Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL repealing Council Regulation (EC) No 552/97 temporarily withdrawing access to generalized tariff preferences from Myanmar/Burma
Date: 2012-09-17
Institutions: European Commission
Subjects: Myanmar/Burma, common commercial policy, generalised preferences, international sanctions, slavery

EUROPEAN COMMISSION 

Brussels, 17.9.2012  
COM(2012) 524 final 

2012/0251 (COD) 

Proposal for a 

REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

repealing Council Regulation (EC) No 552/97 temporarily withdrawing access to 
generalized tariff preferences from Myanmar/Burma 

EN 

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EXPLANATORY MEMORANDUM 

The Generalised Scheme of Tariff Preferences (GSP scheme) is part of the European Union's 
common  commercial  policy,  in  accordance  with  the  general  provisions  governing  the 
European Union's external action. 
Council  Regulation  (EC)  No  732/20081  of  22  July  2008  applying  the  current  GSP  scheme 
("the  current  GSP  Regulation")  provides  that  the  preferential  arrangements  provided  for  in 
this  Regulation  may  be  withdrawn  temporarily,  in  respect  of  all  or  of  certain  products 
originating in a beneficiary country, for the serious and systematic violation of principles laid 
down in fifteen out of the twenty-seven international conventions listed in its Annex, on the 
basis  of  the  conclusions  of  the  relevant  monitoring  bodies.  The  relevant  conventions  also 
cover core labour rights such as forced labour.  

Myanmar/Burma's  access  to  the  GSP  tariff  preferences  was  temporarily  withdrawn  by 
Council Regulation (EC) No 552/972 due to routine and widespread practice of forced labour, 
confirmed  by  the  International  Labour  Organisation  (ILO),  in  a  special  procedure  of  its 
Commission of Inquiry.  

Since  2011,  Myanmar/Burma  has  been  undertaking  a  historic  programme  of  openness  and 
reform as acknowledged by the Council of the EU in its Conclusions of 23 April 20123. The 
Council expressed support for "reinstating the Generalised System of Preferences (GSP) for 
Myanmar/Burma as soon as possible once the required conditions are fulfilled, following the 
assessment of the International Labour Organisation". 

On  13  June  2012,  the  International  Labour  Conference  (ILC)  lifted  restrictions,  which 
excluded the Government of Myanmar/Burma from receiving ILO technical cooperation and 
assistance  and  suspended  for  one  year  the  ILO  request  to  its  members  to  review  their 
relationships  with  Myanmar/Burma  to  ensure  forced  labour  is  not  being  used  in  those 
relationships. 

Accordingly, the violations cannot be any longer considered as "serious and systematic" and 
thus the tariff preferences should be reinstated according to the current GSP Regulation.  
In the absence of explicit reinstatement provisions in the current GSP Regulation, and in light 
of the provisions of the Treaty of Lisbon, the ordinary legislative procedure is applied for the 
adoption of the reinstatement of preferences for Myanmar. This is a one-off procedure aimed 
at responding to a clear and present political need as expeditiously as possible. The new GSP 
Regulation which will apply only as of 1 January 2014 redresses the absence of reinstatement 
provisions. 

The proposed Regulation does not incur costs to the EU budget and its application entails a 
very  limited  loss  of  customs  revenue.  The  actual  loss  of  customs  revenue  resulting  from 
reintegration  of  Myanmar/Burma  is  estimated  at  less  than  €5  million,  as  explained  in  the 
statement  attached,  and  due  to  a  structural  lack  of  production  and  trading  capacity  in  the 
country. 

1 

2 
3 

Council  Regulation  (EC)  No 732/2008  of  22 July  2008  applying  a  scheme  of  generalised  tariff 
preferences for the period from 1 January 2009 to 31 December 2011 and amending Regulations (EC) 
No  552/97,  (EC)  No  1933/2006  and  Commission  Regulations  (EC)  No  1100/2006  and  (EC)  No 
964/2007 (OJ L 211, 6.8.2008, p. 1). 
OJ L 85, 27.3.1997, p. 8. 
9008/12, MCL/aa. 

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2012/0251 (COD) 

Proposal for a 

REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

repealing Council Regulation (EC) No 552/97 temporarily withdrawing access to 
generalized tariff preferences from Myanmar/Burma 

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) 

(4) 

(5) 

Article 1 of Regulation (EC) No 552/974, as amended by Article 28(1) of Regulation 
(EC) 732/2008 applying a scheme of generalised tariff preferences for the period from 
1  January  20095,  provides  that  Myanmar/Burma's  access  to  the  tariff  preferences 
granted by the Regulation (EC) No 732/2008 is temporarily withdrawn. 

Point  (a)  of  Article  15(1)  of  Regulation  (EC)  No  732/2008  provides  that  the 
preferential  arrangements  provided  for  in  this  Regulation  may  be  withdrawn 
temporarily, in respect of all or of certain products originating in a beneficiary country, 
for  the  serious  and  systematic  violation  of  principles  laid  down  in  the  conventions 
listed in Part A of Annex III, on the basis of the conclusions of the relevant monitoring 
bodies.  

The  International  Labour  Organization's  (ILO)  Convention  concerning  Forced  or 
Compulsory Labour, No. 29, (1930) is listed in Annex III, Part A of Regulation (EC) 
No 732/2008.  

According to Article 2 of Regulation (EC) No 552/97, as amended by Article 28(2) of 
Regulation (EC) No 732/2008, the application of Regulation (EC) No 552/97 should 
be  brought  to  the  end  in  the  light  of  a  Commission  report  on  forced  labour  in 
Myanmar/Burma, showing that the practices mentioned in point (a) of Article 15(1) of 
Regulation (EC) No 732/2008 no longer exist. 

On  13  June  2012  the  International  Labour  Conference  (ILC)  adopted  the  Resolution 
‘Concerning the measures on the subject of Myanmar adopted under article 33 of the 
ILO  Constitution’  (‘ILC  resolution’).  Taking  note  of  the  conclusions  adopted  on  4 
June 2012 by the Committee on the Application of Standards (CAS) and considering 
that  maintaining  the  existing  measures  would  no  longer  help  attaining  the  desired 
result,  the  ILC  decided  to  lift  restrictions,  which  excluded  the  Government  of 
Myanmar/Burma  from  receiving  ILO  technical  cooperation  and  assistance.  It  also 

4 
5 

OJ L 085, 27.3.1997, p. 8. 
OJ L 211, 6.8.2008, p. 1.  

EN 

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(6) 

(7) 

(8) 

suspended  for  one  year  the  ILO  request  of  its  members  to  review  their  relationships 
with Myanmar/Burma to ensure forced labour is not being used in those relationships. 

On ….. 2012, the Commission approved a report on forced labour in Myanmar/Burma 
containing  its  findings  (hereinafter  ‘the  Report’).  The  Report  concludes  that  the 
ILO 
progress  made  by  Myanmar/Burma 
recommendations,  which  has  been  acknowledged  by  the  competent  ILO  monitoring 
bodies, justifies that violations of the principles laid down in ILO Convention No 29 
are no longer considered as 'serious and systematic' and recommends that the access to 
generalized tariff preferences should be reinstated to Myanmar/Burma. 

complying  with 

towards 

the 

In view of these conclusions and pursuant to Article 2 of Regulation (EC) No 552/97 
the temporary withdrawal of Myanmar/Burma's access to the tariff preferences granted 
by  Regulation  (EC)  No  732/2008  should  therefore  be  repealed,  as  of  the  date  of  the 
adoption of the ILC resolution. 

The  Commission  should  continue  to  monitor  the  developments  in  Myanmar/Burma 
with respect to forced labour and react to them in accordance with the procedures in 
force, including, if necessary, with renewed withdrawal procedures, 

HAVE ADOPTED THIS REGULATION: 

Council Regulation (EC) No 552/97 is hereby repealed. 

Article 1 

Article 2 

1. 

2. 

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

It shall apply from 13 June 2012. 

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 

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LEGISLATIVE FINANCIAL STATEMENT FOR PROPOSALS HAVING A 
BUDGETARY IMPACT EXCLUSIVELY LIMITED TO THE REVENUE SIDE 

1. 

NAME OF THE PROPOSAL: 

Regulation of the European Parliament and of the Council repealing Council Regulation (EC) 
No  552/97  temporarily  withdrawing  access  to  generalized  tariff  preferences  from 
Myanmar/Burma. 

2. 

BUDGET LINES: 

Chapter and Article: Chapter 12, Article 120 

Amount budgeted for the year concerned: € 19 171 200 000 (B 2012); 
€ 18 631 800 000 (DB 2013)  

3. 

FINANCIAL IMPACT  

The  proposal  has  no  financial  impact  on  expenditure  but  has  a  financial  impact  on 

⌧ 
revenue – the effect is as follows: 

(€ million to one decimal place)  

Budget line 

Revenue6 

6.5 month period, 
starting 13/06/2012

12 month period 
(2013) 

Article 120  

Impact on own resources 

-7.3 

-14.1 

Note: This is a maximum estimate. Taking into account structural constraints which 
limit  export  levels  and  tariff  preference  use,  actual  loss  is  likely  to  be  less  than  €5 
million. 

4. 

… 

5. 

ANTI-FRAUD MEASURES 

OTHER REMARKS  

Myanmar/Burma,  potential  covered  imports  in  2011  and  loss  of  revenue  were  the  GSP 
preferences already reinstated (*€ 1,000) 

GSP  

trade 
Section 

Covered 
Imports 

Revenue under 
MFN7 tariff (A) 

Revenue under EBA 
arrangement8 (B) 

Loss of 
revenue (A-B) 

S-01b 

14,283.1  

1,174.1 

-  

1,174.1 

6 

7 
8 

Regarding  traditional  own  resources  (agricultural  duties,  sugar  levies,  customs  duties)  the  amounts 
indicated must be net amounts, i.e. gross amounts after deduction of 25 % of collection costs 
Most favoured nation status 
Special arrangement for the least-developed countries 

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S-02a 

S-02b 

S-02c 

S-02d 

S-03 

S-04a 

S-04b 

S-06b 

S-07a 

S-08a 

S-08b 

S-09a 

S-09b 

S-10 

S-11a 

S-11b 

S-12a 

S-12b 

S-13 

S-14 

S-15a 

S-15b 

S-16 

S-17b 

S-18 

S-20 

0.3  

10,570.8  

24.6  

3,500.6  

0.1  

2.9  

14.1  

0.6  

131.2  

10.6  

9.5  

17.5  

823.4  

4.0  

4.0  

0.0 

3.4 

0.0 

0.1 

0.0 

0.4 

- 

0.0 

8.5 

0.6 

0.3 

0.0 

30.6 

- 

0.3 

132,516.6  

15,496.5 

3,962.8  

380.7 

22.7  

34.4  

131.1  

0.1  

227.9  

566.4  

143.8  

1.9  

300.4  

0.9 

0.8 

0.0 

0.0 

6.0 

7.7 

3.9 

0.1 

12.1 

6 

EN 

-  

-  

-  

-  

-  

-  

-  

-  

-  

-  

-  

-  

-  

-  

-  

-  

-  

-  

-  

-  

-  

-  

-  

-  

-  

-  

0.0 

3.4 

0.0 

0.1 

0.0 

0.4 

- 

0.0 

8.5 

0.6 

0.3 

0.0 

30.6 

- 

0.3 

15,496.5 

380.7 

0.9 

0.8 

0.0 

0.0 

6.0 

7.7 

3.9 

0.1 

12.1 

   EN 

 
S-21 

Total 

11.0  

- 

167,316.3  

17,127.1 

-  

-  

- 

17,127.1 

Loss of revenue is calculated as follows: 

(Total of Most Favoured Nation duty calculated on covered imports) – (Total of preferential 
duty calculated on preferential trade). 

The  estimated  loss  of  revenue  (calculated  on  the  basis  of  year  2011  trade  flows  and  duty 
collections) for Myanmar/Burma and with a 5% increase per year is (*€ 1,000): 

Year 

2011 

2012 

2013 

2014 

2015 

Total value of imports 

167,316.3  175,682.1  184,466.3   193,689.6   203,374.0 

Maximum preferential import 

N/A 

95,161.1  184,466.3   193,689.6   203,374.0 

Loss of revenue (after deduction of 25% 
of collection costs) 

N/A 

7,305.8  

14,162.0  

14,870.1  

15,613.6  

Note:  This  is  a  maximum  estimate.  Taking  into  account  structural  constraints  which  limit 
export levels and tariff preference use, actual loss is likely to be less than €5 million. 

EN 

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