WRITTEN QUESTION E-0247/03 by Charles Tannock (PPE-DE) to the Commission. Potential abuse of the EU Association Agreement.
Date: 2003-02-05
Institutions: European Parliament, Provisional data
Subjects: Chile, association agreement (EU), commercial arbitration, customs inspection, exemption from customs duties, originating product, trade dispute

C 88 E/594

Official Journal of the European Union

EN

8.4.2004

(cid:1) Enacting domestic regulations,

legislation and other measures to safeguard the public interest. For
example, Members can while opening a sector to competition design and implement policies aimed at
ensuring the availability, quality and affordability of essential public services, such as universal service
obligations.

The Community and other Members have, whenever deemed necessary, used the flexibility described above
to safeguard their public services and there is no evidence that the GATS has affected public services
within the Community.

(1) Directive 2002/22/EC of the Parliament and of the Council of 7 March 2002 on universal service and users’ rights

relating to electronic communications networks and services, OJ L 108, 24.4.2002.

(2004/C 88 E/0607)

WRITTEN QUESTION E-0247/03

by Charles Tannock (PPE-DE) to the Commission

Subject: Potential abuse of the EU Association Agreement

(5 February 2003)

The new EU Association Agreement with Chile, to which the Parliament is soon likely to give its assent, is
a wide-ranging and in many ways groundbreaking agreement with a non-candidate state which will be
widely welcomed on both sides of the Atlantic.

The Commission has also indicated that in the opinion of the Commission, the agreement is fully
compliant with World Trade Organisation (WTO) obligations.

Could the Commission indicate, however, what control mechanisms exist to ensure that tariff-free access is
not abused by companies based in countries which are not parties to the agreement using the European
Union as a conduit for tariff-free exports to Chile or using Chile as a conduit for tariff-free exports to the
European Union?

Answer given by Mr Lamy on behalf of the Commission

(21 February 2003)

The trade pillar of the Union-Chile Association Agreement is indeed one of the most innovative and
ambitious agreement ever negotiated by the Community with a non-candidate country. The trade part of
the agreement entered into force (on a provisional basis) on 1 February 2003.

As indicated by the Honourable Member, the Commission considers that such an agreement is compatible
with the requirements of the WTO, in particular Article XXIV of the General Agreement on Tariffs and
Trade (GATT) and Article V of the General Agreement on Trade in Services (GATS).

As in all agreements containing a free trade area in goods, in order to benefit from tariff preferences, a
product when exported must be considered as originating either in the Community or in Chile. For this
purpose,
it must comply with the rules of origin established in a specific annex to the Agreement
(Annex III and its appendices). In this respect, when the product exported is not ‘wholly obtained’ in one
of the two Parties, goods imported from third countries must undergo sufficient working or processing in
compliance with the specific origin rule set out for the final product to be exported (in practical terms this
means that it is not possible to export a product from e.g. Brazil to Chile and re-export the same product
to the Union under preferential treatment granted under the Union/Chile Agreement).

When goods are deemed to be originating, they must be accompanied at importation by ‘proofs of origin’
clearly defined in the Agreement. Additionally, the above-mentioned Annex III contains provisions on
‘administrative co-operation’, which provide for verification procedures of the originating status of the
goods to be carried out in collaboration between the authorities of the two Parties (1).

Furthermore, possible disputes on verification procedures may be referred in the first place to a specific
Committee (Special Committee on Customs Co-operation and Rules of Origin).

8.4.2004

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Official Journal of the European Union

C 88 E/595

the Association Agreement

includes a general dispute settlement mechanism in case of
Ultimately,
infringements of the obligations under the agreement by either party. This system, which is comparable to
the WTO dispute settlement mechanism, foresees the recourse to independent arbitrators, whose ruling is
compulsory and backed up by trade sanctions.

is also worth mentioning that

includes a clause (Article 82) on the
It
enforcement of preferential treatment, which addresses the cases of fraud and/or the systematic lack of
administrative cooperation related to, inter alia, origin. Under certain conditions and circumstances this
may lead to temporary withdrawal of preferential benefits.

the Association Agreement

(1) Annex III, Article 31 paragraph 1: ‘Subsequent verifications of proofs of origin shall be carried out at random or
whenever the customs authorities of the importing country have reasonable doubts as to the authenticity of such
documents, the originating status of the products concerned or the fulfillment of the other requirements of this
Annex’.

(2004/C 88 E/0608)

WRITTEN QUESTION P-0264/03

by Joachim Wuermeling (PPE-DE) to the Commission

Subject: Discrimination against EU investors in the Czech Republic

(30 January 2003)

Since the borders were opened, EU citizens have been attempting to set up small and medium-sized
businesses in the Czech Republic. With a view to the scheduled EU enlargement in May 2004, the Czech
Republic has undertaken to adapt to EU legal standards and establish a functioning administrative and
judicial system in order to meet the Copenhagen criteria.

Is the Commission aware of cases of discrimination against EU citizens by comparison with citizens of the
Czech Republic as regards setting up businesses and service companies?

Is it correct that the Czech legal system makes no provision for complaints against action taken by the
authorities?

Is it true that the payment of bribes can speed up the entry of firms in the commercial register by up to a
year?

Is the Commission aware of the case in Bozi Dar involving Mr Engert, who is experiencing a number of
problems owing to the fact that he runs a ski school?

Answer given by Mr Verheugen on behalf of the Commission

(28 February 2003)

The Commission informs the Honourable Member that a small number of complaints have been presented
to the Commission by Union citizens or companies in connection with establishing businesses/providing
services in the Czech Republic. However, claims of discrimination are rare, most issues raised are general
problems linked to the legal business environment.

Considering that in recent years the Czech Republic has been the largest recipient of the foreign direct
investment per capita amongst the Candidate Countries, the number of complaints (cid:1) on any basis (cid:1) is
remarkably small.

Any complaints, whatever their grounds, are treated seriously and are dealt with on a case-by-case basis.
The Commission is aware of imperfections in the Czech legal framework for business and highlighted
them in its Regular Reports. The current legislative framework is being further amended with new
legislation on the Act on Trades (Business Act), public procurement and bankruptcy, which is currently
under preparation and closely monitored by the Commission with a view to ensuring full alignment with
Community legislation.