Proposal for a Council Regulation temporarily withdrawing the special incentive arrangement for sustainable development and good governance provided for under Council Regulation (EC) No 732/2008 with respect to the Democratic Socialist Republic of Sri Lanka
Date: 2009-12-15
Institutions: European Commission
Subjects: Sri Lanka, common commercial policy, common tariff policy, development aid, generalised preferences, least-developed country, sustainable development

EN 

EN 

   EN 

 
 
EUROPEAN COMMISSION 

Brussels, 15.12.2009 
COM(2009)671 final 

2009/0179 (NLE) 

Proposal for a 

COUNCIL REGULATION 

temporarily withdrawing the special incentive arrangement for sustainable development 
and good governance provided for under Council Regulation (EC) No 732/2008 with 
respect to the Democratic Socialist Republic of Sri Lanka 

EN 

   EN 

 
 
 
  
1. 

2. 

3. 

4. 

5. 

EXPLANATORY MEMORANDUM 

The special incentive arrangement for sustainable development and good governance 
(“GSP+”),  granted  within  the  Community’s  generalised  system  of  preferences, 
provides  additional  tariff  preferences  for  vulnerable  developing  countries  which 
ratify and effectively implement certain core international conventions on human and 
labour rights, environmental protection and good governance.  

The  Democratic  Socialist  Republic  of  Sri  Lanka  ("Sri  Lanka")  is  a  beneficiary 
country of the GSP+.  

The  granting  and  maintenance  of  GSP+  benefits  is  conditional  on  beneficiary 
countries  fulfilling  the  conditions  for  eligibility  set  out  under  Article  8  of  the  GSP 
Regulation (Council Regulation (EC) No 732/2008, the applicable Regulation for the 
period 1 January 2009 to 31 December 2011). Pursuant to Article 15(2) of the GSP 
Regulation,  GSP+  benefits  may  be  withdrawn  temporarily,  in  respect  of  all  or  of 
certain  products  originating  in  a  beneficiary  country  "in  particular  if  the  national 
legislation no longer incorporates those conventions referred to in Annex III [of the 
GSP  Regulation]  which  have  been  ratified  in  fulfilment  of  the  requirements  of 
Article  8(1)  and  (2)  or  if  that  legislation  is  not  effectively  implemented.”  In 
accordance  with  Article  18  of  the  Council  Regulation  (EC)  No  980/2005  (the  GSP 
Regulation  for  the  2005-2008  period),  where  the  Commission  receives  information 
that  may  justify  temporary  withdrawal  and  where  the  Commission  considers  that 
there are sufficient grounds for investigation, the Commission may decide to open an 
investigation. 

The Commission adopted a Decision providing for the initiation of an investigation 
pursuant  to  Article  18(2)  of  Council  Regulation  (EC)  No  980/2005  with  respect  to 
the effective implementation of certain human rights conventions in Sri Lanka on 14 
October 2008.  

The  Commission  conducted  the  investigation  and  adopted  a  Report  containing  its 
findings on 19 October 2009. In the Report, the Commission reviewed a number of 
distinct  aspects  of  effective  implementation  of  the  three  conventions,  with  a 
particular  focus  on  those  obligations  which  are  amongst  the  most  important  and 
fundamental human rights obligations established in those conventions, and where in 
light  of  the  information  available  to  the  Commission,  most  of  the  problems  in 
effective  implementation  were  concentrated.  On  the  basis  of  the  facts  and 
information available, including relevant materials and  information provided by  Sri 
Lanka  (although  outside  the  formal  context  of  the  investigation),  this  Report 
concluded  that  the  national  legislation  of  Sri  Lanka  incorporating  the  International 
Covenant  on  Civil  and  Political  Rights,  the  Convention  against  Torture  and  other 
Cruel,  Inhuman  or  Degrading  Treatment  or  Punishment  and  the  Convention  on  the 
Rights of the Child is not being effectively implemented. Temporary withdrawal of 
the additional tariff preferences under GSP+ with respect to all products originating 
in Sri Lanka is thus necessary.  

6. 

In  accordance  with  the  procedure  set  out  n  Article 19(4)  of  the  GSP  Regulation, 
where  the  Commission  considers  temporary  withdrawal  to  be  necessary,  it  shall 
submit  a  proposal  to  the  Council,  which  shall  decide  within  two  months  by  a 
qualified  majority  on  the  proposal  from  the  Commission.  If  the  Council  decides  in 

EN 

2 

   EN 

 
7. 

8. 

favour of the temporary withdrawal, the Regulation will enter into force six months 
after the decision is taken. If the situation changes sufficiently before then so that the 
reasons justifying the temporary withdrawal no longer prevail, the Council, acting on 
the basis of a Commission proposal, may decide to revisit the decision. 

The situation should therefore be kept under review, to enable the re-establishment of 
GSP+  benefits  for  products  originating  in  Sri  Lanka  if  the  failings  of  effective 
implementation identified during the investigation are sufficiently addressed. In the 
period  covered  by  the  current  GSP  Regulation  (i.e.  until  31  December  2011),  re-
establishment of GSP+ benefits would be possible through a further decision of the 
Council, based on a proposal from the Commission.  

Following  completion  of  the  investigation,  the  Government  of  Sri  Lanka  provided 
the Commission with a number of observations in respect of the Commission Report. 
The  Commission  services  have  reviewed  the  factual  material  and  arguments 
presented  and  came  to  the  conclusion  that  they  do  not  affect  the  validity  of  the 
findings of the investigation that the three Conventions are not presently effectively 
implemented.  This  conclusion,  including  an  assessment  of  the  points  raised  by  Sri 
Lanka, will also be communicated to Sri Lanka at the latest by the time the Council 
decides on the present proposal. Further, the material provided can be considered to 
be  a  useful  input  to  further  bilateral  dialogue  with  Sri  Lanka  on  the  actions  and 
measures called for to address the problems of effective implementation identified in 
the investigation. 

EN 

3 

   EN 

 
2009/0179 (NLE) 

Proposal for a 

COUNCIL REGULATION 

temporarily withdrawing the special incentive arrangement for sustainable development 
and good governance provided for under Council Regulation (EC) No 732/2008 with 
respect to the Democratic Socialist Republic of Sri Lanka  

THE COUNCIL OF THE EUROPEAN UNION, 

Having regard to the Treaty on European Union and to the Treaty on the Functioning of the 
European Union,  

Having regard to Council Regulation (EC) No 732/2008 of 22 July 2008 applying a scheme of 
generalised  tariff  preferences  for  the  period  from  1 January  2009  to  31 December  2011  and 
amending  Regulations  (EC)  No 552/97,  (EC)  No 1933/2006  and  Commission  Regulations 
(EC) No 1100/2006 and (EC) No 964/20071, and in particular Article 19(4) thereof, 

Having regard to the proposal from the Commission, 

Whereas: 

(1) 

(2) 

(3) 

Pursuant to Council Regulation (EC) No 732/2008, in particular Articles 9 and 10(6) 
thereof, the Democratic Socialist Republic of Sri Lanka (hereinafter "Sri Lanka") is a 
beneficiary country of the special incentive arrangement for sustainable development 
and good governance granted within the Community’s scheme of generalised system 
of preferences.  
Commission Decision 2008/938/EC of 9 December 20082, which includes Sri Lanka 
in the list of countries beneficiary to the special incentive arrangement for sustainable 
development and good governance for the period from 1 January 2009 to 31 December 
2011, noted that Sri Lanka's fulfillment of the qualifying criteria for the arrangement 
relating  to  the  three  human  rights  conventions  was  the  subject  of  an  investigation 
initiated under Council Regulation (EC) No 980/20053. 

Reports,  statements  and  information  of  the  United  Nations  as  well  as  other  publicly 
available  reports  and  information  from  other  relevant  sources,  including  non-
governmental  organisations,  available  to  the  Commission  indicated  that  the  national 
legislation of Sri Lanka incorporating the International Covenant on Civil and Political 
Rights,  the  Convention  against  Torture  and  other  Cruel,  Inhuman  or  Degrading 
Treatment  or  Punishment  and  the  Convention  on  the  Rights  of  the  Child,  was  not 
being  effectively  implemented.  The  three  conventions  mentioned  are  listed  as  core 

1 
2 
3 

OJ L 211, 6.8.2008, p. 1. 
OJ L 334, 12.12.2008, p. 90. 
OJ L 169, 30.6.2005, p. 1.  

EN 

4 

   EN 

 
                                                 
(4) 

(5) 

(6) 

(7) 

(8) 

(9) 

4 

human  rights  conventions  respectively  in  points  1,  5  and  6  of  Annex  III,  Part  A,  of 
Regulation (EC) No 732/2008.  

Article 15(2) of Regulation (EC) No 732/2008 provides for the temporary withdrawal 
of the special incentive arrangement for sustainable development and good governance 
granted  pursuant  to  that  Regulation,  in  particular  where  the  national  legislation 
incorporating the conventions referred to in Annex III of the Regulation, which have 
been ratified in fulfilment of the requirements of Article 8(1) and (2), is not effectively 
implemented. 
By  Commission  Decision  2008/803/EC4,  an  investigation  was  initiated  in  order  to 
establish "whether the national legislation of the Democratic Socialist Republic of Sri 
Lanka  incorporating  the  International  Covenant  on  Civil  and  Political  Rights,  the 
Convention  against  Torture  and  other  Cruel,  Inhuman  or  Degrading  Treatment  or 
Punishment  and  the  Convention  on  the  Rights  of  the  Child  is  effectively 
implemented."  

Throughout the course of the investigation the Commission provided Sri Lanka with 
every opportunity to cooperate in the investigation, including by providing Sri Lanka 
with the opportunity to comment on the comprehensive findings of experts entrusted 
by  the  Commission  to  provide  an  independent  legal  assessment  of  the  matters  under 
the  investigation.  Despite  the  fact  that  Sri  Lanka  decided  not  to  cooperate  with,  or 
participate  in,  the  investigation,  the  Commission  maintained  regular  contact  with  Sri 
Lanka outside the framework of the investigation so as to enable Sri Lanka to bring to 
the  Commission's  attention  any  information  relevant  to  the  investigation.  The 
information received in this context from Sri Lanka has been taken by the Commission 
fully  into  account  and  has  contributed  to  inform  its  assessment  as  contained  in  the 
Commission Report. 

On 19 October 2009, the Commission approved a Report containing its findings. This 
Report concludes that the national legislation of Sri Lanka incorporating international 
human  rights  conventions,  specifically  the  International  Covenant  on  Civil  and 
Political  Rights,  the  Convention  against  Torture  and  other  Cruel,  Inhuman  or 
Degrading Treatment or Punishment and the Convention on the Rights of the Child, is 
not effectively implemented.  

Sri  Lanka  was  provided  with  the  Report  containing  the  findings  of  the  investigation 
and  reminded  that  those  findings  constituted  the  basis  on  which  the  Commission 
intended  to  decide  whether  to  recommend  the  temporary  withdrawal  of  the  special 
incentive  arrangement  for  sustainable  development  and  good  governance.  Sri  Lanka 
was also granted a period within which it could make representations on this matter or 
specifically in relation to the Commission Report.  

Sri Lanka provided the Commission with a number of  observations in respect of the 
subject-matter  of  the  Report  and  conduct  of  the  investigation.  These  observations 
covered  also  facts  and  findings  on  which  Sri  Lanka  was  given  the  opportunity  to 
comment  during  the  investigation  but  did  not  do  so.  The  Commission  nevertheless 
considered  Sri  Lanka's  observations  carefully  and  in  particular  those  relevant  in  the 
context  of  a  decision  on  temporary  withdrawal.  The  Commission's  assessment,  of 

Commission Decision (2008/803/EC) of 14 October 2008 providing for the initiation of an investigation 
pursuant  to  Article  18(2)  of  Council  Regulation  (EC)  No 980/2005  with  respect  to  the  effective 
implementation of certain human rights conventions in Sri Lanka (OJ L 277, 18.10.2008, p. 34). 

EN 

5 

   EN 

 
                                                 
which  Sri  Lanka  was  informed,  led  to  the  conclusion  that  none  of  Sri  Lanka's 
arguments would substantively alter the findings of the investigation. 

(10)  The Commission has submitted the Report on the findings of the investigation to the 
Generalised Preferences Committee on 17 November 2009, in accordance with Article 
19(1) of Council Regulation (EC) No 732/2008. 

(11) 

In  the  light  of  the  foregoing,  the  special  incentive  arrangement  for  sustainable 
development and good governance should be withdrawn temporarily for all products 
originating  in  Sri  Lanka,  until  it  is  decided  that  the  reasons  justifying  the  temporary 
withdrawal no longer prevail.  

(12)  This  Regulation  should  enter  into  force  six  months  after  its  adoption,  unless  it  is 
decided before then, upon a proposal from the Commission, that the reasons justifying 
it no longer prevail, 

HAS ADOPTED THIS REGULATION: 

Article 1 

The  special  incentive  arrangement  for  sustainable  development  and  good  governance  for 
products originating in Sri Lanka provided for in Regulation (EC) No 732/2008 is withdrawn 
temporarily. 

Article 2 

With respect to the period of application of Regulation (EC) No 732/2008, the Council, acting 
by  qualified  majority,  on  a  proposal  from  the  Commission,  shall  re-establish  the  special 
incentive  arrangement  for  products  originating  in  Sri  Lanka,  if  the  reasons  justifying  the 
temporary withdrawal no longer prevail.  

Article 3 

This  Regulation  shall  enter  into  force  six  months  after  the  date  of  its  adoption,  unless  the 
Council  before  then,  on  a  proposal  from  the  Commission  pursuant  to  Article  19(5)  of 
Regulation (EC) No 732/2008, decides otherwise. 

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

Done at Brussels, 

For the Council 
The President 

EN 

6 

   EN 

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

1. 

NAME OF THE PROPOSAL: 

COUNCIL  REGULATION 
incentive 
arrangement  for  sustainable  development  and  good  governance  provided  for  under 
Council  Regulation  (EC)  No  732/2008  with  respect  to  the  Democratic  Socialist 
Republic of Sri Lanka 

temporarily  withdrawing 

the  special 

2. 

BUDGET LINES: 

Chapter and Article: Chapter 12, Article 120 

Amount budgeted for the year concerned:  14.079.700.000 Є 

3. 

FINANCIAL IMPACT  

(cid:133) 

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 

Revenue5 

2010 

Chapter 12 

Impact on own resources 

+24.3 

Situation following action 

2011 

Chapter 12  

+58.2 

4. 

ANTI-FRAUD MEASURES 

… 

5 

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 

EN 

7 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
5. 

OTHER REMARKS 

This estimate of the budgetary impact is based on trade data for 2008 and assumes 
that  standard  GSP  rather  than  GSP+  preferences  would  apply  to  imports  from  Sri 
Lanka  from  August  2010  and  that  there  would  be  no  significant  change  in  volume 
and value of affected imports. If this had been the case in 2008, an additional €77.6 
million would have been paid in duties. 

EN 

8 

   EN