Proposal for a Council Decision on the position to be taken by the European Union within the Association Council created by the Euro-Mediterranean Agreement establishing an association between the European Communities and their Member States, of the one part, and the Arab Republic of Egypt, of the other part, on the amendment of Article 15 (7) of Protocol 4 to that Agreement concerning the definition of the concept of "originating products" and methods of administrative cooperation
Date: 2010-04-20
Institutions: European Commission
Subjects: Egypt, administrative cooperation, association agreement (EU), customs duties, originating product, tariff exemption, trade agreement (EU)

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EUROPEAN COMMISSION 

Brussels, 20.4.2010 
COM(2010)161 final 

2010/0089 (NLE) 

Proposal for a 

COUNCIL DECISION 

on the position to be taken by the European Union within the Association Council 
created by the Euro-Mediterranean Agreement establishing an association between the 
European Communities and their Member States, of the one part, and the Arab 
Republic of Egypt, of the other part, on the amendment of Article 15 (7) of Protocol 4 to 
that Agreement concerning the definition of the concept of "originating products" and 
methods of administrative cooperation 

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EXPLANATORY MEMORANDUM 

1. 

CONTEXT OF THE PROPOSAL 

Prohibition of duty drawback is provided for in Article 15 of Protocol 4 to the EC - 
Egypt  Association  Agreement.  Its  paragraph  7  provides  for  a  transitional  period  in 
relation  to  the  full  implementation  of  prohibition  of  duty  drawback  by  Egypt  and 
its 
the  possibility 
gives 
exporters/economic operators during this period. 

to  grant  duty  drawback 

this  partner  country 

to 

The  transitional  period  expired  on  31  December  2009.  However,  Article  15  (7) 
provides for the possibility to extend its application by “common accord”. 

At the EC-Egypt Association Council on 27 April 2009, Egypt formulated its request 
to  prolong  the  provision  on  duty  drawback  and  review  the  applicable  rates  on 
customs charges. 

According  to  Article  39  of  Protocol  4,  the  provisions  of  that  Protocol  shall  be 
amended by decision of the Association Council. 

The  text  of  the  decision  will  replace  the  existing  provision  laid  down  in  Article  15 
(7). 

It includes, on the one hand, the modification on the validity of this provision on duty 
drawback and, on the other hand, the revision of the applicable customs charges to be 
retained. 

In  order  to  ensure  clarity,  long  term  economic  predictability  and  legal  certainty  for 
economic  operators,  the  parties  to  the  Agreement  have  agreed  to  prolong  the 
application of Article 15 (7) with effect as from 1 January 2010 for a period of three 
years. 

Moreover, the applicable rates in Egypt should be adjusted on the basis of the current 
rates applied in the EU. 

Pending  the  formal  adoption  of  this  decision,  it  was  agreed,  via  an  exchange  of 
correspondence  between  the  European  Commission  and  the  relevant  Egyptian 
authorities that the content of this text would be applied as from 1 January 2010. 

2. 

CONSULTATION OF INTERESTED PARTIES AND IMPACT ASSESSMENT 

Interested  parties  were  consulted  in  the  framework  of  the  Pan-Euro-Med  Working 
Group and Customs code committee Origin section. 

There was no need for external expertise. 

There is no need for an impact assessment insofar as the amendments proposed are 
merely technical and do not modify the substance of the current origin protocol. 

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3. 

LEGAL ELEMENTS OF THE PROPOSAL 

In view of the nature of the changes to be made to Article 15 (7) of Protocol 4 and 
for legal certainty the entire paragraph shall be replaced. 

The amended provision on duty drawback should apply retroactively from 1 January 
2010. 

The  legal  basis  for  the  amendment  of  this  provision  is  laid  down  in  Article  207(4) 
first  subparagraph,  in  conjunction  with  Article  218(9)  of  the  Treaty  on  the 
Functioning of the European Union. 

The  proposal  falls  under  the  exclusive  competence  of  the  Union.  The  subsidiarity 
principle therefore does not apply. 

Proposed instrument: Council decision. 

4. 

BUDGETARY IMPLICATION 

The proposal has no implication for the Union budget. 

5. 

ADDITIONAL INFORMATION 

A review, revision or sunset clause is not foreseen. 

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2010/0089 (NLE) 

Proposal for a 

COUNCIL DECISION 

on the position to be taken by the European Union within the Association Council 
created by the Euro-Mediterranean Agreement establishing an association between the 
European Communities and their Member States, of the one part, and the Arab 
Republic of Egypt, of the other part, on the amendment of Article 15 (7) of Protocol 4 to 
that Agreement concerning the definition of the concept of "originating products" and 
methods of administrative cooperation 

THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  on  the  Functioning  of  the  European  Union,  and  in  particular 
Article 207(4), first subparagraph, in conjunction with Article 218(9) thereof, 

Having regard to the proposal from the European Commission, 

Whereas: 

(1) 

(2) 

(3) 

Protocol 41 to the Euro-Mediterranean Agreement establishing an association between 
the  European  Communities  and  their  Member  States,  of  the  one  part,  and  the  Arab 
Republic  of  Egypt,  of  the  other  part,  hereinafter  "the  Agreement",  as  amended  by 
Decision  No  1/2006  of  the  EU-Egypt  Association  Council  of  17  February  2006  2 
concerns  the  definition  of  the  concept  of  "originating  products"  and  methods  of 
administrative cooperation. 

Article  15  of  Protocol  4  provides  for  a  general  prohibition  of  drawback  of,  or 
exemption  from,  customs  duties  on  any  non-originating  materials  used  in  the 
manufacture  of  originating  products.  However,  paragraph  7  of  that  Article  provides 
that a drawback or exemption may be applied until 31 December 2009 under certain 
conditions. 

In  order  to  ensure  clarity,  long  term  economic  predictability  and  legal  certainty  for 
economic  operators,  the  parties  to  the  Agreement  have  agreed  to  prolong  the 
application of Article 15 (7) with effect as from 1 January 2010 for a period of three 
years. 

(4)  Moreover, the applicable rates in Egypt should be adjusted on the basis of the current 

rates applied in the EU. 

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OJ L 304, 30.9.2004, p. 39 
OJ L 73, 13.3.2006, p. 1 

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(5) 

(6) 

In  accordance  with  Article  39  of  Protocol  4,  the  Association  Council  established  by 
the Agreement, should decide to amend the provisions of that Protocol. 

The European Union should therefore take position in the Association Council as set 
out in the attached draft Decision, 

HAS ADOPTED THIS DECISION: 

Article 1 

The position to be taken by the European Union within the Association Council created by the 
the  European 
Euro-Mediterranean  Agreement  establishing  an  association  between 
Communities and their Member States, of the one part, and the Arab Republic of Egypt, of the 
other  part,  with  regard  to  the  amendment  of  Article  15  (7)  of  Protocol  4  concerning  the 
definition of the concept of "originating products" and methods of administrative cooperation 
for  the  purposes  of  extending  the  application  of  that  provision  on  drawback  or  exemption 
from customs duties shall be based on the draft decision of the Association Council annexed 
to this Decision. 

Article 2 

The  decision  of  the  Association  Council  shall  be  published  in  the  Official  Journal  of  the 
European Union. 

Done at Brussels, 

For the Council 
The President 

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Proposal for a 

DECISION  
No  

OF THE EU-EGYPT ASSOCIATION COUNCIL 

of  

amending Article 15 (7) of Protocol 4 to the Euro-Mediterranean Agreement between 
the European Communities and their Member States, of the one part, and the Arab 
Republic of Egypt, of the other part, concerning the definition of the concept of 
"originating products" and methods of administrative cooperation 

The Association Council, 

Having regard to the Euro-Mediterranean Agreement establishing an association between the 
European Communities and their Member States,  of the one  part, and the Arab  Republic of 
Egypt, of the other part, and in particular Article 39 of Protocol 4 thereto, 

Whereas: 

(1) 

(2) 

Article  15  (7)  of  Protocol  4  to  the  Euro-Mediterranean  Agreement  between  the 
European  Communities  and  their  Member  States,  of  the  one  part,  and  the  Arab 
Republic  of  Egypt,  of  the  other  part,  hereinafter  "the  Agreement",  permits  under 
certain conditions a drawback of, or exemption from, customs duties or charges having 
an equivalent effect until 31 December 2009. 

In  order  to  ensure  clarity,  long  term  economic  predictability  and  legal  certainty  for 
economic  operators,  the  parties  to  the  Agreement  have  agreed  to  prolong  the 
application of Article 15 (7) with effect as from 1 January 2010 for a period of three 
years. 

(3)  Moreover, the applicable rates in Egypt should be adjusted on the basis of the current 

rates applied in the EU. 

(4) 

(5) 

Protocol 4 to the Agreement should therefore be amended accordingly. 

As  the  application  period  of  Article  15  (7)  expires  on  31  December  2009,  this 
Decision should apply from 1 January 2010, 

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HAS DECIDED AS FOLLOWS: 

Article 1 

Article  15  (7)  of  Protocol  4  to  the  Euro-Mediterranean  Agreement  between  the  European 
Communities and their Member States, of the one part, and the Arab Republic of Egypt, of the 
other part, concerning the definition of the concept of "originating products" and methods of 
administrative cooperation is replaced by the following: 

"7.  Notwithstanding  paragraph  1,  Egypt  may,  except  for  products  falling  within 
Chapters 1 to 24 of the Harmonized System, apply arrangements for drawback of, or 
exemption from, customs duties or charges having an equivalent effect, applicable to 
non-originating materials used in the manufacture of originating products, subject to 
the following provisions: 

(a) 

(b) 

a  4  %  rate  of  customs  charge  shall  be  retained  in  respect  of  products  falling 
within  Chapters  25  to  49  and  64  to  97  of  the  Harmonized  System,  or  such 
lower rate as is in force in Egypt; 

a  8  %  rate  of  customs  charge  shall  be  retained  in  respect  of  products  falling 
within Chapters 50 to 63 of the Harmonized System, or such lower rate as is in 
force in Egypt; 

This  paragraph  shall  apply  until  31  December  2012  and  may  be  reviewed  by 
common accord." 

This Decision shall enter into force on the day of its adoption. 

Article 2 

It shall apply from 1 January 2010. 

Done at 

For the Association Council 
The President 

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