Recommendation for a Council Decision on the opening of the negotiations on an agreement concerning monetary relations with the Principality of Andorra
Date: 2004-08-09
Institutions: European Commission
Subjects: Andorra, monetary agreement, monetary relations, negotiation of an agreement (EU)

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 09.08.2004 
COM(2004) 548 final 

2004/0184 (CNB) 

Recommendation for a  

COUNCIL DECISION 

on the opening of the negotiations on an agreement concerning monetary relations with 
the Principality of Andorra 

(presented by the Commission) 

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EXPLANATORY MEMORANDUM 

1. 

GENERAL 

On 11 May 2004, the Council adopted Decision No 548/04 on the position to be taken by the 
Community  regarding  an  agreement  concerning  the  monetary  relations  with  the  Principality 
of  Andorra.  Article  8  of  this  Decision  provides  that  the  negotiations  with  Andorra  on  the 
monetary agreement shall be opened as soon as the Council has agreed, on a recommendation 
from the Commission, that the necessary conditions have been fulfilled. These conditions are 
linked, in particular, to the prior initialling by both parties of the agreement on the taxation of 
income  from  savings,  as  well  as  the  undertaking  by  Andorra  to  conclude  such  agreement 
before a date to be agreed with the Community. 

2. 

FULFILMENT OF THE NECESSARY CONDITIONS 

The  Commission  considers  that  the  conditions  have  now  been  met.  Firstly,  the  agreement 
providing for measures equivalent to those laid down in Council Directive 2003/48/EC on the 
taxation of savings income in the form of interest payments has been initialled in Brussels on 
1  July  2004.  Secondly,  the  Principality  of  Andorra  has  notified  the  Commission  in  writing 
(verbal  note  of  1  July  2004  from  the  Ambassador  of  the  Principality  of  Andorra  to  the 
Community,  Mrs  Meritxell  Mateu)  that  it  intends  to  ratify  this  agreement  before  30  April 
2005.  The  Commission  therefore  recommends  the  adoption  by  the  Council  of  a  Decision 
authorising the opening of negotiations on monetary matters with Andorra. 

3. 

THE  COMMISSION’S  RECOMMENDATION  FOR  THE  OPENING  OF 
NEGOTIATIONS 

The Commission’s Recommendation is based on Article 8 of Council Decision No 548/04 on 
the position to be taken by the Community regarding an agreement concerning the monetary 
relations  with  the  Principality  of  Andorra.  The  procedure  for  the  adoption  of  this 
Recommendation  by  the  Council  is  laid  down  in  Article  111(3)  of  the  Treaty,  which 
constitutes  the  legal  basis  for  monetary  agreements  between  the  Community  and  third 
countries. This article provides for adoption by qualified majority and after consultation of the 
ECB. By virtue of Article 122(5) of the Treaty, only the Member States belonging to the euro 
area  are  allowed  to  vote,  while  qualified  majority  is  defined  as  two-thirds  of  the  votes 
weigthed in accordance with Art. 205(2) of the Treaty.  

The  draft  Council  Decision  establishes  that  the  necessary  conditions  for  the  opening  of  the 
negotiations  with  Andorra  on  an  agreement  on  monetary  matters  have  been  fulfilled.  The 
adoption of this Decision by the Council opens the way for the opening of the negotiations. 

If  the  agreement  on  the  taxation  of  income  from  savings  has  not  been  ratified  by  Andorra 
before the agreed date, the negotiations on the monetary agreement shall be suspended until 
such  conclusion  has  taken  place  as  laid  down  in  Art  8  of  Council  Decision  No  548/04  of  
11 May 2004.  

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2004/0184 (CNB) 

Recommendation for a  

COUNCIL DECISION 

on the opening of the negotiations on an agreement concerning monetary relations with 
the Principality of Andorra 

THE COUNCIL OF THE EUROPEAN UNION, 

Having regard to the Treaty establishing the European Community, 

Having  regard  to  Council  Decision  (EC)  No  548/04  of  11  May  2004  on  the  position  to  be 
taken by the Community regarding an agreement concerning the monetary relations with the 
Principality of Andorra1, and in particular Article 8 thereof; 
Having regard to the Recommendation of the Commission,2 
Having regard to the Opinion of the European Central Bank,3 

Whereas: 

(1) 

(2) 

(3) 

(4) 

The  opening  of  the  negotiations  on  an  agreement  with  the  Principality  of  Andorra 
(hereinafter,  “Andorra”)  on  monetary  matters  should  be  conditional  upon  the 
fulfilment  of  the  necessary  conditions.  The  prior  initialling  by  both  parties  of  the 
agreement  on  the  taxation  of  income  from  savings,  as  well  as  the  undertaking  by 
Andorra  to  ratify  such  agreement  before  a  date  agreed  with  the  Community,  should 
form part of those conditions. 

Andorra and the Commission have proceeded on 1 July 2004 with the initialing of the 
agreement providing for measures equivalent to those laid down in Council Directive 
2003/48/EC on the taxation of savings income in the form of interest payments; 

By  virtue  of  the  verbal  note  from  the  Ambassador  of  Andorra  to  the  Community  of  
1 July 2004, Andorra has undertaken to ratify such agreement before 30 April 2005. 
This date is acceptable to the Community. 

The absence of ratification by Andorra, before the agreed date, of the agreement on the 
taxation of income from savings should result in the suspension of the negotiations on 
the monetary agreement until such ratification has taken place. 

1 
2 
3 

OJ L244 of 16.7.2004 (p.47-49) 
OJ C […] […], p. […] 
OJ C […] […], p. […] 

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HAS DECIDED AS FOLLOWS:  

Sole Article 

The necessary conditions for the opening of the negotiations with the Principality of Andorra 
on  an  agreement  on  monetary  matters,  as  laid  down  in  Article  8  of  Council  Decision  (EC)  
N° 548/04 on the position to be taken by the Community regarding an agreement concerning 
the monetary relations with the Principality of Andorra, have been fulfilled.  

The  Commission  shall  inform  the  Principality  of  Andorra  of  the  Community’s  readiness  to 
conclude  an  agreement  on  monetary  matters  and  it  shall  propose  negotiations  for  such  an 
agreement. 

Done at Brussels,  

For the Council 
The President 

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