Proposal for a COUNCIL DECISION on the position to be taken by the European Union within the Stabilisation and Association Council created by the Stabilisation and Association Agreement between the European Communities and their Member States, of the one part, and the Republic of Croatia, of the other part, on the amendments to Protocol 4 to that Agreement concerning the definition of the concept of "originating products" and methods of administrative cooperation
Date: 2010-12-21
Institutions: European Commission
Subjects: Croatia, administrative cooperation, originating product, stabilisation and association agreement

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EUROPEAN COMMISSION 

Brussels, 21.12.2010 
COM(2010) 778 final 

2010/0378 (NLE) 

Proposal for a 

COUNCIL DECISION 

on the position to be taken by the European Union within the Stabilisation and 
Association Council created by the Stabilisation and Association Agreement between the 
European Communities and their Member States, of the one part, and the Republic of 
Croatia, of the other part, on the amendments to 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 

Articles 3  and 4  of  Protocol 4  to  the  EC-Croatia  Stabilisation  and  Association 
Agreement  (SAA)  currently  provide  for  bilateral  cumulation  of  origin  between  the 
Union and Croatia. No products are excluded from this cumulation.  

Articles 3  and 4  of  the  Protocols  on  rules  of  origin  to  the  Stabilisation  and 
Association  agreements  between  the  EU  and  other  Western  Balkan  countries 
(namely  Albania,  Bosnia  and  Herzegovina,  the  former  Yugoslav  Republic  of 
Macedonia,  Montenegro  and  Serbia)  provide  for  diagonal  cumulation  of  origin 
among  the  EU,  those  Western  Balkan  countries  and  Turkey1.  Annex V  to  the 
abovementioned  protocols  excludes  certain  high-content  sugar  products  from 
cumulation. 

At  the  time  of  negotiations  Croatia  did  not  accept  Annex  V,  thus  precluding  its 
participation into the diagonal cumulation zone. 

In August 2010 Croatia requested the European Commission to be included into the 
zone of diagonal cumulation of origin among the EU, the Western Balkan countries 
and Turkey. 

To this end, Protocol 4 to the EC-Croatia SAA needs to be amended. 

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

The  decision  provides  for  the  necessary  technical  amendments  to  Protocol  4.  It 
includes,  on  the  one  hand,  amendments  to  articles 3,  4,  7,  13,  14,  15,  17,  22,  28 
and 31 of Protocol 4 and, on the other hand, introduces Annex V to Protocol 4. 

2. 

RESULTS OF CONSULTATIONS WITH THE INTERESTED PARTIES AND 
IMPACT ASSESSMENTS 

In August 2010 Croatia requested the European Commission to be included into the 
zone of diagonal cumulation of origin among the EU, the Western Balkan countries 
and Turkey. 

EU  Member  States  were  informed  about  the  inclusion  of  Croatia  into  this  zone  of 
diagonal  cumulation  of  origin  in  the  framework  of  the  Customs  Code  Committee 
Origin section and they reacted favourably. 

There was no need for external expertise. 

There  is  no  need  for  an  impact  assessment  insofar  as  the  proposed  technical 
amendments  align  Protocol 4  with  the  other  existing  protocols  on  rules  of  origin 

1 

As  regards  materials  originating  in  Turkey,  diagonal  cumulation  of  origin  is  limited  to  the  materials 
covered by the EC-Turkey Customs Union. 

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annexed  to  the  Stabilisation  and  Association  Agreements  between  the  European 
Communities and the Western Balkan countries. 

3. 

LEGAL ELEMENTS OF THE PROPOSAL 

In view of the nature of the changes to be made to several articles of Protocol 4 and 
for legal certainty the entire paragraphs of those articles shall be replaced. Annex V 
shall be added to Protocol 4. For the sake of coherence of Protocol 4 and in line with 
the wording of the corresponding provisions of protocols on rules of origin annexed 
to the Stabilisation and Association Agreements between the European Communities 
and other Western Balkan countries, the proposed amendments refer to the European 
Community. 

The legal basis for the amendment of Protocol 4 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 amended provisions of Protocol 4 will enter into force on of the first day of the 
first  month  following  the  date  of  adoption  of  the  decision  by  the  EU-Croatia 
Stabilisation and Association Council. 

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. 

OPTIONAL ELEMENTS 

A review, revision or sunset clause is not foreseen. 

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2010/0378 (NLE) 

Proposal for a 

COUNCIL DECISION 

on the position to be taken by the European Union within the Stabilisation and 
Association Council created by the Stabilisation and Association Agreement between the 
European Communities and their Member States, of the one part, and the Republic of 
Croatia, of the other part, on the amendments to 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) 

2 
3 
4 

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Protocol  4  to  the  Stabilisation  and  Association  Agreement  between  the  European 
Communities and their Member States, of the one part, and the Republic of Croatia, of 
the other part2, hereinafter "the SAA", as last amended by Annex X to the Protocol to 
the Stabilisation and Association Agreement between the European Communities and 
their Member States, of the one part, and the Republic of Croatia, of the other part, to 
take  account  of  the  accession  of  the  Republic  of  Bulgaria  and  Romania  to  the 
European Union3 concerns the definition of the concept of "originating products" and 
methods of administrative cooperation. 

Articles 3 and 4 of Protocol 4 to the SAA provide for bilateral cumulation of origin in 
the Community or in Croatia. 

Croatia  requested  to  cumulate  origin  when  incorporating  materials  originating  in  the 
Union, in Croatia or in any country or territory participating in the European Union's 
Stabilisation  and  Association  process4  or  incorporating  the  materials  originating  in 
Turkey  to  which  the  Decision  No 1/95  of  the  EC-Turkey  Association  Council  of 
22 December 19955 applies. 

OJ L 26, 28.1.2005, p. 3. 
OJ L 286, 29.10.2008, p. 46. 
As  defined  in  the  Conclusions  of  the  General  Affairs  Council  in  April 1997  and  Commission 
Communication  of  May 1999  on  the  establishment  of  the  Stabilisation  and  Association  process  with 
Western Balkan countries. 
Decision  No 1/95  of  the  EC-Turkey  Association  Council  of  22 December 1995  applies  to  products 
other  than  agricultural  products  as  defined  in  the  Agreement  establishing  an  Association  between  the 
European  Economic  Community  and  Turkey  and  other  than  coal  and  steel  products  as  defined  in  the 

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(4) 

(5) 

(6) 

In order to allow the Union and Croatia to benefit from the extended cumulation zone, 
the provisions of Protocol 4 should be amended accordingly. 

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

The  European  Union  should  therefore  take  position  in  the  Stabilisation  and 
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  Stabilisation  and  Association 
Council  established  by  the  Stabilisation  and  Association  Agreement  between  the  European 
Communities  and  their  Member  States,  of  the  one  part,  and  the  Republic  of  Croatia,  of  the 
other  part,  on  the  amendments  to  Protocol 4  to  that  Agreement  concerning  the  definition  of 
the  concept  of  "originating  products"  and  methods  of  administrative  cooperation  shall  be 
based  on  the  draft  decision  of  the  Stabilisation  and  Association  Council  annexed  to  this 
Decision. 

Article 2 

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

Done at Brussels, 

For the Council 
The President 

Agreement between the European Coal and Steel Community and the Republic of Turkey on trade in 
products covered by the treaty establishing the European Coal and Steel Community. 

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ANNEX 

Proposal for a 

DECISION No […] 

OF THE EU-CROATIA STABILISATION AND ASSOCIATION COUNCIL 

of […] 

amending Protocol 4 to the Stabilisation and Association Agreement between the European 
Communities and their Member States, of the one part, and the Republic of Croatia, of the 
other part 

THE STABILISATION AND ASSOCIATION COUNCIL, 

Having regard to the Stabilisation and Association Agreement beetween the European Communities 
and  their  Member  States,  of  the  one  part,  and  the  Republic  of  Croatia,  of  the  other  part,  and  in 
particular Article 39 of Protocol 4 thereto, 

Whereas: 

(1) 

(2) 

Articles 3 and 4 of Protocol 4 provide for bilateral cumulation of origin in the Community or 
in Croatia. 

Croatia requested to cumulate origin when incorporating materials originating in the Union, 
in Croatia or in any country or territory participating in the European Union's Stabilisation 
and Association process6 or incorporating the materials originating in Turkey to which the 
Decision No 1/95 of the EC-Turkey Association Council of 22 December 19957 applies. 

(3) 

In order to allow the Union and Croatia to benefit from the extended cumulation zone, the 
provisions of Protocol 4 should be amended accordingly, 

HAS DECIDED AS FOLLOWS: 

Article 1 

Protocol 4 is amended as follows: 

(1) 

The following is added to the Table of Contents: 

"Annex V: Products excluded from the cumulation provided for in Article 3 and Article 4" 

(2) 

Article 3 is replaced by the following: 

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As defined in the Conclusions of the General Affairs Council in April 1997 and Commission Communication 
of May 1999 on the establishment of the Stabilisation and Association process with Western Balkan countries.  
Decision No 1/95 of the EC-Turkey Association Council of 22 December 1995 applies to products other than 
agricultural products as defined in the Agreement establishing an Association between the European Economic 
Community  and  Turkey  and  other  than  coal  and  steel  products  as  defined  in  the  Agreement  between  the 
European Coal and Steel Community and the Republic of Turkey on trade in products covered by the treaty 
establishing the European Coal and Steel Community. 

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"Article 3 
Cumulation in the Community 

1.  Without  prejudice  to  the  provisions  of  Article 2(1),  products  shall  be  considered  as 
originating in the Community if such products are obtained there, incorporating materials 
originating in Croatia, in the Community or in any country or territory participating in the 
European  Union's  Stabilisation  and  Association  process8,  or  incorporating  the  materials 
originating  in  Turkey  to  which  the  Decision  No 1/95  of  the  EC-Turkey  Association 
Council of 22 December 19959 applies, provided that the working or processing carried out 
in  the  Community  goes  beyond  the  operations  referred  to  in  Article 7.  It  shall  not  be 
necessary that such materials have undergone sufficient working or processing. 

2. Where the working or processing carried out in the Community does not go beyond the 
operations referred to in Article 7, the product obtained shall be considered as originating 
in  the  Community  only  where  the  value  added  there  is  greater  than  the  value  of  the 
materials  used  originating  in  any  one  of  the  other  countries  or  territories  referred  to  in 
paragraph 1. If this is not so, the product obtained shall be considered as originating in the 
country  which  accounts  for  the  highest  value  of  originating  materials  used  in  the 
manufacture in the Community. 

3.  Products,  originating  in  one  of  the  countries  or  territories  referred  to  in  paragraph  1, 
which do not undergo any working or processing in the Community, retain their origin if 
exported into one of these countries or territories. 

4. The cumulation provided for in this Article may be applied only provided that: 

(a) 

a  preferential  trade  agreement  in  accordance  with  Article XXIV  of  the  General 
Agreement  on  Tariffs  and  Trade  (GATT)  is  applicable  between  the  countries  or 
territories  involved  in  the  acquisition  of  the  originating  status  and  the  country  of 
destination; 

(b)  materials and products have acquired originating status by the application of rules of 

origin identical to those given in this Protocol; 

and 

(c) 

notices  indicating  the  fulfilment  of  the necessary  requirements  to  apply  cumulation 
have been published in the Official Journal of the European Union (C series) and in 
Croatia according to its own procedures. 

The cumulation provided for in this Article shall apply from the date indicated in the notice 
published in the Official Journal of the European Union (C series). 

The Community shall provide Croatia, through the European Commission, with details of 
the Agreements and their corresponding rules of origin, which are applied with the other 
countries or territories referred to in paragraph 1. 

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9 

As defined in the Conclusions of the General Affairs Council in April 1997 and Commission Communication 
of May 1999 on the establishment of the Stabilisation and Association process with Western Balkan countries. 
Decision No 1/95 of the EC-Turkey Association Council of 22 December 1995 applies to products other than 
agricultural products as defined in the Agreement establishing an Association between the European Economic 
Community  and  Turkey  and  other  than  coal  and  steel  products  as  defined  in  the  Agreement  between  the 
European Coal and Steel Community and the Republic of Turkey on trade in products covered by the treaty 
establishing the European Coal and Steel Community. 

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The  products  in  Annex V  shall  be  excluded  from  the  cumulation  provided  for  in  this 
Article." 

(3) 

Article 4 is replaced by the following: 

"Article 4 
Cumulation in Croatia 

1.  Without  prejudice  to  the  provisions  of  Article 2(2),  products  shall  be  considered  as 
originating  in  Croatia  if  such  products  are  obtained  there,  incorporating  materials 
originating  in  the  Community,  Croatia  or  in  any  country  or  territory  participating  in  the 
European  Union's  Stabilisation  and  Association  Process10,  or  incorporating  the  materials 
originating  in  Turkey  to  which  the  Decision  No 1/95  of  the  EC-Turkey  Association 
Council  of  22 December 199511  applies,  provided  that  the  working  or  processing  carried 
out in Croatia goes beyond the operations referred to in Article 7. It shall not be necessary 
that such materials have undergone sufficient working or processing. 

2.  Where  the  working  or  processing  carried  out  in  Croatia  does  not  go  beyond  the 
operations referred to in Article 7, the product obtained shall be considered as originating 
in Croatia only where the value added there is greater than the value of the materials used 
originating in any one of the other countries or territories referred to in paragraph 1. If this 
is  not  so,  the  product  obtained  shall  be  considered  as  originating  in  the  country  which 
accounts for the highest value of originating materials used in the manufacture in Croatia. 

3.  Products,  originating  in  one  of  the  countries  or  territories  referred  to  in  paragraph 1, 
which do not undergo any working or processing in Croatia, retain their origin if exported 
into one of these countries or territories. 

4. The cumulation provided for in this Article may be applied only provided that: 

(a) 

a  preferential  trade  agreement  in  accordance  with  Article XXIV  of  the  General 
Agreement  on  Tariffs  and  Trade  (GATT)  is  applicable  between  the  countries  or 
territories  involved  in  the  acquisition  of  the  originating  status  and  the  country  of 
destination; 

(b)  materials and products have acquired originating status by the application of rules of 

origin identical to those given in this Protocol; 

and 

(c) 

notices  indicating  the  fulfilment  of  the necessary  requirements  to  apply  cumulation 
have been published in the Official Journal of the European Union (C series) and in 
Croatia according to its own procedures. 

The cumulation provided for in this Article shall apply from the date indicated in the notice 
published in the Official Journal of the European Union (C series). 

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As defined in the Conclusions of the General Affairs Council in April 1997 and Commission Communication 
of May 1999 on the establishment of the Stabilisation and Association process with Western Balkan countries. 
Decision No 1/95 of the EC-Turkey Association Council of 22 December 1995 applies to products other than 
agricultural products as defined in the Agreement establishing an Association between the European Economic 
Community  and  Turkey  and  other  than  coal  and  steel  products  as  defined  in  the  Agreement  between  the 
European Coal and Steel Community and the Republic of Turkey on trade in products covered by the treaty 
establishing the European Coal and Steel Community. 

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Croatia shall provide the Community, through the European Commission, with details of 
the Agreements, including their dates of entry into force, and their corresponding rules of 
origin, which are applied with the other countries or territories referred to in paragraph 1.  

The  products  in  Annex V  shall  be  excluded  from  the  cumulation  provided  for  in  this 
Article." 

(4) 

Article 7(1)(m) is replaced by the following: 

"(m)  simple  mixing  of  products,  whether  or  not  of  different  kinds;  mixing  of  sugar  with 
any other material;" 

(5) 

Article 13(1) is replaced by the following: 

"1. The preferential treatment provided for under the Agreement applies only to products, 
satisfying  the  requirements  of  this  Protocol,  which  are  transported  directly  between  the 
Community  and  Croatia  or  through  the  territories  of  the  other  countries  or  territories 
referred to in Articles 3 and 4. However, products constituting one single consignment may 
be transported through other territories with, should the occasion arise, trans-shipment or 
temporary warehousing in such territories, provided that they remain under the surveillance 
of  the  customs  authorities  in  the  country  of  transit  or  warehousing  and  do  not  undergo 
operations other than unloading, reloading or any operation designed to preserve them in 
good condition. 

Originating products may be transported by pipeline across territory other than that of the 
Community or Croatia." 

(6) 

Article 14(1) is replaced by the following: 

"1.  Originating  products,  sent  for  exhibition  in  a  country  or  territory  other  than  those 
referred  to  in  Articles 3  and 4  and  sold  after  the  exhibition  for  importation  in  the 
Community  or  in  Croatia  shall  benefit  on  importation  from  the  provisions  of  the 
Agreement provided it is shown to the satisfaction of the customs authorities that: 

(a) 

(b) 

(c) 

and 

(d) 

an exporter has consigned these products from the Community or from Croatia to the 
country in which the exhibition is held and has exhibited them there; 

the products have been sold or otherwise disposed of by that exporter to a person in 
the Community or in Croatia; 

the products have been consigned during the exhibition or immediately thereafter in 
the state in which they were sent for exhibition; 

the  products  have  not,  since  they  were  consigned  for  exhibition,  been  used  for  any 
purpose other than demonstration at the exhibition." 

(7) 

Article 15(1) is replaced by the following: 

"1.  Non-originating  materials  used  in  the  manufacture  of  products  originating  in  the 
Community,  in  Croatia  or  in  one  of  the  other  countries  or  territories  referred  to  in 
Articles 3 and 4 for which a proof of origin is issued or made out in accordance with the 
provisions of Title V shall not be subject in the Community or in Croatia to drawback of, 
or exemption from, customs duties of whatever kind." 

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(8) 

Article 17(4) is replaced by the following: 

"4. A movement certificate EUR.1 shall be issued by the customs authorities of a Member 
State  of  the  Community  or  of  Croatia  if  the  products  concerned  can  be  considered  as 
products  originating  in  the  Community,  in  Croatia  or  in  one  of  the  other  countries  or 
territories referred to in Articles 3 and 4 and fulfil the other requirements of this Protocol." 

(9) 

Article 22(2) is replaced by the following: 

"2. An invoice declaration may be made out if the products concerned can be considered as 
products  originating  in  the  Community,  in  Croatia  or  in  one  of  the  other  countries  or 
territories referred to in Articles 3 and 4 and fulfil the other requirements of this Protocol." 

(10)  Article 28 is replaced by the following: 

"Article 28 
Supporting documents 

The documents referred to in Articles 17(3) and 22(3) used for the purpose of proving that 
products  covered  by  a  movement  certificate  EUR.1  or  an  invoice  declaration  can  be 
considered  as  products  originating  in  the  Community,  in  Croatia  or  in  one  of  the  other 
countries  or  territories  referred  to  in  Articles 3  and 4  and  fulfil  the  other  requirements  of 
this Protocol may consist inter alia of the following: 

(a) 

direct evidence of the processes carried out by the exporter or supplier to obtain the 
goods concerned, contained for example in his accounts or internal book-keeping; 

(b)  documents proving the originating status of materials used, issued or made out in the 
Community  or  in  Croatia  where  these  documents  are  used  in  accordance  with 
domestic law; 

(c) 

documents  proving  the  working  or  processing  of  materials  in  the  Community  or  in 
Croatia, issued or made out in the Community or in Croatia, where these documents 
are used in accordance with domestic law; 

(d)  movement  certificates  EUR.1  or  invoice  declarations  proving  the  originating  status 
of materials used, issued or made out in the Community or in Croatia in accordance 
with  this  Protocol,  or  in  one  of  the  other  countries  or  territories  referred  to  in 
Articles 3 and 4, in accordance with rules of origin which are identical to the rules in 
this Protocol; 

(e) 

appropriate  evidence  concerning  working  or  processing  undergone  outside  the 
Community or Croatia by application of Article 12, proving that the requirements of 
that Article have been satisfied." 

(11)  Article 31(1) is replaced by the following: 

"1.  For  the  application  of  the  provisions  of  Article 22(1)(b)  and  Article 27(3)  in  cases 
where  products  are  invoiced  in  a  currency  other  than  euro,  amounts  in  the  national 
currencies of the Member States of the Community, of Croatia and of the other countries or 
territories referred to in Articles 3 and 4 equivalent to the amounts expressed in euro shall 
be fixed annually by each of the countries concerned." 

(12)  The Annex to this Decision is annexed to Protocol 4. 

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This Decision shall enter into force on of the first day of the first month following the date of its 
adoption. 

Article 2 

Done at 

For the Stabilisation and Association Council 
The President 

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Products excluded from the cumulation provided for in Article 3 and Article 4 

Annex V 

CN-Code 

1704 90 99 
1806 10 30 
1806 10 90 

1806 20 95 

1901 90 99 

2101 12 98 
2101 20 98 
2106 90 59 

2106 90 98 

3302 10 29 

Description 

Other sugar confectionery, not containing cocoa. 
Chocolate and other food preparations containing cocoa 
- cacao powder, containing added sugar or sweetening matter: 
- - containing 65 % or more but less than 80 % by weight of sucrose (including invert sugar 
expressed as sucrose) or isoglucose expressed as sucrose 
- - containing 80 % or more by weight of sucrose (including invert sugar expressed as sucrose) 
or isoglucose expressed as sucrose 
- Other food preparations containing cocoa in block, slabs or bars weighting more than 2 kg or 
in liquid, paste, powder, granular or other bulk form in containers or immediate packaging of a 
content exceeding 2 kg 
-- Other 
--- Other 
Malt extract, food preparations of flour, groats, meal, starch or malt extract, not containing 
cocoa or containing less than 40 % by weight of cocoa calculated on a totally defatted basis, not 
elsewhere specified or included, food preparations of goods of headings 0401 to 0404, not 
containing cocoa or containing less than 5 % by weight of cocoa calculated on a totally defatted 
basis, not elsewhere specified or included 
- Other 
-- Other (than malt extract) 
--- Other 
Other preparations with a basis of coffee. 
Other preparations with a basis of tea or mate. 
Food preparations not elsewhere specified or included 
- Other 
-- Other 
Food preparations not elsewhere specified or included: 
- Other (than protein concentrates and textured protein substances) 
-- Other 
--- Other 
Mixtures of odoriferous substances and mixtures (including alcoholic solutions) with a basis of 
one or more of these substances, of a kind used as raw materials in industry; other preparations 
based on odoriferous substances, of a kind used for the manufacture of beverages: 
-Of a kind used in the food or drink industries 
--Of the type used in the drink industries: 
---Preparations containing all flavouring agents characterising a beverage: 
----Of an actual alcoholic strength by volume exceeding 0,5 % 
----Other: 
-----Containing no milkfats, sucrose, isoglucose, glucose, or starch or containing, by weight, 
less than 1,5 % milkfat, 5 % sucrose or isoglucose, 5 % glucose or starch 
-----Other 

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