Proposal for a Council Regulation amending 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, generalised preferences, proposal (EU), third country

COMMISSION OF THE EUROPEAN COMMUNITIES

Brussels, 11.2.2003
COM(2003) 43 final

2003/0017 (ACC)

Proposal for a

COUNCIL REGULATION

amending 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

Article  7(8)  of  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 the tariff preferences referred to in paragraphs 1 to 4 of that Article shall not
apply to products of sectors in respect of which they have been removed, according to column
D of Annex I or a decision taken subsequently in accordance with Article 12. Article 12 also
applies  to  the  preferences  referred  to  in  Article  10,  i.e.  those  granted  under  the  special
arrangements to combat drug production and trafficking. In order to clarify this, a provision
similar to Article 7(8) should be added to Article 10.

Article  12  provides  for  detailed  rules  governing  graduation  in  the  framework  of  the  GSP.
According to Article 12(1), the tariff preferences granted under the  general  arrangements as
well as those under the special arrangements to combat drug production and trafficking 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  two  criteria  laid  down  in  that  paragraph.
According to Article 12(2), the tariff preferences shall be re-established where a sector which
had previously been graduated has not met the same criteria during three consecutive years.

These criteria refer to past performance. They do not take into account sudden changes of the
economic  and  financial  situation  of  beneficiary  countries  which  occur  after  the  reference
period.  The  present  proposal  is  intended  to  amend  the  GSP  Council  Regulation  in  order  to
introduce a specific provision which would allow any beneficiary country which faces a grave
financial and economic crisis to be exempted from a graduation of new sectors.

Various  provisions  of  the  regulation  refer  to  sectors.  These  provisions  cannot  apply  to
products for which it is not determined to which sector they belong. It is therefore proposed to
add a new sector, in Annex III, for all products which are not included in one of the existing
sectors.

1

OJ L 346 of 31.12.2001, p. 1

2

                                                
2003/0017 (ACC)

Proposal for a

COUNCIL REGULATION

amending 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,

Whereas:

(1) 

(2) 

Since its entry into force on 1 January 2002, 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 20043 has been found to require certain
amendments.

In  particular,  a  specific  provision  should  be  introduced  in  order  to  allow  any
beneficiary  country  which  would  face  a  grave  economic  and  financial  crisis  to  be
exempted  from  the  graduation  of  new  sectors.  Furthermore,  since  the  provisions  of
Regulation (EC) No 2501/2001 referring to sectors cannot apply to products to which
no specific sector has been assigned, Annex III of the Regulation should be amended
so  as  to  specify  a  sector  for  every  product  covered  by  any  of  the  different
arrangements.

(3) 

It has been impossible to adopt the first decision envisaged in paragraph 5 of Article
12  before  1  January  2003;  it  is  therefore  appropriate  to  provide  that  the  graduation
decision shall take effect from 1.6.2003.

(4) 

Regulation (EC) No 2501/2001 should therefore be amended accordingly.

HAS ADOPTED THIS REGULATION:

Article 1

Regulation (EC) 2501/2001 is hereby amended as follows:

(1)

The following paragraph is added to Article 10:

2

3

OJ C …, …, p. …
OJ L 346, 31.12.2001, p 1.

3

                                                
“3.
The  tariff  preferences  referred  to  in  paragraphs  1  and  2  shall  not  apply  to
products of sectors in respect of which those tariff preferences have been removed,
for the country of origin concerned, according to column D of Annex I or a decision
taken subsequently in accordance with Article 12.”

(2)

Paragraph 6 of Article 12 is replaced as follows :

“The first decision taken in accordance with paragraph 5 shall take effect on 1.6.2003
with respect to the removal of tariff preferences  in  accordance  with  paragraph 1  and
on  1st  January  2003  with  respect  to  the  re-establishment  of  tariff  preferences  in
accordance  with  paragraph  2.  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”.

(3)

The following paragraph is added to Article 12:

“8. Where a beneficiary country faces a decrease of at least 10 per cent of its real
Gross Domestic Product, expressed in its national currency and in respect of the most
recent  12-month  period  for  which  data  are  available,  paragraphs  1  and  2  shall  not
apply to the decisions taken in accordance with paragraph 5."

(4)

In Annex I, the explanatory matter at the beginning is amended as follows:

In  the  reference  to  "Column  D",  the  parenthesis  “(Article  7(8))”  is  replaced  by
“(Articles 7(8) and 10(3))”.

(5)

In  Annex  II,  the  text  under  Section  4  ("Statistical  sources")  is  replaced  by  the
following:

“The statistical source for per capita income is the World Bank's World Development
Report,  for  quarterly  gross  domestic  product  the  IMF  International  Financial
Statistics,  for  manufactured  exports  the  UN  COMTRADE  statistics,  and  for
Community imports the COMEXT statistics.”

(6)

In Annex III a further sector, as set out in the Annex to this Regulation, is added.

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

Article 2

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

Done at Brussels,

For the Council
The President

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ANNEX

(Sector referred to in point (5) of Article 1)

XXXIV Other  base  metals  and  articles

of base metal

7202 19; 7202 29; 7202 30 00; 7202 92 00;
7207 11 90; 7207 12 90; 7207 19 19;
7207 19 39; 7207 19 90; 7207 20 19;
7207 20 59; 7207 20 79; 7208 90 90;
7209 90 90; 7210 11 90; 7210 12 90;
7210 20 90; 7210 30 90; 7210 41 90;
7210 49 90; 7210 50 90; 7210 61 90;
7210 69 90; 7210 70 90; 7210 90 10;
7210 90 90; 7211 23 91; 7211 23 99;
7211 29 50; 7211 29 90; 7211 90 19;
7211 90 90; 7212 10 93; 7212 10 99;
7212 20 19; 7212 20 90; 7212 30 19;
7212 30 90; 7212 40 95; 7212 40 98;
7212 50 10; 7212 50 58; 7212 50 75;
7212 50 91; 7212 50 93; 7212 50 97;
7212 50 99; 7212 60 19; 7212 60 93;
7212 60 99; 7215 10 00; 7215 50;
7215 90 90; 7216 61; 7216 69 00; 7216 91;
7216 99 90; 7218 91 90; 7218 99 19;
7218 99 91; 7218 99 99; 7219 90 90;
7220 20 31; 7220 20 39; 7220 20 51;
7220 20 59; 7220 20 91; 7220 20 99;
7220 90 19; 7220 90 39; 7220 90 90;
7222 20; 7222 30 51; 7222 30 91;
7222 30 98; 7222 40 91; 7222 40 93;
7222 40 99; 7224 90 19; 7224 90 91;
7224 90 99; 7225 20 90; 7225 91 90;
7225 92 90; 7225 99 90; 7226 11 90;
7226 19 90; 7226 20 80; 7226 92 90;
7226 93 80; 7226 94 80; 7226 99 80;
7228 10 50; 7228 10 90; 7228 20 60;
7228 40; 7228 50; 7228 60 81; 7228 60 89;
7228 70 91; 7228 70 99; 7229; 7301 20 00;
7302 10 10; 7302 40 90; 7302 90 30;
7302 90 90.

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LEGISLATIVE FINANCIAL STATEMENT

Policy area(s): TRADE

Activit(y/ies): Activity: EU's scheme of generalised tariff preferences

TITLE  OF  ACTION:  Proposal  for  a  Council  Regulation  amending  Regulation  (EC)  No
2501/2001 applying a scheme of generalised tariff preferences for the period from
1 January 2002 to 31 December 2004

1.

LEGAL BASIS

Article 133 of Treaty

2.

DESCRIPTION

2.1.

Objectives pursued

The  purpose  of  the  regulation  is  to  amend  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 2004

3.

FINANCIAL IMPACT

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.

The  objective  of  the  proposal  is  to  amend  the  Regulation  so  as  to  introduce  a  specific
provision which would allow any beneficiary country which faces a  financial and  economic
crisis to be exempted from a graduation of new sectors.

According  to  present  statistics,  this  provision  would  be  applied  for  Argentinean  fishery
products. Argentinean exports  of fishery products towards Europe  amount  annually  to  EUR
600 million. The average tariff rate for these products is 10%. The current preferential tariff
rate  is  6.5  %  (preferential  margin  of  3,5  percentage  points).  Accordingly,  not  applying  the
graduation mechanism for this sector will lead to an annual revenue loss of EUR 21 million
(600.000.000 x 3,5 %). As the measure is intended to enter into force 1 April 2003, the final
revenue loss could be EUR 36,75 million (15,75 for 2003 + 21 million for 2004).

6