Proposal for a 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
Date: 1999-09-14
Institutions: European Commission
Subjects: Lithuania, administrative cooperation, agreement (EU), originating product, processing industry

COMMISSION OF THE EUROPEAN COMMUNITIES

Brussels, 14.09.1999
COM(1999) 422 final

99/0181 (ACC)

Proposal for a

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

(presented by the Commission)

EXPLANATORY MEMORANDUM

1.

GENERAL

The  rules of origin are essential  to the  correct  functioning  of  the  free  trade
agreements between the Community and its trading partners.

The European Council meeting in Essen in December 1994 drew attention to
the  fact  that  differences  in  the  origin  rules  included  in  the  different
agreements  signed  by  the  Community  constituted  a  barrier  to  trade.
Therefore a programme was initiated 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  and  that  was  done
for Turkish industrial products from 1.1.1999.

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.
Therefore,  some  changes  have  already  been  deemed  necessary  to  the  rules
which  entered  into  force  in  1997  and  an  amendment  has  already  been
adopted  in  the  framework  of  all  the  agreement  to  enter  into  force  on
1st January 1999.

2.

AMENDMENTS  TO  THE  RULES  OF  ORIGIN  IN  THE  EU-CEECS,
EU-EFTA AND EEA AGREEMENTS

Since the entry into force of the standard protocol on rules of origin and of its
amendment  of  1999,  a  few  technical  amendments  to  Annex  II  to  the
protocols are already  necessary  and therefore  proposed.  Those  amendments
concern products whose raw materials are in short supply in the trade zone.

3.

CONCLUSION

The annexed proposal is one of a series of 14 proposals intended to improve
the  functioning  of  the  common  system  of  origin  rules.  These  14  proposals
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 2000.

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.

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Proposal for a

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

(Text with EEA relevance)

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community, and in particular
Article 133 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 AS FOLLOWS:

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

3

ANNEX

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

DECISION No …/… of the ASSOCIATION COUNCIL

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 Luxembourg 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,  Turkey,  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  revise  the  Articles  concerning  the  amounts  in
order to fully take into consideration the entry into force of the euro;

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.

In Articles 21 and 26 the word "Ecu" shall be replaced by "euro".

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2.

Article 30 shall be replaced by the following:

"Article 30

Amounts expressed in euro

1.
Amounts in the national currency  of  the exporting  country  equivalent
to the amounts expressed in euro shall be fixed by the exporting country and
communicated to the importing countries through the European Commission.

2. When  the  amounts  exceed  the  corresponding  amounts  fixed  by  the
importing country, the latter shall accept them if the products are invoiced in
the currency of the exporting country. When the products are invoiced in the
currency  of  EC  Member  States  or  another  country  referred  to  in  Articles  3
and  4,  the  importing  country  shall  recognise  the  amount  notified  by  the
country concerned.

3.
The  amounts  to  be  used  in  any  given  national  currency  shall  be  the
equivalent  in that  national  currency  of  the  amounts  expressed  in  euro  as  at
the first working day of October 1999.

4.
The  amounts  expressed  in  euro  and  their  equivalents  in  the  national
currencies  of  Member  States  and  Lithuania  shall  be  reviewed  by  the
Association Committee at the request of the Community or Lithuania. When
carrying out this  review,  the  Association  Committee  shall  ensure  that there
will be no decrease in the amounts to be used in national currency and shall
furthermore  consider  the  desirability  of  preserving  the  effects  of  the  limits
concerned  in  real  terms.  For  this  purpose,  it  may  decide  to  modify  the
amounts expressed in euro."

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3.

Annex II shall be amended as follows:

(a) the entry for HS heading 1904 shall be replaced by:

1904

foods  obtained  by 

the
Prepared 
swelling  or  roasting  of  cereal  or
cereal  products  (for  example,  corn
flakes);  cereals  (other  than  maize
(corn)) in grain form or in the form of
flakes or other worked grains (except
flour  and  meal),  pre-cooked,  or
otherwise  prepared,  not  elsewhere
specified or included

Manufacture:
- from  materials  not
within

classified 
heading No 1806;

and 

the
- in  which  all 
flour
cereals  and 
durum
(except 
wheat 
its
derivatives and Zea
maize)
indurata 
used  must 
be
wholly obtained;¹
- in  which  the  value
of  any  materials  of
Chapter  17  used
does  not  exceed
30%  of 
the  ex-
works  price  of  the
product

¹

The exception concerning the Zea indurata maize is applicable until 31.12.2002.

(b) the entry for HS heading 2207 shall be replaced by:

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:
- from  materials  not
within
classified 
heading  Nos  2207
or 2208,

- in  which  all 

or 

the
any
grapes 
material 
derived
from  grapes  used
must  be  wholly
obtained  or  if  all
the  other  materials
used  are  already
originating,  arrack
may be used up to a
limit  of  5%  by
volume

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(c) the entry for HS Chapter 57 shall be replaced by:

Manufacture from¹:
- natural fibres
or
- chemical  materials

or textile pulp

However:
- polypropylene

filament of heading
No 5402, or
- polypropylene

fibres  of  heading
Nos  5503  or  5506,
or

- polypropylene

filament 
tow  of
heading  No  5501,
the
which 
of 
denomination in  all
cases  of  a  single
filament  or  fibre  is
less than 9 decitex,
may 
used
be 
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
otherwise
or 
processed 
for
spinning,

or
- chemical  materials

or textile pulp

Chapter
57

Carpets  and  other  textile  floor
coverings:

- Of needleloom felt

- Of other felt

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- Of other textiles materials

or jute yarn,

Manufacture from ¹:
- coir
- synthetic 
artificial 
yarn,

or
filament

- natural fibres, or
- man-made 

staple
fibres not carded or
or
combed 
otherwise
processed 
spinning

for

Jute  fabric  may  be
used as backing

¹
see Introductory Note 5.

For special conditions relating to products made of a mixture of textile materials,

(d) the entry for HS heading 8401 shall be replaced by:

ex 8401

Nuclear fuel elements

Manufacture in which
all  the  materials  used
are classified within a
heading  other 
than
that of the product¹

Manufacture 
in
which  the  value
of 
the
all 
materials  does
not  exceed  30%
of  the  ex-works
price of the final
product

¹

This rule shall apply until 31 December 2005.

(e)  the  following  shall  be  inserted  between  the  entries  for  HS  heading
Nos 9606 and 9612:

9608

pens; 

duplicating 

Ball-point pens; felt-tipped and other
porous-tipped  pens  and  markers;
fountain  pens,  stylograph  pens  and
stylos;
other 
propelling  or  sliding  pencils;  pen-
holders,  pencil-holders  and  similar
holders;  parts  (including  caps  and
clips)  of  the  foregoing articles,  other
than those of heading No 9609

Manufacture in which
all  the  materials  used
are classified within a
than
heading  other 
that  of  the  product.
However, nibs or nib-
classified
points 
within 
same
heading may be used

the 

That Decision shall enter into force on the day of its adoption.

Article 2

It is applicable from 1 January 2000.

Done at Brussels,

For the Association Council
The President

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FINANCIAL STATEMENT

1.

BUDGET HEADING INVOLVED

Chapter 12, Article 120 (zero-rated duty)

2.

LEGAL BASIS

Article 133 of the Treaty.

3.

TITLE OF THE MEASURES

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.

OBJECTIVE

To  revise  certain  rules  concerning  the  working  or  processing  of  non-
originating materials that confers originating status and to take  into account
the introduction of the euro.

5.

COST OF THE OPERATION

As the purpose of the amendments is essentially to revise some of the origin
rules without any  implication on the concessions granted by  the  agreement,
this proposal would not seem to have any financial implications.

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