Council Regulation (EC) No 502/2004 of 11 March 2004 amending Regulation (EC) No 1177/2002 concerning a temporary defensive mechanism to shipbuilding
Date: 2004-03-11
Institutions: Council of the European Union
Subjects: EU aid, South Korea, market protection, restriction on competition, shipbuilding

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EN

Official Journal of the European Union

19.3.2004

COUNCIL REGULATION (EC) No 502/2004

of 11 March 2004

amending Regulation (EC) No 1177/2002 concerning a temporary defensive mechanism to ship-
building

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European
Community, and in particular Articles 87(3)(e), 89 and 133
thereof,

Having regard to the proposal from the Commission,

Having regard to the Opinion of the European Parliament (1),

Whereas:

(4)

(5)

consultations, in accordance with the World Trade Orga-
nisation's Understanding on the rules and procedures for
the settlement of disputes.

The consultations which were held between the Republic
of Korea and the Community, as envisaged in the WTO
Agreement, did not reach any satisfactory solution. On
11 June 2003,
the Community requested the WTO
Dispute Settlement Body to set up a panel over the
unfair Korean shipbuilding practices.

Regulation (EC) No 1177/2002 expires on 31 March
2004. The Republic of Korea has still not effectively
implemented its commitments under the agreed minutes
and the WTO disputes settlement proceedings are not
expected to have been resolved by that date. It is there-
fore needed to prolong the
temporary defensive
mechanism,

(1)

(2)

The European Commission and the Government of the
Republic of Korea signed the Agreed Minutes relating to
world shipbuilding on 22 June 2000, hereinafter ‘the
Agreed Minutes’, with the aim of restoring fair and trans-
parent competitive conditions. However, the commit-
ments under the Agreed Minutes, notably the commit-
ment of
surveillance
mechanism, have not been effectively implemented by
the Korean side and therefore a satisfactory result has
still not been obtained.

an effective price

ensuring

As an exceptional and temporary measure, and in order
to assist Community shipyards in those segments that
have suffered adverse effects in the form of material
injury and serious prejudice caused by unfair Korean
competition, a temporary defensive mechanism to ship-
building was established by Regulation (EC) No 1177/
2002 (2) for limited market segments and for a short and
limited period only. In particular, the temporary defen-
sive mechanism was only authorised after the Com-
munity initiated dispute settlement proceedings against
the Republic of Korea and could no longer be authorised
if these dispute settlement proceedings were resolved or
suspended.

(3)

On 8 October 2002, as set out in Decision 2002/818/
EC (3)
settlement
proceedings against the Republic of Korea, by requesting

the Community initiated dispute

(1) Opinion of 26 February 2003 (not yet published in the Official

Journal).

(2) OJ L 172, 2.7.2002, p. 1.
(3) Commission Decision 2002/818/EC of 8 October 2002 under the
provisions of Council Regulation (EC) No 3286/94 concerning trade
practices maintained by Korea affecting trade in commercial vessels
(OJ L 281, 19.10.2002, p. 15).

HAS ADOPTED THIS REGULATION:

Article 1

Article 5 of Regulation (EC) No 1177/2002 shall be replaced
by the following:

‘Article 5

This Regulation shall enter into force on the day following
that of its publication in the Official Journal of the European
Union. It shall expire on 31 March 2005.’

Article 2

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

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Official Journal of the European Union

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

Done at Brussels, 11 March 2004.

For the Council

The President

M. HARNEY