Proposal for a Council Regulation on the tariff rates for bananas
Date: 2005-06-12
Institutions: European Commission
Subjects: ACP countries, CCT duties, import, originating product, tariff quota, tropical fruit

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 12.9.2005 
COM(2005) 433 final 

2005/0174 (ACC) 

Proposal for a 

COUNCIL REGULATION 

on the tariff rates for bananas 

(presented by the Commission) 

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EXPLANATORY MEMORANDUM 

Council  Regulation  (EEC)  No  404/93  of  13  February  1993  on  the  common 
organisation of the market in bananas provides for the entry into force of a tariff only 
regime for imports of bananas no later than 1 January 2006. 

On 12 July 2004, the Council authorised the Commission to notify the WTO that the 
European Community intended to modify concessions on item 0803 00 19 (bananas) 
included in Schedule CXL of the European  Community annexed to the GATT 1994 
pursuant  to  Article  XXVIII  GATT.  Accordingly,  the  European  Community  notified 
the  WTO  on  15  July  2004  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  EC  Treaty  and  the  Special 
Committee  on  Agriculture  within  the  framework  of  the  negotiating  directives  issued 
by the Council. 

The  Commission  has  negotiated  with  Ecuador  and  Panama,  having  principal 
supplying  interest  and  with  Colombia  and  Costa  Rica,  having  substantial  supplier 
interest in products of subheading 0803 00 19 (bananas). Pursuant to the Annex to the 
Decision of the WTO Ministerial Conference of 14 November 2001 on the European 
Communities  –  the  ACP-EC  Partnership  Agreement  the  Commission  has  also  held 
consultations with other WTO Members. 

In spite of its efforts, the Commission was unable to arrive at an acceptable agreement 
pursuant to Article XXVIII with the WTO Members concerned.  

On 31 January 2005 the European Community notified to the WTO that it intends to 
replace its concessions on item 0803 00 19 (bananas) with a bound duty of €230/ton. 

The  arbitration  procedure  set  out  in  the  Annex  to  the  Decision  of  the  Ministerial 
Conference of 14 November 2001 was initiated on 30 March 2005. The Arbitrator’s 
Award  issued  on  1  August  2005  concluded  that  the  MFN  tariff  rate  of  €230/ton 
proposed by the EC was not consistent with the above-mentioned Annex as it would 
not result in at least maintaining total market access for MFN suppliers.  

The Commission has revised the EC proposal in light of the arbitrator’s findings. 

In order to allow the modifications of certain concessions concerning bananas in EC 
Schedule  CXL  before  1  January  2006,  this  proposal  asks  the  Council  to  establish  a 
new tariff rate for products falling under CN code 0803 00 19 (bananas), as well as a 
tariff  rate  quota  subject  to  zero  duty  applicable  to  bananas  originating  in  ACP 
countries. 

For  the  purposes  of  administering  that  tariff  rate  quota,  the  Commission  envisages 
maintaining  the  method  based  on  taking  account  of  traditional  trade  flows 
(“traditionals/newcomers”) as currently applicable to the tariff rate quota C provided 
for in Article 18 of Council Regulation (EEC) No 404/93 of 13 February 1993 on the 
common  organisation  of  the  market  in  bananas,  with  a  share  reserved  for  non-
traditional operators of 18%. 

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2005/0174 (ACC) 

Proposal for a 

COUNCIL REGULATION 

on the tariff rates for bananas 

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 Commission, 

Whereas: 

(1) 

(2) 

(3) 

(4) 

(5) 

1  

Council  Regulation  (EEC)  No  404/93  of  13  February  1993  on  the  common 
organisation of the market in bananas1 provides for the entry into force of a tariff only 
regime for imports of bananas no later than 1 January 2006. 

On  12  July  2004,  the  Council  authorised the Commission to  open negotiations under 
Article  XXVIII  of  the  GATT  1994  with  a  view  to  modifying  certain  concessions  for 
bananas. Accordingly, the European Community notified the WTO on 15 July 2004 of 
its intention to modify concessions on item 0803 00 19 (bananas) in EC Schedule CXL. 
Negotiations  have  been  conducted  by  the  Commission  in  consultation  with  the 
Committee  established  by  Article  133  of  the  Treaty  and  the  Special  Committee  on 
Agriculture  and  within  the  framework  of  the  negotiating  directives  issued  by  the 
Council. 

The Commission has not been able to negotiate an acceptable agreement with Ecuador 
and  Panama,  having  a  principal  supplying  interest,  and  Colombia  and  Costa  Rica, 
having  a  substantial  supplier  interest,  in  products  of  HS  subheading  0803 00 19 
(bananas). Pursuant to the Annex to the Decision of the WTO Ministerial Conference 
of  14  November  2001  on  the  European  Communities  –  the  ACP-EC  Partnership 
Agreement  the  Commission  has  also  held  consultations  with  other  WTO  Members. 
These consultations did not lead to an acceptable agreement. 

On 31 January 2005 the European Community notified to the WTO that it intends to 
replace its concessions on item 0803 00 19 (bananas) with a bound duty of €230/ton.  

The  arbitration  procedure  set  out  in  the  Annex  to  the  Decision  was  initiated  on 
30 March  2005.  The  Arbitrator’s  Award  issued  on  1  August  2005  concluded  that  the 
MFN  tariff  rate  of  €230/ton  proposed  by  the  EC  was  not  consistent  with  the  above-

OJ  L  47  of  25.2.1993,  p. 1.  Regulation  last  amended  by  Act  of  Accession  of  the  Czech  Republic, 
Estonia,  Cyprus,  Latvia,  Lithuania,  Hungary,  Malta,  Poland,  Slovenia  and  Slovakia  (OJ L 236  of 
23.9.2003, p. 33).  

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mentioned Annex as it would not result in at least maintaining total market access for 
MFN suppliers. 

(6) 

(7) 

(8) 

The Commission has revised the EC proposal in light of the arbitrator’s findings.  

In  order  to  allow  the  modifications  of  certain  concessions  concerning  bananas  in  EC 
Schedule  CXL  before  1  January  2006,  a  new  tariff  rate  for  bananas  should  be 
established.  At  the  same  time,  a  tariff  rate  quota  for  bananas  originating  in  ACP 
countries  should  also  be  opened  in  accordance  with  the  EC  commitments  under  the 
ACP-EC Partnership Agreement. 

The measures necessary for the implementation of this Regulation should be adopted in 
accordance  with  Council  Decision  1999/468/EC  of  28  June  1999  laying  down  the 
procedure for the exercise of implementing powers conferred on the Commission2. 

HAS ADOPTED THIS REGULATION: 

Article 1 

1. 

2. 

As  from  1  January  2006  the  tariff  rate  for  bananas  (CN  code  0803 00 19)  shall  be 
€187/ton. 

Each year from 1 January, starting from 1 January 2006, an autonomous tariff quota 
of 775 000 tons net weight subject to a zero duty rate shall be opened for imports of 
bananas (CN code 0803 00 19) originating in ACP countries. 

Detailed  rules  for  implementing  this  Regulation  shall  be  adopted  in  accordance  with  the 
procedure referred to in Article 3(2). 

Article 2 

Article 3 

1. 

2. 

The  Commission  shall  be  assisted  by  the  Management  Committee  for  Bananas 
instituted by Article 27 of Regulation (EC) No 404/93. 

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

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

2 

OJ L 184, 17.7.1999, p. 23. 

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

Article 4 

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

1. 

NAME OF THE PROPOSAL 

Proposal for a Council Regulation on the tariff rates for Bananas 

2. 

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. 
Amount estimated for the year concerned: 763,4 M€ – B 2006. 

3. 

FINANCIAL IMPACT 

(cid:133) 

X 

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 

Revenue3 

12 month period, 
starting 
dd/mm/yyyy 

Article … 

Article … 

Impact on own resources 

Impact on own resources 

– 

– 

Year 2005 

– 

– 

2006 and following years 

+ 277,2 M€ 

Article 1000 

Article … 

4. 

ANTI-FRAUD MEASURES 

No additional or specific measures envisaged. 

3 

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. 

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5. 

OTHER REMARKS 

On the expense side the import duty proposed is neutral with respect to the actual market 
equilibrium.  It  should  not  cause  a  substantial  modification  of  the  market  price  of 
bananas. Therefore, it can be estimated at this stage that there will not be any noticeable 
effect  on  the  level  of  the  compensatory  support  to  be  paid  to  Community  producers, 
other than the traditional seasonal fluctuations. 

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