Proposal for a Regulation of the European Parliament and of the Council implementing the bilateral safeguard clause of the EU-Korea Free Trade Agreement
Date: 2010-02-09
Institutions: European Commission
Subjects: South Korea, free-trade agreement, import, originating product, protective clause, trade agreement (EU), trade volume

EN 

EN 

   EN 

 
 
EUROPEAN COMMISSION 

Brussels, 9.2.2010 
COM(2010) 49 final 

2010/0032 (COD) 

Proposal for a 

REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

implementing the bilateral safeguard clause of the EU-Korea Free Trade Agreement 

EN 

   EN 

 
 
 
  
EXPLANATORY MEMORANDUM 

On  23  April  2007  the  Council  authorised  the  Commission  to  open  negotiations  with  the 
Republic  of  Korea  with  a  view  to  conclude  an  EU-Korea  Free  Trade  Agreement.  The 
agreement was then initialled on 15 October 2009. 

The agreement incorporates a bilateral safeguard clause that provides for the possibility to re-
impose  the  MFN  rate  when  as  a  result  of  a  trade  liberalisation  imports  take  place  in  such 
increased  quantities,  in  absolute  terms  or  relative  to  domestic  production,  and  under  such 
conditions as to cause or threaten to cause serious injury to the Union Industry producing the 
like or directly competitive product. 

In order for these measures to be operational, such safeguard clause must be incorporated in 
European Union law not least because the procedural aspects of the imposition of safeguard 
measures  as  well  as  the  rights  of  interested  parties,  such  as  the  right  of  defence,  need  to  be 
specified.  The  attached  proposal  for  a  Regulation  of  the  European  Parliament  and  of  the 
Council constitutes the legal instrument for the implementation of the safeguard clause of the 
EU-Korea FTA. 

EN 

2 

   EN 

 
2010/0032 (COD) 

Proposal for a 

REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

implementing the bilateral safeguard clause of the EU-Korea Free Trade Agreement 

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  on  the  Functioning  of  the  European  Union,  and  in  particular 
Articles 207(2) thereof, 

Having regard to the proposal from the European Commission1, 

Having regard to the notification to the national Parliaments, 

Acting in accordance with the ordinary legislative procedure, 

Whereas: 

(1) 

(2) 

(3) 

(4) 

(5) 

(6) 

(7) 

On  23  April  2007  the  Council  authorised  the  Commission  to  open  negotiations  with 
the Republic of Korea. 

These  negotiations  have  been  concluded  and  the  Free  Trade  Agreement  between  the 
European Union and the Republic of Korea (hereinafter referred to as the Agreement) 
was initialled on 15 October 2009, was submitted for approval on [ ]2 and entered into 
application on […]. 

It  is  necessary  to  lay  down  the  procedures  for  applying  certain  provisions  of  the 
Agreement concerning safeguards. 

The terms "serious injury", "threat of serious injury" and "transition period" as referred 
to in Article 3.5, Chapter 3 of the Agreement should be defined. 

Safeguard measures may be considered only if the product in question is imported into 
the  Union  in  such  increased  quantities  and  under  such  conditions  as  to  cause,  or 
threaten  to  cause,  serious  injury  to  Union  producers  of  like  or  directly  competing 
products as laid down in Article 3.1, Chapter 3 of the Agreement. 

Safeguard measures should take one of the forms referred to in Article 3.1, Chapter 3 
of the Agreement. 

There  should  be  detailed  provisions  on  the  initiation  of  the  proceedings.  The 
Commission  should  receive  information  including  available  evidence  from  the 

1 
2 

OJ C […], […], p. […]. 
Reference to Commission proposal 

EN 

3 

   EN 

 
                                                 
Member  States  of  any  trends  in  imports  which  might  call  for  the  application  of 
safeguard measures. 

(8) 

(9) 

If there is sufficient evidence to justify the initiation of a proceeding the Commission 
should publish a notice as provided for in Article 3.2.2, Chapter 3 of the Agreement in 
the Official Journal of the European Union. 

There  should  be  detailed  provisions  on  the  opening  of  investigations,  access  and 
inspections  by  interested  parties  to  the  information  gathered,  hearings  for  the  parties 
involved and the opportunities for those parties to submit their views as provided for 
in Article 3.2.2, Chapter 3 of the Agreement. 

(10)  The Commission should notify the Republic of Korea in writing of the initiation of an 
investigation and consult with the Republic of Korea as provided for in Article 3.2.1, 
Chapter 3 of the Agreement. 

(11) 

It is also necessary, pursuant to Articles 3.2. and 3.3, Chapter 3 of the Agreement, to 
set time limits for the initiation of investigations and for determinations as to whether 
or not measures are appropriate, with a view to ensuring that such determinations are 
made  quickly,  in  order  to  increase  legal  certainty  for  the  economic  operators 
concerned. 

(12)  An investigation should precede the application of any safeguard measure, subject to 
the  reservation  that  the  Commission  be  allowed  to  apply  provisional  measures  in 
critical circumstances as referred to in Article 3.3, Chapter 3 of the Agreement. 

(13)  Safeguard measures should be applied only to the extent, and for such time, as may be 
necessary  to  prevent  serious  injury  and  to  facilitate  adjustment.  The  maximum 
duration  of  safeguard  measures  should  be  determined  and  specific  provisions 
regarding  extension  and  review  of  such  measures  be  laid  down,  as  referred  to  in 
Article 3.2.5, Chapter 3 of the Agreement. 

(14)  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 
procedures for the exercise of implementing powers conferred on the Commission3, 

HAVE ADOPTED THIS REGULATION: 

Article 1 

Definitions 

For the purposes of this Regulation: 

(a) 

"Union industry" means the Union producers as a whole of the like or directly 
competitive  products  operating  within  the  territory  of  the  Union,  or  those 
Union  producers  whose  collective  output  of  the  like  or  directly  competitive 

3 

OJ L 184, 17.7.1999, p. 23. 

EN 

4 

   EN 

 
                                                 
products constitutes a major proportion of the total Union production of those 
products; 

"serious  injury"  means  a  significant  overall  impairment  in  the  position  of 
Union producers; 

"threat  of  serious  injury"  means  serious  injury  that  is  clearly  imminent;  a 
determination  of  the  existence  of  a  threat  of  serious  injury  shall  be  based  on 
facts and not merely on allegation, conjecture or remote possibility; 

"transition  period"  means  a  period  for  a  product  from  the  date  of  entry  into 
force  of  the  Agreement  until  10  years  from  the  date  of  completion  of  tariff 
elimination or reduction, as the case may be for each product; 

(b) 

(c) 

(d) 

(e) 

"Agreement" means the EU-Korea Free Trade Agreement. 

Article 2 

Principles 

1. 

A  safeguard  measure  may  be  imposed  in  accordance  with  the  provisions  set  out  in 
this Regulation where a product originating in Korea is, as a result of the reduction or 
the elimination of the customs duties on that product, being imported in the Union in 
such  increased  quantities,  in  absolute  terms  or  relative  to  domestic  production,  and 
under  such  conditions  as  to  cause  or  threaten  to  cause  serious  injury  to  the  Union 
industry producing a like or directly competitive product.  

2. 

Safeguard measures may take one of the following forms: 

(a) 

(b) 

suspensions  of  further  reduction  of  the  rate  of  customs  duty  on  the  good 
concerned provided for under the Agreement; or 

increases  of  the  rate  of  customs  duty  on  the  good  to  a  level  which  does  not 
exceed the lesser of: 

– 

– 

the MFN applied rate of customs duty on the good in effect at the time 
the measure is taken; or 

the base rate of customs duty specified in the Schedules to Annex 2-A 
pursuant to Article 2.5.2 of the Agreement.  

Article 3 

Initiation of proceedings 

An  investigation  shall  be  initiated  upon  request  by  a  Member  State  or  on  the 
Commission’s  own  initiative  if  it  is  apparent  to  the  Commission  that  there  is 
sufficient evidence to justify such initiation. 

The Member States shall inform the Commission should trends in imports from the 
Republic  of  Korea  appear  to  call  for  safeguard  measures.  That  information  shall 

5 

   EN 

1. 

2. 

EN 

 
include  the  evidence  available  as  determined  on  the  basis  of  factors  laid  down  in 
Article  4.  The  Commission  shall  pass  that  information  on  to  all  Member  States 
within three working days. 

3. 

Consultation with the Member States shall take place within eight working days of 
the  Commission’s  sending  the  information  to  Member  States  as  provided  for  in 
paragraph  2  within  the  Committee  referred  to  in  Article  10  on  the  basis  of  the 
procedure  referred  to  in  Article  11.1.  Where,  after  consultation,  it  is  apparent  that 
there is sufficient evidence to justify the initiation of a proceeding the Commission 
shall publish a notice in the Official Journal of the European Union. Initiation shall 
take place within one month of the receipt of information from a Member State. 

4. 

The notice referred to in paragraph 3 shall: 

(a) 

(b) 

(c) 

give  a  summary  of  the  information  received,  and  require  that  all  relevant 
information is to be communicated to the Commission; 

state the period within which interested parties may make known their views in 
writing and submit information, if such views and information are to be taken 
into account during the investigation; 

state the period within which interested parties may apply to be heard orally by 
the Commission in accordance with Article 4(7). 

Article 4 

The investigation 

1. 

2. 

3. 

4. 

5. 

Following  the  initiation  of  the  proceeding,  the  Commission  shall  commence  an 
investigation. 

The  Commission  may  request  Member  States  to  supply  information  and  Member 
States  shall  take  whatever  steps  are  necessary  in  order  to  give  effect  to  any  such 
request. Where that information is of general interest or where its transmission was 
requested by a Member State, the Commission shall forward it to all Member States 
provided  it  is  not  confidential.  If  the  information  is  confidential  the  Commission 
shall forward a non-confidential summary. 

The  investigation  shall,  whenever  possible,  be  concluded  within  six  months  of  the 
initiation  of  the  investigation.  In  exceptional  circumstances  duly  justified  by  the 
Commission, that time limit may be extended by a further period of three months. 

The  Commission  shall  seek  all  information  it  deems  to  be  necessary  to  make  a 
determination with regard to the criteria laid down in Article 2, as appropriate, and 
where it considers it appropriate, endeavour to verify this information. 

In the investigation the Commission shall evaluate all relevant factors of an objective 
and  quantifiable  nature  having  a  bearing  on  the  situation  of  the  Union  industry,  in 
particular, the rate and amount of the increase in imports of the product concerned in 
absolute  and  relative  terms,  the  share  of  the  domestic  market  taken  by  increased 

EN 

6 

   EN 

 
6. 

7. 

8. 

9. 

1. 

2. 

3. 

4. 

imports, changes in the level of sales, production, productivity, capacity utilisation, 
profits and losses, and employment. 

Interested  parties  which  have  come  forward  pursuant  to  Article  3  (4)  (b)  and 
representatives  of  the  Republic  of  Korea  may,  upon  written  request,  inspect  all 
information made available to the Commission in connection with the investigation 
other than internal documents prepared by the authorities of the Union or its Member 
States, provided that that information is relevant to the presentation of their case and 
not  confidential  within  the  meaning  of  Article  9  and  that  it  is  used  by  the 
Commission  in  the  investigation.  Interested  parties  which  have  come  forward  may 
communicate their views on the  information in question to the Commission. Those 
views may be taken into consideration where they are backed by sufficient evidence. 

The Commission may hear the interested parties. Such parties shall be heard where 
they  have  made  a  written  application  within  the  period  laid  down  in  the  notice 
published  in  the  Official  Journal  of  the  European  Union,  showing  that  they  are 
actually likely to be affected by the outcome of the investigation and that there are 
special reasons for them to be heard orally. 

When information is not supplied within the time limits set by the Commission, or 
the investigation is significantly impeded, findings may be made on the basis of the 
facts available. Where the Commission finds that any interested party or third party 
has supplied it with false or misleading information, it shall disregard the information 
and may make use of facts available. 

The Commission shall notify the Republic of Korea in writing of the initiation of an 
investigation and consult with the Republic of Korea as far in advance of applying a 
bilateral safeguard measure as practicable, with a view to reviewing the information 
arising from the investigation and exchanging views on the measure. 

Article 5 

Imposition of provisional safeguard measures 

Provisional  safeguard  measures  shall  be  applied  in  critical  circumstances  where  a 
delay  would  cause  damage  which  it  would  be  difficult  to  repair,  pursuant  to  a 
preliminary determination that there is clear evidence that imports of an originating 
good  from  the  Republic  of  Korea  have  increased  as  the  result  of  the  reduction  or 
elimination of a customs duty under the Agreement, and such imports cause serious 
injury, or threat thereof, to the domestic industry. Provisional measures shall be taken 
on the basis of the procedure referred to in Article 11.1. 

Where  a  Member  State  requests  immediate  intervention  by  the  Commission  and 
where the conditions in paragraph  1 are  met,  the Commission shall take a decision 
within five working days of receiving the request. 

Provisional measures shall not apply for more than 200 days. 

Should  the  provisional  safeguard  measures  be  repealed  because  the  investigation 
shows that the conditions laid down in Article 2 are not met, any duty collected as a 
result of those provisional measures shall be refunded automatically. 

EN 

7 

   EN 

 
Article 6 

Termination of investigation and proceeding without measures 

Where bilateral safeguard measures are deemed unnecessary the investigation and proceeding 
shall be terminated on the basis of the procedure referred to in Article 11.2. 

Article 7 

Imposition of definitive measures  

Where the facts as finally established show that the circumstances  set out in Article 2.1 are 
met, a decision to impose definitive bilateral safeguard measures shall be taken in accordance 
with the procedure referred to in Article 11.2. 

Article 8 

Duration and review of safeguard measures 

A  safeguard  measure  shall  remain  in  force  only  for  such  period  of  time  as  may  be 
necessary to prevent or remedy the serious injury and to facilitate adjustment. That 
period shall not exceed two years, unless it is extended under paragraph 2. 

The initial period of duration of a safeguard measure may exceptionally be extended 
by up to two years provided it is determined that the safeguard measure continues to 
be necessary to prevent or remedy serious injury and to facilitate adjustment and that 
there is evidence that the industry is adjusting. 

Extensions  shall  be  adopted  in  accordance  with  the  procedures  of  this  Regulation 
applying to investigations and using the same procedures as the initial measures. 

The total duration of a safeguard measure may not exceed four years, including any 
provisional measure. 

A  safeguard  measure  shall  not  be  applied  beyond  the  expiration  of  the  transition 
period, except with the consent of the Republic of Korea. 

Article 9 

Confidentiality 

Information received pursuant to this Regulation shall be used only for the purpose 
for which it was requested. 

Any  information  of  a  confidential  nature  or  any  information  provided  on  a 
confidential basis received pursuant to this Regulation shall not be disclosed without 
specific permission from the supplier of such information. 

Each  request  for  confidentiality  shall  state  the  reasons  why  the  information  is 
confidential.  However,  if  it  appears  that  a  request  for  confidentiality  is  unjustified 

1. 

2. 

3. 

4. 

1. 

2. 

3. 

EN 

8 

   EN 

 
and  if  the  supplier  of  the  information  wishes  neither  to  make  it  public  nor  to 
authorise its disclosure in general terms or in the form of a summary, the information 
concerned may be disregarded. 

4. 

5. 

Information  shall  in  any  case  be  considered  to  be  confidential  if  its  disclosure  is 
likely to have a significantly adverse effect upon the supplier or the source of such 
information. 

Paragraphs  1  to  4  shall  not  preclude  reference  by  the  Union  authorities  to  general 
information  and  in  particular  to  reasons  on  which  decisions  taken  pursuant  to  this 
Regulation  are  based.  Those  authorities  shall,  however,  take  into  account  the 
legitimate interest of legal and natural persons concerned that their business secrets 
should not be divulged. 

Article 10 

Committee 

The Commission shall be assisted by the Committee provided for in Article 4(1) of Council 
Regulation  (EC)  No  260/2009  on  the  common  rules  for  imports  (4).  Article  4  of  Council 
Regulation (EC) No 260/2009 shall apply mutatis mutandis. 

Article 11 

Decision making process 

Where reference is made to this paragraph, Articles 3 and 7 of Decision 1999/468/EC 

1. 
shall apply. 

When reference is made to this paragraph, Articles 4 and 7 of Decision 1999/468/EC 

2. 
shall apply.  

The  period  laid  down  in  Article  5(6)  of  Decision  1999/468/EC  shall  be  set  at  one 

3. 
month. 

Article 12 

Entry into force 

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

4 

OJ L 84, 31.3.2009, p.1 

EN 

9 

   EN 

 
                                                 
This Regulation shall apply from the date of application of the Agreement. A notice shall be 
published in the Official Journal of the European Union specifying the date of application of 
the Agreement. 

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

Done at Brussels, 

For the European Parliament 
The President 

For the Council 
The President 

EN 

10 

   EN