Amended proposal for a Council Decision on trade in certain steel products between the European Community and Ukraine (presented by the Commission pursuant to Article 250(2) of the EC-Treaty)
Date: 2002-12-18
Institutions: European Commission
Subjects: Ukraine, import (EU), iron and steel product, metal waste, quantitative restriction, trade agreement (EU)

COMMISSION OF THE EUROPEAN COMMUNITIES

Brussels, 18.12.2002
COM(2002) 758 final

2002/0265 (ACC)

Amended proposal for a

COUNCIL DECISION

on trade in certain steel products between the European Community and Ukraine

(presented by the Commission pursuant to Article 250(2)
of the EC-Treaty)

EXPLANATORY MEMORANDUM

The  Partnership  and  Cooperation  Agreement  between  the  European  Communities  and  their
Member  States,  on  the  one  hand,  and  Ukraine,  on  the  other,  provides  in  Article  22,
paragraph 1, that trade in some steel products shall be the subject of a specific agreement. The
previous bilateral agreement between the ECSC and the Government of Ukraine on trade for
certain steel  products expired  on  31  December  2001.  The  Parties  agreed  to  conclude  a  new
agreement for the years 2002-2004. Negotiations on the new steel agreement were completed
in December 2001, and pending its entry into force, a Decision of the Representatives of the
Governments  of  the  Member  States  meeting  within  the  Council  of  19  December  2001  was
adopted,  setting  out  quantitative  limits  for  the  same  products  covered  by  the  new  steel
agreement  for  the  period  1  January  –  30  June  2002.  A  second  Decision  was  adopted  on
17 June 2002, amending the first one, and setting quantitative limits for the full year 2002 at
the level of 2001, that is below that agreed in the new agreement, pending the resolution of
the VAT refund issue on exports of scrap from Ukraine. Indeed, the draft Agreement foresees
that  there  must  be  no  obstacles  whatsoever  in  trade  of  scrap  between  the  Parties.  The
signature of the agreement has been postponed until the resolution of this trade issue.

The  Commission  already  approved  and  sent  to  the  Council  a  draft  Council  Decision  fixing
quantitative limits on trade in certain steel products between the EC and Ukraine.

The  attached  draft  Council  Decision  amends  the  previous  draft  Council  Decision  in  format
and  in  substance.  This  draft  Council  Decision  decreases  the  quantitative  limits  that  were
proposed  in  the  previous  draft  Council  Decision  as  a  result  of  the  Ukrainian  Parliament
passing  recently  a  law  imposing  a  tax  of  €  30  /tonne  on  export  of  ferrous  scrap  as  from  1
January  2003  that  will  penalise  the  Community  steel  industry  and  will  adversely  affect  the
Community  ferrous  scrap  market.  This  tax  is  likely  to  limit  substantially,  if  not  totally,
exports of ferrous scrap from Ukraine to the EC since the overall cost for EC operators would
be well beyond the current international price of ferrous scrap on the EC market. Quantitative
limits  for  2003  are  therefore  reduced  by  30%  compared  to  those  fixed  for  the  year  2002,
pending a satisfactory solution to this issue and the conclusion of the negotiations of the new
Agreement  (negotiations  are  ongoing  and  both  sides  hope  to  be  able  to  conclude  in  early
2003). This Council Decision would be automatically repealed when the new agreement will
enter into force, and the quantitative limits contained in this Decision would be reviewed in
the case that the Ukrainian tax on ferrous scrap exports was lifted earlier than the entry into
force of the new agreement.

2

2002/0265 (ACC)

Amended proposal for a

COUNCIL DECISION

on trade in certain steel products between the European Community and Ukraine

THE COUNCIL OF THE EUROPEAN UNION,

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

Having regard to the proposal from the Commission,

Whereas:

(1)

(2)

(3)

(4)

(5)

(6)

(7)

The Partnership and Cooperation Agreement between the European Communities and
their Member States, on the one part, and  Ukraine, of  the other part1, provides in its
Article  22,  paragraph  1,  that  trade  in  some  steel  products  shall  be  the  subject  of  a
specific agreement;

The previous bilateral agreement between the ECSC and the Government of Ukraine
on trade for certain steel products expired on 31 December 2001;

The  Parties  agreed  to  conclude  a  new  agreement  and  the  negotiations  of  this  new
agreement have not yet been completed;

The  European  Community  (EC)  has  taken  over  the  international  obligations  of  the
ECSC  since  the  expiry  of  the  ECSC  Treaty,  and  measures  relating  to  trade  in  steel
products with third countries now fall under the competence of the EC in the field of
trade policy;

Quantitative limits for the year 2002 have been fixed by Decision 2001/933/ECSC of
the  representatives  of  the  Government  of  the  Member  States  meeting  within  the
Council of 19 December 20012, as amended by Decision 2002/476/ECSC 3;

Pending  the  signature  and  the  entry  into  force  of  the  new  agreement,  quantitative
limits for the year 2003 must be established ;

The  Ukrainian  Parliament  passed  a  law  imposing  a  tax  of  €  30/  tonne  on  exports  of
ferrous scrap, to be applied as of 1 January 2003; this proposed tax will constitute an
obstacle  to  the  free  trade  of  ferrous  scrap  and  would  seriously  limit,  if  not  block,
exports  of  ferrous  scrap,  thereby  penalising  the  Community  steel  industry  and
affecting  adversely  the  Community  ferrous  scrap  market;  as  a  consequence,  it  is

1

2

3

OJ L 49, 19.2.1998, p.3
OJ L 345, 29.12.2001, p.75
OJ L 164, 22.06.2002, p.37

3

                                                
appropriate  to  reduce  the  quantitative  limits  for  2003  by  30%  compared  to  the
quantitative  limits  set  for  2002,  pending  a  satisfactory  solution  to  this  issue  and  the
conclusion of the negotiations of the new Agreement,

HAS DECIDED AS FOLLOWS:

Article 1

During  the  period  mentioned  in  Annex  1,  imports  into  the  European  Community  of  steel
products referred to in Annex 2 originating in Ukraine shall be subject to licensing. Licenses
shall be issued only within the limits defined in Article 2.

Article 2

Imports shall be authorised, for each product group and for the whole of the Community, up
to the quantitative limits indicated in Annex 1.

The  period  of  validity  of  the  import  licence  is  hereby  fixed  at  four  months.  Unused  or
partially used import licences may be renewed for two months.

Article 3

Member  States  shall  issue  licences  according  to  rules  agreed  within  the  Steel  Liaison
Committee and inform the Commission thereof immediately. The Commission shall keep the
Member States regularly informed of the extent to which the quantities have been used up.

The Member States and the Commission shall confer in order to ensure that these quantities
are not exceeded.

Article 4

The provisions of the agreement on trade in certain steel products together with any measures
to  give  effect  to  it,  shall  as  from  the  date  of  entry  into  force  of  the  agreement  replace  the
provisions of this Decision.

Article 5

This Decision shall enter into force on the day following its publication in the Official Journal
of the European Communities.

Done at Brussels,

For the Council
The President

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ANNEX 1

QUANTITATIVE LIMITS FIXED FOR THE PERIOD 1.1.2002-31.12.2003
(tonnes)

Products

SA. Flat products

SA1. Coils

SA2. Heavy plate

SA3. Other flat products

SB. Long products

SB1. Beams

SB2. Wire rod

46 604

178 364

14 391

6 273

89 624

SB3. Other long products

112 926

5

SA Flat-rolled products

SA1. Coils

7208 10 00
7208 25 00
7208 26 00
7208 27 00
7208 36 00
7208 37 10
7208 37 90
7208 38 10
7208 38 90
7208 39 10
7208 39 90

7211 14 10
7211 19 20

7219 11 00
7219 12 10
7219 12 90
7219 13 10
7219 13 90
7219 14 10
7219 14 90

7225 20 20
7225 30 00

SA2. Heavy Plate

7208 40 10
7208 51 10
7208 51 30
7208 51 50
7208 51 91
7208 51 99
7208 52 10
7208 52 91
7208 52 99
7208 53 10

7211 13 00
7225 40 20
7225 40 50
7225 99 10
SA3. Other flat rolled products

7208 40 90
7208 53 90
7208 54 10
7208 54 90
7208 90 10

7209 15 00
7209 16 10
7209 16 90
7209 17 10

7209 17 90
7209 18 10
7209 18 91
7209 18 99
7209 25 00
7209 26 10
7209 26 90
7209 27 10
7209 27 90
7209 28 10
7209 28 90
7209 90 10

7210 11 10
7210 12 11
7210 12 19
7210 20 10
7210 30 10
7210 41 10
7210 49 10
7210 50 10
7210 61 10
7210 69 10
7210 70 31
7210 70 39
7210 90 31
7210 90 33
7210 90 38

7211 14 90
7211 19 90
7211 23 10
7211 23 51
7211 29 20
7211 90 11

7212 10 10
7212 10 91
7212 20 11
7212 30 11
7212 40 10
7212 40 91
7212 50 31
7212 50 51
7212 60 11
7212 60 91

7219 21 10
7219 21 90
7219 22 10
7219 22 90
7219 23 00
7219 24 00
7219 31 00
7219 32 10
7219 32 90
7219 33 10
7219 33 90

7214 91 10
7214 91 90
7214 99 10
7214 99 31
7214 99 39
7214 99 50
7214 99 61
7214 99 69
7214 99 80
7214 99 90

7215 90 10

7216 10 00
7216 21 00
7216 22 00
7216 40 10
7216 40 90
7216 50 10
7216 50 91
7216 50 99
7216 99 10

7218 99 20

7222 11 11
7222 11 19
7222 11 21
7222 11 29
7222 11 91
7222 11 99
7222 19 10
7222 19 90
7222 30 10
7222 40 10
7222 40 30

7224 90 31
7224 90 39

7228 10 10
7228 10 30
7228 20 11
7228 20 19
7228 20 30
7228 30 20

7228 30 41
7228 30 49
7228 30 61
7228 30 69
7228 30 70
7228 30 89
7228 60 10
7228 70 10
7228 70 31
7228 80 10
7228 80 90

7301 10 00

ANNEX 2

7219 34 10
7219 34 90
7219 35 10
7219 35 90

7225 40 80

SB Longs

SB1. Beams

7207 19 31
7207 20 71

7216 31 11
7216 31 19
7216 31 91
7216 31 99
7216 32 11
7216 32 19
7216 32 91
7216 32 99
7216 33 10
7216 33 90

SB2. Wire rod

7213 10 00
7213 20 00
7213 91 10

7213 91 20
7213 91 41
7213 91 49
7213 91 70
7213 91 90
7213 99 10
7213 99 90

7221 00 10
7221 00 90

7227 10 00
7227 20 00
7227 90 10
7227 90 50

7227 90 95

SB3. Other longs

7207 19 11
7207 19 14
7207 19 16
7207 20 51
7207 20 55
7207 20 57

7214 20 00
7214 30 00

6