Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL amending Council Regulation (EC) No 617/2009 opening an autonomous tariff quota for imports of high-quality beef
Date: 2011-06-24
Institutions: European Commission
Subjects: Canada, United States, beef, import (EU), tariff quota

EUROPEAN COMMISSION 

Brussels, 24.6.2011 
COM(2011) 384 final 

2011/0169 (COD) 

Proposal for a 

REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

amending Council Regulation (EC) No 617/2009 opening an autonomous tariff quota for 
imports of high-quality beef 

 
 
  
 
EXPLANATORY MEMORANDUM 

1. 

CONTEXT OF THE PROPOSAL 

•  General context 

The  Panel  and  Appellate  Body  reports  in  European  Communities  —  Measures  Concerning 
Meat  and  Meat  Products  (Hormones)1,  adopted  by  the  World  Trade  Organization  (WTO) 
Dispute  Settlement  Body  (DSB)  on  13 February  1998,  found  that  the  Community  ban  on 
imports  of  meat  and  meat  products  from  cattle  treated  with  certain  hormones  for  growth 
promotion purposes was inconsistent with the Agreement on the Application of Sanitary and 
Phytosanitary  Measures  (SPS  Agreement).  The  United  States  of  America  and  Canada 
requested and obtained authorization from the DSB for the suspension of concessions to the 
Community in the annual amounts of US$116.8 million and CDN$ 11.3 million, respectively. 

Following  the  amendment  of  Council  Directive  96/22/EC  of  29 April  1996  concerning  the 
prohibition on the use in stockfarming of certain substances having a hormonal or thyrostatic 
action and of beta-agonists  by  Directive  2003/74/EC of  the European  Parliament  and of the 
Council of 22 September 2003 the Community brought itself into compliance with the DSB 
rulings  and  recommendations.  However,  the  United  States  and  Canada  considered  that  the 
Union  was  still  in  breach  of  its  WTO  obligations  and  that  therefore  they  could  continue  to 
apply  sanctions.  The  Community  challenged  the  continued  imposition  of  sanctions  in  new 
WTO cases. 

On 31 March 2008, the Panel in United States — Continued Suspension of Obligations in the 
EC — Hormones Dispute and Canada — Continued Suspension of Obligations in the EC — 
Hormones Dispute concluded that the United States and Canada had made certain procedural 
violations. However, it also concluded that the measure found to be inconsistent with the SPS 
Agreement  in  the  EC  —  Hormones  dispute  has  not  been  entirely  removed  by  the  European 
Communities.  

On  16 October  2008  the  Appellate  Body  partly  reversed  the  Panels  findings  on  procedural 
violations and found that certain findings on the alleged failure to remove the measure found 
to  be  inconsistent  with  the  SPS  Agreement  could  not  be  upheld.  The  Appellate  Body 
recommended the DSB to request the United States, Canada and the European Communities 
to  initiate  proceedings  under  Article 21.5  of  the  WTO  Dispute  Settlement  Understanding 
(DSU)  without  delay  in  order  to  resolve  their  disagreement  as  to  whether  the  European 
Communities  has  removed  the  measure  found  to  be  inconsistent  in  EC  —  Hormones  and 
whether  the  application  of  the  suspension  of  concessions  by  the  United  States  and  Canada 
remains legally valid.  

On 22 December 2008 the Community requested and subsequently held consultations in the 
original Hormones cases with United States and Canada under Article 21.5 of the DSU. 

In  parallel,  the  Commission  and  the  United  States  explored  the  possibility  of  finding  a 
solution in this dispute without prejudice to their respective views on the WTO-consistency of 

1 

WT/DS26 and 48. 

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the Union measures in order to bring this long-lasting transatlantic trade dispute to an end. A 
parallel solution was also sought with Canada. 

In  May  2009,  it  was  found  that  a  practical  solution  by  which  the  Union  would  open  an 
additional autonomous tariff rate quota for high-quality beef on a most-favoured-nation basis 
and  the  United  States  would  reduce  the  amount  of  sanctions  would  be  an  expedient  way  of 
improving trading relations and avoiding further escalation of the dispute. 

The relevant Memorandum of Understanding between the United States of America and the 
European  Commission  Regarding  the  Importation  of  Beef  from  Animals  Not  Treated  with 
Certain  Growth-Promoting  Hormones  and  Increased Duties Applied by the United States to 
Certain  Products  of  the  European  Communities  was  endorsed  by  the  Council  by  letter  of 
12 May 2009 and signed in Geneva on 13 May 2009.2 It foresees a three-phased arrangement 
which progressively reduces the level of sanctions imposed by the United States on products 
from the Union, while the Union progressively increases the tariff-rate quota for high-quality 
beef  that  is  not  treated  with  growth  hormones.  The  first-phase  tariff-rate  quota  for  high-
quality beef of 20,000 tonnes was established by Council Regulation (EC) No 617/2009. In a 
second phase, the United States would suspend all remaining sanctions and the Union would 
expand this tariff rate quota by additional 25,000 tonnes. 

On 17 March 2011, the Commission also signed  a Memorandum of Understanding between 
the Government of Canada and the European Commission Regarding the Importation of Beef 
from  Animals  Not  Treated  with  Certain  Growth-Promoting  Hormones  and  Increased  Duties 
Applied  by  Canada  to  Certain  Products  of  the  European  Union.3  This  Memorandum  of 
Understanding brings about the suspension of all sanctions imposed by Canada and stipulates 
the further expansion of the Union autonomous tariff rate quota for high-quality beef by 1,500 
tonnes (first phase) and additional 1,700 tonnes (second phase). The timing foreseen for the 
first  and  second  phases  in  the  US  and  Canada  Memoranda  is  the  same.  It  is  envisaged  in 
particular  that  the  second  phase  would  normally  begin  on  1 August  2012  under  both 
Memoranda. 

•  Grounds for and objectives of the proposal 

In  order  to  be  in  a  position  to  establish  the  above-mentioned  increases  of  the  existing  tariff 
rate  quota  for  high-quality  beef,  to  a  total  of  21,500  tonnes  (first  phase)  and  subsequently, 
48,200 tonnes foreseen in the second phase of both Memoranda of Understanding starting on 
1 August 2012, the legislative procedure needs to be started in a timely manner. 

This is also necessary in order to follow the Resolution adopted by the European Parliament 
on  8 March  2011  calling  on  the  Commission  to  ensure  that  the  settlement  of  the  'beef 
hormones'  dispute  will  allow  for  the  suspension  of  the  sanctions  on  EU  products,  while 
guaranteeing that beef imports to the EU will be in line with EU requirements.4 

2 
3 
4 

Document WT/DS26/28 of 30 September 2009. 
Document WT/DS48/26 of 22 March 2011. 
European  Parliament  resolution  of  8 March  2011  on  EU  Agriculture  and  international  trade, 
2010/2110(INI). 

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2. 

LEGAL ELEMENTS OF THE PROPOSAL 

•  Summary of the proposed action 

The purpose of this proposal is to request the European Parliament and the Council to amend 
the existing Regulation opening an autonomous tariff quota for imports of high-quality beef, 
in order to implement the steps set out in the Memoranda of Understanding signed with the 
United States of America and Canada, respectively. 

Moreover,  the  amendment  introduces  necessary  alignment  of  Commission  implementing 
powers with the Treaty of Lisbon. 

•  Legal basis 

Article 207 of the Treaty on the Functioning of the European Union. 

•  Subsidiarity Principle 

The proposal falls under exclusive competence of the Union, Article 3(1)(e) of the Treaty on 
the Functioning of the European Union. The subsidiarity principle therefore does not apply. 

•  Proportionality Principle 

The proposal complies with the proportionality principle. 

•  Choice of instruments 

Proposed instrument: Regulation of the European Parliament and of the Council.  

Other means would not be adequate for the following reason: a Regulation must be amended 
by a Regulation. 

3. 

BUDGETARY IMPLICATIONS 

The customs duty of this tariff-rate quota would remain fixed at zero. Depending on the future 
beef market situation, imports of high-quality beef may therefore no longer be shipped using 
the existing quota set up by Regulation (EC) No 810/2008 or out-of-quota. This may imply a 
loss of own resources of the Union (see Financial Statement). 

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2011/0169 (COD) 

Proposal for a 

REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

amending Council Regulation (EC) No 617/2009 opening an autonomous tariff quota for 
imports of high-quality beef 

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 
Article 207 thereof, 

Having regard to the proposal from the European Commission, 

After transmission of the draft legislative act to the national Parliaments, 

Acting in accordance with the ordinary legislative procedure, 

Whereas: 

(1) 

(2) 

(3) 

A  Memorandum  of  Understanding  between  the  United  States  of  America  and  the 
European Commission Regarding the Importation of Beef from Animals Not Treated 
with  Certain  Growth-Promoting  Hormones  and  Increased  Duties  Applied  by  the 
United States to Certain Products of the European Communities was endorsed by the 
Council by letter of 12 May 2009 and signed in Geneva on 13 May 2009. The aim of 
that  Memorandum  of  Understanding  is  to  settle  the  long-standing  WTO  dispute 
between  the  European  Union  and  the  United  States  of  America  on  Beef  Hormones, 
European  Communities  —  Measures  Concerning  Meat  and  Meat  Products 
(Hormones) (DS 26). 

The  Government  of  Canada  and  the  European  Commission  have  reached  an 
understanding, as documented in a Memorandum of Understanding signed in Geneva 
on  17 March  2011  on  a  roadmap  of  steps  to  take  regarding  imports  of  High  Quality 
Beef into the European Union and the level of increased duties applied by Canada to 
certain  Union  products  in  connection  with  the  WTO  dispute  European  Communities 
— Measures Concerning Meat and Meat Products (Hormones) (DS 48). 

Both  Memoranda  provide  for  three-phased  arrangements  which  reduce  the  level  of 
sanctions imposed by the United States and Canada on products from the Union. The 
Union  progressively  increases  the  tariff-rate  quota  for  high-quality  beef  that  is  not 
treated with growth hormones and fully complies with other EU import requirements. 

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(4) 

(5) 

(6) 

(7) 

(8) 

Following the signature of the Memorandum of Understanding with the United States, 
Council  Regulation  (EC)  No  617/20095  opened  an  annual  Community  import  tariff 
quota  of  20 000  tonnes  (first  phase),  expressed  in  product  weight  for  high-quality 
fresh,  chilled  or  frozen  beef  covered  by  CN  codes  0201,  0202,  0206 10 95  and 
0206 29 91. 

The  Memorandum  of  Understanding  with  the  Government  of  Canada  envisages  an 
increase of the initial quantity of 20 000 tonnes by 1 500 tonnes. It also envisages that 
Canada  lifts  all  remaining  sanctions  immediately  after  the  signature  of  the 
Memorandum of Understanding. 

The timetable set by the Memorandum of Understanding with the United States plans 
to increase the quantity of that tariff quota by 25 000 tonnes, once both Parties enter 
the  second  phase  of  the  Memorandum  of  Understanding,  which  entails  lifting  the 
remaining sanctions currently imposed by the United States. 

The  timetable  set  by  the  Memorandum  of  Understanding  with  the  Government  of 
Canada envisages an increase of the quantity of that tariff quota by 3 200 tonnes, once 
both Parties enter the second phase of the Memorandum of Understanding. 

In order to ensure uniform conditions for the implementation of Regulation (EC) No 
617/2009,  implementing  powers  should  be  conferred  on  the  Commission.  In 
particular, the Commission should be empowered to suspend the tariff quota, in whole 
or in part, if the steps planned in either Memorandum are not taken or maintained by 
the  United  States  or  Canada.  Those  powers  should  be  exercised  in  accordance  with 
Regulation  (EU)  No  182/2011  of  the  European  Parliament  and  of  the  Council  of  16 
February  2011  laying  down  the  rules  and  general  principles  concerning  mechanisms 
for control by Member States of the Commission’s exercise of implementing powers6.  

(9) 

Regulation (EC) No 617/2009 should therefore be amended accordingly, 

HAVE ADOPTED THIS REGULATION: 

Article 1 

Regulation (EC) No 617/2009 is amended as follows: 

(1) 

Article 1 is amended as follows: 

(a)  Paragraph 1 is replaced by the following: 

‘1.  An  annual  Union  import  tariff  quota  of  21 500  tonnes,  expressed  in 
product weight, with order No 09.4449, is hereby opened for high-quality 
fresh,  chilled  or  frozen  beef  covered  by  CN  codes  0201,  0202, 
0206 10 95 and 0206 29 91.’ 

(b)  The following paragraph 1a is inserted: 

5 
6 

OJ L 182, 15.7.2009, p. 1. 
OJ L 55, 28.2.2011, p. 13. 

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‘1a.  As of 1 August 2012, the annual Union import tariff quota referred to in 
paragraph  1  shall  be  increased  to  48 200  tonnes,  expressed  in  product 
weight.’ 

(2) 

Article 2 is replaced by the following: 

‘Article 2 

1. 

2. 

The  tariff  rate  quota  referred  to  in  Article  1  shall  be  managed  by  the 
Commission in accordance with the procedure referred to in Article 2a(2). 

The application of the tariff quota referred to in Article 1 may be suspended by 
the Commission, in whole or in part, in the event that either the United States 
or Canada do not take the steps planned in the Memorandum of Understanding 
between  the  United  States  and  the  European  Commission*  or  in  the 
Memorandum  of  Understanding  between  the  Government  of  Canada  and  the 
in 
European  Commission**,  respectively.  The  Commission  shall  act 
accordance with the procedure referred to in Article 2a(2). 

-------------- 

*  Memorandum  of  Understanding  between  the  United  States  of  America 
and  the  European  Commission  Regarding  the  Importation  of  Beef  from 
Animals  Not  Treated  with  Certain  Growth-Promoting  Hormones  and 
Increased Duties Applied by the United States to Certain Products of the 
European  Communities,  endorsed  by  the  Council  by  letter  of  12 May 
2009 and signed in Geneva on 13 May 2009. 

**  Memorandum of Understanding between the Government of Canada and 
the  European  Commission  Regarding  the  Importation  of  Beef  from 
Animals  Not  Treated  with  Certain  Growth-Promoting  Hormones  and 
Increased Duties Applied by Canada to Certain Products of the European 
Union, signed in Geneva on 17 March 2011.’ 

(3) 

The following Article 2a is inserted: 

'Article 2a 

1. 

The  Commission  shall  be  assisted  by  the  Management  Committee  for  the 
Common  Organisation  of  Agricultural  Markets  set  up  by  Article  [195(1)]  of 
[Regulation (EC) No 1234/2007].[1234R2007 is currently being recast] 

2.  Where  reference  is  made  to  this  paragraph,  Article  5  of  Regulation  (EU)  No 

182/2011 shall apply.' 

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

Article 2 

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

Done at […],  

For the European Parliament 
The President 

For the Council 
The President   

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1. 

2. 

3. 

4. 

5. 

5.0 

FINANCIAL STATEMENT 

BUDGET HEADING: 
Chapter 12 – Custom duties and other duties  

DATE: 23/05/2011 
APPROPRIATIONS: 
DB2012 : 19 171.2 

TITLE: 
Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 
amending Council Regulation (EC) No 617/2009 opening an autonomous tariff quota for imports of high-
quality beef 

LEGAL BASIS: 
Article 207 of the Treaty on the Functioning of the European Union 

AIMS: 
Opening and modifying the autonomous import tariff quota for high-quality fresh, chilled or frozen beef  

FINANCIAL IMPLICATIONS 

CHARGED TO THE EC BUDGET 

EXPENDITURE 
- 
(REFUNDS/INTERVENTIONS) 
- 
- 

NATIONAL AUTHORITIES 
OTHER 

12 MONTH 
PERIOD 

(EUR million) 
- 

CURRENT 
FINANCIAL 
YEAR 
2011 
(EUR million) 
- 

FOLLOWING 
FINANCIAL YEAR 
2012 
(EUR million) 

- 

5.1  REVENUE 

- 
(LEVIES/CUSTOMS DUTIES) 

OWN RESOURCES OF THE EC  

5.0.1  ESTIMATED EXPENDITURE 
5.1.1  ESTIMATED REVENUE 
5.2  METHOD OF CALCULATION: 

- 

-  

- 4.6  

2013 
- 
- 

2014 
- 
- 

2015 
- 
- 

2016 
- 
- 

6.0  CAN THE PROJECT BE FINANCED FROM APPROPRIATIONS ENTERED IN THE 

YES NO 

RELEVANT CHAPTER OF THE CURRENT BUDGET? 

6.1  CAN THE PROJECT BE FINANCED BY TRANSFER BETWEEN CHAPTERS OF 

YES NO 

THE CURRENT BUDGET? 

6.2  WILL A SUPPLEMENTARY BUDGET BE NECESSARY? 
6.3  WILL APPROPRIATIONS NEED TO BE ENTERED IN FUTURE BUDGETS? 

YES NO 

YES NO 

OBSERVATIONS: 
The measure aims to modify the annual autonomous tariff quota for imports of high-quality beef in the context of 
the  EU-US  and  the  EU-Canada  Memoranda  of  Understanding  on  "beef  hormones".  This  quota  was  initially 
established  by  Council  Regulation  (EC)  No  617/2009.  It  increases  the  tariff  quota  by  1.500  tonnes  in  the  first 
phase following the EU-Canada MoU. In the second phase (from August 2012) an increase of the tariff quota by 
26.700 tonnes is foreseen, as envisaged by the EU-US MoU and the EU-Canada MoU. 
The custom duty is fixed at 0. The increase in the quota from 20.000 tonnes to 48.200 tonnes would at a very high 
degree consist of quantities that would not have been imported without this tariff quota. However, it could, for a 
potential limited marginal quantity, replace existing quantities imported with full import duty. The exact quantities 
are difficult to quantify at this stage. Under the assumption that up to a maximum of 5% of the new supplementary 
quota should replace existing quantities imported, assuming prices for boneless meat at 10.000€/t and using MFN 
duty  rates,  the  maximum  loss  of  impact  would  be  approximately  4.6  €  M  €  net  amount  after  deduction  of 
collection costs for MS*. 
*(5% x 28.200) x (10.000€/t x 12.8%+3.034€/t)= 6.08 M €. Net after collection cost 25%: 6.08 M € x (1 -25%)= 
4.6 M € 

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