Decision No 1/1999 of the Association Council between the European Communities and their Member States, of the one part, and the Republic of Hungary, of the other part, of 28 January 1999 amending Protocol 4 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
Date: 1999-01-28
Institutions: EC–Hungary Association Council
Subjects: Hungary, Protocol (EU), administrative cooperation, association agreement (EU), originating product

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II

(Acts whose publication is not obligatory)

COUNCIL

DECISION No 1/1999 OF THE ASSOCIATION COUNCIL

between the European Communities and their Member States, of the one part,
and the Republic of Hungary, of the other part

of 28 January 1999

amending Protocol 4 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

(1999/149/EC)

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 (1), signed in Brussels on 16
December 1991, and in particular Article 38 of Protocol
4 (2) thereof,

Whereas the definition of the term ‘originating products'
in Protocol 4 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 (herein-
after referred to as the EEA), Iceland, Norway and Swit-
zerland;

Whereas it would seem advisable to maintain in operation
until 31 December 2000 the system of flat rate charges
provided for in Article 15 of Protocol 4 in connection
with the prohibition of drawback and exemption from
customs duty;

Turkey, it would also be appropriate to extend the cumu-
lation system to such products originating in Turkey;

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

Whereas, to take account of changes in processing tech-
niques 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 concerning the definition of the concept of
‘originating products' and methods of administrative
cooperation is hereby amended as follows:

Whereas, in view of the particular arrangements on indus-
trial products obtaining between the Community and

1. Article 1(i) shall be replaced by:

(1) OJ L 347, 31. 12. 1993, p. 2.
(2) Protocol 4 was replaced by Association Council Decision No

3/96 (OJ L 92, 7. 4. 1997, p. 1).

‘(i) “added value” shall be taken to be the ex-works
price minus the customs value of each of the ma-
terials incorporated which originate in the other

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countries referred to in Articles 3 and 4 or, where
the customs value is not known or cannot be ascer-
tained, the first price verifiably paid for the products
in the Community or Hungary.'

Article 4

Cumulation in Hungary

2. Articles 3 and 4 shall be replaced by the following:

‘Article 3

Cumulation in the European Community

1. Without prejudice to the provisions of Article
2(1), products shall be considered as originating in the
Community if such products are obtained there, incor-
porating materials originating in the Community,
Bulgaria, Poland, Hungary, the Czech Republic, the
Slovak Republic, Romania, Lithuania, Latvia, Estonia,
Slovenia,
Iceland, Norway, Switzerland (including
Liechtenstein (*)) or Turkey (**) in accordance with the
provisions of the Protocol on rules of origin annexed
to the Agreements between the Community and each
of
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 suffi-
cient working or processing.

these countries, provided that

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.

Products, originating in one of

3.
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
the European Communities, with
Commission of
the Agreements and their corresponding
details of
rules of origin, which are applied with the other coun-
tries referred to in paragraph 1. The Commission of
the European Communities shall publish in the Offi-
cial 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 require-
ments.

the Czech Republic,

1. Without prejudice to the provision of Article 2(2),
products shall be considered as originating in Lithu-
ania if such products are obtained there, incorporating
materials originating in the Community, Bulgaria,
Poland, Hungary,
the Slovak
Republic, Romania, Lithuania, Latvia, Estonia, Slov-
enia, Iceland, Norway, Switzerland (including Liech-
tenstein (*)) or Turkey (**) in accordance with the provi-
sions of the Protocol on rules of origin annexed to the
Agreements between Hungary and each of these coun-
tries, 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
sufficient working or
materials have undergone
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 consid-
ered 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 origin-
ating materials used in the manufacture in Hungary.

Products, originating in one of

3.
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
the European Communities, with
Commission of
details of
the Agreements and their corresponding
rules of origin, which are applied with the other coun-
tries referred to in paragraph 1. The Commission of
the European Communities shall publish in the Offi-
cial 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 require-
ments.

(*) 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.'

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3. Article 12 shall be replaced by the following:

‘Article 12

Principle of territoriality

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.

Except as provided for in Articles 3 and 4, where
2.
originating goods exported from the Community or
Hungary to another country return,
they must be
considered as non-originating, unless it can be demon-
strated 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 accord-
ance 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 Hungary and subsequently reim-
ported there, provided:

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

and

the total value of the non-originating materials incor-
porated in the territory of the party concerned, taken
together with the total added value acquired outside
the Community or Hungary by applying the provi-
this Article, shall not exceed the stated
sions of
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 incor-
porated there.

The provisions of paragraphs 3 and 4 shall not
6.
apply to products which do not fulfil the conditions
set out in the list in Annex II or which can be consid-
ered 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 arrange-
ments.'

4. 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'.

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

6. In Article 26(1), the terms ‘C2/CP3' shall be replaced

by ‘CN22/CN23'.

(b) it can be demonstrated to the satisfaction of the

customs authorities that:

7. In Annex I, note 5.2:

(a) between the indents:

(i) the reimported goods have been obtained by
working or processing the exported materials

‘— artificial man-made filaments'

and

(ii) the total added value acquired outside the
Community or Hungary by applying the provi-
sions 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
in the list in
Community or Hungary. But where,
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,

and

‘— synthetic man-made staple fibres of polypropy-

lene'

the following shall be inserted:

‘— current conducting filaments';

(b) the fifth example (‘A carpet with tufts . . . are met.')

shall be deleted.

8. Annex II shall be amended as follows:

(a) the following shall be inserted between the entries

for HS heading Nos 2202 and 2208:

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‘HS heading No

Description of product

Working or processing carried out on non-originating materials that confers originating
status

(1)

(2)

(3)

or

(4)

2207

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
heading Nos 2207 or 2208'

(b) the entry for chapter 57 shall be replaced by:

‘Chapter 57

Carpets
coverings:

and other

textile

floor

— Of needleloom felt

— Of other felt

— Other

Manufacture from (1):
— Natural fibres

or

— Chemical materials or

textile

pulp

However:
— Polypropylene

filament

of

heading No 5402,

— Polypropylene fibres of heading

Nos 5503 or 5506
— Polypropylene filament
heading No 5501,

tow of

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 (1):
— Coir or jute yarn (a)
— Synthetic or artificial

filament

yarn

— Natural fibres,

or

— Man-made

fibres not
staple
carded or combed or otherwise
processed for spinning

— Jute fabric may be used as

backing

(1) For special conditions relating to products made of a mixture of textile materials, see Introductory Note 5.
(a) The use of jute yarn is authorised from 1 July 2000.'

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(c) the entry for HS heading No 7006 shall be replaced by:

‘7006

Glass of heading Nos 7003, 7004 or
7005, bent, edgeworked, engraved,
otherwise
drilled,
worked, but not
framed or fitted
with other materials:

enamelled or

— Glass plate substrate coated with
semi-
thin
dielectric
conductor grade, in accordance
with SEMII standards (1)

film,

— Other

Manufacture from non-coated glass
plate substrate of heading No 7006

Manufacture
heading No 7001

from materials

of

(1) SEMII — Semiconductor Equipment and Materials Institute Incorporated.'

(d) the rule for HS heading No 7601 shall be replaced by:

‘7601

Unwrought aluminium

Manufacture in which:
— All the materials used are classi-
fied within a heading other than
that of the product
and

— The value of all the materials
used does not exceed 50 % of
the
the
product

ex-works price

of

or
Manufacture by thermal or electro-
from unalloyed
lytic
aluminium or waste and scrap of
aluminium'

treatment

9. the following Annex shall be added:

‘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

Chapter 2

Chapter 3

0401 to 0402

ex 0403

0404 to 0410

0504

0511

Chapter 6

0701 to 0709

Buttermilk, curdled milk and cream, yoghurt, kephir and other fermented or
acidified milk and cream, whether or not concentrated or containing added sugar
or other sweetening matter

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Vegetables, except sweetcorn of heading No 0710 40 00 (uncooked or cooked by
steaming or boiling in water), frozen

Vegetables, except sweetcorn of heading No 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 0710

ex 0711

0712 to 0714

Chapter 8

ex Chapter 9

Coffee, tea and spices, excluding mat(cid:130) of heading No 0903

Chapter 10

Chapter 11

Chapter 12

ex 1302

Pectic substances, pectinates and pectates

1501 to 1514

ex 1515

ex 1516

ex 1517 and
ex 1518

ex 1522

Chapter 16

1701

ex 1702

1703

1801 and 1802

ex 1902

ex 2001

2002 and 2003

ex 2004

ex 2005

2006 and 2007

ex 2008

2009

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 hydrogen-
ated, inter-esterified, re-esterified or elaidinised, whether or not refined, but not
further prepared, excluding hydrogenated castor oil known as “opalwax”

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 heading Nos 1702 11 00, 1702 30 51, 1702 30 59, 1702 50 00 and 1702 90 10

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

Other vegetables prepared or preserved otherwise than by vinegar or acetic acid,
frozen, other than products of heading No 2006, excluding potatoes in the form of
flour, meal or flakes, and sweetcorn

Other vegetables prepared or preserved otherwise than by vinegar or acetic acid,
not frozen, other than products of heading No 2006, excluding potatoes in the
form of flour, meal or flakes, and sweetcorn

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

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ex 2106

Flavoured and coloured sugar, syrups

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

This Decision shall apply as from 1 January 1999.

Article 2

Done at Brussels, 28 January 1999.

For the Association Council

The President

J. MARTONYI