Proposal for a Council Decision on the conclusion of an Agreement in the form of an exchange of letters between the European Community and the United States of America relating to the method of calculation of applied duties for husked rice and amending Decisions 2004/617/EC, 2004/618/EC and 2004/619/EC
Date: 2005-05-20
Institutions: European Commission
Subjects: United States, agreement (EU), rice, trading operation

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 20.05.2005 
COM(2005) 202 final 

2005/0097 (ACC) 

Proposal for a 

COUNCIL DECISION 

on the conclusion of an Agreement in the form of an exchange of letters  
between the European Community and the United States of America  
relating to the method of calculation of applied duties for husked rice  
and amending Decisions 2004/617/EC, 2004/618/EC and 2004/619/EC 

(presented by the Commission) 

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1. 

2. 

3. 

4. 

5. 

EXPLANATORY MEMORANDUM 

On 26 June 2003, the Council authorised the Commission to notify the WTO that the 
European  Community  intended  to  modify  concessions  on  products  of  HS  codes 
1006 20  (husked  rice),  1006 30  (milled  rice)  included  in  Schedule  CXL  of  the 
European Community annexed to GATT. Accordingly, the European Community has 
notified the WTO on 2 July 2003 of its intention to modify certain concessions in EC 
Schedule CXL. 

Negotiations  have  been  conducted  by  the  Commission  in  consultation  with  the 
Committee established by Article 133 of the Treaty and within the framework of the 
negotiating directives issued by the Council. 

The Commission has negotiated with the United States of America, having a principal 
supplying  interest  in  products  of  HS  code  1006 20  (husked  rice)  and  substantial 
supplier  interest  in  product  of  HS  code  1006 30  (milled  rice),  Thailand,  having  a 
principal  supplying  interest  in  product  of  HS  code  1006 30  (milled  rice)  and 
substantial  supplier  interest  in  product  of  HS  code  1006 20  (husked  rice)  and  India 
and  Pakistan,  each  having  a  substantial  supplier  interest  in  product  of  HS  code 
1006 20 (husked rice). 

The  agreements  with  India  and  with  Pakistan  have  been  approved  on  behalf  of  the 
Community by Council Decision 2004/617/EC and Council Decision 2004/618/EC of 
11 August  2004.  A  new  tariff  rate  for  husked  and  milled  rice  was  fixed  by  Council 
Decision 2004/619/EC of 11 August 2004. 

The Commission has negotiated an agreement in the form of an exchange of letters 
with the United States of America. 

This proposal asks the Council to approve the agreement in the form of an exchange 
of letters between the European Community and the United States of America. 

As the necessary modifications to Council Regulation (EC) No 1785/2003 require the 
European Parliament’s opinion it is necessary to provide for the Commission to put in 
place  the  necessary  transitional  arrangements.  Therefore,  in  order  to  ensure  the 
application  of  this  agreement  from  1  March  2005,  the  decision  enables  the 
Commission  to  derogate  from  Regulation  (EC)  No  1785/2003  for  a  transitional 
period,  i.e.  until  the  modification  has  entered  into  force,  but  not  later  than  30 June 
2006.  

For  the  same  reason  the  corresponding  derogations  in  Decision  2004/617/EC, 
Decision  2004/618/EC  and  Decision  2004/619/EC  are  also  extended  until  30 June 
2006. 

The  Commission  will  present  a  proposal  for  the  necessary  modification  to  the 
Council Regulation as soon as possible. 

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2005/0097 (ACC) 

Proposal for a 

COUNCIL DECISION 

on the conclusion of an Agreement in the form of an exchange of letters  
between the European Community and the United States of America  
relating to the method of calculation of applied duties for husked rice  
and amending Decisions 2004/617/EC, 2004/618/EC and 2004/619/EC 

THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  establishing  the  European  Community,  and  in  particular 
Article 133  in  conjunction  with  the  first  sentence  of  the  first  subparagraph  of  Article 300(2) 
thereof, 

Having regard to the proposal from the Commission, 

Whereas: 

(1) 

(2) 

(3) 

(4) 

On 26 June 2003, the Council authorised the Commission to open negotiations under 
Article XXVIII of the GATT 1994 with a view to modify certain concessions for rice. 
Accordingly,  the  European  Community  notified  the  WTO  on  2  July  2003  of  its 
intention to modify certain concessions in EC Schedule CXL. 

Negotiations  have  been  conducted  by  the  Commission  in  consultation  with  the 
Committee  established  by  Article  133  of  the  Treaty  and  within  the  framework  of  the 
negotiating directives issued by the Council. 

The Commission has negotiated with the United States of America, having a principal 
supplying  interest  in  products  of  HS  code  1006 20  (husked  rice)  and  substantial 
supplier  interest  in  products  of  HS  code  1006 30  (milled  rice),  Thailand,  having  a 
principal  supplying  interest  in  products  of  HS  code  1006 30  (milled  rice)  and 
substantial  supplier  interest  in  products  of  HS  code  1006 20  (husked  rice)  and  India 
and  Pakistan,  each  having  a  substantial  supplier  interest  in  products  of  HS  code 
1006 20 (husked rice). 

The  agreements  with  India  and  with  Pakistan  have  been  approved  on  behalf  of  the 
Community  by  Council  Decisions  2004/617/EC1  and  2004/618/EC2  respectively.  A 
new tariff rate for husked rice (CN code 1006 20) and milled rice (CN code 1006 30) 
was fixed by Council Decision 2004/619/EC3.  

1 
2 
3 

OJ L 279, 28.8.2004, p. 1. 
OJ L 279, 28.8.2004, p. 23. 
OJ L 279, 28.8.2004, p. 29. 

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(5) 

(6) 

(7) 

(8) 

(9) 

The Commission has successfully negotiated an Agreement in the form of an Exchange 
of Letters between the European Community and the United States of America which 
should therefore be approved. 

In order to ensure that the agreement may be fully applied as from 1 March 2005 and 
pending  the  amendment  of  Council  Regulation  (EC)  No  1785/2003  of  29  September 
2003  on  the  common  organisation  of  the  market  in  rice4,  the  Commission  should  be 
authorised  to  adopt  temporary  derogations  from  that  Regulation,  and  to  adopt 
implementing measures. 

the  same  reason 

For 
2004/618/EC and 2004/619/EC should also be extended until 30 June 2006. 

the  corresponding  derogations  Decisions  2004/617/EC, 

For  the  sake  of  legal  certainty,  it  is  also  appropriate  to  clarify  in  Decisions 
2004/617/EC  and  2004/618/EC  that  the  authorisation  given  to  the  Commission  to 
adopt  temporary  derogations  from  Regulation  (EC)  No  1785/2003  for  implementing 
to  adopt  detailed 
the  agreements  concerned  also 
implementing measures.  

the  authorisation 

includes 

The measures necessary for the implementation of this Decision should be adopted in 
accordance  with  Council  Decision  1999/468/EC  of  28  June  1999  laying  down  the 
procedures for the exercise of implementing powers conferred on the Commission5, 

HAS DECIDED AS FOLLOWS: 

Article 1 

The Agreement in the form of an exchange of letters between the European Community and 
the United States of America relating to the method of calculation of applied duties for husked 
rice is hereby approved on behalf of the Community. 

The text of the agreement is attached to this Decision. 

Article 2 

1. 

2. 

To  the  extent  necessary  to  permit  the  full  application  of  this  agreement  as  from 
1 March 2005, the Commission may derogate from Regulation (EC) No 1785/2003, 
in accordance with the procedure referred to in Article 6(2) of this Decision, until that 
Regulation is amended but at the latest until 30 June 2006. 

The  Commission  shall  adopt  the  detailed  rules  for  implementing  the  agreement  in 
accordance with the procedure laid down in Article 6(2) of this Decision. 

4 
5 

OJ L 270, 21.10.2003, p. 96.  
OJ L 184, 17.7.1999, p. 23. 

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Article 3 

Article 2 of Decision 2004/617/EC is replaced by the following: 

“Article 2 

1. 

To  the  extent  necessary  to  permit  the  full  application  of  this  Agreement  by 
1 September  2004  ,  the  Commission  may  derogate  from  Regulation  (EC) 
No 1785/2003,  in accordance with the procedure referred  to in Article 3(2) of 
this  Decision,  until  that  Regulation  is  amended  but  at  the  latest  until  30 June 
2006. 

2. 

The Commission shall adopt the detailed rules for implementing the agreement 
in accordance with the procedure referred to in Article 3(2) of this Decision.” 

Article 4 

Article 2 of Decision 2004/618/EC is replaced by the following:  

“Article 2 

1. 

To  the  extent  necessary  to  permit  the  full  application  of  this  Agreement  by 
1 September  2004  ,  the  Commission  may  derogate  from  Regulation  (EC) 
No 1785/2003,  in accordance with the procedure referred  to in Article 3(2) of 
this  Decision,  until  that  Regulation  is  amended  but  at  the  latest  until  30  June 
2006 . 

2. 

The Commission shall adopt the detailed rules for implementing the agreement 
in accordance with the procedure referred to in Article 3(2) of this Decision.” 

In Article 2 of Decision 2004/619/EC, the date ’30 June 2005’ is replaced by the date ’30 June 
2006’. 

Article 5 

Article 6 

1. 

2. 

The  Commission  shall  be  assisted  by  the  Management  Committee  for  Cereals 
instituted by Article 25 of Regulation (EC) No 1784/2003. 

Where reference is made to this paragraph, Articles 4 and 7 of Decision 1999/468/EC 
shall apply. 

The period provided for in Article 4(3) of Decision 1999/468/EC shall be one month. 

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The President of the Council is hereby authorised to designate the person empowered to sign 
the agreement in order to express the consent of the Community to be bound thereby6. 

Article 7 

Done at Brussels, 

For the Council 
The President 

6 

The date of entry into force of the agreement will be published in the Official Journal of the European 
Union. 

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ANNEX 

AGREEMENT IN THE FORM OF AN EXCHANGE OF LETTERS 

between the European Community and the European Community and the United States 
of America relating to the method of calculation of applied duties for husked rice 

Letter No 1 

A. Letter from the European Community 

Sir, 

Following  negotiations  between  the  European  Community  (EC)  and  the  United  States  of 
America, the EC agrees to the conclusions as outlined below.  

Brussels, ………. 2005 

1. 

2. 

3. 

4. 

Applied rate of duty for certain husked rice (CN code 1006 20) 

The  EC  shall  apply  a  rate  of  duty  for  certain  husked  rice  in  accordance  with 
paragraphs 2 to 7. 

Annual reference import level 

(a)  First  marketing  year:  in  the  first  marketing  year  within  the  scope  of  this 
agreement (1 September 2004 to 31 August 2005), the annual reference import 
level  shall  be  calculated  as  the  average  volume  of  total  husked  rice  imports 
entering the EC-25 from all origins in the marketing years 1 September 1999 – 
31 August 2000, 1 September 2000 – 31 August 2001, and 1 September 2001 – 
31 August 2002, less imports of Basmati husked rice into the EC-25, plus 10% 
(i.e. 431,678 MT). 

(b) 

Increase  in  subsequent  marketing  years:  for  each  marketing  year  2005/06, 
2006/07  and  2007/08,  the  annual  reference  import  level  shall  be  increased  by 
6 000 MT/year  from  the  level  of  the  previous  marketing  year.  No  later  than 
90 days before the end of the marketing year 1 September 2007, to 31 August 
2008,  both  parties  shall  enter  into  consultations  on  the  annual  increase  for 
subsequent marketing years, taking into account the developments in the EC’s 
rice market notably as regards the evolution of consumption, and shall agree on 
the annual increase no later than 31 August 2008. 

Six-month  reference  import  level:  in  each  marketing  year,  a  six-month  reference 
import  level  shall  be  calculated  as  50  percent  of  the  annual  reference  import  level 
calculated  in  paragraph  2  above,  which  in  the  first  marketing  year  would  be 
215,839 MT. 

Mid-year adjustment to applied tariff rate: within 10 days after the end of the first six 
months  of  each  marketing  year,  the  EC  shall  review  and,  if  necessary,  adjust  the 
applied tariff rate as follows: 

(a) 

if actual husked rice imports for the just-completed six-month period are more 
than 15 percent below the six-month reference import level for that period, as 

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(b) 

(c) 

calculated under paragraph 3 above (i.e., for the first marketing year less than 
183,463 MT), the EC shall apply a tariff rate of EUR 30/MT; 

if actual husked rice imports for the just-completed six-month period are more 
than 15 percent above the six-month reference import level for that period, as 
calculated under paragraph 3 above (i.e., for the first marketing year more than 
248,215 MT), the EC shall apply a tariff rate of EUR 65/MT; 

if actual husked rice imports for the just-completed six-month period are within 
15 percent (inclusive) of the six-month reference import level for that period, as 
calculated  under  paragraph  3  above  (i.e.,  for  the  first  marketing  year  between 
183,463 and 248,215 MT), the applied rate shall be EUR 42,5/MT. 

For  purposes  of  (a)  through  (c)  above,  actual  husked  rice  imports  are  all  imports 
entering  the  EC-25  from  all  origins  under  the  CN  codes  1006 20  less  imports  of 
Basmati husked rice into the EC-25. 

5. 

End-of-year  adjustment  to  applied  tariff  rate:  within  10  days  after  the  end  of  the 
marketing year, the EC shall review and, if necessary, adjust the applied tariff rate as 
follows: 

(a) 

(b) 

(c) 

if  actual  husked  rice  imports  for  the  just-completed  marketing  year  are  more 
than 15 percent below the annual reference import level for that twelve-month 
period, as calculated under paragraph 2 above (i.e., for the first marketing year 
less than 366,926 MT), the EC shall apply a tariff rate of EUR 30/MT; 

if  actual  husked  rice  imports  for  the  just-completed  marketing  year  are  more 
than 15 percent above the annual reference import level for that twelve-month 
period, as calculated under paragraph 2 above (i.e., for the first marketing year 
more than 496,430 MT), the EC shall apply a tariff rate of EUR 65/MT; 

if actual husked rice imports for the just-completed marketing year are within 
15 percent  (inclusive)  of  the  annual  reference  import  level  for  that  twelve-
month  period,  as  calculated  under  paragraph  2  above  (i.e.,  for  the  first 
marketing year between 366,926 and 496,430 MT), the EC shall apply a tariff 
rate of EUR 42,5/MT. 

For  purposes  of  (a)  through  (c)  above,  actual  husked  rice  imports  are  all  imports 
entering  the  EC-25  from  all  origins  under  the  CN  codes  1006 20  less  imports  of 
Basmati husked rice into the EC-25. 

Data:  The  calculation  of  the  annual  and  six-month  actual  import  levels  under 
paragraphs 4 and 5 above shall be determined using EC rice imports license data. The 
EC shall publish these data on the internet on a weekly basis. 

Transparency: The EC shall promptly provide public notice of any adjustment in the 
applied tariff rate. 

Consultation:  At  the  request  of  either  party,  the  parties  shall,  within  30 days  of  the 
receipt  of  such  a  request,  enter  into  consultations  on  matters  covered  by  this 
agreement. 

If  the  parties  are  unable  to  resolve  the  issues  subject  to  consultation  within  30 days 
after receipt of the request, the United States may submit written notification to the 
EC that it intends to exercise any rights under Article XXVIII:3(a) of the GATT 1994 

6. 

7. 

8. 

9. 

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as provided in paragraph 10 below and the EC may submit written notification to the 
United States that it intends to withdraw from the present agreement as provided in 
paragraph 11 below. 

10. 

Extension  of  deadline  for  exercise  of  any  rights  under  Article  XXVIII  of  the 
GATT 1994: 

(a)  The  parties  agree  that  the  deadline  for  withdrawal  of  substantially  equivalent 
concessions pursuant to Article XXVIII:3(a) shall be considered to be extended. 
Accordingly, the United States may exercise any right to withdraw substantially 
equivalent  concessions  under  Article  XXVIII:3(a)  at  any  time  after  the 
expiration of 30 days written notice to the EC of the U.S. intent to exercise such 
rights,  and  the  EC  shall  not  assert  that  the  United  States  is  precluded  from 
taking action pursuant to Article XXVIII:3(a) on the ground that the action was 
untimely. 

(b)  Notwithstanding  (a)  above,  the  United  States  shall  not  exercise  any  right  to 
withdraw  substantially  equivalent  concessions  unless 
it  has  requested 
consultations and provided notification pursuant to paragraph 9 above. Should 
the EC withdraw from the agreement, the US shall be entitled to exercise any 
applicable rights under Article XXVIII:3(a) with immediate effect. 

The  EC  shall  not  withdraw  from  the  present  agreement  unless  it  has  requested 
consultations and provided notification pursuant to paragraph 9 above. The EC may 
withdraw  from  the  agreement  at  any  time  after  the  expiration  of  30  days  from  the 
notification  referred  to  in  paragraph  9.  Should  the  United  States  withdraw 
concessions  pursuant  to  paragraph  10  above,  the  EC  shall  be  entitled  to  withdraw 
from the present agreement with immediate effect. 

Subject to the provisions of paragraph 10, this agreement is without prejudice to any 
right of the EC to challenge any withdrawal of concessions by the United States if it 
considers the withdrawal to be incompatible with Article XXVIII of the GATT 1994 
or other relevant provisions of the WTO Agreement. 

The EC shall consult and cooperate with the United States to obtain the approval by 
the  WTO  General  Council  of  the  extension  of  the  deadline  for  withdrawal  of 
substantially equivalent concessions pursuant to Article XXVIII:3(a).  

This  agreement  shall  be  approved  by  the  parties  in  accordance  with  their  own 
procedures. The EC considers that this agreement shall not serve as a precedent for 
future Article XXVIII negotiations. 

The provisions of this agreement shall be applicable as from 1 March 2005. To this 
purpose, the EC shall put in place the necessary internal procedures in order to ensure 
the  implementation  of  paragraph  4  for  husked  rice  imports  entering  in  the  period 
1 March 2005 to 31 August 2005. 

11. 

12. 

13. 

14. 

15. 

I would be grateful if you could confirm the agreement of your Government to the above. 

Please accept, Sir, the assurance of my highest consideration.  

On behalf of the European Community 

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Letter No 2 

B. Letter from the United States of America 

Washington D.C., ………. 2005 

Sir, 

I have the honour to acknowledge receipt of your letter of today’s date, worded as follows: 

“Following  negotiations  between  the  European  Community  (EC)  and  the  United  States  of 
America, the EC agrees to the conclusions as outlined below. 

1. 

2. 

3. 

4. 

Applied rate of duty for certain husked rice (CN code 1006 20) 

The  EC  shall  apply  a  rate  of  duty  for  certain  husked  rice  in  accordance  with 
paragraphs 2 to 7. 

Annual reference import level: 

(a)  First  marketing  year:  in  the  first  marketing  year  within  the  scope  of  this 
agreement (1 September 2004 to 31 August 2005), the annual reference import 
level  shall  be  calculated  as  the  average  volume  of  total  husked  rice  imports 
entering the EC-25 from all origins in the marketing years 1 September 1999 – 
31 August 2000, 1 September 2000 – 31 August 2001, and 1 September 2001 – 
31 August 2002, less imports of Basmati husked rice into the EC-25, plus 10% 
(i.e. 431,678 MT). 

(b) 

Increase  in  subsequent  marketing  years:  for  each  marketing  year  2005/06, 
2006/07 and 2007/08, the annual reference import level shall be increased by 
6000  MT/year  from  the  level  of  the  previous  marketing  year.  No  later  than 
90 days  before  the  end  of  the  marketing  year  1 September  2007,  to  31 August 
2008,  both  parties  shall  enter  into  consultations  on  the  annual  increase  for 
subsequent marketing years, taking into account the developments in the EC’s 
rice  market  notably  as  regards  the  evolution  of  consumption,  and  shall  agree 
on the annual increase no later than 31 August 2008. 

Six-month  reference  import  level:  in  each  marketing  year,  a  six-month  reference 
import  level  shall  be  calculated  as  50  percent  of  the  annual  reference  import  level 
calculated  in  paragraph  2  above,  which  in  the  first  marketing  year  would  be 
215,839 MT. 

Mid-year adjustment to applied tariff rate: within 10 days after the end of the first six 
months  of  each  marketing  year,  the  EC  shall  review  and,  if  necessary,  adjust  the 
applied tariff rate as follows: 

(a) 

if actual husked rice imports for the just-completed six-month period are more 
than 15 percent below the six-month reference import level for that period, as 
calculated under paragraph 3 above (i.e., for the first marketing year less than 
183,463 MT), the EC shall apply a tariff rate of EUR 30/MT; 

(b) 

if actual husked rice imports for the just-completed six-month period are more 
than 15 percent above the six-month reference import level for that period, as 

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calculated  under  paragraph  3  above  (i.e.,  for  the  first  marketing  year  more 
than 248,215 MT), the EC shall apply a tariff rate of EUR 65/MT; 

(c) 

if actual husked rice imports for the just-completed six-month period are within 
15 percent (inclusive) of the six-month reference import level for that period, as 
calculated under paragraph 3 above (i.e., for the first marketing year between 
183,463 and 248,215 MT), the applied rate shall be EUR 42,5/MT. 

For  purposes  of  (a)  through  (c)  above,  actual  husked  rice  imports  are  all  imports 
entering  the  EC-25  from  all  origins  under  the  CN  codes  1006 20  less  imports  of 
Basmati husked rice into the EC-25. 

5. 

End-of-year  adjustment  to  applied  tariff  rate:  within  10  days  after  the  end  of  the 
marketing year, the EC shall review and, if necessary, adjust the applied tariff rate as 
follows: 

(a) 

(b) 

(c) 

if  actual  husked  rice  imports  for  the  just-completed  marketing  year  are  more 
than 15 percent below the annual reference import level for that twelve-month 
period, as calculated under paragraph 2 above (i.e., for the first marketing year 
less than 366,926 MT), the EC shall apply a tariff rate of EUR 30/MT; 

if  actual  husked  rice  imports  for  the  just-completed  marketing  year  are  more 
than 15 percent above the annual reference import level for that twelve-month 
period, as calculated under paragraph 2 above (i.e., for the first marketing year 
more than 496,430 MT), the EC shall apply a tariff rate of EUR 65/MT; 

if actual husked rice imports for the just-completed marketing year are within 
15  percent  (inclusive)  of  the  annual  reference  import  level  for  that  twelve-
month  period,  as  calculated  under  paragraph  2  above  (i.e.,  for  the  first 
marketing year between 366,926 and 496,430 MT), the EC shall apply a tariff 
rate of EUR 42,5/MT. 

For  purposes  of  (a)  through  (c)  above,  actual  husked  rice  imports  are  all  imports 
entering  the  EC-25  from  all  origins  under  the  CN  codes  1006 20  less  imports  of 
Basmati husked rice into the EC-25. 

Data:  the  calculation  of  the  annual  and  six-month  actual  import  levels  under 
paragraphs  4  and  5  above  shall  be  determined  using  EC  rice  imports  license  data. 
The EC shall publish these data on the internet on a weekly basis. 

Transparency: the EC shall promptly provide public notice of any adjustment in the 
applied tariff rate. 

Consultation:  at  the  request  of  either  party,  the  parties  shall,  within  30 days  of  the 
receipt  of  such  a  request,  enter  into  consultations  on  matters  covered  by  this 
agreement. 

If the parties are unable to resolve the issues subject to consultation within 30 days 
after receipt of the request, the United States  may  submit  written notification to the 
EC that it intends to exercise any rights under Article XXVIII:3(a) of the GATT 1994 
as provided in paragraph 10 below and the EC may submit written notification to the 
United States that it intends to withdraw from the present agreement as provided in 
paragraph 11 below. 

6. 

7. 

8. 

9. 

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10. 

Extension  of  deadline  for  exercise  of  any  rights  under  Article  XXVIII  of  the  GATT 
1994: 

(a)  The  parties  agree  that  the  deadline  for  withdrawal  of  substantially  equivalent 
concessions pursuant to Article XXVIII:3(a) shall be considered to be extended. 
Accordingly, the United States may exercise any right to withdraw substantially 
equivalent  concessions  under  Article  XXVIII:3(a)  at  any  time  after  the 
expiration of 30 days written notice to the EC of the U.S. intent to exercise such 
rights,  and  the  EC  shall  not  assert  that  the  United  States  is  precluded  from 
taking action pursuant to Article XXVIII:3(a) on the ground that the action was 
untimely. 

(b)  Notwithstanding  (a)  above,  the  United  States  shall  not  exercise  any  right  to 
it  has  requested 
withdraw  substantially  equivalent  concessions  unless 
consultations and provided notification pursuant to paragraph 9 above. Should 
the EC withdraw from the agreement, the US shall be entitled to exercise any 
applicable rights under Article XXVIII:3(a) with immediate effect. 

The  EC  shall  not  withdraw  from  the  present  agreement  unless  it  has  requested 
consultations and provided notification pursuant to paragraph 9 above. The EC may 
withdraw  from  the  agreement  at  any  time  after  the  expiration  of  30  days  from  the 
notification  referred  to  in  paragraph  9.  Should  the  United  States  withdraw 
concessions  pursuant  to  paragraph  10  above,  the  EC  shall  be  entitled  to  withdraw 
from the present agreement with immediate effect. 

Subject to the provisions of paragraph 10, this agreement is without prejudice to any 
right of the EC to challenge any withdrawal of concessions by the United States if it 
considers the withdrawal to be incompatible with Article XXVIII of the GATT 1994 or 
other relevant provisions of the WTO Agreement. 

The EC shall consult and cooperate with the United States to obtain the approval by 
the  WTO  General  Council  of  the  extension  of  the  deadline  for  withdrawal  of 
substantially equivalent concessions pursuant to Article XXVIII:3(a).  

This  agreement  shall  be  approved  by  the  parties  in  accordance  with  their  own 
procedures. The EC considers that this agreement shall not serve as a precedent for 
future Article XXVIII negotiations. 

The provisions of this agreement shall be applicable as from 1 March 2005. To this 
purpose,  the  EC  shall  put  in  place  the  necessary  internal  procedures  in  order  to 
ensure  the  implementation  of  paragraph  4  for  husked  rice  imports  entering  in  the 
period 1 March 2005 to 31 August 2005. 

11. 

12. 

13. 

14. 

15. 

The United States of America has the honour of confirming its agreement with the content of 
this letter. 

Please accept, Sir, the assurance of my highest consideration. 

On behalf of the United States of America 

EN 

12 

   EN 

 
LEGISLATIVE FINANCIAL STATEMENT FOR PROPOSALS HAVING A 
BUDGETARY IMPACT EXCLUSIVELY LIMITED TO THE REVENUE 
SIDE 

1. 

2. 

NAME OF THE PROPOSAL 
Proposal  for  a  Council  Decision  on  the  conclusion  of  an  Agreement  in  the 
form  of  an  exchange  of  letters  between  the  European  Community  and  the 
United  States  of  America  relating  to  the  method  of  calculation  of  applied 
duties for husked rice. 

BUDGET LINES 
Chapter 10 - Article 1000: Agricultural duties established by the institutions 
of the European Communities in respect of trade with non-member countries 
under 
the  common  agricultural  policy  (Article  2(1)(a)  of  Decision 
2000/597/EC, Euratom) 

Amount budgeted for the year concerned: EUR 819,45 million– B 2005. 

3. 

FINANCIAL IMPACT 

(cid:133) 

Χ 

Proposal has no financial implications 

Proposal  has  no  financial  impact  on  expenditure  but  has  a  financial 
impact on revenue – the effect is as follows: 

(€ million to one decimal place) 

Budget line

Revenue7 

Article … 

Impact on own resources 

12 month period, 
starting dd/mm/yyyy 
– 

Year 2005 

–45,3 

[n+1] 

Situation following action 
[n+3] 
[n+2] 

[n+4] 

[n+5] 

Article … 
Article … 

ANTI-FRAUD MEASURES 

OTHER REMARKS 

It  is  estimated  that  the  measure  will  have  a  downward  impact  on  the 
previsions for own resources for budget year 2005 amounting to EUR –45,3 
million (before deduction of 25% of expense incurred in collection). Taking 
into  account  its  ratio  with  the  quantity  of  husked  rice  imported  during  the 
year,  it  appears  difficult  to  calculate  the  effect  on  the  previsions  for  own 
resources in 2006. 

Regarding  traditional  own  resources  (agricultural  duties,  sugar  levies,  customs  duties)  the 
amounts  indicated  must  be  net  amounts,  i.e.  gross  amounts  after  deduction  of  25%  of 
collection costs. 

4. 

5. 

7 

EN 

13 

   EN