Proposal for a COUNCIL DECISION on the conclusion of the Agreements in the form of an Exchange of Letters between the European Union and the Commonwealth of Australia, the Federative Republic of Brazil, Canada, the Hong Kong Special Administrative Region of the People’s Republic of China, the Republic of India and Japan pursuant to Article XXI of the General Agreement on Trade in Services (GATS) 1994, relating to the modifications of the commitments in the schedules of the Republic of Bulgaria and Romania in the course of their accession to the European Union
Date: 2013-10-08
Institutions: European Commission
Subjects: Australia, Brazil, Bulgaria, Canada, GATS, Hong Kong, India, Japan, Romania, World Trade Organisation, accession to the European Union, signature of an agreement













EUR-Lex - 52013PC0688 - EN











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52013PC0688

ANNEX to the PROPOSAL FOR A COUNCIL DECISION on the conclusion of the Agreements in the form of an Exchange of Letters between the European Union and the Commonwealth of Australia, the Federative Republic of Brazil, Canada, the Hong Kong Special Administrative Region of the People’s Republic of China, the Republic of India and Japan pursuant to Article XXI of the General Agreement on Trade in Services (GATS) 1994, relating to the modifications of the commitments in the schedules of the Republic of Bulgaria and Romania in the course of their accession to the European Union /* COM/2013/0688 final */









EXPLANATORY MEMORANDUM
1.           CONTEXT OF THE PROPOSAL
Each Member of the Word Trade Organisation
(WTO) has annexed to the General Agreement on Trade in Services (hereinafter
called: GATS) a list of specific commitments which includes the conditions of
market access and national treatment for each service sector and, where
applicable, of exemptions to the Most-Favoured Nation clause.
The European Communities and its Member States at the time submitted at the end of the Uruguay Round (1994), a single
schedule of commitments and of MFN exemptions, which reflected their
obligations vis-à-vis third countries (EC-12). 
In 2003, the European Communities[1] launched the consolidation of
the EC-12 GATS schedule and of the 13 separate GATS schedules of the EC Member
States that joined the EC in 1995 and 2004 (i.e., the Republic of Austria, the Republic of Cyprus, the Czech Republic, the Republic of
Estonia, the Republic of Finland, Hungary, the Republic of Latvia, the Republic
of Lithuania, the Republic of Malta, the Republic of Poland, the Slovak
Republic, the Republic of Slovenia and the Kingdom of Sweden).
The negotiations with WTO Members and the
certification process of the new EC-25 GATS schedule were concluded at the end
of 2006. The conclusion of the agreements signed with the different affected
WTO Members is underway (awaiting ratification in five Member States).
Following the accession of the Republic of Bulgaria
and Romania to the EU, their GATS schedules have to be consolidated with that
of the EU-25 and the process of consolidation of the certified EU-25 GATS
schedule and of schedules of the Republic of Bulgaria and Romania has been
launched (EU-27).
With
a Communication pursuant to Article V of the GATS (circulated as document
S/SECRET/11, dated 30 October 2007, and S/SECRET/11/Corr.1, dated 26 November
2007), the European Communities and its Member States notified its intention to
modify the commitments included in the list of commitments attached to the Communication
in view of the accession of the Republic of Bulgaria and Romania to the EU (“EU
27”).
On 31 January 2008, the Council authorised
the Commission to open negotiations with certain other Members of the WTO under
Article XXI of the General Agreement on Trade in Services (GATS) 1994, with a
view of reaching an agreement on any necessary compensatory adjustment
resulting from the modification of GATS trade commitments as a consequence of
the accession of the Republic of Bulgaria and Romania to the European Union. 
Following
the submission of that Communication, the Commonwealth of Australia, the Federative Republic of Brazil, Canada, the People’s Republic of China, the Republic of India, the Hong Kong Special Administrative
Region of the People’s Republic of China, Japan and the United Mexican States[2] submitted respective claims of
interest.
Pursuant to paragraph 4 of the procedures
for the implementation of Article XXI of the GATS (S/L/80), the modifying
Member and any Member considering itself affected shall negotiate with a view
to reaching an agreement within three months following the last date on which a
claim of interest may be made. 
Negotiations with the Commonwealth of Australia, the Federative Republic of Brazil, Canada, the
Republic of India, the Hong Kong Special Administrative Region of the People’s
Republic of China and Japan resulted in the draft Agreements in the form of an
Exchange of Letters that were initialled by the EU side on XXXX [date to be
added later] and by the Commonwealth of
Australia, the Federative Republic of Brazil, Canada, the Republic of India,
Hong Kong Special Administrative Region of the People’s Republic of China and
Japan side on XXXX [date to be added later].
2.           RESULTS OF CONSULTATIONS
WITH THE INTERESTED PARTIES AND IMPACT ASSESSMENTS
Negotiations have been conducted by the
Commission within the framework of the negotiating directives issued by the
Council[3].
The Council (TPC) and the European Parliament (INTA) were informed of the text
of the draft Agreements prior to being initialled.
3.           LEGAL ELEMENTS OF THE
PROPOSAL
This proposal asks the Council to adopt a
decision concluding the Agreements in the form of an Exchange of Letters with the
Commonwealth of Australia, the Federative Republic of
Brazil, Canada, the Hong Kong Special Administrative Region of the People’s
Republic of China, the Republic of India and Japan.
In parallel, a separate proposal on the
signature of these Agreements is also submitted.
Once the Council Decision on the conclusion
of these Agreements is adopted, the Commission will launch the certification
procedure provided for by the applicable WTO rules.
2013/0329 (NLE)
Proposal for a
COUNCIL DECISION
on the conclusion of the Agreements in the
form of an Exchange of Letters between the European Union and the Commonwealth
of Australia, the Federative Republic of Brazil, Canada, the Hong Kong Special
Administrative Region of the People’s Republic of China, the Republic of India
and Japan pursuant to Article XXI of the General Agreement on Trade in Services
(GATS) 1994, relating to the modifications of the commitments in the schedules
of the Republic of Bulgaria and Romania in the course of their accession to the
European Union 
THE COUNCIL OF THE EUROPEAN UNION, 
Having regard to the Treaty on the
Functioning of the European Union, and in particular Article 207(1) and the
first subparagraph of Article 207(4), in conjunction with Article 218(6)(a)
thereof, 
Having regard to the proposal from the
European Commission, 
Having regard to the consent of the European Parliament,
Whereas: 
(1)       On 31 January 2008, the
Council authorised the Commission to open negotiations with certain other
Members of the World Trade Organisation under Article XXI of the General
Agreement on Trade in Services (GATS) 1994, with a view to reaching an agreement
on any necessary compensatory adjustment resulting from the modification of
GATS trade commitments as a consequence of the accession of the Republic of
Bulgaria and Romania to the European Union. 
(2)       Negotiations have been
conducted by the Commission within the framework of the negotiating directives
adopted by the Council. 
(3)       These negotiations have
been concluded and the Agreements in the form of an Exchange of Letters between
the European Union and Commonwealth of Australia,
the Federative Republic of Brazil, Canada, the Hong Kong Special Administrative
Region of the People’s Republic of China, the Republic of India and Japan
pursuant to Article XXI of the General Agreement on Trade in Services (GATS)
1994, relating to the modification of commitments in the schedules of the
Republic of Bulgaria and Romania in the course of their accession to the
European Union (‘the Agreements’) were initialled by a representative of the
European Union on XXXX and by a representative of the Commonwealth of Australia, the Federative Republic of Brazil, Canada, the Hong
Kong Special Administrative Region of the People’s Republic of China, the
Republic of India and Japan on XXXXX, respectively. 
(4)       The Agreements were signed
on behalf of the European Union on […], subject to its conclusion at a later
date, in accordance with Council Decision […][4].
(5)       The Agreements should be
approved,
HAS ADOPTED THIS DECISION: 
Article 1
The Agreements in the form of an Exchange
of Letters between the European Union and the Commonwealth of Australia, the Federative Republic of Brazil, Canada, the Hong
Kong Special Administrative Region of the People’s Republic of China, the
Republic of India and Japan pursuant to Article XXI of the General Agreement on
Trade in Services (GATS) 1994, relating to the modification of commitments in the schedules of the Republic of Bulgaria and Romania in the course of their
accession to the European Union (‘the Agreements’) are hereby approved on
behalf of the Union.
The text of the Agreements is annexed to
this Decision.
Article 2
The President of the Council is hereby
authorised to designate the person(s) empowered to give, on behalf of the Union, the notification provided for in the Agreements[5].
Article 3
This Decision shall enter into force on the
date of its adoption. 
Done at Brussels,
                                                                       For
the Council
                                                                       The
President
[1]               Now: European Union (EU)
[2]               Mexico and China withdrew their claims later.
[3]               5291/08 dated 31 January 2008
[4]               OJ L […], […], p. […].
[5]               The date of entry into force of the Agreements will
be published in the Official Journal of the European Union by the General
Secretariat of the Council.
ANNEX
to the
PROPOSAL FOR A COUNCIL DECISION
on the conclusion of the
Agreements in the form of an Exchange of Letters between the European Union and
the Commonwealth of Australia, the Federative Republic of Brazil, Canada, the
Hong Kong Special Administrative Region of the People’s Republic of China, the
Republic of India and Japan pursuant to Article XXI of the General Agreement on
Trade in Services (GATS) 1994, relating to the modifications of the commitments
in the schedules of the Republic of Bulgaria and Romania in the course of their
accession to the European Union
AGREEMENT
IN THE FORM OF AN EXCHANGE OF LETTERS
between the European Union and XXXXX
pursuant to Article XXI of the General Agreement on Trade in Services (GATS)
1994 relating to the modification of commitments in the schedules of the
Republic of Bulgaria and Romania in the course of their accession to the
European Union
A.
Letter from the European Union
Place,
date
Sir, 
Following negotiations under Article XXI of the General Agreement on
Trade in Services (GATS) 1994 relating to the modification of the Schedules of
the Republic of Bulgaria and Romania in the course of their accession to the
European Union, I have the honour to send you the attached joint letter as well
as the draft report on the result of the negotiations conducted in accordance
of Article XXI:2(a) of the GATS.
The report includes two annexes: (1)
modifications proposed in the notifications and (2) the elements agreed on the
compensation package.
I should be obliged if you would confirm
that your Government is in agreement with the content of this letter. I have
the honour to propose that, should this be the case, this letter and your
confirmation shall together constitute an Agreement in the form of an Exchange
of Letters between the European Union and XXXXX (the ‘Agreement’).
Should you agree, I would propose that you
also sign the joint letter and initial the report annexed to this letter and
return these documents, which I would then sign and initial and send to the WTO
Secretariat, according to the WTO procedures.
Please accept, Sir, the assurance of my
highest consideration.
For
the European Union
B.
Letter from XXXXX
Place,
date
Sir, 
I have the honor to acknowledge the receipt
of your letter of …, which reads as follows:
“Following negotiations under Article XXI of the General Agreement
on Trade in Services (GATS) 1994 relating to the modification of the Schedules
of the Republic of Bulgaria and Romania in the course of their accession to the
European Union, I have the honour to send you the attached joint letter as well
as the draft report on the result of the negotiations conducted in accordance
of Article XXI:2(a) of the GATS.
The report includes two annexes: (1)
modifications proposed in the notifications and (2) the elements agreed on the
compensation package.
I should be obliged if you would confirm
that your Government is in agreement with the content of this letter. I have
the honour to propose that, should this be the case, this letter and your
confirmation shall together constitute an Agreement in the form of an Exchange
of Letters between the European Union and XXXXX (the ‘Agreement’).
Should you agree, I would propose that
you also sign the joint letter and initial the report annexed to this letter
and return these documents, which I would then sign and initial and send to the
WTO Secretariat, according to the WTO procedures.”
I hereby have the honor to express my
Government's agreement with the above letter.
Please accept, Sir, the assurance of my
highest consideration.
On
behalf of XXXXX
Joint
letter
from
the European Union on the one part, and XXXXX, on the other part, pursuant to
paragraph 5 of the Procedures for the implementation of Article XXI of the
General Agreement on Trade in Services (GATS) (S/L/80 of 29 October 1999)
relating to the modifications proposed in the GATS Schedules of the European
Union (hereafter the EU) to take account of the accession of the Republic of
Bulgaria and Romania to the European Union
On 22 October 2007, the European Union (“EU”)
submitted a Communication pursuant to Article V of the GATS (circulated as
document S/SECRET/11, dated 30 October 2007[1]),
whereby it notified its intention to modify the specific commitments included
in the list attached to the Communication, pursuant to Article V:5 of the GATS
and in accordance with the terms of Article XXI:1(b) of the GATS. 
Following the submission of the
Communication, XXXXX submitted its claim of interest pursuant to Article
XXI:2(a) of the GATS (XXXXX). The EU and XXXXX entered into negotiations
pursuant to Article XXI:2(a) of the GATS with regard to S/SECRET/11.
With regard to the procedure initiated by
the notification contained in document S/SECRET/11, the initial period for the
negotiations, which expired on 14 March 2008, was extended (by mutual
agreement) thirteen times ((until 25 April 2008, until 6 June 2008, until 6
October 2008, until 9 January 2009, until 27 March 2009, until 26 June 2009, until
31 January 2010, until 30 September
2010, until 30 June 2011, until 29 June 2012, until 15 January 2013, until
15 July 2013 and finally until 15 January 2014)). Following such negotiations,
the EU and XXXXX have agreed on compensatory adjustments related to the
modifications contained in document S/SECRET/11. 
The Report on the result of these
negotiations, which is attached to this letter, includes (1) the proposed
modifications in the notification referred to above and (2) the agreed
compensatory adjustments with regard to the modifications notified in
S/SECRET/11. 
This letter and the Annex I and II of the
report attached to it constitute the agreement between the EU and XXXXX with
regard to S/SECRET/11 for purposes of Article XXI:2(a) of the GATS and the
procedures contained in paragraphs 5 and 6 of S/L/80.[2] The agreement shall not be
interpreted as modifying the Lists of Article II Exemptions of the EU. The
agreement shall not be interpreted as affecting the Parties' rights and
obligations under Article VIII of the GATS. 
In order to comply with the procedures
referred to in paragraphs 20 to 22 of S/L/80 the EU will, upon the completion
of the EU's relevant internal approval procedures, circulate through the
Secretariat for certification the modifications and compensatory adjustments
set out in this agreement in the form of a draft consolidated schedule. This
draft schedule will result from merging existing schedules of commitments of
the EU and from inserting therein both the modifications of commitments
notified by the EU under document S/SECRET/11 and the compensatory adjustments
agreed between the EU and XXXXX. 
Pursuant to
paragraph 20 of S/L/80, the certified schedule will enter into force upon the
conclusion of a period of 45 days from the date of circulation, provided no
objection has been raised by a Member on a ground that the draft schedule does
not correctly reflect the results of the action under Article XXI and/or that
the modifications contained in the draft schedule exceed those initially
notified. As a result, the modifications proposed in document S/SECRET/11 shall
not enter into force until all of the compensatory adjustments indicated in
Annex II have entered into force.   
This Agreement is drawn up in duplicate in the English,
French and Spanish, each of these texts being equally authentic.
 Permanent Mission of the European Union to the World Trade Organisation || Permanent Mission of XXXX to the World Trade Organisation 
 Done at: || Done at: 
 Date: || Date: 
Report

on
the result of the negotiations conducted in accordance of Article XXI:2(a) of
the General Agreement on Trade in Services (GATS) relating to the modifications
proposed in the GATS Schedules of the European Union (hereinafter the EU) to
take account of the accession of the Republic of Bulgaria and Romania to the
European Union, 
Pursuant to paragraph 5 of the Procedures
for the implementation of Article XXI of the GATS (S/L/80 of 29 October 1999),
the EU submits the following report:
1.           On 22 October 2007, the EU
submitted a Communication pursuant to Article V of the GATS (circulated as
document S/SECRET/11, dated 30 October 2007[3]),
whereby it notified its intention to modify the specific commitments included
in the list attached to the Communication, pursuant to Article V:5 of the GATS
and in accordance with the terms of Article XXI:1(b) of the GATS. 
2.           XXXXX submitted its claim
of interest pursuant to Article XXI:2(a) of the GATS (XXXXX). The EU and XXXXX entered
into negotiations pursuant to Article XXI:2(a) of the GATS with regard to
S/SECRET/11.
3.           With regard to the
procedure initiated by the notification contained in document S/SECRET/11, the
initial period for the negotiations, which expired on 14 March 2008, was
extended (by mutual agreement) thirteen times (until 25 April 2008, until 6
June 2008, until 6 October 2008, until 9 January 2009, until 27 March 2009, until 26 June 2009, until
31 January 2010, until 30 September
2010, until 30 June 2011, until 29 June 2012, until 15 January 2013, until
15 July 2013 and finally until 15 January 2014). 
4.           Following such
negotiations, the EU and XXXXX have agreed on compensatory adjustments related
to the modifications contained in document S/SECRET/11. Annex I and II of this
report, together with the joint letter to which it is attached, constitute the
agreement between the EU and XXXXX with regard to S/SECRET/11 for the purposes
of Article XXI:2(a) of the GATS.[4]
This agreement shall not be interpreted as modifying the lists of Article II
Exemptions of the EU. This agreement shall not be interpreted as affecting the
Parties' rights and obligations under Article VIII of the GATS. 
5.           In view of the foregoing,
the proposed modifications and the agreed compensatory adjustments are
incorporated into the EU's draft GATS consolidated schedule, which results from
merging existing schedules of commitments of the EU and from inserting therein
both the modifications of commitments notified by the EU under document
S/SECRET/11 and the compensatory adjustments agreed between the EU and XXXXX.
6.           In order to comply with
the procedures referred to in paragraphs 20 to 22 of S/L/80 the EU will, upon
the completion of the EU's relevant internal approval procedures, circulate
through the Secretariat for certification the modifications and compensatory
adjustments set out in this agreement in the form of a draft consolidated schedule.
This draft schedule will result from merging existing schedules of commitments
of the EU and from inserting therein both the modifications of commitments
notified by the EU under document S/SECRET/11 and the compensatory adjustments
agreed between the EU and XXXXX. 
7.           Pursuant to paragraph 20
of S/L/80, the certified schedule will enter into force upon the conclusion of
a period of 45 days from the date of circulation, provided no objection has
been raised by a Member on a ground that the draft schedule does not correctly
reflect the results of the action under Article XXI and/or that the
modifications contained in the draft schedule exceed those initially notified.
As a result, the modifications proposed in document S/SECRET/11 shall not enter
into force until all of the compensatory adjustments indicated in Annex II have
entered into force. 
ANNEX
I
Modifications notified in document S/SECRET/11: 
Horizontal Commitments
1.           Market access: “ All EC
Member States: services considered as public utilities at a national or local
level may be subject to public monopolies or to exclusive rights granted to
private operators[5]”.
This entry was not included in the schedule of specific commitments of Bulgaria and Romania. This limitation now applies to all Member States.
2.           National treatment
limitations on branches, agencies and representative offices under mode 3:
"All EC Member States: Treatment
accorded to subsidiaries (of third country companies) formed in accordance with
the law of a Member State and having their registered office, central
administration or principal place of business within the Communities is not
extended to branches or agencies established in a Member State by a third‑country
company. However, this does not prevent a Member State from extending this
treatment to branches or agencies established in another Member State by a third‑country company or firm, as regards their operation in the first Member State's territory, unless such extension is explicitly prohibited by Community law[6])". This entry was not included in the
schedule of specific commitments of Bulgaria and Romania. This limitation now applies
to all Member States.
3.           National treatment
limitations on subsidiaries under mode 3: "All Member States: Treatment less favourable may be accorded to
subsidiaries (of third‑country companies) formed in accordance with the
law of a Member State which have only their registered office in the territory
of the Communities, unless it can be shown that they possess an effective and
continuous link with the economy of one of the Member States[7]).". This entry was not included in the
schedule of specific commitments of Bulgaria and Romania. This limitation now applies
to all Member States.
4.           National treatment
limitations on subsidies under mode 3: " All
Member States except HU, PL: Eligibility for subsidies from the European
Communities or Member States may be limited to juridical persons established
within the territory of a Member State or a particular geographical sub‑division
thereof. Unbound for subsidies for research and development. The supply of a
service, or its subsidisation, within the public sector is not in breach of
this commitment.
All Member States except AT, BG, CY, CZ, EE,
FI, HU, LT, LV, MT, PL, SE and SK: Unbound for branches established in a Member State by a non‑Community company.
HU, PL: Unbound".
The schedule of specific commitments of Bulgaria and Romania did not include the limitation on subsidies under mode 3 inscribed in the
schedule of the EC and its Member States. This limitation is now extended to
these Member States. 
5.           National treatment
limitations on subsidies under mode 4: "All
Member States except AT, PL: to the extent that any subsidies are made
available to natural persons, their availability may be limited to nationals of
a Member State of the Communities. AT, PL: Unbound." The schedule
of specific commitments of Romania did not include
the limitation on subsidies under mode 4 inscribed in the schedule of the EC
and its Member States. This limitation is now extended to this Member State.
ANNEX
II
COMPENSATION BY THE EC 
–                        
Telecommunication services 
–              
Alignment of the commitments of Bulgaria and Romania with those of the EC-25;
–                        
Financial services 
–              
Improvement of the commitments of Bulgaria and Romania in the insurance sector as following:
For Bulgaria:
Financial services
A. Insurance and Insurance-Related
services 
Mode 3: delete the 5 years requirement for
foreign branches: 
For Romania:
Financial services
A. Insurance and Insurance-Related
services Reinsurance and retrocession 
Mode 1) and 2)
None, delete limitation "except that reinsurance on international market
is allowed only if the reinsured risk cannot be placed on domestic market.” 
The
following abbreviations are used to indicate the Member States:
             AT             Austria 
             BE              Belgium
             BG              Bulgaria
             CY              Cyprus
             CZ              Czech
Republic     
             DE              Germany
             DK             Denmark
             EE               Estonia

             EL               Greece

             ES               Spain
             FI                Finland

             FR              France
             HU             Hungary

             IE                Ireland
             IT               Italy
             LT              Lithuania

             LU              Luxembourg
             LV              Latvia
             MT             Malta
             NL              The
  Netherlands  
             PL               Poland 
             PT              Portugal
             RO              Romania
             SE               Sweden
             SI                Slovenia
             SK              Slovak Republic
             UK             United Kingdom
[1]               Corrigendum circulated as document
S/SECRET/11/corr.1, dated 26 November 2007
[2]               This agreement shall not be interpreted to prejudge the
outcome of separate discussions within the WTO concerning the classification of
telecommunication services (basic telecommunications and value-added services).

[3]               Corrigendum circulated as document
S/SECRET/11/corr.1, dated 26 November 2007
[4]               This agreement shall not be interpreted to prejudge
the outcome of separate discussions within the WTO concerning the
classification of telecommunication services (basic telecommunications and
value-added services). 
[5]               Explanatory Note:
Public utilities exist in sectors such as related scientific and technical
consulting services, R&D services on social sciences and humanities,
technical testing and analysis services, environmental services, health
services, transport services and services auxiliary to all modes of transport.
Exclusive rights on such services are often granted to private operators, for
instance operators with concessions from public authorities, subject to
specific service obligations. Given that public utilities often also exist at
the sub-central level, detailed and exhaustive sector-specific scheduling is
not practical. This limitation does not apply to
telecommunications and to computer and related services.
[6]               With regard to Austria it applies also to modes 1 and
4.
[7]               With regard to Austria it applies also to modes 1 and
4.