Proposal for a Council Decision on the position to be taken by the European Union within the Joint Committee created by the Euro-Mediterranean Interim Association Agreement on trade and cooperation between the European Community, of the one part, and the Palestinian Liberation Organisation (PLO) for the benefit of the Palestinian Authority of the West Bank and the Gaza Strip, of the other part, on the amendment of Article 15 (7) of Protocol 3 to that Agreement concerning the definition of the concept of "originating products" and methods of administrative cooperation
Date: 2010-04-21
Institutions: European Commission
Subjects: Palestine Liberation Organisation, administrative cooperation, association agreement (EU), interim agreement (EU), originating product, trade agreement (EU)

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EUROPEAN COMMISSION 

Brussels, 21.4.2010 
COM(2010)166 final 

2010/0090 (NLE) 

Proposal for a 

COUNCIL DECISION 

on the position to be taken by the European Union within the Joint Committee created 
by the Euro-Mediterranean Interim Association Agreement on trade and cooperation 
between the European Community, of the one part, and the Palestinian Liberation 
Organisation (PLO) for the benefit of the Palestinian Authority of the West Bank and 
the Gaza Strip, of the other part, on the amendment of Article 15 (7) of Protocol 3 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 3 to the EC-
PLO Agreement. Its paragraph 7 provides for a transitional period in relation to the 
full implementation of prohibition of duty drawback by the West Bank and the Gaza 
Strip  and  gives  this  partner  the  possibility  to  grant  duty  drawback  to  its 
exporters/economic operators during this period. 

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

The PLO formulated its request in writing to prolong the provision on duty drawback 
and review the applicable rates on customs charges. 

According  to  Article  39  of  Protocol  3,  the  provisions  of  that  Protocol  shall  be 
amended by decision of the Joint Committee. 

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  the  West  Bank  and  the  Gaza  Strip  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  authorities  of 
the West Bank and the Gaza Strip 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 3 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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2010/0090 (NLE) 

Proposal for a 

COUNCIL DECISION 

on the position to be taken by the European Union within the Joint Committee created 
by the Euro-Mediterranean Interim Association Agreement on trade and cooperation 
between the European Community, of the one part, and the Palestinian Liberation 
Organisation (PLO) for the benefit of the Palestinian Authority of the West Bank and 
the Gaza Strip, of the other part, on the amendment of Article 15 (7) of Protocol 3 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  31  to  the  Euro-Mediterranean  Interim  Association  Agreement  on  trade  and 
cooperation between the European Community, of the one part, and the PLO, for the 
benefit of the Palestinian Authority of the West Bank and the Gaza Strip, of the other 
part, hereinafter "the Agreement", as amended by Decision No 1/2009 of the EC-PLO 
Joint  Committee  of  24  June  20092  concerns  the  definition  of  the  concept  of 
"originating products" and methods of administrative cooperation. 

Article  15  of  Protocol  3  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 West Bank and the Gaza Strip should be adjusted on 

the basis of the current rates applied in the EU. 

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OJ L 187, 16.7.1997, p. 3 
OJ L 298, 13.11.2009, p. 1 

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(5) 

(6) 

In  accordance  with  Article  39  of  Protocol  3,  the  Joint  Committee  established  by  the 
Agreement, should decide to amend the provisions of that Protocol. 

The European Union should therefore take position in the Joint Committee 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  Joint  Committee  created  by  the 
Euro-Mediterranean  Interim  Association  Agreement  on  trade  and  cooperation  between  the 
European Community, of the one part, and the Palestinian Liberation Organisation (PLO) for 
the benefit of the Palestinian Authority of the West Bank and the Gaza Strip, of the other part, 
with regard to the amendment of Article 15 (7) of Protocol 3 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 Joint Committee annexed to this Decision. 

Article 2 

The decision of the Joint Committee 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 EC-PLO JOINT COMMITTEE 

of  

amending Article 15 (7) of Protocol 3 to the Euro-Mediterranean Interim Association 
Agreement on trade and cooperation between the European Community, of the one 
part, and the Palestinian Liberation Organisation (PLO) for the benefit of the 
Palestinian Authority of the West Bank and the Gaza Strip, of the other part, 
concerning the definition of the concept of "originating products" and methods of 
administrative cooperation 

The Joint Committee, 

Having  regard  to  the  Euro-Mediterranean  Interim  Association  Agreement  on  trade  and 
cooperation between the European Community, of the one part, and the Palestinian Liberation 
Organisation  (PLO)  for  the  benefit  of  the  Palestinian  Authority  of  the  West  Bank  and  the 
Gaza Strip, of the other part, and in particular Article 39 of Protocol 3 thereto, 

Whereas: 

(1) 

(2) 

Article 15 (7) of Protocol 3 to the Euro-Mediterranean Interim Association Agreement 
on trade and cooperation between the European Community, of the one part, and the 
Palestinian Liberation Organisation (PLO) for the benefit of the Palestinian Authority 
of the West Bank and the Gaza Strip, 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 the West Bank and the Gaza Strip should be adjusted 

on the basis of the current rates applied in the EU. 

(4) 

(5) 

Protocol 3 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  3  to  the  Euro-Mediterranean  Interim  Association  Agreement  on 
trade and cooperation between the European Community, of the one part, and the Palestinian 
Liberation Organisation (PLO) for the benefit of the Palestinian Authority of the West Bank 
and the Gaza Strip, 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, the West Bank and the Gaza Strip 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 the West Bank and the Gaza Strip; 

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 the West Bank and the Gaza Strip; 

The  provisions  of  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 Joint Committee 
The President 

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