Proposal for a Council Decision concerning the conclusion of an Agreement in the form of an Exchange of Letters between the European Community, of the one part, and the Republic of Iceland, of the other part, on Protocol 2 to the Agreement between the European Economic Community and the Republic of Iceland
Date: 1999-03-19
Institutions: European Commission
Subjects: Iceland, Uruguay Round, bilateral agreement, free-trade agreement, trade agreement

COMMISSION OF THE EUROPEAN COMMUNITIES

Brussels,19.03.1999
COM(1999)132 final

99/0078 (ACC)

Proposal for a

COUNCIL DECISION

concerning the conclusion of an Agreement in the form of an Exchange of
Letters between the European Community, of the one part, and the Republic of
Iceland, of the other part, on Protocol 2 to the Agreement between the European
Economic Community and the Republic of Iceland

(presented by the Commission)

EXPLANATORY MEMORANDUM

The trade regime for processed agricultural products between the EC, on the one
hand, and Norway and Iceland, on the other hand, is regulated by Protocol 2 of the
respective bilateral Free Trade agreements and Protocol 3 of the Agreement on the
European Economic Area.

Protocol 3 has not yet been finalised. The EC and Iceland agreed to adapt Protocol 2
of the bilateral agreement to take into account the implementation of the Uruguay
Round and the enlargement to new countries and to improve bilateral trade regime.

In 1996, the European Community and Norway agreed in the form of an exchange of
letters (Council Decision 96/753/EC of 6.12.1996) to adapt Protocol 2, within the
scope of a common mandate.

The result of this agreement is the improvement, on the reciprocal basis, of the market
access conditions for operators of both parties.

In 1997, the European Community and the Republic of Iceland started exploratory
talks with a view to improving trade on a reciprocal basis in a similar way to the
preferential regime agreed in 1996 with Norway.

Moreover the adaptation of the EC/Iceland agreement is necessary, as it would allow
the Community to have a common basis with both partners before launching the
negotiations to complete Protocol 3 of the Agreement on the European Economic
Area.

The Commission has concluded these negotiations and it proposes to the Council to
approve this proposal for a decision reflecting the result of the negotiations.

2

Proposal for a

COUNCIL DECISION

concerning the conclusion of an Agreement in the form of an Exchange of
Letters between the European Community, of the one part, and the Republic of
Iceland, of the other part, on Protocol 2 to the Agreement between the European
Economic Community and the Republic of Iceland

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community, and in particular
Article 113 in conjunction with the first sentence of Article 228 (2) thereof,

Having regard to the proposal from the Commission,

Whereas an Agreement in the form of an Exchange of Letters between the European
Community, of the one part, and the Republic of Iceland, of the other part, on
Protocol 2 to the Agreement between the European Economic Community and the
Republic of Iceland1 has been negotiated in order to take into account the accession of
the Republic of Austria, the Republic of Finland and the Kingdom of Sweden to the
European Union and the implementation of the Uruguay Round Settlement;

Whereas the Agreement should be approved,

HAS DECIDED AS FOLLOWS:

Article 1

The Agreement
in the form of an Exchange of Letters between the European
Community, of the one part, and the Republic of Iceland, of the other part, on
Protocol 2 to the Agreement between the European Economic Community and the
Republic of Iceland is hereby approved on behalf of the Community.

The text of the Agreement is attached to this Decision.

Article 2

Detailed rules for the application of this Decision shall be adopted by the Commission
assisted by the Committee referred to in Article 15 of Regulation (EC) No 3448/932 in
accordance with the procedure provided for in Article 16 of that Regulation.

1

2

OJ L 301 of 31.12.1972, p. 2
OJ L 318 of 20.12.1993, p. 18

3

Article 3

The President of the Council is hereby authorised to designate the person empowered
to sign the Agreement referred to in Article 1 in order to bind the Community.

Done at Brussels,

For the Council
The President

4

AGREEMENT

in the form of an Exchange of Letters between the European Community, of the one
part, and the Republic of Iceland, of the other part, on Protocol 2 to the Agreement
between the European Economic Community and the Republic of Iceland

A. Letter from the Community

Brussels,

Sir,

I have the honour to confirm the agreement of the European Community to the
"Agreed Minutes" annexed hereto concerning Protocol 2 to the Agreement between
the European Economic Community and the Republic of Iceland.

I should be grateful if you would confirm the agreement of the Government of the
Republic of Iceland with the content of this letter.

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

For the European Community

5

B. Letter from Iceland

Brussels,

Sir,

I have the honour to acknowledge receipt of your letter of today worded as follows:

'I have the honour to confirm the agreement of the European Community to
the "Agreed Minutes" annexed hereto concerning Protocol 2 to the Agreement
between the European Economic Community and the Republic of Iceland.`

I have the honour to confirm the agreement of my Government with the contents of
your letter and to the date proposed for the entry into force of the amendments.

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

the Government of

For
Republic of Iceland

the

6

AGREED MINUTES

I.

INTRODUCTION

1.

2.

3.

from the
Following a number of meetings held between officials
Commission of the EC and Iceland it was agreed to submit
to their
respective authorities for approval a series of adjustments to the import
regimes applied respectively by the Community and Iceland for processed
agricultural products falling within the scope of Protocol 2 to the 1972 Free
Trade Agreement.

These adjustments should enter into force on 1 May 1999.

Both parties agreed that implementation of the Uruguay Round Settlement
by both sides required an adaptation of the duties applied in bilateral trade
between the Community and Iceland. To this end it was agreed to apply the
duties set out below.

Both parties agreed to examine on a regular basis the functioning of this
Agreement and the possibility to improve it.

II.

ICELANDIC IMPORT REGIME

The duties (ISK/kg) applicable to the processed agricultural products
covered by Protocol 2 of the Agreement are as follows:

Tariff no.

Description

0403

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 or flavoured or containing added fruit, nuts or cocoa:

0403-1011 Yoghurt containing cocoa

0403-1012 Yoghurt containing fruit or nuts

0403-1021 Yoghurt as beverage containing cocoa

0403-1022 Yoghurt as beverage containing fruit or nuts

0403-9011 Other containing cocoa

0403-9012 Other containing fruit or nuts

7

Applied
Duty

(in ISK/kg)

61

61

52

52

53

53

Tariff no.

Description

0403-9021 Other as beverage containing cocoa

0403-9022 Other as beverage containing fruit or nuts

Applied
Duty

(in ISK/kg)

53

53

1517

Margarine; edible mixtures or preparations of animal or
vegetable fats or oils or of fractions of different fats or oils of
this Chapter, other than edible fats or oils or their fractions of
heading No 1516:

- Margarine, excluding liquid margarine:

1517-1001

-- Containing more than 10 % but not more than 15 % by
weight of milkfat

1517-9002

-- Containing more than 10 % but not more than 15 % by
weight of milkfat

1806-2003 Cocoa powder containing by weight less than 90 % but more
than 30 % of fresh milk powder and/or skimmed milk powder,
whether or not containing added sugar or other sweetening
matter, but not mixed with other substances

90

90

111

1806-2004 Containing by weight less than 30 % of fresh milk powder

40

and/or skimmed milk powder

1806-2005 Other containing by weight more than 30 % of fresh milk

111

powder and/or skimmed milk powder

1806-2006 Other containing by weight less than 30 % of fresh milk

powder and/or skimmed milk powder

1806-3101 Filled chocolate in slabs or bars

1806-3109 Other filled in slabs or bars

1806-3202 Chocolate containing cocoa paste, sugar, cocoa butter and

milk powder, in slabs or bars

1806-3203

Imitation chocolate in slabs or bars

1806-3209 Other not filled in blocks, slabs or bars

1806-9011 Prepared beverage materials mostly from goods in 0401-0404,
containing by weight 10 % or more of cocoa power,
containing sugar or other sweetening material, and other
materials and flavouring to less extent

1806-9022 Food specially prepared for dietetic purposes

40

52

52

48

40

21

22

18

8

Tariff no.

Description

Applied
Duty

(in ISK/kg)

1806-9023 Easter eggs

1806-9024

Ice-cream sauces and dips

1806-9025 Coated or covered, such as raisins, nuts, "puffed" cereals,

liquorice, caramels and jellies

1806-9026 Chocolate creams

1806-9027 Breakfast cereals

1806-9028 Cocoa powder containing by weight less than 90 % but at
least 30 % of fresh milk powder and/or skimmed milk
powder, whether or not containing added sugar or other
sweetening matter, but not mixed with other substances

1806-9029 Cocoa powder containing by weight less than 30 % of fresh
milk powder and/or skimmed milk powder, whether or not
containing added sugar or other sweetening matter, but not
mixed with other substances

1806-9039 Other

1901

Malt extract; food preparations of flour, meal, starch or malt
extract, not containing cocoa powder or containing cocoa
powder in a proportion by weight of less than 50 %, not
elsewhere specified or included; food preparations of goods of
headings Nos 0401 to 0404, not containing cocoa powder or
containing cocoa powder in a proportion by weight of less
than 10%, not elsewhere specified or included:

1901-2012

--- For the preparation of gingerbread and the like of heading
No. 1905.2000

1901-2013

--- For
the preparation of
No. 1905.3011 and 1905.3029 and the like

sweet biscuits of heading

1901-2014

--- For
No. 1905.3021

the preparation of ginger

snaps of heading

1901-2015

--- For the preparation of waffles and wafers of heading
No. 1905.3030

1901-2016

--- For the preparation of rusks, toasted bread and similar
toasted bread of heading No. 1905.4000

1901-2017

--- For the preparation of bread of the heading No. 1905.9011
with filling based on butter or dairy products

9

49

40

54

49

-

120

44

48

25

17

30

10

15

40

Tariff no.

Description

Applied
Duty

(in ISK/kg)

1901-2018

--- For the preparation of bread of heading No. 1905.9019

1901-2019

1901-2022

--- For
No. 1905.9020

the preparation of plain biscuits of heading

--- For
No. 1905.9040

the preparation of cakes and pastry of heading

1901-2023

--- Mixes and doughs, containing meat, for the production of
pizza and the like of heading No. 1905.9051

1901-2024

--- Mixes and doughs, containing ingredients other than meat,
for
the preparation of pizza and the like of heading
No. 1905.9059

5

5

34

99

54

1901-2029

--- For
No. 1905.9090

the preparation of

the products of heading

44

1902

Pasta, whether or not cooked or stuffed ( with meat or other
such as
substances) or otherwise prepared,
spaghetti,
macaroni, noodles,
ravioli, cannelloni;
lasagne, gnocchi,
couscous, whether or not prepared;

1902-1100

-- Containing eggs

1902-2022

--- Stuffed pasta containing from 3 % up to 20 % by weight of
sausage, meat, meat offal, blood or any combination thereof

1902-2031

--- Stuffed pasta containing more than 3 % by weight of
cheese

1902-2042

--- Pasta stuffed with cheese and meat, containing more than
3 % but not more than 20 % of meat and cheese

1902-3021

--- Other pasta containing more than 3 % but not more than
20 % by weight of sausage, meat, meat offal, blood or any
combination thereof

1902-3031

--- Other pasta containing by weight more than 3 % cheese

1902-3041

--- Containing meat and cheese that combined is more than
3 % but not more than 20 % by weight

1902-4021

--- Couscous containing more than 3 % but not more than
20 % by weight of sausage, meat, meat offal, blood or any
combination thereof

8

42

36

42

42

36

42

42

10

Tariff no.

Description

Applied
Duty

(in ISK/kg)

1904-9001

-- Prepared foods obtained by the swelling or roasting of
cereal products containing by weight more than 3 % but not
more than 20 % of meat

1905-3011

--- Sweet biscuits coated or covered with chocolate or with
fondants containing cocoa

1905-3019

--- Other coated or covered with chocolate or with fondants
containing cocoa

-- :

--- :

1905-3021

---- Ginger snaps

1905-3029

---- Other sweet biscuits and cookies

1905-3030

--- Other

1905-4000

- Rusks, toasted bread and similar toasted products:

- Other:

-- :

1905-9011

--- Bread with a filling consisting essentially of butter or other
dairy products (for example garlic butter)

1905-9019

--- Other

1905-9020

-- Plain biscuits

1905-9040

-- Cakes and pastry

-- : ... (pizza)

1905-9051

--- Pies, including pizza, containing meat

1905-9059

--- Other

1905-9060

-- Snacks, such as flakes, screws, rings, cones, sticks, and the
like

1905-9090

---- Other

42

17

16

32

19

11

16

40

5

5

36

99

54

-

46

11

Tariff no.

Description

Applied
Duty

(in ISK/kg)

2104

Soups and broths and preparations therefor; homogenised
composite food preparations:

2104-1001

-- Preparations of vegetable soups with the basic ingredients
of flour, meal, starch or malt extract

2104-1003

-- Canned fish soups

2104-1011

-- Other soups containing by weight more than 20 % meat

2104-1012

-- Other soups containing by weight more than 3 % but not
more than 20 % meat

2104-1019

--- Other soups

-- Other:

2104-1021

--- Other containing by weight more than 20 % meat

2104-1022

--- Other containing by weight more than 3 % but not more
than 20 % meat

2104-1029

--- Other

2106-9041

--- Powder for making desserts in retail packings of 5kg or
less

2106-9049

--- Powder for making desserts other

2106-9064

-- Containing by weight more than 3 % but not more than
20 % of meat

2202-9001

-- Other of dairy products with other ingredients, provided
that the dairy products are 75 % or more by weight excluding
packings

3

28

80

45

21

80

45

21

68

68

42

42

III.

COMMUNITY IMPORT REGIME

1.

The following basic amounts shall be used for the calculation of the
agricultural components and the additional duties:

– Cereals (common wheat, durum wheat,

rye, barley and maize):

7,817 EUR/100 kg

– Long grain husked rice : 28,910 EUR/100 kg

12

– Whole milk powder : 142,660 EUR/100 kg

– Skimmed-milk powder : 118,800 EUR/100 kg

– Butter : 207,333 EUR/100 kg

– Sugar : 43,675 EUR/100 kg.

2.

3.

The basic amounts laid down in paragraph 1 may not be higher than those
applied to third countries.

Annual quotas of 300, 400 and 500 tonnes will be opened by the
Community respectively for 1999, 2000 and 2001 and the following years,
for imports of:

– sugar confectionery products (including white chocolate) not containing

cocoa falling within CN code 1704 90 and

– chocolate and other food preparations containing cocoa falling within

CN codes 1806 32, 1806 90 and 1905 30.

The duties applicable to this quota will be the erga omnes duties reduced by
50 % with a maximum of 35,15 EUR/100 kg.

IV.

SPIRITS

Both parties agreed to apply a duty free regime from the entry into force of
this Agreement for goods falling within CN codes 2208 50, 2208 60,
2208 90.

13

1.

2.

3.

4.

5.

5.0

5.1

FINANCIAL STATEMENT

DATE: 05/11/1998
APPROPRIATIONS:

BUDGET HEADING:
Article 120
TITLE:
Proposal for a Council Decision concerning the conclusion of an Agreement in the form of an Exchange of Letters between
the European Community, of the one part, and the Republic of Iceland, of the other part, on Protocol 2 to the Agreement
between the European Economic Community and the Republic of Iceland
LEGAL BASIS:
Art. 113, 228
AIMS:
Measures concerning Iceland in the framework of the adaptation of Protocol 2 of the Free Trade Agreement between the
European Community and the Republic of Iceland
FINANCIAL IMPLICATIONS

PERIOD OF
12 MONTHS

CURRENT
FINANCIAL
YEAR
(98)
(ECU million)

FOLLOWING
FINANCIAL
YEAR
(99)
(ECU million)

CHARGED TO THE EC BUDGET

NATIONAL AUTHORITIES
OTHER

EXPENDITURE
-
(REFUNDS/INTERVENTION)
-
-
REVENUE
-
(LEVIES/CUSTOMS DUTIES)
NATIONAL
-

OWN RESOURCES OF THE EC

(ECU million)

- 20 000 ECU

2000

2001

2002

2003

5.0.1 ESTIMATED EXPENDITURE
5.1.1 ESTIMATED REVENUE
5.2 METHOD OF CALCULATION:

6.0

6.1

Calculation of loss of customs revenue taking account of tariff reductions
CAN THE PROJECT BE FINANCED FROM APPROPRIATIONS ENTERED IN THE RELEVANT
CHAPTER OF THE CURRENT BUDGET?
CAN THE PROJECT BE FINANCED BY TRANSFER BETWEEN CHAPTERS OF THE CURRENT
BUDGET?

6.2 WILL A SUPPLEMENTARY BUDGET BE NECESSARY?
6.3 WILL FUTURE BUDGET APPROPRIATIONS BE NECESSARY?
OBSERVATIONS:
Loss of customs revenue has been calculated on the basis of the difference between the average duties applied within the period
1997-1998 and the reduced amounts, in relation to the import volume

YES /NO

YES /NO
YES /NO
YES /NO

14