Europe Agreement  establishing an association between the European 
Communities  and  their  Member  States,  of the  one  part,  and  the  Republic  of  Estonia,  of 
the other part,  signed in Brussels on  12 June  1995 and in particular Article 38 of Protocol 
4 thereof, 

Whereas the definition  of the term "originating  products"  needs to be amended  to  ensure 
the  proper  operation  of  the  extended  system  of  cumulation  which  permits  the  use  of 
materials  originating  in the European  Community,  Poland,  Hungary,  the  Czech Republic, 
the  Slovak  Republic,  Bulgaria,  Romania,  Latvia,  Lithuania,  Estonia,  Slovenia,  the 
European  Economic  Area  (hereinafter  referred  to  as  the  EEA),  Iceland,  Norway  and 
Switzerland; 

Whereas  it  would  seem  advisable  to  maintain  in  operation  until  31  December  2000  the 
system of flat  rate charges provided for  in Article  15 in connection with the prohibition of 
drawback and exemption from customs duty; 

Whereas,  in view  of the  particular  arrangement  on  industrial  products  obtaining  between 
the Community and Turkey, it would  also be appropriate to extend the cumulation  system 
to such products originating in Turkey; 

Whereas  to  facilitate  trade  and  simplify  administrative  tasks  it  would  be  desirable  to 
amend the wording of Articles 3, 4 and  12; 

Whereas,  to  take  account  of  changes  in  processing  techniques  and  shortages  of  certain 
raw  materials,  some  corrections  must  be  made  to  the  list  of  working  and  processing 
requirements  which  non-originating  materials  have  to  fulfil  to  qualify  for  originating 
status, 

HAS DECIDED AS FOLLOWS: 

Article 1 

Protocol  3  on  the  definition  of  the  concept  of  "originating  products"  and  methods  of 
administrative cooperation is hereby amended as follows: 

<a 

1. 

Article  l(i) shall be replaced by: 

"(i) 

'added  value'  shall  be  taken  to  be the  ex-works price  minus  the  customs 
value  of  each  of  the  materials  incorporated  which  originate  in  the  other 
countries referred to in Articles 3 and 4 or, where the customs value is not 
known  or  cannot  be  ascertained,  the  first  price  verifiably  paid  for  the 
products in the Community or Estonia." 

2. 

Articles 3 and 4 shall be replaced by: 

Article 3 

Cumulation  in the European  Community 

1.  Without  prejudice  to  the  provisions  of  Article  2  paragraph  1,  products  shall  be 
considered  as  originating  in  the  Community  if  such  products  are  obtained  there, 
incorporating  materials  originating  in  the  Community,  Bulgaria,  Poland,  Hungary,  the 
Czech  Republic,  the  Slovak  Republic,  Romania,  Lithuania,  Latvia,  Estonia,  Slovenia, 
Iceland,  Norway,  Switzerland  (including  Liechtenstein)1  or  Turkey2  in  accordance  with 
the provisions of the Protocol  on rules of origin annexed to the Agreements between the 
Community and each of these countries, provided that the working  or processing  carried 
out in the Community goes  beyond  that referred to  in Article 7  of this Protocol.  It shall 
not be necessary that such materials have undergone sufficient working or processing. 

2. Where the working or processing carried out in the Community does not go beyond the 
operations referred to in Article 7,  the product obtained shall be considered  as originating 
in  the  Community  only  where  the  value  added  there  is  greater  than  the  value  of  the 
materials used originating in any one of the other countries referred to in paragraph  1.  If 
this is not so, the product obtained shall be considered as originating in the country which 
accounts  for  the  highest  value  of  originating  materials  used  in  the  manufacture  in  the 
Community. 

3.  Products,  originating  in one  of the countries referred to  in paragraph  1, which do  not 
undergo any working or processing in the Community,  retain their origin if exported into 
one of these countries. 

4.  The  cumulation  provided  for  in  this  Article  may  only  be  applied  to  materials  and 
products  which  have  acquired  originating  status  by  an  application  of  rules  of  origin 
identical to those given in this Protocol. 

The Community  shall provide Estonia,  through the European Commission with details of 
the Agreements and their corresponding  rules of origin, which are applied with the other 
countries  referred  to  in  paragraph  1.  The  European  Commission  shall  publish  in  the 
Official  Journal  of  the  European  Communities  (C  Series)  the  date  on  which  the 
cumulation,  provided  for  in  this  Article  may  be  applied  by  those  countries  listed  in 
paragraph 1  which have fulfilled  the necessary requirements. 

1  The Principality  of Liechtenstein has a customs union with Switzerland,  and is a Contracting Party  to 

the Agreement  on the European Economic Area. 

2  Cumulation as provided  for  in this Article  does  not  apply  to materials  originating  in  Turkey which 

are mentioned in the list at Annex  V to this Protocol. 

(43 

Article 4 

Cumulation  in Estonia 

1.  Without  prejudice  to  the  provisions  of  Article  2  paragraph  2,  products  shall  be 
considered  as  originating  in  Estonia  if  such  products  are  obtained  there,  incorporating 
materials originating  in the Community,  Bulgaria,  Poland, Hungary,  the  Czech Republic, 
the  Slovak  Republic,  Romania,  Lithuania,  Latvia,  Estonia,  Slovenia,  Iceland,  Norway, 
Switzerland  (including  Liechtenstein)1  or  Turkey2  in  accordance  with  the  provisions  of 
the Protocol  on rules of origin annexed to  the Agreements between Estonia  and each  of 
these  countries,  provided  that  the  working  or  processing  carried  out  in  Estonia  goes 
beyond  that referred  to  in Article  7  of  this Protocol.  It  shall  not  be  necessary that  such 
materials have undergone sufficient  working or processing. 

2.  Where  the  working  or  processing  carried  out  in  Estonia  does  not  go  beyond  the 
operations referred to in Article 7, the product obtained shall be considered as originating 
in Estonia only where the value added there is greater than the value of the materials used 
originating  in any one  of the other countries  referred to  in paragraph  1. If this is not so, 
the product obtained shall be considered  as originating in the country which accounts for 
the highest value of originating materials used in the manufacture in Estonia. 

3.  Products,  originating  in one  of the  countries referred  to  in paragraph  1, which do not 
undergo any working or processing  in Estonia,  retain their origin if exported  into one  of 
these countries. 

4.  The  cumulation  provided  for  in  this  Article  may  only  be. applied  to  materials  and 
products  which  have  acquired  originating  status  by  an  application  of  rules  of  origin 
identical to those given in this Protocol. 

Estonia  shall provide the Community,  through the European  Commission  with details  of 
the Agreements  and their corresponding  rules of origin, which are applied with the other 
countries  referred  to  in  paragraph  1.  The  European  Commission  shall  publish  in  the 
Official  Journal  of  the  European  Communities  (C  Series)  the  date  on  which  the 
cumulation,  provided  for  in  this  Article  may  be  applied  by  those  countries  listed  in 
paragraph 1  which have fulfilled  the necessary requirements. 

3. 

Article 12 shall be replaced by the following: 

"1.  Except as provided for in Article 2(1 )(c), Articles 3 and 4 and paragraph 3  of 
this Article,  the  conditions  for  acquiring  originating  status  set  out  in Title II 
must continue to be fulfilled  at all times in the Community or Estonia. 

2.  Except as provided for in Articles 3 and 4, where originating goods  exported 
from  the  Community  or  Estonia  to  another  country  return,  they  must  be 

1 

The Principality  of Liechtenstein  has a customs  union with Switzerland,  and is a Contracting Party  to 
the Agreement  on the European  Economic  Area. 

2  Cumulation  as provided for  in  this Article  does  not  apply  to  materials  originating  in  Turkey  which 

are mentioned  in the list at Annex  V to this  Protocol. 

Hi 

considered as non-originating, unless it can be demonstrated ta the -satisfaction 
of the customs authorities that: 

(a) 

the returning goods are the same as those that were exported; and 

(b) 

they  have not undergone  any operation beyond  that necessary to  preserve 
them in good condition while in that country or while being exported. 

3.  The acquisition of originating status in accordance with the conditions set out 
in Title  II  shall  not  be  affected  by  working  or  processing  done  outside  the 
Community or Estonia on materials exported from the Community or Estonia 
and subsequently reimported there, provided: 

(a) 

the said materials are wholly obtained in the Community or Estonia or have 
undergone working or processing  beyond the insufficient  operations  listed 
in Article 7 prior to being exported; and 

(b) 

it can be demonstrated to the satisfaction of the customs authorities that: 

i) 

ii) 

the reimported goods have been obtained by working or processing 
the exported materials; and 

the total added value acquired outside the Community or Estonia by 
applying the provisions  of this Article  does  not  exceed  10% of the 
ex-works  price  of  the  end  product  for  which  originating  status  is 
claimed. 

4.  For  the  purposes  of  paragraph  3,  the  conditions  for  acquiring  originating 
status set out in Title II shall not apply to working or processing done outside 
the Community or Estonia.  But where, in the list in Annex II, a rule setting a 
maximum value for all the non-originating materials incorporated is applied in 
determining  the originating  status  of  the  end  product,  the  total  value  of  the 
non-originating materials incorporated in the territory of the party concerned, 
taken together with the total  added value acquired outside the Community or 
Estonia by applying the provisions of this Article,  shall  not exceed  the stated 
percentage. 

5.  For  the  purposes  of  applying  the  provisions  of  paragraphs  3  and  4,  "total 
added value" shall be taken to  mean all  costs  arising  outside the  Community 
or Estonia, including the value of the materials incorporated there. 

6.  The provisions of paragraphs 3 and 4 shall not apply to products which do not 
fulfil  the conditions set out in the list in Annex II or which can be considered 
sufficiently  worked or processed only if the general values fixed in Article 6(2) 
are applied. 

7.  The  provisions  of  paragraphs  3  and  4  shall  not  apply  to  products  coming 

under Chapters 50 to 63 of the Harmonised System. 

8.  Any  working  or  processing  of  the  kind  covered  by  the  provisions  of  this 
Article  and done  outside  the  Community  or Estonia  shall  be  done under the 
outward processing arrangements, or similar arrangements." 

ff 

4. 

5. 

6. 

7. 

8. 

9. 

In Articles  13,  14,  15,  17, 21, 27, 30 and 32 the phrase "referred to  in Article 4" 
shall be replaced by "referred to in Articles 3 and 4". 

In  the  last  paragraph  of  Article  15(6)  the  date  "31  December  1998"  shall  be 
replaced by "31 December 2000". 

In Article 26 the reference "C2/CP3" shall be replaced by "CN22/CN23". 

In  Annex  I,  Note  5.2,  "current  conducting  filaments"  shall  be  added  between 
"artificial  man-made  filaments"  and  "synthetic  man-made  staple  fibres  of 
polypropylene". 

In Annex I, Note 5.2 the fifth example ("A carpet with tufts  . ..  are met.") shall be 
deleted. 

In Annex II, between the rules for HS headings 2202  and 2208  the following rule 
shall be inserted: 

HS 
Heading 
No 

(1) 

2207 

Description  of product 

Working or processing of non-originating materials that 
confers originating  status 

(2) 

(3) 

or 

(4) 

Undenatured ethyl 
alcohol of an  alcoholic 
strength by volume of 
80% vol or higher; 
ethyl alcohol and  other 
spirits, denatured,  of any 
strength. 

Manufacture: 

- using materials not  classified 
in headings 2207 or 2208 

H(, 

10. 

In  Annex  II, the  rule for  Chapter  57  shall be replaced  by: 

Chapter 
57 

Carpets and other textile 
floor coverings: 

- Of needleloom felt 

Manufacture from (1): 
- natural fibres 
or 
- chemical materials or textile pulp 

However: 
- polypropylene filament of 

heading 5402, 

- polypropylene fibres of heading 

5503 or 5506, 

- polypropylene filament tow of 
heading 5501, of which the 
denomination in all cases of a 
single filament or fibre is less 
than 9 decitex, may be used 
provided their value does not 
exceed 40% of the ex-works 
price of the product 

- jute fabric may be used as 

backing 

Manufacture  from(l): 
- natural fibres not carded or 

combed or otherwise processed 
for spinning, 

or 
- chemical materials or textile pulp 

Manufacture  from(l): 
- coir or jute yarn(a), 
- syndietic or artificial filament yarn 
- natural fibres, or 
- man-made staple fibres not 

carded or combed or otherwise 
processed for spinning 

But jute fabric may be used as 
backing 

-Of other felt 

-Other 

(a)  The use of jute yam is authorised from  1.7.2000. 

^ 

11. 

In Annex II, the rule for HS heading 7006 shall be replaced by: 

7006 

Glass of headings 7003, 
7004 or 7005, bent, 
edgeworked, engraved, 
drilled, enamelled or 
otherwise worked, but 
not framed or fitted with 
other materials : 
- glass plate substrate 

coated with dielectric 
thin film, semi 
conductor grade, in 
accordance with 
SEMII standards1 

- other 

Manufacture from materials 
(substrates) of heading 7006 

Manufacture from materials 
of heading 7001 

12. 

In Annex II, the rule for HS heading 7601 shall be replaced by: 

7601 

Unwrought aluminium  Manufacture in which: 

-  all the materials used are 

classified within a heading 
other than that of the 
product; and 

-  the value of all the 

materials used does not 
exceed 50 % of the ex-
works price of the product 

or 
Manufacture by thermal or 
electrolytic treatment from 
unalloyed aluminium or 
waste and scrap of 
aluminium 

13. 

The following  is added after Annex IV: 

"Annex V 

List of products originating in Turkey 
to which the provisions of Articles 3 and 4 do not apply, 
listed in the order of HS  Chapters and Headings 

Chapter 1 

SEMI I- Semiconductor Equipment and Materials Institute Incorporated. 

^ 

Chapter 2 

Chapter 3 

0401 to 0402 

ex 0403  -

0404 to 0410 

0504 

0511 

Chapter 6 

0701 to 0709 

ex 0710  -
ex  0 7 1 1-

0712 to 0714 

Chapter 8 

Buttermilk,  curdled  milk  and cream,  yoghurt,  képhir and  other  fermented 
or  acidified  milk  and  cream,  whether  or  not  concentrated  or  containing 
added  sugar or other  sweetening  matter or flavoured  or containing  added 
fruit or cocoa 

Vegetables (uncooked or cooked by steaming or boiling in water), frozen 
Vegetables,  except  sweet  corn  of  heading  0711  90  30,  provisionally 
preserved  (for  example,  by sulphur dioxide  gas,  in brine,  in sulphur water 
or  in  other  preservative  solutions),  but  unsuitable  in  that  state  for 
immediate consumption 

ex Chapter 9 -

Coffee,  tea, and spices, excluding maté of heading 0903 

Chapter 10 

Chapter 11 

Chapter 12 

ex  1302-

Pectin 

1501to!514 

ex  1515-

e x l 5 1 6-

ex  1517 and 
ex  1518-

ex  1522-

Chapter 16 

1701 

ex  1702-

Other fixed vegetable  fats  and oils  (excluding jojoba  oil  and  its  fractions) 
and their fractions, whether or not refined, but not chemically modified 

Animal  or  vegetable  fats  and  oils  and  their  fractions,  partly  or  wholly 
hydrogenated,  inter-esterified,  re-esterified  or  elaidinised,  whether  or  not 
refined, but not further prepared, excluding hydrogenated castor oil known 
as 'opal-wax' 

Margarines, imitation lard and other prepared edible fats 

Residues  resulting  from  the  treatment  of  fatty  substances  or  animal  or 
vegetable waxes, excluding degras 

Other  sugars,  including  chemically  pure  lactose,  maltose,  glucose  and 
fructose,  in  solid  form;  sugar  syrups  not  containing  added flavouring or 
colouring  matter;  artificial  honey,  whether  or  not  mixed  with  natural 
honey;  caramel  excluding  that  of  headings  1702  11  00,  1702  30  51, 
1702 30 59,  1702 50 00 and 1702 90 10 

HI 

1703 

1801 and 1802 

ex  1902 - 

ex 2001 - 

Pasta,  stuffed,  containing  more  than 20% by weight  of fish, crustaceans, 
molluscs or other aquatic invertebrates,  sausages  and the like or meat and 
meat offal  of any kind, including fats of all kinds 

Cucumbers  and  gherkins,  onions,  mango  chutney,  fruit  of  the  genus 
Capsicum  other  than  sweet  peppers  or  pimentos,  mushrooms  and  olives, 
prepared or preserved by vinegar or acetic acid 

2002 and 2003 

ex 2004 - 

ex 2005 - 

Other vegetables prepared or preserved otherwise than by vinegar or acetic 
acid,  frozen,  other  than  products  of  heading  2006,  excluding  potatoes  in 
the form of flour or meal and flakes of sweet corn 

Other vegetables prepared or preserved otherwise than by vinegar or acetic 
acid,  not  frozen,  other  than  products  of  heading  2006,  excluding  potato 
and sweet corn products 

2006 and 2007 

ex 2008 - 

2009 

Fruits,  nuts  and  other  edible  parts  of  plants,  otherwise  prepared  or 
preserved,  whether  or  not  containing  added  sugar  or  other  sweetening 
matter  or  spirit,  not  elsewhere  specified  or  included,  excluding  peanut 
butter, palm hearts, maize, yarns, sweet potatoes and similar edible parts of 
plants containing  5% or more by weight  of starch, vine leaves,  hop shoots 
and other similar edible parts of plants 

ex 2106 - 

Flavoured and coloured sugars, syrups and molasses 

Undenatured  ethyl  alcohol  of an alcoholic  strength by volume  of  80% vol 
or higher obtained from agricultural produce listed here 

Undenatured  ethyl  alcohol  of an alcoholic  strength by volume  of less than 
80% vol obtained from agricultural produce listed here. 

2204 

2206 

ex 2207 - 

ex 2208 - 

2209 

Chapter 23 

2401 

4501 

5301  and 5302 

9> 

That Decision shall enter into force on 1  January 1999. 

Article 2 

Done at 

For the Association Council 
The President 

57 

FINANCIAL  STATEMENT 

1. 

2. 

3. 

Budget heading: 

Chapter 12, Article 120 

Legal basis: 

Article  113 of the Treaty 

Titles of the agreements in question: 

Proposal for an amendment to the definition of the concept of "originating 
products" and the methods of administrative cooperation set out in Protocol 4 to 
the different Europe Agreements between the EC and the CEECs, the Baltic 
States and Slovenia and the Agreement on the European Economic Area, and in 
Protocol 3 to the free trade agreements between the EEC and the EFTA countries 

4. 

Purpose: 

To allow Central and Eastern European countries to continue applying flat rates 
where drawback is prohibited or exemption from customs duties is granted. 

To extend the system to industrial products originating in Turkey and simplify or 
correct certain rules, particularly those on determining which country is to be 
considered the originating country. 

5. 

Financial implications: 

As, for the purposes of industrial products, Turkey is already in a customs union 
with the Community and these products are therefore already zero rated when 
imported into the Community, and as the purpose of the amendments is essentially 
to facilitate trade or simplify administrative tasks, this proposal would not seem to 
have any major financial implications. 

fZ 

Proposal for a 

COUNCIL  DECISION 

98/ 0258 (ACC) 

on a Community  position on an amendment to Protocol 3 

on the definition  of the concept of ^'originating products" 

and methods of administrative cooperation set out in 

the Europe Agreement between the 

European  Communities  and the Republic of Latvia 

THE COUNCIL OF THE EUROPEAN UNION, 

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

Having regard to  Article 2(1)  of the Council  and Commission  Decision  of  19 December 
1997 on the conclusion of the Europe Agreement establishing  an association between the 
European  Communities  and their  Member  States,  of  the  one  part,  and  the  Republic  of 
Latvia, of the other part, 

Having regard to the Commission proposal, 

Whereas  Article  38  of  Protocol  3  to  the  said  Europe  Agreement  provides  that  the 
Association Council may amend the provisions of the Protocol, 

HAS DECIDED: 

The position to be adopted by the Community within the Association  Council  created by 
virtue  of  Article  110  of  the  Europe  Agreement  establishing  an association  between  the 
European  Communities  and their  Member  States,  of  the  one  part,  and  the  Republic  of 
Latvia, of the other part, on an amendment to Protocol  3 on the definition of the concept 
of  "originating  products"  and  methods  of  administrative  cooperation  set  out  in  the 
Agreement  shall  be  based  on  the  draft  Association  Council  decision  annexed  to  this 
Decision. 

Done at Brussels, 

For the Council 
The President 

f* 

EUROPE  AGREEMENT 

establishing an association  between the European Communities and their Member 

States, of the one part, and 

the Republic of Latvia, of the other part 

DRAFT 

Decision No . . . / ..  of the Association  Council 

o f . .. 

amending Protocol 3 on the definition  of the concept of "originating products" and 
methods of administrative  cooperation 

THE ASSOCIATION  COUNCIL, 

Having regard to the Europe Agreement  establishing an association between the European 
Communities and their Member  States, of the one part,  and the Republic of Latvia, of the 
other part,  signed  in Brussels  on  12 June  1995 and in particular  Article  38  of Protocol  3 
thereof, 

Whereas the definition  of the term "originating  products" needs to be amended  to  ensure 
the  proper  operation  of  the  extended  system  of  cumulation  which  permits  the  use  of 
materials originating  in the European  Community,  Poland,  Hungary, the  Czech Republic, 
the  Slovak  Republic,  Bulgaria,  Romania,  Latvia,  Lithuania,  Estonia,  Slovenia,  the 
European  Economic  Area  (hereinafter  referred  to  as  the  EEA),  Iceland,  Norway  and 
Switzerland; 

Whereas  it  would  seem  advisable  to  maintain  in  operation  until  31  December  2000  the 
system of flat rate charges provided  for  in Article  15 in connection with the prohibition  of 
drawback and exemption from  customs duty; 

Whereas, in view  of the  particular  arrangement  on  industrial  products  obtaining  between 
the Community and Turkey, it would  also be appropriate to extend the cumulation  system 
to such products originating in Turkey; 

Whereas  to  facilitate  trade  and  simplify  administrative  tasks  it  would  be  desirable  to 
amend the wording of Articles 3, 4 and  12; 

Whereas,  to  take  account  of  changes  in  processing  techniques  and  shortages  of  certain 
raw  materials,  some  corrections  must  be  made  to  the  list  of  working  and  processing 
requirements  which  non-originating  materials  have  to  fulfil  to  qualify  for  originating 
status, 

HAS DECIDED AS FOLLOWS: 

Article 1 

Protocol  3  on  the  definition  of  the  concept  of  "originating  products"  and  methods  of 
administrative cooperation  is hereby amended as follows: 

sy. 

1. 

Article  l(i) shall be replaced by: 

"(i) 

'added  value'  shall  be taken to  be  the  ex-works  price  minus the  customs 
value  of  each  of  the  materials  incorporated  which  originate  in  the  other 
countries referred to in Articles 3 and 4 or, where the customs value is not 
known  or  cannot  be  ascertained,  the  first  price  verifiably  paid  for  the 
products in the Community or Latvia." 

2. 

Articles 3 and 4 shall be replaced by: 

Article 3 

Cumulation in the European  Community 

1.  Without  prejudice  to  the  provisions  of  Article  2  paragraph  1,  products  shall  be 
considered  as  originating  in  the  Community  if  such  products  are  obtained  there, 
incorporating  materials  originating  in  the  Community,  Bulgaria,  Poland,  Hungary,  the 
Czech  Republic,  the  Slovak  Republic,  Romania,  Lithuania,  Latvia,  Estonia,  Slovenia, 
Iceland,  Norway,  Switzerland  (including  Liechtenstein)1  or  Turkey2  in accordance with 
the provisions of the Protocol  on rules of origin annexed to the Agreements between the 
Community and each of these countries, provided that the working  or processing carried 
out in the Community  goes beyond that referred to  in Article  7  of this Protocol.  It shall 
not be necessary that such materials have undergone sufficient  working or processing. 

2. Where the working or processing carried out in the Community does not go beyond the 
operations referred to in Article 7,  the product obtained shall be considered as originating 
in  the  Community  only  where  the  value  added  there  is  greater  than  the  value  of  the 
materials used originating in any one of the other countries referred to in paragraph  1.  If 
this is not so, the product obtained shall be considered as originating in the country which 
accounts  for  the  highest  value  of  originating  materials  used  in  the  manufacture  in  the 
Community. 

3.  Products,  originating  in one of the countries referred  to  in paragraph  1, which do not 
undergo any working or processing in the Community,  retain their origin if exported into 
one of these countries. 

4.  The  cumulation  provided  for  in  this  Article  may  only  be  applied  to  materials  and 
products  which  have  acquired  originating  status  by  an  application  of  rules  of  origin 
identical to those given in this Protocol. 

The  Community  shall  provide Latvia,  through the European  Commission with details  of 
the Agreements  and their corresponding rules of origin, which are applied with the other 
countries  referred  to  in  paragraph  1.  The  European  Commission  shall  publish  in  the 
Official  Journal  of  the  European  Communities  (C  Series)  the  date  on  which  the 
cumulation,  provided  for  in  this  Article  may  be  applied  by  those  countries  listed  in 
paragraph  1  which have fulfilled  the necessary requirements. 

1  The Principality  of Liechtenstein has a customs union with Switzerland, and is a Contracting Party  to 

the Agreement  on the European Economic Area. 

Cumulation as provided for  in this Article  does  not  apply  to  materials  originating  in  Turkey which 
are mentioned in the list at Annex V to this Protocol. 

Ç* 

Article 4 

Cumulation  in Latvia 

1.  Without  prejudice  to  the  provisions  of  Article  2  paragraph  2,  products  shall  be 
considered  as  originating  in  Latvia  if  such  products  are  obtained  there,  incorporating 
materials originating  in the Community,  Bulgaria,  Poland, Hungary,  the  Czech Republic, 
the  Slovak  Republic,  Romania,  Lithuania,  Latvia,  Estonia,  Slovenia,  Iceland,  Norway, 
Switzerland  (including  Liechtenstein)1  or Turkey2  in accordance  with  the  provisions  of 
the Protocol  on  rules  of  origin  annexed  to  the  Agreements  between  Latvia  and  each  of 
these  countries,  provided  that  the  working  or  processing  carried  out  in  Latvia  goes 
beyond that  referred  to  in Article  7  of  this Protocol.  It  shall  not  be  necessary  that  such 
materials have undergone sufficient  working or processing. 

2.  Where  the  working  or  processing  carried  out  in  Latvia  does  not  go  beyond  the 
operations referred to in Article 7, the product obtained shall be considered as originating 
in Latvia only where the value added there is greater than the value of the materials used 
originating in any one  of the other countries referred to  in paragraph  1.  If this is  not so, 
the product obtained  shall be considered  as originating in the country which accounts for 
the highest value of originating materials used in the manufacture in Latvia. 

3.  Products,  originating  in one  of the countries referred  to  in paragraph  1, which  do  not 
undergo  any working  or processing  in Latvia,  retain their  origin  if  exported  into  one  of 
these countries. 

4.  The  cumulation  provided  for  in  this  Article  may  only  be. applied  to  materials  and 
products  which  have  acquired  originating  status  by  an  application  of  rules  of  origin 
identical to those given in this Protocol. 

Latvia  shall  provide  the  Community,  through  the  European  Commission  with  details  of 
the Agreements and their corresponding  rules of origin, which are applied with the other 
countries  referred  to  in  paragraph  1.  The  European  Commission  shall  publish  in  the 
Official  Journal  of  the  European  Communities  (C  Series)  the  date  on  which  the 
cumulation,  provided  for  in  this  Article  may  be  applied  by  those  countries  listed  in 
paragraph 1  which have fulfilled  the necessary requirements. 

3. 

Article  12 shall be replaced by the following: 

"1.  Except as provided for in Article 2(1 )(c), Articles 3 and 4 and paragraph 3  of 
this  Article,  the  conditions  for acquiring  originating  status  set  out  in Title II 
must continue to be fulfilled  at all times in the Community or Latvia. 

2.  Except  as provided for in Articles 3 and 4, where originating goods  exported 
from  the  Community  or  Latvia  to  another  country  return,  they  must  be 

1  The Principality  of Liechtenstein has a customs union with Switzerland,  and is a Contracting Party  to 

the Agreement  on the European Economic Area. 

2  Cumulation as provided  for  in this Article  does  not  apply  to materials  originating  in  Turkey which 

are mentioned in the list at Annex V to this Protocol. 

^ 

considered as non-originating, unless it can be demonstrated to the-satisfaction 
of the customs authorities that: 

(a) 

the returning goods are the same as those that were exported; and 

(b) 

they have not undergone  any operation beyond that necessary  to  preserve 
them in good condition while in that country or while being exported. 

3.  The acquisition of originating status in accordance with the conditions set out 
in  Title  II  shall  not  be  affected  by  working  or  processing  done  outside  the 
Community  or Latvia  on  materials  exported  from  the  Community  or Latvia 
and subsequently reimported there, provided: 

(a) 

the said materials are wholly obtained in the Community or Latvia or have 
undergone working  or processing beyond the insufficient  operations listed 
in Article 7 prior to being exported; and 

(b) 

it can be demonstrated to the satisfaction of the customs authorities that: 

i) 

ii) 

the reimported goods have been obtained by working or processing 
the exported materials; and 

the total added value acquired outside the Community or Latvia by 
applying the provisions  of this Article does not  exceed  10% of the 
ex-works  price  of  the  end  product  for  which  originating  status  is 
claimed. 

4.  For  the  purposes  of  paragraph  3,  the  conditions  for  acquiring  originating 
status set out in Title II shall not apply to working or processing done outside 
the Community or Latvia.  But where, in the list in Annex II, a rule setting a 
maximum value for all the non-originating materials incorporated is applied in 
determining  the  originating  status  of  the  end  product,  the  total  value  of  the 
non-originating materials incorporated in the territory of the party concerned, 
taken together with the total  added value acquired outside the Community or 
Latvia by applying  the  provisions  of  this  Article,  shall  not  exceed  the  stated 
percentage. 

5.  For  the  purposes  of  applying  the  provisions  of  paragraphs  3  and  4,  "total 
added value" shall be taken to  mean all  costs  arising  outside  the Community 
or Latvia, including the value of the materials incorporated there. 

6.  The provisions of paragraphs 3 and 4 shall not apply to products which do not 
fulfil  the conditions set out in the list in Annex II or which can be considered 
sufficiently  worked or processed only if the general values fixed in Article 6(2) 
are applied. 

7.  The  provisions  of  paragraphs  3  and  4  shall  not  apply  to  products  coming 

under Chapters 50 to 63 of the Harmonised System. 

8.  Any  working  or  processing  of  the  kind  covered  by  the  provisions  of  this 
Article  and  done  outside  the  Community  or Latvia  shall  be  done  under  the 
outward processing arrangements, or similar arrangements." 

f> 

4. 

5. 

6. 

7. 

8. 

9. 

In Articles  13,  14,  15,  17, 21, 27,  30 and 32 the phrase "referred-to*irr Article 4" 
shall be replaced by "referred to in Articles 3 and 4". 

In  the  last  paragraph  of  Article  15(6)  the  date  "31  December  1998"  shall  be 
replaced by "31 December 2000". 

In Article 26 the reference "C2/CP3" shall be replaced by "CN22/CN23". 

In  Annex  I,  Note  5.2,  "current  conducting filaments" shall  be  added  between 
"artificial  man-made  filaments"  and  "synthetic  man-made  staple  fibres  of 
polypropylene". 

In Annex I, Note 5.2 the fifth example ("A carpet with tufts  . ..  are met.") shall be 
deleted. 

In Annex II, between the rules for HS headings 2202  and 2208  the following rule 
shall be inserted: 

HS 
Heading 
No 

(1) 

2207 

Description of product 

Working or processing of non-originating materials that 
confers originating status 

(2) 

(3) 

or 

(4) 

Undenatured ethyl 
alcohol of an alcoholic 
strength by volume of 
80% vol or higher; 
ethyl alcohol and odier 
spirits, denatured, of any 
strength. 

Manufacture: 

- using materials not classified 
in headings 2207 or 2208 

# 

10. 

In Annex II, the rule for Chapter 57 shall be replaced by: 

Chapter 
57 

Carpets and other textile 
floor  coverings: 

-Ofneedleloomfelt 

Manufacture from (1): 
- natural fibres 
or 
- chemical materials or textile pulp 

However: 
- polypropylene filament of 

heading 5402, 

- polypropylene fibres of heading 

5503 or 5506, 

- polypropylene filament tow of 
heading 5501, of which the 
denomination in all cases of a 
single filament or fibre is less 
than 9 decitex, may be used 
provided their value does not 
exceed 40% of the ex-works 
price of the product 

- jute fabric may be used as 

backing 

Manufacture  from(l): 
- natural fibres not carded or 

combed or otherwise processed 
for spinning, 

or 
- chemical materials or textile pulp 

Manufacture  from(l): 
- coir or jute yarn(a), 
- synthetic or artificial filament yam 
- natural fibres, or 
- man-made staple fibres not 

carded or combed or otherwise 
processed for spinning 

But jute fabric  may be used as 
backing 

Ofodierfelt 

-Other 

(a)  The use of jute yam is authorised from 1.7.2000. 

n 

11. 

In Annex II, the rule for HS heading 7006 shall be replaced by: 

7006 

Glass of headings 7003, 
7004 or 7005, bent, 
edgeworked, engraved, 
drilled, enamelled or 
otherwise worked, but 
not framed or fitted with 
other materials: 
- glass plate substrate 

coated with dielectric 
thin film, semi 
conductor grade, in 
accordance with 
SEMII standards1 

- other 

Manufacture from materials 
(substrates) of heading 7006 

Manufacture from materials 
of heading 7001 

12. 

In Annex II, the rule for HS heading 7601 shall be replaced by: 

7601 

Unwrought aluminium  Manufacture in which: 

-  all the materials used are 

classified within a heading 
other than that of the 
product; and 

-  the value of all the 

materials used does not 
exceed 50 % of the ex-
works price of the product 

or 
Manufacture by thermal or 
electrolytic treatment from 
unalloyed aluminium or 
waste and scrap of 
aluminium 

• 

13. 

The following is added after Annex IV: 

"Annex V 

List of products originating in Turkey 
to which the provisions of Articles 3 and 4 do not apply, 
listed in the order of HS Chapters and Headings 

Chapter 1 

SEMII- Semiconductor Equipment and Materials Institute Incorporated. 

£o 

Chapter 2 

Chapter 3 

0401 to 0402 

ex 0403 - 

0404 to 0410 

0504 

0511 

Chapter 6 

0701 to 0709 

ex 0710 - 
ex 0 7 1 1- 

0712 to 0714 

Chapter 8 

Buttermilk,  curdled  milk  and cream, yoghurt,  képhir and other  fermented 
or  acidified  milk  and  cream,  whether  or  not  concentrated  or  containing 
added  sugar or other  sweetening  matter or flavoured  or containing  added 
fruit or cocoa 

Vegetables (uncooked or cooked by steaming or boiling in water), frozen 
Vegetables,  except  sweet  corn  of  heading  0711  90  30,  provisionally 
preserved  (for  example,  by sulphur dioxide  gas,  in brine,  in  sulphur water 
or  in  other  preservative  solutions),  but  unsuitable  in  that  state  for 
immediate consumption 

ex Chapter 9 -  Coffee,  tea, and spices, excluding maté of heading 0903 

Chapter 10 

Chapter 11 

Chapter 12 

ex  1302 - 

Pectin 

1501tol514 

ex  1515 - 

ex 1516- 

ex 1517 and 
ex  1518 - 

ex 1522- 

Chapter 16 

1701 

ex  1702- 

Other fixed vegetable  fats  and oils  (excluding jojoba  oil  and its  fractions) 
and their fractions, whether or not refined, but not chemically modified 

Animal  or  vegetable  fats  and  oils  and  their  fractions,  partly  or  wholly 
hydrogenated,  inter-esterified,  re-esterified  or  elaidinised,  whether  or  not 
refined, but not further prepared, excluding hydrogenated castor oil known 
as 'opal-wax' 

Margarines, imitation lard and other prepared edible fats 

Residues  resulting  from  the  treatment  of  fatty  substances  or  animal  or 
vegetable waxes, excluding degras 

Other  sugars,  including  chemically  pure  lactose,  maltose,  glucose  and 
fructose,  in  solid  form;  sugar  syrups  not  containing  added  flavouring  or 
colouring  matter;  artificial  honey,  whether  or  not  mixed  with  natural 
honey;  caramel  excluding  that  of  headings  1702  11  00,  1702  30  51, 
1702 30 59,  1702 50 00 and 1702 90 10 

1er 

1703 

1801 and 1802 

ex  1902 - 

ex 2 0 0 1- 

Pasta,  stuffed,  containing  more  than  20% by  weight  of fish, crustaceans, 
molluscs or other aquatic invertebrates,  sausages  and the like or meat and 
meat offal  of any kind, including fats of all kinds 

Cucumbers  and  gherkins,  onions,  mango  chutney,  fruit  of  the  genus 
Capsicum  other  than  sweet  peppers  or  pimentos,  mushrooms  and  olives, 
prepared or preserved by vinegar or acetic acid 

2002 and 2003 

ex 2004 - 

ex 2005 - 

Other vegetables prepared or preserved otherwise than by vinegar or acetic 
acid,  frozen,  other  than  products  of  heading  2006,  excluding  potatoes  in 
the form of flour or meal and flakes of sweet corn 

Other vegetables prepared or preserved otherwise than by vinegar or acetic 
acid,  not  frozen,  other  than  products  of  heading  2006,  excluding  potato 
and sweet corn products 

2006 and 2007 

ex 2008 - 

2009 

Fruits,  nuts  and  other  edible  parts  of  plants,  otherwise  prepared  or 
preserved,  whether  or  not  containing  added  sugar  or  other  sweetening 
matter  or  spirit,  not  elsewhere  specified  or  included,  excluding  peanut 
butter, palm hearts, maize, yams, sweet potatoes and similar edible parts of 
plants containing  5% or more by weight  of starch, vine leaves, hop shoots 
and other similar edible parts of plants 

ex 2106 - 

Flavoured and coloured sugars, syrups and molasses 

Undenatured  ethyl  alcohol  of an alcoholic  strength by volume  of 80% vol 
or higher obtained from agricultural produce listed here 

Undenatured  ethyl  alcohol  of an alcoholic  strength by volume of less than 
80% vol obtained from agricultural produce listed here. 

2204 

2206 

ex 2207 - 

ex 2208 - 

2209 

Chapter 23 

2401 

4501 

5301 and 5302 

bi. 

That Decision shall enter into force on 1  January 1999. 

Article 2 

Done at 

For the Association Council 
The President 

(*3 

FINANCIAL  STATEMENT 

1. 

2. 

3. 

Budget heading: 

Chapter  12, Article 120 

Legal basis: 

Article  113 of the Treaty 

Titles of the agreements in question: 

Proposal for an amendment to the definition of the concept of "originating 
products" and the methods of administrative cooperation set out in Protocol 4 to 
the different Europe Agreements between the EC and the CEECs, the Baltic 
States and Slovenia and the Agreement on the European Economic Area, and in 
Protocol 3 to the free trade agreements between the EEC and the EFTA countries 

4. 

Purpose: 

To allow Central and Eastern European countries to continue applying flat rates 
where drawback is prohibited or exemption from customs duties is granted. 

To extend the system to industrial products originating in Turkey and simplify or 
correct certain rules, particularly those on determining which country is to be 
considered the originating country. 

5. 

Financial implications: 

As, for the purposes of industrial products, Turkey is already in a customs union 
with the Community and these products are therefore already zero rated when 
imported into the Community, and as the purpose of the amendments is essentially 
to facilitate trade or simplify administrative tasks, this proposal would not seem to 
have any major financial implications. 

hi 

Proposal for a 

98/0259  (ACQ 

COUNCIL  DECISION 

on a Community position  on an amendment  to Protocol 3 

on the definition  of the concept of "originating products" 

and methods of administrative cooperation  set out in 

the Europe Agreement  between the 

European  Communities and the Republic of Lithuania 

THE COUNCIL OF THE EUROPEAN UNION, 

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

Having regard  to  Article 2(1)  of the Council  and Commission Decision  of  19 December 
1997 on the conclusion of the Europe Agreement establishing  an association between the 
European  Communities  and  their Member  States,  of  the  one  part,  and  the  Republic  of 
Lithuania, of the other part, 

Having regard to the Commission proposal, 

Whereas  Article  38  of  Protocol  3  to  the  said  Europe  Agreement  provides  that  the 
Association Council may amend the provisions of the Protocol, 

HAS DECIDED: 

The position to be adopted by the Community within the Association  Council  created by 
virtue  of  Article  111  of  the  Europe  Agreement  establishing  an  association  between  the 
European  Communities  and their Member  States,  of  the  one  part,  and  the  Republic  of 
Lithuania,  of  the  other  part,  on  an  amendment  to  Protocol  3  on  the  definition  of  the 
concept  of  "originating  products" and  methods  of  administrative  cooperation  set  out  in 
the  Agreement  shall  be based  on the  draft  Association  Council  decision  annexed  to  this 
Decision. 

Done at Brussels, 

For the Council 
The President 

fa 

EUROPE  AGREEMENT 

establishing an association  between  the European  Communities and their Member 
States, of the one part, and 

n 

the Republic of Lithuania, of the other part 

DRAFT 

Decision  No . . . / ..  of the Association  Council 

o f . .. 

amending Protocol 3 on the definition  of the concept of "originating products" and 
methods of administrative  cooperation 

THE ASSOCIATION  COUNCIL, 

Having regard to the Europe Agreement  establishing an association between the European 
Communities and their Member  States,  of the  one part,  and  the  Republic of Lithuania,  of 
the other part,  signed  in Brussels on  12 June  1995 and in particular  Article 38 of Protocol 
3 thereof, 

Whereas the definition  of the term "originating  products"  needs to  be  amended to  ensure 
the  proper  operation  of  the  extended  system  of  cumulation  which  permits  the  use  of 
materials  originating  in the European  Community,  Poland,  Hungary,  the  Czech Republic, 
the  Slovak  Republic,  Bulgaria,  Romania,  Latvia,  Lithuania,  Estonia,  Slovenia,  the 
European  Economic  Area  (hereinafter  referred  to  as  the  EEA),  Iceland,  Norway  and 
Switzerland; 

Whereas  it  would  seem  advisable  to  maintain  in  operation  until  31  December  2000  the 
system of flat rate charges provided  for  in Article  15 in connection  with the prohibition  of 
drawback and exemption from  customs duty; 

Whereas,  in view  of the  particular  arrangement  on  industrial  products  obtaining  between 
the Community and Turkey, it would  also be appropriate to  extend the cumulation  system 
to such products originating in Turkey; 

Whereas  to  facilitate  trade  and  simplify  administrative  tasks  it  would  be  desirable  to 
amend the wording of Articles 3, 4 and  12; 

Whereas,  to  take  account  of  changes  in  processing  techniques  and  shortages  of  certain 
raw  materials,  some  corrections  must  be  made  to  the  list  of  working  and  processing 
requirements  which  non-originating  materials  have  to  fulfil  to  qualify  for  originating 
status, 

HAS DECIDED AS FOLLOWS : 

Article 1 

Protocol  3  on  the  definition  of  the  concept  of  "originating  products"  and  methods  of 
administrative cooperation is hereby amended  as follows: 

&& 

1. 

Article  l(i) shall be replaced by: 

"(i) 

'added  value'  shall  be  taken to  be the  ex-works  price  minus  the  customs 
value  of  each  of  the  materials  incorporated  which  originate  in  the  other 
countries referred to in Articles 3 and 4 or, where the customs value is not 
known  or  cannot  be  ascertained,  the  first  price  verifiably  paid  for  the 
products in the Community or LithuaiÉia." 

2. 

Articles 3 and 4 shall be replaced by: 

Article 3 

Cumulation in the European  Community 

1.  Without  prejudice  to  the  provisions  of  Article  2  paragraph  1,  products  shall  be 
considered  as  originating  in  the  Community  if  such  products  are  obtained  there, 
incorporating  materials  originating  in  the  Community,  Bulgaria,  Poland,  Hungary,  the 
Czech  Republic,  the  Slovak  Republic,  Romania,  Lithuania,  Latvia,  Estonia,  Slovenia, 
Iceland,  Norway,  Switzerland  (including  Liechtenstein)1  or  Turkey2  in  accordance  with 
the provisions of the Protocol  on rules of origin annexed to the Agreements between the 
Community and each of these countries, provided that the working  or processing  carried 
out in the Community goes  beyond  that referred  to  in Article  7  of this Protocol.  It shall 
not be necessary that such materials have undergone sufficient  working or processing. 

2. Where the working or processing carried out in the Community does not go beyond the 
operations referred to in Article 7, the product obtained shall be considered as originating 
in  the  Community  only  where  the  value  added  there  is  greater  than  the  value  of  the 
materials used originating in any one of the other countries referred to in paragraph  1.  If 
this is not so, the product obtained shall be considered as originating in the country which 
accounts  for  the  highest  value  of  originating  materials  used  in  the  manufacture  in  the 
Community. 

3.  Products,  originating  in one of the countries referred to  in paragraph  1, which do not 
undergo any working or processing in the Community,  retain their origin if exported into 
one of these countries. 

4.  The  cumulation  provided  for  in  this  Article  may  only  be  applied  to  materials  and 
products  which  have  acquired  originating  status  by  an  application  of  rules  of  origin 
identical to those given in this Protocol. 

The Community  shall  provide Lithuania,  through the European  Commission  with  details 
of  the  Agreements  and  their  corresponding  rules  of  origin,  which  are  applied  with  the 
other countries referred to in paragraph  1. The European Commission shall publish in the 
Official  Journal  of  the  European  Communities  (C  Series)  the  date  on  which  the 
cumulation,  provided  for  in  this  Article  may  be  applied  by  those  countries  listed  in 
paragraph  1  which have fulfilled  the necessary requirements. 

l 

The Principality  of Liechtenstein  has a customs union with Switzerland,  and is a Contracting  Party to 
the Agreement  on the European  Economic Area. 

2  Cumulation as provided  for  in this Article  does not  apply  to materials  originating  in  Turkey  which 

are mentioned in the list at Annex  V to this Protocol. 

OP-

Article 4 

Cumulation  in Lithuania 

1.  Without  prejudice  to  the  provisions  of  Article  2  paragraph  2,  products  shall  be 
considered  as  originating  in Lithuania  if such products  are obtained  there,  incorporating 
materials originating  in the Community,  Bulgaria,  Poland, Hungary,  the  Czech Republic, 
the  Slovak  Republic,  Romania,  Lithuania,  Latvia,  Estonia,  Slovenia,  Iceland,  Norway, 
Switzerland  (including  Liechtenstein)1  or  Turkey2  in  accordance  with  the  provisions  of 
the Protocol  on rules of origin annexed to the Agreements between Lithuania and each of 
these  countries,  provided  that  the  working  or  processing  carried  out  in Lithuania  goes 
beyond  that  referred  to  in Article  7  of  this Protocol.  It  shall  not  be  necessary  that  such 
materials have undergone sufficient  working or processing. 

2.  Where  the  working  or  processing  carried  out  in  Lithuania  does  not  go  beyond  the 
operations referred to in Article 7,  the product obtained shall be considered as originating 
in Lithuania  only where  the value  added  there  is  greater than the  value  of the  materials 
used originating in any one of the other countries referred to in paragraph  1. If this is not 
so, the product obtained  shall be considered  as originating in the country which accounts 
for the highest value of originating materials used in the manufacture in Lithuania. 

3.  Products,  originating  in one  of the  countries referred  to  in paragraph  1, which do  not 
undergo any working or processing in Lithuania, retain their origin if exported into one of 
these countries. 

4.  The  cumulation  provided  for  in  this  Article  may  only  be  applied  to  materials  and 
products  which  have  acquired  originating  status  by  an  application  of  rules  of  origin 
identical to those given in this Protocol. 

Lithuania shall provide the Community, through the European Commission with details of 
the Agreements and their corresponding  rules of origin, which are applied with the other 
countries  referred  to  in  paragraph  1.  The  European  Commission  shall  publish  in  the 
Official  Journal  of  the  European  Communities  (C  Series)  the  date  on  which  the 
cumulation,  provided  for  in  this  Article  may. be  applied  by  those  countries  listed  in 
paragraph 1  which have fulfilled the necessary requirements. 

3. 

Article  12 shall be replaced by the following: 

"1.  Except as provided for in Article 2(1 )(c), Articles 3 and 4 and paragraph 3  of 
this  Article,  the  conditions  for  acquiring  originating  status  set  out  in Title II 
must continue to be fulfilled  at all times in the Community or Lithuania. 

2.  Except as provided for in Articles 3 and 4, where originating goods  exported 
from  the  Community  or  Lithuania  to  another  country  return,  they  must  be 

1 

The Principality  of Liechtenstein  has a customs union with Switzerland, and is a Contracting  Party  to 
the Agreement  on the European  Economic  Area. 

2  Cumulation  as provided  for  in  this Article  does  not  apply  to materials  originating  in  Turkey  which 

are mentioned  in the list at Annex  V to this Protocol. 

G>J> 

considered as non-originating, unless it can be demonstrafed to-the-satisfaction 
of the customs authorities that: 

(a) 

the returning goods are the same as those that were exported; and 

(b) 

they have not undergone  any operation beyond that necessary to  preserve 
them in good condition while in that country or while being exported. 

3.  The acquisition of originating status in accordance with the conditions set out 
in Title  II  shall  not  be  affected  by  working  or  processing  done  outside  the 
Community  or  Lithuania  on  materials  exported  from  the  Community  or 
Lithuania and subsequently reimported there, provided: 

(a) 

the  said  materials  are  wholly  obtained  in the  Community  or Lithuania  or 
have undergone  working  or  processing  beyond  the  insufficient  operations 
listed in Article 7 prior to being exported; and 

(b) 

it can be demonstrated to the satisfaction of the customs authorities that: 

i) 

ii) 

the reimported goods have been obtained by working or processing 
the exported materials; and 

the total added value acquired outside the Community or Lithuania 
by applying the  provisions  of this Article  does  not  exceed  10% of 
the ex-works price of the end product for which originating status is 
claimed. 

4.  For  the  purposes  of  paragraph  3,  the  conditions  for  acquiring  originating 
status set out in Title II shall not apply to working or processing done outside 
the Community or Lithuania.  But where, in the list in Annex II, a rule setting 
a maximum value for all the non-originating  materials incorporated  is applied 
in determining the originating status of the end product, the total  value of the 
non-originating materials incorporated in the territory of the party concerned, 
taken together with the total  added value acquired outside the Community or 
Lithuania by applying the provisions of this Article, shall not exceed the stated 
percentage. 

5.  For  the  purposes  of  applying  the  provisions  of  paragraphs  3  and  4,  "total 
added value" shall be taken to  mean all  costs  arising  outside  the  Community 
or Lithuania, including the value of the materials incorporated there. 

6.  The provisions of paragraphs 3 and 4 shall not apply to products which do not 
fulfil  the conditions set out in the list in Annex II or which can be considered 
sufficiently  worked or processed only if the general values fixed in Article 6(2) 
are applied. 

7.  The  provisions  of  paragraphs  3  and  4  shall  not  apply  to  products  coming 

under Chapters 50 to 63 of the Harmonised System. 

8.  Any  working  or  processing  of  the  kind  covered  by  the  provisions  of  this 
Article and done outside the Community or Lithuania shall be done under the 
outward processing arrangements, or similar arrangements." 

&j 

4. 

5. 

6. 

7. 

8. 

9. 

In Articles  13,  14,  15,  17, 21, 27,  30 and 32 the phrase "referred <to, in -Article 4" 
shall be replaced by "referred to in Articles 3 and 4". 

In  the  last  paragraph  of  Article  15(6)  the  date  "31  December  1998"  shall  be 
replaced by "31 December 2000". 

In Article 26 the reference "C2/CP3" shall be replaced by "CN22/CN23". 

In  Annex  I,  Note  5.2,  "current  conducting filaments" shall  be  added  between 
"artificial  man-made  filaments"  and  "synthetic  man-made  staple  fibres  of 
polypropylene". 

In Annex I, Note 5.2 the fifth example ("A carpet with tufts  . ..  are met.") shall be 
deleted. 

In Annex II, between the rules for HS headings 2202  and 2208 the following  rule 
shall be inserted: 

HS 
Heading 
No 

(1) 

2207 

Description of product 

Working or processing of non-originating materials that 
confers originating status 

(2) 

(3) 

or 

(4) 

Undenatured ethyl 
alcohol of an alcoholic 
strength by volume of 
80% vol or higher; 
ethyl alcohol and other 
spirits, denatured, of any 
strength. 

Manufacture: 

- using materials not classified 
in headings 2207 or 2208 

A? 

10. 

In Annex II, the rule for Chapter 57 shall be replaced by: 

Chapter 
57 

Carpets and other texUle 
floor coverings: 

- Of needleloom felt 

Manufacture from (1): 
- natural fibres 
or 
- chemical materials or textile pulp 

However: 
- polypropylene filament of 

heading 5402, 

- polypropylene fibres of heading 

5503 or 5506, 

- polypropylene filament tow of 
heading 5501, of which die 
denomination in all cases of a 
single filament or fibre is less 
than 9 decitex, may be used 
provided their value does not 
exceed 40% of die ex-works 
price of the product 

- jute fabric may be used as 

backing 

Manufacture  from(l): 
- natural fibres not carded or 

combed or otherwise processed 
for spinning, 

or 
- chemical materials or textile pulp 

Manufacture  from(l): 
- coir or jute yarn<a), 
- synthetic or artificial filament yarn 
- natural fibres, or 
- man-made staple fibres not 

carded or combed or otherwise 
processed for spinning 

But jute fabric may be used as 
backing 

Of other felt 

- Other 

{a)  The use of jute yarn is authorised from  1.7.2000. 

?f 

11. 

In Annex II, the rule for HS heading 7006 shall be replaced by: 

7006 

Glass of headings  7003, 
7004 or 7005, bent, 
edgeworked,  engraved, 
drilled, enamelled or 
otherwise worked, but 
not framed  or fitted  with 
other materials : 
- glass plate substrate 

coated with dielectric 
thin film, semi 
conductor grade, in 
accordance with 
SEMII standards1 

- other 

Manufacture  from  materials 
(substrates) of heading 7006 

Manufacture  from  materials 
of heading 7001 

12. 

In Annex II, the rule for HS heading 7601 shall be replaced by: 

7601 

Unwrought  aluminium 

Manufacture  in which: 
-  all the materials used are 

classified  within a heading 
other than that of the 
product; and 

-  the value of all the 

materials used does not 
exceed 50 % of the ex-
works price of the product 

or 
Manufacture  by thermal or 
electrolytic treatment  from 
unalloyed aluminium or 
waste and scrap of 
aluminium 

13. 

The following  is added after  Annex IV: 

"Annex V 

List of products originating in Turkey 
to which the provisions of Articles 3 and 4 do not apply, 
listed in the order of HS Chapters and Headings 

Chapter 1 

1 

SEMII- Semiconductor  Equipment and Materials Institute  Incorporated. 

% 

Chapter 2 

Chapter 3 

0401 to 0402 

ex 0403 - 

0404 to 0410 

0504 

0511 

Chapter 6 

0701 to 0709 

ex 0710 - 
ex 0 7 1 1- 

0712 to 0714 

Chapter 8 

Buttermilk,  curdled  milk  and cream,  yoghurt,  képhir and other  fermented 
or  acidified  milk  and  cream,  whether  or  not  concentrated  or  containing 
added  sugar or other sweetening  matter or flavoured  or containing  added 
fruit or cocoa 

Vegetables (uncooked or cooked by steaming or boiling in water), frozen 
Vegetables,  except  sweet  corn  of  heading  0711  90  30,  provisionally 
preserved  (for  example,  by sulphur dioxide gas,  in brine,  in sulphur water 
or  in  other  preservative  solutions),  but  unsuitable  in  that  state  for 
immediate consumption 

ex Chapter 9 -  Coffee,  tea, and spices, excluding maté of heading 0903 

Chapter 10 

Chapter 11 

Chapter 12 

ex  1302 - 

Pectin 

1501tol514 

ex  1515 - 

ex  1516- 

ex  1517 and 
ex  1518 - 

ex  1522- 

Chapter 16 

1701 

ex  1702 - 

Other fixed vegetable  fats  and oils  (excluding jojoba  oil  and  its  fractions) 
and their fractions, whether or not refined, but not chemically modified 

Animal  or  vegetable  fats  and  oils  and  their  fractions,  partly  or  wholly 
hydrogenated,  inter-esterified,  re-esterified  or  elaidinised,  whether  or  not 
refined, but not further prepared, excluding hydrogenated  castor oil known 
as 'opal-wax' 

Margarines, imitation lard and other prepared edible fats 

Residues  resulting  from  the  treatment  of  fatty  substances  or  animal  or 
vegetable waxes, excluding degras 

Other  sugars,  including  chemically  pure  lactose,  maltose,  glucose  and 
fructose,  in solid  form;  sugar  syrups  not  containing  added flavouring or 
colouring  matter;  artificial  honey,  whether  or  not  mixed  with  natural 
honey;  caramel  excluding  that  of  headings  1702  11  00,  1702  30  51, 
1702 30 59,  1702 50 00 and 1702 90 10 

Ï3 

1703 

1801 and 1802 

ex  1902 - 

ex 2 0 0 1- 

Pasta,  stuffed,  containing  more  than 20% by  weight  of fish, crustaceans, 
molluscs or other aquatic invertebrates,  sausages and the like or meat and 
meat offal  of any kind, including fats of all kinds 

Cucumbers  and  gherkins,  onions,  mango  chutney,  fruit  of  the  genus 
Capsicum  other  than  sweet  peppers  or pimentos,  mushrooms  and  olives, 
prepared or preserved by vinegar or acetic acid 

2002 and 2003 

ex 2004 - 

ex 2005 - 

Other vegetables prepared or preserved otherwise than by vinegar or acetic 
acid,  frozen,  other  than  products  of  heading  2006,  excluding  potatoes  in 
the form of flour or meal and flakes of sweet corn 

Other vegetables prepared or preserved otherwise than by vinegar or acetic 
acid,  not  frozen,  other  than  products  of  heading  2006,  excluding  potato 
and sweet corn products 

2006 and 2007 

ex 2008 - 

2009 

Fruits,  nuts  and  other  edible  parts  of  plants,  otherwise  prepared  or 
preserved,  whether  or  not  containing  added  sugar  or  other  sweetening 
matter  or  spirit,  not  elsewhere  specified  or  included,  excluding  peanut 
butter, palm hearts, maize, yams, sweet potatoes and similar edible parts of 
plants containing  5% or more by weight of starch, vine leaves, hop shoots 
and other similar edible parts of plants 

ex 2106 - 

Flavoured and coloured sugars, syrups and molasses 

Undenatured  ethyl  alcohol  of an alcoholic  strength by volume  of 80% vol 
or higher obtained from agricultural produce listed here 

Undenatured  ethyl  alcohol  of an alcoholic strength by volume  of less than 
80% vol obtained from agricultural produce listed here. 

2204 

2206 

ex 2207 - 

ex 2208 - 

2209 

Chapter 23 

2401 

4501 

5301 and 5302 

ïh 

That Decision shall enter into force on 1  January 1999. 

Article 2 

Done at 

For the Association Council 
The President 

tf 

FINANCIAL  STATEMENT 

1. 

2. 

3. 

Budget heading: 

Chapter 12, Article 120 

Legal basis: 

Article  113 of the Treaty 

Titles of the agreements in question: 

Proposal for an amendment to the definition of the concept of "originating 
products" and the methods of administrative cooperation set out in Protocol 4 to 
the different Europe Agreements between the EC and the CEECs, the Baltic 
States and Slovenia and the Agreement on the European Economic Area, and in 
Protocol 3 to the free trade agreements between the EEC and the EFTA countries 

4. 

Purpose: 

To allow Central and Eastern European countries to continue applying flat rates 
where drawback is prohibited or exemption from customs duties is granted. 

To extend the system to industrial products originating in Turkey and simplify or 
correct certain rules, particularly those on determining which country is to be 
considered the originating country. 

5. 

Financial implications: 

As, for the purposes of industrial products, Turkey is already in a customs union 
with the Community and these products are therefore already zero rated when 
imported into the Community, and as the purpose of the amendments is essentially 
to facilitate trade or simplify administrative tasks, this proposal would not seem to 
have any major financial implications. 

M 

Proposai for a 

98/0260  (ACQ 

COUNCIL  DECISION 

on a Community  position  on an amendment  to Protocol 4 

on the definition  of the concept of "originating  products" 

and methods of administrative cooperation  set out in 

the Europe Agreement  between the 

European  Communities  and Hungary 

THE COUNCIL OF THE EUROPEAN  UNION, 

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

Having  regard  to  Article  2(1)  of the  Council  and  Commission  Decision  of  13  December 
1993 on the  conclusion  of the Europe  Agreement  establishing  an association  between  the 
European  Communities  and  their  Member  States,  of  the  one  part,  and  the  Republic  of 
Hungary, of the other part, 

Having regard to the Commission  proposal, 

Whereas  Article  38  of  Protocol  4  to  the  said  Europe  Agreement  provides  that  the 
Association  Council may amend the provisions of the Protocol, 

HAS DECIDED: 

The position  to  be adopted  by the  Community  within  the  Association  Council  created  by 
virtue  of  Article  104  of  the  Europe  Agreement  establishing  an  association  between  the 
European  Communities  and  their  Member  States,  of  the  one  part,  and  the  Republic  of 
Hungary,  of  the  other  part,  on  an  amendment  to  Protocol  4  on  the  definition  of  the 
concept  of  "originating  products"  and  methods  of  administrative  cooperation  set  out  in 
the  Agreement  shall  be  based  on  the  draft  Association  Council  decision  annexed  to  this 
Decision. 

Done at Brussels, 

For the Council 
The President 

?•?• 

EUROPE  AGREEMENT 

establishing an association  between the European Communities  and their Member 

States, of the one part, and 

the Republic of Hungary, of the other part 

DRAFT 

Decision No . . . / ..  of the Association  Council 

o f . .. 

amending Protocol  4 on the definition  of the concept of "originating  products" and 
methods of administrative  cooperation 

THE ASSOCIATION  COUNCIL, 

Having regard to the Europe Agreement  establishing an association between the European 
Communities  and  their Member  States,  of the  one part,  and  the Republic  of Hungary,  of 
the  other  part,  signed  in Brussels  on  16 December  1991  and  in  particular  Article  38  of 
Protocol 4 thereof, 

Whereas the definition  of the term "originating  products" needs to  be amended  to  ensure 
the  proper  operation  of  the  extended  system  of  cumulation  which  permits  the  use  of 
materials  originating  in the European  Community,  Poland,  Hungary,  the  Czech  Republic, 
the  Slovak  Republic,  Bulgaria,  Romania,  Latvia,  Lithuania,  Estonia,  Slovenia,  the 
European  Economic  Area  (hereinafter  referred  to  as  the  EEA),  Iceland,  Norway  and 
Switzerland; 

Whereas  it  would  seem  advisable  to  maintain  in  operation  until  31  December  2000  the 
system of flat  rate charges provided  for  in Article  15 in connection  with the prohibition  of 
drawback and exemption from  customs duty; 

Whereas,  in view  of the  particular  arrangement  on  industrial  products  obtaining  between 
the Community and Turkey,  it would  also be appropriate to extend the cumulation  system 
to such products originating in Turkey; 

Whereas  to  facilitate  trade  and  simplify  administrative  tasks  it  would  be  desirable  to 
amend the wording of Articles 3, 4 and  12; 

Whereas,  to  take  account  of  changes  in  processing  techniques  and  shortages  of  certain 
raw  materials,  some  corrections  must  be  made  to  the  list  of  working  and  processing 
requirements  which  non-originating  materials  have  to  fulfil  to  qualify  for  originating 
status, 

HAS DECIDED  AS FOLLOWS: 

Article 1 

Protocol  4  on  the  definition  of  the  concept  of  "originating  products"  and  methods  of 
administrative cooperation  is hereby amended as follows: 

?f 

1. 

Article  l(i) shall be replaced by: 

"(i) 

'added  value'  shall  be taken  to  be the  ex-works  price  minus the  customs 
value  of  each  of  the  materials  incorporated  which  originate  in  the  other 
countries referred to in Articles 3 and 4 or, where the customs value is not 
known  or  cannot  be  ascertained,  the  first  price  verifiably  paid  for  the 
products in the Community or Hungary." 

2. 

Articles 3 and 4 shall be replaced by: 

Article 3 

Cumulation  in the European  Community 

1.  Without  prejudice  to  the  provisions  of  Article  2  paragraph  1,  products  shall  be 
considered  as  originating  in  the  Community  if  such  products  are  obtained  there, 
incorporating  materials  originating  in  the  Community,  Bulgaria,  Poland,  Hungary,  the 
Czech  Republic,  the  Slovak  Republic,  Romania,  Lithuania,  Latvia,  Estonia,  Slovenia, 
Iceland,  Norway,  Switzerland  (including  Liechtenstein)1  or  Turkey2  in  accordance  with 
the provisions of the Protocol  on rules of origin annexed to the Agreements between the 
Community  and each of these countries, provided that the working  or processing carried 
out  in the Community goes  beyond that referred to  in Article 7  of this Protocol.  It shall 
not be necessary that such materials have undergone sufficient  working or processing. 

2. Where the working or processing carried out in the Community does not go beyond the 
operations referred to in Article 7,  the product obtained shall be considered as originating 
in  the  Community  only  where  the  value  added  there  is  greater  than  the  value  of  the 
materials used originating in any one of the other countries referred to in paragraph  1.  If 
this is not so, the product obtained shall be considered as originating in the country which 
accounts  for  the  highest  value  of  originating  materials  used  in  the  manufacture  in  the 
Community. 

3.  Products,  originating  in one  of the countries referred  to  in paragraph  1, which do not 
undergo any working or processing in the Community,  retain their origin if exported into 
one of these countries. 

4.  The  cumulation  provided  for  in  this  Article  may  only  be  applied  to  materials  and 
products  which  have  acquired  originating  status  by  an  application  of  rules  of  origin 
identical to those given in this Protocol. 

The Community shall provide Hungary, through the European Commission with details of 
the Agreements  and their corresponding  rules of origin, which are applied with the other 
countries  referred  to  in  paragraph  1.  The  European  Commission  shall  publish  in  the 
Official  Journal  of  the  European  Communities  (C  Series)  the  date  on  which  the 
cumulation,  provided  for  in  this  Article  may  be  applied  by  those  countries  listed  in 
paragraph 1  which have fulfilled the necessary requirements. 

l 

The Principality  of Liechtenstein  has a customs union with Switzerland,  and is a Contracting  Party  to 
the Agreement  on the European  Economic  Area. 

2  Cumulation  as provided  for  in  this Article  does not  apply  to materials  originating  in  Turkey  which 

are mentioned  in the list at Annex  V to this Protocol. 

& 

Article  4 

Cumulation  in  Hungary 

1.  Without  prejudice  to  the  provisions  of  Article  2  paragraph  2,  products  shall  be 
considered  as  originating  in Hungary  if  such  products  are  obtained  there,  incorporating 
materials originating  in the  Community,  Bulgaria,  Poland, Hungary,  the  Czech Republic, 
the  Slovak  Republic,  Romania,  Lithuania,  Latvia,  Estonia,  Slovenia,  Iceland,  Norway, 
Switzerland  (including  Liechtenstein)1  or  Turkey2  in  accordance  with the  provisions  of 
the Protocol  on rules of origin annexed to the Agreements between Bulgaria and each  of 
these  countries,  provided  that  the  working  or  processing  carried  out  in  Hungary  goes 
beyond that referred  to  in Article  7  of  this  Protocol.  It  shall  not  be  necessary  that  such 
materials have undergone sufficient  working or processing. 

2.  Where  the  working  or  processing  carried  out  in  Hungary  does  not  go  beyond  the 
operations referred to in Article 7, the product obtained shall be considered  as originating 
in Hungary  only  where  the  value  added  there  is  greater  than the  value  of  the  materials 
used originating in any one of the other countries referred to in paragraph  1. If this is not 
so, the product obtained  shall be considered  as originating in the country which accounts 
for the highest value of originating materials used in the manufacture in Hungary. 

3.  Products,  originating  in one  of the  countries  referred  to  in paragraph  1, which do  not 
undergo any working or processing in Hungary, retain their origin if exported into one  of 
these countries. 

4.  The  cumulation  provided  for  in  this  Article  may  only  be  applied  to  materials  and 
products  which  have  acquired  originating  status  by  an  application  of  rules  of  origin 
identical to those given in this Protocol. 

Hungary shall provide the Community, through the European Commission with details  of 
the Agreements and their corresponding  rules of origin, which are applied with the other 
countries  referred  to  in  paragraph  1.  The  European  Commission  shall  publish  in  the 
Official  Journal  of  the  European  Communities  (C  Series)  the  date  on  which  the 
cumulation,  provided  for  in  this  Article  may  be  applied  by  those  countries  listed  in 
paragraph 1  which have fulfilled  the necessary requirements. 

3. 

Article 12 shall be replaced by the following: 

"1.  Except as provided for in Article 2(1 )(c),  Articles 3 and 4 and paragraph 3  of 
this Article,  the  conditions  for  acquiring  originating  status  set  out  in Title II 
must continue to be fulfilled  at all times in the Community or Hungary. 

2.  Except as provided for  in Articles 3 and 4,  where originating goods  exported 
from  the  Community  or  Hungary  to  another  country  return,  they  must  be 

1 

The Principality  of Liechtenstein  has a customs  union with Switzerland, and is a Contracting  Party  to 
the Agreement  on the European  Economic  Area. 

2  Cumulation  as provided for  in  this Article  does  not  apply  to materials  originating  in  Turkey  which 

are mentioned  in the list at Annex  V to this  Protocol. 

&D 

considered  as non-originating, unless it can be demonstrated  to-the-satisfaction 
of the customs authorities that: 

(a) 

the returning goods are the same as those that were exported; and 

(b) 

they  have not  undergone  any  operation  beyond  that  necessary  to  preserve 
them in good  condition while in that country or while being exported. 

3.  The acquisition of originating  status in accordance with the conditions  set  out 
in  Title  II  shall  not  be  affected  by  working  or  processing  done  outside  the 
Community  or  Hungary  on  materials  exported  from  the  Community  or 
Bulgaria and subsequently reimported there,  provided: 

(a) 

the  said  materials  are  wholly  obtained  in  the  Community  or  Hungary  or 
have  undergone  working  or  processing  beyond  the  insufficient  operations 
listed in Article 7 prior to being exported; and 

(b) 

it can be demonstrated  to the satisfaction  of the customs authorities that: 

i) 

ii) 

the reimported  goods have been  obtained  by working  or  processing 
the exported  materials; and 

the total  added  value  acquired  outside the  Community  or  Hungary 
by  applying  the  provisions  of this  Article  does  not  exceed  10%  of 
the ex-works price of the end product for which originating status is 
claimed. 

4.  For  the  purposes  of  paragraph  3,  the  conditions  for  acquiring  originating 
status set out in Title II shall not apply to working or processing  done  outside 
the Community or Hungary.  But where, in the list in Annex II, a rule setting a 
. maximum value for  all the non-originating  materials incorporated  is applied in 
determining  the  originating  status  of  the  end  product,  the  total  value  of  the 
non-originating  materials incorporated  in the territory  of the party  concerned, 
taken  together  with the total  added  value acquired  outside the Community  or 
Hungary by applying the provisions of this Article, shall not  exceed the  stated 
percentage. 

5.  For  the  purposes  of  applying  the  provisions  of  paragraphs  3  and  4,  "total 
added  value"  shall  be taken  to  mean  all  costs  arising  outside  the  Community 
or Hungary, including the value of the materials incorporated  there. 

6.  The provisions of paragraphs 3 and 4 shall not apply to products which do not 
fulfil  the conditions  set  out  in the  list  in Annex II  or which  can be  considered 
sufficiently  worked  or processed  only if the general values fixed in Article 6(2) 
are applied 

7.  The  provisions  of  paragraphs  3  and  4  shall  not  apply  to  products  coming 

under Chapters 50 to 63 of the Harmonised  System. 

8.  Any  working  or  processing  of  the  kind  covered  by  the  provisions  of  this 
Article and  done  outside  the  Community  or Hungary  shall  be  done  under  the 
outward  processing arrangements, or similar arrangements." 

*V 

4. 

5. 

6. 

7. 

8. 

9. 

In  Articles  13,  14,  15,  17,  21, 27,  30  and  32 the  phrase "refeYred<te*in*Article  4" 
shall be replaced  by "referred  to in Articles 3 and 4". 

In  the  last  paragraph  of  Article  15(6)  the  date  "31  December  1998"  shall  be 
replaced by "31 December 2000". 

In Article 26 the reference "C2/CP3" shall be replaced by "CN22/CN23". 

In  Annex  I,  Note  5.2,  "current  conducting  filaments"  shall  be  added  between 
"artificial  man-made  filaments"  and  "synthetic  man-made  staple  fibres  of 
polypropylene". 

In Annex I, Note 5.2 the fifth example ("A carpet with tufts  . ..  are met.") shall be 
deleted. 

In  Annex II, between  the rules for  HS  headings  2202  and  2208 the following  rule 
shall be inserted: 

HS 
Heading 
No 

(1) 

2207 

Description of product 

Working or processing of non-originating materials that 
confers originating status 

(2) 

(3) 

or 

(4) 

Undenatured ethyl 
alcohol of an alcoholic 
strength by volume of 
80% vol or higher; 
ethyl alcohol and other 
spirits, denatured, of any 
strength. 

Manufacture: 

- using materials not classified 
in headings 2207 or 2208 

<f£ 

10. 

In Annex II, the rule for Chapter 57 shall be replaced by: 

Chapter 
57 

Carpets and other textile 
floor coverings: 

- Of needleloom felt 

-OfoUierfelt 

- Other 

Manufacture from (1): 
- natural fibres 
or 
- chemical materials or textile pulp 

However; 
- polypropylene filament of 

heading 5402, 

- polypropylene fibres of heading 

5503 or 5506, 

- polypropylene filament tow of 
heading 5501, of which the 
denomination in all cases of a 
single filament or fibre is less 
than 9 decitex, may be used 
provided their value does not 
exceed 40% of the ex-works 
price of the product 

- jute fabric may be used as 

backing 

Manufacture from(l): 
- natural fibres not carded or 

combed or otherwise processed 
for spinning, 

or 
- chemical materials or textile pulp 

Manufacture from(l): 
- coir or jute yarn(a), 
- synthetic or artificial filament yarn 
- natural fibres, or 
- man-made staple fibres not 

carded or combed or otherwise 
processed for spinning 

But jute fabric  may be used as 
backing 

(a)  The use of jute yarn is authorised from  1.7.2000. 

^ 

11. 

In Annex II, the rule for HS heading 7006 shall be replaced by: 

7006 

Glass of headings 7003, 
7004 or 7005, bent, 
edgeworked,  engraved, 
drilled, enamelled or 
otherwise worked, but 
not framed  or fitted  with 
other materials : 
- glass plate substrate 

coated with  dielectric 
thin film, semi 
conductor grade, in 
accordance with 
SEMII  standards1 

- other 

Manufacture  from  materials 
(substrates) of heading 7006 

Manufacture  from  materials 
of heading 7001 

12. 

In Annex II, the rule for HS heading 7601 shall be replaced by: 

7601 

Unwrought  aluminium 

Manufacture  in which: 
-  all the materials used are 

classified  within a heading 
other than that of the 
product; and 

-  the value of all the 

materials used does not 
exceed 50 % of the ex-
works price of the product 

or 
Manufacture  by thermal or 
electrolytic treatment  from 
unalloyed  aluminium or 
waste and scrap of 
aluminium 

13. 

The following  is added after  Annex IV: 

"Annex V 

List of products originating in Turkey 
to which the provisions of Articles 3 and 4 do not apply, 
listed in the order of HS Chapters and Headings 

Chapter 1 

SEMIl- Semiconductor  Equipment and Materials Institute  Incorporated. 

f*f 

Chapter 2 

Chapter 3 

0401 to 0402 

ex 0403 - 

0404 to 0410 

0504 

0511 

Chapter 6 

0701 to 0709 

ex 0710 - 
ex 0 7 1 1- 

0712 to 0714 

Chapter 8 

Buttermilk,  curdled  milk  and  cream,  yoghurt,  képhir  and  other  fermented 
or  acidified  milk  and  cream,  whether  or  not  concentrated  or  containing 
added  sugar  or  other  sweetening  master or  flavoured  or  containing  added 
fruit  or cocoa 

Vegetables (uncooked  or cooked by steaming or boiling in water),  frozen 
Vegetables,  except  sweet  corn  of  heading  0711  90  30,  provisionally 
preserved  (for  example,  by sulphur  dioxide  gas,  in brine,  in  sulphur  water 
or  in  other  preservative  solutions),  but  unsuitable  in  that  state  for 
immediate consumption 

ex Chapter 9 -  Coffee,  tea, and spices, excluding maté of heading 0903 

Chapter  10 

Chapter  11 

Chapter  12 

ex  1302- 

Pectin 

1501tol514 

ex  1515 - 

ex  1516- 

ex 1517 and 
ex  1518 - 

ex  1522- 

Chapter  16 

1701 

ex  1702- 

Other  fixed  vegetable  fats  and  oils  (excluding jojoba  oil  and  its  fractions) 
and their fractions,  whether or not refined,  but not chemically  modified 

Animal  or  vegetable  fats  and  oils  and  their  fractions,  partly  or  wholly 
hydrogenated,  inter-esterified,  re-esterified  or  elaidinised,  whether  or  not 
refined,  but not further  prepared,  excluding hydrogenated  castor  oil known 
as 'opal-wax' 

Margarines, imitation lard and other prepared  edible fats 

Residues  resulting  from  the  treatment  of  fatty  substances  or  animal  or 
vegetable waxes, excluding degras 

Other  sugars,  including  chemically  pure  lactose,  maltose,  glucose  and 
fructose,  in  solid  form;  sugar  syrups  not  containing  added  flavouring  or 
colouring  matter;  artificial  honey,  whether  or  not  mixed  with  natural 
honey;  caramel  excluding  that  of  headings  1702  11  00,  1702  30  51, 
1702 30 59,  1702 50 00 and  1702 90 10 

«Y 

1703 

1801 and  1802 

ex  1902- 

ex 2001 - 

Pasta,  stuffed,  containing  more  than  20%  by  weight  offish,  crustaceans, 
molluscs  or  other  aquatic  invertebrates,  sausages  and  the  like  or  meat  and 
meat offal  of any kind, including fats of all kinds 

Cucumbers  and  gherkins,  onions,  mango  chutney,  fruit  of  the  genus 
Capsicum  other  than  sweet  peppers  or  pimentos,  mushrooms  and  olives, 
prepared  or preserved by vinegar or acetic acid 

2002 and 2003 

ex 2004 - 

ex 2005 - 

Other vegetables prepared or preserved  otherwise than by vinegar or acetic 
acid,  frozen,  other  than  products  of  heading  2006,  excluding  potatoes  in 
the form  of flour  or meal and flakes of sweet corn 

Other vegetables prepared or preserved  otherwise than by vinegar or acetic 
acid,  not  frozen,  other  than  products  of  heading  2006,  excluding  potato 
and sweet corn  products 

2006 and 2007 

ex 2008 - 

2009 

Fruits,  nuts  and  other  edible  parts  of  plants,  otherwise  prepared  or 
preserved,  whether  or  not  containing  added  sugar  or  other  sweetening 
matter  or  spirit,  not  elsewhere  specified  or  included,  excluding  peanut 
butter,  palm hearts, maize, yams, sweet potatoes and similar edible parts of 
plants containing  5% or  more by weight  of starch,  vine leaves,  hop  shoots 
and other similar edible parts of plants 

ex 2106 - 

Flavoured  and coloured  sugars, syrups and molasses 

Undenatured  ethyl  alcohol  of  an  alcoholic  strength  by volume  of  80% vol 
or higher obtained from  agricultural produce listed here 

Undenatured  ethyl  alcohol  of an alcoholic  strength  by volume  of less  than 
80% vol obtained from  agricultural produce listed here. 

2204 

2206 

ex 2207 - 

ex 2208 - 

2209 

Chapter 23 

2401 

4501 

5301 and  5302 

ft. 

That Decision shall enter into force on  1  January  1999. 

Article 2 

Done at 

For the Association  Council 
The President 

*? 

FINANCIAL  STATEMENT 

1. 

2. 

3. 

Budge-  wading: 

Chapter  12, Article  120 

Legal sasis: 

Article  113 of the Treaty 

Titles of the agreements in question: 

Proposal for  an amendment to the definition  of the concept of "originating 
products" and the methods of administrative cooperation  set out in Protocol 4 to 
the different  Europe Agreements between the EC and the CEECs, the Baltic 
States and Slovenia and the Agreement  on the European Economic Area, and in 
Protocol 3 to the free trade agreements between the EEC and the EFTA countries 

4. 

Purpose: 

To allow Central and Eastern European  countries to continue applying flat  rates 
where drawback is prohibited  or exemption from  customs duties is granted. 

To extend the system to industrial  products originating in Turkey and simplify  or 
correct  certain rules, particularly those on determining which country is to be 
considered the originating country. 

5. 

Financial implications: 

As, for the purposes of industrial products, Turkey is already in a customs union 
with the Community and these products are therefore  already zero rated when 
imported into the Community,  and as the purpose of the amendments is essentially 
to facilitate trade or simplify  administrative tasks, this proposal would not seem to 
have any major financial  implications. 

<ts 

Proposal for a 

98/ 0261  (ACQ 

COUNCIL DECISION 

on a Community  position  on an amendment  to Protocol 4 

on the definition  of the concept of "originating  products" 

and  methods of administrative cooperation  set out in 

the Europe Agreement  between  the 

European Communities  and the Slovak Republic 

THE COUNCIL  OF THE EUROPEAN UNION, 

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

Having  regard  to  Article 2(1)  of the  Council  and  Commission  Decision  of  19 December 
1994 on the conclusion  of the Europe  Agreement  establishing  an  association between the 
European  Communities  and  their  Member  States,  of  the  one  part,  and  the  Slovak 
Republic, of the other part, 

Having regard to the Commission proposal, 

Whereas  Article  38  of  Protocol  4  to  the  said  Europe  Agreement  provides, that  the 
Association  Council  may amend the provisions of the Protocol, 

HAS  DECIDED: 

The position  to  be  adopted  by the Community within the Association  Council  created  by 
virtue  of  Article  104  of  the  Europe  Agreement  establishing  an  association  between  the 
European  Communities  and  their  Member  States,  of  the  one  part,  and  the  Slovak 
Republic,  of  the  other  part,  on  an  amendment  to  Protocol  4  on  the  definition  of  the 
concept  of  "originating  products"  and  methods  of  administrative  cooperation  set  out  in 
the  Agreement  shall  be based  on  the  draft  Association  Council  decision  annexed  to  this 
Decision. 

Done at Brussels, 

For the Council 
The President 

ST 

EUROPE  AGREEMENT 

establishing  an  association  between  the European  Communities  and  their  Member 

States, of the one part,  and 

the Slovak Republic, of the other  part 

DRAFT 

Decision  No . . . / ..  of the Association  Council 

o f . .. 

amending Protocol  4 on the definition  of the concept  of "originating  products"  and 
methods  of administrative  cooperation 

THE ASSOCIATION  COUNCIL, 

Having regard to the Europe Agreement  establishing an association between the European 
Communities  and  their  Member  States,  of the  one  part,  and  the  Slovak  Republic,  of  the 
other part,  signed in Brussels on 4 October  1993 and in particular Article 38 of Protocol 4 
thereof, 

Whereas the definition  of the term  "originating  products"  needs to  be  amended  to  ensure 
the  proper  operation  of  the  extended  system  of  cumulation  which  permits  the  use  of 
materials originating  in the European  Community,  Poland,  Hungary,  the  Czech  Republic, 
the  Slovak  Republic,  Bulgaria,  Romania,  Latvia,  Lithuania,  Estonia,  Slovenia,  the 
European  Economic  Area  (hereinafter  referred  to  as  the  EEA),  Iceland,  Norway  and 
Switzerland; 

Whereas  it  would  seem  advisable  to  maintain  in  operation  until  31  December  2000  the 
system of flat  rate charges provided  for  in Article  15 in connection  with the prohibition  of 
drawback and exemption from  customs duty; 

Whereas,  in view  of the  particular  arrangement  on  industrial  products  obtaining  between 
the Community and Turkey,  it would  also be appropriate to extend the cumulation  system 
to such products originating in Turkey; 

Whereas  to  facilitate  trade  and  simplify  administrative  tasks  it  would  be  desirable  to 
amend the wording of Articles 3, 4 and  12; 

Whereas,  to  take  account  of  changes  in  processing  techniques  and  shortages  of  certain 
raw  materials,  some  corrections  must  be  made  to  the  list  of  working  and  processing 
requirements  which  non-originating  materials  have  to  fulfil  to  qualify  for  originating 
status, 

HAS DECIDED  AS FOLLOWS: 

Article 1 

Protocol  4  on  the  definition  of  the  concept  of  "originating  products"  and  methods  of 
administrative cooperation is hereby amended as follows: 

9b 

1. 

Article  l(i)  shall be replaced by: 

"(i) 

'added  value'  shall  be  taken  to  be the  ex-works  price  minus the  customs 
value  of  each  of  the  materials  incorporated  which  originate  in  the  other 
countries referred to in Articles 3 and 4 or, where the customs value is not 
known  or  cannot  be  ascertained,  the  first  price  verifiably  paid  for  the 
products in the Community or the Slovak Republic." 

2. 

Articles 3 and 4 shall be replaced by: 

Article 3 

Cumulation in the European Community 

1.  Without  prejudice  to  the  provisions  of  Article  2  paragraph  1,  products  shall  be 
considered  as  originating  in  the  Community  if  such  products  are  obtained  there, 
incorporating  materials  originating  in  the  Community,  Bulgaria,  Poland,  Hungary,  the 
Czech  Republic,  the  Slovak  Republic,  Romania,  Lithuania,  Latvia,  Estonia,  Slovenia, 
Iceland,  Norway,  Switzerland  (including  Liechtenstein)1  or Turkey2  in  accordance  with 
the provisions of the Protocol  on rules of origin annexed to the Agreements between the 
Community and each of these countries,  provided that the working  or processing  carried 
out  in the  Community  goes beyond that referred to  in Article 7  of this Protocol.  It shall 
not be necessary that such materials have undergone sufficient  working or processing. 

2. Where the working or processing carried out in the Community does not go beyond the 
operations referred to in Article 7,  the product obtained shall be considered as originating 
in  the  Community  only  where  the  value  added  there  is  greater  than  the  value  of  the 
materials used originating in any one of the other countries referred to in paragraph  1.  If 
this is not so, the product obtained shall be considered as originating in the country which 
accounts  for  the  highest  value  of  originating  materials  used  in  the  manufacture  in  the 
Community. 

3.  Products,  originating  in one  of the countries referred  to in paragraph  1, which  do  not 
undergo any working or processing in the Community,  retain their origin if exported into 
one of these countries. 

4.  The  cumulation  provided  for  in  this  Article  may  only  be  applied  to  materials  and 
products  which  have  acquired  originating  status  by  an  application  of  rules  of  origin 
identical to those given in this Protocol. 

The  Community  shall  provide  the  Slovak  Republic,  through  the  European  Commission 
with details of the Agreements  and their corresponding  rules of origin, which are applied 
with  the  other  countries  referred  to  in  paragraph  1.  The  European  Commission  shall 
publish in the Official  Journal of the European Communities (C Series) the date on which 
the  cumulation,  provided  for  in this  Article  may be  applied  by those  countries  listed  in 
paragraph  1  which have fulfilled  the necessary requirements. 

1 

The Principality  of Liechtenstein  has a customs  union with Switzerland, and is a Contracting  Party  to 
the Agreement  on the European  Economic  Area. 

2  Cumulation  as provided  for  in  this Article  does  not  apply  to materials  originating  in  Turkey  which 

are mentioned  in the list at Annex  V to this  Protocol. 

$r 

Article  4 

Cumulation  in the Slovak  Republic 

1.  Without  prejudice  to  the  provisions  of  Article  2  paragraph  2,  products  shall  be 
considered  as  originating  in  the  Slovak  Republic  if  such  products  are  obtained  there, 
incorporating  materials  originating  in  the  Community,  Bulgaria,  Poland,  Hungary,  the 
Czech  Republic,  the  Slovak  Republic,  Romania,  Lithuania,  Latvia,  Estonia,  Slovenia, 
Iceland,  Norway,  Switzerland  (including  Liechtenstein)1  or  Turkey2  in  accordance  with 
the provisions of the Protocol  on rules of origin annexed to the Agreements between the 
Slovak  Republic  and  each  of  these  countries,  provided  that  the  working  or  processing 
carried  out  in  the  Slovak  Republic  goes  beyond  that  referred  to  in  Article  7  of  this 
Protocol.  It shall not be necessary that such materials have undergone  sufficient  working 
or processing. 

2.  Where  the  working  or  processing  carried  out  in  the  Slovak  Republic  does  not  go 
beyond the operations referred to in Article 7, the product obtained shall be considered as 
originating  in the  Slovak  Republic  only  where  the  value  added  there  is  greater than the 
value  of  the  materials  used  originating  in  any  one  of  the  other  countries  referred  to  in 
paragraph 1. If this is not so, the product obtained shall be considered as originating in the 
country  which  accounts  for  the  highest  value  of  originating  materials  used  in  the 
manufacture in the Slovak Republic. 

3.  Products,  originating  in one of the  countries  referred  to  in paragraph  1, which do not 
undergo any working or processing in the Slovak Republic,  retain their origin if exported 
into one of these countries. 

4.  The  cumulation  provided  for  in  this  Article  may  only  be  applied  to  materials  and 
products  which  have  acquired  originating  status  by  an  application  of  rules  of  origin 
identical to those given in this Protocol. 

The  Slovak  Republic  shall  provide  the  Community,  through  the  European  Commission 
with details of the Agreements  and their corresponding  rules of origin, which are applied 
with  the  other  countries  referred  to  in  paragraph  1.  The  European  Commission  shall 
publish in the Official  Journal of the European Communities (C Series) the date on which 
the  cumulation,  provided  for  in  this  Article  may be  applied  by those  countries  listed  in 
paragraph 1  which have fulfilled  the necessary requirements. 

3. 

Article  12 shall be replaced by the following: 

"1.  Except as provided for in Article 2(1 )(c),  Articles 3 and 4 and paragraph 3  of 
this Article,  the conditions  for  acquiring  originating  status  set  out  in Title II 
must  continue  to  be  fulfilled  at  all  times  in  the  Community  or  the  Slovak 
Republic. 

1  The Principality  of Liechtenstein  has a customs  union with Switzerland,  and is a Contracting Party  to 

the Agreement  on the European Economic  Area. 

Cumulation  as provided for  in  this Article  does  not  apply  to materials  originating  in  Turkey  which 
are mentioned  in the list at Annex  V to this  Protocol. 

<u~ 

2.  Except  as provided  for  in Articles  3 and  4, where  originating'goods  exported 
from  the  Community  or  the  Slovak  Republic  to  another  country  return,  they 
must  be  considered  as  non-originating,  unless  it  can  be  demonstrated  to  the 
satisfaction  of the customs authorities that: 

(a) 

the returning goods are the same as those that were exported; and 

(b) 

they  have  not  undergone  any  operation  beyond  that  necessary  to  preserve 
them in good  condition while in that country or while being exported. 

3.  The acquisition  of originating  status in accordance with the conditions set  out 
in  Title  II  shall  not  be  affected  by  working  or  processing  done  outside  the 
the 
Community  or  the  Slovak  Republic  on  materials  exported  from 
Community or Bulgaria and subsequently reimported there, provided: 

(a) 

the  said  materials  are  wholly  obtained  in  the  Community  or  the  Slovak 
Republic  or have undergone working or  processing beyond  the  insufficient 
operations listed in Article 7 prior to being exported; and 

(b) 

it can be demonstrated  to the satisfaction  of the customs authorities that: 

i) 

ii) 

the reimported  goods have been  obtained  by working  or  processing 
the exported  materials; and 

the  total  added  value  acquired  outside  the  Community  or  the 
Slovak Republic by applying the provisions  of this Article does not 
exceed  10%  of  the  ex-works  price  of  the  end  product  for  which 
originating status is claimed. 

4.  For  the  purposes  of  paragraph  3,  the  conditions  for  acquiring  originating 
status  set out in Title II shall not apply to working or processing  done outside 
the  Community  or the  Slovak Republic.  But  where,  in the list in Annex II,  a 
rule  setting  a  maximum  value  for  all 
the  non-originating  materials 
incorporated  is  applied  in  determining  the  originating  status  of  the  end 
product,  the  total  value  of  the  non-originating  materials  incorporated  in  the 
territory  of  the  party  concerned,  taken  together  with  the  total  added  value 
acquired  outside  the  Community  or  the  Slovak  Republic  by  applying  the 
provisions of this Article, shall not exceed the stated  percentage. 

5.  For  the  purposes  of  applying  the  provisions  of  paragraphs  3  and  4,  "total 
added  value"  shall  be taken  to  mean  all  costs  arising  outside  the  Community 
or  the  Slovak  Republic,  including  the  value  of  the  materials  incorporated 
there. 

6.  The provisions of paragraphs 3 and 4 shall not apply to products which do not 
fulfil  the  conditions  set  out  in the  list  in Annex II  or which  can be  considered 
sufficiently  worked  or processed  only if the general values fixed in Article 6(2) 
are applied. 

7.  The  provisions  of  paragraphs  3  and  4  shall  not  apply  to  products  coming 

under Chapters 50 to 63 of the Harmonised  System. 

13 

8.  Any  working  or  processing  of  the  kind  covered  by  the  provisions  of  this 
Article and  done outside the Community or the Slovak Republic  shall be done 
under the outward  processing arrangements, or similar arrangements." 

In  Articles  13,  14,  15,  17, 21, 27, 30  and  32 the  phrase "referred  to  in Article  4" 
shall be replaced  by "referred  to in Articles 3 and 4". 

In  the  last  paragraph  of  Article  15(6)  the  date  "31  December  1998"  shall  be 
replaced by "31 December 2000". 

In Article 26 the reference "C2/CP3" shall be replaced by "CN22/CN23". 

In  Annex  I,  Note  5.2,  "current  conducting  filaments"  shall  be  added  between 
"artificial  man-made  filaments"  and  "synthetic  man-made  staple  fibres  of 
polypropylene". 

In Annex I, Note 5.2 the fifth example ("A carpet with tufts  . ..  are met.") shall be 
deleted. 

In Annex II, between  the rules for  HS  headings 2202  and  2208  the following  rule 
shall be inserted: 

4. 

5. 

6. 

7. 

8. 

9. 

HS 
Heading 
No 

(1) 

2207 

Description  of  product 

Working or processing of non-originating  materials that 
confers originating status 

(2) 

(3) 

or 

(4) 

Undenatured  ethyl 
alcohol  of an  alcoholic 
strength by volume of 
80% vol or  higher; 
ethyl alcohol  and  other 
spirits, denatured, of any 
strength. 

Manufacture: 

- using materials not  classified 
in headings 2207 or 2208 

^ 

10. 

In Annex II, the rule for Chapter 57 shall be replaced by: 

Chapter 
57 

Carpets and other textile 
floor coverings: 

- Of needleloom felt 

-Of other felt 

-Other 

Manufacture from (1): 
- natural fibres 
or 
- chemical materials or textile pulp 

However: 
- polypropylene filament of 

heading 5402, 

- polypropylene fibres of heading 

5503 or 5506, 

- polypropylene filament tow of 
heading 5501, of which the 
denomination in all cases of a 
single filament or fibre is less 
than 9 decitex, may be used 
provided their value does not 
exceed 40% of the ex-works 
price of the product 

- jute fabric may be used as 

backing 

Manufacture from( 1): 
- natural fibres not carded or 

combed or otherwise processed 
for spinning, 

or 
- chemical materials or textile pulp 

Manufacture  from(l): 
- coir or jute yarn(a), 
- synthetic or artificial filament yarn 
- natural fibres, or 
- man-made staple fibres not 

carded or combed or otherwise 
processed for spinning 

But jute fabric may be used as 
backing 

(a)  The use of jute yarn is authorised from  1.7.2000. 

Rh 

11. 

In Annex II, the rule for HS heading  7006 shall be replaced by 

7006 

Glass of headings 7003, 
7004 or 7005, bent, 
edgeworked,  engraved, 
drilled, enamelled or 
otherwise worked, but 
not framed  or fitted  with 
other materials : 
- glass plate substrate 

coated with dielectric 
thin film, semi 
conductor grade, in 
accordance with 
SEMII standards1 

- other 

Manufacture  from  materials 
(substrates) of heading  7006 

Manufacture  from  materials 
of heading 7001 

12. 

In Annex II, the rule for HS heading 7601 shall be replaced by 

7601 

Unwrought aluminium 

Manufacture  in which: 
-  all the materials used are 

classified  within a heading 
other than that of the 
product; and 

-  the value of all the 

materials used does not 
exceed 50 % of the ex-
works price of the product 

or 
Manufacture  by thermal  or 
electrolytic treatment  from 
unalloyed  aluminium  or 
waste and scrap of 
aluminium 

13. 

The following  is added after  Annex IV: 

"Annex V 

List of products originating  in Turkey 
to which the provisions of Articles 3 and 4 do not apply 
listed in the order of HS Chapters and Headings 

Chapter 1 

SEMII- Semiconductor  Equipment  and  Materials  Institute  Incorporated. 

9c 

Chapter 2 

Chapter 3 

0401 to  0402 

ex 0403 - 

0404 to  0410 

0504 

0511 

Chapter 6 

0701 to 0709 

ex 0710 - 
ex 0 7 1 1- 

0712 to  0714 

Chapter 8 

Buttermilk,  curdled  milk  and  cream,  yoghurt,  képhir  and  other  fermented 
or  acidified  milk  and  cream,  whether  or  not  concentrated  or  containing 
added  sugar  or  other  sweetening  matter  or  flavoured  or  containing  added 
fruit  or cocoa 

Vegetables (uncooked  or cooked by steaming or boiling in water), frozen 
Vegetables,  except  sweet  corn  of  heading  0711  90  30,  provisionally 
preserved  (for  example,  by sulphur  dioxide  gas,  in brine,  in  sulphur  water 
or  in  other  preservative  solutions),  but  unsuitable  in  that  state  for 
immediate  consumption 

ex Chapter 9 -  Coffee,  tea, and spices, excluding maté of heading 0903 

Chapter  10 

Chapter  11 

Chapter  12 

ex  1302 - 

Pectin 

1501tol514 

ex  1515 - 

ex  1516- 

ex  1517 and 
ex  1518 - 

ex  1522- 

Chapter  16 

1701 

ex  1702- 

Other fixed vegetable  fats  and  oils  (excluding jojoba  oil  and  its  fractions) 
and their fractions,  whether or not refined,  but not chemically  modified 

Animal  or  vegetable  fats  and  oils  and  their  fractions,  partly  or  wholly 
hydrogenated,  inter-esterified,  re-esterified  or  elaidinised,  whether  or  not 
refined,  but not further  prepared,  excluding hydrogenated  castor  oil known 
as 'opal-wax' 

Margarines, imitation lard and other prepared  edible fats 

Residues  resulting  from  the  treatment  of  fatty  substances  or  animal  or 
vegetable waxes, excluding degras 

Other  sugars,  including  chemically  pure  lactose,  maltose,  glucose  and 
fructose,  in  solid  form;  sugar  syrups  not  containing  added  flavouring  or 
colouring  matter;  artificial  honey,  whether  or  not  mixed  with  natural 
honey;  caramel  excluding  that  of  headings  1702  11  00,  1702  30  51, 
1702 30 59,  1702 50 00 and  1702 90 10 

^ 

1703 

1801 and  1802 

ex  1902 - 

ex 2 0 0 1- 

Pasta,  stuffed,  containing  more  than  20%  by  weight  of  fish,  crustaceans, 
molluscs  or  other  aquatic  invertebrates,  sausages  and  the  like  or  meat  and 
meat offal  of any kind, including fats of all kinds 

Cucumbers  and  gherkins,  onions,  mango  chutney,  fruit  of  the  genus 
Capsicum  other  than  sweet  peppers  or  pimentos,  mushrooms  and  olives, 
prepared  or preserved by vinegar or acetic acid 

2002 and 2003 

ex 2004 - 

ex 2005 - 

Other vegetables prepared  or preserved otherwise than by vinegar or acetic 
acid,  frozen,  other  than  products  of  heading  2006,  excluding  potatoes  in 
the form of flour or meal and flakes of sweet corn 

Other vegetables prepared  or preserved  otherwise than by vinegar or acetic 
acid,  not  frozen,  other  than  products  of  heading  2006,  excluding  potato 
and sweet corn  products 

2006 and 2007 

ex 2008 - 

2009 

Fruits,  nuts  and  other  edible  parts  of  plants,  otherwise  prepared  or 
preserved,  whether  or  not  containing  added  sugar  or  other  sweetening 
matter  or  spirit,  not  elsewhere  specified  or  included,  excluding  peanut 
butter,  palm hearts, maize, yams, sweet potatoes and similar  edible parts of 
plants containing  5% or  more by weight  of starch,  vine leaves, hop  shoots 
and other similar edible parts of plants 

ex 2106 - 

Flavoured  and coloured  sugars, syrups and molasses 

Undenatured  ethyl  alcohol 'of an  alcoholic  strength  by volume  of  80% vol 
or higher obtained from  agricultural produce listed here 

Undenatured  ethyl  alcohol  of an alcoholic  strength  by volume  of less than 
80% vol obtained from  agricultural produce listed here. 

2204 

2206 

ex 2207 - 

ex 2208 - 

2209 

Chapter 23 

2401 

4501 

5301 and  5302 

<& 

That Decision shall enter into force on  1  January 1999. 

Article 2 

Done at 

For the Association Council 
The President 

<?? 

FINANCIAL  STATEMENT 

1. 

2. 

3. 

Budget heading: 

Chapter  12, Article 120 

Legal basis: 

Article  113 of the Treaty 

Titles of the agreements in question: 

Proposal for an amendment to the definition of the concept of "originating 
products" and the methods of administrative cooperation set out in Protocol 4 to 
the different Europe Agreements between the EC and the CEECs, the Baltic 
States and Slovenia and the Agreement on the European Economic Area, and in 
Protocol 3 to the free trade agreements between the EEC and the EFTA countries 

4. 

Purpose: 

To allow Central and Eastern European countries to continue applying flat rates 
where drawback is prohibited or exemption from customs duties is granted. 

To extend the system to industrial products originating in Turkey and simplify or 
correct certain rules, particularly those on determining which country is to be 
considered the originating country. 

5. 

Financial implications: 

As, for the purposes of industrial products, Turkey is already in a customs union 
with the Community and these products are therefore already zero rated when 
imported into the Community, and as the purpose of the amendments is essentially 
to facilitate trade or simplify administrative tasks, this proposal would not seem to 
have any major financial implications. 

/66 

Proposai for a 

98/0262 (ACQ 

COUNCIL DECISION 

on a Community position on an amendment to Protocol 4 

on the definition of the concept of "originating products" 

and methods of administrative cooperation set out in 

the Europe Agreement between the 

European Communities and Romania 

THE COUNCIL OF THE EUROPEAN UNION, 

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

Having regard to Article 2(1) of the Council  and Commission Decision  of  19 December 
1994 on the conclusion of the Europe Agreement establishing an association between the 
European  Communities  and their Member  States,  of the one part,  and Romania,  of the 
other part, 

Having regard to the Commission proposal, 

Whereas  Article  38  of  Protocol  4  to  the  said  Europe  Agreement  provides  that  the 
Association Council may amend the provisions of the Protocol, 

HAS DECIDED: 

The position to be adopted by the Community within the Association Council created by 
virtue  of  Article  106 of the Europe  Agreement  establishing  an association  between the 
European  Communities  and their Member  States,  of the one part,  and Romania,  of the 
other part, on an amendment to Protocol 4 on the definition of the concept of "originating 
products" and  methods of administrative  cooperation  set  out  in the  Agreement  shall be 
based on the draft Association Council decision annexed to this Decision. 

Done at Brussels, 

For the Council 
The President 

/6/ 

EUROPE  AGREEMENT 

establishing an  association  between  the EuropeanjCommunities  and  their  Member 

States, of the one part,  and 

Romania,  of the other  part 

DRAFT 

Decision  No . . . / ..  of the Association  Council 

o f . .. 

amending  Protocol  4 on the definition  of the concept  of "originating products" and 
methods  of administrative  cooperation 

THE ASSOCIATION  COUNCIL, 

Having regard to the Europe Agreement  establishing an association between the European 
Communities  and  their  Member  States,  of  the  one  part,  and  Romania,  of  the  other  part, 
signed in Brussels on  1  February  1993 and in particular Article 38 of Protocol 4 thereof, 

Whereas the definition  of the term "originating  products"  needs to  be amended  to  ensure 
the  proper  operation  of  the  extended  system  of  cumulation  which  permits  the  use  of 
materials  originating  in the European  Community,  Poland,  Hungary,  the  Czech  Republic, 
the  Slovak  Republic,  Bulgaria,  Romania,  Latvia,  Lithuania,  Estonia,  Slovenia,  the 
European  Economic  Area  (hereinafter  referred  to  as  the  EEA),  Iceland,  Norway  and 
Switzerland; 

Whereas  it  would  seem  advisable  to  maintain  in  operation  until  31  December  2000  the 
system of flat rate charges provided  for  in Article  15 in connection  with the prohibition  of 
drawback and exemption from  customs duty; 

Whereas,  in view  of the  particular  arrangement  on  industrial  products  obtaining  between 
the Community  and Turkey, it would  also be appropriate to  extend the cumulation  system 
to such products originating in Turkey; 

Whereas  to  facilitate  trade  and  simplify  administrative  tasks  it  would  be  desirable  to 
amend the wording of Articles 3, 4 and  12; 

Whereas,  to  take  account  of  changes  in  processing  techniques  and  shortages  of  certain 
raw  materials,  some  corrections  must  be  mad 
tc  the  list  of  working  and  processing 
requirements  which  non-originating  materials  have  to  fulfil  to  qualify  for  originating 
status, 

HAS DECIDED AS FOLLOWS: 

Article 1 

Protocol  4  on  the  definition  of  the  concept  of  "originating  products"  and  methods  of 
administrative cooperation  is hereby amended as follows: 

/oz-

1. 

Article  l(i) shall be replaced by: 

"(i) 

'added  value'  shall  be  taken  to  be  the  ex-works  price  minus the  customs 
value  of  each  of  the  materials  incorporated  which  originate  in  the  other 
countries referred to in Articles 3 and 4 or, where the customs value is not 
known  or  cannot  be  ascertained,  the  first  price  verifiably  paid  for  the 
products in the Community or Romania." 

2. 

Articles 3 and 4 shall be replaced by: 

Article 3 

Cumulation in the European  Community 

1.  Without  prejudice  to  the  provisions  of  Article  2  paragraph  1,  products  shall  be 
considered  as  originating  in  the  Community  if  such  products  are  obtained  there, 
incorporating  materials  originating  in  the  Community,  Bulgaria,  Poland,  Hungary,, the 
Czech  Republic,  the  Slovak  Republic,  Romania,  Lithuania,  Latvia,  Estonia,  Slovenia, 
Iceland,  Norway,  Switzerland  (including  Liechtenstein)1  or Turkey2  in  accordance  with 
the provisions  of the Protocol  on rules of origin annexed to the Agreements between the 
Community and each of these countries,  provided that the working or processing carried 
out  in the  Community  goes  beyond that referred  to  in Article  7  of this Protocol.  It shall 
not be necessary that such materials have undergone sufficient working or processing. 

2. Where the working or processing carried out in the Community does not go beyond the 
operations referred to in Article 7,  the product obtained shall be considered as originating 
in  the  Community  only  where  the  value  added  there  is  greater  than  the  value  of  the 
materials used originating in any one of the other countries referred to in paragraph  1.  If 
this is not so, the product obtained shall be considered as originating in the country which 
accounts  for  the  highest  value  of  originating  materials  used  in  the  manufacture  in  the 
Community. 

3.  Products,  originating  in one  of the  countries referred to in paragraph  1, which do not 
undergo any working or processing in the Community,  retain their origin if exported into 
one of these countries. 

4.  The  cumulation  provided  for  in  this  Article  may  only  be  applied  to  materials  and 
products  which  have  acquired  originating  status  by  an  application  of  rules  of  origin 
identical to those given in this Protocol. 

The Community shall provide Romania, through the European Commission with details of 
the Agreements  and their corresponding  rules of origin, which are applied with the other 
countries  referred  to  in  paragraph  1.  The  European  Commission  shall  publish  in  the 
Official  Journal  of  the  European  Communities  (C  Series)  the  date  on  which  the 
cumulation,  provided  for  in  this  Article  may  be  applied  by  those  countries  listed  in 
paragraph  1 which have fulfilled  the necessary requirements. 

1  The Principality  of Liechtenstein  has a customs union with Switzerland,  and is a Contracting  Party  to 

the Agreement  on the European  Economic  Area. 

2  Cumulation  as provided for  in  this Article  does  not  apply  to materials  originating  in  Turkey  which 

are mentioned  in the list at Annex  V to this Protocol. 

ioz 

Article 4 

Cumulation in Romania 

1.  Without  prejudice  to  the  provisions  of  Article  2  paragraph  2,  products  shall  be 
considered  as  originating  in Romania  if^uch  products  are  obtained  there,  incorporating 
materials originating  in the Community,  Bulgaria,  Poland, Hungary,  the  Czech Republic, 
the  Slovak  Republic,  Romania,  Lithuania,  Latvia,  Estonia,  Slovenia,  Iceland,  Norway, 
Switzerland  (including  Liechtenstein)1  or  Turkey2  in  accordance  with  the  provisions  of 
the Protocol  on rules of origin annexed to the Agreements between Romania and each of 
these  countries,  provided  that  the  working  or  processing  carried  out  in  Romania  goes 
beyond  that  referred  to  in Article  7  of  this Protocol.  It  shall  not  be  necessary  that  such 
materials have undergone sufficient  working or processing. 

2.  Where  the  working  or  processing  carried  out  in  Romania  does  not  go  beyond  the 
operations referred to in Article 7, the product obtained shall be considered  as originating 
in Romania  only  where  the  value  added  there  is  greater  than the  value  of  the  materials 
used originating in any one of the other countries referred to in paragraph  1. If this is not 
so, the product obtained  shall be considered  as originating in the country which  accounts 
for the highest value of originating materials used in the manufacture in Romania. 

3.  Products,  originating  in one  of the  countries referred to  in paragraph  1, which  do  not 
undergo any working or processing in Romania, retain their origin if exported into one of 
these countries. 

4.  The  cumulation  provided  for  in  this  Article  may  only  be  applied  to  materials  and 
products  which  have  acquired  originating  status  by  an  application  of  rules  of  origin 
identical to those given in this Protocol. 

Romania shall provide the Community, through the European Commission with details of 
the Agreements  and their corresponding  rules of origin, which are applied with the other 
countries  referred  to  in  paragraph  1.  The  European  Commission  shall  publish  in  the 
Official  Journal  of  the  European  Communities  (C  Series)  the  date  on  which  the 
cumulation,  provided  for  in  this  Article  may  be  applied  by  those  countries  listed  in 
paragraph  1  which have fulfilled  the necessary requirements. 

3. 

Article  12 shall be replaced by the following: 

"1.  Except as provided for in Article 2(l)(c),  Articles 3 and 4 and paragraph 3  of 
this  Article,  the  conditions  for  acquiring  originating  status  set  out  in Title II 
must continue to be fulfilled  at all times in the Community or Romania. 

2.  Except  as provided for in Articles 3 and 4, where originating goods  exported 
from  the  Community  or  Romania  to  another  country  return,  they  must  be 

i 

The Principality  of Liechtenstein  has a customs union with Switzerland,  and is a Contracting  Party  to 
the Agreement  on the European  Economic  Area. 

2  Cumulation  as provided  for  in  this Article  does  not  apply  to  materials  originating  in  Turkey  which 

are mentioned  in the list at Annex  V to this Protocol. 

m 

considered  as non-originating, unless it can be demonstrated to 4he-satisfaction 
of the customs authorities that: 

(a) 

the returning goods are the same as those that were exported; and 

(b) 

they  have  not  undergone  any  operation  beyond  that  necessary to  preserve 
them in good  condition while in that country or while being exported. 

3.  The acquisition  of originating  status in accordance with the conditions set  out 
in  Title  II  shall  not  be  affected  by  working  or  processing  done  outside  the 
Community  or  Romania  on  materials  exported  from  the  Community  or 
Romania and subsequently reimported there, provided: 

(a) 

the  said  materials  are  wholly  obtained  in  the  Community  or  Romania  or 
have  undergone  working  or  processing  beyond  the  insufficient  operations 
listed in Article 7 prior to being exported; and 

(b) 

it can be demonstrated  to the satisfaction  of the customs authorities that: 

i) 

ii) 

the reimported goods have been obtained  by working or  processing 
the exported  materials; and 

the total  added  value  acquired  outside the  Community  or  Romania 
by  applying  the  provisions  of this  Article  does  not  exceed  10%  of 
the ex-works price of the end product for which originating status is 
claimed. 

4.  For  the  purposes  of  paragraph.3,  the  conditions  for  acquiring  originating 
status set out in Title II shall not apply to working or processing done  outside 
the Community or Romania.  But where, in the list in Annex II, a rule setting a 
maximum value for  all the non-originating  materials incorporated  is applied in 
determining  the  originating  status  of  the  end  product,  the  total  value  of  the 
non-originating  materials incorporated  in the territory  of the party  concerned, 
taken together  with the total  added  value  acquired  outside the Community  or 
Romania by applying the provisions of this Article, shall not exceed  the  stated 
percentage. 

5.  For  the  purposes  of  applying  the  provisions  of  paragraphs  3  and  4,  "total 
added  value"  shall  be  taken  to  mean  all  costs  arising  outside  the  Community 
or Romania, including the value of the materials incorporated  there. 

6.  The provisions of paragraphs 3 and 4 shall not  apply to products which do not 
fulfil  the conditions  set  out  in the  list  in Annex  II or which  can be  considered 
sufficiently  worked  or processed  only if the general values fixed in Article 6(2) 
are applied. 

7.  The  provisions  of  paragraphs  3  and  4  shall  not  apply  to  products  coming 

under Chapters 50 to 63 of the Harmonised  System. 

8.  Any  working  or  processing  of  the  kind  covered  by  the  provisions  of  this 
Article  and  done outside  the  Community  or Romania  shall be done  under  the 
outward  processing arrangements, or similar arrangements." 

/of 

4. 

5. 

6. 

7. 

8. 

9. 

In Articles  13,  14,  15,  17, 21, 27,  30 and 32 the phrase "referred te-in-Article 4" 
shall be replaced by "referred to in Articles 3 and 4". 

In  the  last  paragraph  of  Article  15(6)  the  date  "31  December  1998"  shall  be 
replaced by "31 December 2000". 

In Article 26 the reference "C2/CP3" shall be replaced by "CN22/CN23". 

In  Annex  I,  Note  5.2,  "current  conducting filaments" shall  be  added  between 
"artificial  man-made  filaments"  and  "synthetic  man-made  staple  fibres  of 
polypropylene". 

In Annex I, Note 5.2 the fifth example ("A carpet with tufts  . ..  are met.") shall be 
deleted. 

In Annex II, between the rules for HS headings 2202  and 2208  the following rule 
shall be inserted: 

HS 
Heading 
No 

(1) 

2207 

Description of product 

Working or processing of non-originating  materials that 
confers originating  status 

(2) 

(3) 

or 

(4) 

Undenatured ethyl 
alcohol of an alcoholic 
strength by volume of 
80% vol or higher; 
ethyl alcohol and other 
spirits, denatured, of any 
strength. 

Manufacture: 

- using materials not classified 
in headings 2207 or 2208 

/ÔQ 

10. 

In Annex II, the rule for Chapter 57  shall be replaced by: 

Chapter 
57 

Carpets and other textile 
floor  coverings: 

- Of needleloom felt 

-Of other felt 

- Other 

Manufacture from (1): 
- natural fibres 
or 
- chemical materials or textile pulp 

However: 
- polypropylene filament of 

heading 5402, 

- polypropylene fibres of heading 

5503 or 5506, 

- polypropylene filament tow of 
heading 5501, of which the 
denomination in all cases of a 
single filament or fibre is less 
than 9 decitex, may be used 
provided their value does not 
exceed 40% of the ex-works 
price of the product 

- jute fabric may be used as 

backing 

Manufacture from(l): 
- natural fibres not carded or 

combed or otherwise processed 
for spinning, 

or 
- chemical materials or textile pulp 

Manufacture  from(l): 
- coir or jute yarn(a), 
- synthetic or artificial filament yarn 
- natural fibres, or 
- man-made staple fibres not 

carded or combed or otherwise 
processed for spinning 

But jute fabric may be used as 
backing 

-

<a)  The use of jute yarn is auUiorised from 1.7.2000. 

/o/ 

11. 

In Annex II, the rule for HS heading 7006 shall be replaced by: 

7006 

Glass of headings 7003, 
7004 or 7005, bent, 
edgeworked, engraved, 
drilled, enamelled or 
otherwise worked, but 
not framed or fitted with 
other materials: 
- glass plate substrate 

coated with dielectric 
thin film, semi 
conductor grade, in 
accordance with 
SEMII standards1 

- other 

Manufacture from materials 
(substrates) of heading 7006 

Manufacture from materials 
of heading 7001 

12. 

In Annex II, the rule for HS heading 7601 shall be replaced by: 

7601 

Unwrought aluminium  Manufacture in which: 

-  all the materials used are 

classified within a heading 
other than that of the 
product; and 

-  the value of all the 

materials used does not 
exceed 50 % of the ex-
works price of the product 

or 
Manufacture by thermal or 
electrolytic treatment from 
unalloyed aluminium or 
waste and scrap of 
aluminium 

13. 

The following  is added after Annex IV: 

"Annex V 

List of products originating in Turkey 
to which the provisions of Articles 3 and 4 do not apply, 
listed in the order of HS Chapters and Headings 

Chapter 1 

SEMII- Semiconductor Equipment and Materials Institute Incorporated. 

JoT 

Chapter 2 

Chapter 3 

0401 to 0402 

ex 0403 - 

0404 to 0410 

0504 

0511 

Chapter 6 

0701 to 0709 

ex 0710 - 
ex 0 7 1 1- 

0712 to 0714 

Chapter 8 

Buttermilk,  curdled  milk  and cream,  yoghurt,  képhir and other  fermented 
or  acidified  milk  and  cream,  whether  or  not  concentrated  or  containing 
added  sugar or other  sweetening  matter or flavoured  or containing  added 
fruit or cocoa 

Vegetables (uncooked or cooked by steaming or boiling in water), frozen 
Vegetables,  except  sweet  corn  of  heading  0711  90  30,  provisionally 
preserved  (for  example,  by sulphur dioxide  gas,  in brine,  in sulphur water 
or  in  other  preservative  solutions),  but  unsuitable  in  that  state  for 
immediate consumption 

ex Chapter 9 -  Coffee, tea, and spices, excluding maté of heading 0903 

Chapter 10 

Chapter 11 

Chapter 12 

ex  1302- 

Pectin 

1501tol514 

ex  1515 - 

ex  1516- 

ex  1517 and 
ex 1518 - 

ex  1522- 

Chapter 16 

1701 

ex  1702 - 

Other fixed vegetable  fats  and oils  (excluding jojoba  oil  and its  fractions) 
and their fractions, whether or not refined, but not chemically modified 

Animal  or  vegetable  fats  and  oils  and  their  fractions,  partly  or  wholly 
hydrogenated,  inter-esterified,  re-esterified  or  elaidinised,  whether  or  not 
refined, but not further prepared, excluding hydrogenated castor oil known 
as 'opal-wax' 

Margarines, imitation lard and other prepared edible fats 

Residues  resulting  from  the  treatment  of  fatty  substances  or  animal  or 
vegetable waxes, excluding degras 

Other  sugars,  including  chemically  pure  lactose,  maltose,  glucose  and 
fructose,  in  solid  form;  sugar  syrups  not  containing  added  flavouring  or 
colouring  matter;  artificial  honey,  whether  or  not  mixed  with  natural 
honey;  caramel  excluding  that  of  headings  1702  11  00,  1702  30  51, 
1702 30 59,  1702 50 00 and 1702 90 10 

m 

1703 

1801 and  1802 

ex  1902- 

ex 2001 - 

Pasta,  stuffed,  containing  more  than  20%  by  weight  offish,  crustaceans, 
molluscs  or  other  aquatic  invertebrates,  sausages  and  the like or  meat  and 
meat offal  of any kind, including fats of all kinds 

Cucumbers  and  gherkins,  onions,  mango  chutney,  fruit  of  the  genus 
Capsicum  other  than  sweet  peppers  or  pimentos,  mushrooms  and  olives, 
prepared  or preserved by vinegar or acetic acid 

2002 and 2003 

ex 2004 - 

ex 2005 - 

Other vegetables prepared or preserved  otherwise than by vinegar or acetic 
acid,  frozen,  other  than  products  of  heading  2006,  excluding  potatoes  in 
the form  of flour  or meal and flakes of sweet corn 

Other vegetables prepared  or preserved  otherwise than by vinegar or acetic 
acid,  not  frozen,  other  than  products  of  heading  2006,  excluding  potato 
and  sweet corn  products 

2006 and 2007 

ex 2008 - 

2009 

Fruits,  nuts  and  other  edible  parts  of  plants,  otherwise  prepared  or 
preserved,  whether  or  not  containing  added  sugar  or  other  sweetening 
matter  or  spirit,  not  elsewhere  specified  or  included,  excluding  peanut 
butter,  palm hearts, maize, yams, sweet potatoes and  similar edible parts of 
plants containing  5% or  more by weight  of starch,  vine leaves, hop  shoots 
and other similar edible parts of plants 

ex 2106 - 

Flavoured  and coloured  sugars, syrups and molasses 

Undenatured  ethyl  alcohol  of an  alcoholic  strength  by volume  of  80% vol 
or higher obtained  from  agricultural  produce listed here 

Undenatured  ethyl  alcohol  of an alcoholic  strength  by volume  of less than 
80% vol obtained  from  agricultural produce listed here. 

2204 

2206 

ex 2207 - 

ex 2208 -' 

2209 

Chapter 23 

2401 

4501 

5301 and  5302 

Uà 

That Decision shall enter into force on  1  January 1999. 

Article 2 

Done at 

For the Association Council 
The President 

/ // 

FINANCIAL  STATEMENT 

1. 

2. 

3. 

Budget heading: 

Chapter  12, Article 120 

Legal basis: 

Article  113 of the Treaty 

Titles of the agreements in question: 

Proposal for an amendment to the definition of the concept of "originating 
products" and the methods of administrative cooperation set out in Protocol 4 to 
the different Europe Agreements between the EC and the CEECs, the Baltic 
States and Slovenia and the Agreement on the European Economic Area, and in 
Protocol 3 to the free trade agreements between the EEC and the EFTA countries 

4. 

Purpose: 

To allow Central and Eastern European countries to continue applying flat rates 
where drawback is prohibited or exemption from customs duties is granted. 

To extend the system to industrial products originating in Turkey and simplify or 
correct certain rules, particularly those on determining which country is to be 
considered the originating country. 

5. 

Financial implications: 

As, for the purposes of industrial products, Turkey is already in a customs union 
with the Community and these products are therefore already zero rated when 
imported into the Community, and as the purpose of the amendments is essentially 
to facilitate trade or simplify administrative tasks, this proposal would not seem to 
have any major financial implications. 

lit 

Proposal for a 

COUNCIL  DECISION 

98/ 0263 (ACC) 

on a Community position  on an amendment to Protocol 4 

on the definition  of the concept of "originating products" 

and methods of administrative cooperation set out in 

the Interim Agreement on trade and trade-related  matters 

between the 

European Communities  and the Republic of Slovenia 

THE COUNCIL OF THE EUROPEAN UNION, 

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

Having  regard  to  Article  1 of  the  Council  and  Commission  Decision  of  25  November 
1996  on  the  conclusion  of  the  Interim  Agreement  on  trade  and  trade-related  matters 
between  the  European  Communities  and  their  Member  States,  of  the  one  part,  and  the 
Republic of Slovenia, of the other part, 

Having regard to the Commission proposal, 

Whereas  Article  38  of  Protocol  4  to  the  said  Interim  Agreement  provides  that  the 
Association Council may amend the provisions of the Protocol, 

HAS DECIDED: 

The  position  to  be  adopted  by  the  Community  within  the  Cooperation  Council  which 
performs  the  duties  of  the  Association  Council  according  to  Article  38  of  the  Interim 
Agreement  on  trade  and  trade-related  matters  between  the  European  Communities  and 
their Member  States, of the one part,  and the Republic  of Slovenia,  of the other part,  on 
an  amendment  to  Protocol  4  on  the  definition  of  the  concept  of  "originating  products" 
and methods of administrative cooperation  set out in the Agreement shall be based on the 
draft  Cooperation Council decision annexed to this Decision. 

Done at Brussels, 

For the Council 
The President 

nz 

INTERIM  AGREEMENT 

on trade and trade-related  matters between the European  Communities  and their 
Member  States and  the Republic of Slovenia 

DRAFT 

Decision No . . . / ..  of the Cooperation  Council 

o f . .. 

amending  Protocol 4 on the definition  of the concept of "originating products"  and 
methods of administrative  cooperation 

THE COOPERATION  COUNCIL, 

Having  regard  to  the  Interim  Agreement  on  trade  and  trade-related  matters  between  the 
European  Communities  and  the  Republic  of  Slovenia,  of  the  other  part,  signed  in 
Brussels on  11 November  1996 and in particular Article 38 of Protocol 4 thereof, 

Whereas the definition  of the term "originating products" needs to be amended  to  ensure 
the  proper  operation  of  the  extended  system  of  cumulation  which  permits  the  use  of 
materials originating in the European Community, Poland, Hungary, the Czech Republic, 
the  Slovak  Republic,  Bulgaria,  Romania,  Latvia,  Lithuania,  Estonia,  Slovenia,  the 
European  Economic  Area  (hereinafter  referred  to  as  the  EEA),  Iceland,  Norway  and 
Switzerland; 

Whereas  it  would  seem  advisable  to  maintain  in  operation  until  31  December  2000  the 
system  of  flat  rate  charges provided  for  in Article  15 in connection  with  the  prohibition 
of drawback  and exemption from customs duty; 

Whereas, in view  of the particular  arrangement  on industrial  products obtaining  between 
the  Community  and  Turkey,  it  would  also  be  appropriate  to  extend  the  cumulation 
system to such products originating in Turkey; 

Whereas  to  facilitate  trade  and  simplify  administrative  tasks  it  would  be  desirable  to 
amend the wording of Articles 3, 4 and  12; 

Whereas,  to  take  account  of  changes  in  processing  techniques  and  shortages  of  certain 
raw  materials,  some  corrections  must  be  made  to  the  list  of  working  and  processing 
requirements  which  non-originating  materials  have  to  fulfil  to  qualify  for  originating 
status, 

HAS DECIDED AS FOLLOWS: 

Article 1 

Protocol  4  on  the  definition  of  the  concept  of  "originating  products"  and  methods  of 
administrative cooperation is hereby amended as follows: 

ttY 

1. 

Article l(i) shall be replaced by: 

"(i) 

'added value'  shall be taken to be the ex-works price minus the customs 
value  of  each  of the  materials  incorporated  which  originate  in  the  other 
countries referred to in Articles 3 and 4 or, where the customs value is not 
known  or  cannot  be  ascertained,  the  first  price  verifiably  paid  for  the 
products in the Community or Slovenia." 

2. 

Articles 3 and 4 shall be replaced by: 

Article 3 

Cumulation in the European Community 

1.  Without  prejudice  to  the  provisions  of  Article  2  paragraph  1,  products  shall  be 
considered  as  originating  in  the  Community  if  such  products  are  obtained  there, 
incorporating  materials  originating  in  the  Community,  Bulgaria,  Poland,  Hungary,  the 
Czech  Republic,  the  Slovak  Republic,  Romania,  Lithuania,  Latvia,  Estonia,  Slovenia, 
Iceland, Norway,  Switzerland  (including Liechtenstein)1 or Turkey2 in accordance with 
the provisions of the Protocol on rules of origin annexed to the Agreements between the 
Community and each of these countries, provided that the working or processing carried 
out in the Community goes beyond that referred to in Article 7 of this Protocol. It shall 
not be necessary that such materials have undergone sufficient  working or processing. 

2. Where the working or processing carried out in the Community does not go beyond the 
operations referred to in Article 7, the product obtained shall be considered as originating 
in  the  Community  only  where  the  value  added  there  is  greater  than  the  value  of  the 
materials used originating in any one of the other countries referred to in paragraph  1.  If 
this is not so, the product obtained shall be considered as originating in the country which 
accounts  for  the highest  value  of  originating  materials  used  in  the manufacture  in  the 
Community. 

3. Products, originating in one of the countries referred  to in paragraph  1, which do not 
undergo any working or processing in the Community, retain their origin if exported into 
one of these countries. 

4.  The  cumulation  provided  for  in  this  Article  may  only  be  applied  to  materials  and 
products  which  have  acquired  originating  status  by  an  application  of  rules  of  origin 
identical to those given in this Protocol. 

The Community shall provide Slovenia, through the European Commission with details 
of the Agreements and their  corresponding  rules of  origin, which  are applied  with the 
other countries referred to in paragraph 1. The European Commission shall publish in the 
Official  Journal  of  the  European  Communities  (C  Series)  the  date  on  which  the 

1 

The Principality  of Liechtenstein  has a customs union with Switzerland, and  is a Contracting  Party  to 
the Agreement  on the European Economic Area. 

2  Cumulation  as provided for  in this Article does not apply to materials originating in Turkey which  are 

mentioned  in the list at Annex  V to this Protocol. 

/ /* 

cumulation,  provided  for  in  this  Article  may  be  applied  by  those .countries  listed  in 
paragraph  1  which have fulfilled  the necessary requirements. 

Article 4 

Cumulation in Slovenia 

1.  Without  prejudice  to  the  provisions  of  Article  2  paragraph  2,  products  shall  be 
considered  as  originating  in  Slovenia  if  such  products  are  obtained  there,  incorporating 
materials originating  in the Community, Bulgaria, Poland, Hungary, the Czech Republic, 
the  Slovak  Republic,  Romania,  Lithuania,  Latvia,  Estonia,  Slovenia,  Iceland,  Norway, 
Switzerland  (including  Liechtenstein)1  or  Turkey2  in  accordance  with  the  provisions  of 
the Protocol  on rules of origin annexed to the Agreements between  Slovenia and each  of 
these  countries,  provided  that  the  working  or  processing  carried  out  in  Slovenia  goes 
beyond  that  referred  to  in  Article  7 of  this  Protocol.  It  shall  not  be  necessary  that  such 
materials have undergone sufficient  working or processing. 

2.  Where  the  working  or  processing  carried  out  in  Slovenia  does  not  go  beyond  the 
operations referred  to in Article 7, the product obtained shall be considered  as originating 
in  Slovenia  only  where  the  value  added  there  is  greater  than  the  value  of  the  materials 
used originating  in any one of the other countries referred  to in paragraph  1. If this is not 
so, the product obtained  shall be considered  as originating in the country which  accounts 
for the highest value of originating materials used in the manufacture  in Slovenia. 

3.  Products,  originating  in one  of the countries  referred  to  in paragraph  1, which  do  not 
undergo any working or processing in Slovenia, retain their origin if exported  into one of 
these countries. 

4.  The  cumulation  provided  for  in  this  Article  may  only  be  applied  to  materials  and 
products  which  have  acquired  originating  status  by  an  application  of  rules  of  origin 
identical to those given in this Protocol. 

Slovenia shall provide the Community, through the European Commission with details of 
the Agreements  and their corresponding rules of origin, which are applied with the  other 
countries  referred  to  in  paragraph  1.  The  European  Commission  shall  publish  in  the 
Official  Journal  of  the  European  Communities  (C  Series)  the  date  on  which  the 
cumulation,  provided  for  in  this  Article  may  be  applied  by  those  countries  listed  in 
paragraph  1  which have fulfilled  the necessary requirements. 

3. 

Article  12 shall be replaced by the  following: 

1 

The Principality  of Liechtenstein  has a customs union with Switzerland,  and is a Contracting  Party  to 
the Agreement  on the European Economic Area. 

2  Cumulation  as provided for  in this Article does not apply to materials originating in Turkey which  are 

mentioned  in the list at Annex  V to this Protocol. 

UG 

"1.  Except as provided for in Article 2(1 )(c), Articles 3 and 4 and paragraph 3  of 
this  Article, the  conditions  for  acquiring  originating  status set out  in Title. II 
must continue to be fulfilled  at all times in the Community or Slovenia. 

2.  Except as provided for  in Articles 3 and 4, where originating goods  exported 
from  the  Community  or  Slovenia  to  another  country  return,  they  must  be 
considered  as  non-originating,  unless 
the 
satisfaction  of the customs authorities thaï 

it  can  be  demonstrated 

to 

(a) 

the returning goods are the same as those that were exported; and 

(b) 

they  have not undergone  any  operation  beyond  that  necessary  to  preserve 
them in good condition while in that country or while being exported. 

3.  The acquisition of originating  status in accordance with the conditions set out 
in  Title  II  shall  not  be  affected  by  working  or  processing  done  outside  the 
Community  or  Slovenia  on  materials  exported  from  the  Community  or 
Slovenia and subsequently  reimported there, provided: 

(a) 

the  said  materials  are  wholly  obtained  in  the  Community  or  Slovenia  or 
have  undergone  working  or processing  beyond  the  insufficient  operations 
listed in Article 7 prior to being exported; and 

(b) 

it can be demonstrated to the satisfaction  of the customs authorities that: 

i) 

ii) 

the reimported  goods have been obtained by working or processing 
the exported materials; and 

the total added  value  acquired  outside the  Community  or* Slovenia 
by  applying  the  provisions  of this Article  does not exceed  10% of 
the ex-works  price  of the  end  product  for  which originating  status 
is claimed. 

4.  For  the  purposes  of  paragraph  3,  the  conditions  for  acquiring  originating 
status set out in Title II shall not apply to working or processing done outside 
the Community or Slovenia.  But where, in the list in Annex II, a rule setting 
a maximum value for all the non-originating materials incorporated is applied 
in determining the originating  status of the end product, the total value of the 
non-originating  materials incorporated  in the territory  of the party  concerned, 
taken together with the total  added value acquired  outside the Community  or 
Slovenia by applying the provisions of this Article, shall not exceed the stated 
percentage. 

5.  For  the  purposes  of  applying  the  provisions  of  paragraphs  3  and  4,  "total 
added value" shall be taken to mean all costs arising  outside the  Community 
or Slovenia, including the value of the materials incorporated there. 

6.  The  provisions  of  paragraphs  3  and  4  shall  not  apply  to products  which  do 
not  fulfil  the  conditions  set  out  in  the  list  in  Annex  II  or  which  can  be 
considered  sufficiently  worked  or processed  only  if the  general  values  fixed 
in Article 6(2) are applied. 

/ /^ 

7.  The  provisions  of  paragraphs  3  and  4  shall  not  apply  to  products'  c o r!  lg 

under Chapters 50 to 63 of the Harmonised  System. 

8.  Any  working  or  processing  of  the  kind  covered  by  the  provisions  of  this 
Article and done outside the Community  or Slovenia  shall be done under  the 
outward processing arrangements, or similar arrangements." 

In Articles  13, 14,  15,  17, 21, 27, 30 and  32 the phrase  "referred  to  in Article  4" 
shall be replaced by "referred  to in Articles 3 and 4". 

In  the  last  paragraph  of  Article  15(6)  the  date  "31  December  1998"  shall  be 
replaced by "31 December 2000". 

In Article 26 the reference  "C2/CP3" shall be replaced by "CN22/CN23". 

In  Annex  I,  Note  5.2,  "current  conducting  filaments"  shall  be  added  between 
"artificial  man-made  filaments"  and  "synthetic  man-made  staple  fibres  of 
polypropylene". 

In Annex I, Note 5.2 the fifth  example ("A carpet with tufts  . ..  are met.") shall be 
deleted. 

In Annex  II, between the rules for  HS headings 2202 and 2208 the following  rule 
shall be  inserted: 

HS 
Heading 
No 

(1) 

2207 

Description  of product 

Working or processing of non-originating  materials that 
confers originating status 

(2) 

(3) 

or 

(4) 

Undenatured  ethyl 
alcohol of an alcoholic 
strength by volume of 
80% vol or higher;  ethyl 
alcohol and other spirits, 
denatured, of any 
strength. 

Manufacture: 

- using materials not  classified 
in headings 2207 or 2208 

//T 

10. 

In Annex II, the rule for Chapter 57 shall be replaced by: 

Chapter 
57 

Carpets and other textile 
floor  coverings: 

-Ofneedleloom  felt 

Manufacture  from  (1): 
- natural  fibres 
or 
- chemical materials or textile pulp 

However: 
- polypropylene filament of 

heading 5402, 

- polypropylene fibres of heading 

5503 or 5506, 

- polypropylene filament  tow of 
heading 5501, of which the 
denomination  in all cases of a 
single filament  or fibre is less 
than 9 decitex, may be used 
provided their value does not 
exceed 40% of the ex-works 
price of the product 

- jute fabric  may be used  as 

backing 

Manufacture  from(l): 
- natural fibres not carded or 

combed or otherwise processed 
for spinning, 

or 
- chemical materials or textile pulp 

Manufacture  from(l): 
- coir or jute yam^a\ 
- synthetic or artificial  filament  yam, 
- natural fibres, or 
- man-made staple fibres not carded 

or combed or otherwise 
processed  for spinning 

But jute  fabric  may  be used  as 
backing 

-Of  other felt 

- Other 

<a)  The use of jute yam  is authorised from  1.7.2000. 

/ / <; 

11. 

In Annex II, the rule for HS heading 7006 shall be replaced by: 

7006 

Glass of headings 7003, 
7004 or 7005, bent, 
edgeworked,  engraved, 
drilled, enamelled  or 
otherwise worked, but 
not framed  or fitted  with 
other materials : 
- glass plate substrate 

coated with  dielectric 
thin film,  semi 
conductor grade, in 
accordance with 
SEMII standards1 

- other 

Manufacture  from  materials 
(substrates) of heading 7006 

Manufacture  from  materials 
of heading 7001 

12. 

In Annex II, the rule for HS heading 7601 shall be replaced by: 

7601 

Unwrought  aluminium 

Manufacture  in which: 
-  all the materials used are 

classified  within a heading 
other than that of the 
product; and 

-  the value of all the 

materials used does not 
exceed  50 % of the ex-
works price of the product 

or 
Manufacture  by thermal or 
electrolytic treatment  from 
unalloyed aluminium  or 
waste and scrap of 
aluminium 

13. 

The following  is added after  Annex IV: 

"Annex V 

List of products originating in Turkey 
to which the provisions of Articles 3 and 4 do not apply, 
listed in the order of HS Chapters and Headings 

Chapter 1 

SEMII- Semiconductor  Equipment  and Materials Institute  Incorporated. 

Uo 

Chapter 2 

Chapter 3 

0401 to 0402 

ex 0403  -

0404 to 0410 

0504 

0511 

Chapter 6 

0701 to 0709 

ex  0 7 1 0-
ex  0 7 1 1-

0712 to 0714 

Chapter 8 

Buttermilk,  curdled  milk  and  cream,  yoghurt,  képhir and  other  fermented 
or  acidified  milk  and  cream,  whether  or  not  concentrated  or  containing 
added  sugar  or other  sweetening  matter  or  flavoured  or containing  added 
fruit  or cocoa 

Vegetables (uncooked or cooked by steaming or boiling in water), frozen 
Vegetables,  except  sweet  corn  of  heading  0711  90  30,  provisionally 
preserved  (for  example, by  sulphur  dioxide  gas, in brine, in sulphur  water 
or  in  other  preservative  solutions),  but  unsuitable  in  that  state  for 
immediate  consumption 

ex Chapter 9 -  Coffee,  tea, and spices, excluding maté of heading 0903 

Chapter 10 

Chapter 11 

Chapter  12 

ex  1302- 

Pectin 

1501tol514 

ex 1515-

e x l 5 1 6-

ex  1517 and 
ex  1518-

e x l 5 2 2-

Chapter  16 

1701 

ex  1702  -

Other fixed  vegetable  fats  and oils (excluding jojoba  oil and its  fractions) 
and their fractions, whether or not refined,  but not chemically  modified 

Animal  or  vegetable  fats  and  oils  and  their  fractions,  partly  or  wholly 
hydrogenated,  inter-esterified,  re-esterified  or  elaidinised,  whether  or  not 
refined,  but not further  prepared, excluding hydrogenated  castor oil known 
as 'opal-wax' 

Margarines, imitation lard and other prepared edible fats 

Residues  resulting  from  the  treatment  of  fatty  substances  or  animal  or 
vegetable waxes, excluding degras 

Other  sugars,  including  chemically  pure  lactose,  maltose,  glucose  and 
fructose,  in  solid  form;  sugar  syrups  not  containing  added  flavouring  or 
colouring  matter;  artificial  honey,  whether  or  not  mixed  with  natural 
honey;  caramel  excluding  that  of  headings  1702  11  00,  1702  30-51, 
1702 30 59, 1702 50 00 and  1702 90 10 

/z/ 

1703 

1801 and  1802 

ex  1902 - 

ex 2 0 0 1- 

Pasta,  stuffed,  containing  more  than  20%  by  weight  of  fish,  crustaceans, 
molluscs  or other  aquatic  invertebrates,  sausages  and the  like or meat  and 
meat offal  of any kind, including fats of all kinds 

Cucumbers  and  gherkins,  onions,  mango  chutney,  fruit  of  the  genus 
Capsicum  other  than  sweet  peppers  or  pimentos,  mushrooms  and  olives, 
prepared or preserved by vinegar or acetic acid 

2002 and 2003 

ex 2004 - 

ex 2005 - 

Other vegetables prepared or preserved otherwise than by vinegar or acetic 
acid,  frozen,  other  than  products  of  heading  2006,  excluding  potatoes  in 
the form of flour or meal and flakes of sweet corn 

Other vegetables prepared or preserved otherwise than by vinegar or acetic 
acid,  not  frozen,  other  than  products  of  heading  2006,  excluding  potato 
and sweet corn products 

2006 and 2007 

ex 2008 - 

2009 

Fruits,  nuts  and  other  edible  parts  of  plants,  otherwise  prepared  or 
preserved,  whether  or  not  containing  added  sugar  or  other  sweetening 
matter  or  spirit,  not  elsewhere  specified  or  included,  excluding  peanut 
butter, palm hearts, maize, yams, sweet potatoes and similar edible parts of 
plants containing  5% or more by weight of starch, vine leaves, hop shoots 
and other similar edible parts of plants 

ex 2106 - 

Flavoured and coloured sugars, syrups and molasses 

Undenatured  ethyl alcohol of an alcoholic  strength by volume  of  80% vol 
or higher obtained from  agricultural produce listed here 

Undenatured  ethyl alcohol of an alcoholic strength by volume of less than 
80% vol obtained from  agricultural produce listed here. 

2204 

2206 

ex 2207 - 

ex 2208 - 

2209 

Chapter 23 

2401 

4501 

5301 and 5302 

/Zl 

That Decision shall enter into force on 1  January 1999. 

Article 2 

Done at 

For the Cooperation Council 
The President 

/£. 

FINANCIAL  STATEMENT 

1. 

2- 

3. 

Budget heading: 

Chapter  12, Article  120 

Legal basis: 

Article  113 of the Treaty 

Titles of the agreements in question: 

Proposal for an amendment to the definition  of the concept of "originating 
products" and the methods of administrative cooperation set out in Protocol 4 to 
the different  Europe Agreements between the EC and the CEECs, the Baltic 
States and Slovenia and the Agreement on the European Economic Area, and in 
Protocol 3 to the free trade agreements between the EEC and the EFT A countries 

4. 

Purpose: 

To allow Central and Eastern European countries to continue applying flat  rates 
where drawback is prohibited or exemption from customs duties is granted. 

To extend the system to industrial products originating in Turkey and simplify  or 
correct certain rules, particularly those on determining which country is to be 
considered the originating  country. 

5. 

Financial  implications: 

As, for the purposes of industrial products, Turkey is already in a customs union 
with the Community and these products are therefore  already zero rated when 
imported into the Community, and as the purpose of the amendments is 
essentially to facilitate  trade or simplify  administrative tasks, this proposal  would 
not seem to have any major  financial  implications. 

/£<? 

DECISION N° 

.../ OF THE EC-SWITZERLAND  JOINT  COMMITTEE 

of 
amending Protocol 3 to the Agreement between the European Economic 
Community  and the Swiss Confederation  concerning the definition  of the concept of 
"originating products" and methods of administrative  cooperation 

THE JOINT COMMITTEE, 

Having  regard  to  the  Agreement  between  the  European  Economic  Community  and  the 
Swiss  Confederation1,  hereinafter  referred  to  as "the  Agreement",  signed  in Brussels  on 
22 July  1972, 

Having  regard  to  Protocol  3  concerning  the  definition  of  the  concept  of  originating 
products  and methods  of administrative  cooperation,  hereinafter  referred  to as  "Protocol 
3", and in particular Article 38 thereof, 

Whereas the definition  of the term "originating products" needs to be amended to ensure 
the  proper  operation  of  the  extended  system  of  cumulation  which  permits  the  use  of 
materials originating in the European  Community, Poland, Hungary, the Czech Republic, 
the  Slovak  Republic,  Bulgaria,  Romania,  Latvia,  Lithuania,  Estonia,  Slovenia,  the 
European  Economic  Area  (hereinafter  referred  to  as  the  EEA),  Iceland,  Norway  and 
Switzerland; 

Whereas, in view of the particular  arrangement  on industrial  products obtaining  between 
the  Community  and  Turkey,  it  would  also  be  appropriate  to  extend  the  cumulation 
system to such products originating in Turkey; 

Whereas  to  facilitate  trade  and  simplify  administrative  tasks  it  would  be  desirable  to 
amend the wording of Articles 3 and 4; 

Whereas,  to  take  account  of  changes  in  processing  techniques  and  shortages  of  certain 
raw  materials,  some  corrections  must  be  made  to  the  list  of  working  and  processing 
requirements  which  non-originating  materials  have  to  fulfil  to  qualify  for  originating 
status, 

HAS DECIDED AS FOLLOWS: 

Article 1 

Protocol 3 is hereby amended as follows: 

1. 

Article  l(i) shall be replaced by: 

"(i) 

'added  value'  shall  be  taken  to  be the  ex-works price  minus the  customs 
value  of  each  of  the  materials  incorporated  which  originate  in  the  other 
countries referred  to in Articles 3 and 4 or, where the customs value is not 

1 r\ i xr° 

OJN°L300,  31.12.1972, p. 189 

Mf 

known  or  cannot  be  ascertained,  the  first  price  verifiably  paid  for  the 
products in the Community or Switzerland." 

2. 

Articles 3 and 4 shall be replaced by: 

Article 3 

Cumulation in the European  Community 

1.  Without  prejudice  to  the  provisions  of  Article  2  paragraph  1,  products  shall  be 
considered  as  originating  in  the  Community  if  such  products  are  obtained  there, 
incorporating  materials  originating  in  the  Community,  Bulgaria,  Poland,  Hungary,  the 
Czech  Republic,  the  Slovak  Republic,  Romania,  Lithuania,  Latvia,  Estonia,  Slovenia, 
Iceland,  Norway,  Switzerland  (including  Liechtenstein)1  or  Turkey2  in  accordance  with 
the provisions  of the  Protocol  on rules of origin annexed to the Agreements  between the 
Community  and  each of these countries, provided that the working  or processing  carried 
out  in the  Community  goes beyond  that referred  to in Article  7 of this  Protocol.  It  shall 
not be necessary that such materials have undergone sufficient  working or processing. 

2. Where the working or processing carried out in the Community does not go beyond the 
operations referred  to in Article 7, the product obtained shall be considered  as originating 
in  the  Community  only  where  the  value  added  there  is  greater  than  the  value  of  the 
materials used originating  in any one of the other countries referred  to in paragraph  1.  If 
this is not so, the product obtained shall be considered as originating in the country which 
accounts  for  the  highest  value  of  originating  materials  used  in  the  manufacture  in  the 
Community. 

3.  Products,' originating  in one  of the  countries  referred  to  in paragraph  1, which  do not 
undergo any working or processing in the Community, retain their origin if exported  into 
one of these countries. 

4.  The  cumulation  provided  for  in  this  Article  may  only  be  applied  to  materials  and 
products  which  have  acquired  originating  status  by  an  application  of  rules  of  origin 
identical to those given in this Protocol. 

The  Community  shall  provide  Switzerland,  through  the  European  Commission  with 
details of the Agreements  and their corresponding rules of origin, which are applied  with 
the other countries referred  to in paragraph  1. The European Commission  shall publish in 
the  Official  Journal  of  the  European  Communities  (C  Series)  the  date  on  which  the 
cumulation,  provided  for  in  this  Article  may  be  applied  by  those  countries  listed  in 
paragraph  1  which have fulfilled  the necessary requirements. 

Article 4 

Cumulation in Switzerland 

1 

The Principality  of Liechtenstein  has a customs union with Switzerland,  and  is a Contracting  Party to 
the Agreement  on the European Economic Area. 

2  Cumulation  as provided for  in this Article does not apply to materials originating  in  Turkey which are 

mentioned  in the list at Annex  V to this Protocol. 

'°V 

in  Switzerland 

1.  Without  prejudice  to  the  provisions  of  Article  2  paragraph  2,  products; shall  be 
if  such  products  are  obtained  ^here, 
considered  as  originating 
incorporating  materials  originating  in  the  Community,  Bulgaria,  Poland,  Hungary,  the 
Czech  Republic,  the  Slovak  Republic,  Romania,  Lithuania,  Latvia,  Estonia,  Slovenia, 
Iceland,  Norway,  Switzerland  (including  Liechtenstein)1  or  Turkey2  in  accordance  with 
the  provisions  of  the  Protocol  on  rules  of  origin  annexed  to  the  Agreements  between 
Switzerland  and  each of these countries, provided  that the working or processing  carried 
out  in  Switzerland  goes beyond  that referred  to  in Article  7 of this Protocol.  It  shall  not 
be necessary that such materials have undergone sufficient  working or processing. 

2.  Where  the  working  or processing  carried  out  in  Switzerland  does  not  go  beyond  the 
operations referred  to in Article 7, the product obtained shall be considered as originating 
in Switzerland  only where the value added there is greater than the value of the  materials 
used originating  in any one of the other countries referred  to in paragraph  1. If this is not 
so, the product  obtained  shall be considered  as originating  in the country which  accounts 
for the highest value of originating materials used in the manufacture  in  Switzerland. 

3.  Products, originating  in one  of the countries  referred  to  in paragraph  1, which  do  not 
undergo any working or processing in Switzerland, retain their origin if exported into one 
of these countries. 

4.  The  cumulation  provided  for  in  this  Article  may  only  be  applied  to  materials  and 
products  which  have  acquired  originating  status  by  an  application  of  rules  of  origin 
identical to those given in this Protocol. 

Switzerland  shall  provide  the  Community,  through  the  European  Commission  with 
details of the Agreements and their corresponding  rules of origin, which are applied  with 
the other countries referred  to in paragraph  1. The European Commission shall publish in 
the  Official  Journal  of  the  European  Communities  (C  Series)  the  date  on  which  the 
cumulation,  provided  for  in  this  Article  may  be  applied  by  those  countries  listed  in 
paragraph  1  which have fulfilled  the necessary requirements. 

3. 

4. 

5. 

6. 

In Articles  13, 14,  15, 17, 21, 27, 30 and  32 the phrase "referred  to  in  Article  4" 
shall be replaced by "referred  to in Articles 3 and 4". 

In Article 26 the reference  "C2/CP3" shall be replaced by "CN22/CN23". 

In  Annex  I,  Note  5.2,  "current  conducting  filaments"  shall  be  added  between 
"artificial  man-made  filaments"  and  "synthetic  man-made  staple  fibres  of 
polypropylene". 

In Annex I, Note 5.2 the fifth  example ("A carpet with tufts  . ..  are met.") shall be 
deleted. 

1 

The Principality  of Liechtenstein  has a customs  union  with Switzerland, and is a Contracting  Party  to 
the Agreement  on the European Economic Area. 

2  Cumulation  as provided for  in this Article does not apply  to materials originating  in Turkey which are 

mentioned  in the list at Annex  V to this Protocol. 

u. 

7. 

In Annex  II, between  the  rules  for  HS  headings  2202  and 2208  the  following  rule 
shall  be inserted: 

* ' 

••<• 

. 

HS 
Heading 
No 

(1) 

2207 

Description of product 

Working or processing of non-originating  materials that 
confers originating status 

(2) 

(3) 

or 

(4) 

Undenatured ethyl 
alcohol of an alcoholic 
strength by volume of 
80% vol or higher;  ethyl 
alcohol and other spirits, 
denatured, of any 
strength. 

Manufacture: 

- using materials not classified 
in headings 2207 or 2208 

/& 

8. 

In Annex II, the rule for Chapter 57 shall be replaced by: 

Chapter 
57 

Carpets and other textile 
floor  coverings: 

- Of needleloom  felt 

i 

-Of  other  felt 

- Other 

Manufacture  from  (1): 
- natural  fibres 

or 
- chemical materials or textile pulp 

However: 
- polypropylene filament  of 

heading 5402, 

- polypropylene fibres  of heading 

5503 or 5506, 

- polypropylene filament  tow of 
heading 5501, of which the 
denomination  in all cases of a 
single filament  or fibre  is less 
than 9 decitex, may be used 
provided their value does not 
exceed 40% of the ex-works 
price of the product 

- jute fabric  may be used as 

backing 

Manufacture  from(l): 
- natural fibres not carded  or 

combed  or otherwise  processed 
for spinning, 

or 
- chemical materials or textile pulp 

Manufacture  from(l): 
- coir or jute yarn*3), 
- synthetic or artificial  filament  yam, 
- natural  fibres, or 
- man-made staple fibres  not carded 

or combed or otherwise 
processed  for  spinning 

But jute fabric  may be used as 
backing 

<a)  The use of jute yam  is authorised  from  1.7.2000. 

II 

9. 

In Annex II, the rule for HS heading 7006 shall be replaced by: 

7006 

Glass of headings  7003, 
7004 or 7005, bent, 
edgeworked,  engraved, 
drilled, enamelled  or 
otherwise worked, but 
not framed  or fitted  with 
other materials : 
- glass plate substrate 

coated with  dielectric 
thin film, semi 
conductor grade, in 
accordance with 
SEMII standards1 

- other 

Manufacture  from  materials 
(substrates) of heading 7006 

Manufacture  from  materials 
of heading 7001 

10. 

In Annex II, the rule for HS heading 7601 shall be replaced by: 

7601 

Unwrought  aluminium 

Manufacture  in which: 
-  all the materials used are 

classified  within a heading 
other than that of the 
product; and 

-  the value of all the 

materials used does not 
exceed 50 % of the ex-
works price of the product 

or 
Manufacture  by thermal or 
electrolytic treatment  from 
unalloyed aluminium or 
waste and scrap of 
aluminium 

11. 

The following  is added after  Annex IV: 

"Annex V 

List of products originating in Turkey 
to which the provisions of Articles 3 and 4 do not apply, 
listed in the order of HS Chapters and Headings 

SEMIl- Semiconductor  Equipment  and Materials Institute  Incorporated. 

/3 O 

x 

-. 

Buttermilk, curdled milk and cream, Yoghurt, képhir and other  fermented 
or  acidified  milk  and  cream,  whether  or not  concentrated  or  containing 
added sugar or other sweetening  matter or flavoured  or containing  added 
fruit or cocoa 

Vegetables (uncooked or cooked by steaming or boiling in water), frozen 
Vegetables,  except  sweet  corn  of  heading  0711  90  30,  provisionally 
preserved (for example, by sulphur dioxide gas, in brine, in sulphur water 
or  in  other  preservative  solutions),  but  unsuitable  in  that  state  for 
immediate consumption 

Chapter 1 

Chapter 2 

Chapter 3 

0401 to 0402 

ex 0403 - 

0404 to 0410 

0504 

0511 

Chapter 6 

0701 to 0709 

ex 0710 - 
ex 0 7 1 1- 

0712 to 0714 

Chapter 8 

ex Chapter 9 -  Coffee, tea, and spices, excluding maté of heading 0903 

Chapter 10 

Chapter 11 

Chapter 12 

ex  1302- 

Pectin 

1501tol514 

ex  1515 - 

ex  1516- 

ex  1517 and 
ex  1518 - 

ex  1522- 

Chapter 16 

1701 

ex  1702- 

Other fixed  vegetable fats and oils (excluding jojoba oil and its  fractions) 
and their fractions, whether or not refined, but not chemically  modified 

Animal  or  vegetable  fats  and  oils  and  their  fractions,  partly  or  wholly 
hydrogenated,  inter-esterified,  re-esterified  or elaidinised,  whether  or not 
refined, but not further prepared, excluding hydrogenated castor oil known 
as 'opal-wax' 

Margarines, imitation lard and other prepared edible fats 

Residues  resulting  from  the  treatment  of  fatty  substances  or  animal  or 
vegetable waxes, excluding degras 

Other  sugars,  including  chemically  pure  lactose,  maltose,  glucose  and 
fructose,  in solid  form;  sugar syrups not containing  added flavouring  or 

IS/ 

colouring  matter;  artificial  honey,  whether  or  not  mixed  with  natural 
honey;  caramel  excluding  that  of  headings  1702  11  00, Ï702  30  51, 
1702 30 59, 1702 50 00 and 1702 90 10 

1703 

1801 and 1802 

ex  1902 - 

ex 2001 - 

Pasta,  stuffed,  containing  more than 20% by weight  of  fish,  crustaceans, 
molluscs  or other aquatic invertebrates, sausages and the like or meat and 
meat offal of any kind, including fats of all kinds 

Cucumbers  and  gherkins,  onions,  mango  chutney,  fruit  of  the  genus 
Capsicum  other than sweet  peppers  or pimentos,  mushrooms  and olives, 
prepared or preserved by vinegar or acetic acid 

2002 and 2003 

ex 2004 - 

ex 2005 - 

Other vegetables prepared or preserved otherwise than by vinegar or acetic 
acid,  frozen,  other than products  of  heading  2006,  excluding  potatoes  in 
the form of flour or meal and flakes of sweet corn 

Other vegetables prepared or preserved otherwise than by vinegar or acetic 
acid,  not  frozen,  other  than  products  of  heading  2006,  excluding  potato 
and sweet corn products 

2006 and 2007 

ex 2 0 0 8- 

2009 

Fruits,  nuts  and  other  edible  parts  of  plants,  otherwise  prepared  or 
preserved,  whether  or  not  containing  added  sugar  or  other  sweetening 
matter  or  spirit,  not  elsewhere  specified  or  included,  excluding  peanut 
butter, palm hearts, maize, yams, sweet potatoes and similar edible parts of 
plants containing  5% or more by weight of starch, vine leaves, hop shoots 
and other similar edible parts of plants 

ex 2106 - 

Flavoured and coloured sugars, syrups and molasses 

Undenatured ethyl alcohol of an alcoholic strength by volume of 80% vol 
or higher obtained from agricultural produce listed here 

Undenatured ethyl alcohol  of an alcoholic strength by volume of less than 
80% vol obtained from agricultural produce listed here. 

2204 

2206 

ex 2207 - 

ex 2208 - 

2209 

Chapter 23 

2401 

4501 

5301 and 5302 

131 

That Decision shall enter into force on 1 January 1999. 

Article 2 

Done at 

For the Joint Committee 
The President 

133 

FINANCIAL  STATEMENT 

1. 

2. 

3. 

Budget heading: 

Chapter  12, Article  120 

Legal basis: 

Article  113 of the Treaty 

Titles of the agreements in question: 

Proposal for  an amendment to the definition  of the concept of "originating 
products" and the methods of administrative cooperation set out in Protocol 4 to 
the different  Europe Agreements between the EC and the CEECs, the Baltic 
States and Slovenia and the Agreement on the European Economic Area, and in 
Protocol 3 to the free trade agreements between the EEC and the EFTA  countries 

4. 

Purpose: 

To allow Central and Eastern European countries to continue applying flat  rates 
where drawback is prohibited or exemption from customs duties is granted. 

To extend the system to industrial products originating in Turkey and simplify  or 
correct certain rules, particularly those on determining which country is to be 
considered the originating  country. 

5. 

Financial implications: 

As, for the purposes of industrial products, Turkey is already in a customs union 
with the Community and these products are therefore  already zero rated when 
imported into the Community, and as the purpose of the amendments  is 
essentially to facilitate trade or simplify  administrative tasks, this proposal would 
not seem to have any major  financial  implications. 

m 

DECISION N° 

.../ OF THE EC-NORWAY JOINT  COMMITTEE 
'"'  *' 

of 
amending Protocol 3 to the Agreement between the European  Economic 
Community  and the Kingdom of Norway concerning the definition  of the concept of 
"originating products" and methods of administrative  cooperation 

THE JOINT COMMITTEE, 

Having  regard  to  the  Agreement  between  the  European  Economic  Community  and the 
Kingdom  of Norway1,  hereinafter  referred  to  as "the  Agreement",  signed  in Brussels on 
14 May 1973, 

Having  regard  to  Protocol  3  concerning  the  definition  of  the  concept  of  originating 
products  and  methods  of administrative  cooperation,  hereinafter  referred  to as  "Protocol 
3", and in particular Article 38 thereof, 

Whereas the definition  of the term "originating products" needs to be amended to ensure 
the  proper  operation  of  the  extended  system  of  cumulation  which  permits  the  use  of 
materials originating in the European Community, Poland, Hungary, the Czech Republic, 
the  Slovak  Republic,  Bulgaria,  Romania,  Latvia,  Lithuania,  Estonia,  Slovenia,  the 
European  Economic  Area  (hereinafter  referred  to  as  the  EEA),  Iceland,  Norway  and 
Switzerland; 

Whereas, in view of the particular  arrangement "on industrial products obtaining between 
the  Community  and  Turkey,  it  would  also  be  appropriate  to  extend  the  cumulation 
system to such products originating in Turkey; 

Whereas  to  facilitate  trade  and  simplify  administrative  tasks  it  would  be  desirable  to 
amend the wording of Articles 3 and 4; 

Whereas,  to  take  account  of  changes  in  processing  techniques  and  shortages  of  certain 
raw  materials,  some  corrections  must  be  made  to  the  list  of  working  and  processing 
requirements  which  non-originating  materials  have  to  fulfil  to  qualify  for  originating 
status, 

HAS DECIDED AS FOLLOWS: 

Article 1 

Protocol 3 is hereby amended as follows: 

1. 

Article  l(i) shall be replaced by: 

"(i) 

'added  value'  shall  be  taken  to  be  the  ex-works price  minus  the  customs 
value  of  each  of  the  materials  incorporated  which  originate  in  the  other 
countries referred  to in Articles 3 and 4 or, where the customs value is not 

1O J N °L  171, 27.6.1973, p. 2 

W 

known  or  cannot  be  ascertained,  the  first  price  verifiably  paid  for  the 
products in the Community or Norway." 

2. 

Articles 3 and 4 shall be replaced by: 

Article  3 

Cumulation in the European  Community 

1.  Without  prejudice  to  the  provisions  of  Article  2  paragraph  1,  products  shall  be 
considered  as  originating  in  the  Community  if  such  products  are  obtained  there, 
incorporating  materials  originating  in  the  Community,  Bulgaria,  Poland,  Hungary,  the 
Czech  Republic,  the  Slovak  Republic,  Romania,  Lithuania,  Latvia,  Estonia,  Slovenia, 
Iceland, Norway,  Switzerland  (including  Liechtenstein)1  or Turkey2  in accordance  with 
the provisions of the Protocol  on rules of origin annexed to the Agreements between the 
Community  and each of these countries, provided that the working or processing carried 
out in the Community  goes beyond that referred to in Article 7 of this Protocol.  It shall 
not be necessary that such materials have undergone sufficient working or processing. 

2. Where the working or processing carried out in the Community does not go beyond the 
operations referred to in Article 7, the product obtained shall be considered as originating 
in  the  Community  only  where  the  value  added  there  is  greater  than  the  value  of  the 
materials used originating in any one of the other countries referred to in paragraph  1.  If 
this is not so, the product obtained shall be considered as originating in the country which 
accounts  for  the  highest  value  of  originating  materials  used  in  the  manufacture  in  the 
Community. 

3.  Products, originating  in one of the countries referred to in paragraph  1, which do not 
undergo any working or processing in the Community, retain their origin if exported into 
one of these countries. 

4.  The  cumulation  provided  for  in  this  Article  may  only  be  applied  to  materials  and 
products  which  have  acquired  originating  status  by  an  application  of  rules  of  origin 
identical to those given in this Protocol. 

The  Community  shall provide Norway,  through the European Commission with details 
of  the  Agreements  and their  corresponding  rules  of  origin,  which  are  applied  with the 
other countries referred to in paragraph 1. The European Commission shall publish in the 
Official  Journal  of  the  European  Communities  (C  Series)  the  date  on  which  the 
cumulation,  provided  for  in  this  Article  may  be  applied  by  those  countries  listed  in 
paragraph 1  which have fulfilled  the necessary requirements. 

Article  4 

Cumulation in Norway 

1 

The Principality of Liechtenstein  has a customs  union with Switzerland,  and is a Contracting Party  to 
the Agreement on the European Economic Area. 

2  Cumulation as provided for  in this Article does not apply to materials originating in Turkey which are 

mentioned in the list at Annex  V to this Protocol. 

IH 

1.  Without  prejudice  to  the  provisions  of  Article  2  paragraph  2,  products'shall  be 
considered  as  originating  in  Norway  if  such  products  are  obtained  there, Incorporating 
materials originating  in the Community,  Bulgaria, Poland, Hungary, the Czech Republic, 
the  Slovak  Republic,  Romania,  Lithuania,  Latvia,  Estonia,  Slovenia,  Iceland,  Norway, 
Switzerland  (including  Liechtenstein)1  or  Turkey2  in  accordance  with  the  provisions  of 
the Protocol  on rules  of origin  annexed  to the Agreements  between Norway  and  each  of 
these  countries,  provided  that  the  working  or  processing  carried  out  in  Norway  goes 
beyond  that  referred  to  in  Article  7  of  this  Protocol.  It  shall  not  be  necessary  that  such 
materials have undergone sufficient  working or processing. 

2.  Where  the  working  or  processing  carried  out  in  Norway  does  not  go  beyond  the 
operations referred  to in Article 7, the product obtained shall be considered as originating 
in  Norway  only  where  the  value  added  there  is  greater  than  the  value  of  the  materials 
used originating  in any one of the other countries referred  to in paragraph  1. If this is not 
so, the product  obtained  shall be considered  as originating  in the country which  accounts 
for the highest value of originating materials used in the manufacture  in Norway. 

3.  Products, originating  in  one  of the  countries  referred  to in paragraph  1, which  do  not 
undergo any working  or processing  in Norway, retain their origin if exported  into one  of 
these countries. 

4.  The  cumulation  provided  for  in  this  Article  may  only  be  applied  to  materials  and 
products  which  have  acquired  originating  status  by  an  application  of  rules  of  origin 
identical to those given in this Protocol. 

Norway shall provide the Community,  through the European  Commission  with details of 
the Agreements  and their corresponding  rules of origin, which are applied  with the  other 
countries  referred  to  in  paragraph  1.  The  European  Commission  shall  publish  in  the 
Official  Journal  of  the  European  Communities  (C  Series)  the  date  on  which  the 
cumulation,  provided  for  in  this  Article  may  be  applied  by  those  countries  listed  in 
paragraph  1  which have fulfilled  the necessary requirements. 

3. 

4. 

5. 

6. 

1 

In Articles  13,  14,  15,  17, 21, 27, 30 and  32 the phrase "referred  to in Article  4" 
shall be replaced by "referred  to in Articles 3 and 4". 

In Article 26 the reference  "C2/CP3" shall be replaced by "CN22/CN23". 

In  Annex  I,  Note  5.2,  "current  conducting  filaments"  shall  be  added  between 
"artificial  man-made  filaments"  and  "synthetic  man-made  staple  fibres  of 
polypropylene". 

In Annex I, Note 5.2 the fifth  example ("A carpet with tufts  . ..  are met.") shall be 
deleted. 

The Principality  of Liechtenstein  has a customs union with Switzerland, and is a Contracting  Party  to 
the Agreement  on the European Economic Area. 

2  Cumulation as provided for  in this Article does not apply to materials originating  in Turkey which are 

mentioned  in the list at Annex  V to this Protocol. 

(31 

7. 

In Annex II, between the rules for  HS headings 2202 and 2208 the following  rule 
shall be inserted: 

HS 
Heading 
No 

(1) 

2207 

Description of  product 

Working or processing of non-originating  materials that 
confers originating status 

(2) 

(3) 

or 

(4) 

Undenatured  ethyl 
alcohol of an alcoholic 
strength by volume of 
80% vol or higher;  ethyl 
alcohol and other spirits, 
denatured, of any 
strength. 

Manufacture: 

- using materials not  classified 
in headings 2207 or 2208 

132 

8. 

In Annex II, the rule for Chapter 57 shall be replaced by: 

Chapter 
57 

Carpets and other textile 
floor  coverings: 

-Ofneedleloomfelt 

Manufacture  from  (1): 
- natural  fibres 
or 
- chemical materials or textile pulp 

However: 
- polypropylene filament  of 

heading 5402, 

- polypropylene fibres of heading 

5503 or 5506, 

- polypropylene filament  tow of 
heading 5501, of which  the 
denomination  in all cases of a 
single filament  or fibre  is less 
than 9 decitex, may be used 
provided their value does not 
exceed 40% of the ex-works 
price of the product 

- jute fabric may be used as 

backing 

Manufacture  from(l): 
- natural fibres not carded or 

combed or otherwise processed 
for spinning, 

or 
- chemical materials or textile pulp 

Manufacture  from(l): 
- coir or jute yam^a\ 
- synthetic or artificial filament yam, 
- natural fibres, or 
- man-made staple fibres  not carded 

or combed or otherwise 
processed  for spinning 

But jute fabric may be used as 
backing 

-Of  other  felt 

- Other 

(a)  The use of jute yam is authorised from 1.7.2000. 

I3*i 

9. 

In Annex II, the rule for HS heading 7006 shall be replaced by: 

7006 

Glass of headings  7003, 
7004 or 7005, bent, 
edgeworked,  engraved, 
drilled, enamelled or 
otherwise worked, but 
not framed  or fitted with 
other materials : 
- glass plate substrate 

coated with  dielectric 
thin film, semi 
conductor grade, in 
accordance with 
SEMll  standards1 

-  other 

Manufacture  from  materials 
(substrates) of heading 7006 

Manufacture  from  materials 
of heading 7001 

10. 

In Annex II, the rule for HS heading 7601 shall be replaced by: 

7601 

Unwrought  aluminium 

Manufacture  in which: 
-  all the materials used are 

classified  within a heading 
other than that of the 
product; and 

-  the value of all the 

materials used does not 
exceed  50 % of the ex-
works price of the product 

or 
Manufacture  by thermal or 
electrolytic treatment  from 
unalloyed aluminium or 
waste and scrap of 
aluminium 

11. 

The following  is added after  Annex IV: 

"Annex V 

List of products originating  in Turkey 
to which the provisions of Articles 3 and 4 do not apply, 
listed in the order of HS Chapters and Headings 

SEMII- Semiconductor  Equipment and Materials  Institute  Incorporated. 

l^O 

Chapter 1 

Chapter 2 

Chapter 3 

0401 to 0402 

ex 0403 - 

0404 to 0410 

0504 

0511 

Chapter 6 

0701 to 0709 

ex 0710 - 
ex 0 7 1 1- 

0712 to 0714 

Chapter 8 

Buttermilk,  curdled  milk  and  cream, yoghurt,  képhir  and  other  fermented 
or  acidified  milk  and  cream,  whether  or  not  concentrated  or  containing 
added  sugar  or  other  sweetening  matter  or  flavoured  or  containing  added 
fruit  or cocoa 

Vegetables (uncooked or cooked by steaming or boiling in water),  frozen 
Vegetables,  except  sweet  corn  of  heading  0711  90  30,  provisionally 
preserved  (for  example, by sulphur dioxide gas, in brine, in sulphur  water 
or  in  other  preservative  solutions),  but  unsuitable  in  that  state  for 
immediate  consumption 

ex Chapter 9 -  Coffee,  tea, and spices, excluding maté of heading 0903 

Chapter  10 

Chapter 11 

Chapter  12 

ex  1302- 

Pectin 

1501tol514 

ex  1515 - 

ex  1516 - 

ex  1517 and 
ex  1518 - 

ex  1522 - 

Chapter  16 

1701 

ex  1702 - 

Other  fixed  vegetable  fats  and  oils (excluding jojoba  oil and  its  fractions) 
and their fractions,  whether or not refined,  but not chemically  modified 

Animal  or  vegetable  fats  and  oils  and  their  fractions,  partly  or  wholly 
hydrogenated,  inter-esterified,  re-esterified  or  elaidinised,  whether  or  not 
refined,  but not further  prepared, excluding hydrogenated  castor oil known 
as  'opal-wax' 

Margarines, imitation lard and other prepared edible  fats 

Residues  resulting  from  the  treatment  of  fatty  substances  or  animal  or 
vegetable waxes, excluding degras 

Other  sugars,  including  chemically  pure  lactose,  maltose,  glucose  and 
fructose,  in  solid  form;  sugar  syrups  not  containing  added  flavouring  or 

Mr 

colouring  matter;  artificial  honey,  whether  or  not  mixed  with  natural 
honey;  caramel  excluding  that  of  headings  1702  11  00,  1702  30  51, 
1702 30 59,  1702 50 00 and  1702 90 10 

1703 

1801 and  1802 

ex  1902 - 

ex 2001 - 

Pasta,  stuffed,  containing  more  than  20% by  weight  of  fish,  crustaceans, 
molluscs  or other  aquatic  invertebrates, sausages  and the  like  or  meat  and 
meat offal  of any kind, including fats of all kinds 

Cucumbers  and  gherkins,  onions,  mango  chutney,  fruit  of  the  genus 
Capsicum  other  than  sweet  peppers  or  pimentos,  mushrooms  and  olives, 
prepared or preserved by vinegar or acetic acid 

2002 and 2003 

ex 2004 - 

ex 2005 - 

Other vegetables prepared  or preserved otherwise than by vinegar or acetic 
acid,  frozen,  other  than  products  of  heading  2006,  excluding  potatoes  in 
the form  of flour or meal and flakes of sweet corn 

Other vegetables prepared or preserved otherwise than by vinegar or acetic 
acid,  not  frozen,  other  than  products  of  heading  2006,  excluding  potato 
and sweet corn products 

2006 and 2007 

ex 2008 - 

2009 

Fruits,  nuts  and  other  edible  parts  of  plants,  otherwise  prepared  or 
preserved,  whether  or  not  containing  added  sugar  or  other  sweetening 
matter  or  spirit,  not  elsewhere  specified  or  included,  excluding  peanut 
butter, palm hearts, maize, yams, sweet potatoes and similar edible parts of 
plants containing  5% or more by weight of starch, vine leaves, hop  shoots 
and other similar edible parts of plants 

ex 2106 - 

Flavoured and coloured sugars, syrups and molasses 

Undenatured  ethyl  alcohol  of an alcoholic  strength by volume  of  80% vol 
or higher obtained from  agricultural produce listed here 

Undenatured  ethyl alcohol  of an alcoholic strength by volume of  less  than 
80% vol obtained from  agricultural produce listed here. 

2204 

2206 

ex 2207 - 

ex 2208 - 

2209 

Chapter 23 

2401 

4501 

5301 and 5302 

Ml 

That Decision shall enter into force on 1  January 1999. 

Article 2 

Done at 

For the Joint Committee 
The President 

H 3 

FINANCIAL  STATEMENT 

1 • 

2- 

3. 

Budget heading: 

Chapter  12, Article  120 

Legal basis: 

Article  113 of the Treaty 

Titles of the agreements in question: 

Proposal for an amendment to the definition  of the concept of "originating 
products" and the methods of administrative cooperation set out in Protocol 4 to 
the different  Europe Agreements between the EC and the CEECs, the Baltic 
States and Slovenia and the Agreement on the European Economic Area, and in 
Protocol 3 to the free trade agreements between the EEC and the EFTA countries 

4. 

Purpose: 

To allow Central and Eastern European countries to continue applying flat  rates 
where drawback is prohibited or exemption from  customs duties is granted. 

To extend the system to industrial products originating in Turkey and simplify  or 
correct certain rules, particularly those on determining which country is to be 
considered the originating country. 

5. 

Financial  implications: 

As, for the purposes of industrial products, Turkey is already in a customs union 
with the Community and these products are therefore  already zero rated when 
imported  into the Community, and as the purpose of the amendments is 
essentially to facilitate  trade or simplify  administrative tasks, this proposal would 
not seem to have any major  financial  implications. 

M°j 

DECISION N° 

.../ OF THE EC-ICELAND JOINT  COMMITTEE 

of 
amending Protocol 3 to the Agreement between the European Economic 
Community  and the Republic of Iceland concerning the definition  of the concept of 
"originating products" and methods of administrative  cooperation 

THE JOINT COMMITTEE, 

Having  regard  to  the  Agreement  between  the  European  Economic  Community  and  the 
Republic of Iceland1, hereinafter  referred to as "the Agreement", signed in Brussels on 22 
July  1972, 

Having  regard  to  Protocol  3  concerning  the  definition  of  the  concept  of  originating 
products  and  methods  of administrative  cooperation,  hereinafter  referred  to  as  "Protocol 
3", and in particular Article 38 thereof, 

Whereas the definition  of the term "originating products" needs to be amended to  ensure 
the  proper  operation  of  the  extended  system  of  cumulation  which  permits  the  use  of 
materials originating in the European Community, Poland, Hungary, the Czech Republic, 
the  Slovak  Republic,  Bulgaria,  Romania,  Latvia,  Lithuania,  Estonia,  Slovenia,  the 
European  Economic  Area  (hereinafter  referred  to  as  the  EEA),  Iceland,  Norway  and 
Switzerland; 

Whereas, in view of the particular  arrangement  on industrial products obtaining  between 
the  Community  and  Turkey,  it  would  also  be  appropriate  to  extend  the  cumulation 
system to such products originating in Turkey; 

Whereas  to  facilitate  trade  and  simplify  administrative  tasks  it  would  be  desirable  to 
amend the wording of Articles 3 and 4; 

Whereas,  to  take  account  of  changes  in  processing  techniques  and  shortages  of  certain 
raw  materials,  some  corrections  must  be  made  to  the  list  of  working  and  processing 
requirements  which  non-originating  materials  have  to  fulfil  to  qualify  for  originating 
status, 

HAS DECIDED AS FOLLOWS: 

Article 1 

Protocol 3 is hereby amended as  follows: 

1. 

Article  1 (i) shall be replaced by: 

"(i) 

'added  value'  shall  be  taken  to  be  the  ex-works  price  minus  the  customs 
value  of  each  of  the  materials  incorporated  which  originate  in  the  other 
countries referred  to in Articles 3 and 4 or, where the customs value is not 

1O J N °L  301, 31.12.1972, p.2. 

Mf 

known  or  cannot  be  ascertained,  the  first  price  verifiably  paid  for  the 
products in the Community or Iceland." 

2. 

Articles 3 and 4 shall be replaced by: 

Article  3 

Cumulation in the European Community 

1.  Without  prejudice  to  the  provisions  of  Article  2  paragraph  1,  products  shall  be 
considered  as  originating  in  the  Community  if  such  products  are  obtained  there, 
incorporating  materials  originating  in  the  Community,  Bulgaria,  Poland,  Hungary,  the 
Czech  Republic,  the  Slovak  Republic,  Romania,  Lithuania,  Latvia,  Estonia,  Slovenia, 
Iceland,  Norway,  Switzerland  (including  Liechtenstein)1  or  Turkey2  in  accordance  with 
the provisions  of the  Protocol  on rules of origin annexed to the Agreements  between  the 
Community  and  each of these  countries, provided  that the working or processing  carried 
out  in the  Community  goes beyond  that referred  to  in Article  7 of this  Protocol.  It  shall 
not be necessary that such materials have undergone sufficient  working or processing. 

KM 

2. Where the working or processing carried out in the Community does not go beyond the 
operations referred  to in Article 7, the product obtained shall be considered as originating 
in  the  Community  only  where  the  value  added  there  is  greater  than  the  value  of  the 
materials used originating  in any one of the other countries referred  to in paragraph  1.  If 
this is not so, the product obtained shall be considered as originating in the country  which 
accounts  for  the  highest  value  of  originating  materials  used  in  the  manufacture  in  the 
Community. 

3.  Products,  originating  in one  of the  countries  referred  to in paragraph  1, which  do  not 
undergo any working or processing in the Community, retain their origin if exported  into 
one of these countries. 

4.  The  cumulation  provided  for  in  this  Article  may  only  be  applied  to  materials  and 
products  which  have  acquired  originating  status  by  an  application  of  rules  of  origin 
identical to those given in this Protocol. 

The Community  shall provide Iceland, through the European Commission  with details of 
the Agreements  and their corresponding  rules of origin, which are applied with the  other 
countries  referred  to  in  paragraph  1.  The  European  Commission  shall  publish  in  the 
Official  Journal  of  the  European  Communities  (C  Series)  the  date  on  which  the 
cumulation,  provided  for  in  this  Article  may  be  applied  by  those  countries  listed  in 
paragraph  1  which have fulfilled  the necessary requirements. 

Article 4 

Cumulation in Iceland 

1 

The Principality  of Liechtenstein  has a customs  union  with Switzerland, and  is a Contracting  Party  to 
the Agreement  on the European Economic Area. 

2  Cumulation as provided for  in this Article does not apply  to materials originating in Turkey which  are 

mentioned  in the list at Annex  V to this Protocol. 

N<o 

1.  Without  prejudice  to  the  provisions  of  Article  2  paragraph  2,  products,'shall  be 
considered  as  originating  in  Iceland  if  such  products  are  obtained  there,  incorporating 
materials originating  in the Community, Bulgaria, Poland,  Hungary, the Czech Republic, 
the  Slovak  Republic,  Romania,  Lithuania,  Latvia,  Estonia,  Slovenia,  Iceland,  Norway, 
Switzerland  (including  Liechtenstein)1  or  Turkey2  in  accordance  with  the provisions  of 
the  Protocol  on rules  of  origin  annexed  to  the  Agreements  between  Iceland  and  each  of 
these  countries,  provided  that  the  working  or  processing  carried  out  in  Iceland  goes 
beyond  that  referred  to  in  Article  7 of  this  Protocol.  It  shall  not  be  necessary  that  such 
materials have undergone sufficient  working or processing. 

2.  Where  the  working  or  processing  carried  out  in  Iceland  does  not  go  beyond  the 
operations referred  to in Article 7, the product obtained shall be considered as originating 
in Iceland only where the value added there is greater than the value of the materials used 
originating  in any  one of the other countries  referred  to  in paragraph  1. If this is not  so, 
the product obtained  shall be considered  as originating  in the country which accounts  for 
the highest value of originating materials used in the manufacture  in Iceland. 

3.  Products, originating  in one  of the  countries  referred  to  in paragraph  1, which  do  not 
undergo  any  working  or processing  in Iceland,  retain their  origin if exported  into  one of 
these countries. 

4.  The  cumulation  provided  for  in  this  Article  may  only  be  applied  to  materials  and 
products  which  have  acquired  originating  status  by  an  application  of  rules  of  origin 
identical to those given in this Protocol. 

Iceland  shall provide the Community, through the European Commission with details  of 
the Agreements and their corresponding  rules of origin, which are applied with the other 
countries  referred  to  in  paragraph  1.  The  European  Commission  shall  publish  in  the 
Official  Journal  of  the  European  Communities  (C  Series)  the  date  on  which  the 
cumulation,  provided  for  in  this  Article  may  be  applied  by  those  countries  listed  in 
paragraph  1  which have fulfilled  the necessary requirements. 

3. 

4. 

5. 

6. 

In Articles  13, 14,  15,  17, 21, 27, 30 and  32  the phrase  "referred  to in Article  4" 
shall be replaced by "referred  to in Articles 3 and 4". 

In Article 26 the reference  "C2/CP3" shall be replaced by "CN22/CN23". 

In  Annex  I,  Note  5.2,  "current  conducting  filaments"  shall  be  added  between 
"artificial  man-made  filaments"  and  "synthetic  man-made  staple  fibres  of 
polypropylene". 

In Annex I, Note 5.2 the fifth  example ("A carpet with tufts  . ..  are met.") shall be 
deleted. 

1 

The Principality  of Liechtenstein has a customs  union with Switzerland,  and  is a Contracting Party to 
the Agreement  on the European Economic  Area. 

2  Cumulation as provided for  in this Article does not apply  to materials originating in Turkey which are 

mentioned  in the list at Annex  V to this  Protocol. 

Ml 

7. 

In Annex II, between the rules for  HS headings 2202 and 2208 the following  rule 
shall be inserted: 

•  . 

HS 
Heading 
No 

(1) 

2207 

Description  of product 

Working or processing of non-originating  materials that 
confers originating status 

(2) 

(3) 

or 

(4) 

Undenatured  ethyl 
alcohol of an alcoholic 
strength by volume of 
80% vol or higher;  ethyl 
alcohol and other spirits, 
denatured, of any 
strength. 

Manufacture: 

- using materials not  classified 
in headings 2207 or 2208 

H? 

8. 

In Annex II, the rule for Chapter 57 shall be replaced by: 

Chapter 
57 

Carpets and other textile 
floor  coverings: 

- Of needleloom  felt 

Manufacture  from  (1): 
- natural fibres 
or 
- chemical materials or textile pulp 

However: 
- polypropylene filament of 

heading 5402, 

- polypropylene fibres  of heading 

5503 or 5506, 

- polypropylene  filament  tow of 
heading 5501, of which the 
denomination  in all cases of a 
single filament or fibre is less 
than 9 decitex, may be used 
provided their value does not 
exceed 40% of the ex-works 
price of the product 

- jute fabric may be used as 

backing 

Manufacture  from(l): 
- natural fibres not carded or 

combed or otherwise processed 
for spinning, 

or 
- chemical materials or textile pulp 

Manufacture  from(l): 
- coir or jute yam(a\ 
- synthetic or artificial  filament  yam, 
- natural fibres, or 
- man-made staple fibres not carded 

or combed or otherwise 
processed for spinning 

But jute fabric may be used as 
backing 

-Of  other  felt 

- Other 

(a)  The use of jute yam is authorised from  1.7.2000. 

M 

9. 

In Annex II, the rule for HS heading 7006 shall be replaced by: 

7006 

Glass of headings  7003, 
7004 or 7005, bent, 
edgeworked,  engraved, 
drilled, enamelled or 
otherwise worked, but 
not framed  or fitted with 
other materials : 
- glass plate substrate 

coated with  dielectric 
thin film, semi 
conductor grade, in 
accordance with 
SEMII standards1 

- other 

Manufacture  from  materials 
(substrates) of heading 7006 

Manufacture  from  materials 
of heading 7001 

10. 

In Annex II, the rule for HS heading 7601 shall be replaced by: 

7601 

Unwrought  aluminium 

Manufacture  in which: 
-  all the materials used are 

classified  within a heading 
other than that of the 
product; and 

-  the value of all the 

materials used does not 
exceed 50 % of the ex-
works price of the product 

or 
Manufacture  by thermal or 
electrolytic treatment  from 
unalloyed aluminium or 
waste and scrap of 
aluminium 

11. 

The following  is added after Annex IV: 

"Annex V 

List of products originating in Turkey 
to which the provisions of Articles 3 and 4 do not apply, 
listed in the order of HS Chapters and Headings 

SEMII- Semiconductor  Equipment and Materials  Institute  Incorporated. 

>& 

Chapter 1 

Chapter 2 

Chapter 3 

0401 to 0402 

ex 0403 - 

0404 to 0410 

0504 

0511 

Chapter 6 

0701 to 0709 

ex 0710 - 
ex 0 7 1 1- 

0712 to 0714 

Chapter 8 

Buttermilk,  curdled  milk  and  cream, yoghurt,  képhir and  other  fermented 
or  acidified  milk  and  cream,  whether  or  not  concentrated  or  containing 
added  sugar  or other  sweetening  matter  or  flavoured  or  containing- added 
fruit  or cocoa 

Vegetables (uncooked or cooked by steaming or boiling in water),  frozen 
Vegetables,  except  sweet  corn  of  heading  0711  90  30,  provisionally 
preserved  (for  example, by sulphur  dioxide gas, in brine, in sulphur  water 
or  in  other  preservative  solutions),  but  unsuitable  in  that  state  for 
immediate consumption 

ex Chapter 9 -  Coffee,  tea, and spices, excluding maté of heading 0903 

Chapter 10 

Chapter 11 

Chapter  12 

ex  1302- 

Pectin 

1501tol514 

ex  1515 - 

ex  1516 - 

ex  1517 and 
ex  1518 - 

ex  1522- 

Chapter  16 

1701 

Other fixed  vegetable  fats  and  oils (excluding jojoba  oil  and  its  fractions) 
and their fractions, whether or not refined, but not chemically  modified 

Animal  or  vegetable  fats  and  oils  and  their  fractions,  partly  or  wholly 
hydrogenated,  inter-esterified,  re-esterified  or  elaidinised,  whether  or  not 
refined,  but not further  prepared, excluding hydrogenated  castor oil known 
as 'opal-wax' 

Margarines, imitation lard and other prepared edible fats 

Residues  resulting  from  the  treatment  of  fatty  substances  or  animal  or 
vegetable waxes, excluding degras 

ex  1702 —  Other  sugars,  including  chemically  pure  lactose,  maltose,  glucose  and 
fructose,  in  solid  form;  sugar  syrups  not  containing  added  flavouring  or 

in 

colouring  matter;  artificial  honey,  whether  or  not  mixed  with  natun 
honey;  caramel  excluding  that  of  headings  1702  11  00,  1702  30  $\ 
1702 30 59, 1702 50 00 and  1702 90 10 

1703 

1801 and  1802 

ex  1902 - 

ex 2 0 0 1- 

Pasta,  stuffed,  containing  more  than  20% by  weight  of  fish,  crustaceans, 
molluscs  or other aquatic invertebrates, sausages  and  the  like or meat  and 
meat offal  of any kind, including fats of all kinds 

Cucumbers  and  gherkins,  onions,  mango  chutney,  fruit  of  the  genus 
Capsicum  other  than  sweet  peppers  or  pimentos,  mushrooms  and  olives, 
prepared or preserved by vinegar or acetic acid 

2002 and 2003 

ex 2004 - 

ex 2005 - 

Other vegetables prepared or preserved otherwise than by vinegar or acetic 
acid,  frozen,  other  than  products  of  heading  2006,  excluding  potatoes  in 
the form of flour or meal and flakes of sweet corn 

Other vegetables prepared or preserved otherwise than by vinegar or acetic 
acid,  not  frozen,  other  than  products  of  heading  2006,  excluding  potato 
and sweet corn products 

2006 and 2007 

ex 2008 - 

2009 

Fruits,  nuts  and  other  edible  parts  of  plants,  otherwise  prepared  or 
preserved,  whether  or  not  containing  added  sugar  or  other  sweetening 
matter  or  spirit,  not  elsewhere  specified  or  included,  excluding  peanut 
butter, palm hearts, maize, yams, sweet potatoes and similar edible parts of 
plants containing  5% or more by weight of starch, vine leaves, hop  shoots 
and other similar edible parts of plants 

ex 2106 - 

Flavoured and coloured sugars, syrups and molasses 

Undenatured  ethyl alcohol  of an alcoholic  strength  by volume of  80% vol 
or higher obtained from agricultural produce listed here 

Undenatured  ethyl alcohol of an alcoholic  strength by volume of less than 
80% vol obtained from agricultural produce listed here. 

2204 

2206 

ex 2207 - 

ex 2208 - 

2209 

Chapter 23 

2401 

4501 

5301 and 5302 

/fl 

That Decision  shall enter into force  on  1  January  1999. 

Article 2 

Done at 

For the Joint  Committee 
The President 

lT3 

FINANCIAL  STATEMENT 

*• 

Budget heading: 

Chapter  12, Article  120 

2- 

3. 

Legal basis: 

Article  113 of the Treaty 

Titles of the agreements in question: 

Proposal  for an amendment to the definition  of the concept of "originating 
products" and the methods of administrative cooperation set out in Protocol  4 to 
the different  Europe Agreements between the EC and the CEECs, the Baltic 
States and Slovenia and the Agreement on the European Economic Area, and in 
Protocol 3 to the free trade agreements between the EEC and the EFTA  countries 

4. 

Purpose: 

To allow Central and Eastern European countries to continue applying flat  rates 
where drawback is prohibited or exemption from  customs duties is granted. 

To extend the system to industrial products originating in Turkey and simplify  or 
correct certain rules, particularly those on determining which country  is to be 
considered the originating  country. 

5. 

Financial  implications: 

As, for the purposes of industrial products, Turkey is already in a customs union 
with the Community and these products are therefore  already zero rated when 
imported into the Community, and as the purpose of the amendments is 
essentially to facilitate trade or simplify  administrative tasks, this proposal would 
not seem to have any major  financial  implications. 

IPI 

DECISION N° 

.../ OF THE EEA JOINT COMMITTEE 

No  .. 

of 

amending Protocol 4 to the EEA Agreement on rules of origin 

THE EEA JOINT  COMMITTEE, 

Having  regard  to  the  Agreement  on  the  European  Economic  Area,  as  adjusted  by  the 
Protocol  adjusting  that  Agreement,  hereinafter  referred  to  as  the  Agreement,  and  in 
particular Article 98 thereof, 

Whereas the definition  of the term "originating products" needs to be amended to  ensure 
the  proper  operation  of  the  extended  system  of  cumulation  which  permits  the  use  of 
materials originating in the European Community, Poland, Hungary, the Czech Republic, 
the  Slovak  Republic,  Bulgaria,  Romania,  Latvia,  Lithuania,  Estonia,  Slovenia,  the 
European  Economic  Area  (hereinafter  referred  to  as  the  EEA),  Iceland,  Norway  and 
Switzerland; 

Whereas, in view of the particular  arrangement  on industrial products obtaining  between 
the  Community  and  Turkey,  it  would  also  be  appropriate  to  extend  the  cumulation 
system to such products originating in Turkey; 

Whereas  to  facilitate  trade  and  simplify  administrative  tasks  it  would  be  desirable  to 
amend the wording of Article 3; 

Whereas,  to  take  account  of  changes  in  processing  techniques  and  shortages  of  certain 
raw  materials,  some  corrections  must  be  made  to  the  list  of  working  and  processing 
requirements  which  non-originating  materials  have  to  fulfil  to  qualify  for  originating 
status, 

HAS DECIDED AS FOLLOWS: 

Article 1 

Protocol 4 is hereby amended as follows: 

1. 

Article  1 (i) shall be replaced by : 

"(i) 

'added  value'  shall  be  taken  to  be  the  ex-works  price  minus  the  customs 
value  of  each  of  the  materials  incorporated  which  originate  in  the  other 
countries referred  to in Articles 3 and 4 or, where the customs value  is not 
known  or  cannot  be  ascertained,  the  first  price  verifiably  paid  for  the 
products in the EEA." 

2. 

Article 3 shall be replaced by: 

AT 

Article  3 

Cumulation with originating  materials 

1.  Without  prejudice  to  the  provisions  of  Article  2  paragraph  1,  products  shall  be 
considered  as  originating  in  the  EEA  if  such  products  are  obtained  there,  incorporating 
materials originating in the Community, Bulgaria, Poland, Hungary, the Czech Republic, 
the  Slovak  Republic,  Romania,  Lithuania,  Latvia,  Estonia,  Slovenia,  Iceland,  Norway, 
Switzerland  (including  Liechtenstein)1  or  Turkey2  in  accordance  with  the  provisions  of 
the  Protocol  on  rules  of  origin  annexed  to  the  Agreements  between  the  Contracting 
Parties  and  these  countries,  provided  that  the  working  or  processing  carried  out  in  the 
EEA  goes  beyond  that referred  to  in Article  6 of this  Protocol.  It  shall  not  be necessary 
that such materials have undergone sufficient  working or processing. 

2.  Where  the  working  or  processing  carried  out  in  the  EEA  does  not  go  beyond  the 
operations referred  to in Article 6, the product obtained  shall be considered as originating 
in  the  EEA  only  where  the  value  added  there  is  greater  than  the  value  of  the  materials 
used originating in any one of the other countries referred  to in paragraph  1.  If this is not 
so, the product obtained  shall be considered as originating  in the country  which accounts 
for the highest value of originating materials used in the manufacture  in the EEA. 

3.  Products,  originating  in one of the  countries  referred  to  in paragraph  1, which  do not 
undergo any working or processing in the EEA, retain their origin if exported  into one of 
these countries. 

4.  The  cumulation  provided  for  in  this  Article  may  only  be  applied  to  materials  and 
products  which  have  acquired  originating  status  by  an  application  of  rules  of  origin 
identical to those given in this Protocol. 

The Contracting Parties shall provide each other, through the European Commission with 
details of the Agreements and their corresponding  rules of origin, which are applied  with 
the other countries referred  to in paragraph  1. The European  Commission  shall publish in 
the  Official  Journal  of  the  European  Communities  (C  Series)  the  date  on  which  the 
cumulation,  provided  for  in  this  Article  may  be  applied  by  those  countries  listed  in 
paragraph  1 which have fulfilled  the necessary requirements. 

3. 

4. 

1 

In Article 25 the reference "C2/CP3" shall be replaced by "CN22/CN23". 

In  Annex  I,  Note  5.2,  "current  conducting  filaments"  shall  be  added  between 
"artificial  man-made  filaments"  and  "synthetic  man-made  staple  fibres  of 
polypropylene". 

The Principality  of Liechtenstein has a customs  union with Switzerland,  and  is a Contracting Party to 
the Agreement  on the European Economic Area. 

2  Cumulation  as provided for  in this Article does not apply  to materials  originating  in Turkey which are 

mentioned  in the list at Annex  V to this Protocol. 

ICI 

5. 

6. 

In Annex I, Note 5.2 the fifth  example ("A carpet with tufts  . ..  are met."} shall be 
deleted. 

In Annex  II, between the rules for HS headings 2202 and 2208 the following  rule 
shall be inserted: 

HS 
Heading 
No 

(1) 

2207 

Description  of  product 

Working or processing of non-originating  materials that 
confers originating status 

(2) 

(3) 

or 

(4) 

Undenatured ethyl 
alcohol of an alcoholic 
strength by volume of 
80% vol or higher;  ethyl 
alcohol and other spirits, 
denatured, of any 
strength. 

Manufacture: 

- using materials not  classified 
in headings 2207 or 2208 

m 

7. 

In Annex II, the rule for Chapter 57 shall be replaced by: 

Chapter 
57 

Carpets and other textile 
floor  coverings: 

- Of needleloom  felt 

Manufacture  from  (1): 
- natural fibres 
or 
- chemical materials or textile pulp 

However: 
- polypropylene filament of 

heading 5402, 

- polypropylene  fibres of heading 

5503 or 5506, 

- polypropylene filament tow of 
heading 5501, of which the 
denomination  in all cases of a 
single filament or fibre is less 
than 9 decitex, may be used 
provided their value does not 
exceed 40% of the ex-works 
price of the product 

- jute fabric  may be used as 

backing 

Manufacture  from(l): 
- natural fibres not carded or 

combed or otherwise  processed 
for spinning, 

or 
- chemical materials or textile pulp 

Manufacture  from(l): 
- coir or jute yarn(a), 
- synthetic or artificial filament yam, 
- natural fibres, or 
- man-made staple fibres not carded 

or combed or otherwise 
processed for spinning 

But jute fabric may be used as 
backing 

-Of  other  felt 

- Other 

<a)  The use of jute yam  is authorised  from  1.7.2000. 

/ ff 

8. 

In Annex II, the rule for HS heading 7006 shall be replaced by 

7'J J 6 

Glass of headings  7003, 
7004 or 7005, bent, 
edgeworked,  engraved, 
drilled, enamelled or 
otherwise worked, but 
not framed  or fitted  with 
other materials : 
- glass plate substrate 

coated with  dielectric 
thin film, semi 
conductor grade, in 
accordance with 
SEMI1 standards1 

- other 

Manufacture  from  materials 
(substrates) of heading 7006 

Manufacture  from  materials 
of heading 7001 

In Annex II. the rule for HS heading 7601 shall be replaced by 

7601 

L'nwrought  aluminium 

Manufacture  in which: 
-  all the materials used are 

classified  within  a heading 
other than  lhat of the 
product; and 

-  the value of all the 

materials used does not 
exceed  50 % of the ex-
works price of the product 

or 
Manufacture  by thermal or 
electrolytic  treatment  from 
unalloyed  aluminium  or 
waste and scrap of 
aluminium 

10. 

The following  is added after  Annex VI: 

"Annex VII 

List of products originating  in Turkey 
to which the provisions of Article 3 do not apply. 
listed  in the order of HS Chapters and Headings 

SEMI I- Semiconductor  Equipment  and  Materials  Institute  Incorporated. 

>*? 

Chapter 1 

Chapter 2 

Chapter 3 

0401 to 0402 

ex 0403 - 

0404 to 0410 

0504 

0511 

Chapter 6 

0701 to  0709 

ex 0710 - 
ex 0 7 1 1- 

0712 to 0714 

Chapter 8 

Buttermilk,  curdled  milk  and  cream,  yoghurt,  képhir  and  other  fermented 
or  acidified  milk  and  cream,  whether  or  not  concentrated  or  containing 
added  sugar  or other  sweetening  matter  or  flavoured  or  containing  added 
fruit  or cocoa 

Vegetables (uncooked or cooked by steaming or boiling in water), frozen 
Vegetables,  except  sweet  com  of  heading  0711  90  30,  provisionally 
preserved  (for  example, by sulphur  dioxide  gas, in brine, in sulphur  water 
or  in  other  preservative  solutions),  but  unsuitable  in  that  state  for 
immediate consumption 

ex Chapter 9 -  Coffee,  tea, and spices, excluding maté of heading 0903 

Chapter  10 

Chapter  11 

Chapter  12 

ex  1302- 

Pectin 

1501tol514 

ex  1515 - 

ex  1516 - 

ex  1517 and 
ex  1518 - 

ex  1522- 

Chapter  16 

1701 

ex  1702 - 

Other fixed  vegetable fats  and oils (excluding jojoba  oil and  its  fractions) 
and their fractions, whether or not refined, but not chemically  modified 

Animal  or  vegetable  fats  and  oils  and  their  fractions,  partly  or  wholly 
hydrogenated,  inter-esterified,  re-esterified  or  elaidinised,  whether  or  not 
refined, but not further  prepared, excluding hydrogenated  castor oil known 
as 'opal-wax' 

Margarines, imitation lard and other prepared edible  fats 

Residues  resulting  from  the  treatment  of  fatty  substances  or  animal  or 
vegetable waxes, excluding degras 

Other  sugars,  including  chemically  pure  lactose,  maltose,  glucose  and 
fructose,  in  solid  form;  sugar  syrups  not  containing  added  flavouring  or 

/QÔ 

colouring  matter;  artificial  honey,  whether  or  not  mixed  with  natural 
honey;  caramel  excluding  that  of  headings  1702  11  00,  1702  30  51, 
1702 30 59, 1702 50 00 and  1702 90 10 

1703 

1801 and  1802 

ex  1902 - 

ex 2 0 0 1- 

Pasta,  stuffed,  containing  more  than  20% by  weight  of  fish,  crustaceans, 
molluscs  or other  aquatic  invertebrates, sausages  and  the  like or meat  and 
meat offal  of any kind, including fats of all kinds 

Cucumbers  and  gherkins,  onions,  mango  chutney,  fruit  of  the  genus 
Capsicum  other  than  sweet  peppers  or  pimentos,  mushrooms  and  olives, 
prepared or preserved by vinegar or acetic acid 

2002 and 2003 

ex 2004 - 

ex 2005 - 

Other vegetables prepared or preserved otherwise than by vinegar or acetic 
acid,  frozen,  other  than  products  of  heading  2006,  excluding  potatoes  in 
the form of flour or meal and flakes of sweet corn 

Other vegetables prepared or preserved otherwise than by vinegar or acetic 
acid,  not  frozen,  other  than  products  of  heading  2006,  excluding  potato 
and sweet corn products 

2006 and 2007 

ex 2008 - 

2009 

Fruits,  nuts  and  other  edible  parts  of  plants,  otherwise  prepared  or 
preserved,  whether  or  not  containing  added  sugar  or  other  sweetening 
matter  or  spirit,  not  elsewhere  specified  or  included,  excluding  peanut 
butter, palm hearts, maize, yams, sweet potatoes and similar edible parts of 
plants containing  5% or more by weight of starch, vine  leaves, hop  shoots 
and other similar edible parts of plants 

ex 2106- 

Flavoured and coloured sugars, syrups and molasses 

Undenatured  ethyl alcohol of an alcoholic  strength  by volume  of  80% vol 
or higher obtained from  agricultural produce listed here 

Undenatured  ethyl alcohol of an alcoholic strength by volume of less than 
80%) vol obtained from  agricultural produce listed here. 

2204 

2206 

ex 2207 - 

ex 2208 - 

2209 

Chapter 23 

2401 

4501 

5301 and 5302 

%{ 

That Decision shall enter into force on  1  January  1999. 

Article 2 

Done at 

For the EEAJoint  Committee 
The President 

/(el 

FINANCIAL STATEMENT 

1. 

2. 

3. 

Budget heading: 

Chapter 12, Article 120 

Legal basis: 

Article 113 of the Treaty 

Titles of the agreements in question: 

Proposal for an amendment to the definition of the concept of "originating 
products" and the methods of administrative cooperation set out in Protocol 4 to 
the different  Europe Agreements between the EC and the CEECs, the Baltic 
States and Slovenia and the Agreement on the European Economic Area, and in 
Protocol 3 to the free trade agreements between the EEC and the EFTA countries 

4. 

Purpose: 

To allow Central and Eastern European countries to continue applying flat rates 
where drawback is prohibited or exemption from customs duties is granted. 

To extend the system to industrial products originating in Turkey and simplify or 
correct certain rules, particularly those on determining which country is to be 
considered the originating country. 

5. 

Financial implications: 

As, for the purposes of industrial products, Turkey is already in a customs union 
with the Community and these products are therefore already zero rated when 
imported into the Community, and as the purpose of the amendments is 
essentially to facilitate trade or simplify administrative tasks, this proposal would 
not seem to have any major financial implications. 

IQ>3 

ISSN 0254-1475 

COM(98) 389 final 

DOCUMENTS 

EN 

02  10  11  06 

Catalogue  number  :  CB-CO-98-404-EN-C 

ISBN  92-78-37371-0 

Office  for  Official  Publications of the European  Communities 

L-2985  Luxembourg 

M