Proposal for a Council Regulation implementing Article 12 of Council Regulation (EC) No 2501/2001 applying a scheme of generalised tariff preferences for the period from 1 January 2002 to 31 December 2004
Date: 2003-02-11
Institutions: European Commission
Subjects: common commercial policy, developing countries, generalised preferences, proposal (EU), third country

COMMISSION OF THE EUROPEAN COMMUNITIES

Brussels, 21.2.2003
COM(2003) 45 final/2

2003/0016 (ACC)

CORRIGENDUM
Des dates dans l’article 2
Concerne uniquement: EN/DA/EL

Proposal for a

COUNCIL REGULATION

implementing Article 12 of Council Regulation (EC) No 2501/2001 applying a scheme of
generalised tariff preferences for the period from 1 January 2002 to 31 December 2004

(presented by the Commission)

EXPLANATORY MEMORANDUM

1. 

2. 

Sectoral  graduation  is  a  feature  of  the  European  Union’s  Scheme  of  Generalised
Tariff  Preferences.  It  is  meant  to  target  such  preferences  on  those  countries  which
need them most, by removing preferential treatment from sectors of countries which
turn  out  to  be  able  to  face  international  competition  without  preferential  market
access.

Recital  15  of  the  Council  Regulation  (EC)  No  2501/2001  of  10  December  2001
applying  a  scheme  of  generalised  tariff  preferences  for  the  period  from  1  January
2002 to 31 December 20041 states that

"During  the  first  year  of  application  of  this  Regulation,  the  sectors  previously
graduated should remain graduated.”

3. 

Article 12 of the above regulation states that

“1. The tariff preferences referred to in Articles 7 and 10 shall be removed in respect
of products originating in  a  beneficiary  country, of a sector which has  met, during
three consecutive years, either of the following criteria:

-  the  country's  development  index,  as  defined  in  Annex  II,  is  higher  than  -2,

(a)
and

- Community imports from that country of all products of the sector concerned and
included  in  the  arrangements  enjoyed  by  that  country  exceed  25%  of  Community
imports of the same products from all countries and territories listed in Annex I;

(b)

– the country's development index, as defined in Annex II, is higher than -2 and

–  the  specialisation  index  of  the  sector  concerned  is  higher  than  the  threshold
corresponding to that country's development index, as defined in Annex II, and

– Community imports from that country of all products of the sector concerned and
included  in  the  arrangements  enjoyed  by  that  country  exceed  2%  of  Community
imports of the same products from all countries and territories listed in Annex I.

2. Where a sector, in respect of which tariff preferences had been removed according
to column D of Annex I or to a decision taken subsequently in accordance with this
Article, has not met, during three consecutive years, either of the criteria set out in
paragraph 1, the tariff preferences shall be re-established.

3.   On the basis of the most recent data available on 1 September of each year, the
Commission  shall  establish  which  sectors  meet  the  conditions  laid  down  in
paragraphs 1 and 2.

4.   The Commission shall publish a notice in the Official Journal of the  European
Communities,  listing  the  sectors  which  meet  the  criteria  set  out  in  paragraph  1  in
respect of the most recent year for which data are available.

1 

OJ L 346, 31.12.2001, p. 1

2

                                                
5.   Upon the entry into force of this Regulation, and before the end of each year, the
Commission shall decide, in accordance with the procedure referred to in Article 38,
to remove tariff preferences in respect of sectors which meet the condition set out in
paragraph  1  and  to  re-establish  tariff  preferences  for  sectors  which  meet  the
condition set out in paragraph 2.

6.    The first decision taken in accordance with paragraph 5 shall enter into force on
1 January 2003. Subsequently, decisions taken in accordance with paragraph 5 shall
enter  into  force  on  1  January    of  the  second  year  following  the  one  during  which
they were  taken.”

According  to  Article  12  (5),  the  Commission  has  to  take  a  decision  on  graduation.
The present draft regulation is meant to implement this provision.

The calculations referred to in Article 12 have to be carried out using the most recent
and  complete  trade  statistics  available.  These  are,  at  present,  those  referring  to  the
years 1997, 1998 and 1999.

According  to  the  results  of  these  calculations,  52  sectors,  which  were  graduated  in
the  past,  should  remain  graduated.  22  sectors  previously  not  graduated  should  be
graduated in the future while 16 sectors which were graduated in the past, should be
readmitted for GSP treatment. The updated situation is reflected in the annex of the
draft Regulation.

According  to  Article  12  (5),  the  Commission’s  decision  has  to  be  taken  in
accordance  with  the  procedure  referred  to  in    Article  38  of  the  GSP  Regulation.
Accordingly,  Member  States  have  been  consulted  in  the  framework  of  the
Generalised  Preferences  Committee.  They  did  not  approve  the  Commission’s
proposal to update graduation in accordance with the results of the calculations. As
the measures envisaged are not in accordance with the opinion of the Committee, the
Commission shall, without delay, submit this draft Regulation to the Council.

4. 

5. 

6. 

7. 

3

2003/0016 (ACC)

Proposal for a

COUNCIL REGULATION

implementing Article 12 of Council Regulation (EC) No 2501/2001 applying a scheme of
generalised tariff preferences for the period from 1 January 2002 to 31 December 2004

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 Commission2,

 Having regard to the opinion of the Committee referred to in article 37 of Council Regulation
No  2501/2001,  which  was  not  in  accordance  with  the  proposed  Commission  Regulation
submitted  by the  Commission  with  regard  to  the  measures  to  be  taken  in  application  of  the
Article 12 above mentioned,

Whereas:

(1) 

(2) 

(3) 

(4) 

(5) 

The  tariff  preferences  referred  to  in  Articles  7  and  10  of  Regulation  (EC)  No
2501/2001  should  be  removed  in  respect  of  products,  originating  in  a  beneficiary
country,  of  a  sector  which  has  met,  during  three  consecutive  years,  either  of  the
criteria laid down in that Regulation.

Tariff  preferences  which  had  been  removed  under  previous  schemes,  should  be  re-
established in respect of a sector that has not met, during three consecutive years, the
criteria set out in that Regulation.

The most recent and complete statistics available to establish which sectors meet the
conditions laid down in Regulation (EC) No 2501/2001 are those for the years 1997 to
1999.

The  date  of  application  of  this  Regulation  should  be  set  taking  into  account  the
necessity for economic operators to adapt to the new customs duties thus established.

Annex  I  of  Council  Regulation  (EC)  No  2501/2001  should  be  replaced  in  order  to
reflect the removal or re-establishment of tariff preferences provided for in Articles 7
and 10.

2

OJ C , , p. .

4

                                                
HAS ADOPTED THIS REGULATION:

Article 1

(1) 

(2) 

(1) 

(2) 

The tariff preferences provided for in Articles 7 and 10 of Council Regulation (EC) No
2501/2001  are  hereby  removed  in  respect  of  products  originating  in  the  beneficiary
countries listed in Annex  I to this  regulation,  of  the  sectors  mentioned  in  that  annex
alongside each country concerned.

The tariff preferences provided for in Articles 7 and 10 of Council Regulation (EC) No
2501/2001  are  hereby  re-established  in  respect  of  products  originating  in  the
beneficiary countries listed in Annex II to this regulation, of the sectors mentioned in
that annex alongside each country concerned.

Article 2

This Regulation shall enter into force from its date of publication . It shall apply from
1 June 2003 in respect of Article 1(1), and from  1 January 2003 in respect of Article
1(2).

Annex I of Council Regulation (EC) No 2501/2001 shall be replaced by Annex III of
this Regulation from 1 June 2003.

This Regulation shall be binding in its entirety and directly applicable in all Member States.

Done at Brussels,

                                                                      The President

For the Council

[…]

5

ANNEX I

Sectors in respect of which tariff  preferences shall be removed.

Country
Code

Beneficiary country Sector

Description

AR

Argentina

II

V

X

Fishery products

Trees, plants, cut flowers, edible vegetables and nuts

Fats, oils and waxes

BR

CN

CO

CR

KW

MA

MU

MX

TH

TN

Brazil

XIX

Wood

People's  Republic  of
China

III

XVI

XX

Edible products of animal origin

Plastics and rubber

Paper

XXVIII

Electro-mechanics

XXIX

Consumer electronics

XXXII

Optical and clocks

V

V

XIII

XV

Trees, plants, cut flowers, edible vegetables and nuts

Trees, plants, cut flowers, edible vegetables and nuts

Mineral products

Fertilisers

XXII

Clothing

XI

XIV

Edible preparations of meat or fish and beverages

Chemicals except fertilisers

XXIV

Glass and ceramic

XXIX

Consumer electronics

XV

Fertilisers

XXII

Clothing

Colombia

Costa Rica

Kuwait

Morocco

Mauritius

Mexico

Thailand

Tunisia

UY

Uruguay

XVII

Leather, raw hides and skins

6

ANNEX II

Sectors in respect of which tariff  preferences shall be re-established.

Country
code

Beneficiary country

Sector

Description

AR

Argentina

BR

CL

Brazil

Chile

KZ

Kazakhstan

III

XI

Edible products of animal origin

Edible preparations and beverages

XXX

Transport equipment

IX

XV

XV

Lac, gums and resins

Fertilisers

Fertilisers

XXV

Jewellery and precious metals

XXVII

Base  metals  and  articles  of  base  metal,  other  than
products of sector XXVI

MX

Mexico

MY

Malaysia

III

V

VII

Edible products of animal origin

Trees, plants, cut flowers, edible vegetables and nuts

Cereals and malt and starches

XXII

Clothing

RU

Russian Federation

XXVII

Base  metals  and  articles  of  base  metal,  other  than
products of sector XXVI

TH

Thailand

V

Trees, plants, cut flowers, edible vegetables and nuts

XXII

Clothing

XXXIII

Miscellaneous

7

ANNEX III

       ' ANNEX I

Beneficiary countries and territories of the Community's scheme

of generalised tariff preferences

Column A: code  according  to  the  nomenclature  of  countries  and  territories  for  the  external

trade statistics of the Community

Column B: name of country

Column C: sectors  not  included  in  the  general  arrangements  for  the  beneficiary  country

concerned (Article 7(7))

Column D: sectors  in  respect  of  which  tariff  preferences  have  been  removed  for  the

beneficiary country concerned (Article 7(8))

Column E: countries  included  in  the  special  incentive  arrangements  for  the  protection  of

labour rights (Title III Section1)

Column F: sectors  included  in  these  arrangements  for  the  beneficiary  country  concerned

(Article 8(1) and (2))

Column G: countries included in the special incentive arrangements for the protection of the

environment (Title III Section 2)

Column H: countries  included  in  the  special  arrangements  for  least  developed  countries

(Article 9)

Column I: countries  included  in  the  special  arrangements  to  combat  drug  production  and

trafficking (Title IV)

A

B

C

D

E

F

G

H

I

AE

United Arab Emirates

AF

Afghanistan

AG Antigua and Barbuda

AI

Anguilla

AM Armenia

II, XXVI

8

X

A

B

C

D

E

F

G

H

I

X

X

X

X

X

X

X

I, II, V, X, XVII

II, XXVI

AN Netherlands Antilles

AO Angola

AQ Antarctica

AR Argentina

AS

American Samoa

AW Aruba

AZ

Azerbaijan

BB

Barbados

BD Bangladesh

BF

Burkina Faso

BH Bahrain

BI

BJ

Burundi

Benin

BM Bermuda

BN Brunei Darussalam

XXV

BO Bolivia

BR

Brazil

BS

Bahamas

BT

Bhutan

BV Bouvet Island

BW Botswana

I, VI, IX, XI, XII,
XVII,  XIX,  XX,
XXIII, XXVI

BY Belarus

BZ

Belize

CC

Cocos 
Islands)

Islands 

(or  Keeling

II, XXVI XV

9

A

B

C

D

E

F

G

V

III, IV, VIII, XIV,
XVI,  XVIII,  XX,
XXII, 
XXIII,
XXIV,  XXVII,
XXVIII,  XXIX,
XXXII, XXXIII

V

V

CD Democratic Republic of Congo

CF

Central African Republic

CG Congo

CI

Côte d'Ivoire

CK Cook Islands

CL

Chile

CM Cameroon

CN People's Republic of China

XXVI(1)

CO Colombia

CR

Costa Rica

CU Cuba

CV Cape Verde

CX Christmas Islands

CY Cyprus

DJ

Djibouti

DM Dominica

DO Dominican Republic

DZ

Algeria

EC

Ecuador

EG

Egypt

ER

Eritrea

I

H

X

X

X

X

X

X

X

X

(1) 

Only the products  of  sector  XXVI  which are underlined  in  Annex  III  are  not  included  for  the People's  Republic  of  China,  pursuant  to
Article 7(7).

10

                                                
A

B

C

D

E

F

G

ET

Ethiopia

FJ

Fiji

FK

Falklands Islands

FM Federated States of Micronesia

GA Gabon

GD Grenada

GE

Georgia

GH Ghana

GI

Gibraltar

GL

Greenland

GM Gambia

GN Guinea

GQ Equatorial Guinea

GS

South  Georgia 
Sandwich Islands

and 

South

GT

Guatemala

GU Guam

GW Guinea-Bissau

GY Guyana

HM Heard 
Islands

Island  and  McDonald

HN Honduras

HT

Haiti

ID

IN

IO

IQ

Indonesia

India

British Indian Ocean Territory

Iraq

II, XXVI

II

X, XIX, XXIII

XVII, XVIII, XXI

11

I

H

X

X

X

X

X

X

X

X

A

B

C

D

E

F

G

H

I

IR

Iran (Islamic Republic of)

JM Jamaica

JO

Jordan

KE

Kenya

KG Kyrgyzstan

KH Cambodia

KI

Kiribati

KM Comoros

KN St Kitts and Nevis

KW Kuwait

KY Cayman Islands

II, XXVI

XIII

KZ

Kazakhstan

II, XXVI

LA

LB

LC

Lao 
Republic

People's 

Democratic

Lebanon

St Lucia

LK

Sri Lanka

LR

Liberia

LS

Lesotho

LY

Libyan Arab Jamahiriya

MA Morocco

XIII

XV

MD Moldova (Republic of)

II, XXVI

X

All
except
II and
XXVI

MG Madagascar

MH Marshall Islands

ML Mali

MM Myanmar

12

X

X

X

X

X

X

X

X

X

A

B

C

D

E

F

G

H

I

XXII

XXII

XI,  XIV,  XXIV
XXVI

X,  XVI,  XIX,
XXIX

MN Mongolia

MO Macao

MP Northern Mariana Islands

MR Mauritania

MS Montserrat

MU Mauritius

MV Maldives

MW Malawi

MX Mexico

MY Malaysia

MZ Mozambique

NA Namibia

NC New Caledonia

NE

Niger

NF

Norfolk Island

NG Nigeria

NI

Nicaragua

NP

Nepal

NR Nauru

NU Niue Island

OM Oman

PA

Panama

PE

PF

Peru

French Polynesia

PG

Papua New Guinea

13

X

X

X

X

X

X

X

X

X

A

PH

PK

Philippines

Pakistan

B

C

D

E

F

G

H

I

X

XVII, XVIII, XXI

X

PM St Pierre and Miquelon

PN

Pitcairn

PW Palau

PY

Paraguay

QA Qatar

RU Russian Federation

II, XXVI XIII, XV

RW Rwanda

SA

Saudi Arabia

SB

SC

Solomon Islands

Seychelles

SD

Sudan

SH

Santa Helena

SL

SN

SO

SR

ST

SV

SY

SZ

Sierra Leone

Senegal

Somalia

Suriname

São Tomé and Príncipe

El Salvador

Syrian Arab Republic

Swaziland

TC

Turks and Caicos Islands

TD

Chad

TF

French Southern territories

TG

Togo

XIII

14

X

X

X

X

X

X

X

X

X

X

A

B

C

D

E

F

G

H

I

II,  XI,  XVI,
XVIII, 
XXIII,
XXV, XXIX

XV, XXII

TH

Thailand

TJ

Tajikistan

II, XXVI

TK

Tokelau Islands

TM Turkmenistan

II, XXVI

TN

Tunisia

TO

Tonga

TP

TT

East Timor

Trinidad and Tobago

TV

Tuvalu

TZ

Tanzania (United Republic of)

UA Ukraine

UG Uganda

UM United  States  Minor  outlying

islands

UY Uruguay

UZ

Uzbekistan

VC

St  Vincent 
Grenadines

and  Northern

II, XXVI VIII, XV

I, XVII

II, XXVI

VE

Venezuela

VG Virgin Islands (British)

VI

Virgin Islands (USA)

VN Viet Nam

VU Vanuatu

WF Wallis and Futuna

WS

Samoa

YE

Yemen

15

X

X

X

X

X

X

X

A

B

C

D

E

F

G

H

I

YT Mayotte

ZA

South Africa

XXVI

ZM Zambia

ZW Zimbabwe

X

16

FINANCIAL STATEMENT

DATE: 16.12.2002

1. TITLE:
PROPOSAL FOR A COUNCIL REGULATION IMPLEMENTING ARTICLE 12 OF COUNCIL REGULATION (EC) NO
2501/2001 APPLYING A SCHEME OF GENERALISED TARIFF PREFERENCES FOR THE PERIOD FROM 1 JANUARY 2002
TO 31 DECEMBER 2004
2. LEGAL BASIS:
Article 12 of  Council Regulation (EC) No2501/2001
3. AIMS:
The purpose of the regulation is to implement Article 12 of Council Regulation (EC) No 2501/2001 applying a
scheme of generalised tariff preferences for the period from 1 January 2002 to 31 December 2004
4. FINANCIAL IMPLICATIONS

Implementing  a  scheme  of  generalised  preferences  does  not  entail  any  expenditure  to  be  entered  in  the
Community budget. It may result in a loss or gain of customs revenue, depending on the number of sectors and
the volume of trade which qualify for graduation and de-graduation.

Based on the figures of 2001, the graduation of 22 sectors would have resulted in a gain of customs revenue of
approximately EUR 761 million and the degraduation of 16 sectors in a loss of customs revenue of
approximately EUR 33 million, i.e. a net gain of EUR 728 million.  As graduation enters into force on 1 April
2003, the gain would be correspondingly less.

17