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COMVIISSION OF THE EUROPEAN COMMUNITIES

C 0 M ( 9 4 ) 4 14 f i n a I

# **URUGUAY ROUND** **IMPLEMENTING** **LEGISLATION**

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         (presented by the Coaalssion)

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94/ 0225(ACC)
94/ 0226(ACC)
94/ 0227(ACC)
94/ 0228(CNS)
94/ 0229(C0D)
94/ 0230(ACC)
94/ 023KACC)
94/ 0232(ACC)

94/ 0233(ACC)

94/ 0234(CNS)

```

_**1**_

**Parti**

**Central Implementation Act**

EXPLANATORY MEMORANDUM

I **Political aspects**

1. Background

The European Community is one of the participating parties in the negotiations making
up the eighth round of multilateral trade negotiations held under the auspices of the
General Agreement on Tariffs and Trade (GATT). The Uruguay Round negotiations, as
they were known, were concluded by the Trade Negotiations Committee in Geneva on
15 December 1993. The Final Act embodying the results of the Uruguay Round
multilateral trade negotiations (hereinafter the Final Act) was formally signed on behalf
of the Community by the President of the Council, Mr Pangalos, and Sir Leon Brittan,
Member of the Commission, in Marrakesh on 15 April.

The Commission has officially presented the Council with a proposal for a decision on
the conclusion of the results of the Uruguay Round Trade Negotiations. [1] The Council has
yet to act on this point.

Like its principal trading partners, the Community gave its official approval for the
establishment of the World Trade Organization and the other results of the Uruguay
Round to take effect at multilateral level at the earliest possible opportunity, i.e.
1 January 1995.

An implementation conference will be held in Geneva early in December to this end.

The Commission is convinced that any further delay in fulfilling its international
obligations would be severely prejudicial to the Community's international prestige and
credibility.

**2.** **Grounds for the proposed approach**

The Commission considers it appropriate, as matters now stand, to implement forthwith
all the additions and amendments to Community legislation required by the Final Act.

Aside from the Community's formal adoption of the results of the Uruguay Round and,
consequently, from its accession to the World Trade-Organization as a founder member,
the prompt adoption of this decision by the Council would also allow the Community to
honour its commitments to its international trading partners.

Pending lodging of the Community's official instruments of acceptance with the World
Trade Organization, the current state of affairs in GATT would thus continue.

COM(94) 143 final, 15.4.1994.

**1/**

Irrespective of the fulfilment of commitments made under its auspices, the General
Agreement has not been submitted for ratification by the parties.

II Legislative aspects

Examination of the Final Act shows that several measures it contains are already
adequately covered by existing Community legislation.

However, other measures do require the Community either to adopt new legislative acts
or to amend existing Community law.

This memorandum s sets out the reasons for the entry into force of all the acts required to
implement the results of the Uruguay Round and summarizes the main grounds justifying
the acts listed in the annex to the proposed implementing decision.

In addition, each of the acts listed in the annex is preceded by its own explanatory
memorandum giving detailed observations on the act concerned.

1. Simultaneous entry into force

Mainly at the Community's insistence, the Punta Del Este Declaration, which launched
the Uruguay Round trade negotiations, established the principle of globality as one of the
"guiding principles of the negotiations".

From the point of view of the Community's objectives it was thought appropriate that
"the launching, the conduct and the implementation of the outcome of the negotiations
shall be treated as parts of a single undertaking". [2 ]

The Council was regularly informed of progress and consistently underlined the point that
the result of the Uruguay Rpund should be a "comprehensive and balanced outcome".

The Commission also believes that only a global assessment will allow the Uruguay
Round's contribution to the Community to be fairly judged.

Most of the Community's partners in the negotiations have adopted procedures aimed at
guaranteeing the "globality" of the outcome.

On the multilateral front, accession to the World Trade Organization is subject to
acceptance in full of the Final Act (see Agreement establishing the WTO, Articles XI and
XII).

Consideration of these factors led the Commission to propose at the Council meeting of
15 April 1994 that the implementing legislation be presented as a whole in the form of
a single legislative act.

However, in order to facilitate discussion in the various Council committees, the
Commission decided on the approach outlined here in which the political unity of the

GATT document, MIN. DEC of 20.9.1986, p. 2 and 3.

**^**

outcome is embodied in legal form by the attached decision on simultaneous entry into
force.

This decision lays down that all the acts required for the implementation of the results of
the Uruguay Round, which are listed in full in its annex, will come into force legally in
the Community simultaneously on 1 January 1995. The entry into force of each act is
therefore subject to the adoption of this decision simultaneously implementing all the
other acts.

2. Commitments **on** customs duties for products not covered by **the** agriculture
offer

The negotiations on customs duties in the Uruguay Round resulted in the deposit by the
Community of a new schedule of tariff concessions.

The commitments entered into represent in total an average 30% reduction in the rate of
customs duties applicable to imports from other GATT contracting parties.

The participating parties in the Uruguay Round agreed to implement the first stage of
reductions with effect from 1 January 1995.

Pursuant to Council Regulation (EEC) No 2658/87 of 25 July 1987 the tariff to be
applied as from 1 January of the following year must be published by 31 October at the
latest. It seems unlikely that procedural delays would allow adoption of the tariff resulting
from the Uruguay Round by that date, but publication of the pre-Uruguay Round tariff
on the prescribed date would probably cause some confusion amongst businesses and lead
to doubts inside and outside Europe as to the Community's determination to honour its
commitments under the Uruguay Round.

To avoid giving the wrong impression and damaging the Community's prestige
internationally, the Commission considers it appropriate to waive the obligation to publish
and, instead, to publish the tariff fixed in the Uruguay Round by way of information in
the C series of the Official Journal on the prescribed date.

The decision on tariffs is a key element and integral part of the overall outcome of the
Uruguay Round. It is important, therefore, that it should be given due consideration
along with the other results. Likewise, the tariff concessions granted by the Community
in the Uruguay Round should take effect on the same date as the other commitments
entered into during the negotiations.

**3.** **Non-tariff commitments**

The results of the Uruguay Round multilateral trade negotiations also include important
non-tariff provisions.

**(a) Customs valuation**

Leaving aside a small number of essentially technical amendments, the Agreement on
Implementation of Article VII of the General Agreement (Rules on Customs Valuation)
was further clarified in two Decisions on customs valuation formally adopted at the

_**c**_

ministerial meeting in Marrakesh on 15 April 1994 and incorporated into the Final Act
embodying the results of the Uruguay Round.

The Decision on Texts Relating to Minimum Values and Imports by Sole Agents, Sole
Distributors and Sole Concessionnaires is mainly addressed to developing countries and
requires no action on the Community's part.

The Decision Regarding Cases where Customs Administrations Have Reason to Doubt the
Truth or Accuracy of the Declared Value, on the other hand, provides added protection
for importers by stipulating that customs administrations must give reasons in writing for
doubting the declared value, and giving importers a right of reply.

These safeguards do not exist in Community law as it stands. As a result, Commission
Regulation No 2454/93 of 2 July 1993, laying down provisions for the implementation
of the Community Customs Code, needs to be amended.

Since this is, however, a matter for the Commission, no amendments need be tabled for
adoption by the Council, so none are included in the Annexes to the Decision.

**(b)** **Preshipment Inspection**

A number of developing countries lacking adequate customs facilities have given
private-sector companies the task of verifying the price, quality and quantity of goods sent
to them. This practice, with private firms exercising public authority, is known as
preshipment inspection'.

Preshipment inspection was included in discussions on non-tariff matters at the
Community's suggestion.

The Agreement incorporated into the Final Act applies basic GATT tenets such as nondiscrimination and transparency to the practices of preshipment inspection companies. It
spells out in detail a set of obligations governing all aspects of preshipment inspection,
paying special attention to price verification. It also introduces a two-tier dispute
settlement system for private parties and Governments who are signatories to the GATT.

Disputes between the inspection bodies and exporters will be settled by binding
arbitration. Governments, however, will be fully liable, under the GATT dispute
settlement procedure, for seeing that the Agreement on Preshipment Inspection is
complied with.

Community law has no rules on preshipment inspection, although it does exist in some
of the Member States' national legislation.

In view of the nature of the commitments made under the Agreement on Preshipment
Inspection in the Uruguay Round, the various national authorities should implement the
provisions, with a Council Directive to guide them.

**(c)** **Rules of** **Origin**

The Community entered negotiations with no specific demands of its own. It did,
however, successfully push for the principle of a single set of rules of origin at

international level, along with the notion that the last substantial transformation should
determine origin. The criteria listed in Annex II of the Agreement on Rules of Origin
correspond to current Community practice and do not affect the Community's preferential
rules of origin.

Part IV of the Agreement on Rules of Origin sets out a work programme for
harmonization entailing further negotiations under the GATT. Work will be started as
soon as the World Trade Organization is set up and is planned to last three years at this
stage.

The major changes to Community legislation will therefore not have to be introduced
until 1998 at the earliest. In the meantime, there are the procedural changes relating to
information on origin, which come under implementing arrangements for the Community
Customs Code.

The implementing regulation is Commission legislation and is being amended in line with
the results of the Uruguay Round. It could be brought into force whenever appropriate,
and does not need to be included among the proposals presented for adoption by the
Council.

**(d)** **Import licences**

The Agreement on Import Licensing Procedures reached in the Tokyo Round has been
revised, though the changes are mainly technical.

On the substantive side, the nature of trade-restricting effects is now spelled out. The
transparency clauses and the non-automatic licensing procedures have also been markedly
improved.

Upon examination, however, these changes do not appear to entail any amendments to
Community legislation as it currently stands.

**4.** **Textiles and clothing**

The negotiations on bringing textiles and clothing under the GATT, subject to
strengthened rules and disciplines, was one of the major issues of the Uruguay Round.

The Agreement finally reached and incorporated into the Final Act meets the
Community's objectives in this area via a twin process of liberalization and integration
spread over three distinct phases.

Some amendments to Council Regulation (EEC) No 3030/93 of 12 October 1993 on
common rules for imports of certain textile products from third countries will be
necessary to implement the Agreement. The details and the logic behind the amendments
are discussed in the specific Explanatory Memorandum on textiles which is annexed to
the attached Decision.

**5.** **Agriculture**

The hopes and fears of the Uruguay Round, from start to finish, were largely bound up
with one issue - agriculture.

The talks resulted in a string of provisions on agriculture which are largely, though not
exclusively, contained in the Agreement on Agriculture set out in the Final Act.

The Community's commitments in this sector will require a number of amendments to
Community legislation and certain transitional measures.

The changes, and the reasons for them, are detailed in a specific Explanatory
Memorandum annexed to the Decision.

**6.** **Rules and disciplines**

**(a)** **Technical barriers to trade**

The new'Agreement constitutes a major revision of the Code that emerged from the
Tokyo Round. It generally has a clearer structure, stronger disciplines, and wider coverage
in respect of those involved in standardization, drafting technical regulations, and
evaluating products' conformity with the standards in question.

More specifically, the new Agreement contains a Code of Practice setting out rules to be
observed in establishing voluntary standards, which apply to both public and private
bodies. It also takes an important step towards striking a better balance between rights and
obligations by applying GATT disciplines to large local authorities. The introduction of
the principle of proportionality is another major innovation, as is the inclusion of
production processes and methods in the scope of the agreement.

The changes made to the Agreement on Technical Barriers to Trade during the Uruguay
Round negotiations broadly reflect the Community approach to standardization as it has
emerged from work on the Single Market. No changes will therefore need to be made to
the Community legislation currently in force to ensure compliance with the Agreement.

**(b)** **Trade-related investment measures**

The Uruguay Round Agreement on Trade-Related Investment Measures (TRIMs) clarifies
the GATT provisions in this area, in that the contracting parties undertake not to apply
any measures that are incompatible with Articles 111(4) and XI(1) of the GATT. There
is an illustrative, i.e. non-exhaustive, list of definitions of the measures covered by the
agreement.

The section in Article III on breaches of national treatment obligations defines local
content and limited manufacturing requirements, while the section in Article XI on
breaches of the obligation to abolish quantitative restrictions lists domestic sales, product
mandating and trade balancing requirements.

Article 5 of the TRIMs Agreement allows the industrialized countries a transitional period
of two years to dismantle measures covered by the Agreement. However, this period of
grace will be granted only for measures of which GATT is notified within 90 days of the
creation of the WTO.

Community legislation is unaffected by the TRIMs Agreement, although the Member
States are advised to take note of the terms of the agreement.

**S**

(c) Fair-trade provisions

The negotiations on dumping and subsidies produced far-reaching changes to the Codes
that emerged from the Tokyo Round. In order to comply with its commitments in this
area, the Community will have to adopt new legislation and amend Regulation (EEC) No
2423/88 and Regulations (EC) Nos 521/94 and 522/94.

The reasons for the proposed changes are set out in detail in the sections on dumping and
subsidies in the annex to this decision.

The Uruguay Round negotiations also produced a new agreement specifically on
safeguards. In order to comply with its commitments in this field, the Community will
have to adopt a new regulation and repeal Council Regulation (EC) No 518/94 on
common rules for imports. The grounds for this conclusion are set out in the annex.

The new GATT codes and the changes designed to streamline and rationalize the
Community's decision-making procedures should further strengthen our hand against
illicit commercial practices and resulting damage to trade. The procedures laid down in
Council Regulation (EEC) No 2641/84, as recently amended by Council Regulation (EC)
No 522/94, accordingly need to be tightened up.

7. Services

The Uruguay Round produced two new developments in the field of international trade
in services.

The first is the General Agreement on Trade in Services (GATS), which establishes a
binding framework regulating all measures covered by the agreement. Underpinning the
rules in question are the GATT principles of non-discrimination and transparency.

The GATS contains sectoral annexes on the movement of natural persons, air transport,
telecommunications, financial services and maritime transport, which adapt the GATS
provisions to the specific features of the sectors concerned.

The schedule of initial liberalization commitments, which spells out the contracting
parties' commitments as regards national treatment and/or market access in all services
sectors, forms an integral part of the obligations imposed by the GATS.

The Community approach in this area of negotiations was a function of progress in the
creation of the Single Market, and consisted of translating its internal achievements in this
field to the multilateral stage. The commitments into which it has entered do not exceed
the obligations already imposed by the creation of the Single Market, and consequently
do not entail any changes to current Community legislation.

**8.** **Intellectual property**

The Community's other main priority for the Uruguay Round was the creation of an
efficient instrument to ensure that those intellectual property rights with implications for
trade are genuinely enforced.

**A**

The Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs) fully
satisfies this requirement, in that it contains provisions on the protection of intellectual
property rights that together make up a body of multilateral rules designed to promote
international trade in products bearing such rights and to prevent the trade distortions and
frictions that arise from the lack of adequate and effective protection.

In addition to the general provisions and basic principles governing the protection of
intellectual property rights, the TRIPs Agreement contains binding rules guaranteeing the
existence, scope and protection of copyright and associated rights, trade marks,
geographical indications, industrial models and designs, patents, and semi-conductor layout designs, plus rules for the protection of business secrets and the control of anticompetitive licensing practices.

There are also detailed provisions on implementation of the TRIPs Agreement by national
authorities. These provisions cover border procedures, which must meet certain specific
requirements, the acquisition and retention of rights, and the procedures by which the
holders of such rights can ensure that they are enforced.

The obligations imposed by the TRIPs Agreement must be enforced by the contracting
parties within one year of the creation of the WTO.

In order to honour its commitments, the Community will have to amend its current
legislation in this area along the lines detailed in the annex, though compliance with some
of the obligations will be the responsibility of the Member States.

**9.** **Plurilateral** **agreements**

The Final Act of the Uruguay Round also contains the plurilateral agreements concluded
under GATT auspices.

**(a)** **Sectoral agriculture agreements**

The International Dairy Agreement and the International Bovine Meat Agreement were
not covered by the Uruguay Round negotiations. They appear in the Final Act unchanged
from their Tokyo Round formats of 1979.

The incorporation of plurilateral agreements into the WTO system, including its dispute
settlement procedures, is binding for members^who are party to the agreements concerned.

**(b)** **Civil aircraft**

When the Uruguay Round proper was concluded, it was decided to prolong the
negotiations on the revision of the Agreement on Trade in Civil Aircraft by another year.
Pending the expiry of that deadline in May 1995, the 1979 Agreement produced by the
Tokyo Round will remain in force.

Needless to say, no changes in legislation are necessary at this stage.

**(c)** **Public procurement**

A new Agreement on Government Procurement was successfully concluded.

8

_**A-l**_

The main outcome of the negotiations was to extend the scope of the Agreement to
embrace procurement of supplies, works and services by national and local government
agencies, and by public undertakings operating in the utility sectors (ports, airports, water,
electricity and urban transport).

Here too, the Community approach was conditioned by the progress achieved in the
creation of the Single Market. Consequently, the revision of the Agreement on Public
Procurement does not entail any major changes to current Community legislation.

However, the Community is engaged in a series of bilateral negotiations on entities to be
subject to the disciplines. The results of these negotiations will be submitted to the
Council for adoption on a case-by-case basis, as the talks are concluded.

It is possible that some of these bilateral agreements will entail making some minor
changes to the legislation. Given that parties to the new Agreement on Public
Procurement will not be required to enforce its provisions until 1 January 1996, and that
the bilateral agreements will enter into force on the same date or even later, the
Commission reserves the right if necessary to return to the implementation of the public
procurement aspects of the Uruguay Round at a later date.

**10.** **Other agreements**

Negotiations for the Multilateral Agreement for Steel are still continuing so no text is
included in the Final Act and no amendments to the legislation are therefore necessary
for the time being.

**in.** **Procedural aspects**

The Commission proposal to the Council for a Decision concluding the Uruguay Round
agreements recommends referral to Parliament under the assent procedure, since the Final
Act, by virtue of the Agreement establishing the WTO, provides for a "specific
institutional framework" within the meaning of the second subparagraph of Article 228(3)
of the Union Treaty.

In any case, the Uruguay Round agreements undeniably constitute international
agreements of significant importance for the Community within the terms of the Stuttgart
Solemn Declaration.

In the interests of political and legislative consistency, therefore, it would also be sensible
to submit to Parliament for its opinion the acts implementing the agreements.

Since those acts are based on Article 113, however, that move is optional.

When the package of legislation is,sent to Parliament the attention of the House should
be drawn to the importance of enabling the Community to honour its international
commitments as from 1 January next year.

_**43/**_

**COUNCIL DÉCISION** **flfloe/Arn**
_**f**_ **10CM** **9 4 /** **0225CACC)**
**of** ... **1994**

bringing into force simultaneously the acts implementing the results of the Uruguay
Round of multilateral trade negotiations

```
THE COUNCIL OF THE EUROPEAN UNION,

```

Having regard to the Treaty establishing the European Community, and in particular
Article 113 thereof,

Having regard to the proposal from the Commission,

Having regard to the opinion of the European Parliament,

Whereas the several acts giving effect to the results of the Uruguay Round should come
into force at the same time;

Whereas the said results should enter into force in the Community on the same day that
the Agreement establishing the World Trade Organization and its annexes enters into
force at multilateral level;

Whereas it was decided at the conference on implementation in Geneva in [December
1994] that the said results should take effect on [1 January 1995],

HAS DECIDED AS FOLLOWS:

Article 1

The acts giving effect to the results of the Uruguay Round multilateral trade negotiations
listed in the annex to this Decision shall enter into force on [1 January 1995], except for
acts relating to agreements which specifically provide for a later date.

Article 2

This Decision shall be published in the Official Journal of the European Communities.
It shall take effect on the date of its publication.

Done at Brussels, For the Council

The President

10

**A3**

```
                     ANNEX

Council Decision amending the Combined Nomenclature and the Common
Customs Tariff in the light of the results of the Uruguay Round.

Council Directive on Pre-Shipment Inspections for Exports from the
Community.

Council Regulation amending Council Regulation No 3030/93 on common rules
for imports of certain textile products from third countries.

Council Regulation on the adjustments and transitional arrangements
required in the agricultural sector in order to implement the agreements
concluded during the Uruguay Round of Multilateral Trade Negotiations.

Parliament and Council Regulation amending Council Regulation (EEC) No
1576/89 laying down general rules on the definition, description and
presentation of spirit drinks and Council Regulation (EEC) No 1601/91
laying down general rules on the definition, description and presentation
of aromatized wines, aromatized wine-based drinks and aromatized wineproduct cocktails following the Uruguay Round of the multilateral trade
negotiations.

Council Regulation on protection against dumped imports from countries
not members of the European Community.

Council Regulation on protection against subsidized imports from
countries not members of the European Community.

Council Regulation on common rules for imports, repealing Regulation (EC)
No 518/94.

Council Regulation on the strengthening of the common commercial policy,
in particular with regard to protection against illicit commercial
practices and adverse trade effects suffered by Community enterprises,
and to the exercise of the Community's rights under international trade

rules

Council Regulation concerning certain measures to be taken to implement
the Agreement on Trade-Related Aspects of Intellectual Property Rights in
relation to certain modifications of Council Regulation (EC) No 40/94 on
the Community trade mark.

Council Decision concerning certain measures on the extension of the
legal protection of topographies of semiconductor products to persons
from a country of the World Trade Organisation.

```

**y** **'k**

**Part** **2**

**Customs Tariff**

**„1f**

**Part3**

**Preshipment Inspection**

_**^**_

**COUNCIL DIRECTIVE** **94/ 0226(ACC)**
**on** **pre-shipment** **inspections for exports from the** **Community**

**The Council of the European Union**

**Having regard to the Treaty establishing the European Community, and in particular**
**Article** **113** **thereof,**

**Having regard to the proposal from the** **Commission,**

**Having regard to the opinion of the European Parliament;**

**Whereas a number of developing countries have recourse to so-called pre-shipment**
**inspection programmes in order to ensure a proper distribution of limited foreign** **currency.**
**resources to importers and in order to combat such practices as over-invoicing and fraud;**
**whereas these developing countries have charged private companies with this task, which**
**includes a check on quality, as well as price of the goods intended for export to the**
**territory of these countries;**

**Whereas the Community recognises the right of the developing countries to have recourse**
**to pre-shipment inspection; whereas, however, pre-shipment inspections can give rise to**
**abusive interferences in the price freely agreed between parties to a contract and to other**
**practices which form unnecessary obstacles to trade;**

**Whereas the Uruguay Round final act, signed on 15 April 1994 in Marrakech (Morocco),**
**establishes an agreement on pre-shipment inspection between members of the World**
**Trade Organisation (WTO); whereas this agreement needs to be put into effect for the**
**Community;**

**Whereas, in view of the maintenance of** **a** **common commercial policy of the Community it**
**is necessary that the Member States regulate the activities of pre-shipment inspection**
**entities along uniform lines;**

**Whereas, to this end the Member States need to provide for a notification of pre-shipment**
**inspection activities**

**Whereas there is good reason to simplify procedures as much as possible, in particular**
**with respect to the review of prices; whereas exemptions, however, are not foreseen by**
**the agreement on pre-shipment inspection of** **the** **WTO** **and** **such exemptions can thus only**
**be applied with the agreement of the by pre-shipment inspection entities;**

**Whereas the Member State should institute a quick and effective procedure for the**
**settlement of disputes between exporters and pre-shipment inspection entities; whereas**
**such a procedure is foreseen by the agreement on pre-shipment inspection of the WTO;**

**2**

**Whereas the non-compliance with conditions or non-observance with procedures by** **pre-**
**shipment inspection entities should be settled with the third countries making use of such**
**entities;**

**Whereas Article 3 paragraph 3 of the agreement on pre-shipment inspection of the WTO**
**provides for technical assistance to third countries;**

**HAS ADOPTED THIS DIRECTIVE:**

**Article 1**

**This directive applies to activities, carried out on the customs territory of the European**
**Community, by pre-shipment inspection entity** **which,** **for the account of governments or**
**public entities of third countries, carry out controls on the quality, quantity or price of**
**goods destined for exports to the territory of these third countries (pre-shipment**
**inspection programmes).**

**Article 2**

**1.** **Member States shall make the activities of pre-shipment inspection entities as defined**
**in Article 1 subject to a procedure for prior notification under the conditions set out in**
**this directive. Modifications in the way pre-shipment inspection entities carry out these**
**activities shall also be notified prior to their implementation**

**2.** **This procedure shall be applied in a** **non-discriminatory** **manner**

**Article 3**

**The notification of activities mentioned in Article 2 shall cover the following activities:**

**a.** **physical inspection of the merchandise before it is exported in order to verify the**
**conformity of the dispatch (quality, quantity) with the specifications of the contract**
**and the respect of rules and standards foreseen by the importing country or**
**recognised at the international level;**

**b.** **verification of the price, and where applicable, of currency exchange rate, on the**
**basis of the contract between the exporter and the importer, the pro forma invoice**
**and, where applicable, the application for import authorisation.**

_**A\**_

_**Ai**_

**3**

**Article 4**

**With a view to facilitating the implementation of** **the** **agreement on pre-shipment**
**inspection of the WTO, Member States shall verify whether the notified activities meet at**
**least the following conditions:**

**a.** **when they notify their activities, the pre-shipment entities shall communicate to the**
**authorities of the Member State(s) the dispositions, with the exception of the**
**remuneration,** **of the contract agreed with the governments or public entities of third**
**countries for the** **account** **of which the pre-shipment inspection programmes have**
**been** **put in place. They shall subsequently communicate all modifications regarding**
**the conditions for control to these same authorities. The competent authorities of the**
**Member States shall verify that the dispositions of** **the** **contract are not contrary to**
**the conditions of this directive.**

**b.** **Prior to any control, the pre-shipment inspection entity informs the exporter of the**
**modalities of the inspection and the criteria that will be applied.**

**The** **pre-shipment** **inspection entity shall carry out the appropriate controls in a time**
**span that avoids** **unreasonable** **delays. They shall also, following receipt of the final**
**documents and completion of the** **inspection,** **within five working days, either issue a**
**Clean Report of Findings or provide a detailed written explanation specifying the**
**reasons for** **non-issuance.** **In the latter case exporters shall be given the opportunity**
**to present their views in writing and, if exporters so request, arrange for re-**
**inspection at the earliest mutually** **convenient** **date.**

**Pre-shipment** **inspection entities shall also undertake, whenever so requested by the**
**exporter, prior to the date of** **physical** **inspection,** **a preliminary verification of price**
**and, where applicable, of currency exchange rate, on** **the** **basis of the contract**
**between exporter and importer, the pro forma invoice and, where applicable, the**
**application for import authorisation. They shall, after a preliminary verification has**
**taken place, immediately inform exporters in writing either of their acceptance or of**
**their detailed reasons for non-acceptance of the price** **and/or** **currency exchange rate.**

**In order to avoid delays in payment, pre-shipment inspection entities shall send to**
**exporters or to designated representatives of the exporters a Clean Report of**
**Findings as** **expeditiously** **as possible. They** **shall.also,** **in the event of a clerical error**
**in the Clean Report of Findings, correct the error and forward the corrected**
**information to the appropriate parties as expeditiously as possible.**

**c.** **The** **pre-shipment** **inspections shall be carried out in a non-discriminatory manner,**
**and the procedures and criteria employed in the conduct of** **these** **activities shall be**
**objective and applied on an equal basis to all exporters affected by such activities.**

**d.** **Pre-shipment inspection entities shall not request exporters to provide information**
**regarding manufacturing data related to patented, licensed or undisclosed processes,**
**or to processes for which a patent is pending; unpublished technical data other than**
**data necessary to demonstrate compliance with technical regulations or standards;**
**internal** **pricing,** **including manufacturing costs; profit levels; the terms of contracts**
**between exporters and their suppliers unless it is not otherwise possible for the**
**entity to conduct the inspection in question. (In such cases, the entity shall only**
**request the** **information** **necessary for** **this** **purpose).**

**^\5**

**In general, pre-shipment inspection entities shall treat all information provided by**
**exporters as business confidential, to the extent that such information is not already**
**published, generally available to third parties, or otherwise in the public domain.**
**Such business confidential information shall be shared with the governments**
**contracting or mandating the entity only to the extent that such information is**
**customarily required for letters of credit or other forms or payment or for customs,**
**import licensing or exchange control purposes.**

**e.** **Pre-shipment inspection entities shall establish procedures to receive, consider and**
**render decisions concerning grievances raised by the exporters. These procedures**
**shall be developed and maintained in accordance with the following guidelines:**

**i.** **pre-shipment inspection entities shall designate one or more officials who shall**
**be available during normal business hours in each city or port in which they**
**maintain a pre-shipment inspection an administrative office to receive, consider**
**and render decisions on** **exporters'** **appeals or grievances;**

**ii.** **exporters shall provide in writing to the designated official(s) the facts**
**concerning the specific transaction in** **question,** **the nature of the grievance and a**
**suggested solution;**

**iii. the designated official(s) shall afford sympathetic consideration to exporters'**
**grievances and shall render a decision as soon as possible after receipt of the**
**documentation referred to in sub-paragraph (ii).**

_OLD_

_**5**_

**Article 5**

**In order to prevent over- and under-invoicing and fraud in the importing third country,**
**Member States shall verify that pre-shipment inspection entities conduct price verification** **[1 ]**

**according to the following conditions.**

**a.** **pre-shipment inspection entities shall only reject a contract price agreed between an**
**exporter and an importer if they can demonstrate** **that** **their findings of an**
**unsatisfactory price are based on** **a** **;** **verification process which is in conformity with**
**the criteria set out in sub-paragraphs (b) through (e),**

**b.** **the pre-shipment inspection entity shall base its price comparison for the verification**
**of the export price on the price(s) of identical or similar goods offered for export**
**from the same country of exportation at or about the same time, under competitive**
**and comparable conditions of** **^sale,** **in conformity with customary commercial**
**practices and net of any applicable standard discounts. Such comparison shall be**
**based on the following:**

**i.** **only prices providing a valid basis of comparison shall be used, taking into**
**account the relevant economic factors pertaining to the country of importation**
**and a country or countries used for price comparison;**

**ii.** **the** **pre-shipment** **inspection entity shall not rely upon the price of goods offered**
**for export to different countries of importation to arbitrarily impose the lowest**
**price upon the shipment;**

**iii. the pre-shipment inspection entity shall take into account the specific elements**
**listed in sub-paragraph (c);**

**iv. at any stage in the process described above, the pre-shipment inspection entity**
**shall provide the exporter with an opportunity to explain the price;**

**c.** **when conducting price** **verification,** **pre-shipment inspection entities shall make**
**appropriate allowances for the** **terms** **of the sales contract and generally applicable**
**adjusting factors pertaining to the transaction; these factors shall include but not be**
**limited to the commercial level and quantity of the sale, delivery periods and**
**conditions, price escalation clauses, quality** **specifications,** **special design features,**
**special shipping or packing specifications, order size, spot sales, seasonal influences,**
**licence or other intellectual property fees, and services rendered as part of the**
**contract if these are not customarily invoiced separately; they shall also include**
**certain** **elements** **relating to the** **exporter's** **price, such as the contractual relationship**
**between the exporter and importer;**

**1**
**It should be remembered that the obligations of user Members with respect to the services of** **pre-**
**shipment entities in connection with customs valuation shall be the obligation which they have accepted**
**in GATT 1994 and the other Multilateral Trade Agreements included in Annex 1A of the WTO**
**Agreement (footnote 4 of the agreement on pre-shipment inspection of the WTO).**

**Ad**

**6**

**d.** **the verification of transportation charges shall relate only to the agreed price of the**
**mode of transport in the country of exportation as indicated in the sales contract;**

**e.** **the following shall not be used for price verification purposes:**

**i.** **the selling price in the country of importation of goods produced in such**
**country;**

**ii.** **the price off goods for export from a country other** **than** **the country of**
**exportation;**

**iii. the cost of production;**

**iv. arbitrary or fictitious prices or values.**

**Article 6**

**In order to avoid unnecessary delays for exporters, Member States shall incite** **pre-**
**shipment inspection entities to use simplified verification procedures, where appropriate,**
**in particular to** **exclude** **the review** **of** **prices in certain cases.** **In establishing these**
**simplified procedures, however, account shall be taken of the obligation by Member States**
**and pre-shipment inspection entities to carry out the activity in a non-discriminatory**

**manner.**

**Article 7**

**If the pre-shipment inspection entity does not observe the conditions set out in Articles 4**
**and 5 of this Directive, or if the entity does** **not** **comply with the procedures set out in**
**Article 9, the authorities of a Member State shall** **notify** **the Commission and the other**
**Member States of such non-observance or non-compliance and may have recourse to the**
**procedure foreseen by Article 4 of Council** **Regulation2641/84** **(EC)** **[2]** **.**

**Article 8**

**Member States shall provide third** **countries,** **if requested, technical assistance** **directed**
**towards the achievement of the objectives of the agreement on pre-shipment inspection in**
**the WTO mutually agreed terms, or how to do without them.**

2 OJL252of20.9.1984p. 1

**a^/**

**Article 9**

**Member States shall encourage pre-shipment inspection entities and exporters mutually to**
**resolve their disputes. However, two working days after submission of the grievance in**
**accordance with the provisions of paragraph e of Article 4, either party may refer the**
**dispute to independent review entity as foreseen by Article 4 of the agreement on** **pre-**
**shipment inspection of** **the** **World Trade Organisation (WTO). The procedure shall be as**
**follows:**

**a.** **an exporter or pre-shipment inspection entity wishing to raise a dispute shall contact**
**the independent entity referred to above and request the formation of a panel. The**
**independent entity shall be responsible for establishing a panel. This panel shall**
**consist of** **three** **members. The members of** **the** **panel shall be chosen so as to avoid**
**unnecessary costs and delays. The first member shall be chosen from section (i) of**
**the** **hst** **foreseen in the WTO agreement on pre-shipment inspection by the** **pre-**
**shipment inspection entity concerned, provided that this member is not affiliated to**
**that entity. The second member shall be chosen** **from** **section (ii) of the list foreseen**
**in the WTO agreement on pre-shipment inspection by the exporter concerned,**
**provided that this member is** **not** **affiliated to that exporter. The third member shall**
**be chosen from section (iii) of the list foreseen in the WTO** **agreement** **on** **pre-**
**shipment inspection by the independent entity referred to above. No objections shall**
**be made to any independent trade expert drawn** **from** **section (iii) of the list foreseen**
**in** **the** **WTO** **agreement on pre-shipment inspection;**

**b.** **the independent trade expert drawn** **from** **section (iii) of the list foreseen in the WTO**
**agreement on** **pre-shipment** **inspection shall serve as the chairman of the panel. The**
**independent trade expert shall take the necessary decisions to ensure an expeditious**
**settlement** **of the dispute by the panel, for instance, whether the facts of the case**
**require the panellists to meet and, if so, where such a meeting shall take place,**
**taking into account the site of the inspection** **in** **question;**

**c.** **if the parties of the dispute so agree, one independent trade expert could be selected**
**from section (iii) of the list foreseen in the WTO agreement on pre-shipment**
**inspection by the independent entity referred to in** **sub-paragraph** **(a) to review the**
**dispute in question. This expert shall take the necessary decisions to ensure an**
**expeditious settlement of the dispute, for instance taking into account the site of the**
**inspection in question;**

**d.** **the object of the review shall be to** **estabUsh** **whether, in the course of the inspection**
**in dispute, the parties to the dispute have complied with the provisions of this**
**directive. The procedures shall be expeditious and provide the opportunity for both**
**parties to present their views in person or** **in** **writing;**

_**^**_

**8**

**e.** **decisions by a three-member panel shall be taken by majority vote. The decision on**
**the dispute shall be rendered within eight working days of the request for**
**independent review and be communicated to the parties of the dispute. This time-**
**limit could be extended upon agreement by the parties to the dispute. The panel or**
**independent trade expert shall apportion the costs, based on the merits of the case;**

**f.** **the decision of the panel shall be binding upon the pre-shipment inspection entity and**
**the exporter which are parties to the dispute.**

**Article 10**

**This directive shall enter into force on the date determined bv the decision on the entry**
**into force of the acts implementing the Results of the Uruguay Round**

**They** **will** **inform the Commission of these measures or any modifications** **thereof.**
**Separately they will submit copies of these measures to the Secretariat of the WTO.**

**The measures or modifications thereof shall not be enforced before they have been**
**published.**

**Article** **11**

**This directive is addressed to Member States.**

_'ÀLf_

**Part** **4**

**Textiles & clothing**

_**d£**_

**Proposal for a Council Regulation amending**

**COUNCIL REGULATION (EEC) No 3030/93 of** **12** **October 1993**

**on common** **rules** **for imports of certain textile products from third countries**

_**2(o**_

**Explanatory Memorandum**

**1.** **The present proposal amending Regulation 3030/93 on common rules for imports**
**of textiles is designed to ensure effective implementation of the Agreement on Textiles**
**and Clothing of the World Trade Organization.**

**2.** **The WTO Agreement on Textiles and Clothing necessitates three types of**
**changes to Regulation 3030/93:**

**(i)** **the safeguard provisions (Article 10) have to be brought into line with**
**those of the new** **WTO** **Agreement on Textiles and Clothing (Article 6);**

**(ii)** **the Community quantitative limits contained in Annex V affecting imports**
**from members of the WTO will have to be adjusted at the beginning of each of the 3**
**phases of the WTO Agreement on Textiles and Clothing to reflect the higher annual**
**quota growth rates foreseen; similarly at such time as the European Union integrates**
**products** **subject** **to quantitative limits such products should be deleted** **from** **Annex V;**

**(iii)** **as and when certain of the third countries listed in Annex VIII (flexibility**
**provisions) become members of the WTO, the respective "cap" on cumulative use of**
**flexibility provisions indicated in column 8 of the table will have to be deleted since**
**Article 2 paragraph 16 of** **the** **WTO Agreement on Textiles and Clothing stipulates that**
**there shall be no limit to the "combined use of swing, carry over and carry forward".**

**Since it is not clear at this stage whether and when all the third countries listed in the**
**Annexes will become members of** **the** **WTO and thereby benefit from the Agreement on**
**Textiles and Clothing, the Commission will adopt the necessary technical amendments to**
**the Annexes to Regulation 3030/93 referred to in points (ii) and (iii) above via the**
**Textiles Committee procedure laid down in Article** **17** **of the Regulation.**

**To this end and for reasons of clarity it is proposed to delete the reference to the quota**
**years** **1993-1995** **in Article 2 paragraph** **1** **of the Regulation since for WTO Members the**
**quota increases will be automatic for** **the** **next** **10** **years.**

**3.** **With regard to the safeguard clause, it is proposed to maintain the existing**
**language on the basket exit mechanism contained in the present paragraphs 1 and 2 of**
**Article 10 of** **the** **Regulation and to add clauses corresponding to the new** **provisions** **of**
**the WTO Agreement on Textiles and Clothing. The reason for this is that of the countries**
**listed in Annex IX which are currently subject to the basket exit mechanism a number of**
**important suppliers (eg China, Taïwan, Vietnam, ex USSR) will probably not be**
**members of the WTO upon the date of its entry into force but join in the near future.**
**Therefore, it will be necessary to maintain the current safeguard mechanism to cover the**
**interim period. The Commission proposes two parallel safeguard provisions in the**
**Regulation and as and when each of the third countries listed in Annex IX benefits from**
**the WTO Agreement on Textiles and Clothing, that country will be deleted from Annex**
**IX via the Textiles Committee procedure (Article** **17** **of the Regulation).**

**A>**

**Proposal for a Council Regulation** **amending** ***** **[94/ 0 2 2 7 ( A c c } ]**

**COUNCIL REGULATION (EEC) No 3030/93 of** **12** **October 1993**

**on common rules for imports of certain textile products from third countries**

**THE COUNCIL OF THE EUROPEAN UNION,**

**Having regard to the Treaty establishing the European Community and in particular**
**Article** **113** **thereof,**

**Having regard to the proposal** **from** **the Commission,**

**Having regard to the opinion of the European Parliament,**

**Whereas the Community has signed the Final act of the Uruguay Round of GATT**
**negotiations setting up a World Trade Organization, (hereinafter referred to as the WTO);**

**Whereas it is necessary to amend the safeguard provisions laid down in Regulation**
**(EEC) No 3030/93 of 12 October 1993** **[1]** **on common rules for imports of certain textile**
**products from third countries, as last amended by Commission Regulation (EC) No.**
**195/94 of 12 January** **1994** **[2]** **,** **in order to bring them into line with the new safeguard**
**provisions contained in the WTO Agreement on Textiles and Clothing with regard to**
**imports** **from** **WTO Members;**

**Whereas the WTO Agreement on Textiles and Clothing also stipulates the annual growth**
**rates which will be applied automatically to remaining Community quantitative limits on**
**imports from WTO Members for a period of 10 years following entry into force of the**
**WTO;** **whereas it is therefore appropriate** **that the** **Community quantitative limits foreseen**
**in Annex V of Regulation (EEC) No** **3030/93** **on imports** **from** **WTO Members should be**
**amended at each stage of the WTO Agreement on Textiles and Clothing via the**
**procedure foreseen in Article 17 of the Regulation and paragraph i of Article 2 of the**
**Regulation should be amended to that effect.**

1 OJ No L 275, 8.11.1993, p.l
2 OJ No L 29, 2.2.1994, p. 1

**5Ï**

HAS ADOPTED THIS REGULATION

**Article 1**

Article 10 of Council Regulation (EEC) No 3030/93 is replaced by the following:

**"Article 10**
**Safeguard measures**

1. Should imports into the Community of products falling within any given
category, not subject to the quantitative limits set out in Annex V and originating in one
of the countries listed in Annex IX exceed, in relation to the preceding calendar year's
total imports into the Community of products in the same category, the percentages
indicated in the Table appearing in Annex IX, such imports may be made subject to
quantitative limits under the conditions laid down in this Article.

2. Paragraph 1 shall not apply where the percentages specified therein have been
reached as a result of a fall in total imports into the Community, and not as a result of an
increase in exports of products originating in the supplier country concerned.

3. Where the Commission, upon its own initiative or at the request of a Member
State, considers that the conditions set out in paragraph 1 are fulfilled and that a given
category of products should be made subject to a quantitative limit:

(a) it shall open consultations with the supplier country concerned in accordance with
the procedure specified in Article 16 with a view to reaching an arrangement or joint
conclusions on a suitable level of restriction for the category or products in question;

(b) pending a mutually satisfactory solution, the Commission shall, as a general rule,
request the supplier country concerned to limit exports of the products in the category
concerned to the Community, for a provisional period of three months from the date on
which the request for consultations is made. Such provisional limit shall be established at
25% of the level of imports during the previous calender year, or 25% of the level
resulting from the application of the formula set out in paragraph 1, whichever is the
higher;

(c) it may, pending the outcome of the requested consultations, apply to the imports
of the category of products in question quantitative limits identical to those requested of
the supplier country pursuant to point (b). These measures shall be without prejudice to
the definitive arrangements to be made by the Community, taking into account the results
of the consultations.

4. (a) Should imports into the Community of textile products not subject to the
quantitative limits set out in Annex V and originating in Bulgaria, the Czech Republic,
Hungary, Poland, Romania or the Slovak Republic take place in such increased
quantities, or under such conditions, so as to cause serious damage or actual threat
thereof, to the Community's production of like or directly competitive products, such
imports may be made subject to quantitative limits under the conditions laid down in the
Additional Protocols with these countries.

**25**

(b) The provisions of paragraph 3, shall also apply in such cases except that
the provisional limit referrred to in paragraph 3 (b) shall be established at 25%, at least,
of the level of imports during the twelve-month period terminating two months, or where
data is not available three months, preceding the month in which the request for
consultations is made.

5. (a) With regard to products not subject to the quantitative limits set out in
Annex V and originating in countries which are Members of the World Trade
Organization, safeguard action may be taken where it is demonstrated that a particular
product is being imported into the Comunity in such increased quantities as to cause
serious damage, or actual threat thereof, to the domestic industry producing like and/or
directly competitive products. Serious damage or actual threat thereof must demonstrably
be caused by such increased quantities in total imports of that product and not by such
other factors as technological changes or changes in consumer preference.

(b) In making a determination of serious damage, or actual threat thereof, as
referrred to in paragraph (a) the effect of those imports on the state of the particular
industry shall be examined, as reflected in changes in such relevant economic variables
as output, productivity, utilization of capacity, inventories, market share, exports, wages,
employment, domestic prices, profits and investment.

(c) The third country or countries, Member(s) of the World Trade
Organization to whom serious damage, or actual threat thereof, as referred to in
paragraph (a) is attributed, shall be determined on the basis of a sharp and substantial
increase in imports, actual or imminent and on the level of imports as compared with
imports from other sources, market share and import and domestic prices at a comparable
stage of commercial transaction.

6. Where the Commission, upon its own initiative or at the request of a Member
State, considers that the conditions set out in paragraph 5 are fulfilled and that the
products in question should be made subject to a quantitative limit:

(a) it shall open consultations with the supplier country concerned in accordance with
the procedure specified in Article 16 with a view to reaching an arrangement or joint
conclusions on a suitable level of restriction for the products in question;

(b) it may, pending the outcome of the consultations and in highly unusual and
critical circumstances where delay would cause damage which could be difficult to
repair, impose a provisional quantitative limit on the products in question. Such
provisional limit shall not be lower than the actual level of imports from the supplier
country during the twelve-month period terminating two months proceding the month in
which the request for consultations was made.

7. (a) Measures taken pursuant to paragraphs 3, 4 and 6 shall be the subject of a
Commission communication published without delay in the Official Journal of the
European Communities.

_**I**_ **o**

**(b)** **The Commission shall refer urgent cases to the Committee provided for in**
**Article 17 either at its own initiative or within five working days of receipt of** **a** **request**
**from a Member State or States setting out the reasons for the urgency and shall take a**
**decision within five working days of the end of the Committee's deliberation.**

**8.** **The consultations with the supplier country concerned which are provided for in**
**paragraphs 3, 4 and 6 may lead to an arrangement between that country and the**
**Community, on the introduction and the level of quantitative limits. Such arrangements**
**shall stipulate that the quantitative limits agreed be administered in accordance with a**
**double-checking system.**

**9.** **Should the parties be unable to reach a satisfactory solution within 60 days**
**following notification of the request for consultations, the Community shall have the**
**right to introduce a definitive quantitative limit at** **an** **annual level not lower than:**

**(a)** **in the case of supplier countries listed in Annex IX, the level resulting from the**
**application of the formula set out in paragraph** **1** **or** **106%** **of the level of imports reached**
**during the calendar year preceding** **that** **in which imports exceeded the level resulting**
**from the application of the formula set out in paragraph** **1** **and gave rise to the request for**
**consultations, whichever is the higher.**

**(b)** **in the case of** **Bulgaria,** **the Czech Republic, Hungary, Poland, Romania or the**
**Slovak Republic,** **110%** **of the imports for the twelve-month period tenninating two**
**months, or where data is not available three months, preceding the month in which the**
**request for consultations is made.**

**(c)** **in the case of supplier countries,** **members** **of the WTO, the actual level of imports**
**from the supplier country concerned during the twelve-month period terminating two**
**months preceding the month in which** **the** **request for consultations was made.**

**10.** **The annual level of the** **quantitative** **limits established in accordance with**
**paragraphs 3 to 6 or 9 may not be less than the level of** **imports** **into the Community in**

**1985 for** **Argentina,** **Brazil, Hong Kong, Pakistan, Peru,** **Sri** **Lanka and Uruguay, and in**
**1986 for Bangladesh,** **India,** **Indonesia,** **Malaysia,** **Macao, Philippines, Singapore,** **South**
**Korea and Thailand, of products of the same category and originating in the same**
**supplier country.**

**11.** **The** **quantitative limits established under this Article shall not apply to products**
**which have already been dispatched to the Community provided that they** **were** **shipped**
**from the supplier country in which they** **originate** **for export to the Community before the**
**date of notification of the request for consultations.**

## **_u_**

12. Measures taken in acordance with the provisions of paragraph 5 may remain in
place:

(a) for up to three years without extension, or

(b) until the product is integrated into GATT 1994, whichever comes first.

13. The measures provided for in paragraphs 3, 4, 6 and 9 and the arrangements
referred to in paragraph 9 shall be adopted and implemented in accordance with the
procedure laid down in Article 17."

**Article 2**

Article 2 paragraph 1 of Council Regulation (EEC) No. 3030/94 is replaced by the
following:

"The importation in the Community of the textile products listed in Annex V originating
in one of the supplier countries listed in that Annex shall be subject to the annual
quantitative limits laid down in that Annex".

**Article 3**

This Regulation shall enter into force on date determined by the decision of entry into
force of the acts implementing the results of the Uruguay Round.

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

Done at Brussels, For the Council

_**l>**_

**Part5**

**Agriculture**

**V}**

```
                EXPLANATORY MEMORANDUM

I. INTRODUCTION

  Several of the agreements which the Community has negotiated under the
  Uruguay Round (hereinafter referred to as the "GATT Agreements")(*)
  involve adapting some of the legislation implementing the common
  agricultural policy. These are in particular:

  - the Agreement on Agriculture (hereinafter referred to as the
    "Agreement"),
    the Agreement on the Application of Sanitary and Phytosanitary

    Measures,

    the Agreement on Safeguards, and
  - the Agreement on Trade-Related Aspects of Intellectual Property Rights
    (hereinafter referred to as the "TRIPS Agreement").

  As regards agriculture, these Agreements cover the following aspects:

    the internal support arrangements,
    the arrangements on trade with third countries,
    a system for the protection of designations of origin (part of the
   TRIPS Agreement),
    arrangements concerning veterinary and plant health measures affecting

    international trade.

   The attached proposals for Regulations( [2] ) contain the provisions
    necessary for incorporating into Community law the rules referred to
    in the last three indents above. As regards the arrangements for
    internal support, the Commission considers that specific provisions
    should not be introduced into the market organizations. The relevant
   rules in the Agreement should be taken into account when prices are
    fixed and aid measures are adopted for future marketing years.

    In order to safeguard the possibility of the necessary measures being

   taken in trade relations with third countries vis-à-vis which the

   Commission has no obligations under the GATT Agreements, the "GATT"
   proposal provides a suitable legal basis.

(1) See proposal for a Council Decision con the conclusion of the results
   of the Uruguay Round of the multilateral trade negotiations (1986-94),
   COM(94) 143 final of 15 May 1994.
(2) there are two draft Regulations: one covering all the amendments based
   on Article 43 of the EC Treaty (referred to as the "GATT" proposal)
   and one based on Articles 43 and 100a of the Treaty.

```

**^**

```
   These proposals do not cover the following:

    - issues arising from the GATT Agreements and affecting the
     preferential agreements concluded with third countries (e.g. Lomé
     Convention) and the enlargement of the Community, which are still to
     be dealt with;

    - the agri-monetary arrangements for the new system; these will be
     dealt with in the report on the agri-monetary system which the
     Commission is to present to the Council before the end of 1994.

II. TRADE ARRANGEMENTS

  A. General

   The GATT Agreements centre the trade arrangements on the following
   main points:

       tarification,
   - access to the Community market,
   - safeguard provisions,

       the export subsidy system.

   The "GATT" proposal is based on the following principles:

   - careful compliance with obligations under the GATT Agreements,
   - maximum flexibility for management,
   - full use of possibilities offered by the GATT Agreements,
   - as little change as possible to the organization of the markets in
     the various agricultural products.

   However, it has proved inevitable to make amendments to almost all the
   provisions in the basic Regulations relating to trade with third
   countries. The abolition of variable levies not only entails
   abolishing the rules for their calculation but also calls for the
   articles relating thereto to be adapted. This also holds true for
   export refunds, which can only be granted subject to the quantitative
   and financial limits laid down in the Agreement.

   Nevertheless, this proposal largely confines' itself to incorporating
   in the basic Regulations the main principles on the implementation of
   the GATT Agreements and entrusting the Commission with the task of
   implementing them in line with the needs of the various sectors. This
   approach, which is based in particular on the heed to preserve
   sufficient flexibility for day-to-day management, takes account in
   particular of the fact that most obligations to be met are defined
   precisely in the Agreements.

```

**ir**

```
  When making these amendments, the Commission has also held to the
  principle recognized at the time of the consolidation of the
  Regulation on the market organization for cereals (Regulation (EEC)
  No 1766/92) under the reform of the CAP and applied on several
  occasions since then, to the effect that competence for legislation

  should be shared between the Council and the Commission so as to

  result in two levels only: on the one hand the provisions adopted by
  the Council in accordance with the procedure laid down in
  Article 43(2) of the EC Treaty and, on the other, the detailed rules
  of application adopted by the Commission in accordance with the
  Management Committee procedure.

  As regards the implementation of the GATT Agreements in legislation,
  the Commission has opted for an approach by product group which
  preserves the traditional structure of the market organizations, as
  set out in particular in the basic Regulations, and at the same time
  ensures the transparency of the solutions chosen. The "GATT" proposal
  accordingly consists in concise substantive provisions covering all
  product groups and comprising in particular a legal basis for the
  adoption of the necessary transitional rules, the annexes to which
  contain the adjustments to be made for the various sectors. It also
  provides for the repeal of the regulations laying down general rules.

B. Import arrangements

1. Import charges (tarification)

  The fundamental change introduced by the new import arrangements is
  the replacement of variable charges (levies, compensatory amounts,
  etc.) and other types of non-tariff import restrictions (quantitative
  restrictions, voluntary restraint agreements, etc.) by stable,
  degressive tariffs. The introduction of such tariffs will be effected,
  in legal terms, by means of a suitable amendment to the Common Customs
  Tariff, the relevant figures being set out in the final schedules
  presented by the Community to the Director-General of GATT and forming
  a legal part of the Agreement. In the basic Regulations, it will
  accordingly be sufficient to refer to the duties entered in the CCT.

  The replacement of variable charges by the CCT duties implies the
  repeal of all the rules which refer to their calculation, i.e. in
  particular all provisions on the fixing of threshold prices, reference
  prices, etc. and the rules laid down for the calculation of variable
  •charges applying to derived products.

```

_**u**_

```
Certain special points should be mentioned:

(a) The "special safeguard provisions"

  These provisions allow a minimum level of protection to be
  maintained against the adverse effects on the market of the
  conversion of the former import restrictions into customs duties
  ("tarification"). They therefore only apply to products
  specifically identified in the final schedules. They must not be
  confused with the safeguard provisions traditionally appearing in
  all the basic Regulations; in fact, they involve a system which is
  additional to the import duty and allow the latter to be increased
  if certain conditions specified in the Agreement are met.
  Accordingly, a specific article has been introduced, providing a
  suitable legal basis for making use, at the right time, of the
  possibilities afforded by this system. The extent to which the
  system will be used depends on the market conditions applying for
  the various products.

(b) Standard safeguard provisions

  The standard safeguard provisions appearing hitherto in the basic
  Regulations are maintained. However, the Agreement on Safeguards
  contains reinforced all-sector arrangements specifying the
  conditions under which they may be applied. A reference to these
  rules has accordingly been included in the articles in question,
  which have also been adapted to take account of the division of
  competence mentioned in A.

(c) Specific arrangements for raw sugar for refining and molasses

  Tarification as provided for in the Agreement could result in raw
  sugar for refining and molasses being subject to an import charge
  which could jeopardize supplies of such products to processing
  industries in the Community. Accordingly, a special mechanism has
  been introduced to permit the application of the duty entered in
  the CCT to be suspended where the price recorded on the world

  market exceeds a certain level.

```

*** >**

```
  (d) Special arrangements on prices applying

    For certain products (e.g. some cereals and rice), the Agreement
    involves a level of protection, lower than that provided by the
    CCT, which is dependent on import prices. Similarly, for certain
    fruit and vegetables, must and grape juice, the import charge
    depends on the entry price. In this respect, certain special rules
    or necessary derogations from the CCT have been laid down,
    implementation and details being left to the detailed rules of
    application, which will have to deal in particular with the thorny
    problem of controls. The present system of minimum import prices
    remains in force for dried grapes and processed cherries until
    1 January 2000.

  (e) Management measures for beef and veal

    The Agreement's ban on quantitative import restrictions requires
    the repeal of Council Regulation (EEC) No 1157/92 of 28 April
    1992, which at present serves as a legal basis for the erga omnes
    limitation on imports of young bovine animals. As that measure is
    of special importance for maintaining balance on the market for
    beef and veal in the Community, the Commission will deal with the
    matter during the renegotiation of the Europe Agreements with
    certain East European countries.

2. Access to the Community market

  In this context, the term "market access" covers all the conditions
  under which imports may take place at reduced or zero duty. A
  distinction should be made in principle between agreements concluded
  with certain third countries containing preferential conditions
  granted by the Community, current access within the meaning of the
  Agreement (which includes part of the abovementioned agreements) and

  minimum access.

  In view of the high number of quotas in question and in order to
  ensure their implementation as effectively as possible, a uniform
  approach has been adopted for all cases, whatever their history. For
  the sake of simplification and efficiency, this approach provides
  that, on the basis of the international agreements concluded by the

  Council or of autonomous acts of the latter and in accordance with the

  conditions stipulated therein, the opening and administration of
  •tariff quotas are to be carried out by the Commission in accordance
  with the Management Committee procedure. A similar approach was
  adopted for the administration of the quotas opened recently as a
  result of the Soya Panel (Regulation (EC) No 774/94). Naturally, this
  uniform procedural approach does not imply that the detailed rules
  will be the same for all product groups.

```

_**M**_

```
    As regards the market organization for bananas, the "GATT" proposal
    involves taking over the framework agreement with certain countries in
    Latin America. In accordance with the general approach in Regulation
    (EEC) No 404/93, certain aspects of the allocation of tariff quotas
    are incorporated in the Regulation.

  C. Export arrangements

  1. General

    The export arrangements resulting from the Agreement provide for a
    reduction in forthcoming years in the subsidies which may be granted
    on agricultural products exported from the Community as such or after
    processing. The reduction is to be made in accordance with rules
    concerning the sums granted for all such exports and the quantities of
    products exported as such(3). The arrangements must be applied in
    such a way as to permit verification of compliance with those limits
    for a period of 12 months, to commence in principle on 1 July 1995
    and, in the case of other products (rice, wine, olive oil and sugar)

    at later dates.

    The Commission considers that compliance with limits on the value of
    refunds may be monitored:

    - when refunds are fixed,

    - on the basis of advance fixing authorized by the Commission or of
     tenders accepted in response to invitations to tender,
    - on the basis of information provided by the Member States on
     licences issued, refunds granted being compulsorily fixed in
     advance, and
    - on the basis of information provided to the EAGGF relating to
     payments made by national bodies. Using such information, it should
     be possible to charge each payment made to the EAGGF financial year
     during which export formalities were completed.

   As a result no other specific mechanisms need be introduced to ensure
    compliance with limits on value..

  2. Compliance with limits on quantity

   As regards limits on quantity, the Agreement provides that compliance
   must be demonstrated in terms of the quantities qualifying for export
   •refunds for which export licences have been issued during the
   marketing year in question.

(3) Limits on quantity do not apply to non-Annex II products.

```

_**19**_

```
(a) The aim of the "GATT" proposal is to ensure monitoring of the
  quantities exported using export licences. Accordingly, such
  licences will become compulsory where products covered by a refund
  application are exported. This does not rule out the possibility
  that, for certain product groups where such arrangements already
  exist, export licences may also be required for purposes of
  statistical monitoring of trade where export takes place without
  any refund being granted. It remains to be decided whether
  monitoring of the quantities exported will mean limiting the
  duration of validity of export licences to the curent marketing
  year or whether monitoring can be based on licences issued during
  the marketing year. The detailed rules for the application of the
  licence arrangements, and in particular the conditions
  specifically relating to the issuing, term of validity and
  transferability of licences, will be laid down, as at present, in
  accordance with the Management Committee procedure for the product
  group concerned.

  Clearly, compliance with limits on quantity under the Agreement
  calls for mechanisms to prevent any overrun. As the choice of
  measures to be taken depends on the specific situation and the
  requirements of the market in each product, the "GATT" proposal
  does not dictate the methods to be used for checking quantities

  available.

(b) One possible option is to determine export refunds by invitation
  to tender. Here too, the "GATT" proposal does not dictate the
  procedures to be adopted; refunds could also be fixed periodically
  as they are now.

(c) It is the Commission's intention to select the approach which
  involves the least red tape and is best adapted to the specific
  situation of the product group concerned. This is why the "GATT"
  proposal lays down flexible legal bases which allow the most
  suitable solution to be sought for each product group, in
  particular to make maximum use of the latitude offered by the GATT
  Agreements and, where appropriate, for the arrangements to be
  amended in the light of experience in applying them. This approach
  is, moreover, in line with the way the Commission has hitherto
  exercised the competence it has enjoyed under the arrangements in

  force to date.

```

_**h**_

```
  (d) Some points should be mentioned:

    - there are exceptions from the general arrangements:

     * for exports under food-aid operations, which are not subject
       to any limits on quantity or value,

     * for agricultural products exported in the form of goods not
       listed in Annex II to the EC Treaty, such goods not being
       subject to any limit on quantity;

    - it is necessary to limit the scope for speculation and to create
     a linkage with limits on value; accordingly, it is proposed to
     make advance fixing compulsory, including reference to the
     destination but allowing changes to another destination within
     the same geographical area at the same refund rate;

    - for certain products, the Agreement sets the quantities which
     may be exported with payment of refunds at a level which, in the
     light of experience gained, is unlikely to be exceeded. The
     Regulation takes account of this by making provision for the
     Commission, in accordance with the Management Committee
     procedure, to relax the constraints laid down in this respect
     for the products concerned to the extent appropriate;

    - the pre-financing arrangements should be adapted at a later
     stage, in particular on account of negative experience in
     applying them and with a view to ruling out fraud when they are
     applied.

D. Other provisions on trade

1. The provisions on inward processing arrangements have been maintained
  without any substantial change.

2. The articles oh the prohibition of measures having an effect
  equivalent to customs duties and quantitative restrictions and
  measures having an equivalent effect have been adapted to the new

  arrangements.

3. The article on shortages in supply has been adapted to the extent
  necessary to take account of the abolition of threshold prices.

```

**VI**

```
III. INCLUSION OF THE TRIPS AGREEMENT

    For the first time the GATT Agreements lay down provisions on the
    protection of intellectual property rights. Under this heading there
    are specific provisions on the protection of designations of origin.

    The Community regulations in force lay down rules on designations of
    origin in several areas:

    - for wine (quality wine psr),
    - for spirituous beverages, and
    - more generally, for certain agricultural and food products (in
     Regulation (EEC) No 2081/92).

    All these Community regulations (except those on wine) contain a
    reservation relating to international agreements concluded by the
    Community. Since the TRIPS agreement contains special arrangements on
    wine and spirit drinks, specific provisions must be incorporated into
    the relevant regulations. As a result, when the various Community
    arrangements are applied, due account may be taken of the obligations
    and restrictions resulting from the TRIPS Agreement.

IV. VETERINARY AND PLANT-HEALTH LEGISLATION

    In the veterinary and plant-health fields, the provisions in force
    permit the rules in the relevant Agreement to be applied. However,
    Directive 77/93/EEC on protective measures against the introduction
    into the Community of organisms harmful to plants or plant products
    must be amended to ensure uniform application of the arrangements with
    regard to third countries.

V. ENTRY INTO FORCE

    In accordance with the Commission's policy decision that the results
    of the Uruguay Round should be implemented as a whole, the proposals
    refer to a Council decision on entry into force which will apply to

    all the sectors concerned. ^

```

_**H**_ _**[i/ ]**_

```
                                   94/ 0228(CNS)
                 Proposal for a
           COUNCIL REGULATION (EC) No . /94

                 of U l . . . . . 1994 U 3 t

    on the adjustments and transitional arrangements required
in the agriculture sector in order to implement the agreements concluded

```

```
     during the Uruguay Round of multilateral trade negotiations

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community, and in
particular Article 43 thereof,

Having regard to Council Regulation (EEC) No 805/68 of 27 June 1968 on the
common organization of the market in beef and veal(^), as last amended by
Regulation (EC) No 1884/94( [2] ), and in particular Article 7(2) thereof,

Having regard to the proposal from the Commission,

Having regard to the opinion of the European Parliament,

Whereas the Community has adopted a set of rules governing the common
agricultural policy;

Whereas, under the Uruguay Round of multilateral trade negotiations, the
Community has negotiated various agreements (hereinafter referred to as the
"GATT agreements");, whereas several of those agreements concern agriculture,
in particular the Agreement on Agriculture (hereinafter referred to as "the
Agreement"); whereas the concessions relating to domestic support can be
complied with by setting prices and aid at a suitable level and specific
provisions need not be laid down on this subject; whereas the Agreement lays
down a six—year timetable for the extension of access to the Community
market for agricultural products from third countries on the one hand and
the gradual reduction in support granted by the Community on exports of
agricultural products on the other hand; whereas the agricultural
legislation on trade with third countries should be adapted accordingly;

(1) OJ No L 148, 28.6.1968, p.24,
(2) OJ No L 197, 27.7.1994, p.27,

```

**te**

```
Whereas, by converting all the measures restricting imports of agricultural
products into customs duties (tarification) and by prohibiting the
application of such measures in the future, the Agreement requires the
abolition of variable import levies and of the other measures and import
charges currently provided for under the market organizations; whereas the
rates of customs duty applicable to agricultural products in accordance with
the Agreement are to be fixed in the common customs tariff; whereas,
however, for certain product groups such as cereals, rice, wine and fruit
and vegetables, the introduction of supplementary or other trade mechanisms

that do not involve the collection of fixed customs duties calls for the

adoption of rules providing for derogations in the basic Regulations;
whereas, in addition, the measures to protect the Community market against
imports of dried grapes and processed cherries can, under the Agreement on
Safeguards, be maintained for a period of five years; whereas, moreover, in
order to avert problems of supply to the Community market, the suspension of
customs duties on certain sugar products should be permitted;

Whereas, in order to maintain a minimum level of protection against the
adverse effects on the market as a result of tarification, the Agreement
permits the application of additional customs duties under precisely defined
conditions but only to products subject to tarification; whereas the
corresponding provisions should accordingly be inserted into the basic
Regulations concerned;

Whereas the Agreement provides for a series of tariff quotas under
arrangements for current and minimum access; whereas the conditions
applicable to such quotas are spelled out in detail in the Agreement;
whereas the Community has undertaken to open other tariff quotas for certain
products under special arrangements; whereas, in view of the large number of
quotas and in order to ensure that they are implemented as effectively as
possible, the Commission should be responsible for opening and administering
them using the management committee procedure;

Whereas the amendments resulting from the framework agreement on bananas
concluded with certain countries in South America under the Uruguay Round
should be incorporated in Council Regulation (EEC) No 404/93 of 13 February
1993 on the common organization of the market in bananas^);

(3) OJ No L 47, 25.02.1993, p.l.

```

**Mt**

```
Whereas, since the Agreement on Safeguards lays down clear rules on the
application of protective clauses as incorporated in the market
organizations, such clauses should be supplemented by a reference to the
obligations flowing from international agreements;

Whereas in its trading relations with third countries not subject to the
GATT agreements the Community is not bound by the constraints on access to
the Community market arising therefrom; whereas, in order to ensure that the
necessary measures may be taken where applicable with regard to products
from such countries, the Commission should be given the relevant powers, to
be exercised through the management committee procedure;

Whereas, by virtue of the Agreement, the granting of export subsidies is
limited henceforward to certain groups of agricultural products defined
therein; whereas, in addition, it is subject to limits in terms of quantity
and value;

Whereas compliance with the limits in terms of value can be ensured at the
time when refunds are fixed and through monitoring of payments under the
rules relating to the EAGGF; whereas monitoring may be facilitated by the
compulsory advance fixing of refunds, while allowing the possibility, in the
case of differentiated refunds, of changing the specified destination within
the same geographical area to which a single given rate of refund applies;

Whereas monitoring of constraints in terms of quantity calls for the
introduction of a reliable and effective system of monitoring; whereas, to
that end, the granting of refunds should be made subject to an export
licence; whereas refunds should be granted up to the limits available,
depending on the particular situation of each product concerned; whereas
exceptions to that rule can only be permitted in the case of processed
products not listed in Annex II to the Treaty, to which limits in value do
not apply, and in the case of food-aid operations, which are exempt from any
limitation; whereas provision should be made for derogations from strict
compliance with management rules where exports benefiting from refunds are
not likely to exceed the limits in quantity .laid down; whereas monitoring of
the quantities exported with refunds during the marketing years referred to
in the Agreement can be carried out on the basis of export licences issued
for each marketing year;

```

_**tf**_

```
Whereas compliance with the Agreement on Trade-Related Aspects of
Intellectual Property Rights must also be ensured; whereas, to that end, the
requisite stipulations must be inserted into Council Regulation (EEC)
No 822/87 of 16 March 1987 on the common organization of the market in
wine( [4] ), as last amended by Regulation (EEC) No 1891/94( [5] );

Whereas, with regard to plant health, Council Directive 77/93/EEC of
21 December 1976 on protective measures against the introduction into the
Member States of organisms harmful to plants or plant products and against
their spread within the Community( [6] ), as last amended by Directive
94/13/EC^), should be amended in order to provide for uniform
arrangements vis-à-vis third countries precluding quantitative restrictions
or measures having equivalent effect;

Whereas, in the wake of the amendments to the legislation on agriculture
provided for in this Regulation, many Council Regulations deriving from the
basic Regulations no longer serve any purpose; whereas, for the sake of
legal clarity, they should be repealed; whereas certain provisions which
have lapsed although they are not directly connected with the GATT
Agreements should also be repealed;

Whereas the switchover from the existing arrangements to those resulting,
from the GATT agreements may give rise to difficulties of adaptation which
are not dealt with in this Regulation; whereas, in order to deal with that
eventuality, a general provision should be included enabling the Commission
to adopt the transitional measures necessary for a certain period,

HAS ADOPTED THIS REGULATION:

                    Article 1

This Regulation lays down the adaptations and transitional measures
required in the agriculture sector in order to implement the agreements
concluded during the Uruguay Round of multilateral trade negotiations.

(4) OJ No L 84, 27.03.1987, p.l.
(5) OJ No L 197, 30.07.1994, p.42
(6) OJ No L 26, 31.01.1977, p.20.
(7) OJ No L 92, 9.4.1994, p. 27.

```

_**kh**_

```
                    Article 2

The adaptations referred to in Article 1 are set out in the Annexes hereto.

                    Article 3

1. Where transitional measures are necessary under the common agricultural
  policy in order to facilitate the switchover from the existing
  arrangements to those resulting from the requirements of the agreements
  referred to in Article 1, such measures shall be adopted in accordance
  with the procedure provided for in Article 38 of Regulation No 136/66/EEC
  or, as appropriate, the corresponding Articles in the other Regulations
  on the common organization of agricultural markets, or in Regulation (EC)
  No 3448/93.

  When such measures are adopted, account shall be taken of the special
  features of the various agricultural sectors, having due regard to the
  obligations arising from the agreements referred to in Article 1.

2. The measures referred to in paragraph 1 may be adopted during a period
  expiring on 31 December 1997 and shall not apply beyond that date. The
  Council, acting by a qualified majority on a proposal from the
  Commission, can extend that period.

                    Article 4

1. Where, in view of the special circumstances affecting an agricultural
  product, compliance with the requirements on export support under the
  agreements referred to in Article 1 can be assured by means having a
  lesser effect than those provided for to that end, the Commission may, to
  the extent and for the period strictly necessary, exempt that product
  from the application of the provisions on export refunds covered by this
  Regulation.

2. Without prejudice to the provisions of this Regulation, the Commission
  may take any measures necessary to protect the Community market against
  imports of agricultural products from third countries towards which the
  Community has no binding obligations under the agreements referred to in

  Article 1.

3. Measures pursuant to paragraphs 1 and 2 shall be- adopted in accordance
  with the procedure provided for in Article 3(1).

```

_**'^**_

```
                    Article 5

1. This Regulation shall enter into force on a date determined by a decision
  on the entry into force of the acts implementing the results of the
  Uruguay Round.

2. It shall apply from 1 July 1995.

  However :

  (a) Article 3 and Article 4(2) shall apply from 1 January 1995;

  (b) the provisions laid down in the Annexes on import duties and
     additional import duties which apply to products listed in
     Annex XIII and XVI for which an entry price is applicable before
     1 July 1995 shall apply as from the commencement during 1995 of the
     marketing year for the products concerned;

  (c) the provisions on export refunds shall apply:

     - as from 1 September 1995 as regards Annexes II and XVI,
     - as from 1 October 1995 as regards Annex IV,
     - as from 1 November 1995 as regards Annex V;

  (d) the provisions laid down in Annex XV shall apply as from [ ].

  (e) the provisions laid down in Annex XVI, -1.2, shall apply as from
     1 January 1996.

This Regulation shall be binding in its entirety and directly applicable in

all Member States.

Done at For the Council

```

```
       proposal for a

PARLIAMENT AND COUNCIL REGULATION

      of 1994

```

_tt-U5_

```
94/ 0229CC0D)

```

```
      amending Council Regulation (EEC) No 1576/89 laying down

     general rules on the definition, description and presentation
    of spirit drinks and Council Regulation (EEC) No 1601/91 laying
       down general rules on the definition, description and
      presentation of aromatized wines, aromatized wine-based
     drinks and aromatized wine-product cocktails following the
       Uruguay Round of the multilateral trade negotiations

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community, and in
particular Articles 43 and 100a thereof,

Having regard to the proposal from the Commission,

Having regard to the opinion of the Economic and Social Committee,

Acting in accordance with the procedure referred to in Article 189b of the

Treaty,

Whereas Council Regulation (EEC) No 1576/89 of 29 May lgsg* [1] ), as amended
by Regulation (EEC) No 3280/92( [2] ), and Council Regulation (EEC) No 1601/91
of 10 June 1991( [3] ), as amended by Regulation (EEC) No 3fi79/92< [4] ), lay down
general rules for the definition, description and presentation of spirit
drinks, aromatized wines, aromatized wine-based drinks and aromatized wineproduct cocktails; whereas in order to take account in the said Regulations
of the obligations arising, in particular, from Articles 23 and 24 of the
Agreement on Trade-Related Aspects of Intellectual Property Rights, which
forms an integral part of the Agreement establishing the World Trade
Organization, provision should be made therein for the parties concerned to
prevent, under certain* conditions, the unlawful use of geographical
designations protected by a third country member of the World Trade
Organization,

(1) OJ No L 160, 12.6.1989, p. 1.
(2) OJ No L 327, 13.11.1992, p. 3.
(3) OJ No L 149, 14.6.1991, p. 1.
(4) OJ No L 327, 13.11.1992, P. 1.

```

**S"<**

```
HAVE ADOPTED THE FOLLOWING REGULATION:

                    Article 1

1. The following Article is inserted after Article 11 of Regulation (EEC)
   No 1576/89:

                   "Article 11a

   1. Member States shall adopt all measures necessary to permit those
     concerned to prevent, under the conditions laid down in Articles 23
     and 24 of the Agreement on Trade-Related Aspects of Intellectual
     Property Rights, the use within the Community of a geographical
     designation identifying products covered by this Regulation for
     products which do not originate in the place referred to by the
     geographical designation in question, including in cases where the
     actual origin of the product is indicated or where the geographical
     designation is given in translation or accompanied by expressions
     such as "like", "type", "style", "imitation" or other.

     For the purposes of this Article, "geographical designation" shall
     mean any indication identifying a product as originating in the
     territory of a third country which is a member of the World Trade
     Organization, or in a region or locality of that territory, where a
     quality, reputation or other specific characteristic of that product
     can essentially be attributed to that geographical origin.

   2. Paragraph 1 shall apply notwithstanding Article 11 of this
     Regulation and other provisions of Community legislation laying down
     rules for the description and presentation of products covered by
     this Regulation.

   3. Detailed rules for the application of this Article, where necessary,
     shall be adopted in accordance with the procedure laid down in

     Article 14."

```

_**si**_

```
2. The following Article is inserted after Article 10 of Regulation (EEC)
   No 1601/91:

                   "Article 10a

   1. Member States shall adopt all measures necessary to permit those
     concerned to prevent, under the conditions laid down in Articles 23
     and 24 of the Agreement on Trade-Related Aspects of Intellectual
     Property Rights, the use within the Community of a geographical
     designation identifying products covered by this Regulation for
     products which do not originate in the place referred to by the
     geographical designation in question, including in cases where the
     actual origin of the product is indicated or where the geographical
     designation is given in translation or accompanied by expressions
     such as "like", "type", "style", "imitation" or other.

     For the purposes of this Article, "geographical designation" shall
     mean any indication identifying a product as originating in the
     territory of a third country which is a member of the World Trade
     Organization, or in a region or locality of that territory, where a
     quality, reputation or other specific characteristic of that product
     can essentially be attributed to that geographical origin.

   2. Paragraph 1 shall apply notwithstanding Article 10 of this
     Regulation and other provisions of Community legislation laying down
     rules for the description and presentation of products covered by
     this Regulation.

   3. Detailed rules for the application of this Article, where necessary,
     shall be adopted in accordance with the procedure laid down in

     Article 13."

                    Article 2

1. This Regulation shall enter into force on a date determined by a
   decision on the entry into force of the acts implementing the results
   of the Uruguay Round.

2. It shall apply from 1 January 1996.

This Regulation shall be binding in its entirety and directly applicable in

all Member States.

```

```
^JL.

```

```
Done at

```

```
For Parliament For the Council

```

**S3**

```
                  List of Annexes

ANNEX I Cereals

ANNEX II Rice

ANNEX III Dried fodder

ANNEX IV Sugar

ANNEX V Oils and fats

ANNEX VI Flax and hemp

ANNEX VII Milk products

ANNEX VIII Beef and veal

ANNEX IX Sheepmeat and goatmeat

ANNEX X Pigmeat

ANNEX XI Poultrymeat

ANNEX XII Eggs', ovalbumin and lactalbumin

ANNEX XIII Fruit and vegetables

ANNEX XIV Processed fruit and vegetables

ANNEX XV Bananas

ANNEX XVI Wine

ANNEX XVII Tobacco

ANNEX XVIII Hops

ANNEX XIX Flowers and live plants

ANNEX XX Seeds

ANNEX XXI Miscellaneous regulations

ANNEX XXII Most remote regions

ANNEX XXIII Plant-health legislation

```

**Çf**

```
                    ANNEX I

                    CEREALS

I. Council Regulation (EEC) No 1766/92 of 30 June 1992 (OJ No L 181,
   1.7.1992, p.21), as amended by Regulation (EEC) No 1866/94
   (OJ No L 197, 30.7.1994, p.l).

 (1) Article 3(2) is deleted.

 (2) The following subparagraph is added to Article 3(3):.

   "The intervention price valid for maize and grain sorghum in May shall
   remain valid in July, August and September of the following marketing
   year."

 (3) The first sentence of the second subparagraph of Article 3(4) is
   replaced by the following:

   "The intervention price shall be subject to monthly increases for the
   whole or part of the marketing year."

 (4) The first and last indents of Article 5 are deleted.

 (5) Title II is replaced by the following:

                    "Title II

                    Article 9

1. Imports into the Community, or exports therefrom, of any of the

   products listed in Article 1 shall be subject to presentation of an
   import or export licence.

   Licences shall be issued by the Member States to any applicant,
   irrespective of his place of establishment in the Community and without
   prejudice to measures taken for the application of Articles 12 and 13.

   Import and export licences shall be valid throughout the Community.
   Such licences shall be issued subject to the lodging of a security
   guaranteeing that the products are imported or exported during the term
   of validity of the licence; the security shall be forfeited in whole or
   in part if import or export is not carried out, or is only carried out
   partially, within that period.

```

```
                    - 18 - K~r
2. The term of validity of licences and other detailed rules for the
  application of this Article shall be adopted in accordance with the
  procedure laid down in Article 23. t

                   Article 10

1. Unless this Regulation provides otherwise, the rates of duty in the
  common customs tariff shall apply to the products listed in Article 1.

2. Notwithstanding paragraph 1, the import duty on products covered by
  CN codés ex 1001 other than meslin, 1002, 1003, ex 1005 other than
  hybrid seed, and ex 1007 other than hybrid for sowing, shall be equal,
                   , to the intervention price valid for such
  products on importation and increased by 55%, minus the import price.
  However, that duty may not exceed the rate of duty in the common

  customs tariff.

3. Detailed rules for the application of this Article shall be adopted in
  accordance with the procedure laid down in Article 23. Such detailed
  rules shall cover in particular the measures necessary to determine and
  calculate import prices and to verify their authenticity.

                   Article 11

1. In order to prevent or counteract adverse effects on the market in the
  Community which may result from imports of certain products listed in
  Article 1, imports of one or more of such products at the rate of duty
  laid down in Article 10 may be subject to payment of an additional
  import duty under the conditions set out in Article 5 of the Agreement
  on Agriculture concluded in accordance with Article 228 of the Treaty
  in the framework of the Uruguay Round of multilateral trade
  negotiations.

2. The Commission shall adopt detailed rules for the application of this
  Article in accordance with the procedure laid down in Article 23. Such
  detailed rules shall specify in particular:

   (a) the products to which additional import duties may be applied,

  (b) the criteria for triggering the application of paragraph 1 and
       in particular the calculation and determination of the various
      quantities and prices.

```

`- 19 -` _r_ _._

```
                   Article 12

   Tariff quotas for the products listed in Article 1 resulting from
   agreements concluded in accordance with Article 228 of the Treaty or
   from any other act of the Council pursuant to the Treaty shall be
   opened and administered in accordance with detailed rules adopted under
   the procedure laid down in Article 23. Such detailed rules shall
   provide for annual quotas, suitably phased over the year, to be opened
   and, where appropriate, for:

   (a) guarantees covering the nature, provenance and origin of the
       product,

   (b) recognition of the document used for verifying the guarantees
       referred to in (a), and

   (c) the conditions under which import licences are issued and their
       term of validity.

                   Article 13

1. To the extent necessary to enable the products listed in Article 1 to
  be exported without further processing or in the form of goods listed
   in Annex B on the basis of quotations or prices for those products on
  the world market and within the limits resulting from agreements
  concluded in accordance with Article 228 of the Treaty, the difference
  between those quotations or prices and prices in the Community may be
  covered by export refunds.

  Export refunds on the products listed in Article 1 in the form of goods
  listed in Annex B may not be higher than those applicable to such
  products exported without further processing.

2. Refunds shall be the same for the whole Community. They may vary
  according to destination.

  Refunds shall be fixed in accordance with the procedure laid down in

  Article 23.

  Refunds may be fixed:

   (a) at regular intervals,

   (b) by invitation to tender.

  Refunds fixed at regular intervals may, where necessary, be adjusted in
  the intervenirig period by the Commission at the request of a Member

  State or its own initiative.

3. Refunds on products listed in Article 1 and exported without further
  processing shall only be granted on application and on presentation of
  the relevant export licence.

```

```
4. The refund applicable to exports of products listed in Article 1

   exported without further processing shall be that applicable on the day

   of application for the licence and, in the case of a differentiated

  -refund, that applicable on the same day for the destination indicated

   on the licence.

5. Paragraphs 3 and 4 may be made to apply to products listed in Article 1

   and exported in the form of goods listed in Annex B in accordance with
   the procedure laid down in Article 16 of Regulation (EC) No 3448/93.

6. Paragraphs 3 and 4 may be waived in the case of products listed in

   Article 1 on which refunds are paid under food-aid operations, in

   accordance with the procedure laid down in Article 23.

7. Save as otherwise provided in accordance with the procedure laid down

   in Article 23, the refund on products listed in Article 1(1)(a) and (b)

   in accordance with paragraph 4 shall be adjusted, during the period

   from August to June of the same marketing year, in respect of each

   month elapsing prior to export, by an amount equal to the monthly

   increase applicable to the intervention price fixed.for that marketing

   year.

   A corrective amount may be fixed in accordance with the procedure laid

   down in Article 23. However, the Commission may, where necessary, alter

   corrective amounts.

   The first and second subparagraphs may be applied, in whole or in part,

   to products listed in Article 1(1)(c) and (d) and to products listed in

   Article 1 and exported in the form of goods listed in Annex B. In that

   case, the adjustment referred to in the first subparagraph shall be

   corrected by applying to the monthly increase a coefficient expressing

   the ratio between the quantity of basic product and the quantity of the

   latter contained in the processed product exported or used in the goods

   exported.

8. In so far as is necessary to take account of the features of production

   peculiar to certain spirituous beverages obtained from cereals, the

   criteria for granting export refunds as provided for in paragraph 1 and

   the procedures for verification may be adapted to fit this particular

   situation.

9. Detailed rules for the application of this Article and in particular

   those on the adaptation provided for in paragraph 8 shall be adopted in

   accordance with the procedure laid down in Article 23. Annex B shall be

   amended in accordance with the same procedure.

```

```
                   Article 14

1. To the extent necessary for the proper working of the common
  organization of the market in cereals, the use of inward processing
  arrangements may be prohibited in whole or in part:

  - in respect of products listed in Article 1 which are intended for
    the manufacture of products listed in Article 1(1)(c) and (d), and

    in special cases, in respect of products listed in Article 1 which
    are intended for the manufacture of goods listed in Annex B.

2. Measures adopted pursuant to this Article shall be decided on in
  accordance with the procedure laid down in Article 23.

                   Article 15

1. The general rules for the interpretation of the Combined Nomenclature
  and the special rules for its application shall apply to the tariff
  classification of products covered by this Regulation; the tariff
  nomenclature resulting from the application of this Regulation shall be
  incorporated in the common customs tariff.

2. Save as otherwise provided for in this Regulation or pursuant to a  provision thereof,, the following shall be prohibited in trade with

  third countries:

    the levying of any charge having equivalent effect to a customs
    duty,

    the application of any quantitative restriction or measure having
    equivalent effect.

                           1 Article 16

1. Where the quotations or prices on the world market for one or more of
  the products listed in Article 1 reach the level of Community prices
  and where that situation is likely to continue and to deteriorate,
  thereby disturbing or threatening to disturb the Community market,
  appropriate measures may be taken.

2. Detailed rules for the application of this Article shall be adopted in
  accordance with the procedure laid down in Article 23.

```

```
 - 22 
Article 17

```

**Si**

```
 1. If, by reason of an increase in imports or exports, the Community
   market in one or more of the products listed in Article 1 is affected
   by, or is threatened with, serious disturbance likely to jeopardize the
   achievement of the objectives set out in Article 39 of the Treaty,
   appropriate measures may be applied in trade with third countries until

   such disturbance or threat of disturbance has ceased.

 2. If the situation referred to in paragraph 1 arises, the Commission
   shall, at the request of a Member State or on its own initiative,
   decide upon the necessary measures; the Member States shall be notified
   of such measures, which shall be immediately applicable. If the
   Commission receives a request from a Member State, it shall take a
   decision thereon within three working days following receipt of the

   request.

 3. Measures decided upon by the Commission may be referred to the Council
   by any Member State within three working days of the day on which they
   were notified. The Council shall meet without delay. It may, acting by
   a qualified majority, amend or annul the measure in question.

 4. The Commission shall adopt detailed rules for the application of this
   Article in accordance with the procedure laid down in Article 23. .

 5. This Article shall be applied having regard to the obligations arising
   from agreements concluded in accordance with Article 228(2) of the
   Treaty."

 6. The following is added to Annex A:

   "CN code Description

   2306 Oil-cake and other solid residues, whether or not

              ground or in the form of pellets, resulting from the
              extraction of vegetable fats or oils, other than
              those of headings 2304 and 2305

   2306 90 - other:

              — other

   2306 90 91 — - of germ of maize "

II. Council Regulation (EEC) No 2729/75 of 29 October 1975 (OJ No L 281,
   1.11.1975, p.18).

   The terms "levy" and "levies" are replaced by "duty" and "duties"
   respectively.

```

```
                     - 23 
                    ANNEX II

                     RICE

I. Council Regulation (EEC) No 1418/76 of 21 June 1976 (OJ No L 166,
   25.6.1976, p.l), as last amended by Regulation (EEC) No 1869/94 (OJ
   No L 197, 30.7.1994, p.7).

 (1) Article 4(5) is replaced by the following:

 "5. The following shall be determined in accordance with the procedure
   provided for in Article 27:

   a) after consultation with the Member States, the intervention centres
     referred to in paragraph 4,

   b) the rate for converting husked rice into paddy rice, or vice versa,

     and

   c) processing costs and the value of by-products to be taken into
```

`consideration for the application of paragraph` `3.` _"_

```
 (2) Title II is replaced by the following:

                    "Title II

```

`Trade with` `third` _,_ `countries`

```
                   Article 10

 1. Imports into the Community, or exports therefrom, of any of the

   products listed in Article 1 shall be subject to presentation of an
   import or export licence.

   Licences shall be issued by the Member States to any applicant,
   irrespective of his place of establishment in the Community and without
   prejudice to measures taken for the application of Articles 14 and 15.

   Import and export licences shall be valid throughout the Community.
   Such licences shall be issued subject to the lodging of a security
   guaranteeing that the products are imported or exported during the term
   of validity of the licence; the security shall be forfeited in whole or
   in part if import or export is not carried out, or is only carried out
   partially, within that period.

```

```
                     - 24

 2. The term of validity of licences and other detailed rules for the
   application of this Article shall be adopted in accordance with the
   procedure laid down in Article 27.

                   Article 11

1. A subsidy may be fixed for consignments to the French overseas
   department of Réunion of products falling within CN code 1006
   (excluding code 1006 10 10) which come from the Member States and are
   in one of the situations referred to in Article 9(2) of the Treaty.

   That subsidy shall be fixed, taking into account the supply
   requirements of the Réunion market, on the basis of the difference
   between the quotations or prices of the relevant products on the world
   market and the quotations or prices of those products on the Community
   market, and, if necessary the price of those products delivered to

   Réunion.

   The subsidy shall be granted on application by the party concerned.
   The subsidy may be fixed, where appropriate, by tendering procedure.
   This tender shall involve the subsidy amount.

   The subsidy shall be fixed periodically in accordance with the
   procedure laid down in Article 27. However, where the need arises, the
   Commission may, at the request of a Member State or on its own
   initiative, alter the subsidy in the interval.

2. The rules on the financing of the common agricultural policy shall
   apply to the subsidy provided for in paragraph 1.

3. The detailed rules for the application of this Article shall be adopted
   in accordance with the procedure laid down in Article 27.

```

```
                     - 25 ## **_u_**

                    Article 12

 1. Unless this Regulation provides otherwise, the rates of duty in the
   common customs tariff shall apply to the products listed in Article 1.

 2. Notwithstanding paragraph 1, the import duty on:

   (a) husked rice covered by CN code 1006 20 shall be equal,
                    to the intervention price valid for indica
       rice and japonica rice respectively on importation increased by

       - 80% in the case of indica rice and

       - 88% in the case of japonica rice,

       minus the import price; and

   (b) wholly milled rice covered by CN code NC 1006 30 shall be equal,

                         to the intervention price at the
       time of importation plus a percentage to be calculated and minus
       the import price.

   However, that duty may not exceed the rate of duty in the common

   customs tariff.

   The percentage referred to in b) shall be calculated by adjusting the
   respective percentages referred to in a) by reference to the conversion
   rate, processing costs and the value of by-products, and then adding an
   amount for the protection of the industry.

3. Notwithstanding paragraph 1:

   (a) no duty shall be charged on imports of products falling within
       products covered by CN code 1006 10 10, CN 1006 20 or
       CN 1006 40 00 into the French overseas department of Réunion,

   (b) the duty to be charged on imports of products falling within
       CN code 1006 30 into the French overseas department of Reunion
       shall be muliplied by a coefficient of 0,30.

4. Detailed rules for the application of this Article shall be adopted in
   accordance with the procedure laid down in Article 27. Such detailed
   rules shall in particular lay down the criteria for distinguishing the
   types of imported rice referred to in paragraph 2, fix the amount for
   the protection of the industry and include the necessary provisions for
   determining and calculating import prices and checking their
   authenticity.

```

 - 26 

A r t i c l e 13

lo3

```
1. In order to prevent or counteract adverse effects on the market in the
  Community which may result from imports of certain products listed in
  Article 1, imports of one or more of such products at the rate of duty
  laid down in Article 12 may be subject to payment of an additional
  import duty under the conditions set out in Article 5 of the Agreement
  on Agriculture concluded in accordance with Article 228 of the Treaty
  in the framework of the Uruguay Round of multilateral trade
  negotiations.

2. The Commission shall adopt detailed rules for the application of this
  Article in accordance with the procedure laid down in Article 27. Such
  detailed rules shall specify in particular:

   (a) the products to which additional import duties may be applied,

   (b) the criteria for triggering the application of paragraph 1 and
       in particular the calculation and determination of the various
      quantities and prices.

                   Article 14

  Tariff quotas for the products listed in Article 1 resulting from
  agreements concluded in accordance with Article 228 of the Treaty or
  from any other act of the Council pursuant to the Treaty shall be
  opened and administered in accordance with detailed rules established
  pursuant to Article 27. Such detailed rules shall provide for annual
  quotas, suitably phased over the year, to be opened and, where
  appropriate, for:

   (a) guarantees covering the nature, provenance and origin of the
       product,

   (b) recognition of the document used for verifying the guarantees
       referred to in (a), and

   (c) the conditions under which import licences are issued and their
      term of validity.

                   Article 15

1. To the extent necessary to enable the products listed in Article 1 to
  be exported without further processing or in the form of goods listed
  in Annex B on the basis of quotations or prices for those products on
  the world market and within the limits resulting from agreements
  concluded in accordance.with Article 228 of the Treaty, the difference
  between those quotations or prices and prices in the Community may be
  covered by export refunds.

```

`- 27` _**Gt**_

```
   Export refunds on the products listed in Article 1 in the form of goods
   listed in Annex B may not be higher than those applicable to such
   products exported without further processing.

2. Refunds shall be the same for the whole Community. They may vary
   according to destination.

   Refunds shall be fixed in accordance with the procedure laid down in

   Article 27.

   Refunds may be fixed:

   (a) at regular intervals,

   (b) by invitation to tender.

  Refunds fixed at regular intervals may, where necessary, be adjusted in
  the intervening period by the Commission at the request of a Member

  State or on its own initiative.

  When the amount of the refund is set, account shall be taken in

  particular of the need to establish a balance between the use of
  Community basic agricultural products for export as processed goods to
  third countries, and the use of products from these countries admitted
   for inward processing.

3. Refunds on products listed in Article 1 and exported without further
  processing shall only be granted on application and on presentation of
  the relevant export licence.

4. The refund applicable to exports of products listed in Article 1
  exported without further processing shall be that applicable on the day
  of application for the licence and, in the case of a differentiated
  refund, that applicable on the same day for the destination indicated

  on the licence.

5. Paragraphs 3 and 4 may be made to apply to products listed in Article 1
  and exported in the form of goods listed in Annex B in accordance with
  the procedure laid down in Article 16 of Regulation (EC) No 3448/93.

6. Paragraphs 3 and 4 may be waived in the case of products listed in
  Article 1 on which refunds are paid under food-aid operations, in
  accordance with the procedure laid down in Article 27.

7. Save as otherwise provided in accordance with the procedure laid down
  in Article 27, the refund on products listed in Article l(l)(a) and (b)
  in accordance with paragraph 4 shall be adjusted, during the period
  from October to July of the same marketing year, in respect of each
  month elapsing prior to export, by an amount equal to the monthly
  increase applicable to the intervention price fixed for that marketing
  year, adjusted according to the degree of processing using the
  applicable conversion rate.

```

**us**

```
  A corrective amount may be fixed in accordance with the procedure laid
  down in Article 27. However, the Commission may, where necessary, alt,er

  corrective amounts.

  The first and second subparagraphs may be applied, in whole or in part,
  to products listed in Article 1(1)(c) and to products listed in
  Article 1 and exported in the form of goods listed in Annex B. In that
  case, the adjustment referred to in the first subparagraph shall be
  corrected by applying to the monthly increase a coefficient expressing
  the ratio between the quantity of basic product and the quantity of the
  latter contained in the processed product exported or used in the goods
  exported.

8. Detailed rules for the application of this Article shall be adopted in
  accordance with the procedure laid down in Article 27. Annex B shall be
  amended in accordance with the same procedure.

                   Article 16

1. To the extent necessary for the proper working of the common
  organization of the market in rice, the use of inward processing
  arrangements may be prohibited in whole or in part in respect of
  products listed in Article 1.

2. Measures adopted pursuant to this Article shall be decided on in
  accordance with the procedure laid down in Article 27.

                   Article 17

1. The general rules for the interpretation of the Combined Nomenclature
  and the special rules for its application shall apply to the tariff
  classification of products covered by this Regulation; the tariff
  nomenclature resulting from the* application of this Regulation,
  including the definitions listed in Annex A, shall be incorporated in

  the common customs tariff.

2. Save as otherwise^ provided for in this Regulation or pursuant to a
  provision thereof, the following shall be prohibited:

    the. levying of any charge having equivalent effect to a customs
    duty,

    the application of any quantitative restriction on imports or
    measure having equivalent effect.

```

```
 - 29 
Article 18

```

**Ok**

```
 1. Where the quotations or prices on the world market for one or more of
   the products listed in Article 1(a) or (b) reach the level of Community
   prices and where that situation is likely to continue and to
   deteriorate, thereby disturbing or threatening to disturb the Community
   market, appropriate measures may be taken.

 2. Detailed rules for the application of this Article shall be adopted in
   accordance with the procedure laid down in Article 27.

                    Article 19

 1. If, by reason of an increase in imports or exports, the Community
   market in one or more of the products listed in Article 1 is affected
   by, or is threatened with, serious disturbance likely to jeopardize the
   achievement of the objectives set out in Article 39 of the Treaty,
   appropriate measures may be applied in trade with third countries until

   such disturbance or threat of disturbance has ceased.

 2. If the situation referred to in paragraph 1 arises, the Commission
   shall, at the request of a Member State or on its own initiative,
   decide upon the necessary measures; the Member States shall be notified
   of such measures, which shall be immediately applicable. If the
   Commission receives a request from a Member State, it shall take a
   decision thereon within three working days following receipt of the

   request.

 3. Measures decided upon by the Commission may be referred to the Council
   by any Member State within three working days of the day on which they
   were notified. The Council shall meet without delay. It may, acting by
   a qualified majority, amend or annul the measure in question.

 4. The Commission shall adopt detailed rules for the application of this
   Article in accordance with the procedure laid down in Article 27.

 5. This Article shall be applied having regard to the obligations arising
   from agreements concluded in accordance with Article 228(2) of the v
   Treaty."

II. Council Regulation (EEC) No 1423/76 of 21 June 1976 (OJ No L 166,
   25.6.1976, p.20).

   Article 3 is deleted.

```

```
                     - 30 
III. Council Regulation (EEC) No 1428/76 of 21 June 1976 (OJ No L 166,
   25.6.1976, p.30).

   Council Regulation* (EEC) No 1431/76 of 21 June 1976 (OJ No L 166,
   25.6.1976, p.36).

   Council Regulation (EEC) No 1432/76 of 21 June 1976 (OJ No L 166,
   25.6.1976, p.39).

   Council Regulation (EEC) No 1433/76 of 21 June 1976 (OJ No L 166,
   25.6.1976, p.42).

   Council Regulation (EEC) No 1263/78 of 12 June 1978 (OJ No L 156,
   14.6.1976, p.14).

   The above Regulations are repealed.

```

**U**

```
                     - 31 
                    ANNEX III

                   DRIED FODDER

Council Regulation (EEC) No 117/78 of 22 May 1978 (OJ No L 142, 30.5.1978,
p.2), as last amended by Regulation (EEC) No 3496/93 (OJ No L 319,
21.12.1993, p.17)

(1) In Title II the following Article is inserted before Article 7:

                   "Article 6a

 Unless this Regulation provides otherwise, the rates of duty in the common
 customs tariff shall apply to the products listed in Article 1."

(2) Article 7(2) is replaced by the following:

 "Save as otherwise provided for in this Regulation or pursuant to a
 provision thereof, the following shall be prohibited in trade with third

 countries:

     the levying of any charge having equivalent effect to a customs

     duty,

   - the application of any quantitative restriction or measure having
     equivalent effect".

(3) After Article 7 the following Article is inserted:

                   "Article 7a

Tariff quotas for the products listed in Article 1 resulting from
agreements concluded in accordance with Article 228 of the Treaty or from
any other act of the Council pursuant to the Treaty shall be opened and
administered in accordance with detailed rules adopted according to the
procedure laid down in Article 12. Such detailed rules shall provide for
annual quotas, suitably phased over the year, to be opened and, where
appropriate, for:

```

`- 32 -` `/` _n_

_O_ `"i`

```
   (a) guarantees covering the nature, provenance and origin of the

       product,

   (b) recognition of the document used for verifying the guarantees
       referred to in (a), and

   (c) the conditions under which import licences are issued and their
       term of validity."

(4) Article 8 is replaced by the following:

                   "Article 8

1. If, by reason of an increase in imports or exports, the Community •
   market in one or more of the products listed in Article 1 is affected
   by, or is threatened with, serious disturbance likely to jeopardize the
   achievement of the objectives set out in Article 39 of the Treaty,
   appropriate measures may be applied in trade with third countries until

   such disturbance or threat of disturbance has ceased.

2. If the situation referred to in paragraph 1 arises, the Commission
   shall, at the request of a Member State or on its own initiative,
   decide upon the necessary measures; the Member States shall be notified
   of such measures, which shall be immediately applicable. If the
   Commission receives, a request from a Member State, it shall take a
   decision thereon within three working days following receipt of the

   request.

3. Measures decided upon by the Commission may be referred to the Council
   by any Member State within three working days of the day on which they
   were notified. The Council shall meet without delay. It•may, acting by
   a qualified majority, amend or annul the measure in question.

4. The Commission shall adopt detailed rules for the application of this
   Article in accordance with the procedure laid down in Article 12.

5. This Article shall be applied in compliance with the obligations
   arising from agreements concluded in accordance with Article 228(2) of
   the Treaty. ••

```

```
 - 33 
ANNEX IV

 SUGAR

```

**1o**

```
I. Council Regulation (EEC) No 1785/81 of 30 June 1981 (OJ No L 177,
   1.7.1981, p.4), as last amended by Regulation (EC) No 133/94
   (OJ No L 22, 27.1.1994, p.7).

 (1) Title II is replaced by the following:

                    "Title II

               Trade with third countries

                   Article 13

 1. Imports into the Community, or exports therefrom, of any of the
   products listed in Article 1(1)(a), (b), (c), (d), (f), (g) and (h)
   shall be subject to presentation'of an import or export licence.

   Licences shall be issued by the Member States to any applicant,
   irrespective of his place of establishment in the Community and without
   prejudice to measures taken for the application of Articles 16 and. 17.

   Import and export licences shall be valid throughout the Community.
   Such licences shall be issued subject to the lodging of a security
   guaranteeing that the products are imported or exported during the term
   of validity of the licence; the security shall be forfeited in whole or
   in part if import or export is not carried out, or is only carried out
   partially, within that period.

2. In accordance with the procedure laid down in Article 41:

   (a) the scheme provided for by this Article may be extended to cover,
       the products listed in Article 1(1)(e),

   (b) the term of validity of licences and other detailed rules for
       the application of this Article, which may lay down in
       particular a time limit for the issue of licences, shall be
       adopted.

```

```
                    - 34
```

_**V**_

```
                   Article 14

1. Unless this Regulation provides otherwise, the rates of duty in the
  common customs tariff shall apply to the products listed in Article 1.

2. Notwithstanding paragraph 1, to ensure that the Community market is
  adequately supplied with the products listed in Article 1(1)(a) (raw
  sugar for refining falling within CN codes 1701 11 10 and 1701 12 10)
  and Article 1(1)(c) (molasses) by means of imports from third
  countries, the Commission may, in accordance with the procedure laid
  down in Article 41, suspend in whole or in part the application of
  import duties on these products, and establish the arrangements for any
  such suspension.

                   Article 15

1. In order to prevent or counteract adverse effects on the market in the
  Community which may result from imports of certain agricultural
  products, imports of one or more of such products at the rate of duty
  laid down in the common customs tariff may be subject to payment of an
  additional import duty under the conditions set out in Article 5 of the
  Agreement on Agriculture concluded in accordance with Article 228 of
  the Treaty in the framework of the Uruguay Round of multilateral trade
  negotiations.

2. The Commission shall adopt detailed rules for the application of this
  Article in accordance with the procedure laid down in Article 41. Such
  detailed rules shall specify in particular:

  (a) the products to which additional import duties may be applied,

   (b) the criteria for triggering the application of paragraph 1 and
       in particular the calculation and determination of the various
       quantities and prices.

```

_**n**_

```
                   Article 16

1. Tariff quotas for the products listed in Article 1 resulting from

   agreements concluded in accordance with Article 228 of the Treaty or
   from any other act of the Council pursuant to the Treaty shall be
  opened and administered in accordance with detailed rules adopted under
  the procedure laid down in Article 41. Such detailed rules shall
  provide for annual quotas, suitably phased over the year, to be opened
  and, where appropriate, for:

   (a) guarantees covering the nature, provenance and origin of the
       product,

   (b) recognition of the document used for verifying the guarantees
       referred to in (a), and

   (c) the conditions under which import licences are issued and their
       term of validity.

                   Article 17

1. To the extent necessary to enable the products listed in
  Article 1(1)(a), (c) and (d) to be exported without further processing
  or in the form of goods listed in Annex I, on the basis of quotations
  or prices on the world market for those products listed in
  Article 1(1)(a) and (c), and within the limits resulting from
  agreements concluded in accordance wit,h Article 228 of the Treaty, the
  difference between those quotations or prices and prices in the
  Community may be covered by export refunds.

  The export refund granted for raw sugar may not exceed that granted for
  white sugar.

2. Provision may be made for export refunds in respect of the products
  listed in Article 1(1)(f), (g) and (h) and exported without further
  processing or in the form of goods mentioned in Annex I.

  When determining the amount of the refund, for each 100 kg of dry
  matter particular account shall be taken of:

  (a) the refund applicable to exports of products falling within
      subheading 1702 30 91 of the Combined Nomenclature,

  (b) the refund applicable to exports of the products referred to in
      Article 1(1)(d),

  (C) the economic aspects of the planned exports.

```

`- 36` _**11**_

```
3. The refund applicable to products listed in Article 1 exported in the
  form of good listed in Annex I shall not be greater than that
  applicable to these products exported without further processing.

4. When the amount of the refund is set, account shall be taken in
  particular of the need to establish.a balance between the use of
  Community basic agricultural products for export as processed goods to
  third countries, and the use of products from these countries admitted
  for inward processing.

  Refunds shall be the same for the whole Community. They may vary
  according to destination.

  Refunds shall be fixed in accordance with the procedure laid down in
  Article 41. Refunds may- be fixed:

   (a) at regular intervals,

   (b) by invitation to tender.

  Refunds fixed at regular intervals may, where necessary, be adjusted in
  the intervening period by the Commission at the request of a Member

  State or on its own initiative.

5. Refunds on products listed in Article 1 and exported without further
  processing shall only be granted on application and on presentation of
  the relevant export licence.

6. The refund applicable to- exports of products listed in Article 1
  exported without further processing shall be that applicable on the day
  of application for the licence and, in the case of a differentiated
  refund, that applicable on the same day for the destination indicated

  on the licence.

7. Paragraphs 5 and 6 may be made to apply to products listed in Article 1
  and exported in the form of goods listed in Annex I, in accordance with
  the procedure laid down in Article 16 of Regulation (EC) No 3448/93.

8. Paragraphs 5 and 6 may be waived in the case of products listed in
  Article 1 on which refunds are paid under food-aid operations, in
  accordance with the procedure laid down in Article 41.

9. Detailed rules for the application of this Article and the amendment of
  Annex I shall be adopted in accordance with the procedure laid down in

  •Article 41.

```

```
 - 37 
Article 18

```

**^**

```
1. To the extent necessary for the proper working of the common
  organization of the market in sugar, the use of inward processing
  arrangements may be prohibited in whole or in part:

    in respect of products listed in Article 1(a) and (d), and

    in special cases, in si^i&pjejg^t 1( of products listed in Article 1(1)
    which are intended for the manufacture of goods listed in Annex I.

2. Measures adopted pursuant to this Article shall be decided on in
  accordance with the procedure laid down in Article 41.

                   Article 19

1. The general rules for the interpretation of the Combined Nomenclature
  and the special rules for its application shall apply to the tariff
  classification of products covered by this Regulation; the tariff
  nomenclature resulting from the application of this Regulatiort shall be
  incorporated in the common customs tariff.

2. Save as otherwise provided for in this Regulation or pursuant to a
  provision thereof, the following shall be prohibited in trade with

  third countries:

   (a) the levying of any charge having equivalent effect to a customs
      duty,

   (b) the application of any quantitative restriction or measure
      having equivalent effect.

                   Article 20

1. Where the price of sugar on the world market exceeds the intervention
  price, provision may be made to apply an export levy in respect of the
  sugar in question. This levy must be applied when the cif price of
  white sugar or raw sugar is greater than the reference price.

  Save as otherwise provided in accordance with the procedure laid down
  in Article 41, the levy payable shall be that applicable on the date of

  export.

2. Where the cif price of white or raw sugar is greater than a reference
  price to be determined, a decision may be made to suspend the
  applicable import duty and/or grant an import subsidy for the product
  in question.

```

`- 38 -` **1C**

```
3. The following shall be adopted in accordance with the procedure laid

  down in Article 41:

   (a) the detailed rules for establishing the cif prices referred to .
       in paragraph 2,

   (b) the reference price referred to in paragraphs 1 and 2,

   (c) the decisions referred to in-pa-r&qr^aphs 1 and 2,

   (d) the detailed rules for the application of this Article.

  In the case of the products referred to in Article 1(1)(b), (c), (d),
   (f), (g) and (h) provisions similar to those in paragraphs 1 and 2 and
  to the rules for their application may be adopted using the same
  procedure.

4. The levies stemming from the application of this Article shall be fixed
  by the Commission.

                   Article 21

1. If, by reason of an increase in imports or exports, the Community
  market in one or more of the products listed in Article 1 is affected
  by, or is threatened with, serious disturbance likely to jeopardize the
  achievement of the objectives set out in Article 39 of the Treaty,
  appropriate measures may be applied in trade with third countries until

  such disturbance or threat of disturbance has ceased.

2. If the situation referred to in paragraph 1 arises, the Commission
  shall, at the request of a Member State or on its own initiative,
  decide upon the necessary measures; the Member States shall be notified
  of such measures, which shall be immediately applicable. If the
  Commission receives a request from a Member State, it shall take a
  decision thereon within three working days following receipt of the

  request.

3. Measures decided upon by the Commission may be referred to the Council
  by any Member State within three working days of the day on which they
  were notified. The Council shall meet without delay. It may, acting by
  a qualified majority, amend or annul the measure in question.

4. The Commission shall adopt detailed rules for the application of this
  Article in accordance with the procedure laid down in Article 41.

5. This Article shall be applied having regard to the obligations arising
  from agreements concluded in accordance with Article 228(2) of the
  Treaty."

```

```
                     - 39 
```

_**y,**_
```
(2) Article 26 is amended as follows:

 (a) In paragraph 1 the last sentence is replaced by:

   "Articles 8, 9, 17 and 20 shall not apply to such sugar and Articles 9,
   17 and 20 to such isoglucose and inulin sirop."

 (b) The reference to "Article 18" in paragraph 2 is replaced by a reference

   to "Article 20".

(3) Article 35(1) is replaced by the following:

   "1. No import duty shall apply to imports of preferential sugar."

II. Council Regulation (EEC) No 431/68 of 9 April 1968 (OJ No L 89,
   10.4.1968, p.3)

   Article 2 is deleted.

III. Council Regulation (EEC) No 766/68 of 18 June 1968 (OJ No L 143,
   25.6.1968, p.6), as last amended by Regulation (EEC) No 1489/76 (OJ
   No L 167, 26.6.1976, p.13)

   Council Regulation (EEC) No 770/68 of 18 June 1968 (OJ No L 143,
   25.6.1968, p.16)

   Council Regulation (EEC) No 226/72 of 31 January 1972 (OJ No L 28,
   1.2.1972, p.3)

   Council Regulation (EEC) No 608/72 of 23 March 1972 (OJ No L 75,
   28.3.1972, p.5)

   The above Regulations are repealed.

```

```
  - 40 
  ANNEX V

OILS AND FATS

```

_**11**_

```
:. Council Regulation No 136/66/EEC of 22 September 1966 (OJ No 172,
   30.9.1966, p.3025/66), as last amended by Regulation (EC) No 3179/93
   (OJ No L 285, 20.11.1993, p.9).

(1) Title I is replaced by the following:

                    "Title I

                     Trade

                   Article 2

1. Imports into the Community, or exports therefrom, of any of the
   products listed in Article 1(2) shall be subject to presentation of an
   import or export licence.

   Licences shall be issued by the Member States to any applicant,
   irrespective of his place of establishment in the Community and without
   prejudice to measures taken for the application of Articles 2c and 3.

   Import and export licences shall be valid throughout the Community.
   Such licences shall be issued subject to the lodging of a security
   guaranteeing that the products are imported or exported during the term
   of validity of the licence; the security shall be forfeited in whole or
   in part if import or export is not carried out, or is only carried out
   partially, within that period.

2. The term of validity of licences and other detailed rules for the
   application of this Article shall be adopted in accordance with the
   procedure laid down in Article 38.

                   Article 2a

   Save where this Regulation provides otherwise, the rates of duty in the
   common customs tariff shall apply to the products listed in
   Article 1(2).

                   Article 2b

1. In order to prevent or counteract adverse effects on the market in the
   Community which may result from imports of certain products listed in
   Article 1(2)(c), (d) and (e), imports of one or more of such products
   at the rate of duty laid down in the common customs tariff may be
   subject to payment of an additional import duty under the conditions
   set out in Article 5 of the Agreement on Agriculture concluded in
   accordance with Article 228 of the Treaty in the framework of the
   Uruguay Round of multilateral trade negotiations.

```

##### **_u_**

```
2. The Commission shall adopt detailed rules for the application of this
   Article in accordance with the procedure laid down in Article 38. Such
   detailed rules shall specify in particular:

   (a) the products to which additional import duties may be applied,

   (b) the criteria for triggering the application of paragraph 1 and
       in particular the calculation and determination of the various
       quantities and prices.

                   Article 2c

1. Tariff quotas for the products listed in Article 1(2) resulting from
   agreements concluded in accordance with Article 228 of the Treaty or
   from any other act of the Council pursuant to the Treaty shall be
   opened and administered in accordance with detailed rules adopted under
   the procedure laid down in Article 38. Such detailed rules shall
   provide for annual quotas, suitably phased over the year, to be opened
   and, where appropriate, for:

   (a) guarantees covering the nature, provenance and origin of the
       product,

   (b) recognition of the document used for verifying the guarantees
       referred to in (a), and

   (c) the conditions under which import licences are issued and their
       term of validity.

                   Article 3

1. To the extent necessary to enable the olive oil and oilseeds harvested
   in the Community to be exported on the basis of quotations or prices
   for those products on the world market and within the limits resulting
   from agreements concluded in accordance with Article 228 of the Treaty,
  the difference between those quotations or prices and prices in the
  Community may be covered by export refunds.

2. Refunds shall be the same for the whole Community. They may vary
  according to destination.• .

  Refunds shall be fixed in accordance w,ith the procedure laid down in

  Article 38.

  Refunds may be fixed:

   (a) at regular intervals,

  (b) by invitation to tender.

  Refunds fixed at regular intervals may, where necessary, be adjusted in
  the intervening period by the Commission at the request of a Member

  State or on its own initiative.

3. Refunds shall only be granted on request and on presentation of the
  relevant export licence.

```

`- 42 -` _Zj G_

```
4. The refund applicable to exports of products listed in paragraph 1
  shall be that applicable on the day of application for the licence and,
  in the case of a differentiated refund, that applicable on the same day

  for the destination indicated on the licence.

5. Paragraphs 3 and 4 may be waived in the case of olive oil and oilseeds
  on which refunds are paid under food-aid operations, in accordance with
  the procedure laid down in Article -3^; •

```

`«` `3` `3` _01_ `"5`

```
6. Detailed rules for the application of this Article shall be adopted in
  accordance with the procedure laid down in Article 38.

                   Article 3a

1. The general rules for the interpretation of the Combined Nomenclature
  and the special rules for its application shall apply to the tariff
  classification of products covered by this Regulation; the tariff
  nomenclature resulting from the application of this Regulation shall be
  incorporated in the common customs tariff.

2. Save as otherwise provided for in this Regulation or pursuant to a
  provision thereof, the following shall be prohibited, in trade with

  third countries:

    the levying of any charge having equivalent effect to a customs

    duty,

    the application of any quantitative restriction or measure having
    equivalent effect.

                   Article 3b

1. If, by reason of an increase in imports or exports, the Community
  market in one or more of the products listed in Article 1(2) is
  affected by, or is threatened with, serious disturbance likely to
  jeopardize the achievement of the objectives set out in Article 39 of
  the Treaty, appropriate measures may be applied in trade with third

  countries until such disturbance or threat of disturbance has ceased.

2. If the situation referred to in paragraph 1 arises, the Commission
  shall, at the request of a Member State or on its own initiative,
  decide upon the necessary measures; the Member States shall be notified
  of such measures, which shall be immediately applicable. If the
  Commission receives a request from a Member State, it shall take a
  decision thereon within three working days following receipt of the

  request.

3. Measures decided upon by the Commission may be referred to the Council
  by any Member State within three working days of the day on which they
  were notified. The Council shall meet without delay. It may, acting by
  a qualified majority, amend or annul the measure in question.

4. The Commission shall adopt detailed rules for the application of this
  Article in accordance with the procedure laid down in Article 38.

```

```
 5. This Article shall be applied having regard to the obligations arising
   from agreements concluded in accordance with Article 228(2) of the
   Treaty."

(2) Article 4(1) is replaced by the following:

 "1. A production target price, an intervention price and a representative
   market price for olive oil shall be fixed each year for the Community.

   However, when during the marketing year the factors which are used to
   determine the representative market price for olive oil undergo a
   change which, on the basis of the criterion to be established under the
   procedure laid down in Article 38, may be considered as substantial, a
   decision may be taken under the said procedure to adjust the
   representative market price during the marketing year.

   In such cases, the level of consumption aid referred to in
   Article 11(5) and (6) may be adjusted in accordance with the same
   procedure."

(3) Articles 9, 14, 15, 16, 17, 18 and 19 are deleted.

(4) Article 20 is replaced by the following:

                   "Article 20

 1. Where olive oil is exported to third countries and world prices are
   higher than the Community price, a levy to cover the difference may be
   charged.

 2. The general rules for the application of this Article shall be adopted
   in accordance with the procedure laid down in Article 38."

(5) Article 20a is replaced by the following:

                   "Article 20a

   Olive oil used for the manufacture of preserved foods shall benefit
   from a system of production refunds.

   The general rules for the application of this Article and the list of
   preserved foods in question shall be adopted in accordance with the
   procedure laid down in Article 38."

(6) Articles 20c and 28 are deleted.

```

```
                   - 44 - 9

II. Regulation (EEC) No 142/67 of 21 June 1967 (OJ No L 125,' 26.6.1967,
   p.2461/67), as last amended by Regulation (EEC) No 2429/72
   (OJ No L 264, 23.11.1972, p.l.)

   Regulation (EEC) No 143/67 of 21 June 1967 (OJ No L 125, 26.6.1967,
   p.2463/67), as last amended by Regulation (EEC) No 2077/71
   (OJ No L 220, 30.9.1971, p.l.)

   Regulation (EEC) No 19/69 of 20 December 1968 (OJ No L 3, 7.1.1969,
   p.2), as last amended by Regulation (EEC) No 2429/72 (OJ No L 264,
   23.11.1972, p.l.)

   Regulation (EEC) No 2596/69 of 18 December 1969 (OJ No L 324,
   27.12.1969, p.12)

   Regulation (EEC) No 1076/71 of 25 May 1971 (OJ No L 116, 28.5.1971,
   p.2)

   Regulation (EEC) No 443/72 of 29 February 1972 (OJ No L 54, 3.3.1972,
   p.3), as last amended by Regulation (EEC) No 2560/77 (OJ No L 303,
   28.11.1977, p.l.)

   Regulation (EEC) No 1569/72 of 20 July 1972 (OJ No L 167, 25.7.1972,
   p.9), as last amended by Regulation (EEC) No 2206/90 (OJ No L 201,
   31.1.1990, p.11.)

   Regulation (EEC) No 2751/78 of 23 November 1978 (OJ No L 331,
   28.11.1978, p.5)

   Regulation (EEC) No 591/79 of 26 March 1979 (OJ No L 78, 30^3.1979,
   p.2), as last amended by Regulation (EEC) No 2903/89 (OJ No L 280,
   29.9.1989, p.3.)

   Regulation (EEC) No 1594/83 of 14 June 1983 (OJ No L 163, 22.6.1983,
   p.44), as last amended by Regulation (EEC) No 1321/90 (OJ No L 132,
   23.5.1990, p.15.)

```

`- 4 5 -` _Q_ _**a**_

```
Regulation (EEC) No 1491/85 of 23 May 1985 (OJ No L 151, 10.6.1985,
p.15), as last amended by Regulation (EEC) No 1724/91 (OJ No L 162,
26.6.1991, p.35.)

Regulation (EEC) No 2194/85 of 25 July 1985 (OJ No L 204, 2.8.1985,
p.7), as last amended by Regulation (EEC) No 1725/91 (OJ No L 162,
26.6.1991, p.37.)

Regulation (EEC) No 1650/86 of 26 May 1986 (OJ No L 145, 30.5.1986,
p.8).

The above Regulations are repealed.

```

_-_ `46 -` **s?**

```
                    ANNEX VI

                  FLAX AND HEMP

I. Council Regulation (EEC) No 1308/70 of 29 June 1970 (OJ No L 146,
   4.7.1970, p.l), as last amended by Regulation (EEC) No 1557/93 (OJ No
   L 154, 25.6.1993, p.26).

   Articles 7 and 8 are replaced by the following:

                   "Article 7

 Save as otherwise provided for in this Regulation or pursuant to a
 provision thereof, the following shall be prohibited in trade with third

 countries:

   the levying of any charge having equivalent effect to a customs duty,

 - the application of any quantitative restriction or measure having
   equivalent effect.

                    Article 8

 1. The importation of raw hemp falling within CN code 5302 10 00 is
   permitted only if the product meets the conditions laid down in
   Article 4(1).

 2. The importation of hemp seed falling within CN code 1207 99 10 is
   permitted only if the seed offers the guarantees laid down in
   Article 4(1).

 3. The importation of hemp seed, not broken, falling within CN code

   1207 99 91 is permitted only if it undergoes a check guaranteeing that
   the seed will be used other than for sowing.

 4. Detailed rules for the application of this Article shall be adopted in
   accordance with the procedure laid down in Article 12.

                   Article 8a

 1. If, by reason of an increase in imports or exports, the Community

   market in one or more of the products listed in Article 1 is affected
   by, or is threatened with, serious disturbance likely to jeopardize the
   achievement of the objectives set out in Article 39 of the Treaty,
   appropriate measures may be applied in trade with third countries until

   such disturbance or threat of disturbance has ceased.

```

```
                     - 47 ```

_**iy**_

_2._ `If the` `situation` `referred to in paragraph 1 arises, the Commission`
```
   shall, at the request of a Member State or on its own initiative,
   decide upon the necessary measures; the Member States shall be notified
   of such measures, which shall be immediately applicable. If the
   Commission receives a request from a Member State, it shall take a
   decision thereon within three working days following receipt of the

   request.

 3. Measures decided upon by the Commission may be referred to the Council
   by any Member State within three working days of the day on which they
   were notified. The Council shall meet without delay. It may, acting by
   a qualified majority, amend or annul the measure in question.

 4. The Commission shall adopt detailed rules for the application of this
   Article in accordance with the procedure laid down in Article 12.

 5. This Article shall be applied having regard to the obligations arising
   from agreements concluded in accordance with Article 228(2) of the
   Treaty."

II. Council Regulation (EEC) No 1054/72 of 18 May 1972 (OJ No L 120,
   25.5.1972, p.l).

   The above Regulation is repealed.

```

```
  - 48 
 ANNEX VII

MILK PRODUCTS

```

**fc**

```
I. Council Regulation (EEC) No 804/68 of 27 June 1968 (OJ No L 148,
   28.6.1968, p.13), as last amended by Regulation (EC) No 1880/94 (OJ No
   L 197, 30.7.1994, p.21).

(1) Article 4 is deleted.

(2) Title III is replaced by the following:

                   "Title III

               Trade with third countries

                   Article 13

 1. Imports into the Community of any of the products listed in Article 1
   shall be subject to the presentation of an import licence. Exports from
   the Community of any such products may be made subject to presentation
   of an export licence.

 2. Licences shall be issued by Member States to any applicant,
   irrespective of his place of establishment in the Community and without
   prejudice to the measures taken for the application of Articles 16

   and 17.

   Import and export licences shall be valid throughout the Community.
   Such licences shall be issued subject to the lodging of a security
   guaranteeing that the products are imported or exported during the term
   of validity of the licence; the security shall be forfeited in whole or
   in part if import or export is not carried out, or is only carried out
   partially, within that period.

 3. The following shall be adopted in accordance with the procedure laid

   down in Article 30:

   (a) the list of products in respect of which import and export
       licences are required,

   (b) the term of validity of the licences, and

   (c) the other detailed rules for the application of this Article.

```

```
                    - 49 
                   Article 14

Unless this Regulation provides otherwise, the rates of duty in the common
customs tariff shall apply to the products listed in Article 1.

                   Article 15

1. In order to prevent or counteract adverse effects on the market in the
   Community which may result from imports of certain products listed in
  Article 1, imports of one or more of such products at the rate of duty
   laid down in the common customs tariff may be subject to payment of an
   additional import duty under the conditions set out in Article 5 of the
  Agreement on Agriculture concluded in accordance with Article 228 of
  the Treaty in the framework of the Uruguay Round of multilateral trade
   negotiations.

2. The Commission shall adopt detailed rules for the application of this
  Article in accordance with the procedure laid down in Article 30. Such
  detailed rules shall specify in particular:

   (a) the products to which additional import duties may be applied,

   (b) the criteria for triggering the application of paragraph 1 and
       in particular the calculation and determination of the various
       quantities and prices.

                   Article 16

Tariff quotas for the products listed in Article 1 resulting from
agreements concluded in accordance with Article 228 of the Treaty or from
any other act of the Council pursuant to the Treaty shall be opened and
administered in accordance with detailed rules adopted under the procedure
laid down in Article 30. Such detailed rules shall provide for annual
quotas, suitably phased over the year, to be opened and, where appropriate,

for:

(a) guarantees covering the nature, provenance and origin of the product,

(b) recognition of the document used for verifying the guarantees referred
  to in (a), and

(c) the conditions under which import licences are issued and their term of
  validity.

```

```
                    - 50

                   Article 17

1. To the extent necessary to enable the products listed in Article 1 to
  be exported without further processing or in the form of goods listed
  in the Annex if they are products listed in Article 1(a), (b), (c),
   (d), (e) and (g), on the basis of prices for those products on the
  world market and within the limits resulting from agreements concluded
  in accordance with Article 228 of the Treaty, the difference between
  those prices and prices in the Community may be covered by export

  refunds.

  Export refunds on the products listed in Article 1 in the form of goods
  listed in the Annex may not be higher than those applicable to such
  products exported without further processing.

2. Refunds shall be the same for the whole Community. They may vary
  according to destination.

  Refunds shall be fixed in accordance with the procedure laid down in

  Article 30.

  Refunds may be fixed:

   (a) at regular intervals,

   (b) by invitation to tender.

  Refunds fixed at regular intervals may, where necessary, be adjusted in
  the intervening period by the Commission at the request of a Member

  State or on its own initiative.

  When the refund is.being fixed particular account shall be taken of the
  need to establish a balance between the use of Community basic products
  in the manufacture of processed goods to third countries and the use of
  products from these countries admitted for processing.

3. Refunds on products listed in Article 1 and exported without further
  processing shall only be granted on application and on presentation of
  the relevant export licence.

```

###### - 51 - u

```
4. The refund applicable to exports of products listed in Article 1
   exported without further processing shall be that applicable on the day
   of application for the licence and, in the case of a differentiated
   refund, that applicable on the same day for the destination indicated

   on the licence.

5. Paragraphs 3 and 4 may be made to apply to products listed in Article 1
   and exported in the form of goods listed in the Annex in accordance
  with the procedure laid down in Article 16 of Regulation (EC)
  No 3448/93.

6. Paragraphs 3 and 4 may be waived in the case of products listed in
  Article 1 on which refunds are paid under food-aid operations, in
  accordance with the procedure laid down in Article 30.

7. Detailed rules for the application of this Article shall be adopted in
  accordance with the procedure laid down in Article 30.

                   Article 18

To the extent necessary for the proper working of the common organization
of the market in milk and milk products the Commission may in special
cases, in accordance with the procedure laid down in Article 30, prohibit
in whole or in part the use of inward processing arrangements,in respect of
products listed in Article 1 which are intended for the manufacture of
products listed in that Article or of goods listed in the Annex.

                   Article 19

1. The general rules for the interpretation of the combined nomenclature
  and tfhe special rules for its application shall apply to the tariff
  classification of products covered by this Regulation; the tariff
  nomenclature resulting from the application of this Regulation shall be
  incorporated in the common customs tariff.

2. Save as otherwise provided for in this Regulation or pursuant to a
  provision thereof, the following shall be prohibited in trade with

  third countries:

  - the levying of any charge having equivalent effect to a customs

    duty,

    the application of any quantitative restriction or measure having
    equivalent effect.

```

```
 - 52 
Article 20

```

**ri**

```
 1. Where the quotations or prices on the world market for one or more of
   the products listed in Article 1 reach the level of Community prices
   and where that situation is likely to continue and to deteriorate,
   thereby disturbing or threatening to disturb the Community market,
   appropriate measures may be taken.

 2. Detailed rules for the application of this Article shall be adopted in
   accordance with the procedure laid down in Article 30.

                   Article 21

 1. If, by reason of an increase in imports or exports, the Community
   market in one or more of the products listed in Article 1 is affected
   by, or is threatened with, serious disturbance likely to jeopardize the
   achievement of the objectives set out in Article 39 of the Treaty,
   appropriate measures may be applied in trade with third countries until

   such disturbance or threat of disturbance has ceased.

 2. If the situation referred to in paragraph 1 arises, the Commission
   shall, at the request of a Member State or on its own initiative,
   decide upon the necessary measures; the Member States shall be notified
   of such measures, which shall be immediately applicable. If the
   Commission receives a request from a Member State, it shall take a
   decision thereon within three working days following receipt of the

   request.

 3. Measures decided upon by the Commission may be referred to the Council
   by any Member State within three working days of the day on which they
   were notified. The Council shall meet without delay. It may, acting by
   a qualified majority, amend or annul the measure in question.

 4. The Commission shall adopt detailed rules for the application of this
   Article in accordance with the procedure laid down in Article 30.

 5. This Article shall be applied having regard to the obligations arising
   from agreements concluded in accordance with Article 228(2) of the
   Treaty."

II. Council Regulation (EEC) No 876/68 of 28 June 1968 (OJ No L 155,
   3.7.1968, p.l), as last amended by Regulation (EEC) No 1344/86
   (OJ No L 119, 8.5.1986, p.36).

   Council Regulation (EEC) No 2115/71 of 28 September 1971 (OJ No L 222,
   2.10.1971, p.5).

   Council Regulation (EEC) No 2180/71 of 12 October 1971 (OJ No L 231,
   14.10.1971, p.l).

```

```
                  - 53 - q

Council Regulation (EEC) No 1603/74 of 25 June 1974 (OJ No L 172,

27.6.1974, p.9).

Council Regulation (EEC) No 2915/79 of 18 December 1979 (OJ No L 329,
24.12.1979, p.l), as last amended by Regulation (EEC) No 3798/91
(OJ No L 357, 28.12.1991, p.3).

The above Regulations are repealed.

```

```
                    - 54 ```

_**<\l**_

```
                   ANNEX VIII

                  BEEF AND VEAL

I. Council Regulation (EEC) No 805/68 of 27 June 1968 (OJ No L 148,
   28.6.1968, p.24), as last amended by Regulation (EC) No 1884/94
   (OJ No L 197, 30.7.1994, p.27).

 (1) Article 3 is deleted.

 (2) Title II is replaced by the following:

                    "Title II

               Trade with third countries

                    Article 9

 1. Imports into the Community of any of the products listed in

   Article 1(1)(a) shall be subject to presentation of an import licence.

   Imports into the Community of any of the products listed in
   Article 1(1)(b) and exports from the Community of products listed in
   Article 1(1)(a) and (b) may be subject to presentation of an import or
   export licence.

   Licences shall be issued by the Member States to any applicant,
   irrespective of his place of establishment in the Community and without
   prejudice to measures taken for the application of Articles 12 and 13.

   Import and export licences shall be valid throughout the Community.
   Such licences shall be issued subject to the lodging of a security
   guaranteeing that the products are imported or exported during the term
   of validity of the licence; the security shall be forfeited in whole or
   in part if import or export is not carried out, or is only carried out
   partially, within that period.

```

```
                    - 55 ```

_**n**_

```
2. The term of validity of licences and other detailed rules for the
  application of this Article shall be adopted in accordance with the
  procedure laid down in Article 27.

                   Article 10

  Unless this Regulation provides otherwise, the rates of duty in the
  common customs tariff shall apply to the products listed in Article 1.

                   Article 11

1. In order to prevent or counteract adverse effects on the market in the
  Community which may result from imports of certain agricultural
  products listed in Article 1, imports of one or more of such products
  at the rate of duty laid down in the common customs tariff may be
  subject to payment of an additional import duty under the conditions
  set out in Article 5 of the Agreement on Agriculture concluded in
  accordance with Article 228 of the Treaty in the framework of the
  Uruguay Round of multilateral trade negotiations.

2. The Commission shall adopt detailed rules for the application of this
  Article in accordance with the procedure laid down in Article 27. Such
  detailed rules shall specify in particular:

  (a) the products to which additional import duties may be applied,

  (b) the criteria for triggering the application of paragraph 1 and
       in particular the calculation and determination of the various
      quantities and prices.

```

```
                   Article 12

Tariff quotas for the products listed in Article 1 resulting from
agreements concluded in accordance with Article 228 of the Treaty or from
any other act of the Council pursuant to the Treaty shall be opened and
administered in accordance with detailed rules adopted under the procedure
laid down in Article 27. Such detailed rules shall provide for annual
quotas, suitably phased over the year, to be opened and, where appropriate,

for:

(a) guarantees covering the nature, provenance and origin of the product,

(b) recognition of the document used for verifying the guarantees referred
  to in (a), and

(c) the conditions under which import licences are issued and their term of
  validity.

                   Article 13

1. To the extent necessary to enable the products listed in Article 1 to
  be exported on the basis of quotations or prices for. those products on
  the world market and within the limits resulting from agreements
  concluded in accordance with Article 228 of the Treaty, the difference
  between those quotations or prices and prices in the Community may be
  covered by export refunds.

2. Refunds shall be the same for the whole Community. They may vary
  according to destination.

  Refunds shall be fixed in accordance with the procedure laid down in

  Article 27.

  Refunds may be fixed:

   (a) at regular intervals,

   (b) by invitation to tender.

```

`- 57 -` _O.LI_

_**I**_ _**I**_

```
   Refunds fixed at regular intervals may, where necessary, be adjusted in
   the intervening period by the Commission at the request of a Member

   State or on its own initiative.

3. When the amount of the refund is set, account shall be taken in

   particular of the need to establish a balance between the use of
   Community basic agricultural products for export as processed goods to
   third countries and the use of products from these countries admitted
   for inward processing.

4. Refunds shall be granted only on application and on presentation of the
   relevant export licence.

5. The refund applicable to exports of products listed in Article 1
   exported shall be that applicable on the day of application for the
   licence and, in the case of a differentiated refund, that applicable on
  the same day for the destination indicated on the licence.

6. Paragraphs 3 and 4 may be waived in the case of products listed in
  Article 1 on which refunds are paid under food-aid operations, in
  accordance with the procedure laid down in Article 27.

7. Detailed rules for the application of this Article shall be adopted in
  accordance with the procedure laid down in Article 27.

                   Article 14

To the extent necessary for the proper working of the common organization
of the market in beef and veal, the Commission, acting in accordance with
the procedure laid down in Article 27, may prohibit the use of inward or
outward processing arrangements in whole or in part for the products listed

in Article 1.

```

```
                Article 15

The general rules for the interpretation of the Combined Nomenclature
and the detailed rules for its application shall apply to the tariff
classification of products covered by this Regulation; the tariff
nomenclature resulting from the application of this Regulation shall be
incorporated in the common customs tariff.

Save as otherwise provided for in this Regulation or pursuant to a
provision thereof, the following shall be prohibited in trade with

third countries:

- the levying of any charge having equivalent effect to a customs

  duty,

- the application of any quantitative restriction or measure having
  equivalent effect.

                Article 16

If, by reason of an increase in imports or exports, the Community
market in one or more of the products listed in Article 1 is affected
by, or is threatened with, serious disturbance likely to jeopardize the
achievement of the objectives set out in Article 39 of the Treaty,
appropriate measures may be applied in trade with third countries until

such disturbance or threat of disturbance has ceased.

If the situation referred to in paragraph 1 arises, the Commission
shall, at the request of a Member State or on its own initiative,
decide upon the necessary measures; the Member States shall be notified
of such measures, which shall be immediately applicable. If the
Commission receives a request from a Member State, it shall take a
decision thereon within three working days following receipt of the

request.

```

```
                     - 59 ```

_**%**_

```
 3. Measures decided upon by the Commission may be referred to the Council
   by any Member State within three working days of the day on which they
   were notified. The Council shall meet without delay. It may, acting by
   a qualified majority, amend or annul the measure in question.

 4. The Commission shall adopt detailed rules for the application of this
   Article in accordance with the procedure laid down in Article 27.

 5. This Article shall be applied having regard to the obligations arising
   from agreements concluded in accordance with Article 228(2) of the
   Treaty."

(3) Article 22a is amended as follows:

   (a) paragraph 2 is deleted.

   (b) paragraph 3 becomes paragraph 2.

II. Council Regulation (EEC) No 98/69 of 16 January 1969 (OJ No L 14,
   21.1.1969, p.2), as amended by Regulation (EEC) No 429/77 (OJ No L 61,
   5.3.1977, p.18)

   Article 1 is replaced by the following:

                    "Article 1

 1. Disposal of the products held by intervention agencies may be
   undertaken only:

   (a) where the products are intended for a particular use, or

   (b) where the products are intended for export, or

   (c) in the case of disposal without a specific destination, if no
       risk of disturbance of the market results, having regard in
       particular to the level of average market prices for adult
       bovine animals in the Community and in the Member States, as
       recorded in accordance with Regulation (EEC) No 1982/87, or

```

`- 60 -` **S3**

```
   (d) where removal from storage is necessary for technical reasons.

   In the cases referred to in paragraph 1(a) and (b), special conditions

   may be laid down to ensure that the products are not used for a purpose

   other than that for which they were intended and to take- account of the

   particular requirements of such sales.

   To ensure that the obligations entered into are fulfilled, such

   conditions may include the provision of a security which shall be

   forfeited in whole or in part if the said obligations are not or are

   only partially fulfilled."

III. Council Regulation (EEC) No 885/68 of 28 June 1968 (OJ No L 156,

   4.7.1968, p.2), as last amended by Regulation (EEC) No 427/77

   (OJ No L 61, 5.3.1977, p.16)

   Council Regulation (EEC) No 1157/92 of 28 April 1992 (OJ No L 122,

   7.5.1992, p.4)

   The above Regulations are repealed.

```

**-** **6 1** **-**

```
    ANNEX IX

SHEEPMEAT AND GOATMEAT

```

_**11**_

```
I. Council Regulation (EEC) No 3013/89 of 25 September 1989 (OJ No L 289,
   7.10.1989, p.l), as last amended by Regulation (EC) No 1886/94 (OJ No L
   197, 30.7.1994, p.30).

   Title II is replaced by the following:

                    "Title II

               Trade with third countries

                    Article 9

 1. Imports into the Community, or exports therefrom, of any of the
   products listed in Article 1 may be subject to presentation of an
   import or export licence.

   Licences shall be issued by the Member States to any applicant,
   irrespective of. his place of establishment in the Community and without
   prejudice to measures taken for the application of Article 12.

   Import and export licences shall be valid throughout the Community. The
   issuing of such licences may be subject to the lodging of a security
   guaranteeing that the products are imported or exported during the term
   of validity of the licence; the security shall be forfeited in whole or
   in part if import or export is not carried out, or is only carried out
   partially, within that period.

2. The term of validity of licences and other detailed rules for the
   application of this Article shall be adopted in accordance with the
   procedure laid down in Article 30.

```

```
 - 62 
Article 10

```

**T]**

```
  Unless this Regulation provides otherwise, the rates of duty in the
  common customs tariff shall apply to the products listed in Article 1

                   Article 11

1. In order to prevent or counteract adverse effects on the market in the
  Community which may result from imports of certain products listed in
  Article 1, imports of one or more of such products at the rate of duty
  laid down in the common customs tariff may be subject to payment of an
  additional import duty under the conditions set out in Article 5 of the
  Agreement on Agriculture concluded in accordance with Article 228 of
  the Treaty in the framework of the Uruguay Round of multilateral trade
  negotiations.

2. The Commission shall adopt detailed rules for the application of this
  Article in accordance with the procedure laid down in Article 30. Such
  detailed rules shall specify in particular:

   (a) the products to which additional import duties may be applied,

   (b) the criteria for triggering the application of paragraph 1 and
       in particular the calculation and determination of the various
      quantities and prices.

                   Article 12

  Tariff quotas for the products listed in Article 1 resulting from
  agreements concluded in accordance with Article 228 of the Treaty or
  from any other act of the Council pursuant to the Treaty shall be
  opened and administered in accordance with detailed rules adopted under
  the procedure laid down in Article 30. Such detailed rules shall
  provide for annual quotas, suitably phased over the year, to be opened
  and, where appropriate, for:

  (a) guarantees covering the nature, provenance and origin of the
      product,

```

`- 63 -` _**\oo**_

```
   (b) recognition of the document used for verifying the guarantees
       referred to in (a), and

   (c) the conditions under which import licences are issued and their
       term of validity.

                   Article 13

1. To the extent necessary for the proper working of the common
  organization of the market in sheepmeat and goatmeat, the use of inward
  or outward processing arrangements may be prohibited in whole or in
  part for the products listed in Article 1.

2. Measures adopted pursuant to this Article shall be decided on in
  accordance with the procedure laid down in Article 23.

                   Article 14

1. The general rules for the interpretation of the Combined Nomenclature
  and the detailed rules for its application shall apply to the tariff
  classification of products covered by this Regulation; the tariff
  nomenclature resulting from the application of this Regulation shall be
  incorporated in the common customs tariff.

2. Save as otherwise provided for in this Regulation or pursuant to a
  provision thereof, the following shall be prohibited in trade with

  third countries:

     the levying of any charge having equivalent effect to a customs

    duty,

    the application of any quantitative restriction or measure having
    equivalent effect.

```

```
                    - 64 
                   Article 15

 1. If, by reason of an increase in imports or exports, the Community
   market in one or more of the products listed in Article 1 is affected
   by, or is threatened with, serious disturbance likely to jeopardize the
   achievement of the objectives set out in Article 39 of the Treaty,
   appropriate measures may be applied in trade with third countries until

   such disturbance or threat of disturbance has ceased.

 2. If the situation referred to in paragraph 1 arises, the Commission
   shall, at the request of a Member State or on its own initiative,
   decide upon the necessary measures; the Member States shall be notified
   of such measures, which shall be immediately applicable. If the
   Commission receives a request from a Member State, it shall take a
   decision thereon within three working days following receipt of the

   request.

 3. Measures decided upon by the Commission may be referred to the Council
   by any Member State within three working days of the day on which they
   were notified. The Council shall meet without delay. It may, acting by
   a qualified majority, amend or annul the measure in question.

 4. The Commission shall adopt detailed rules for the application of this
   Article in accordance with the procedure laid down in Article 30.

 5. This Article shall be applied having regard to the obligations arising
   from agreements concluded in accordance with Article 228(2) of the
   Treaty."

II. Council Regulation (EEC) No 2641/80 of 14 October 1980 (OJ No L 275,
   18.10.1980, p.2), as last amended by Regulation (EEC) No 3890/92
   (OJ No L 391, 31.12.1992, p.51)

   Council Regulation (EEC) No 2642/80 of 14 October 1980 (OJ No L 275,
   18.10.1980, p.4), as last amended by Regulation (EEC) No 3939/87
   (OJ No L 373, 31.12.1987, p.l)

```

```
                  - 65 - J [ „ ]

Council Regulation (EEC) No 3643/85 of 19 December 1985 (OJ No L 348,
24.12.1985, p.2), as last amended by Regulation (EEC) No 3890/92
(OJ No L 391, 31.12.1992, p.51)

The above Regulations are repealed.

```

```
                    - 66 
                    ANNEX X

                    PIGMEAT

  Council Regulation (EEC) No 2759/75 of 29 October 1975 (OJ No L 282,
  1.11.1975, p.l), as last amended by Regulation (EEC) No 1249/89
   (OJ No L 129, 11.5.1989, p.12).

(1) The second subparagraph of Article 4(1) is replaced by the following:

  "The basic price shall be fixed taking account, in particular, of the
  need to fix this price at a level which contributes towards stabilizing
  market prices without, however, leading to the formation of structural
  surpluses in the Community."

(2) Article 5(2) is replaced by the following:

   "For products of standard quality other than pig carcases, buying-in
  prices shall be derived from the buying-in price for pig carcases on
  the basis of the ratio existing between the commercial value of these
  products to the commercial value of pig carcases."

(3) The following point is added to Article 5(4):

   "(d) fixing the coefficient expressing the ratio referred to in
       paragraph 2."

(4) Title II is replaced by the following:

                   "Title II

              Trade with third countries

                   Article 8

1. Imports into the Community, or exports therefrom, of any of the
  products listed in Article 1(1) may be subject to presentation of an
  import or export licence.

  Licences shall be issued by the Member States to any applicant,
  irrespective of his place of establishment in the Community and without
  prejudice to measures taken for the application of Articles 11 and 13.

  Import and export licences shall be valid throughout the Community.
  Such licences shall be issued subject to the lodging of a security
  guaranteeing that the products are imported or exported during the term
  of validity of the licence; the security shall be forfeited in whole or
  in part if import or export is not carried out, or is only carried out
  partially, within that period.

2. The term of validity of licences and other detailed rules for the
  application of this Article shall be adopted in accordance with the
  procedure laid down in Article 24.

```

```
 - 67 
Article 9

```

_**An**_

```
1. Unless this Regulation provides otherwise, the rates of duty in the
  common customs tariff shall apply to the products listed in
  Article 1(1).

                   Article 10

1. In order to prevent or counteract adverse effects on the market in the
  Community which may result from imports of certain products listed in
  Article 1(1), imports of one or more of such products at the rate of
  duty laid down in the common customs tariff may be subject to payment
  of an additional import duty under the conditions set out in Article 5
  of the Agreement on Agriculture concluded in accordance with
  Article 228 of the Treaty in the framework of the Uruguay Round of
  multilateral trade negotiations.

2. The Commission shall adopt detailed rules for the application of this
  Article in accordance with the procedure laid down in Article 24. Such
  detailed rules shall specify in particular:

  (a) the products to which additional import duties may be applied,

  (b) the criteria for triggering the application of paragraph 1 and
       in particular the calculation and determination of the various
      quantities and prices.

                   Article 11

  Tariff quotas for the products listed in Article 1(1) resulting from
  agreements concluded in accordance with Article 228 of the Treaty or
  from any other act of the Council pursuant to the Treaty shall be
  opened and administered in accordance with detailed rules adopted under
  the procedure laid down in Article 24. Such detailed rules shall
  provide for annual quotas, suitably phased over the year, to be opened
  and, where appropriate, for:

  (a) guarantees covering the nature, provenance and origin of the
      product,

  (b) recognition of the document used for verifying the guarantees

      referred to in (a), and

  (c) the conditions under which import licences are issued and their
      term of validity.

                   Article 12

  Where prices on the Community market rise significantly and where that
  situation is likely to continue, thereby disturbing or threatening to
  disturb that market, appropriate measures may be taken.

  Detailed rules for the application of this Article shall be adopted in
  accordance with the procedure laid down in Article 24.

```

```
                      - 68 
                     Article 13

1. To the extent necessary to enable the products listed in Article 1(1)

   to be exported on the basis of quotations or prices for those products

   on the world market and within the limits resulting from agreements

   concluded in accordance with Article 228 of the Treaty, the difference

   between those quotations or prices and prices in the Community may be

   covered by export refunds.

2. Refunds shall be the same for the whole Community. They may vary

   according to destination.

   Refunds shall be fixed in accordance with the procedure laid down in

   Article 24.

   Refunds may be fixed:

   (a) at regular intervals,

   (b) by invitation to tender.

   Refunds fixed at regular intervals may, where necessary, be adjusted in

   the intervening period by the Commission at the request of a Member

   State or on its own initiative.

3. When the amount of the refund is set, account shall be taken in

   particular of the need to establish a balance between the use of

   Community basic agricultural products for export as processed goods to

   third countries, and the use of products from these countries admitted

   for inward processing.

4. Refunds shall only be granted on application and on presentation of the

   relevant export licence.

5. The refund applicable to exports of products listed in Article 1(1)

   shall be that applicable on the day of application for the licence and,

   in the case of a differentiated refund, that applicable on the same day

   for the destination indicated on the licence.

6. Paragraphs 4 and 5 may be waived in the case of products listed in

   Article 1(1) on which refunds are paid under food-aid operations, in

   accordance with the procedure laid down in Article 24.

7. Detailed rules for the application of this Article shall be adopted in

   accordance with the procedure laid down in Article 24.

                     Article 14

1. To the extent necessary for the proper working of the common

   organization of the market in pigmeat, the use of inward processing

   arrangements may be prohibited in whole or in part in respect of

   products listed in Article 1(1) which are intended for the manufacture

   of products listed in that same paragraph.

2. Measures adopted pursuant to this Article shall be decided on in

   accordance with the procedure laid down in Article 24.

```

**-** **JS** _**-**_

```
                    Article 15

 1. The general rules for the interpretation of the Combined Nomenclature
   and the special rules for its application shall apply to the
   classification of products covered by this Regulation; the tariff
   nomenclature resulting from the application of this Regulation shall be
   incorporated in the common customs tariff.

 2. Save as otherwise provided for in this Regulation or pursuant to a
   provision thereof, the following shall be prohibited in trade with

   third countries:

   - the levying of any charge having equivalent effect to a customs
     duty,

   - the application of any quantitative restriction or measure having
     equivalent effect.

                   Article 16

 1. If, by reason of an increase in imports or exports, the Community
   market in one or more of the products listed in Article 1(1) is
   affected by, or is threatened with, serious disturbance likely to
   jeopardize the achievement of the objectives set out in Article 39 of
   the Treaty, appropriate measures may be applied in trade with third

   countries until such disturbance or threat of disturbance has ceased.

 2. If the situation referred to in paragraph 1 arises, the Commission
   shall, at the request of a Member State or on its own initiative,
   decide upon the necessary measures; the Member States shall be notified
   of such measures, which shall be immediately applicable. If the »
   Commission receives a request from a Member State, it shall take a
   decision thereon within three working days following receipt of the

   request.

 3. Measures decided upon by the Commission may be referred to the Council
   by any Member State within three working days of the day on which they
   were notified. The Council shall meet without delay. It may, acting by
   a qualified majority, amend or annul the measure in question.

 4. The Commission sl>all adopt detailed rules for the application of this
   Article in accordance with the procedure laid down in Article 24.

 5. This Article shall be applied having regard to the obligations arising
   .from agreements concluded in accordance with Article 228 of the
   Treaty."

II. Council Regulation (EEC) No 2764/75 of 29 October 1975 (OJ No L 282,
   1.11.1975, p.21), as last amended by Regulation (EEC) No 4160/87 (OJ No
   L 392, 31.12.1987, p. 46)

   Council Regulation (EEC) No 2765/75 of 29 October 1975 (OJ No L 282,
   1.11.1975, p. 23)

   Council Regulation (EEC)' No 2766/75 of 29 October 1975 (OJ No L 282,
   1.11.1975, p. 25), as last amended by Regulation (EEC) No 3906/87 (OJ
   No L 370, 30.12.1987, p. 11)

```

`- 70 -` _**ÀO'l**_

```
Council Regulation (EEC) No 2768/75 of 29 October 1975 (OJ No L 282,
1.11.1975, p. 39)

Council Regulation (EEC) No 2769/75 of 29 October 1975 (OJ No L 282,
1.11.1975, p. 43)

The above Regulations are repealed.

```

```
                     - 71 ```

_**AQ%**_

```
                    ANNEX XI

                   POULTRYMEAT

I. Council Regulation (EEC) No 2777/75 of 29 October 1975 (OJ No L 282,
   1.11.1975, p.77), as last amended by Regulation (EEC) No 1574/93
   (OJ No L 52, 24.6.1993, p.l).

 (1) Articles 3 to 11 are replaced by the following:

                   "Tùrticle 3

 1. Imports into the Community, or exports therefrom, of any of the
   products listed in Article 1(1) may be subject to presentation of an
   import or export licence.

   Licences shall be issued by tlVe Member States to any applicant,
   irrespective of his place of establishment in the Community and without
   prejudice to measures taken for the application of Articles 6 and 8.

   Import and export licences shall be valid throughout the Community.
   Such licences shall be issued subject to the lodging of a security
   guaranteeing that the products are imported or exported during the term
   of validity of the licence; the security shall be forfeited in whole or
   in part if import or export is not carried out, or is only carried out
   partially, within that period.

 2. The term of validity of licences and pther detailed rules for the
   application of this Article shall be adopted in accordance with the
   procedure laid down in Article 17. i

                    Article 4

   Unless this Regulation pr<5vide [F] s otherwise, the rates of duty in the
   common customs tariff shall apply to the products listed in
```

`Article` `1(1) .` `r i` `° '` _~~'~''_

```
                    Article 5

 1. In order to prevent or counteract adverse effects on the market in the
   Community which may result from imports of certain products listed in
   Article 1(1), imports of one or more of such products at the rate of
   duty laid down in the common customs tariff may be subject to payment
   of an additional import duty under the conditions set out in Article 5
   of the Agreement on Agriculture concluded in accordance with
   Article 228 of the Treaty in the framework of the Uruguay Round of
   multilateral trade negotiations.

2. The Commission shall adopt detailed rules for the application of this
   Article in accordance with the procedure laid down in Article 17. Such
   detailed rules shall specify in particular:

   (a) the products to which additional import duties may be applied,

   (b) the criteria for triggering the application of paragraph 1 and
       in particular the calculation and determination of the various
       quantities and prices.

```

**- 7 2 -** _**y**_ _**{Q**_ _**o**_

A r t i c l e 6

```
Tariff quotas for the products listed in Article 1(1) resulting from
agreements concluded in accordance with Article 228 of the Treaty or from
any other act of the Council pursuant to the Treaty shall be opened and
administered in accordance with detailed rules adopted under the procedure
laid down in Article 17. Such detailed rules shall provide for annual
quotas, suitably phased over the year, to be opened and, where appropriate,

for:

(a) guarantees covering the nature, provenance and origin of the product,

(b) recognition of the document used for verifying the guarantees referred
  to in (a), and

(c) the conditions under which import licences are issued and their term of
  validity.

                   Article 7

  Where prices on the Community market rise significantly and where that
  situation is likely to continue, thereby disturbing or threatening to
  disturb that market, appropriate measures may be taken.

  Detailed rules for the application of this Article shall be adopted in
  accordance with the procedure laid down in Article 17

                   Article 8

1. To the extent necessary to enable the products listed in Article 1(1)
  to be exported on the basis of prices for those products on the world
  market and within the limits resulting from agreements concluded in
  accordance with Article 228 of the Treaty, the difference between those
  prices and prices in the Community ma,y, be_.covered by export refunds.

2. Refunds shall be the same for the whole Community. They may vary
  according to destination.

  Refunds shall be fixed in accordance with the procedure laid down in

  Article 17.

  Refunds may be fixed: /

   (a) at regular intervals,

   (b) by invitation to tender.

  Refunds fixed at regular intervals may, where necessary, be adjusted in
  the intervening period by the Commission at the request of a Member

  State or on its own initiative.

3. When the amount of the refund is set, account shall be taken in
  particular of the need to establish a balance between the use of
  Community basic agricultural products for export as processed goods to
  third countries, and the use of products from those countries admitted
  for inward processing.

4. Refunds shall only be granted on application and on presentation of the
  relevant export licence.

```

**`- 73 -`** _**i**_ _**40**_

```
5. The refund applicable to exports of products listed in Article 1(1)
   shall be that applicable on the day of application for the licence and,
   in the case of a differentiated refund, that applicable on the same day

   for the destination indicated on the licence.

6. Paragraphs 4 and 5 may be waived in the case of products listed in
   Article 1(1) on which refunds are paid under food-aid operations, in
   accordance with the procedure laid down in Article 17.

7. Detailed rules for the applàcafc&on of this Article shall be adopted in
   accordance with the procedure laid down in Article 17.

                   Article 9

To the extent necessary for the proper working of the common organization
of the market in poultrymeat, the use of inward processing arrangements may
be prohibited in whole or in part in respect of products listed in
Article 1 which are intended for the manufacture of products listed in
Article 1(1).

Measures adopted pursuant to this Article shall be decided on in accordance
with the procedure laid down in Article 17.

                   Article 10

1. The general rules for the interpretation of the Combined Nomenclature
   and the special rules for its application shall apply to the
   classification of products covered by this Regulation; the tariff
   nomenclature resulting from the application of this Regulation shall be
   incorporated in the common customs tariff.

2. Save as otherwise provided for in this Regulation or pursuant to a
  provision thereof, the following shall be prohibited in trade with

  third countries:

  - the levying of any charge having equivalent effect to a customs

    duty,

    the application of any quantitative restriction or measure having
    equivalent effect.

                   Article 11

1. If, by reason of an increase in imports or exports, the Community
  •market in one or more of the products listed in Article 1(1) is
  affected by, or is threatened with, serious disturbance likely to
  jeopardize the achievement of the objectives set out in Article 39 of
  the Treaty, appropriate measures may be applied in trade with third

  countries until such disturbance or threat of disturbance has ceased.

2. If the situation referred to in paragraph 1 arises, the Commission
  shall, at the request of a Member State or on its own initiative,
  decide upon the necessary measures; the Member States shall be notified
  of such measures, which shall be immediately applicable. If the
  Commission receives a request from a Member State, it shall take a
  decision thereon within three working days following receipt of the

  request.

```

```
 3. Measures decided upon by the Commission may be referred to the Council
   by any Member State within three working days of the day on which they
   were notified. The Council shall meet without delay. It may, acting by
   a qualified majority, amend or annul the measure in question.

 4. The Commission shall adopt detailed rules for the application of this
   Article in accordance with the procedure laid down in Article 17.

 5. This Article shall be applied having regard to the obligations arising
   from agreements concluded in accordance! «yqt h Article 228(2) of the
   Treaty. " = r- .••;..
 (2) Article 12 is deleted.

II. Council Regulation (EEC) No 2778/75 of 29 October 1975 (OJ No L 282,
   1.11.1975, p.84), as last amended by Regulation (EEC) No 3714/92 (OJ No
   L 378, 23.12.1992, p.23).

   Council Regulation (EEC) No 2779/75 of 29 October 1975 (OJ No L 282,
   1.11.1975, p.90).

   Council Regulation (EEC) No 2780/75 of 29 October 1975 (OJ No L 282,
   1.11.1975, p.94).

   The above Regulations are repealed.

```

`-` `7 5` `- -` _J_ _A_ `-`

```
                    ANNEX XII

                     EGGS,

               OVALBUMIN AND LACTALBUMIN

   Council Regulation (EEC) No 2771/75 of 29 October 1975 (OJ No L 282,
   1.11.1975, p.49), as last amended by Regulation (EEC) No 1574/93
   (OJ No L 152, 24.6.1993, p.l).

(1) Articles 3 to 11 (inclusive) are replaced by the following:

                   "Article 3

1. Imports into the Community, or exports therefrom, of any of the
   products listed in Article 1(1) shall be subject to presentation of an
   import or export licence.

   Licences shall be issued by the Member States to any applicant,
   irrespective of his place of establishment in the Community and without
   prejudice to measures taken for the application of Articles 6 and 8.

   Import and export licences shall be valid throughout the Community.
   Such licences shall be issued subject to the lodging of a security
   guaranteeing that the products are imported or exported during the term
   of validity of the licence; the security shall be forfeited in whole or
   in part if import or export is not carried out, or is only carried out
   partially, within that period.

2. The term of validity of licences and other detailed rules for the
   application of this Article shall be adopted in accordance with the
   procedure laid down in Article 17.

                   Article 4

Unless this Regulation provides otherwise, the rates of duty in the common
customs tariff shall apply to the products listed in Article 1(1).

                   Article 5

1. In order to prevent or counteract adverse effects on the market in the
   Community which may result from imports of certain products listed in
   Article 1(1), imports of one or more of such products at the rate of
   duty laid down in the common customs tariff may be subject to payment
   pf an additional import duty under the conditions set out in Article 5
   of the Agreement on Agriculture concluded in accordance with
   Article 228 of the Treaty in the framework of the Uruguay Round of
   multilateral trade negotiations.

```

`- 76 -` _A_ _V_ _i_

_2._ `The Commission shall adopt detailed rules for the application of this`
```
  Article in accordance with the procedure laid down in Article 17. Such
  detailed rules shall specify in particular:

   (a) the products to which additional import duties, may be applied,

   (b) the criteria for triggering the application of paragraph 1 and
       in particular the calculation and determination of the various
      quantities and prices.

         * Article 6

Tariff quotas for the products listed in Article 1(1) resulting from
agreements concluded in accordance with Article 228 of the Treaty or from
any other act of the Council pursuant to the Treaty shall be opened and
administered in accordance with detailed rules adopted under the procedure
laid down in Article 17. Such detailed rules shall provide for annual
quotas, suitably phased over the year, to be opened and, where appropriate,

for:

(a) guarantees covering the nature, provenance and origin of the product,

(b) recognition of the document used for verifying the guarantees referred
  to in (a), and

   (c) the conditions under which import licences are issued and their
      term of validity.

                   Article 7

Where prices on the Community market rise significantly and where that
situation is likely to continue, thereby disturbing or threatening to
disturb that market, appropriate measures may be taken.

Detailed rules for the application of this Article shall be adopted in
accordance with the procedure laid down in Article 17.

                   Article 8

1. To the extent necessary to enable the products listed in Article 1(1)
  to be exported without further processing or in the form of goods
  listed in Annex I on the basis of quotations or prices for those
  products on the world market and within the limits resulting from
  agreements concluded in accordance with Article 228 of the Treaty, the
  difference between those quotations or prices and prices in the
  Community may be covered by export refunds.

```

`- 77 -` **4-H**

```
2. Refunds shall be the same for the whole Community. They may vary
   according to destination.

   Refunds shall be fixed in accordance with the procedure laid down in

  Article 17.

  Refunds may be fixed:

   (a) at regular intervals,

   (b) by invitation to tender. •

  Refunds fixed at regular intervals may, where necessary, be adjusted in
  the intervening period by the Commission at the request of a Member

  State or on its own initiative.

3. When the amount of the refund is set, account shall be taken in
  particular of the need to establish a balance between the use of basic
  Community agricultural products for export as processed goods to third
   countries, and the use of basic agricultural products from these
  countries admitted for inward processing.

4. Refunds on products listed in Article 1(1) and exported without further
  processing shall only be granted on application and on presentation of
  the relevant export licence.

5. The refund applicable to exports of products listed in Article 1(1)
  exported without further processing shall be that applicable on the day
  of application for the licence and, in the case of a differentiated
  refund, that applicable on the same day for the destination indicated

  on the licence.

6. Paragraphs 4 and 5 may be made to apply to products listed in
  Article 1(1) and exported in the form of goods listed in Annex I in
  accordance with the procedure laid down in Article 16 of Regulation
   (EC) No 3448/93.

7. Paragraphs 4 and 5 may be waived in the case of products listed in
  Article 1(1) on which refunds are paid under food-aid operations, in
  accordance with the procedure laid down in Article 17.

8. Detailed rules for the application of this Article shall be adopted in
  accordance with the procedure laid down in Article 17. Annex I shall be
  amended in accordance with the same procedure.

                   Article 9

1. To the extent necessary for the proper working of the common

  organization of the market in eggs, the use of inward processing
  arrangements may be prohibited in whole or in part:

    in respect of products listed in Article 1(1) which are intended for
    the manufacture of products listed in Article 1(1)(b), and

  - in special cases, in respect of products listed in Article 1(1)
    which are intended for the manufacture of goods listed in Annex I.

```

`78 -` _* /*_ `;—`

```
                            ^
                                            » b .

 2. Measures adopted pursuant to this Article shall be decided on in
   accordance with the procedure laid down in Article 17.

                   Article 10

 1. The general rules for the interpretation of the Combined Nomenclature
   and the special rules for its application shall apply to the
   classification of products covered by this Regulation; the tariff
   nomenclature resulting from the application of this Regulation shall be
   incorporated in the common customs tariff.

 2. Save as otherwise provided for in this Regulation or pursuant to a
   provision thereof, the following shall be prohibited in trade with

   third countries:

   - the levying of any charge having equivalent effect to a customs
     duty,

     the application of any quantitative restriction or measure having
     equivalent effect.

                   Article 11

 1. If, by reason of an increase in imports or exports, the Community
   market in one or more of the products listed in Article 1(1) is
   affected by, or is threatened with, serious disturbance likely to
   jeopardize the achievement of the objectives set out in Article 39 of
   the Treaty, appropriate measures may be applied in trade with third

   countries until such disturbance or threat of disturbance has ceased.

 2. If the situation referred to in paragraph 1 arises, the Commission
   shall, at the request of a Member State or on its own initiative,
   decide upon the necessary measures; the Member States shall be notified
   of such measures, which shall be immediately applicable. If the
   Commission receives a request from a Member State, it shall take a
   decision thereon within three working days following receipt of the

   request.

 3. Measures decided upon by the Commission may be referred to the Council
   by any Member State within three working days of the day on which they
   were notified. The Council shall meet without delay. It may, acting by
   a qualified majority, amend or annul the measure in question.

4. The Commission shall adopt detailed rules for the application of this
   .Article in accordance with the procedure laid down in Article 17.

5. This Article shall be applied having regard to the obligations arising
   from agreements concluded in accordance with Article 228(2) of the
   Treaty."

(2) Article 12 is deleted.

```

`- 79 -` _**A**_ _**Ab**_

```
II. Council Regulation (EEC) No 2783/75 of 29 October 1975 (OJ No L 282,
   1.11.1975, p.104), as last amended by Regulation (EEC) No 4001/87
   (OJ No L 377, 31.12.1987, p.44).

(1) The introductory sentence in Article 1 is replaced by the following:

   "Unless this Regulation provides otherwise, the rates of duty in the
   common customs tariff shall apply to the following products:"

(2) Article 2 is replaced by the following:

                   "Article 2

 1. Imports into the Community, or exports therefrom, of any of the
   products listed in Article 1 shall be subject to presentation of an
   import or export licence.

   Licences shall be issued by the Member States to any applicant,
   irrespective of his place of establishment in the Community and without
   prejudice to measures taken for the application of Article 4.

   Import and export licences shall be valid throughout the Community.
   Such licences shall be issued subject to the lodging of a security
   guaranteeing that the products are imported or exported during the term
   of validity of the licence; the security shall be forfeited in whole or
   in part if import or export is not carried out, or is only carried out
   partially, within that period.

2. The term of validity of licences and other detailed rules for the
   application of this Article shall be adopted in accordance with the
   procedure laid down in Article 17 of Regulation (EEC) No 2771/75.".

```

`- 80 -` _**À**_ _**a**_

```
(3) Article 3 is replaced by the following:

                   "Article 3

 1. In order to prevent or counteract adverse effects on the market in the
   Community which may result from imports of certain products listed in
   Article 1, imports of one or more of such products at the rate of duty
   laid down in the common customs tariff may be subject to payment of an
   additional import duty under the conditions set out in Article 5 of the
   Agreement on Agriculture concluded in accordance with Article 228 of
   the Treaty in the framework of the Uruguay Round of multilateral trade
   negotiations.

2. The Commission shall adopt detailed rules for the application of this .
   Article in accordance with the procedure laid down in Article 17 of
   Regulation (EEC) No 2771/75. Such detailed rules shall specify in
   particular:

   (a) the products to which additional import duties may be applied,

   (b) the criteria for triggering the application of paragraph 1 and
       in particular the calculation and determination of the various
       quantities and prices."

(4) Article 4 is replaced by the following:

                   "Article 4

Tariff quotas for the products listed in Article 1 resulting from
agreements concluded in accordance with Article 228 of the Treaty or from
any other act of the Council pursuant to the Treaty shall be opened and
administered in accordance with detailed, rules adopted under the procedure
laid down in Article 17 of Regulation (EEC) No 2771/75. Such detailed rules
shall provide for annual quotas, suitably phased over the year, to be
opened and, where appropriate, for:

 (a) guarantees covering the nature, provenance and origin of the product,

 (b) recognition of the document used for verifying the guarantees referred
   to in (a), and

 (c) the conditions under which import licences are issued and their term of
   validity."

```

**-** **[8 1]** **-** _**A**_ _**Al**_

```
(5) Article 5 is replaced by the following:

                    "Article 5

 Where prices on the Community market rise significantly and where that
 situation is likely to continue, thereby disturbing or threatening to
 disturb that market, appropriate measures may be taken.

 Detailed rules for the application of this Article shall be adopted in
 accordance with the procedure laid down in Article 17 of Regulation (EEC)
 No 2771/75."

(6) Article 7 is replaced by the following:

                    "Article 7

 To the extent necessary for the proper working of the common organization
 of the market in eggs and this Regulation, the use of inward processing
 arrangements may be prohibited in whole or in part in respect of products
 listed in Article 1 which are intended for the manufacture of products

 listed in that same Article.

 Measures adopted pursuant to this Article shall be decided on in accordance
 with the procedure laid down in Article 17 of Regulation (EEC) No 2771/75."

(7) Article 8 is replaced by thé following:

                    "Article 8

 1. The general rules for the interpretation of the Combined Nomenclature
   and the special rules for its application shall apply to the
   classification of products covered by this Regulation; the tariff
   nomenclature resulting from the application of this Regulation shall be
   incorporated in the common customs tariff.

 2. Save as otherwise provided for in this Regulation or pursuant to a
   provision thereof, the following shall be prohibited in trade with

   third countries:

   - the levying of any charge having equivalent effect to a customs
     duty,
   - the application of any quantitative restriction or measure having
     equivalent effect."

III. Council Regulation (EEC) No 2773/75 of 29 October 1975 (OJ No L 282,
   1.11.1975, p.64), as last amended by Regulation (EEC) No 4155/87
   (OJ No L 392, 31.12.1987, p.29)

   Council Regulation (EEC) No 2774/75 of 29 October 1975 (OJ No L 282,
   1.11.1975, p.68)

   Council Regulation (EEC) No 2775/75 of 1 October 1975 (OJ No L 282,
   1.11.1975, p.72)

   The above Regulations are repealed.

```

**- 82 -** **/Ml**

**ANNEX XIII**

```
                FRUIT AND VEGETABLES

  Council Regulation (EEC) No 1035/72 of 18 May 1972 (OJ No L 118,
  20.5.1972, p.l), as last amended by Regulation (EC) No 3669/93
  (OJ No L 338, 31.12.1993, p.26)

  Title IV is replaced by the following:

                   "Title IV

              Trade with third countries

                   Article 22

1. Imports into the Community, or exports therefrom, of any of the
  products listed in Article 1(2) shall be subject to presentation of an
  import or export licence.

  Licences shall be issued by the Member States to any applicant,
  irrespective of his place of establishment in the Community and without
  prejudice to measures taken for the application of Articles 25 and 26.

  Import and export licences shall be valid throughout the Community.
  Such licences shall be issued subject to the lodging of a security
  guaranteeing that the products are imported or exported during the term
  of validity of the licence; excep.in cases of force majeure, the
  security shall be forfeited in whole or in part if import or export is
  not carried out, or is only carried out partially, within that period.

2. The term of validity of licences and other detailed rules for the
  application of this Article shall be adopted in accordance with the
  procedure laid down in Article 33.

                   Article 23

1. Unless this Regulation provides otherwise, the rates of duty in the
  common Customs tariff shall apply to the products listed in
  Article 1(2).

2. Detailed rules for the application of this Article shall be adopted in
  accordance with the procedure laid down in Article 33. Such detailed
  .rules shall cover in particular the measures necessary to check on
  import prices.

```

42o

**A r t i c l e 24**

```
1. In order to prevent or counteract adverse effects on the market in the
   Community which may result from imports of certain products listed in
   Article 1(2), imports of one or more of such products at the rate of
   duty laid down in the common customs tariff may be subject to payment
   of an additional import duty under the conditions set out in Article 5
   of the Agreement on Agriculture concluded in accordance with
   Article 228 of the Treaty in the framework of the Uruguay Round of
  multilateral trade negotiations.

2. The Commission shall adopt detailed rules for the application of this
  Article in accordance with the procedure laid down in Article 33. Such
  detailed rules shall specify in particular:

   (a) the products to which additional import duties may be applied,

   (b) the criteria for triggering the application of paragraph 1 and
       in particular the calculation and determination of the various
       quantities and prices.

                   Article 25

  Tariff quotas for the products listed in Article 1(2) resulting from
  agreements concluded in accordance with Article 228 of the Treaty or
   from any other act of the Council pursuant to the Treaty shall be
  opened and administered in accordance with detailed rules adopted under
  the procedure laid down in Article 33. Such detailed rules shall
  provide for annual quotas, suitably phased over the year, to be opened
  and, where appropriate, for:

   (a) guarantees covering the nature, provenance and origin of the
       product,

   (b) recognition of the document used for verifying the guarantees
      referred to in (a), and

   (c) the conditions under which import licences are issued and their
      term of validity.

                / Article 26

1. To the extent necessary to enable the products listed in Article 1(2)
  to be exported on the basis of the prices of these products in
  •international trade and within the limits resulting from agreements
  concluded in accordance with Article 228 of the Treaty, the difference
  between those prices and.prices in the Community may be covered by
  export refunds.

2. Refunds shall be the same for the whole Community. They may vary
  according to destination.

  Refunds shall be fixed,in accordance with the procedure laid down in

  Article 33.

  Refunds may be fixed:

  (a) at regular intervals, > ' ' ' ' '
  (b) by invitation to tender.

```

```
                    - 8 4 - J, £ i

  Refunds fixed at regular intervals may, where necessary, be adjusted in
  the intervening period by the Commission at the request of a Member

  State or on its own initiative.

3. The refund shall be granted only on request and on presentation of the
  relevant export licence.

4. The refund applicable to exports of products listed in Article 1(2)
  shall be that applicable on the day of application for the licence and,
  in the case of a differentiated refund, that applicable on the same day

  for the destination indicated on the licence.

5. Paragraphs 3 and 4 may be waived in the case of products listed in
  Article 1(2) on which refunds are paid under food-aid operations, in
  accordance with the procedure laid down in Article 33.

6. Detailed rules for the application of this Article shall be adopted in
  accordance with the procedure laid down in Article 33.

                   Article 27

1. Save as otherwise provided for in this Regulation or pursuant to a
  provision thereof, the following shall be prohibited when importing the
  products listed in Article 1(2) from third countries:

  - the levying of any charge having equivalent effect to a customs
    duty,

  - the application of any quantitative restriction or measure having
    equivalent effect.

2. The general rules for the interpretation of the Combined Nomenclature
  and the special rules for its application shall apply to the
  classification of products covered by this Regulation; the tariff
  nomenclature resulting from the application of this Regulation shall be
  incorporated in the common customs tariff.

                   Article 28

1. Appropriate measures may be taken when trading with third countries:

    if, by reason of an increase in imports or exports, the Community
    market in one or more of the products listed in Article 1(2) is
    affected by, or is threatened with, serious disturbance likely to
    jeopardize the achievement of the objectives set out in Article 39
    of the Treaty,

    or if, in the case of the products listed in Annex Ilia, the
    withdrawal or buying-in operations undertaken pursuant to
    Articles 18 and 19 involve significant quantities.

```

**-** **[ 85]**
**-** _**lit**_

```
  Such measures may be applied only until, depending on the case, the
  disturbance or threat of disturbance has ceased or the quantities
  withdrawn or bought in have diminished appreciably.

2. If the situation referred to in paragraph 1 arises, the Commission
  shall, at the request of a Member State or on its own initiative,
  decide upon the necessary measures; the Member States shall be notified
  of such measures, which shall be immediately applicable. If the
  Commission receives a request from a Member State, it shall take a
  decision thereon within three working days following receipt of the

  request.

3. Measures decided upon by the Commission may be referred to the Council
  by any Member State within three working days of the day on which they
  were notified. The Council shall meet without delay. It may, acting by
  a qualified majority, amend or annul the measure in question.

4. The Commission shall adopt detailed rules for the application of this
  Article in accordance with the procedure laid down in Article 33.

5. This Article shall be applied having regard to the obligations arising
  from agreements concluded in accordance with Article 228(2) of the
  Treaty."

```

                     - 86                     - _423_

```
II. Council Regulation (EEC) No 2518/69 of 9 December 1969 (OJ No L 318,
   18.12.1969, p.17), as last amended by Regulation (EEC) No 2455/72
   (OJ No L 266, 14.11.1972, p.7)

   Council Regulation (EEC) No 2707/72 of 19 December 1972 (OJ No L 291,
   28.12.1972, p.3)

   Council Regulation (EEC) No 1200/88 of 28 April 1988 (OJ No L 115,
   3.5.1988, p.7), as last amended by Regulation (EEC) No 3821/90
   (OJ No L 366, 29.12.1990, p.45)

   The above Regulations are repealed.

```

`::r.'.i-;j` _nil_

" [ 8?]
~ _A2-H_

```
                    ANNEX XIV

              PROCESSED FRUIT AND VEGETABLES

I. Council Regulation (EEC) No 426/86 of 24 February 1986 (OJ No L 49,
   27.2.1986, p.l), as last amended by Regulation (EC) No 1490/94
   (OJ No L 161, 29.6.1994, p.13).

(1) Title II is replaced by èhé'following:

                    ">noo sri J

                    "Title II

               Trade with third countries

                    Article 9

 1. Imports into the Community, or exports therefrom, of any of the
   products listed in Article 1(1) may be subject to presentation of an
   import or export licence.

   Licences shall be issued by the Member States to any applicant,
   irrespective of his place of establishment in the Community and without
   prejudice to measures taken for the application of Articles 12 and 15.

   Import and export licences shall be valid throughout the Community. The
   issue of such licences may be subject to the lodging of a security
   guaranteeing that the products are imported or exported during the term
   of validity of the licence;'"excep.in cases of force majeure, the
                       T erf:* o"
   security shall be forfeited in whole or in part if import or export is
   not carried out, or is only carried out partially, within that period.

2. The term of validity of licences and other detailed rules for the
   application of this Article shall be adopted in accordance with the
   procedure laid down in Article 22.

                   Article 10

1. Unless this Regulation provides otherwise, the rates of duty in the
   common customs tariff shall apply to the products listed in
   Article 1(1).

2. A minimum import price for the 1995, 1996, 1997, 1998 and 1999
   marketing years shall be fixed for the products listed in Part B of
   Annex I. The minimum import price shall be determined having regard in
   particular to:

   - the free-at-frontier prices on import into the Community,
   - the prices obtaining on world markets,
   - the situation on the internal Community market,

    the trend of trade with third countries.

   Where the minimum import price is not observed, a countervailing charge
   in addition to customs duty shall be imposed, based on the prices of
   the main supplier third countries.

```

```
3. Minimum import prices and other detailed rules for the application of
  this Article shall be adopted in accordance with the procedure provided

  for in Article 22.

                   Article 11

1. In order to prevent or counteract adverse effects on the market in the
  Community which may result from imports of certain products listed in
  Article 1(1), imports of one or more of such products at the rate of
  duty laid down in the common customs tariff may be subject to payment
  of an additional import duty under the conditions set out in Article 5
  of the Agreement on Agriculture concluded in accordance with
  Article 228 of the Treaty in the framework of the Uruguay Round of
  multilateral trade negotiations.

2. The Commission shall adopt detailed rules for the application of this
  Article in accordance with the procedure laid down in Article 22. Such
  detailed rules shall specify in particular:

   (a) the products to which additional import duties may be applied,

   (b) the criteria for triggering the application of paragraph 1 and
       in particular the calculation and determination of the various
       quantities and prices.

                   Article 12

Tariff quotas for the products listed in Article 1(2) resulting from
agreements concluded in accordance with .Article 228 of the Treaty or from
any other act of the Council pursuant to 'the Treaty shall be opened and
administered in accordance with detailed rules adopted under the procedure
laid down in Article 22. Such detailed rules shall provide for annual
quotas, suitably phased over the year, to be opened and, where appropriate,

for:

(a) guarantees covering the nature, provenance and origin of the product,

(b) recognition of the document used for verifying the guarantees referred
  to in (a), and

(c) the conditions under which import licences are issued and their term of
  validity.

                   Article 13

To the extent necessary to enable the export of:

(a) the products not containing added sugar listed in Article 1(1),

```

```
             - [ 89]
```

**`-`** _**\Uo**_

```
(b) - white sugar and raw sugar falling within heading 1701,
   - glucose and glucose syrup falling within subheadings 1702 30 51,
    1702 30 59, 1702 30 91, 1702 30 99 and 1702 40 90,
   - isoglucose falling within subheadings 1702 30 10, 1702 40 10,
    1702 60 10 and 1702 90 30, and
    beet and cane syrup.falling within subheading 1702 90 90,

  used in the products listed in Article 1(1)(b),

  on the basis of prices for those products on the world market and
  within the limits resultâligsfrrbm agreements concluded in accordance
  with Article 228 of the Treaty, the difference between those prices and
  prices in the Communityjuta^i^e covered by export refunds.

                   Article 14

1. Refunds shall be the same for the whole Community. They may vary
  according to destination.

  Refunds shall be fixed in accordance with the procedure laid down in

  Article 22.

  Refunds may be fixed:

   (a) at regular intervals,

   (b) by invitation to tender.

  Refunds fixed at regular 4 iintecv>als may, where necessary, be adjusted in
  the intervening period by the Commission at the request of a Member

  State or on its own initiative.

2. The refund referred to in Article 13(b) shall be equal:

    in the case of raw sugar, white sugar and beet and cane syrup, to
    the amount of refund for export of these products unprocessed as
    fixed in accordance with Article 19 of Council Regulation (EEC)
    No 1785/81 of 30 June 1981 on the common organization of the markets
    in the sugar sector and with the provisions adopted for its
    application,

  - in the case of isoglucose, to the amount of the refund for export
    of this product unprocessed as fixed in accordance with Article 19
    of Regulation (EEC) No 1785/81 and with the provisions adopted for
    its application,

  - in the case of glucose and glucose syrup, to the amount of the
    refund for export of these products unprocessed as fixed for each of
    these products in accordance with Article 16 of Council Regulation
    (EEC) No 1766/92 of 30 June 1992 on the common organization of the
    market in cereals and with the provisions adopted for its
    application.

```

**`- 90 -`** **`/J`** _**1**_ **`^`**

```
3. To qualify for the refund referred to in Article 13(b), the products
  listed in Article 1(1)(b) must, on export, be accompanied by a
  declaration from the applicant indicating the amounts of raw sugar,
  white sugar and beet and cane sugar, isoglucose, glucose and glucose
  syrup used in their manufacture.

  The accuracy of the declaration referred to in the first subparagraph
  shall be subject to checks by the competent authorities of the Member

  State concerned.

```

`••'....„'` _i o_ `i`

```
4. Where the refund referred to in ArtiTcleprl&Kb) is not sufficient to
  permit exports of the products listed in Article 1(1)(b), the
  provisions laid down for the refund refeapired to in Article 13(a) shall
  apply to those products instead of those laid down in Article 13(b).

5. Refunds shall only be granted on request and on presentation of the
  relevant export licence.

6. The refund shall be that applicable on the day of application for the
  licence and, in the case of a differentiated refund, that applicable on
  the same day for the destination indicated on the licence.

7. Paragraphs 5 and 6 may be waived in the case of the refunds referred to
  in Article 13(b) and products listed in Article 1(1) on which refunds
  are paid under food-aid operations, in accordance with the procedure

  laid down in Article 22.

8. Detailed rules for the application of this Article shall be adopted in
  accordance with the procedure laid down in Article 22.

```

`*` `:0` _art!_ _'{-•_

```
                   Article 15

1. To the extent necessary for the proper working of the common
  organizations of the market in cereals, sugar and fruit and vegetables,
  the use of inward processing arrangements may, in special cases, be
  prohibited in whole or in part in respect of:

    products listed in Article 13(b), and

  - fruit and vegetables

  intended for the manufacture of products listed in Article 1(1)

2. Measures adopted pursuant to this Article shall be decided on in
  •accordance with the procedure laid down in Article 22.

                   Article 16

1. The general rules for the interpretation of the Combined Nomenclature
  and the special rules for its application shall apply to the
  classification of products covered by this Regulation; the tariff
  nomenclature resulting from the application of this Regulation shall be
  incorporated in the common customs tariff.

```

`- 91 -` _**y,**_

```
2. Save as otherwise provided for in this Regulation or pursuant to a
   provision thereof, the following shall be prohibited with regard to
   imports from third countries:

    the levying of any charge having equivalent effect to a customs
    duty,

    the application of any quantitative restriction or measure having
    equivalent effect.

                   Article 17

1. If, by reason of an increase in imports or exports, the Community
  market in one or more of the products listed in Article 1(1) is
  affected by, or is threatened with, serious disturbance likely to
   jeopardize the achievement of the objectives set out in Article 39 of
  the Treaty, appropriate measures may be applied in trade with third

  countries until such disturbance or threat of disturbance has ceased.

2. If the situation referred to in paragraph 1 arises, the Commission
   shall, at the request of a Member State or on its own initiative,
  decide upon the necessary measures; the Member States shall be notified
  of such measures, which shall be immediately applicable. If the
  Commission receives a request from a Member State, it shall take a
  decision thereon within three working days following receipt of the

  request.

3. Measures decided upon by the Commission may be referred to the Council
  by any Member State within three working days of the day on which they
  were notified. The Council shall meet without delay. It may, acting by
  a qualified majority, amend or annul the measure in question.

4. The Commission shalr adopt detailed rules for the application of this
  Article in accordance with the procedure laid down in Article 22.

5. This Article shall be applied having regard to the obligations arising
  from agreements concluded in accordance with Article 228(2) of the
  Treaty."

```

`- 92 -` _A_ _^_

```
(2) Annexes II, III and IV are deleted.

II. Council Regulation (EEC) No 518/77 of 14 March 1977 (OJ No L 73,
   21.3.1977, p.22).

   Council Regulation (EEC) No 519/77 of 14 March 1977 (OJ No L 73,
   21.3.1977, p.24).

   Council Regulation (EEC) No 520/77 of 14 March 1977 (OJ No L 73,
   21.3.1977, p.26).

   Council Regulation (EEC) No 521/77 of 14 March 1977 (OJ No L 73,
   21.3.1977, p.28).

   Council Regulation (EEC) No 1796/81 of 30 June 1981 (OJ No L 183,
   4.7.1981), as last amended by Regulation (EEC) No 1122/92 (OJ No L 117,
   1.5.1992, p. 98).

   Council Regulation (EEC) No 2089/85 of 23 July 1985 (OJ No L 197,
   27.7.1985, p. 10).

   Council Regulation (EEC) No 3225/88 of 17 October 1988 (OJ No L 288,
   21.10.1988, p. 11).

   Council Regulation (EEC) No 1201/88 of 28 April 1988 (OJ No L 115,
   3.5.1988, p. 9), as last amended by Regulation (EEC) No 2781/90 (OJ No
   L 265, 28.9.1990, p. 3).

   The above Regulations are repealed.

```

```
 - 93 
ANNEX XV

BANANAS

```

1 3 O

```
Council Regulation (EEC) No 404/93 of 13 February 1993 (OJ No L 47,
25.2.1993, p.l), as last amended by Regulation (EC) No 3518/93 (OJ No L 320,
22.12.1993, p. 15).

(1) Article 15 is replaced by the following:

                   "Article 15

 1. Unless this Regulation provides otherwise, the rates of duty in the
   common customs tariff shall apply to the products listed in
   Article 1(2).

 2. In order to prevent or counteract adverse effects on the market in the
   Community which may result from imports of certain products listed in
   Article 1(2), imports of one or more of such products at the rate of
   duty laid down in the common customs tariff may be subject to payment
   of an additional import duty within the limits set out in Article 5 of
   the Agreement on Agriculture concluded in accordance with Article 228
   of the Treaty in the framework of the Uruguay Round of multilateral
   trade negotiations.

 2. The Commission shall adopt detailed rules for the application of
   paragraph 2 in accordance with the procedure laid down in Article 27.
   Such detailed rules shall specify in particular:

   (a) the products to which additional import duties may be applied,

   (b) the criteria for. triggering the application of paragraph 2 and
       in particular the calculation and determination of the various
       .quantities and prices."

(2). The following Article is inserted:

                   "Article 15a

Articles 15a to 20 inclusive of this Title shall apply only to fresh
products falling within CN code ex 0803, excluding plantains.

For the purposes of this Title:

1. 'traditional imports from ACP States' means the quantities of bananas
   set out in the Annex exported by each ACP State which has traditionally
   exported bananas to the Community; such bananas shall be referred to as
   'traditional ACP bananas';

```

`-` `94 -` _A_ `*` `.`
_**A**_ _**ÎA**_

```
 2. 'non-traditional imports from ACP States* means the quantities of
   bananas exported by the ACP States which exceed the quantity defined at
   1 above; such bananas shall be referred to as 'non-traditional ACP

   bananas';

 3. "imports from non-ACP third countries' means quantities exported by
   other third countries; such bananas shall be referred to as 'third
   country bananas';

 4. 'Community bananas' means bananas produced in the Community;

 5. 'to market' and 'marketing' mean placing on the market, not including
   making the product available to the final consumer."

(3) Article 18 is replaced by the following:

                   "Article 18

 1. A tariff quota of 2.2 million tonnes (net weight) shall be opened each
   year for imports of third-country bananas and non-traditional ACP

   bananas.

   Within the framework of the tariff quota, imports of third-country
   bananas shall be subject to a levy of ECU 75 per tonne and imports of
   non-traditional ACP bananas shall be subject to a zero duty.

   For 1994, the tariff quota shall be 2.1 million tonnes (net weight).

   Where Community demand determined on the basis of the supply balance
   referred to in Article 16 increases, the volume of the quota shall be
   increased in consequence, in accordance with the procedure laid down in
   Article 27. Any such adjustment shall be made before 30 November
   preceding the marketing year concerned.

 2. By derogation from Article 15(1), non-traditional AÇP bananas imported
   outside the tariff quota referred to in paragraph 1 of this Article
   shall be subject to a customs duty per tonne equal to the duty referred
   to in Article 15(1) less ECU 100.

 3. The quantities of third-country bananas and non-traditional ACP bananas
   re-exported from the Community shall not be charged to the quota
   referred to in paragraph 1.

4. The amounts referred to in this Article shall be converted into

   national currency at the rate applicable to the products concerned in

   connection with the common customs tariff."

```

`- 95 -` _All_

```
(4) The following indents, are added to Article 20:

   "- measures guaranteeing the provenance and origin of bananas imported
     within the tariff quota provided for in Article 18(1),

    - measures necessary to fulfil obligations arising from agreements
     concluded by the Community in accordance with Article 228 of the
     Treaty."

(5) Article 23 is replaced by the following:

                   "Article 22

   The general rules for the interpretation of the Combined Nomenclature
   and the special rules for its application, shall apply to the
   classification of products covered by this Regulation; the tariff
   nomenclature resulting from the application of this Regulation shall be
   incorporated in the common customs tariff."

(6) Article 23 is replaced by the following:

                   "Article 23

1. If, by reason of an increase in imports or exports, the Community
   market in one or more of the products listed in Article 1 is affected
   by, or is threatened with, serious disturbance likely likely to
   jeopardize the achievement of the objectives set out in Article 39 of
   the Treaty, appropriate measures may be taken in trade with third

   countries until such disturbance or threat of disturbance has ceased.

2. If the situation referred to in paragraph 1 arises, the Commission
   shall, at the request of a Member State or on its own initiative,
   decide upon the necessary measures; the Member States shall be notified
   of such measures, which shall be immediately applicable. If the
   Commission receives a request from a Member State, it shall take a
   decision thereon within three working days following receipt of the

   request.

3. Measures decided upon by the Commission may be referred to the Council
   by any Member State within three working days of the day on which they
   were notified. The Council shall meet without delay. It may, acting by
   a qualified majority, amend or annul the measure in question.

4. Detailed rules for the application of this Article shall be adopted in
   accordance with the procedure laid down in Article 27.

5. This Article shall be applied having regard to the obligations arising
   from international agreements concluded in accordance with
   Article 228(2) of the Treaty."

```

`- 96 -` **^1** **33**

```
                    ANNEX XVI

                     WINE

I. Council Regulation (EEC) No 822/87 of 16 March 1987 (OJ No L 84,
   27.3.1987, p.l), as last amended by Regulation (EEC) No 1891/94
   (OJ No L 197, 30.7.1994, p.42).

(1) Title IV is replaced by the following:

                    "Title IV

               Trade with third countries

                   Article 52

 1. Imports into the Community of any of the products listed in
   Article 1(2)(a) and (b) shall be subject to presentation of an import
   licence. Imports into the Community of any other products listed in
   Article 1^2) and exports from the Community of any products listed in
   Article 1(2) may be subject to presentation of an export licence.

 2. Licences shall be issued by Member States to any applicant,
   irrespective of his place of establishment in the Community and without
   prejudice to measures taken for the application of Articles 55 and 56.

   Licences shall be valid throughout the Community.

   Such licences shall be issued subject to the lodging of a security
   guaranteeing that the products are imported or exported during the term
   of validity of the licence; the security shall be forfeited in whole or
   in part if import or export is not carried out, or is only carried out
   partially, within that period.

 3. The following shall be adopted in accordance with the procedure laid

   down in Article 83:

   (a) the list of products in respect of which export licences are
       required,

   (b) the term of validity of the licences and other detailed rules
       for the application of this Article.

```

```
 - 97 
Article 53

```

**/Î3</**

```
1. Unless this Regulation provides otherwise, the rates of duty in the
  common customs tariff shall apply to the products listed in Article 1.

2. The detailed rules for the application of this Article shall be adopted
  in accordance with the procedure laid down in Article 83. Such detailed
  rules shall include the provisions necessary for the verification of
  import prices.

                   Article 54

1. In order to prevent or counteract adverse effects on the market in the
  Community which may result from imports of certain agricultural
  products, imports of one or more such products at the rate of duty laid
  down in the common customs tariff may be subject to payment of an
  additional import duty under the conditions set out in Article 5 of the
  Agreement on Agriculture concluded in accordance with Article 228 of
  the Treaty in the framework of the Uruguay Round of multilateral trade
  hegotiations.

2. The Commission shall adopt detailed rules for the application of this
  Article in accordance with the procedure laid down in Article 83. Such
  detailed rules shall specify in particular:

  (a) the products to which additional import duties may be applied,

  (b) the criteria for triggering the application of paragraph 1 and
      in particular the calculation and determination of the various
      quantities and prices.

```

```
  98 
Article 55

```

**1 3 s ~**

```
Tariff quotas for the products listed in Article 1 resulting from
agreements concluded in accordance with Article 228 of the Treaty or from
any other act of the Council pursuant to the Treaty shall be opened and
administered in accordance with detailed rules adopted under the procedure
laid down in Article 83. Such detailed rules shall provide for annual
quotas, suitably phased over the year, to be opened and, where appropriate,

for:

(a) guarantees covering the nature, provenance and origin of the product,

(b) recognition of the document used for verifying the guarantees referred
  to in (a), and

(c) the conditions under which import licences are issued and their term of
  validity.

```

**"** **[9]**
**-~**
_**4%**_

```
                   Article 56

1. To the extent necessary to enable the export of:

   (a) products listed in Article 1(2),

   (b) sugars falling within Combined Nomenclature code 1701, glucose
       and glucose syrup falling within CN subheadings 1702 30 91, 1702
       30 99, 1702 40 90 and 1702 90 50, including in the form of
       products falling within subheadings 1702 30 51 and 1702 30 59,
       incorporated into the products falling within subheadings 2009
       60 11, 2009 60 71, 2009 60 79 and 2204 30 99,

  on the basis of prices for those products on the world market and
  within the limits resulting from agreements concluded in accordance
  with Article 228 of the Treaty, the difference between those prices and
  prices in the Community may be covered by export refunds.

2. Refunds shall be the same for the^whole Community. They may vary
  according to destination.

  The refunds referred to in paragraph 1(a) shall be fixed in accordance
  with the procedure laid down in Article 83. They may be fixed:

  (a) at regular intervals,

  (b) by invitation to tender.

  Refunds fixed at regular intervals may, where necessary, be adjusted in
  the intervening period by the Commission at the request of a Member

  State or on its own initiative.

```

`- 100 -` _/\_ _n 1_
_**y\**_

```
3. The amount of the refund referred to in paragraph 1(b) shall be:

    in the case of raw sugar and white sugar, to the amount of refund
    for export of these products unprocessed as fixed in accordance with
    Article 19 of Council Regulation (EEC) No 1785/81 of 30 June 1981 on
    the common organization of the markets in the sugar sector and with
    the provisions adopted for its application,

  - in the case of glucose and glucose syrup, to the amount of the

    refund for export of these products unprocessed as fixed for each of
    these products in accordance with Article 17 of Council Regulation
    (EEC) No 1766/92 of 30 June 1992 on the common organization of the
    market in cereals and with the provisions adopted for its
    application.

4. To qualify for the refund referred to in paragraph 1(b), processed
  products must, on export, be accompanied by a declaration from the
  applicant indicating the amounts of raw sugar, white sugar, glucose and
  glucose syrup used in their manufacture.

  The accuracy of this declaration shall be subject to checks by the
  competent authorities of the Member State concerned.

5. Refunds shall only be granted on application and on presentation of the
  relevant export licence.

6. The refund applicable to exports of products listed in Article 1 shall
  be that applicable on the day of application for the licence and, in
  the case of a differentiated refund, that applicable on the same day

  for the destination indicated on the licence.

7. Paragraphs 4 and 5 may be waived in the case of products listed in
  Article 1 on which refunds are paid under food-aid operations, in
  accordance with the procedure laid down in Article 83.

8. Detailed rules for the application of this Article shall be adopted in
  accordance with the procedure laid down in Article 83.

                   Article 57

1. To the extent necessary for the proper working of the common
  organization of the market in wine the use of inward processing
  arrangements may be prohibited .wholly or partially in respect of all or
  some of the products listed in Article 1(2).

2. The measures taken pursuant to this Article shall be adopted in
  accordance with the procedure laid down in Article 83.

```

```
                    - 101 - „ ^,
                   Article 58

1. The general rules for the interpretation of the Combined Nomenclature
  and the special rules for its application shall apply to the
  classification of products covered by this Regulation; the tariff
  nomenclature resulting from the application of this Regulation shall be
  incorporated in the common customs tariff.

2. Save as otherwise provided for in this Regulation or pursuant to a
  provision thereof, the following shall be prohibited:

    the levying of any charge having equivalent effect to a customs
    duty,

  - the application of any quantitative restriction or measure having
    equivalent effect.

                   Article 59

1. The import of the products referred to in Article 1.(2) to which alcohol
  has been added, with the exception of those products equivalent to
  products originating in the Community in respect of which such an
  admixture is permitted p-ujr^uant to Article 25(1) and (2), shall be
  prohibited.,,: ..,

2. Detailed rules for the application of this Article, and in particular
  the conditions for the equivalence of products, shall be adopted in
  accordance with the procedure laid down in Article 83.

                   Article 60

1. If, by reason of an increase in imports or exports, the Community
  market in one or more of the products listed in Article 1(2) is
  affected by, or is threatened with, serious disturbance likely to
```

`jeopardize the achievement` `of` `the objectives set out in Article 39 of` _t_
```
  the Treaty, appropriate measures may be applied in trade with third

  countries until such disturbance or threat of disturbance has ceased.

  In order to assess whether the situation justifies the application of
  such measures, the following must be taken into account:

  (a) the quantities in respect of which import licences have been
       issued or applied for and the figures given in the forecast
       supply balance;

  (b) where appropriate, the scale of the intervention.

```

_AZ°i_
```
                    - 102

 2. If the situation referred to in paragraph 1 arises, the Commission
   shall, at the request of a Member State or on its own initiative,
   decide upon the necessary measures; the Member States shall be notified
   of such measures, which shall be immediately applicable. If the
   Commission receives a request from a Member State, it shall take a
   decision thereon within three working days following receipt of the

   request.

 3. Measures decided upon by the Commission may be referred to the Council
   by any Member State within three working days of the day on which they
   were notified. The Council shall meet without delay. It may, acting by
   a qualified majority, amend or annul the measure in question.

 4. The Commission shall adopt detailed rules for the application of this
   Article in accordance with the procedure laid down in Article 83.

 5. This Article shall be applied having regard to the obligations arising
   from agreements concluded in accordance with Article 228(2) of the

   Treaty.

                   Article 61

 1. Imported wine intended for direct human consumption and described with
   the aid of a geographical ascription^hta^iie~ eligible, with regard to
   its marketing in the Community and with the proviso that reciprocity
   exists, for the control and protection arrangements referred to in
   Article 16 of Regulation (EEC) No 823/87- [i] fcir quality wines produced in
   specified regions.

 2. The provision laid down in paragraph 1 shall be implemented by means of
   agreements with interested third countries to be negotiated and
   concluded in accordance with the procedure laid down in Article 113 of
   the Treaty.

3. Detailed rules for the application of this Article shall be adopted in
   accordance with the procedure laid down in Article 83."

(2) The following is inserted after Article 72:

                   "Article 72a

1. The Member States shall take all necessary measures to enable
   interested parties to prevent, on the terms stipulated in Articles 23
   and 24 of the Agreement on Tirade-related Aspects of Intellectual
   Property Rights, the use in the Community of a geographical indication
   attached to the products referred to in Article 1(2)(b) for products
   not originating in the place indicated by the geographical indication
   in question, even where the true origin of the goods is indicated or
   the geographical indication is used in translation or accompanied by
   expressions such as "kind", "type", "style", "imitation" or the like.

   For the purposes of this Article, "geographical indications" is taken
   to, mean indications which identify a product as originating in the
   territory of a third country which is a member of the World Trade
   Organization or in a region or locality within that territory, in cases
   where a certain quality, reputation or other given characteristic of
   the product may be attributed essentially to that geographic place of
   origin.

2. Paragraph 1 shall apply notwithstanding other specific provisions in
   Community legislation laying down rules for the designation and

```

`- 103 -` `,` _,_

```
   presentation of the products referred to in Article 1(2)(b).

3. Detailed rules for the application of this Article shall be adopted in
   accordance with the procedure laid down in Article 83."

(3) Annex VII is deleted.

```

`- 104` **>H1**

```
II. Council Regulation (EEC) No 344/79 of 5 February 1979 (OJ No L 54,
   5.3.1979, p.67)

   Council Regulation (EEC) No 345/79 of 5 February 1979 (OJ No L 54,
   5.3.1979, p.69), as amended by Regulation (EEC) No 2009/81
   (OJ No L 195, 18.7.1981, p.6)

   The above Regulations are repealed.

```

```
                    - 105 ```

_AHl_

```
                    ANNEX XVII

                    TOBACCO

Council Regulation (EEC) No 2075/92 of 30 June 1992 (OJ No L 215, 30.7.1992,
p.70)

Title IV is replaced by the following:

                    "Title IV

               Trade with third countries

                   Article 15

 Unless this Regulation provides otherwise, the rates of duty in the common
 customs tariff shall apply to the products listed in Article 1.

                   Article 16

Tariff quotas for the products listed in Article 1 resulting from
agreements concluded in accordance with Article 228 of the Treaty or from
any other act of the Council!qataisiEant to the Treaty shall be opened and
administered in accordance with detailed rules adopted under the procedure
 laid down in Article 23. Such detailed rules shall provide for annual
quotas, suitably phased over the year, to be opened and, where appropriate,

for:

 (a) guarantees covering the nature, provenance and origin of the product,

 (b) recognition of the document used for verifying the guarantees referred
   to in (a), and

 (c) the conditions under which import licences are issued and their terra of
   validity.

                   Article 16a

              » 
1. The general rules for the interpretation of the Combined Nomenclature
   and the special rules for its application shall apply to the tariff
   classification of products covered by this Regulation. 
```

_**/jH1**_

```
2. Save as otherwise provided for in this Regulation or pursuant to a
  provision thereof, the following shall be prohibited in trade with

  third countries:

   (a) the levying of any charge having equivalent effect to a customs
      duty,

   (b) the application of any quantitative restriction or measure
      having equivalent effect.

                  Article 16c

1. If, by reason of an increase in imports or exports, the Community
  market in one or more of the products listed in Article 1 is affected
  by, or is threatened with, serious disturbance likely to jeopardize the
  achievement of the objectives set out in Article 39 of the Treaty,
  appropriate measures may be applied in trade with third countries until

  such disturbance or threat of disturbance has ceased.

2. If the situation referred to in paragraph 1 arises, the Commission
  shall, at the request of a Member State or on its own initiative,
  decide upon the necessary measures; the Member States shall be notified
  of such measures, which shall be imraadabafcply applicable. If the
  Commission receives a request from a Member State, it shall take a
  decision thereon within three working days! following receipt of the

  request. -v-:.-+

3. Measures decided upon by the Commission may be referred to the Council
  by any Member State within three working days of the day on which they
  were notified. The Council shall meet without delay. It may, acting by
  a qualified majority, amend or annul the measure in question.

4. The Commission shall adopt detailed rules for the application of this
  Article in accordance with the procedure laid down in Article 23.

5. This Article shall be applied having regard to the obligations arising
  from agreements concluded in accordance with Article 228(2) of the
  Treaty."

```

_-_ `107` `-•` _**A H**_ **4**

```
                 , ANNEX XVIII

                     HOPS

Council Regulation (EEC) No 1696/71 of 26 July 1971 (OJ No L 175, 4.8.1971,
p.l), as last amended by Regulation (EEC) No 3124/92 (OJ No L 313,
30.10.1992, p.l)

Title V is replaced by the following:

                    "Title V

               Trade with third countries

                   Article 14

 Unless this Regulation provides otherwise, the rates of duty in the common
 customs tariff shall apply to the products listed in Article 1.

                   Article 15

 Tariff quotas for the products listed in Article 1 resulting from
 agreements concluded in accordance with Article 228 of the Treaty or from
 any other act of the Council pursuant to the Treaty shall be opened and
 administered in accordance with detailed rules adopted under the procedure
 laid down in Article 20. Such detailed rules shall provide for annual
 quotas, suitably phased over the year, to be opened and, where appropriate,

 for:

 (a) guarantees covering the nature, provenance and origin of the product,

 (b) recognition of the document used for verifying the guarantees referred
   to in (a), and

 (c) the conditions under which import licences are issued and their term of
   validity.

```

`108`                  - ^ - K

```
                  Article 15a

1. The general rules for the interpretation of the Combined Nomenclature
  and the special rules for its application shall apply to the tariff
  classification of products covered by this Regulation.

2. Save as otherwise provided for in this Regulation or pursuant to a
  provision thereof, the following shall be prohibited:

       the levying of any charge having equivalent effect to a customs
      duty,

      the application of any quantitative restriction or measure
      having equivalent effect.

                  Article 15c

1. If, by reason of an increase in imports or exports, the Community
  market in one or more of the products listed in Article 1 is affected
  by, or is threatened with, serious disturbance likely to jeopardize the
  achievement of the objectives set out in Article 39 of the Treaty,
  appropriate measures may be applied in trade with third countries until

  such disturbance or threat of disturbance has ceased.

2. If the situation referred to in paragraph 1 arises, the Commission
  shall, at the request of a Member State or on its own initiative,
  decide upon the necessary measures; the Member States'shall be notified
  of such measures, which shall be immediately applicable. If the
  Commission receives a request from a Member State, it shall take a
  decision thereon within three working days following receipt of the

  request.

3. Measures decided upon by the Commission may be referred to the Council
  by any Member State within three working days of the day on which they
  were notified. The Council shall meet without delay. It may, acting by
  a qualified majority, amend or annul the measure in question.

4. The Commission shall adopt detailed rules for the application of this
  Article in accordance with the procedure laid down in Article 20.

5. This Article shall be applied having regard to the obligations arising
  from agreements concluded in accordance with Article 228(2) of the
  Treaty."

```

`-` `109` `-` _A_ _H(n_

```
                    ANNEX XIX

      LIVE TREES AND OTHER PLANTS, BULBS, ROOTS AND THE LIKE,

             CUT FLOWERS AND ORNAMENTAL FOLIAGE

I. Council Regulation (EEC). No 234/68 of 27 February 1968 (OJ No L 55,
   2.3.1968, p.l), as last amended by Regulation (EEC) No 3336/92
   (OJ No L 336, 20.11.1992, p.l).

   Articles 8, 9 and 10 are replaced by the following:

                    "Article 8

 1. Imports into the Community of any of the products listed in Article 1
   may be subject to presentation of an import licence.

   Licences shall be issued by the Member States to any applicant,
   irrespective of his place of establishment in the Community.

   Import licences shall be valid throughout the Community. Such licences
   shall be issued subject to the lodging of a security guaranteeing that
   the products are imported during the term of validity of the licence;
   the security shall be forfeited in whole or in part if import is not
   carried out, or. is only carried out partially, within that period.

 2. The term of validity of licences and other detailed rules for the
   application of this Article shall be adopted in accordance with the
   procedure laid down in Article 14.

i Article 9

 Unless this Regulation provides otherwise, the rates of duty in the common
 customs tariff shall apply to the products listed in Article 1.

                    Article 10

 Tariff quotas for the products listed in Article 1 resulting from
 agreements concluded in accordance with Article 228 of the Treaty or from
 any other act of the Council pursuant to the Treaty shall be opened and
 administered in accordance with detailed rules adopted under the procedure
 laid down in Article 14, Such detailed rules shall provide for annual
 quotas, suitably phased over the year, to be opened and, where appropriate,

 for:

```

`- 110 -` _AHl_

```
(a) guarantees covering the nature, provenance and origin of the product,

(b) recognition of the document used for verifying the guarantees referred
  to in (a), and

(c) the conditions under which import licences are issued and their term of
  validity.

                  Article 10a

1. The general rules for the interpretation of the Combined Nomenclature
  and the special rules for its application shall apply to the tariff
  classification of products covered by this Regulation; the tariff
  nomenclature resulting from the application of this Regulation shall be
  incorporated in the common customs tariff.

2. Save as otherwise provided for in this Regulation or pursuant to a
  provision thereof, the following shall be prohibited in trade with

  third countries:

    the levying of any charge having equivalent effect to a customs
    duty,

    the application of any quantitative restriction or measure having
    equivalent effect.

                  Article 10b

1. If, by reason of an increase in imports or exports, the Community
  market in one or more of the products listed in Article 1 is affected
  by, or is threatened with, serious disturbance likely to jeopardize the
  achievement of the objectives set out in Article 39 of the Treaty,
  appropriate measures may be applied in trade with third countries until

  such disturbance or threat of disturbance has ceased.

2. If the situation referred to in paragraph 1 arises, the Commission
  shall, at the request of a Member State or on its own initiative,
  decide upon the necessary measures; the Member States shall be notified
  of such measures, which shall be immediately applicable. If the
  Commission receives a request from a Member State, it shall take a
  decision thereon within three working days following receipt of the

  request.

3. Measures decided upon by the Commission may be referred to the Council
  by any Member State within three working days of the day on which they
  were notified. The Council shall meet without delay. It may, acting by '
  a qualified majority, amend or annul the measure in question.

```

#### Ill - n

```
 4. The Commission shall adopt detailed rules for the application of this
   Article in accordance with the procedure laid down in Article 14.

 5. This Article shall be applied having regard to the obligations arising
   from agreements concluded in accordance with Article 228(2) of the
   Treaty."

II. Council Regulation (EEC) No 3290/75 of 16 December 1975 (OJ No L 326,

   18.12.1975, p.4).

   The above Regulation is repealed.

```

```
              ```

`112`                    - _AH_ _°)_

```
                    ANNEX XX

                     SEEDS

I. Council Regulation (EEC) No 2358/71 of 26 October 1971 (OJ No L 246,
   5.11.1971, p.l), as last amended by Regulation (EC) No 3375/93 (OJ No
   L 303, 10.12.1993, p.9).

(1) Articles 5, 6 and 7 are replaced by the following:

                   "Article 5

 1. Unless this Regulation provides otherwise, the rates of duty in the
   common customs tariff shall apply to the products listed in Article 1.

 2. The general rules for the interpretation of the Combined Nomenclature
   and the special rules for its application shall apply to the
   classification of products covered by this Regulation; the tariff
   nomenclature resulting from the application of this Regulation shall be
   incorporated in the common customs tariff.

                    Article 6

 Tariff quotas for the products listed in Article 1 resulting from
 agreements concluded in accordance with Article 228 of the Treaty or from
 any other act of the Council pursuant to the Treaty shall be opened and
 administered in accordance with detailed rules adopted under the procedure
 laid down in Article 11. Such detailed rules shall provide for annual
quotas, suitably phased over the year, to be opened and, where appropriate,

 for:

 (a) guarantees covering the nature, provenance and origin of the product,

 (b) recognition of the document used for verifying the guarantees referred
   to in (a), and

 (c) the conditions under which import licences are issued and their term of
   validity.

```

```
 - 113 
Article 7

```

_**ACQ**_

```
 Save as otherwise provided for in this Regulation or pursuant to a
 provision thereof, the following shall be prohibited in trade with third

 countries:

 - the levying of any charge having equivalent effect to a customs duty,

 - the application of any quantitative restriction or measure having
   equivalent effect.

                    Article 7a

 1. If, by reason of an increase in imports or exports, the Community
   market in one or more of the products listed in Article 1 is affected
   by, or is threatened with, serious disturbance likely to jeopardize the
   achievement of the objectives set out in Article 39 of the Treaty,
   appropriate measures may be applied in trade with third countries until

   such disturbance or threat of disturbance has ceased.

 2. If the situation referred to in paragraph 1 arises, the Commission
   shall, at the request of a Member. State or on its own initiative,
   decide upon the necessary measures; the Member States shall be notified
   of such measures, which shall be immediately applicable. If the
   Commission receives a request from a Member State, it shall take a
   decision thereon within three working days following receipt of the

   request.

 3. Measures decided upon by the Commission may be referred to the Council
   by any Member State within three working days of the day on which they
   were notified. The Council shall meet without delay. It may, acting by
   a qualified majority, amend or annul the measure in question.

 4. The Commission shall adopt detailed rules for the application of this
   Article in accordance with the procedure laid down in Article 11.

 5. This Article shall be applied having regard to the obligations arising
   from agreements concluded in accordance with Article 228(2) of the
   Treaty."

(2) Article 8a is deleted.

II. Council Regulation (EEC) No 1578/72 of 20 July 1972 (OJ No L 168,
   .26.7.1972, p.l), as amended by Regulation (EEC) No 1984/86
   (OJ No L 171, 28.6.1986, p.3).

   The above Regulation is repealed.

```

_**4&L**_

```
                    ANNEX XXI

               MISCELLANEOUS REGULATIONS

I. Council Regulation (EEC) No 827/68 of 28 June 1968 (OJ No L 151,
  30.6.1968, p.16), as last amended by Regulation (EEC) No 794/94
  (OJ No L 92, 9.4.1994, p.15).

(1) Articles 2 and 3 are replaced by the following:

                   "Article 2

  1. Unless this Regulation provides otherwise, the rates of duty in the
    common customs tariff shall apply to the products listed in the Annex.

  2. The general rules for the interpretation of the Combined Nomenclature
    and the special rules for its application shall apply to the
   classification of products covered by this Regulation; the tariff
    nomenclature resulting from the application of this Regulation shall
   be incorporated in the common customs tariff.

  3. Save as otherwise provided for in this Regulation or pursuant to a
   provision thereof, and subject to the obligations arising from
    international agreements concerning the products listed in the Annex,
   the following shall be prohibited in trade with third countries:

   - the levying of any charge having equivalent effect to a customs
     duty,

   - the application of any quantitative restriction or measure having
     equivalent effect.

                    Article 3

  Tariff quotas for the products listed in the Annex resulting from
  agreements concluded in accordance with Article 228 of the Treaty or from
  any other act of the Council pursuant to the Treaty shall be opened and
  administered in accordance with detailed rules adopted under the
  procedure laid down in Article 14. Such detailed rules shall provide for
  annual quotas, suitably phased over the year, to be opened and, where
  appropriate, for:

```

_**AS**_ _**su**_

```
  (a) guarantees covering the nature, provenance and origin of the
     product,

  (b) recognition of the document used for verifying the guarantees
     referred to in (a), and

  (c) the conditions under which import licences are issued and their term
     of validity.

                   Article 3a

  1. If, by reason of an increase in imports or exports, the Community
   market in one or more of the products listed in the Annex is affected
    by, or is threatened with, serious disturbance likely to jeopardize
    the achievement of the objectives set out in Article 39 of the Treaty,
    appropriate measures may be applied in trade with third countries

    until such disturbance or threat of disturbance has ceased.

  2. If the situation referred to in paragraph 1 arises, the Commission
    shall, at the request of a Member State or on its own initiative,
    decide upon the necessary measures; the Member States shall be
    notified of such measures, which shall be immediately applicable. If
   the Commission receives a request from a Member State, it shall take a
   decision thereon within three working days following receipt of the

    request.

  3. Measures decided upon by the Commission may be referred to the Council
   by any Member State within three working days of the day on which they
   were notified. The Council shall meet without delay. It may, acting by
   a qualified majority, amend or annul the measure in question.

  4. The Commission shall adopt detailed rules for the application of this
   Article in accordance with the procedure laid down in Article 6.

  5. This Article shall be applied having regard to the obligations arising
   from agreements concluded in accordance with Article 228(2) of the
   Treaty."

(2) Article 6 is replaced by the following:

                   "Article 6

  Where reference is made to this Article, mesures shall be adopted in
  accordance with the procedures laid down in Article 38 of Regulation
  No 136/66/EEC and the corresponding articles of the other regulations on
  the common organizations of agricultural markets."

```

```
II. Council Regulation (EEC) No 234/79 of 5 February 1979 (OJ No L 34,
    9.2.1979, p.2), as last amended by Regulation (EEC) No 3209/89

    (OJ No L 312, 27.10.1989, p.5).

    Article 2(2) is deleted.

```

`- 117 -` **^S"f**

```
                    ANNEX XXII

                THE MOST REMOTE REGIONS

I. Council Regulation (EEC) No 3763/91 of 16 December 1991 (OJ No L 356,
   24.12.1991, p.l), as amended by Regulation (EEC) No 3714/92 (OJ No
   L 378, 23.12.1992, p.23).

   Article 2(2) is amended as follows:

   (a) In the first subparagraph, the part of the sentence which reads:
       "The levies fixed pursuant to Article 13(1) of Council
       Regulation (EEC) No 2727/75 of 29 October 1975 on the common
       organization of the market in cereals" is replaced by:

     "The import duties provided for in the common customs tariff".

   (b) In the second subparagraph, the words "the levy (exemption)" are
       replaced by "(exemption from) import duty".

II. Council Regulation (EEC) No 1600/92 of 15 June 1992 (OJ No L 173,
   27.6.1992, p.l), as amended by Regulation (EEC) No 3714/92 (OJ No
   L 378, 23.12.1992, p.23).

(1) In Article 3(1), the words "Levies and/or" are deleted.

(2) In Article 5(1)(a), the words "and/or levies referred to in Article 9
   of Council Regulation (EEC) No 805/68 on the common organization of the

   market in beef and veal" are deleted.

III. Council Regulation (EEC) No 1601/92 of 15 June 1992 (OJ No L 173,
   27.6.1992, p.13), as amended by Regulation (EEC) No 3714/92 (OJ No L
   378, 23.12.1992, p.23).

(1) In Article 3(1), the words "Levies and/or" are deleted.

(2) In Article 5(1)(a), the words "and/or levies referred to in Article 9
   of Council Regulation (EEC) No 805/68" are deleted.

```

```
                    - 118 
                   ANNEX XXIII

               PLANT HEALTH LEGISLATION

Council Directive 77/93/EEC of 21 December 1977 (OJ No L 26, 31.1.1977,
p.20), as last amended by Directive 94/13/EC (OJ No L 92, 9.4.1994, p.27).

In Article 14(1), the introductory part of the first subparagraph is
replaced by the following:

 "In accordance with the procedure laid down in Article 16 or, in cases of
 emergency, in accordance with that laid down in Article 17, provision shall
 be made for derogations:".

```

**.4** **re-**

**Part 6**

**Commercial defence**

**-'M**

**Commercial** **defence:**

**Anti-dumping**

_As?_

**Proposal for a**

**Council Regulation (EC)**

**on protection against dumped imports from countries not members of** **the** **European Community**

-"•- _?Mm_ _9b_

_**Aï**_ _**°)**_

**Explanatory Memorandum**

A. Introduction

The Uruguay Round trade negotiations, concluded in 1994, have led to a new agreement on anti-dumping
which requires to be implemented into Community legislation in order that, as agreed at Marrakech, it can
come into effect on 1 January 1995.

The new Agreement, namely, the Agreement on Implementation of Article VI of the General Agreement
on Tariffs and Trade 1994 (the Agreement), contains new arid detailed rules on almost every aspect of antidumping and in view of the extent of the changes and to ensure an adequate and transparent
implementation of the new rules, it is considered necessary to transpose the language of the Agreement
into Community legislation to the extent possible and for this purpose the Agreement, rather than the
existing Community legislation, Regulation (EC) No 2423/88*, has been taken as the basis for the
proposed legislation.

Additions to the Agreement are few and they have, for the most part, been restricted to: clarifications
where the Agreement is unclear; incorporation of existing provisions on EU's rather unique procedures and
decision-making, amended to take account of Court judgements; and the amendment or incorporation of
EU specific rules on issues, such as negligible import volumes, absorption, circumvention and Community
interest, on which the Agreement is silent, imprecise or where it merely gives an indication of minima.

The Agreement sets tougher standards for the imposition of anti-dumping measures with its new and
detailed rules on the calculation of dumping, its increased procedural requirements for initiation and
subsequent investigation, its restrictions on the imposition of provisional duties and the restriction on the
application of duty absorption rules. Its implementation into Community legislation will, of course,
produce the same result.

Moreover, the adoption of these new rules, would at the same time, achieve one of the key objectives set
by the Community at the outset of these negotiations, i.e., to improve legal certainty through greater
precision, to extend transparency and to increase the right of parties.

In the same vein, some of the new rules, such as on negligible import volumes and Community interest,
should further reinforce this effect of transparency and legal certainty. Community industries would have a
clear idea of the minimum level of import volumes required both for complaints and final action.
Moreover, all interested parties would be made aware of their rights and obligations with regard to the
Community interest aspects of these cases, in that a structured framework would be provided for the
provision and treatment of information by the authorities.

Another key objective in the Uruguay round negotiations was that measures, once taken, should be more
effectively enforced and the suggested amendments on retroactivity, absorption and circumvention are
aimed at achieving this objective. In this regard, it should be noted that these enforcement provisions are
not new concepts since they are specifically provided for in existing EU legislation and the amendments
proposed are simply to make them more workable and/or more compatible with GATT rules.

It should be noted that the proposed text does not include rules on subsidies as this matter shall be dealt
with in a separate proposal.

OJ No L 209,2.9.1988, p.l

_Aùa_

B. T h e main changes

This section details the main areas where the transposition of the text of the Agreement into Community
legislation involves changes or clarifications to that text.

1. **Start-up** costs

_**a)**_ _**The problem**_

This new Code ( Article 2.2.1.1) provides for an allowance for the exporter in a start-up situation which,
unfortunately, it does not define, e.g. it does not give any guidance on whether start-up refers to a new
product or a new factory, or both, or give any guidance with regard to the length of the start-up phase. In
considering this problem, it has to be borne in mind that the Agreement already provides for costs, be they
high or low, to be allocated in accordance with normal accounting principles, which means that, even
without a specific start-up allowance, high start-up costs would still be allocated over a reasonable number
of years. Therefore, the situation for which an adjustment has to be made is the low production volume
which may prevail during start-up and which may give rise to abnormally high unit costs.

_**b)**_ _**The**_ _**solution**_

As can be seen in Article 2.5.2 of the proposal, the existence of a start-up situation can be defined
relatively easily by providing for it to include all situations where there is significant investment and new
production facilities and this would cover both new products or new factories.

However, it is a lot more difficult to define the length of a start-up period. Consideration has been given to
specifying a normal sales quantity or setting a precise duration for the length of a start-up phase, e.g. 6
months. Such specific definitions would, however, be controversial and could take no account of
differences between products and industries. It also has to be borne in mind that the rules on start-up
cannot be defined in isolation from the other Code rules and, in this respect, account has to be taken of the
fact that the Agreement states that the normal period for cost recovery for a product is 12 months.
Logically, therefore, a start-up phase can only constitute a part of that period of cost recovery and this is
made clear in the proposed text. While the above suggestion leaves a certain imprecision, the alternatives
are even less palatable. Moreover, it would permit some flexibility to cater for situations which differ from
product to product and industry to industry.

2. **Normal value for non-market economy countries**

_**a)**_ _**The problem**_

The problem here is that with the introduction of time limits, it may not always be possible, in the
restricted time available, to find a suitable market economy analogue country which is willing to
cooperate. Under the wording of the existing legislation, such circumstances would require the use of
Community prices and costs, a situation which should be avoided except in exceptional circumstances.
Consequently, provision has to be made to permit the use of other reasonable methods in such situations.
Moreover, as the choice of analogue country is sometimes a matter of controversy, the proposal provides
for the exporters to be consulted before a final selection is made.

_**b)**_ _**The solution**_

In Article 2.7 of the proposed text, provision is made for normal value **to** be based "on any reasonable
basis" and this would permit the application of methods other than Community prices and costs.
At the same time, the proposed text would require that exporters are given 10 days to comment on the
choice of analogue country. Also, mention is made of time limits and, for the choice of analogue country,
preference may be given to a country subject to the same investigation though it would, of course, have to
fulfil the "reasonable" criteria.

_AUl_

3. **Fair** comparison

_a)_ _The problem_

In existing Community legislation, level of trade is dealt with under the section dealing with the
establishment of prices (Article 2.3), rather than under fair comparison as is the case in the Agreement.
Moreover, as "quantities" are also dealt with in the Agreement under "fair comparison" it is difficult for the
EU to continue to deal with the related factors, namely discounts and rebates, under the above-mentioned
Article 2.3.

_**b)**_ _The solution_

In order to keep strict consistency with the Agreement it is proposed to cater for level of trade under the
heading "fair comparison" (Article 2.10) in the draft text. In the same manner, it appears necessary to treat
discounts and rebates, alongside quantities, under the same heading.
Furthermore, with the new emphasis on level of trade adjustments, it is no longer rational to grant an
adjustment for a fixed overhead like salesmen salaries outside the context of a level of trade adjustment. It
is, therefore, proposed to give this adjustment under level of trade, in accordance with the Agreement.

**4.** **Conclusion of investigations**

_a)_ _**The problem**_

**The** Agreement (Article 5.10) provides that investigations should normally be concluded within 12 months
which conflicts with the 15 months which is envisaged for EU investigations next year

_**b)**_ _**The solution**_

It is **proposed** to incorporate the provisions of the Agreement into EU legislation (Article 6.9). This shall
**permit complex** cases to be completed in 18 months as set out in the Agreement but, of course, provisional
**duties would still have** to be applied within 9 months.

**5.** **Violation or withdrawal of undertakings**

_**a)**_ _**The problem**_

**Over the years,** there have been continual problems on what to do in cases where exporters have violated
**or** **withdrawn** undertakings. In such circumstances, it is considered that the Community should be entitled
**to impose** definitive duties based on the findings of the previous investigation, otherwise an exporter which
**is violating its** undertaking could end up in a more advantageous position than its rivals which may be
**faithfully applying the** undertakings. Moreover, carrying out a completely new investigation based on new
**facts is a** time-consuming affair which should only be carried where the circumstances justify it. Violation
**does not** **appear** **to be** one **of** these circumstances.

_**b)**_ _**The solution**_

**The new** provisions **set out** in article 8.9 and 8.10 of the draft text would permit the imposition of definitive
**duties in cases of proven** violation or withdrawal though, of course, **the** exporter's rights would be
**safeguarded** in **that he would** be entitled to **a** ask for a review if the circumstances with regard to dumping
**or injury have** changed. Moreover, the change in measures would not generate a new 5 year "sunset"
period. Where violation is only suspected, the remedy is a provisional duty while the matter is under
investigation.

dd'x

**6.** **Negligible volume** **of** **imports**

_**a)**_ _**The**_ _**problem**_

**The** **Agreement** **(** **Article** **5.8 )** **fixes negligible import volumes below which action could** **not** **normally** **be**
**taken,** **i.e.,** **where** **the** **dumped imports** **are** **less than** **3%** **of** **total imports** **and** **where those less than** **3%**
**collectively account** **for** **more than** **7%.** **These minima** **are set** **in** **relation to volume** **of** **imports rather than**
**in** **relation** **to** **consumption which** **is the** **usual Commumty** **practice.**

_**b)**_ _**The solution**_

**Simply to transpose** **the** **Agreement provision into** **EU** **legislation**

**7.** **Retroactivity**

_**a)**_ _**The**_ _**problem**_

**The** **retroactivity provisions** **in the** **Agreement (Article** **10.4)** **need to be defined to deal with situations**
**where** **importers,** **in** **order to avoid** **the** **impact** **of** **provisional** **duties,** **import** **a** **substantial quantity just prior**
**to** **the** **imposition** **of** **such** **duties.** **The** **Agreement requires** **the** **investigating authority to show** **a** **"history** **of**
**dumping"** **or** **"awareness"** **of** **dumping** **and** **"massive"** **imports before action can be** **taken.** **This problem**
**also exists** **in** **the** **existing Code but because** **of the** **imprecise nature** **of** **these** **terms,** **and the** **fact that**
**customs have** **had no** **means** **of** **imposing duties retroactively because** **the** **goods were** **not** **marked** **on** **entry,**
**it** **was** **not** **possible to** **use the** **provisions.**

_**b)**_ _**The solution**_

**It is** **proposed (Article** **10.4 of** **proposal) that** **a** **history** **of** **dumping could be considered to be established**
**where** **it** **has been taking place over an extended period and** **"awareness"** **would be established where** **the**
**margins alleged or found are** **high.** **The** **requirement** **"massive"** **would** **be** **achieved** **where,** **in** **addition** **to**
**the** **level** **of** **the** **dumped imports during** **the** **investigation** **period,** **there** **was a** **further substantial increase** **in**
**imports just prior to** **the** **imposition** **of** **provisional** **duties.** **Thus,** **both combined would satisfy** **the**
**requirement** **of the** **term** **"massive"** **in** **the** **Agreement.**

8. Refund of anti-dumping duties

_a)_ _The problem_

The Community's calculations for refund claims, concerning importers which are related to exporters, have
to be changed to reflect the Agreement provisions on "duty as a cost" as set out in its Article 9.3.3.

To grasp the full implications of the change it should be recalled that, in any dumping calculation, export
prices between related parties are deemed to be unreliable because of the relationship. Thus, it is necessary
to re-construct a reliable export price and this is done by taking the first independent price charged by the
related importer in the Community and deducting from it the costs and profit of the related importer, a
process which gives a reliable Community frontier export price.

The implications of the above for related importers in refund claims is that, as clearly specified in existing
EU legislation, an anti-dumping duty is one of the costs which must be deducted to arrive at a reliable
export price and, therefore, a related importer has to do more than just reflect the cost of the duty in its
resale price to obtain a refund. It would also, for example, have to reduce normal values or in fact increase
its resale prices by more than the level of the duty. This is equivalent to the treatment given to independent
importers, who need to do more than just pay the duty before they can obtain a refund.

The Agreement, however, restricts the application of "duty as a cost" by stating that this principle cannot -•
apply where resale prices and subsequent selling prices in the Community have increased to reflect the cost
of the duty.

_b)_ _The solution_

The simple solution is to incorporate the Agreement provision into Community legislation. The Agreement
provision has been added at the end of Article 11 in the proposed text so that the restrictions placed on its
use by GATT would be extended to all cases where export prices may have to be reconstructed, e.g. in
reviews.

**9.** **Absorption of anti-dumping duties**

_a)_ _The problem_

The existing Community legislation (Article 13.11) has provisions to deal with cases where duties do not
have any price effects on the goods subject to measures. These provisions have been criticised because
they appear to permit the imposition of additional duties because duties have not led to price increases and
without a new calculation of dumping being made. In fact, their underlying rationale is that the lack of a
price increase must mean that the exporter is bearing the cost of the duty, an occurrence which
automatically increases the margin of dumping.

_b)_ _**The**_ _solution_

The draft text includes a radical re-draft in Article 12 of the absorption provisions and they now
specifically require a re-assessment of export prices and a new calculation of dumping margins, where
measures have had no impact on the prices of the goods subject to duty. In contrast to the existing
provisions they also permit an investigation to take account of changes in the normal values where
evidence of this is produced by the exporter.

In common with the refund provisions, duties cannot, in contrast to the position now, be treated as a cost
incurred between importation and resale in cases of a re-construction of export prices, where measures
have impacted on prices or where there is legitimate reason why prices have not increased following the

measures.

The new provisions may be slightly less wide-ranging than those set out in Article 13.11 of existing
legislation but they can now be considered safe in that they are compatible with GATT.

10. Circumvention

_a)_ _The problem_

Circumvention can occur in several forms ranging from assembly operations, in the importing country or
in third countries, to more direct instances of duty avoidance, such as wrong origin declarations, imports of
knockdown kits and slightly altered products, etc. The Community has encountered all these forms of
circumvention in the recent past, e.g. cameras, bicycles and compact discs and, as such, there appears to be
an immediate problem which requires attention.

At present, however, our existing circumvention legislation (Article 13.10), which only deals with
assembly operations in the Community, has been criticised by a GATT panel. Moreover, origin rules are
proving increasingly inadequate to deal even with cases of blatant circumvention, such as is apparently
occurring, or has occurred, in the above-mentioned cases. Also, the result of the Uruguay does not give any
guidance. Negotiations in this area failed and there is nothing in the Agreement, though Marrakech
produced a Ministerial Declaration on this subject which appears, for the first time, to permit individual
Members to deal with problem unilaterally, pending a multilateral solution via

the GATT Anti-Dumping Committee. In this respect, the Community has always made it clear that its
acceptance of the above-mentioned panel report was conditional on a satisfactory solution in the Uruguay
Round, a condition that has not been realised.

_b)_ _The solution_

New circumvention provisions are set out in Article 13 of the proposal. The classic circumvention
provisions, i.e. assembly in the importing country or a third country, are to the degree possible, modelled
on the importing country provision set out in the "Dunkel Draft" of December 1991, which was later
dropped in the last days of the negotiations in December 1993, while the rules set out for other forms of
circumvention have been inspired by concepts set out in customs law.

(i) Classic circumvention

The proposal maintains the existing Community rules on the percentage of parts which must
originate in the exporting country before action can be taken, i.e. at least 60% as compared to
70% in the Dunkel Draft. These levels equate to those set out in Community legislation and there
seems little reason to change them as they have proved workable for all parties concerned when
they have been applied. Moreover, it would be unwise to lower the percentages given that this
would undermine the EU's negotiating position in Geneva, when the problem of circumvention
comes up for negotiation.

Some of the more burdensome and, in some cases, illogical conditions contained in the Dunkel
Draft, including an additional dumping test, have been omitted. The aim is to combat the
circumvention of existing measures quickly and not to carry out lengthy de novo investigations of
dumping and injury. However, the proposal maintains the "Dunkel" provision that measures may
only be extended where their remedial effects are being undermined and this will ensure that these
provisions are only used in truly deserving cases.

(ii) Other forms of circumvention

The proposed draft would also permit action to be taken against other forms of circumvention
which, nowadays, are probably more important than classic circumvention in terms of
undermining measures. This would allow quick investigation of changes in the pattern of trade
which coincide with anti-dumping investigations, to check whether such practices have been set
up to circumvent measures. In the same way as for classic circumvention, an injury test would be
undertaken and no measures could be applied unless it was shown that the remedial effects of the
measures were being undermined. This is a very important restriction which would limit the use
of this provision.

The provisions may appear wide-ranging, in that investigations can be opened following distinct
changes in the pattern of trade which coincide with anti-dumping action. It should be noted,
however, that measures could only be imposed under narrowly defined circumstances, with the
underlying rationale stemming from the Customs Code, which does not grant legal recognition to
acts whose only economic justification is to avoid payment of duties. It could be argued that these
problems should be dealt with by customs authorities but this would not be practical or effective
for three reasons;

(i) customs do not appear to have the means, or the necessary legal provisions, to carry these
investigations, certainly not as quickly as would be necessary; (ii) the circumvention provisions
would need to cover undertakings which are outside the remit of customs; and most, importantly
(iii) these provisions require injury investigations to be carried out and this can only be done by
the anti-dumping services of the Commission.

Provisions to deal with these other forms of circumvention are important for another reason. They
are almost always practised via third countries and, unless effective measures are taken to deal
with them, there will always be an incentive for investment to go to these other third countries
rather than the Community.

(iii) How these provisions will operate in practice

A circumvention investigation can only be opened following receipt of a complaint by the
Community industry and appraisement would be withheld, or imports would be registered,
pending the outcome of the investigation which would be completed within a time limit of 9
months.

The withholding of appraisement, or registration of imports, which is a mechanism under which
neither cash deposits or guaranties are collected but the imports are recorded, is necessary in order
to be able to impose and collect duties at the Community frontier, in accordance with the panel
report, should circumvention be found.

The proposals have been deliberately left open with regard to certain aspects of product coverage,
both for initiation and the imposition of measures as it considered that questions relating to
product or country coverage can only be addressed on a case-by-case basis. In any event, once a
circumvention investigation is initiated, the proposal envisages a flexible certificate system under
which certain products, parts or exporters could be exempted from the scope of the investigation,
from the moment it becomes clear that they should be so exempted. These certificates could easily
be obtained by traders from the authorities in order to avoid payment of duties. In fact, this type
of certificate system is not new to customs as they operate them in other areas and they are
considered indispensable here to be able to comply with the findings of the GATT panel.

_y\bk;_

11. Suspension of anti-dumping measures

_a)_ _The problem_

There are times during the application of measures where market conditions may indicate that such
measures are temporarily inappropriate, yet at the moment there is no way of dealing with this problem
short of lifting the measures altogether, and this is something that cannot easily be done at present if it is
suspected that the lack of injury is only temporary.

_b)_ _The solution_

Provide specifically for such an eventuality in the legislation and this is done in its Article 14.4. The ability
to place measures in suspension, which would only take place after consultation of the Community
industry, would be of great value and would mean that duties are only collected where necessary. The
suspension would be fora limited period and measures could be re-instated swiftly should the need arise.

**12.** **Withholding of appraisement (Registration of imports)**

_a)_ _The problem_

This concept of withholding of appraisement is one of the important innovations introduced by the
Agreement in its Article 7. It is a mechanism under which imports would not be subject to either cash
deposit or guarantee but they would be recorded by customs until a decision was taken on the matter which
led to such withholding, e.g. investigations for new exporters, retroactivity and circumvention. The
mechanics of the system would be identical to those used for provisional measures, except that importers
would be in a better position because they would not pay cash or have to give guarantees on importation.
Customs may well have some reservations about not being able to require guarantees but that is not a
sufficient reason not to apply a concept which is now firmly embedded in the Agreement and which is
considered absolutely essential for circumvention.

_b)_ _The solution_

The solution is simple and it is to cater for a system of withholding of appraisement as set out in Article
14.5 of the proposal. Note that the term "withholding of appraisement" has been substituted by the more
understandable term "registration of imports" in the text.

**13.** **Community interest**

The proposal contains an Article 21 which would formalise the way in which the Community interest is to
be taken into account in anti-dumping investigations. This would have the advantage that it would permit
the examination of this aspect to be carried out within a structured framework which is considered to be
absolutely essential when time limits come into operation.

Paragraph 1 of the above-mentioned Article sets out the principles relating to Community interest and an
attempt has been made to highlight the two basic interests which have to be taken into account, i.e. the
need, on the one hand, to eliminate injurious dumping and restore effective competition and, on the other
hand, to grant certain rights to users and consumers. This will, for the first time, give users and consumers
a comprehensive set of rights, under which they will be entitled to provide information, to see information
provided by other parties and to comment on it, to haye their information taken into account and presented
to Member States, and to have proper disclosure rights for both provisional and definitive measures.

However, when rights are obtained, obligations inevitably also arise and these are inherent in the time
limits within which all parties have to work and in the fact that information presented has to be
substantiated to a sufficient degree.

C. Conclusion

In order to implement the 1994 Anti-Dumping agreement as concluded as a result of the Uruguay Round
of multilateral trade negotiations, and to take account of the issues set out in section B above, the
Commission submits to the Council.

a proposal to replace the Community's basic anti-dumping legislation.

**10**

**/uy**

**Proposal for implementation of Uruguay Round results**

**on Anti-Dumping**

**Regulation**

**[Underlining indicates text which differs from new Agreement or existing legislation]**

_**A^5**_

**Council Regulation (EC) No** **94/ o2ao(ACO**

**on protection against dumped imports from countries** not **members of the European**

**Community**

The Council of the European Union,

Having regard to the Treaty establishing the European Community, and in particular Article 113 thereof,

Having regard to the Regulations establishing the common organisation of agricultural markets and the
Regulations adopted under Article 235 of the Treaty applicable to goods manufactured from agricultural
products, and in particular the provisions of those Regulations which allow for derogation from the
general principle that protective measures at frontiers may be replaced solely by the measures provided
for in those Regulations,

Having regard to the proposal from the Commission,

Having regard to the opinion of the European parliament,

Whereas, by Regulation (EC) No 2423/88 (*), as amended by Regulation (EC) No 521/94( [2] ) and
Regulation (EC) No 522/94 (3 ), the Council adopted common rules for protection against dumped or
subsidised imports from countries which are not members of the European Economic Community;

Whereas, these rules were adopted in accordance with existing international obligations, in particular
those arising from Article VI of the General Agreement on Tariffs and Trade, from the Agreement on
Implementation of Article VI of the GATT (1979 Anti-Dumping Code) and from the Agreement on
Interpretation and Application of Articles VI, XVI and XXIII of the GATT (Code on Subsidies and
Countervailing Duties);

Whereas, the multilateral trade negotiations concluded in 1994 have led to new Agreements on the
implementation of Article VI of GATT and it is therefore appropriate to amend the Community rules in
the light of these new Agreements; whereas it is also desirable, in the light of the different nature of the
new rules for dumping and subsidies, to have separate Community rules in these two areas and,
consequently, the new rules on protection against subsidies and countervailing duties are dealt with in a
separate Regulation;

Whereas, in applying these rules it is essential, in order to maintain the balance of rights and obligations
which the GATT Agreement establishes, that the Community takes account of their interpretation by the
Community's major trading partners;

Whereas, the new agreement on dumping, namely, the Agreement on Implementation of Article VI of
the General Agreement on Tariffs and Trade 1994 (1994 Anti-Dumping Agreement), contains new and
detailed rules, in particular, with regard to the calculation of dumping, procedures for initiation and the
subsequent investigation, including the establishment and treatment of the facts, the imposition of
provisional measures, the imposition and collection of anti-dumping duties, the duration and review of
anti-dumping measures and the public disclosure of information relating to anti-dumping investigations;
whereas, in view of the extent of the changes and to ensure an adequate and transparent implementation
of the new rules, it is appropriate to transpose the language of the new agreements into Community
legislation to the extent possible;

_(])_ OJ No L 209, 2.8.1988, p. 1.
H OJ No L 66, 10.3.1994, p. 7.
( [3] )OJNoL66, 10.3.1994, p. 10.

_**A\o**_

**Whereas,** **it is desirable to lay down clear and detailed rules on the calculation of normal value, in**
**particular that in all cases it should be based on representative sales in the ordinary course of trade in the**
**exporting country; whereas, it is expedient to define the circumstances in which domestic sales may be**
**considered to be made at a loss and disregarded and that recourse may be made to remaining sales or**
**constructed value or sales to a third country; whereas it is also desirable to provide for a proper**
**allocation of** **costs,** **including in start-up situations, where it is also appropriate to lay down guidance on**
**the definition of start-up and the extent and method of allocation; whereas it is also necessary, when**
**constructing normal value, to indicate the methodology that shall be applied to determine the amounts for**
**selling, general and administrative costs and the profit that shall be included in such value.**

**Whereas, when determining normal value for non-market economy countries, it appears prudent to set**
**out rules of procedure for choosing the appropriate market economy third country that shall be used for**
**such purpose and, where it is not possible to find a suitable third country, to provide that normal value**
**may be established on any reasonable basis.**

**Whereas, it is expedient to define the export price and to enumerate the adjustments which shall be made**
**in those cases where a reconstruction of this price** **from** **the** **first** **open-market price is deemed** **necessary;**

**Whereas, for the purpose of ensuring a fair comparison between export price and normal value, it is**
**advisable to list the factors which may affect prices and price comparability and to lay down specific**
**rules on when and how the adjustments shall be made, including the fact that any duplication of**
**adjustments has to be avoided; whereas, it is also necessary to provide that comparison may be made**
**using average prices though individual export prices may be compared to an average normal value where**
**the former vary by customer, region or** **time** **period;**

**Whereas, it is desirable to lay down clear and** **detailed** **guidance on the factors which may be relevant for**
**the determination of whether the dumped imports have caused material injury or are threatening to cause**
**injury; whereas, in demonstrating that the volume and price levels of the imports concerned are**
**responsible for injury sustained by a Community industry, attention should be given to the effect of other**
**factors and in particular existing market conditions in the Community.**

**Whereas, it is advisable to define the term "Community** **industry"** **and** **provide that parties related to**
**exporters may be excluded** **from** **such industry** **and** **to define the** **term** **"related";** **whereas, it is also**
**necessary to provide for** **anti-dumping** **action to be taken on behalf of producers in a region of the**
**Commumty and to lay down guidelines on the definition of such a region.**

**Whereas, it is necessary to set down who may lodge an** **anti-dumping** **complaint,** **including the extent to**
**wiiich it should be supported by the Community industry, and the information on dumping, injury and**
**causality which such complaint should contain; whereas, it is also expedient to specify the procedures**
**with** **regard** **to the rejection of** **complaints** **or the initiation of proceedings.**

**Whereas,** **it is necessary to lav down how interested parties shall be given notice of the information**
**which the authorities** **require,** **ample opportunity to present all relevant evidence and a full opportunity**
**for** **the** **defence of their** **interests:** **whereas, it is also desirable to set out clearly the rules and** **procedures**
**to be** **followed** **during the** **investigation,** **in particular that interested parties have to** **make** **themselves**
**known, present their views and submit information within specified time limits, if such views and**
**information are to be taken into account; whereas, it is also appropriate to set out the conditions under**
**which an interested party may have access to, and comment** **on,** **information presented by other interested**
**parties; whereas, there should also be cooperation between the Member States and the Commission with**
**regard to the collection of information.**

_**A-\l**_

Whereas, it is necessary to lay down the conditions under which provisional duties may be imposed,
including that they may not be imposed sooner than 60 days from initiation and no later than 9 months
from initiation; whereas, for administrative reasons, it is also necessary to provide that such duties may
in all cases be imposed by the Commission either directly for a nine month period or in two stages of six
and three months.

Whereas, it is necessary to specify procedures for the acceptance of undertakings which eliminate the
dumping and injury instead of the imposition of provisional or definitive duties; whereas, it is also
appropriate to lay down the consequences of violation or withdrawal of undertakings and that
provisional duties may be imposed in cases of suspected violation or where further investigation is
necessary to complete the findings; whereas, in accepting undertakings, care should be taken that the
proposed undertakings, and their enforcement, do not lead to anti-competitive behaviour.

Whereas, in order to reflect the provisions of the Agreement, it is necessary to provide for the
termination of cases, with or without measures, normally within twelve months, and in no case later than
eighteen months, from the initiation of the investigation; whereas, investigations or proceedings should
be terminated where the dumping is de-minimis or the injury is negligible and it is appropriate to define
these terms; whereas, where measures are to be imposed, it is necessary to provide for the termination of
investigations and to lay down that measures should be less than the margin of dumping if such lesser
amount would remove the injury, as well as to specify the method of calculating the level of measures in
cases of sampling.

Whereas, it is necessary to provide for the retroactive collection of provisional duties as deemed
appropriate and to define the circumstances which may trigger the retroactive application of duties to
avoid the undermining of the definitive measures to be applied; whereas it is also necessary to provide
that duties may be applied retroactively in cases of violation or withdrawal of undertakings.

Whereas, it is necessary to provide that measures shall lapse after five years unless a review
investigation indicates that they should be maintained; whereas, it is also necessary to provide, in cases
where sufficient evidence is submitted of changed circumstances, for interim reviews or for
investigations to determine whether refunds of anti-dumping duties are warranted; whereas it is also
appropriate to lay down that in any re-calculation of dumping which necessitates a reconstruction of
export prices, duties shall not be treated as a cost mcurred between importation and resale where the said
duty is being reflected in the prices of the products subject to measures in the Community.

Whereas, it is necessary to specifically provide for the re-assessment of export prices and dumping
margins where the duty is being absorbed by the exporter through a form of compensatory arrangement
and the measures are not being reflected in the prices of the products subject to measures in the
Community.

Whereas, the 1994 Anti-Dumping Agreement does not contain provisions with regard to the
circumvention of anti-dumping measures, though a separate GATT Ministerial Decision recognises
circumvention as a problem and has referred it to the GATT Anti-dumping Committee for resolution;
whereas given the failure of the multilateral negotiations so far and pending the outcome of the referral to
the GATT Anti-Dumping Committee, it is necessary to introduce new provisions into Community
legislation to deal with practices, including simple assembly in the Community or a third country, which
have as their main aim the circumvention of anti-dumping measures.

Whereas, it is expedient to pennit the suspension of anti-dumping measures where there is a temporary
change in market conditions which make the continued imposition of such measures temporarily
inappropriate.

_**A**_ **'}** _**X»**_

**WTiereas,** **it is necessary to provide that imports under investigation may be made subject to registration**
**upon importation to enable measures to be subsequently applied against** **such** **imports.**

**Whereas, to ensure a proper enforcement of measures, it is necessary that Member States monitor and**
**report to the Commission the import trade of products subject to investigation and subject to measures**
**and** **the amount of duties collected** **under this** **regulation.**

**Whereas, it is necessary to provide for consultations of an Advisory Committee at regular and specified**
**stages of the investigation; whereas, the** **comrnittee** **shall consist of representatives of Member States**
**with a representative of the Commission as chairman.**

**Whereas, it is expedient to provide for verification visits to check information submitted on dumping and**
**injury, though such visits should be dependent** **on** **proper replies to questionnaires being received.**

**Whereas, it is essential to provide for sampling in cases where** **the** **number of parties or transactions are**
**large in order to permit a timely completion of investigations.**

**Whereas, it is necessary to provide** **that** **for** **parties** **who do not cooperate** **satisfactorily** **other information**
**may be used to estabhsh** **findings** **and such information may be less** **favourable** **to the party** **than** **if it had**
**cooperated.**

**Whereas,** **provision should be made for** **the** **treatment of confidential information so that business secrets**
**are not divulged.**

**Whereas, it is essential that provision is made for** **the** **proper disclosure of the essential facts and**
**considerations to parties which qualify for such treatment** **and that** **such disclosure is made, with due**
**regard** **to the decision-making process** **in** **the Community, within a time period which permits parties to**
**détend** **their interests.**

**Whereas, it is** **prudent** **to provide for** **an** **administrative system under which arguments can be presented**
**in relation to whether measures are** **in** **the Community** **interest,** **including the consumer** **interest,** **and** **to**
**lay down** **the** **time periods within which such information has to** **be** **presented as well as the disclosure**
**rights of the parties concerned.**

**Whereas, it is imperative to link the implementation of time limits for the lodging of complaints, the**
**initiation of proceedings** **and** **the imposition of provisional duties to the establishment of the necessary**
**administrative structure within the Commission's services; whereas, the Council, therefore, should**
**specify, in a decision to be adopted by qualified majority no later than 1 April 1995, when these time**
**limits shall apply.**

**Has Adopted This Regulation:**

_**A"j**_ _**">**_

**Article** **1**

**Principles**

**1.1** **An** **anti-dumping** **duty may be applied to any dumped product whose release for free circulation**
**in the Community causes injury.**

**1.2** **A product is to be considered as being dumped if its export price to** _**the**_ **Community is less than a**
**comparable price for** **the** **like** **product,** **in** **the ordinary course of trade, as established for the exporting**
**country.**

**1.3** **The exporting country shall normally** **be** **the country of origin.** **However,** **it may be an**
**intermediate** **country,** **except** **where,** **for example, the products are merely** **trans-shipped** **through that**
**country,** **or the** **products concerned are not produced in that country, or there is no comparable price for**
**them** **in** **that country.**

**1.4** **For the purpose of this Regulation, the** **term "like** **product"** **shall be interpreted to mean a product**
**which is identical, i.e., alike in all respects to** **the** **product** **under** **consideration, or** **in** **the absence of such a**
**product,** **another product which although not alike in all respects, has characteristics closely resembling**
**those of the product under consideration.**

Article 2

Determination of dumping

A. Normal value

2.1 The normal value shall normally be based on the prices paid or payable, in the ordinary course
of trade, bv independent customers in the exporting country.

2.1.1 Where the producer or exporter in the exporting country neither produces nor sells the
like product the normal value may be established on the basis of prices of other sellers or producers.

2.1.2 Prices between parties which appear to be associated or to have a compensatory
arrangement with each other may be considered as being in the ordinary course of trade and may be
used to establish normal value only if it is determined that they are not affected by the relationship.

2.2 Sales of the like product destined for domestic consumption, shall normally be used to determine
normal value if such sales volume constitute 5 per cent or more of the sales volume of the product under
consideration to the Community. However, a lower volume of sales may be used when, for example, the
prices charged are considered representative for die market concerned.

2.3 When there are no or insufficient sales of the like product in the ordinary course of trade, or
where because of the particular market situation such sales do not permit a proper comparison, the
normal value of the like product shall be calculated on the basis of the cost of production in the country
of origin plus a reasonable amount for selling, general and administrative costs and for profits, or based
on the export prices, in the ordinary course of trade, to an appropriate third country, provided that these
prices are representative.

2.4 Sales of the like product in the domestic market of the exporting country, or export sales to a
third country, at prices below per unit (fixed and variable) costs of production plus selling, general and
administrative costs may be treated as not being in the ordinary course of trade by reason of price and
may be disregarded in determining normal value only if it is determined that such sales are made within
an extended period of time in substantial quantities, and are at prices which do not provide for the
recovery of all costs within a reasonable period of time.

2.4.1 If prices which are below costs at the time of sale are above weighted average costs for
the period of investigation, such prices shall be considered to provide for recovery of costs within a
reasonable period of time.

2.4.2 The extended period of time should normally be one year but shall in no case be less
than six months and sales below per unit cost shall be considered to be made in substantial quantities
within such a period when it is established that die weighted average selling price is below the
weighted average unit cost, or that the volume of sales below unit cost is not less than 20 per cent of
sales being used to determine normal value.

_**•A**_ _**A\**_
2.5 For the purpose of Article 2, Section A, costs shall normally be calculated on the basis of
records kept by the party under investigation, provided that such records are in accordance with the
generally accepted accounting principles of the country concerned and it is shown that the records
reasonably reflect the costs associated with the production and sale of the product under consideration.

2.5.1 Consideration shall be given to evidence submitted on the proper allocation of costs,
provided that it is shown that such allocations have been historically utilised. In the absence of a more
appropriate method, preference shall be given to the allocation of costs on the basis of turnover.
Unless already reflected in the cost allocations under this paragraph, costs shall be adjusted
appropriately for those non-recurring items of cost which benefit future and/or current production.

2.5.2 Where the costs for part of the period for cost recovery are affected bv the use of new
production facilities requiring substantial additional investment and bv low capacity utilisation rates,
which are the result of start-up operations which take place within or during part of the investigation
period, the average costs for the start-up phase shall be those applicable, under the above-mentioned
allocation rules, at the end of such a phase, and shall be included at that level, for the period
concerned, in the weighted average costs referred to in paragraph 4.1. The length of a start-up phase
shall be determined in relation to the circumstances of the producer or exporter concerned, but shall
not exceed an appropriate initial portion of the period for cost recovery. For this adjustment to costs
applicable during the investigation period, information relating to a start-up phase which extends
beyond that period shall be taken into account in so far as it is submitted prior to verification visits
and within three months of the initiation of the investigation.

2.6 For the purpose of Article 2, Section A, the amounts for selling, general and administrative costs
and for profits shall be based on actual data pertaining to production and sales, in the ordinary course of
trade, of the hke product, by the exporter or producer under investigation. When such amounts cannot be
determined on this basis, the amounts may be determined, on the basis of:

(i) the weighted average of the actual amounts determined for other exporters or producers subject
to investigation in respect of production and sales of the like product, or individual types thereof, in
the domestic market of the country of origin;

(ii) the actual amounts applicable to production and sales, in the ordinary course of trade, of the
same general category of products for the exporter or producer in question in the domestic market of
the country of origin;

(iii) any other reasonable method, provided that the amount for profit so established shall not exceed
the profit normally realised by other exporters or producers on sales of products of the same general
category in the domestic market of the country of origin.

_**Al**_ _**H**_

2.7 In the case of imports from non-market economy countries and, in particular, those to which
Regulation (EC) No 519/94^ applies, normal value shall be determined on the basis of the price or
constructed value in a market economy third country, or the price from such a third country to other
countries, including the Community, or where these are not possible, on any other reasonable basis.
including the price actually paid or payable in the Community for the like product, duly adjusted, if
necessary, to include a reasonable profit margin.

2.7.1 For the purpose of this paragraph, an appropriate market economy third country shall
be selected in a not unreasonable manner, with due account taken of any reliable information made
available at _the_ time of selection. Account shall also be taken of time lunits and, where appropriate, a
market economy third country which is subject to the same investigation shall be used.

2.7.2 The parties to the investigation shall be informed shortly after initiation of the market
economy third country envisaged and shall be given 10 days to comment.

( [4] ) OJ No L 67, 10.3.1994, p. 89.

_**AA\**_

B. Export price '

2.8 The export price shall be the price actually paid or payable for the product when sold from the
exporting country to the Community.

2.9 In cases where there is no export price or where it appears that the export price is unreliable
because of association or a compensatory arrangement between the exporter and the importer or a third
party, the export price may be constructed on the basis of the price at which the imported products are
first resold to an independent buyer, or if the products are not resold to an independent buyer, or not
resold in the condition as imported, on any reasonable basis.

2.9.1 In these cases, adjustment for all costs, including duties and taxes, incurred between
importation and resale, and for profits accruing, shall be made to establish a reliable export price, at
the Community frontier level.

2.9.2 The costs for which adjustment shall be made include those normally bome by an
importer but paid by any party, either in or outside the Community, which appears to be associated or
to have a compensatory arrangement with the importer or exporter, including: usual transport,
insurance, handling, loading and ancillary costs; customs duties, any anti-dumping duties, and other
taxes payable in the importing country by reason of the importation or sale of the goods; and a
reasonable margin for selling, general and administrative costs and profit.

**10**

C. Comparison

2.10 A fair comparison shall be made between the export price and the normal value. This
comparison shall be made at the same level of trade and in respect of sales made at as nearly as possible
the same time and with due account taken of other differences. Where the normal value and the export
price as established are not on such a comparable basis due allowance, in the form of adjustments, shall
be made in each case, on its merits, for differences in factors which are claimed, and demonstrated to
affect prices and, therefore, price comparability. Any duplication when making adjustments shall be
avoided, in particular in relation to discounts, rebates, quantities and level of trade. When the specified
conditions are met, the factors for which adjustments can be made are listed hereafter:

_(a) Physical characteristics_

An adjustment shall be made for differences in the physical characteristics of the product concerned.
The amount of the adjustment shall correspond to a reasonable estimate of the market value of the
difference.

_(b) Import charges and indirect taxes_

An adjustment shall be made to normal value for an amount corresponding to any import charges or
indirect taxes borne by the like product and by materials physically incorporated therein, when
destined for consumption in the exporting country and not collected or refunded in respect of the
product exported to the Community.

_(c) Discounts, rebates and quantities_

An adjustment shall be made for differences in discounts and rebates, including those given for
differences in quantities, if these are properly quantified and are directly linked to the sales under
consideration. An adjustment may also be made for deferred discounts and rebates if the claim is
based on consistent practice in prior periods, including compliance with the conditions required to
qualify for the discount or rebates.

_(d) Level of trade_

An adjustment for differences in levels of trade shall be granted where, in relation to the distribution
chain in both markets, it is shown that the export price, including a constructed export price, is at a
different level of trade to the normal value and the difference has affected price comparability which
is demonstrated bv consistent and distinct differences in functions and prices of the seller for the
different levels of trade in the domestic market of the exporting country. The amount of the
adjustment shall be based on the market value of the difference.

_(e) Transport, insurance,_ _handling,_ _loading,_ _and ancillary costs_

An adjustment shall be made for differences in the directly related costs incurred for conveying the
product concerned from the premises of the exporter to an independent buyer, where such costs are
included in the prices charged. These costs comprise transport, insurance, handling, loading and
ancillary costs.

**11**

_**n**_ **?**

_(f)_ _Packing:_ '

An adjustment shall be made for differences in the respective, directly related costs of the packing for
the product concerned.

_(g) Credit_

An adjustment shall be made for differences in the cost of any credit granted for the sales under
consideration, provided that it is a factor taken into account in the determination of the prices
charged.

_(h) After-sales costs_

An adjustment shall be made for differences in the direct costs of providing warranties, guarantees,
technical assistance and services, as provided for bv law and/or in the sales contract.

_(i)_ _Commissions_

An adjustment shall be made for differences in commissions paid in respect of the sales under
consideration.

_(j) Currency conversions_

When the price comparison requires a conversion of currencies, such conversion should be made
using the rate of exchange on the date of sale, provided that when a sale of foreign currency on
forward markets is directly linked to the export sale involved, the rate of exchange in the forward sale
shall be used. Normally, the date of sale should be the date of invoice but the date of contract,
purchase order or order confirmation, may be used if these more appropriately establish the material
terms of sale. Fluctuations in exchange rates shall be ignored and exporters shall be granted 60 days
to reflect a sustained movement in exchange rates during the period of investigation.

**12**

~ ~ . . _A~bo_
**D.** **Dumping margin**

**2.11** **Subject to the** **releyant prpyisietis governing** **fair comparison, the existence of margins of**
**dumping during the investigation** **period.shall** **normally be established on the basis of a comparison of a**
**weighted average normal value** **with** **a weighted average of prices of** **all** **export transactions** **to** **the**
**Cornrniuirtv** **or by a comparison of individual** **normal vaines** **and individual export prices** **to** **the**
**Community on a transaction to transaction basis.** **However,** **a normal value established on a weighted**
**average basis may be compared to prices of all individual export transactions to** **the** **Community,** **if there**
**is a pattern of export prices which differ significantly among different purchasers,** **regions** **or time**
**periods and the methods** **specified m** **foe first sentence of this paragraph would not reflect the full degree**
**of dumping being practised. This** **paragraph** **shall not preclude the use of sampling in accordance with**
**Article 17.**

**2.12** **The dumping margin shall** **be the** **amount by which** _**the**_ **normal value exceeds the export price.**
**Where dumping margins vary,** **a** **weighted average dumping margin may be established.**

**13**

Article 3, A » ' l

Determination of Injury

3.1 Under this Regulation, the term "injury" shall, unless otherwise specified, be taken to mean
material injury to the Community industry, threat of material injury to the Community industry or
material retardation of the establishment of such an industry and shall be interpreted in accordance with
the provisions of this Article.

3.2 A determination of injury shall be based on positive evidence and involve an objective
examination of both (a) the volume of the dumped imports and the effect of the dumped imports on
prices in the Community market for like products, and (b) the consequent impact of these imports on the
Community industry.

3.3 With regard to the volume of the dumped imports, consideration shall be given as to whether
there has been a significant increase in dumped imports, either in absolute terms or relative to production
or consumption in the Community. With regard to the effect of the dumped imports on prices,
consideration shall be given as to whether there has been a significant price undercutting by the dumped
imports as compared with the price of a like product of the Community industry, or whether the effect of
such imports is otherwise to depress prices to a significant degree or prevent price increases, which
otherwise would have occurred, to a significant degree. No one or several of these factors can necessarily
give decisive guidance.

3.4 Where imports of a product from more than one country are simultaneously subject to antidumping investigations, the effects of such imports shall be cumulatively assessed only if it is determined
that (a) the margin of dumping established in relation to the imports from each country is more than de
minimis as defined in Article 9.3 and that the volume of imports from each country is not negligible and
(b) a cumulative assessment of the effects of the imports is appropriate in light of the conditions of
competition between imported products and the conditions of compétition between the imported products
and the like Community product.

3.5 The examination of the impact of the dumped imports on the Community industry concerned
shall include an evaluation of all relevant economic factors and indices having a bearing on the state of
the industry including: the fact that an industry is still in the process of recovering from the effects of
past dumping or subsidisation, the magnitude of the actual margin of dumping, actual and potential
decline in sales, profits, output, market share, productivity, return on investments, utilisation of capacity;
factors affecting Community prices; actual and potential negative effects on cash flow, inventories,
employment, wages, growth, ability to raise capital or investments. This list is not exhaustive, nor can
one or several of these factors necessarily give decisive guidance.

3.6 It must be demonstrated, from all the relevant evidence presented in relation to paragraph 2. that
the dumped imports are causing injury within the meaning of this Regulation. Specifically, this shall
entail a demonstration that the volume and/or price levels identified under paragraph 3 are responsible
for an impact on the Community industry as provided for in paragraph 5. and that this impact exists to a
degree which enables it to be classified as material.

**14**

_**A**_ _**Y**_ _**)**_
3.7 Known factors other than the dumped imports, which at the same time are injuring the ' ' _"^_
Community industry shall also be examined to ensure that injury caused by these other factors is not
attributed to the dumped imports under paragraph 6. Factors which may be considered in this respect
include, inter alia, the volume and prices of imports not sold at dumping prices, contraction in demand or
changes in the patterns of consumption, trade restrictive practices of and competition between the foreign
and Community producers, developments in technology and the export performance and productivity of
the Community industry.

3.8 The effect of the dumped imports shall be assessed in relation to the production of the
Community industry of the like product when available data permit the separate identification of that
production on the basis of such criteria as the production process, producers' sales and profits. If such
separate identification of that production is not possible, the effects of the dumped imports shall be
assessed by the examination of the production of the narrowest group or range of products, which
includes the like product, for which the necessary information can be provided.

3.9 A determination of a threat of material injury shall be based on facts and not merely on
allegation, conjecture or remote possibility. The change in circumstances which would create a situation
in which the dumping would cause injury must be clearly foreseen and imminent.

3.9.1 In making a determination regarding the existence of a threat of material injury,
consideration should be given to, inter aha, such factors as:

(i) a significant rate of increase of dumped imports into the Community market indicating the
likelihood of substantially increased imports;

(ii) sufficient freely disposable or an imminent, substantial increase in capacity of the
exporter indicating the likelihood of substantially increased dumped exports to the Community,
taking into account the availability of other export markets to absorb any additional exports;

(iii) whether imports are entering at prices that would, to a significant degree, depress prices
or prevent price increases which otherwise would have occurred, and would likely increase demand
for further imports; and

(îv) inventories of the product being investigated.

3.9.2 No one of the factors listed above by itself can necessarily give decisive guidance but
the totality of the factors considered must lead to the conclusion that further dumped exports are
imminent and that, unless protective action is taken, material injury would occur.

**15**

Article 4

Definition of Community industry

4.1 For the purposes of this Regulation, the term " the Community industry" shall be interpreted as
referring to the Community producers as a whole of the like products or to those of them whose
collective output of the products constitutes a major proportion, as defined in Article 5.4. of the total
Community production of those products, except that

(i) when producers are related to the exporters or importers or are themselves importers of the
allegedly dumped product, the term "the Community industry" may be interpreted as referring to the
rest of the producers;

_**Ah**_

(ii) in exceptional circumstances the territory of the Community may, for the production in question,
be divided into two or more competitive markets and the producers within each market may be
regarded as a separate industry if (a) the producers within such market sell all or almost all of their
production of the product in question in that market, and (b) the demand in that market is not to any
substantial degree supplied by producers of the product in question located elsewhere in the
Community. In such circumstances, injury may be found to exist even where a major portion of the
total Community industry is not injured, provided there is a concentration of dumped imports into
such an isolated market and provided further that the dumped imports are causing injury to the
producers of all or almost all of the production within such market.

4.2 For the purpose of paragraph 1, producers shall be considered to be related to exporters or
importers only if (a) one of them directly or mdirectly controls the other: or (b) both of them are directly
or indirectly controlled by a third person; or (c) together they directly or indirectly control a third person,
provided that there are grounds for behevmg or suspecting that the effect of the relationship is such as to
cause the producer concerned to behave differently from non-related producers. For the purpose of this
paragraph, one shall be deemed to control another when the former is legally or operationally in a
position to exercise restraint or direction over the latter.

4.3 Where the Community industry has been interpreted as referring to the producers in a certain
region, the exporters shall be given an opportunity to offer undertakings pursuant to Article 8 in respect
of the region concerned. If an adequate undertaking is not offered promptly or the situations set out in
Article 8.9 and Article 8.10 apply, a provisional or definitive duty may be imposed in respect of the
Community as a whole. In such cases, the duties may, if practicable, be limited to specific products or
exporters.

4.4 The provisions of Article 3.8 shall be applicable to this Article.

**16**

Article 5 1

Initiation of proceedings

5.1 Except as provided for in Article 5.6, an investigation to determine the existence, degree and
effect of any alleged dumping shall be initiated upon a written complaint by any natural or legal person,
or any association not having legal personality, acting on behalf of the Community industry.

5.1.1 The complaint may be submitted to the Commission, or a Member State, which shall
forward it to the Commission. The Commission shall send Member States a copy of any complaint it
receives. _The complaint shall be deemed to have been lodged on the first_ _working_ _day following_
_its delivery to the Commission by registered mail or the issuing of an acknowledgement of receipt_
_by the Commission._

5.1.2 Where, in the absence of any complaint, a Member State is in possession of sufficient
evidence of dumping and of injury resulting therefrom for the Community industry, it shall
immediately communicate such evidence to the Commission.

5.2 A complaint under paragraph 1 shall include evidence of dumping, injury and à causal link
between the allegedly dumped imports and the alleged injury. The complaint shall contain such
information as is reasonably available to the complainant on the following:

(i) identity of the complainant and a description of the volume and value of the Community
production of the like product by the complainant. Wfaere a written complaint is made on behalf of
the Community industry, the complaint shall identify the industry on behalf of which the complaint is
made by a list of all known Community producers of the like product (or associations of Community
producers of the hke product) and, to the extent possible, a description of the volume and value of
Community production of the like product accounted for by such producers;

(ii) a complete description of the allegedly dumped product, the names of the country or countries of
origin or export in question, the identity of each known exporter or foreign producer and a list of
known persons importing the product in question;

(iii) information on prices at which the product in question is sold when destined for consumption in
the domestic markets of the country or countries of origin or export (or, where appropriate,
information on the prices at which the product is sold from the country or countries of origin or
export to a third country or countries or on the constructed value of the product) and information on
export prices or, where appropriate, on the prices at which the product is first resold to an
independent buyer in the Community;

(iv) information on the evolution of the volume of the allegedly dumped imports, the effect of these
imports on prices of the like product on the Community market and the consequent impact of the
imports on the Community industry, as demonstrated by relevant factors and indices having a bearing
on the state of the Community industry, such as those listed in Article 3.3 and 3.5.

5.3 The Commission shall, to the degree possible, examine _the_ accuracy and adequacy of the
evidence provided in the complaint to determine whether there is sufficient evidence to justify the
initiation of an investigation.

**17**

5.4 An investigation shall not be initiated pursuant to paragraph I unless it has been determined, on
the basis of an examination of the degree of support for, or opposition to, the complaint expressed by
Community producers of the like product, that the complaint has been made by or on behalf of the
Community industry. The complaint shall be considered to have been made "by or on behalf of the
Community industry" if it is supported by those Community producers whose collective output
constitutes more than 50 per cent of the total production of the like product produced by that portion of
the Community industry expressing either support for or opposition to the complaint. However, no
investigation shall be initiated when Community producers expressly supporting the complaint account
for less than 25 per cent of total production of the like product produced by the Community industry.

5.5 The authorities shall avoid, unless a decision has been made to initiate an investigation, any
publicising of the complaint for the initiation of an investigation. However, after receipt of a properly
documented complaint and before proceeding to initiate an investigation, the government of the exporting
country concerned shall be notified.

5.6 If in special circumstances, it is decided to initiate an investigation without having received a
written complaint by or on behalf of the Community industry for the initiation of such investigation, this
shall be done on the basis of sufficient evidence of dumping, injury and a causal link, as described in
paragraph 2, to justify the initiation of an investigation.

5.7 The evidence of both dumping and injury shall be considered simultaneously in the decision
whether or not to initiate an investigation. A complaint shall be rejected where there is insufficient
evidence of either dumping or of injury to justify proceeding with the case. In this respect, the imports
concerned shall normally be regarded as negligible if the volume of dumped imports from a particular
country accounts for less than 3 per cent of imports of the like product in the Community unless
countries which individually account for less than 3 per cent of the imports of the like product in the
Community collectively account for more than 7 per cent of imports of the like product in the
Community.

5.8 The complaint may be withdrawn prior to initiation, in which case it shall be considered not to
have been lodged.

5.9 Where, after consultation, it is apparent that there is sufficient evidence to justify initiating
proceedings the Commission _shall initiate proceedings within one month of the lodging of the_
_complaint_ and publish a notice in the Official Joumal of the European Communities. Where insufficient
evidence has been presented, the complainant shall, after consultation, be so informed _within one month_
_of the date on which the complaint is lodged with the Commission._

5.10 The notice of initiation of the proceedings shall announce the initiation of an investigation.
indicate the product and countries concerned, give a summary of the information received, and provide
that all relevant information is to be communicated to the Commission; it shall state _the periods_ within
which interested parties may make themselves known, present their views in writing _and submit_
_information,_ _if_ _such views and information are to be taken into account during the_ _investigation;_ _it_
_shall also state the period within which interested parties_ may apply to be heard by the Commission in
accordance with _Article 6.5._

**18**

_**A**_ **;\f**

_**A%**_

5.11 The Commission shall advise the exporters and importers known to it to be concemed, as well as
representatives of the exporting country and the complainants, of the initiation of the proceedings and,
with due regard to _the_ protection of confidential information, provide the full text of the written
complaint received under Article 5.1 to the known exporters, and to the authorities of the exporting
country and make it available, upon request, to other interested parties involved. Where the number of
exporters involved is particularly high, the full text of the written complaint should instead be provided
only to the authorities of the exporting country or to _the_ relevant trade association.

5.12 An anti-dumping investigation shall not hinder the procedures of customs clearance.

**19**

_**Aï**_

Article 6

The investigation

A. Information and procedure

6.1 Following the initiation of the proceedings, the Commission, acting in co-operation with the
Member States, shall commence an investigation at Community level. Such investigation shall cover
both dumping and injury and these shall be investigated simultaneously. For the purpose of a
representative finding, an investigation period shall be selected which, in the case of dumping shall,
normally, cover a period of not less than six months immediately prior to the initiation of the
proceedings. Information relating to a period subsequent to the investigation period shall, normally, not
be taken into account.

6.2 Parties receiving questionnaires used in an anti-dumping investigation shall be given at least
thirty days for reply. The time-limit for exporters shall be counted from the date of receipt of the
questionnaire, which for this purpose shall be deemed to have been received one week from the day on
which it was sent to the exporter or transmitted to the appropriate diplomatic representative of the
exporting country. An extension to the thirty day period may be granted, taking due account of the time
limits of the investigation and provided the party gives a good reason, in terms of its particular
circumstances, for such extension.

6.3 The Commission may request Member States to supply information and Member States shall
take whatever steps are necessary in order to give effect to such requests. They shall send to the
Commission the information requested together with the results of all inspections, checks or
investigations carried out. Where this information is of general interest or where its transmission has
been requested by a Member State, the Commission shall forward it to the Member States, provided it is
not confidential, in which case a non-confidential summary shall be forwarded.

6.4 The Commission may request Member States to carry out all necessary checks and inspections,
particularly amongst importers, traders and Community producers, and to carry out investigations in
third countries, provided the firms concerned give their consent and the government of the country in
question has been officially notified and raises no objection. Member States shall take whatever steps are
necessary in order to give effect to such requests from the Commission; Officials of the Commission
shall be authorised, if the Commission or a Member State so requests, to assist the officials of Member
States in carrying out their duties.

6.5 The interested parties, which have made themselves known in accordance with Article 5.10. may
be heard if they have, within the period prescribed in the notice published in the Official Journal of the
European Communities, made a written request for a hearing showing that they are an interested party
likely to be affected by the result of the proceedings and that there are particular reasons why they
should be heard.

6.6 Opportunities shall, on request, be provided for the importers, exporters, representatives of the
government of the exporting country and the complainants, which have made themselves known in
accordance with Article 5.10. to meet those parties with adverse interests, so that opposing views may be
presented and rebuttal arguments offered. Provision of such opportunities must take account of the need
to preserve confidentiality and of the convenience to the parties. There shall be no obligation on any
party to attend a meeting, and failure to do so shall not be prejudicial to that party's case. Oral
information provided under this paragraph shall be taken into account in so far as it is subsequently
reproduced in writing.

**20**

_6.7_ _The complainants, importers, exporters, users and consumer organisations,_
_made themselves known in accordance with Article 5.10,_ as well as the representatives 01
country may, upon written request, inspect all information made available by any party to
investigation, as distinct from internal documents prepared by the authorities of the C
Member States, which is relevant to the presentation of their cases and not confidential w^hltô
meaning of Article 19, and that it is used in the investigation. Such parties may respond to
information and their comments should be taken into consideration, to the extent that they are^*
sufficiently substantiated in the response.

6.8 Except in the circumstances provided for in Article 18, the information supplied by ;
parties and upon which findings are based, shall be examined for accuracy to the degree j

_6.9_ Investigations shall, except in special circumstances, be concluded within one year; _\_
case more than 18 months, after their initiation.

_AM_

_**»Xi**_

_**$Mù**_

_**m**_

_**<»**_ **Mi**

_!Ai_ _l_
**21**

**Artîffef**

**measures**

**7.1** **^Provisional** **measures may be applied if proceedings have been initiated in accordance with the**
**provisions** **of Article 5, a public notice has been given to that** **effect** **and interested parties have been**
**given** **fHJpcfoate** **opportunities to submit information and make comments in accordance with Article** **5.10.**
**a proviiional** **affirmative determination has been made of dumping and consequent injury to the**
**CofOfl|ijpgÇY** **industry,** **and** **the Community interest calls for intervention to prevent such injury.** _**The**_

_**measures**_ _**shall be imposed no sooner than 60 days from the initiation of**_ _**the**_ _**proceedings**_

*** {JKfff** _**nine months from the initiation of the proceedings.**_

**amount of the provisional** **anti-dumping** **duty shall not exceed** **the** **margin of dumping as**
**established but it should be less than the margin, if such lesser duty would be adequate to**
**Itijury** **to the Community industry.**

**ional measures** **shall take the form of a security** **and the** **release of the products** **concemed**
**tion** **in** **the Community shall be conditional upon the provision of such security.**

**ommission** **shall take provisional action after consultation or, in cases of extreme urgency,**
**the Member States.** **In** **this latter case, consultations shall take place 10 days, at the**
**notification** **to the Member States** **of** **the action taken by the Commission.**

**a** **Member State requests immediate intervention by the Commission** **and** **the conditions of**

_**Wry**_ **'fi**

**the Commission shall within a maximum of five working days of receipt of** **the**
**whether a provisional** **anti-dumping** **duty should be imposed.**

**rÈomrrussion** **shall forthwith inform** **the** **Council** **and** **the Member** **States** **of any decision**
**pjts** **Article. The Council, acting by a qualified majority, may decide differently.**

**al** **duties may be imposed for six months and extended for a further** **three** **months or**

**for nine months.** **However,** **they** **may only be** **extended,** **or imposed for a** **ninfr**
**erq** **exporters representing a significant percentage of** **the trade** **involved so** **request** **or**
**upon** **notification** **bvthe** **Commission.**

CWk:

**22**

_**A%**_

Article 8

Undertakings

8.1 Investigations may be terminated without the imposition of provisional or definitive duties upon
receipt of satisfactory voluntary undertakings from any exporter to revise its prices or to cease exports to
the area in question at dumped prices so that the Commission, after consultation, is satisfied that the
injurious effect of the dumping is eliminated. Price increases under such undertakings shall not be higher
than necessary to eliminate the margin of dumping and they should be less than the margin of dumping if
such increases would be adequate to remove the injury to the Community industry.

8.2 Undertakings may be suggested by _the_ Commission, but no exporter shall be obliged to enter
into such an undertaking. The fact that exporters do not offer such undertakings, or do not accept an
invitation to do so, shall in no way prejudice the consideration of the case. However, it may be
determined that a threat of injury is more likely to be realised if the dumped imports continue.
Undertakings shall not be sought or accepted from exporters unless a provisional affirmative
determination of dumping and injury caused by such dumping has been made. Save in exceptional
circumstances, undertakings may not be offered later than the end of the period during which
representations may be made under Article 20.5.

8.3 Undertakings offered need not be accepted if their acceptance is considered impractical, for
example, if the number of actual or potential exporters is too great, or for other reasons, including
reasons of general policy. The exporter concerned may be provided with the basis on which it is intended
to propose the rejection of the offer of an undertaking and may be given an opportunity to make
comments thereon. The reasons for rejection shall be set out in the definitive decision.

8.4 Parties which offer an undertaking shall be required to provide a non-confidential version of
such undertaking, so that it may be made available to interested parties to the investigation.

8.5 Where undertakings are, after consultation, accepted and there is no objection raised within the
Advisory Committee, the investigation shall be terminated. In all other cases, the Commission shall
submit to the Council forthwith a report on the results of the consultation, together with a proposal that
the investigation be terminated. The investigation shall stand terminated if, within one month, the
Council, acting by a qualified majority, has not decided otherwise.

8.6 If the undertakings are accepted, the investigation of dumping and injury shall normally be
completed. In such a case, if a negative determination of dumping or injury is made, the undertaking
shall automatically lapse, except in cases where such a determination is due in large part to the existence
of an undertaking. In such cases the authorities may require that an undertaking be maintained for a
reasonable period. In the event that an affirmative determination of dumping and injury is made, the
undertaking, shall continue consistent with its terms and the provisions of this Regulation.

8.7 The Commission shall require any exporter from which an undertaking has been accepted to
provide, periodically, information relevant to the fulfilment of such undertaking, and to permit
verification of pertinent data. Non-compliance with such requirements shall be construed as a violation
of the undertaking.

**23**

_**A**_ _**[c]**_
_**y**_
8.8 Where undertakings are accepted from certain exporters during the course of an investigation,
they shall, for the purpose of Article 11. be deemed to take effect from the date on which the
investigation is concluded for the exporting country.

8.9 In case of violation or withdrawal of undertakings bv any party, a definitive duty shall be
imposed in accordance with Article 9. on the basis of the facts established within the context of the
investigation which led to the undertaking, provided that such investigation was concluded with a final
determination on dumping and injury and the exporter concerned, except in the case of withdrawal of
undertakings bv the exporter, has been given an opportunity to comment.

8.10 A provisional duty may, after consultation, be imposed in accordance with Article 7 on the basis
of the best information available, where there is reason to believe that an undertaking is being violated,
or in case of violation or withdrawal of undertaking where the investigation which led to the undertaking
was not concluded.

**24**

**'"** **<** **.** _**A**_ _**c**_ _**)x**_

Article 9

Termination without measures; imposition of definitive duties

9.1 Where the complaint is withdrawn, proceedings may be terminated unless such termination
would not be in the Community interest. 

9.2 WTiere, after consultation, protective measures are unnecessary and there is no objection raised
within the Advisory Committee, the investigation or proceedings shall be terminated. In all other cases,
the Commission shall submit to the Council forthwith a report on the results of the consultation, together
with a proposal that the proceedings be terminated. The proceedings shall stand terminated if, within one
month, the Council, acting by a qualified majority, has not decided otherwise.

9.3 For proceedings initiated under Article 5.9. injury shall normally be regarded as negligible where
the imports concerned represent less than the volumes set out in Article 5 7. For the same proceedings,
there shall be immediate termination where it is determined that the margin of dumping is less than 2 per
cent, expressed as a percentage of the export price, provided that it is only the investigation that shall be
terminated where the margin is below 2% for individual exporters and they shall remain subject to the
proceedings and may be re-investigated in any subsequent review carried out for the country concerned
under Article 11.

9.4 Where the facts as finally established show that there is dumping and injury caused thereby, and
the Community interest calls for intervention in accordance with Article 21. a definitive anti-dumping
duty shall be imposed by the Council, acting by simple majority on a proposal submitted by the
Commission after consultation of the Advisory Committee. Where provisional duties are in force, a
proposal for definitive action shall be submitted to the Council not later than one month before the expiry
of such duties. The amount of the anti-dumping duty shall not exceed the margin of dumping established
but it should be less than the margin if such lesser duty would be adequate to remove the injury to the
Community industry.

9.5 An anti-dumping duty shall be imposed in the appropriate amounts in each case, on a nondiscriminatory basis on imports of a product from all sources found to be dumped and causing injury,
except as to imports from those sources from which undertakings under the terms of this Regulation
have been accepted. The Regulation shall specify the duty for each supplier or, if that is impracticable
and in the cases referred to in Article 2.7. the supplying country concerned.

9.6 When the Commission has limited its examination in accordance with Article 17, any antidumping duty applied to imports from exporters or producers which have made themselves known in
accordance with Article 17 but were not included in the examination shall not exceed the weighted
average margin of dumping established for die parties in the sample. For the purpose of this paragraph,
the Commission shall disregard any zero and de minimis margins, and margins established under the
circumstances referred to in Article 18. The authorities shall apply individual duties or normal values to
imports from any exporter or producer which is granted individual treatment as provided for in Article
17.

**25**

_**A**_ _**^**_

Article 10

Retroactivity

10.1 Provisional measures and definitive anti-dumping duties shall only be applied to products which
enter free circulation after the time when the decision taken under Article 7.1 and Article 9.5,
respectively enters into force, subject to the exceptions set out in this Regulation.

10.2 Where a provisional duty has been applied and the facts as finally established show that there is
dumping and injury, the Council shall decide, irrespective of whether a definitive anti-dumping duty is to
be imposed, what proportion of the provisional duty is to be definitively collected. For this purpose,
'injury' shall not include material retardation of the estabhshment of a Community industry, nor threat of
material injury, except where it is found that this would, in the absence of provisional measures, have
developed into material injury. In all other cases involving such threat or retardation, any provisional
amounts shall be released and definitive duties can only be imposed from the date that a final
detennination of threat or material retardation is made.

10.3 If the definitive anti-dumping duty is higher than the provisional duty, the difference shall not be
collected. If the definitive duty is lower than the provisional duty, the duty shall be recalculated. Where a
final determination is negative, the provisional duty shall not be confirmed.

10.4 A definitive anti-dumping duty may be levied on products which were entered for consumption .
not more than 90 days prior to the date of application of provisional measures but not prior to the
initiation of the investigation, provided that imports have been registered in accordance with Article
14.5, the Commission has provided the importers concemed with an opportunity to comment, and that:

(i) there is, for the product in question, a history of dumping over an extended period, or the
importer was aware of the dumping or the importer should have been aware of the dumpmg. in terms
of the extent of the dumping and injury alleged or found; and

(ii) in addition to the level of imports which caused injury during _the_ investigation period, there is a
further substantial rise in imports which, in the light of its timing and volume and other
circumstances, is likely to seriously undermine the remedial effect of the definitive anti-dumping duty
to be applied.

10.5 In cases of violation or withdrawal of undertakings, definitive duties may be levied in
accordance with this Regulation on goods entered for free circulation not more than ninety days before
the application of provisional measures, provided that imports have been registered in accordance with
Article 14.5, and that any such retroactive assessment shall not apply to imports entered before the
violation or withdrawal of the undertaking.

**26**

Article 11

Duration, reviews and refunds

11.1 An anti-dumping measure shall remain in force only as long as and to the extent necessary to
counteract dumping which is causing injury.

_**V)**_
_**h**_

11.2 A definitive anti-dumping measure shall expire five years from its imposition or five years from
the date of the conclusion of the most recent review which has covered both dumping and injury unless it
is determined in a review that the expiry would be likely to lead to a continuation or recurrence of
dumping and injury. Such an expiry review shall be initiated on the initiative of the Commission, or upon
request made by or on behalf of Community producers and the measure shall remain in force pending the
outcome of such review.

11.2.1 An expiry review shall be initiated where the request contains sufficient evidence that
the removal of the measures would be likely to result in a continuation or recurrence of dumping and
injury. Such a likelihood may, for example, be indicated bv evidence of continued dumping and injury
or evidence that the removal of injury is partly or solely due to the existence of measures or evidence
that the circumstances of the exporters, or market conditions, are such that thev would indicate the
likelihood of further injurious dumping.

11.2.2 In carrying out investigations under this paragraph, the exporters, importers, the
representatives of the exporting country and the Community producers shall be provided with the
opportunity to amplify, rebut or comment on the matters set out in the review request and conclusions
shall be reached with due account taken of all relevant and duly supported evidence presented in
relation to the question of whether the removal of measures would be likely, or unlikely, to lead to the
continuation or recurrence of dumping and injury.

11.2.3 Under this paragraph, a notice of impending expiry shall be published in the Official
Journal of the European Communities at an appropriate time in the final year of the period of
application of the measures as defined in this paragraph. Thereafter, the Community producers shall,
no later than three months before the end of the five year period, be entitled to lodge a review request
in accordance with paragraph 2.1. A notice announcing the actual expiry of measures under this
paragraph shall also be published.

11.3 The need for the continued imposition of measures may also be reviewed, where warranted on
the initiative of the Commission or at the request of a Member State or, provided that a reasonable
period of time of at least 1 year has elapsed since the imposition of the definitive measure, upon a
request, by any exporter or importer or bv the Community producers, which contains sufficient evidence
substantiating the need for such an interim review.

11.3.1 An interim review shall be initiated where the request contains sufficient evidence that
the continued imposition of the measure is no longer necessary to offset dumping and/or the injury
would be unlikely to continue or recur if the measure were removed or varied, or that the existing
measure is not, or is no longer, sufficient to counteract dumping which is causing injury.

11.3.2 In carrying out investigations under this paragraph, the Commission may, inter alia,
consider whether the circumstances with regard to dumping and injury have changed significantly, or
whether existing measures are achieving the intended results in removing the injury previously
established in accordance with Article 3 of this Regulation. In these respects, account shall be taken
of all relevant and duly supported evidence in the final determination.

**27**

_**A%**_

11.4 A review shall also be carried out for the purpose of determining individual margins of dumping
for new exporters in the exporting country in question which have not exported the product during the
period of investigation on which the measures were based.

11.4.1 The review shall be initiated where a new exporter or producer can show that it is not
related to any of the exporters or producers in the exporting country which are subject to the antidumping measures on the product, and where they have actually exported to the Community
following the above-mentioned investigation period, or where they can demonstrate that they have
entered into a an irrevocable contractual obligation to export a significant quantity to the Community.

11.4.2 A review for a new exporter shall be initiated, and carried out on an accelerated basis,
after consultation of the Advisory Committee and Community producers have been given an
opportunity to comment. The Commission Regulation initiating a review shall repeal the duty in force
with regard to the new exporter concerned, bv amending the Regulation which imposed the duty, and
making imports subject to registration in accordance with Article 14.5 in order to ensure that, should
the review result in a determination of dumping in respect of such an exporter, anti-dumping duties
can be levied retroactively to the date of the initiation of the review.

11.4.3 The provisions of this paragraph shall not apply where duties have been imposed under
the provisions of Article 9.6.

11.5 The relevant provisions of this Regulation with regard to procedures and the conduct of
investigations, excluding those relating to time limits, shall apply to any review carried out under
paragraphs 2. 3 and 4. Any such review shall be carried out expeditiously and shall normally be
concluded within twelve months of the date of initiation of the review.

11.6 Reviews under this Article shall be initiated by the Commission after consultation of the
Advisory Committee. Where warranted by reviews, measures shall be repealed or maintained under
paragraph 2. or repealed, maintained or amended under paragraphs 3 and 4. by the Community
institution responsible for their introduction. Where measures are repealed for mdividual exporters, but
not for the country as a whole, such exporters shall remain subject to the proceedings and may,
automatically, be re-investigated in any subsequent review carried out for that country under this Article.

11.7 Where a review of measures under paragraph 3 is in progress at the end of the period of
application of measures as defined in paragraph 2. such review shall also cover the circumstances set out
in paragraph 2.

**28**

11.8 Notwithstanding paragraph 2. an importer may request reimbursement of duties collected where
it is shown that the dumping margin, on the basis of which duties were paid, has been eliminated, or
reduced to a level which is below the level of the duty in force.

11.8.1 In order to request a refund of anti-dumping duties, the importer shall submit an
application to the Commission. The application shall be submitted via the Member State in the
territory of which the products were released for free circulation and within six months of the date on
which the amount of the definitive duties to be levied was duly determined by the competent
authorities or of the date on which a decision was made definitively to collect the amounts secured by
way of provisional duty. Member States shall forward the request to the Commission forthwith.

11.8.2 An application for refund shall only be considered to be duly supported by evidence
where it contains precise information on the amount of refund of anti-dumping duties claimed and all
customs documentation relating to the calculation and payment of such amount. It shall also include
evidence, for a representative period, on normal values and export prices to the Community for the
exporter or producer to which the duty applies. In cases where the importer is not associated to the
exporter or producer concerned and such information is not immediately available, or the exporter or
producer is unwilling to release it to the importer, the application shall contain a statement from the
exporter or producer that the dumping margin has been reduced or eliminated, as specified in this
Article, and that the relevant supporting evidence shall be provided to the Commission. Where such
evidence is not forthcoming from the exporter or producer, within a reasonable period of time, the
application shall be rejected.

11.8.3 The Commission shall, after consultation of the Advisory Committee, decide whether
and to what extent the application should be granted or it may decide at any time to initiate an interim
review and the information and findings from such review, carried out in accordance with the
provisions applicable for such reviews, shall be used to determine whether and to what extent a
refund is justified. Refunds of duties shall normally take place within 12 months, and in no case more
than 18 months after the date on which a request for a refund, duly supported by evidence, has been
made by an importer of the product subject to the anti-dumping duty. The payment of any refund
authorised should normally be made by Member States within 90 days of the above-mentioned
decision.

11.9 In all review or refund investigations carried out under this Article, the Commission shall apply,
in so far as circumstances have not changed, the same methodology as in the investigation which led to
the duty, with due account taken of the provisions set out in Articled, and in particular Section D
thereof, and the provisions of Article 17 of this Regulation.

11.10 In any investigation carried out under this Article, the Commission shall examine the reliability
of export prices in accordance with Article 2. However, where it is decided to construct the export price
in accordance with Article 2.9, it shall calculate the export price with no deduction for the amount of
anti-dumping duties paid when conclusive evidence is provided that the duty is duly reflected in resale
prices and the subsequent selling prices in the Community.

**29**

_**A%**_

_**A3)**_
Article 12 f

12.1 Where the Community industry submits sufficient information showing that measures have led
to no movement, or insufficient movement, in resale prices or subsequent selling prices in the
Community, the investigation may, after consultation, be re-opened to examine whether the measure has
had effects on the above-mentioned prices.

12.2 During an investigation under this Article, exporters, importers and Community producers shall
be provided with an opportunityto clarify the situation with regard to resale prices and subsequent
selling prices and if it is concluded that the measure should have led to movements in such prices, in
order to remove the injury previously established in accordance with Article 3. export prices shall be reassessed in accordance with Article 2. and dumping margins shall be re-calculated to take account of the
re-assessed export prices. Where it is considered that a lack of movement in the prices in the Community
is due to a fall in export prices, which occurred prior to or following the imposition of measures,
dumping margins may be re-calculated to take account of such lower export prices.

12.3 WTiere a re-investigation under this Article shows increased dumping, the measures in force shall
be amended bv the Council, by simple majority on a proposal from the Commission, in accordance with
the new findings on export prices.

12.4 The relevant provisions of Article 5 and Article 6 shall apply to any review carried out under
this Article, except that such review shall be carried out expeditiously and shall normally be concluded
within six months of the date of initiation of the re-investigation.

12.5 Alleged changes in normal value shall only be taken into account under this Article where
complete information on revised normal values, duly substantiated bv evidence, is made available to the
Commission within the time limits set out in the notice of initiation of an investigation. Where an
investigation involves a re-examination of normal values, imports may be made subject to registration in
accordance with Article 14.5 pending the outcome of the investigation.

**30**

Articled ^

Circumvention

13.1 Anti-dumping duties imposed under this Regulation may be extended to apply to imports from
third countries of like products, or parts thereof, when circumvention of the measures in force is taking
place. Circumvention shall be defined as a change in the pattern of trade between third countries and the
Community which stems from a practice, process or work for which there is insufficient due cause or
economic justification, other than the imposition of the duty, and there is evidence that the remedial
effects of the duty are being undennined. in terms of the prices and/or quantities of the assembled like
product.

13.2 An assembly operation in the Community or a third country shall be considered to circumvent
_the_ measures in force where:

(i) the operation started or substantially increased since, or just prior to. the initiation of the antidumping investigation and the parts concerned are from the country subject to measures: and

(ii) the parts constitute 60% or more of the total value of the parts of the assembled product except
that in no case shall circumvention be considered to be taking place where the value added to the
parts brought in. during the assembly or completion operation, is greater than 25% of the
manufacturing cost: and

(iii) the remedial effects of the duty are being undermined, in terms of the prices and/or quantities of
the assembled like product.

13.3 Investigations shall be initiated under this Article where the request contains sufficient evidence
on the factors set out in paragraph 1. Initiations shall be made, after consultation of the Advisory
Committee, bv Commission Regulation which shall also instruct the customs authorities to make imports
subject to registration in accordance with Article 14.5 or to request guarantees. Investigations shall be
carried out bv the Commission, which may be assisted bv customs authorities, and shall be concluded
within nine months. When the facts, as finally ascertained, justify the extension of measures, this shall
be done bv the Council, acting bv simple majority and on a proposal from the Commission, from the date
that registration was imposed under Article 14.5 or guarantees were requested. The relevant procedural
provisions of this Regulation with regard to initiations and the conduct of investigations shall apply
under this Article.

13.4 Products shall not be subject to registration under Article 14.5 or measures where they are
accompanied bv a customs certificate declaring that the importation of the goods does not constitute
circumvention. Tliese certificates may be issued to importers, upon written application, bv the authorities
following authorisation bv a decision of die Commission after consultation of the Advisory Committee
or the decision of the Council imposing measures and they shall remain valid for the period, and under
the conditions, set down therein.

13.5 Nothing in this Article shall preclude the normal application of the provisions in force
concerning customs duties.

**31**

Article 14

General provisions

14.1 Provisional or definitive anti-dumping duties shall be imposed by Regulation, and collected by
Member States in the form, at the rate specified and according to the other criteria laid down in the
Regulation imposing such duties. Such duties shall also be collected independently of the customs duties,
taxes and other charges normally imposed on imports. No product shall be subject to both anti-dumping
and countervailing duties for the purpose of dealing with one and the same situation arising from
dumping or from export subsidisation.

14.2 Regulations imposing provisional or definitive anti-dumping duties, or Regulations or Decisions
accepting undertakings or terminating investigations or proceedings, shall be published in the Official
Journal of the European Communities. Such Regulations or Decisions shall contain, in particular, and
with due regard to the protection of confidential information, the names of the exporters, if practical, or
countries involved, a description of the product and a summary of the material facts and considerations
relevant to the dumping and injury detenrtinations. In each case, a copy of the Regulation or Decision
shall be sent to known interested parties. The provisions of this paragraph shall apply mutatis mutandis
to reviews.

14.3 Special provisions, in particular with regard to the common definition of the concept of origin, as
contained in Council Regulation (EEC) No 2913/92 of 12 October 1992. may be adopted in. or under. .
this Regulation.

14.4 In the Community interest, measures imposed under this Regulation may, after consultation of
the Advisory Cornmittee. be suspended bv a decision of the Commission for a period of up to one year
because of a change in market conditions in the Community which makes the application of such
measures temporarily inappropriate, provided that the Community industry has been given an
opportunity to comment. The suspension may be extended for a further period if the Council so decides,
by simple majority, on a proposal from the Commission. Measures may, at any time and after
consultation, be re-instated if the reason for suspension is no longer applicable.

14.5 The Commission may, after consultation of the Advisory Committee, direct the customs
authorities to take the appropriate steps to register imports, so that measures may subsequently be
applied against these imports from the date of such registration. Imports may be made subject to
registration following a request from the Community industry which contains sufficient evidence to
justify such action. Registration shall be introduced bv Regulation which shall specify the purpose of the
action and, if appropriate, the estimated amount of possible future liability. Imports may not be made
subject to registration for a period longer than nine months.

14.6 Member states shall report to the Commission, on a monthly basis, the import trade of products
subject to investigation and subject to measures, and the amount of duties collected under this
Regulation.

**32**

Article 15

Consultations

15.1 Any consultations provided for in this Regulation shall take place within an Advisory
Cornmittee, which shall consist of representatives of each Member State, with a representative of the
Commission as chairman. Consultations shall be held immediately on request by a Member State or on
the initiative of the Commission _and in any event within a timeframe which allows the time limits set_
_by this Regulation to be_ _respected._

15.2 The Committee shall meet when convened by its chairman. He shall provide the Member States,
as promptly as possible, with all relevant information.

15.3 Where necessary, consultation may be in writing only; in such case the Commission shall notify
the Member States and shall specify a period within which they shall be entitled to express their opinions
or to request an oral consultation _which the chairman shall arrange, provided that such oral_
_consultation can be held within a_ _timeframe_ _which allows the time limits set by this Regulation to_
_be_ _respected._

15.4 Consultation shall in particular cover:

(i) the existence of dumping and the methods of establishing the dumping margin;

(ii) the existence and extent of injury;

(iii) the causal link between the dumped imports and injury;

(iv) the measures which, in the circumstances, are appropriate to prevent or remedy the injury
caused by dumping and the ways and means for putting such measures into effect.

**33**

Article 16

Verification visits

16.1 The Commission shall, where it considers it appropriate, carry out visits to examine the records
of importers, exporters, traders, agents, producers, trade associations and organisations, to verify
information provided on dumping and injury. In the absence of a proper and timely reply, a verification
visit may not be carried out.

16.2 The Commission may carry out investigations in third countries as required, provided it obtains
the agreement of the firms concemed, it notifies the representatives of the government of the country in
question and the latter does not object to the investigation. As soon as the agreement of the firms
concemed has been obtained the Commission should notify the authorities of the exporting country of the
names and addresses of the firms to be visited and the dates agreed.

16.3 The firms concemed shall be advised of the nature of the information to be verified during
verification visits and of any further information which needs to be provided during such visits, though
this should not preclude requests to be made during the verification for further details to be provided in
the light of information obtained.

16.4 In investigations carried out under this paragraph, the Commission shall be assisted by officials
of those Member States who so request.

**34**

**Articled** _**olo£s**_

**Sampling**

**17.1** **In cases where the number of** **complainants,** **exporters or importers, types of product or**
**transactions is large, the investigation may be limited to a reasonable number of parties, products or**
**transactions bv using samples which are statistically valid** **on** **the basis of information available at the**
**time of the selection,** **or to** **the largest representative volume of production, sales or** **exports** **which can**
**reasonably be investigated within the time available.**

**17.2** **The** **final** **selection of** **parties,** **types of products** **or** **transactions made under these sampling**
**provisions shall** **rest with** **the** **Commission,** **though preference shall be given to choosing a sample in**
**consultation** **with,** **and** **with** **the** **consent of,** **die** **parties** **concemed,** **provided such parties** **make** **themselves**
**known and make sufficient information** **available,** **within** **three** **weeks of** **initiation,** **to enable a**
**representative sample to be chosen.**

**17.3** **In cases** **where the** **examination has been limited in accordance with this Article, an individual**
**margin of dumping shall, nevertheless, be calculated** **for** **any exporter or producer not initially selected**
**who submits the necessary information within** **the time** **limits provided for** **in** **this** **Regulation,** **except**
**where the number of exporters or producers is so** **large that** **mdividual examinations would be unduly**
**burdensome and** **prevent the** **timely completion of the investigation.**

**17.4** **Where it is decided to sample** **and there** **is a degree of** **non-co-operation** **bv some or all of the**
**parties selected which is likely to materially affect the outcome of the mvestigation. a new sample may**
**be selected.** **However,** **if a material degree of** **non-co-operation** **persists** **or there** **is insufficient time to**
**select a new** **sample,** **the** **relevant** **provisions of Article** **18** **shall apply.**

**35**

_oie_ r>
Article 18

Non-co-operation

18.1 In cases in which any interested party refuses access to, or otherwise does not provide, necessary
information _within the time limits as provided for in this Regulation,_ or significantly impedes the
investigation, provisional or final findings, affirmative or negative, may be made on the basis of the facts
available. Where it is found that any interested party has supplied false or misleading information, _the_
_information shall be disregarded and use may be made of facts_ _available._ Interested parties should be
made aware of the consequences of non-co-operation.

18.2 A lack of a computerised response shall not be deemed to constitute non-co-operation, provided
that the interested party shows that presenting the response as requested would result in an unreasonable
extra burden or unreasonable additional cost.

18.3 Where the information presented by an interested party may not be ideal in all respects it should
not be disregarded, provided that any deficiencies are not such as to cause undue difficulty in arriving at
a reasonably accurate finding and provided the information is appropriately submitted in timely fashion,
it is verifiable and the party has acted to the best of its ability.

18.4 If evidence or information is not accepted, the supplying party should be informed forthwith of
the reasons therefor and should be granted an opportunity to provide further explanations within the time.
limit specified. If the explanations are considered unsatisfactory, the reasons for rejection of such
evidence or information should be disclosed and given in any published findings.

18.5 If determinations, including those with respect to normal value, are based on the provisions of
paragraph 1 of this Article, including the information supplied in the complaint, it should, where
practicable and with due regard to the time limits of the mvestigation. be checked by reference to
information from other independent sources which may be available, such as published price lists,
official import statistics and customs returns, or information obtained from other interested parties
during the investigation.

18.6 If an interested party does not cooperate, or only cooperates partially, and thus relevant
information is being withheld, the result could be less favourable to thé party than if it had cooperated.

**36**

**2»^**
Article 19 '

Confidentiality

19.1 Any information which is by nature confidential, (for example, because its disclosure would be
of significant competitive advantage to a competitor or because its disclosure would have a significantly
adverse effect upon a person supplying the information or upon a person from whom he acquired the
information) or which is provided on a confidential basis by parties to an investigation shall, upon good
cause shown, be treated as such by the authorities.

19.2 Interested parties providing confidential information shall be required to furnish non-confidential
summaries thereof. These summaries shall be in sufficient detail to permit a reasonable understanding of
the substance of the information submitted in confidence. In exceptional circumstances, such parties may
indicate that such information is not susceptible of summary. In such exceptional circumstances, a
statement of the reasons why summarisation is not possible must be provided.

19.3 If it is considered that a request for œrifidentiality is not warranted and if the supplier of the
information is either unwilling to make the information available or to authorise its disclosure in
generalised or summary form, such information may be disregarded unless,it can be satisfactorily _-_
demonstrated from appropriate sources that the information is correct. Requests for confidentiality
should not be arbitrarily rejected,

19.4 This Article shall not preclude the disclosure of general information by the Community
authorities and in particular of the reasons on which decisions taken pursuant to this Regulation are
based, or disclosure of the evidence relied on by the Community authorities in so far as necessary to
explain those reasons in court proceedings. Such disclosure must take into account the legitimate interest
of the parties concerned that their business secrets should not be divulged.

19.5 The Council, the Commission and Member States, or the officials of any of these, shall not
reveal any information received pursuant to this Regulation for which confidential treatment has been
requested by its supplier, without specific permission from the supplier. Exchanges of information
between _the_ Commission and Member States or any information relating to consultations made pursuant
to Article 15 or any internal documents prepared by the authorities of the Community or its Member
States shall not be divulged except as specifically provided for in this Regulation.

19.6 Information received pursuant to this Regulation shall be used only for the purpose for which it
was requested.

**37**

Article20 " ^ ^

Disclosure

20.1 The complainants, importers, exporters and representatives of the exporting country may request
disclosure of the details underlying the essential facts and considerations, on the basis of which
provisional measures have been imposed. Requests for such disclosure shall be made in writing
immediately following the imposition of provisional measures and the disclosure shall be made in writing
as soon as possible thereafter.

20.2 The parties mentioned in paragraph 1, may request final disclosure of the essential facts and
considerations, on the basis of which it is intended to recommend the imposition of definitive measures,
or the termination of an investigation or proceedings without the imposition of measures, with particular
attention being paid to the disclosure of any facts or considerations which are different from those used
for any provisional measures.

20.3 Requests for final disclosure, as defined in paragraph 2, shall be addressed to the Commission in
writing and be received, in cases where a provisional duty has been applied, not later than one month
after publication of the imposition of that duty. Where a provisional duty has not been applied, parties
shall be provided with an opportunity to request final disclosure within time limits set by the
Commission.

20.4 Final disclosure shall be given in writing. It shall be made, with due regard paid to the protection
of confidential information, as soon as possible and, normally, not later than one month prior to a
definitive decision or the submission by the Commission of any proposal for final action pursuant to
Article 9. Where the Commission is not in a position to disclose certain facts or considerations at that
time, these shall be disclosed as soon as possible thereafter. Disclosure shall not prejudice any
subsequent decision which may be taken bv the Commission or the Council but where such decision is
based on any different facts and considerations, these shall be disclosed as soon as possible.

20.5 Representations made after final disclosure is given shall be taken into consideration only if
received within a period to be set by the Commission in each case, which shall be at least 10 days, due
consideration being given to the urgency of the matter.

**38**

_**3 c**_

Article 21 <*^ j .

Community interest

21.1 Under this Regulation, a determination as to whether the Community interest calls for
intervention shall be based on an appreciation of all the various interests taken as a whole, including the
interests of the domestic industry and users and consumers, and a determination under this Article shall
only be made where all parties have been given the opportunity to make their views known under
paragraph 2. In such an examination, the need to eliminate the trade distorting effects of injurious
dumping and to restore effective competition shall be given special consideration. Measures, as
determined on the basis of the dumping and injury found, may not be applied, where the authorities, on
the basis of all the information submitted, can clearly conclude that it is not in the Community interest to
apply such measures.

21.2 In order to provide a sound basis on which the authorities can take account of all views and
information in the decision on whether, or not, the imposition of measures is in the Communitv interest,
the complainants, importers, representative users and representative consumer organisations may, within
_the_ time limits specified in the notice of initiation of the anti-dumping investigation, make themselves
known and provide information to the Commission. Such information, or appropriate summaries thereof,
shall be made available to the other parties specified in this Article, and they shall be entitled to respond
to such information.

21.3 The parties which have acted in conformity with paragraph 2 may request a hearing. Such
requests may be granted when they are submitted within the time limits set in paragraph 2. and when
they set out the particular reasons, in terms of the Communitv interest why _the_ parties should be heard.

21.4 The parties which have acted in conformity with paragraph 2. may provide comments on the
application of any provisional duties imposed. Such comments shall be received within one month of the
application of such measures if they are to be taken into account and they, or appropriate summaries
thereof, shall be made available to other parties who shall be entitled to respond to such comments.

21.5 The Commission shall examine the information which is properly submitted, and the extent to
which it is representative, and the results of such analysis, together with an opinion on its merits, shall be
transmitted to the Advisory Committee. The balance of views expressed in _the_ Committee shall be taken
into account bv the Commission in any proposal made under Article 9.

21.6 The parties which have acted in conformity with paragraph 2. may request the facts and
considerations on which final decisions are likely to be taken to be made available to them. Such
information shall be made available to the extent possible and without prejudice to any subsequent
decision taken bv the Commission or the Council.

21.7 Under this Article, information shall only be taken into account where it is supported bv actual
evidence which substantiates its validity.

**39**

Article 22

Final provisions

This Regulation shall not preclude the application of:

(i) any special rules laid down in agreements concluded between the Community and third
countries;

(ii) the Community Regulations in the agricultural sector and of Regulation (EEC) No 1059/69 (^J.
(EEC) No 2730/75 ( [6] ); and (EEC) No 2783/75 ( [7] ); this Regulation shall operate by way of complement
to those Regulations and in derogation from any provisions thereof which preclude the application of
anti-dumping duties;

(iii) special measures, provided that such action does not run counter to obligations under the GATT.

**Article 23**

**Repeal** of **existing legislation**

Regulation (EC) No 2423/88, as amended by Regulation (EC) No 521 and Regulation (EC) No 522, is
hereby repealed. References to the repealed Regulation shall be construed as references to this
Regulation.

**Article 24**

**Entry into force**

This Regulation shall enter into force on the date determined by the decision on the entry into force of the
acts implementing the results of the Uruguay Round. It shall apply to proceedings already initiated.
However, the references to time limits for the initiation of proceedings and the imposition of provisional
duties, shall only apply after a date which the Council shall specify in a Decision to be adopted by a
qualified majority no later than 1 April 1995 on the basis of a Commission proposal to be submitted to
the Council once the necessary budgetary resources have been made available.

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

Done at Brussels,

5 OJNoL 141,12.06.1969, p. 1.
6 OJ No L 281,01.11.1975, p. 20.
7 OJNoL282,01.11.1975,p. 104.

**40**

- 2o?

**Commercial defence**

**Subsidies**

_**%s**_

**Explanatory memorandum**

**A.** **INTRODUCTION**

The Uruguay Round trade negotiations, concluded in 1994, have led to the new

Agreement on Subsidies and Countervailing Measures ("The Subsidies

Agreement") which, as regards countervailing measures, is required to be

implemented into Community legislation in order that, as agreed at Marrakech, it

can come into effect on 1 January 1995.

The Subsidies Agreement contains new and detailed rules on subsidies and

countervailing duty investigations, and in view of the extent of the changes and

to ensure an adequate and transparent implementation of the new rules, it is

considered necessary to transpose the language of the Subsidies Agreement into

Community legislation to the extent possible and for this purpose the Agreement,
rather than the existing Community legislation, Regulation (EC) No 2423/88 _[]]_ _,_ has

been taken as the basis for the proposed legislation.

Additions to the Subsidies Agreement have been, for the most part, been restricted

to : clarifications where the Agreement is unclear; incorporation of existing

provisions on the EU's rather unique procedures and decision-making, amended to

take account of Court judgements; and the amendment or incorporation of EU

specific rules on issues such as negligible import volumes, sampling, non
corporation, circumvention and Community interest, on which the Agreement is

silent, imprecise or where it merely gives an indication of minima. On several

issues, more detailed provisions from the new anti-dumping regulation are used in

this regulation, where there is no conflict with the provisions of the Subsidies

Agreement.

OJ No L 209, 2.9.1988, p. 1.

**2i<**

The Subsidies Agreement sets new standards for the imposition of countervailing

measures with its new and detailed rules on the definition of a subsidy,

countervailability and calculation, its increased procedural requirements for

initiation and subsequent investigation and its restrictions on the imposition of

provisional duties. Its implementation into Community legislation will, of course,

produce the same result. Moreover, the adoption of these new rules would,at the

same time, improve legal certainty through greater precision, extend transparency

and increase the rights of parties.

In the same vein, some of the new rules, such as on negligible import volumes

and Community interest, should further reinforce this effect of transparency and

legal certainty. Community industries would have a clear idea of the minimum

level of import volumes required both for complaints and final action. Moreover,

all interested parties would be made aware of their rights and obligations with

regard to the Community interest aspects of these cases, in that a structured

framework would be provided for the provision and treatment of information by

the authorities.

Furthermore, it is important that measures, once taken, should be effective, and in

this regard a new provision on circumvention has been added.

Finally, it will be noted that this draft countervailing duty regulation is, for the

first time, entirely separate from the proposed legislation on anti-dumping. This

development is justified by the far more detailed nature of the new Subsidies

Agreement, the increasingly distinct procedures with regard to CVD and anti
dumping investigations, and the consequent need to give the CVD instrument

greater autonomy.

Sli

**B.** **MAIN FEATURES OF DRAFT COUNTERVAILING DUTY**

**REGULATION**

**1.** **Definition of** **a** **subsidy (Article 2)**

The definition of a subsidy reproduces literally that contained in the Subsidies

Agreement, that is, a financial contribution by public authorities and a benefit to

enterprises which is derived from such financial contribution.

**2.** **Notion of** **a** **countervailable subsidy (Article 3)**

The conditions for countervailability (or non-countervailability, as the case may

be) also reproduce those of the Subsidies Agreement concerning specificity of

subsidies and the green list, as well as the so-called "green box" contained in the

Agreement on Agriculture.

**3.** **Calculation of the amount of** **a** **countervailable subsidy (Article 4)**

The provision on calculation of the amount of a countervailable subsidy espouses

the principle of "benefit to the recipient". This approach is now permitted by

Article 14 of the Subsidies Agreement, and will enhance the possibility of the

Community using countervailing duty actions compared to the "cost to the

government" approach. The "benefit to the recipient" approach is more in line

with the methodology employed in state aid cases in the Community.

**1 * V L -**

**4.** **Injury and Community industry (Articles 5 and 6)**

These provisions closely follow those of the Subsidies Agreement.

**5.** **Initiation** of proceedings (Article 7)

In addition to the basic criteria for initiating countervailing duty proceedings,

Paragraphs 5-7 also set out the conditions under which investigations can be

opened with regard to non-countervailable types of subsidy in order to determine

whether the criteria for non-countervailability have been met.

**6.** **Conclusion of investigations (Article 8)**

The Subsidies Agreement provides that investigations should normally be

concluded within 12 months, which conflicts with the 13 months envisaged for

EU investigations from 1995 onwards.

It is proposed to incorporate the provisions of the Agreement into this regulation

(Article 8.9), although provisional duties would still have to be applied with 9

months (Article 9.1).

**7.** **Undertakings (Article 10)**

(a) In countervailing duty investigations, undertakings may be. accepted from

Governments or exporters.

_**m**_

(b) Over the years, there have been continual problems on what to do in cases where

exporters have violated or withdrawn undertakings. In such circumstances, it is

considered that the Community should be entitled to impose definitive duties based

on the findings of the previous investigation, otherwise an exporter which is

violating its undertaking could end up in a more advantageous position than its

rivals which may be faithfully applying the undertakings. Moreover, carrying out a

completely new investigation based on new facts is a time-consuming affair which

should only be undertaken where the circumstances justify it. Violation does not

appear to be one of these circumstances.

The new provisions set out in Articles 10.9 and 10.10 of the draft text would

permit the imposition of definitive duties in cases of proven violation or

withdrawal though, of course, the exporter's rights would be safeguarded in that

he would be entitled to ask for a review if the circumstances with regard to

subsidization or injury have changed. Moreover, the change in measures would

not generate a new 5 year "sunset" period. Where violation is only suspected, the

remedy is a provisional duty while the matter is under investigation.

**8.** **Negligible import volumes and de minimis subsidy (Article 11).**

(a) This Regulation takes over the negligible import volumes for developing countries

set out in the Subsidies Agreement. It also takes over the provision of the

Agreement that a subsidy amount of less than 1% ad-valorem is de minimis.

**,^M**

(b) It is proposed not to define developing countries for the purpose of this

Regulation..

9. **Reviews and refunds (Article 13)**

(a) The provisions on reviews and refunds are broadly in line with those of the anti
dumping regulation, with one exception.

(b) As regards accelerated reviews for new exporters (Section C), the Subsidies

Agreement is far less explicit than the Anti-Dumping Agreement on the question

of new exporters. Article 19.3 states only that :

_"Any exporter whose exports are subject to a definitive countervailing duty but_

_who was not actually investigated for reasons other than a refusal to co-operate,_

_shall be entitled_ _to_ _an expedited review in order that the investigating authorities_

_promptly establish an individual countervailing duty rate for that_ _exporter._ _"_

_**IK**_

There is no equivalent to the anti-dumping provisions which stipulate that the

exporter must not have exported to the Community during the investigation

period and must not be related to other exporters; neither is it stated that duties

must not be collected during the review period.

In these circumstances, it is proposed to maintain a text based on the Subsidies

Agreement.

**10.** **Circumvention (Article 14)**

Anti-circumvention measures are not mentioned in the Subsidies Agreement, and

the appropriateness of measures against the circumvention of countervailing

duties has to be evaluated on the basis of certain specified conditions. It should

also be considered that the circumvention of countervailing duties, which result

from a subsidy granted by a Government, by exporters, is a particular situation,

which needs to be analysed in its proper context.

Therefore, the anti-circumvention provision of this regulation emphasises the

possibility of taking measures to prevent circumvention of countervailing duties

through practices, either assembly in third countries or the Community, for which

there is insufficient due cause or economic justification other than the imposition

of the duty. If the remedial effects of duties are undermined, measures may be

taken, provided that the imported like product and/or parts still benefit from a

countervailable subsidy.

This provision provides a solid safeguard against circumvention of countervailing

duties, and enables the Community to ensure that measures remain effective.

The procedural part of the Article is in line with the anti-dumping regulation.

**2 ^**

**11.** **Sampling (Article 18)**

There are no specific provisions on sampling in the Subsidies Agreement.

However, it is desirable to establish rules for sampling in countervailing duty

cases, since the same problems of large numbers of exporters and importers which

arise in anti-dumping investigations may also arise in countervailing duty

proceedings. Therefore it is proposed to transpose the anti-dumping regulation's

provisions on sampling into the countervailing duty regulation.

**12.** **Non-co-operation (Article 19)**

Article 12.7 of the Subsidies Agreement only contains the following brief

reference to this issue :

_"In cases in which any interested Member or interested party refuses access_ _to,_ _or_

_otherwise does not provide, necessary information within a reasonable period or_

_significantly impedes the_ _investigation,_ _preliminary and_ _final_ _determinations,_

_affirmative or negative, may be made on the basis of the facts available._ _"_

The same provision exists in the Anti-Dumping Agreement, but is supplemented

by Annex II to that Agreement, which does not appear in the Subsidies

Agreement.

As regards the countervailing duty regulation, it is proposed to take over the anti
dumping regulation's provisions on non-co-operation, given that these do not

conflict with Subsidy Agreement's provision, but simply expand on it, and are

aimed at greater transparency and predictability of the Community's actions on

this issue.

**m**

**13.** **Confidentiality (Article 20)**

Provisions on confidentiality are based on the provisions of the Subsidies

Agreement, which are slightly different from those of the Anti-Dumping

Agreement because of the direct involvement of Governments in countervailing

duty proceedings, and therefore of the presence, in the record of an investigation,

of government confidential, as well as business confidential, information. In

particular, it will be specified that details of all bilateral consultations with

Governments under the Subsidies Agreement are confidential.

**14.** **Simultaneous imposition of anti-dumping and countervailing duties (Article**

**15.1)**

The basic provision of GATT Article VI:5 is included in the CVD regulation.

**15.** **Relationship between countervailing duty measures and multilateral**

**remedies (Article 23)**

A provision has been inserted to permit withdrawal of countervailing duties in

cases in which a multilateral subsidy action has been carried out (Panel) and

measures other than countervailing duties have been taken as a consequence of

such action (since countervailing duty investigations and GATT panels can be

carried out in parallel, but only one type of remedy is allowed under the Subsidies

Agreement).

**«MS**

**16.** **Other**

It should be noted that the provisions on suspension of measures and registration

of imports (Article 15) and Community interest (Article 22), are in line with the

anti-dumping provisions, as are most of the procedural rules in this regulation

which are not specifically referred to in this section.

C. CONCLUSION

In order to implement the 1994 Agreement on Subsidies and Countervailing

Measures as concluded as a result of the Uruguay Round of multilateral trade

negotiations, and to take account of the issues set out above, the Commission

submits to the Council

a proposal to replace the Community's basic countervailing duty legislation.

**10**

_**l'\**_ _**[c]**_ _**)**_

**PROPOSAL FOR :**

**COUNCIL REGULATION (EC) N°** **/94** **9 4 /** **0231 (ACC)**

**on protection against subsidised imports**

**from countries not members of** **the** **European Community.**

The Council of the European Union

Having regard to the Treaty establishing the European Community, and in particular

Article 113 thereof,

Having regard to the Regulations establishing the common organisation of agricultural

markets and the Regulations adopted under Article 235 of the Treaty applicable to

goods manufactured from agricultural products, and in particular the provisions of those

Regulations which allow for derogation from the general principle that protective

measures at frontiers may be replaced solely by the measures provided for in those

Regulations,

Having regard to the proposal from the Commission,

Having regard to the opinion of the European Parliament,

Whereas, by Regulation (EEC) N° 2423/880), as amended by Regulation (EC) N°
521/94( [2] ) and Regulation (EC) N° 522/94( [3] ) the Council adopted common rules for

protection against dumped or subsidised imports from countries which are not members

of the European Economic Community;

0) O.J. L209, 2.8.1988, c J .
( [2] )O.J.L66, 16.3.1994, p. 7
( [3] )O.J. L66, 16.3.1994, p. 10

_CA-xÀ-^s_

Whereas, these rules were adopted in accordance with existing international obligations,

in particular those arising from Article VI of the General Agreement on Tariffs and

Trade ("the GATT"), from the Agreement on Implementation of Article VI of the

GATT ("the 1979 Anti-Dumping Code") and from the Agreement on Interpretation and

Application of Articles VI, XVI and XXIII of the GATT ("the 1979 Subsidies Code");

Whereas, the conclusion of the Uruguay Round of multilateral trade negotiations has led

to the establishment of the World Trade Organisation ("the WTO");

Whereas, Annex 1A to the Agreement establishing the WTO ("the WTO Agreement")

contains, _inter_ _alia,_ the General Agreement on Tariffs and Trade 1994 ("the GATT

1994"), an Agreement on Agriculture ("the Agreement on Agriculture"), a new

Agreement on implementation of Article VI of the GATT 1,994 ("the Anti-Dumping

Agreement"), and a new Agreement on Subsidies and Countervailing Measures ("the

Subsidies Agreement");

Whereas, in order to reach greater transparency and effectiveness in the application by

the Community of the rules laid down in respectively the Anti-Dumping Agreement and

the Subsidies Agreement, it is considered necessary to adopt two separate Regulations

which will lay down in sufficient detail the requirements for the application of each of

these commercial defence instruments;

Whereas, it is therefore appropriate to amend Community rules governing the

application of countervailing measures in the light of the new multilateral rules, _inter_

_alia_ with regard to the procedures for initiation of proceedings and the conduct of

subsequent investigations, including the establishment and treatment of the facts, the

application of provisional measures, the imposition and collection of countervailing

duties, the duration and review of countervailing measures, and the public disclosure of

information relating to countervailing investigations;

_**1**_ _**1**_

Whereas, in view of the extent of the changes brought about by the new Agreements

and to ensure an adequate and transparent implementation of the new rules, it is

appropriate to transpose the' language of the new Agreements into Community

legislation to the extent possible;

Whereas, furthermore it seems advisable to explain, in adequate detail, when a subsidy

shall be deemed to exist, according to which principles it shall be countervailable (in

particular whether the subsidy has been granted specifically), and according to which

criteria the amount of the countervailable subsidy shall be calculated;

Whereas, it is clear that in determining the existence of a subsidy it is necessary to

demonstrate that there has been a financial contribution by a government or any public

authority within the territory of a country, or that there has been any form of income or

price support in the sense of Article XVI of the GATT 1994, and that a benefit has

thereby been conferred to the recipient enterprise;

Whereas, it is necessary to explain in sufficient detail which kind of subsidies are not

countervailable and which procedure shall be followed if during an investigation it is

determined that an investigated enterprise has received non-countervailable subsidies;

Whereas, the Subsidies Agreement states that the provisions concerning non
countervailable subsidies shall cease to apply five years after the date of entry into force

of the WTO Agreement, unless they are extended by mutual agreement of the Members

of the WTO, and that it may therefore be necessary to amend this Regulation

accordingly, if the validity of those provisions is not so extended;

Whereas, the measures listed in Annex 2 to the Agreement on Agriculture are non

countervailable, to the extent provided for in that Agreement;

_**HZ**_

Whereas, it is desirable to lay down clear and detailed guidance on the factors which

may be relevant for the determination of whether the subsidised imports have caused

material injury or are threatening to cause injury; and whereas, in demonstrating that the

volume and price levels of the imports concerned are responsible for injury sustained by

a Community industry, attention should be given to the effect of other factors and in

particular existing market conditions in the Community;

Whereas, it is advisable to define the term "Community industry" and provide that

parties related to exporters may be excluded from such industry and to define the term

"related"; and whereas it is also necessary to provide for countervailing duty action to be

taken with regard to producers in a region of the Community and to lay down guidelines

on the definition of such a region;

Whereas, it is necessary to set down who may lodge a countervailing duty complaint,

including the extent to which it sholilfi $fc supported by the Community industry, and

the information on countervailable subsidies, injury and causality which such complaint

should contain; and whereas it is also expedient to specify the procedures with regard to

the rejection of complaints or the initiation of proceedings;

Whereas, it is necessary to lay down how interested parties shall be given notice of the

information which the authorities require, ample opportunity to present all relevant

evidence and a full opportunity for the defence of their interests; whereas, it is also

desirable to set out clearly the rules and procedures to be followed during the

investigation, in particular that interested parties have to make themselves known,

present their views and submit information within specified time limits, if such views

and information are to be taken into account; and whereas it is also appropriate to set

out the conditions under which an interested party may have access to, and comment on,

information presented by other interested parties; whereas there should also be

cooperation between the Member States and the Commission with regard to the

collection of information;

**22**

Whereas, it is necessary to lay down the conditions under which provisional duties may

be imposed, including that they may not be imposed sooner than 60 days from initiation

and no later than 9 months from initiation; whereas, such duties may in all cases be

imposed by the Commission only for a four month period;

Whereas, it is necessary to specify procedures for the acceptance of undertakings which

eliminate or offset the countervailable subsidies and injury instead of the imposition of

provisional or definitive duties; whereas it is also appropriate to lay down the

consequences of violation or withdrawal of undertakings and that provisional duties

may be imposed in cases of suspected violation or where further investigation is

necessary to complete the findings; whereas, in accepting undertakings, care should be

taken that the proposed undertakings, and their enforcement, do not lead to anti
competitive behaviour;

Whereas, in order to reflect the provisions of tlie Subsidies Agreement, it is necessary to

provide for the termination of cases, without or without measures, normally within

twelve months, and in no case later than eighteen months from the initiation of the

investigation; whereas, an investigation should be terminated in case the amount of the

subsidy is found to be _de minimis_ or if, particularly in case of imports originating in

developing countries, the volume of subsidised imports or the injury is negligible, and it

is appropriate to define these criteria; whereas, where measures are to be imposed, it is

necessary to provide for the termination of investigations and to lay down that measures

should be less than the amount of countervailable subsidies if such lesser amount would

remove the injury, as well as to specify the method of calculating the level of measures

in cases of sampling;

**20**

Whereas, it is necessary to provide for the retroactive collection of provisional duties as

deemed appropriate and to define the circumstances which may trigger the retroactive

application of duties to avoid the undermining of the definitive measures to be applied;

whereas it is also necessary to provide that duties may be applied retroactively in cases

of violation or withdrawal of undertakings;

Whereas, it is necessary to provide that measures shall lapse after five years unless a

review investigation indicates that they should be maintained; whereas, it is also

necessary to provide, in cases where sufficient evidence is submitted of changed

circumstances, for interim reviews or for investigations to determine whether refunds of

countervailing duties are warranted;

Whereas, even though the Subsidies Agreement does not contain provisions concerning

circumvention of countervailing measures, the possibility of such circumvention exists,

in terms similar, albeit not identical, to the circumvention of anti-dumping measures;

whereas it appears therefore appropriate to enact an anti-circumvention provision in this

Regulation;

Whereas, it is expedient to permit the suspension of countervailing measures where

there is a temporary change in market conditions which make the continued imposition

of such measures temporarily inappropriate;

Whereas, it is necessary to provide that imports under investigation may be made

subject to registration upon importation to enable measures to be subsequently applied

against such imports;

Whereas, to ensure a proper enforcement of measures, it is necessary that Member

States monitor and report to the Commission the import trade of products subject to

investigation and subject to measures and the amount of duties collected under this

regulation;

_tzç_

Whereas, it is necessary to provide for consultations of an Advisory Committee at

regular and specified stages of the investigation; whereas the committee shall consist of

representatives of Member States with a representative of the Commission as chairman;

Whereas, it is expedient to provide for verification visits to check information submitted

on countervailable subsidies and injury, though such visits should be dependent on

proper replies to questionnaires being received;

Whereas, it is essential to provide for sampling in cases where the number of parties or

transactions are large in order to permit a timely completion of investigations;

Whereas, it is necessary to provide that for parties who do not cooperate satisfactorily

other information may be used to establish findings and such information may be less

favourable to the party than if it had cooperated;

Whereas, provision should be made for the treatment of confidential information so that

business or governmental secrets are not divulged;

Whereas, it is essential that provision is made for the proper disclosure of the essential

facts and considerations to parties which qualify for such treatment and that such

disclosure is made, with due regard to the decision-making process in the Community,

within a time period which permits parties to defend their interests;

Whereas, it is prudent to provide for an administrative system under which arguments

can be presented in relation to whether measures are in the Community interest,

including the interests of consumers, and to lay down the time periods within which

such information has to be presented as well as the disclosure rights of the parties

concerned;

**4%**

**Whereas, it is imperative to link the implementation of time limits for the lodging of**

**complaints, the initiation of proceedings and the imposition of provisional duties to the**

**establishment of the necessary administrative structure within the Commission's**

**services;** **whereas the Council, therefore, should specify, in a decision to be adopted by**

**qualified majority no later than** **1** **April** **1995,** **when these time limits shall apply;**

**Whereas, in applying the rules of the Subsidies Agreement it is essential, in order to**

**maintain the balance of** **rights** **and obligations which this Agreement sought to establish,**

**that the Community take account of their interpretation by the Community's major**

**trading** **partners,** **as reflected in legislation or established practice,**

**HAS ADOPTED THIS REGULATION :**

21*3

Article 1

Principles

1. This Regulation lays down provisions for protection against subsidised imports

from countries not members of the European Community. A countervailing duty may be

imposed for the purpose of offsetting any subsidy granted, directly or indirectly, for the

manufacture, production, export or transport of any product whose release for free

circulation in the Community causes injury.

2. For the purpose of this Regulation, a product is considered as being subsidised if

it benefits from a countervailable subsidy as defined in Articles 2 and 3 of this

Regulation.

3. Such subsidy may be granted by the Government of the country of origin of the

imported product, or by the Government of an intermediate country from which the

product is exported to the Community, known for the purpose of this Regulation as "the

country of export".

4. Notwithstanding the above, where products are not directly imported from the

country of origin but are exported to the Community from an intermediate country, the

provisions of this Regulation shall be fully applicable and the transaction or transactions

shall, where appropriate, be regarded as having taken place between the country of

origin and the Community.

5. For the purpose of this Regulation the term "like product" shall be interpreted to

mean a product which is identical, i.e. alike in all respects to the product under

consideration, or in the absence of such a product, another product which although not

alike in all respects, has characteristics closely resembling those of the product under

consideration.

**1** _**1**_ _**\**_

Article 2

Definition of a subsidy

A subsidy shall be deemed to exist if:

1. (a) there is a financial contribution by a government or any public body within

the territory of the country of origin or export (hereinafter referred to as

"government"), i.e. where:

(i) a government practice involves a direct transfer of funds (e.g., grants, loans,

and equity infusion), potential direct transfers of funds or liabilities (e.g.,

loan guarantees);

(ii) government revenue that is otherwise due, is foregone or not collected (e.g.,

fiscal incentives such as tax credits); in this regard, the exemption of an

exported product from duties or taxes borne by the like product when

destined for domestic consumption, or the remission of such duties or taxes

in amount not in excess of those which have been accrued, shall not be

deemed to be a subsidy, provided that such an exemption is granted in

accordance with the provisions of Annexes I-III to this Regulation;

(iii) a government provides goods or services other than general infrastructure,

or purchases goods;

(iv) a government ' '   

makes payments to a funding mechanism, or

entrusts or directs a private body to carry out one or more of the type

of functions illustrated in (i) to (iii) above which would normally be

vested in the government, and

**10**

_2-1S._

the practice, in no real sense, differs from practices normally followed by

governments;

or

(b) there is any form of income or price support in the sense of Article XVI of

the GATT 1994,

and

2. a benefit is thereby conferred.

**11**

**2 ^**

**Article 3**

**Countervailability** **of** **subsidies**

**A. PRINCIPLE**

1. Subsidies as defined by Article-2 shall be subject to countervailing measures only

if they are specific, as defined in Paragraphs 2 to 4 below.

**B.** **SPECIFICITY**

2. In order to determine whether a subsidy, as defined in Article 2 above is specific

to an enterprise or industry or group of enterprises or industries (hereinafter referred to

as "certain enterprises") within the jurisdiction of the granting authority, the following

principles shall apply:

(a) Where the granting authority, or the legislation pursuant to which the

granting authority operates, explicitly limits access to a subsidy to certain

enterprises, such subsidy shall be specific.

(b) Where the granting authority, or the legislation pursuant to which the

granting authority operates, establishes objective criteria or conditions

governing the eligibility for, and the amount of, a subsidy, specificity shall

not exist, provided that the eligibility is automatic and that such criteria and

conditions are strictly adhered to.

For the purpose of this Article, objective criteria or conditions mean criteria

or conditions which are neutral, which do not favour certain enterprises over

others, and which are economic in nature and horizontal in application, such

as number of employees or size of enterprise.

**12**

_lyi_

The criteria or conditions must be clearly spelled out in law, regulation, or

other official document, so as to be capable of verification.

(c) If, notwithstanding any appearance of non-specificity resulting from the

application of the principles laid down in subparagraphs (a) and (b) above,

there are reasons to believe that the subsidy may in fact be specific, other

factors may be considered. Such factors are: use of a subsidy programme by

a limited number of certain enterprises, predominant use by certain

enterprises, the granting of disproportionately large amounts of subsidy to

certain enterprises, and the manner in which discretion has been exercised

by the granting authority in the decision to grant a subsidy. In this regard,

information on the frequency with which applications for a subsidy are

refused or approved and the reasons for such decisions shall, in particular,

be considered.

In applying this provision, account shall be taken of the extent of

diversification of economic activities within the jurisdiction of the granting

authority, as well as of the length of time during which the subsidy

programme has been in operation.

3. A subsidy which is limited to certain enterprises located within a designated

geographical region within the jurisdiction of the granting authority shall be specific.

The setting or change of generally applicable tax rates by all levels of government

entitled to do so shall not be deemed to be a specific subsidy for the purposes of this

Regulation.

4. Irrespective of the provisions of paragraphs 2 and 3 above, the following subsidies

shall be deemed to be specific:

(a) Subsidies contingent, in law or in fact, whether solely or as one of several

other conditions, upon export performance, including those illustrated in

Annex I to this Regulation.

**13**

_**l ^**_

Subsidies shall be considered to be contingent in fact upon export

performance when the facts demonstrate that the granting of a subsidy,

without having been made legally contingent upon export performance, is in

fact tied to actual or anticipated exportation or export earnings. The mere

fact that a subsidy is accorded to enterprises which export shall not for that

reason alone be considered to be an export subsidy within the meaning of

this provision.

(b) Subsidies contingent, whether solely or as one of several other conditions,

upon the use of domestic over imported goods.

5. Any determination of specificity under the provisions of this Article shall be

clearly substantiated on the basis of positive evidence.

C. NON-COUNTERVAILABLE SUBSIDIES

6. The following subsidies shall not be subjected to countervailing measures:

(a) Subsidies which are not specific within the meaning of paragraphs 2 and 3

of this Article;

(b) Subsidies which are specific, within the meaning of paragraphs 2 and 3 of

this Article, but which meet the conditions provided for in paragraphs 7, 8

or 9 below.

(c) The element of subsidy which may exist in any of the measures listed in

Annex IV to this Regulation.

**14**

**B^**

7. Subsidies for research activities conducted by firms or by higher education or

research establishments on a contract basis with firms shall not be subject to

countervailing measures, if the subsidies cover not more than 75 per cent of the costs of

industrial research or 50 per cent of the costs of pre-competitive development activity,

and provided that such subsidies are limited exclusively to:

(i) personnel costs (researchers, technicians and other supporting staff employed

exclusively in the research activity);

(ii) costs of instruments, equipment, land and buildings used exclusively and

permanently (except when disposed of on a commercial basis) for the research

activity;

(iii) costs of consultancy and equivalent services used exclusively for the research

activity, including bought-in research, technical knowledge, patents, etc.;

(iv) additional overhead costs incurred directly as a result of the research activity;

(v) other running costs (such as those of materials, supplies and the like), incurred

directly as a result of the research activity.

For the purpose of this paragraph:

(a) The allowable levels of non-countervailable subsidy referred to in this paragraph

shall be established by reference to the total eligible costs incurred over the

duration of an individual project.

In case of programmes which span both "industrial research" and "pre-competitive

development activity", the allowable level of non-countervailable subsidy shall

not exceed the simple average of the allowable levels of non-countervailable

subsidy applicable to the above two categories, calculated on the basis of all

eligible costs as set forth in items (i)-(v) of this paragraph.

**15**

XVLl

(b) The term "industrial research" means planned search or critical investigation

aimed at discovery of new knowledge, with the objective that such knowledge

may be useful in developing new products, processes or services, or in bringing

about a significant improvement to existing products, processes or services.

(c) The term "pre-competitive development activity" means the translation of

industrial research findings into a plan, blueprint or design for new, modified or

improved products, procteEsesH or services whether intended for sale or use,

including the creation ofm; first prototype which would not be capable of

commercial use. It may further include the conceptual formulation and design of

products, processes or services alternatives and initial demonstration or pilot

projects, provided that these same projects cannot be converted or.used for

industrial application or commercial exploitation. It does not include routine or

periodic alterations to existing products, production lines, manufacturing process,

services, and other on-going operations even though those alterations may

represent improvements. The provisions of this paragraph shall not apply to civil

aircraft (as defined in the 1979 Agreement on Trade in Civil Aircraft, as amended,

or in any later Agreement amending or replacing such Agreement).

8. Subsidies to disadvantaged regions within the territory of the country of origin

and/or export, given pursuant to a general framework of regional development, and

which would be non-specific if the criteria laid down in paragraphs 2 and 3 of this

Article were applied to each eligible region concerned, shall not be subject to

countervailing measures provided that:

(i) each disadvantaged region is a clearly designated contiguous geographical area

with a definable economic and administrative identity;

**16**

_**& \**_

(ii) the region is considered as disadvantaged on the basis of neutral and objective

criteria, indicating that the region's difficulties arise out of more than temporary

circumstances; such criteria must be clearly spelled out in law, regulation, or other

official document, so as to be capable of verification;

(iii) the criteria include a measurement of economic development which shall be based

on at least one of the following factors:

one of either income per capita or hou^iold income per capita, or GDP per

capita, which must not be above 85 per cent of the average for the territory

of the country of origin or export concerned;

unemployment rate, which must be at least 110 per cent of the average for

the territory of the country of origin or export concerned;

as measured over a three-year period: such measurement, however, may be a

composite one and may include other factors.

For the purpose of this paragraph :

(a) A "general framework of regional development" means that regional subsidy

programmes are part of an internally consistent and generally applicable regional

development policy and that regional development subsidies are not granted in

isolated geographical points having no, or virtually no influence on the

development of a region.

(b) "Neutral and objective criteria" means criteria which do not favour certain regions

beyond what is appropriate for the elimination or reduction of regional disparities

within the framework of the regional development policy. In this regard, regional

subsidy programmes shall include ceilings on the amount of subsidy which can be

granted to

**17**

_ïtto_

each subsidised project. Such ceilings must be differentiated according to the

different levels of development of eligible regions and must be expressed in terms

of investment costs or the cost of job creation. Within such ceilings, the

distribution of subsidy shall be sufficiently broad and even to avoid the

predominant use of a subsidy by, or the granting of disproportionately large

amounts of subsidy to, certain enterprises. This sub-paragraph shall be applied in

the light of the criteria set out in paragraphs 2 and 3 of this Article.

9. Subsidies to promote adaptation of existing facilities to new environmental

requirements imposed by law ancj/or regulations which result in greater constraints and

financial burden on firms, shall not be subject to countervailing measures, provided that

the subsidy:

(i) is a one-time non-recurring measure; and

(ii) is limited to 20 per cent of the cost of adaptation; and

(iii) does not cover the cost of replacing and operating the subsidised investment,

which must be fully borne by firms; and

(iv) is directly linked to and proportionate to a firm's planned reduction of nuisances

and pollution, and does not cover any manufacturing cost savings which may be

achieved; and

(v) is available to all firms which can adopt the new equipment and/or production

processes.

For the purpose of this paragraph the term "existing facilities" means facilities having

been in operation for at least two years at the time when new environmental

requirements are imposed.

**18**

13}

**Article 4**

**Calculation of** **the** **amount of** **the** **countervailable subsidy**

**A. PRINCIPLE**

1. The amount of countervailable subsidies, for the purpose of this Regulation, shall

be calculated in terms of the benefit conferred to the recipient which is found to exist

during the investigation period for subsidisation. Normally this period shall be the most

recent accounting year of the beneficiary, but may be any other period of at least six

months prior to the initiation of the investigation for which reliable financial and other

relevant data are available.

**B.** **CALCULATION OF BENEFIT TO THE RECIPIENT**

2. As regards the calculation of benefit to the recipient, the following rules shall

apply:

(a) Government provision of equity capital shall not be considered as conferring

a benefit, unless the investment can be regarded as inconsistent with the

usual investment practice (including for the provision of risk capital) of

private investors in the territory of the country of origin and/or export.

.(b) A loan by a government shall not be considered as conferring **a** benefit,

unless there is a difference between the amount that the firm receiving the

loan pays on the government loan and the amount that the firm would pay

for a comparable commercial loan which the firm could actually obtain on

the market. In this case the benefit shall be the difference between the two

amounts.

**19**

_**2M**_

(c) A loan guarantee by a government shall not be considered as conferring a

benefit, unless there is a difference between the amount that the firm

receiving the guarantee pays on a loan guaranteed by the government and

the amount that the firm would pay for a comparable commercial loan

absent the government guarantee. In this case the benefit shall be the

difference between these two amounts adjusted for any differences in fees.

(d) The provision of goods or services or purchases of goods by a government

shall not be considered as-conferring a benefit unless the provision is made

for less than adequate remuneration, or the purchase is made for more than

adequate remuneration. The adequacy of remuneration shall be determined

in relation to prevailing market conditions for the good or service in

question in the country of provision or purchase (including price, quality,

availability, marketability, transportation and other conditions of purchase

or sale).

C. GENERAL PROVISIONS ON CALCULATION

3. The amount of countervailable subsidies shall be determined according to the

following provisions

(a) The amount of the countervailable subsidies shall be determined per unit of

the subsidised product exported to the Community.

(b) In establishing this amount the following elements may be deducted from

the total subsidy:

(i) any application fee, or other costs necessarily incurred in order to

qualify for, or to obtain, the subsidy;

**20**

**Xà5**

(ii) export taxes, duties or other charges levied on the export of the

product to the Community specifically intended to offset the subsidy.

Where an interested party claims a deduction, it must prove that the claim is

justified.

(c) Where the subsidy is not granted by reference to the quantities

?
manufactured, produced, exported or transported, the amount of

countervailable subsidy shall be determined by allocating the value of the

total subsidy, as appropriate, over the level of production, sales or exports of

the products concerned during the investigation period for subsidisation.

(d) Where the subsidy can be linked to the acquisition or future acquisition of

fixed assets, the amount of the countervailable subsidy shall be calculated

by spreading the subsidy across a period which reflects the normal

depreciation of such assets in the industry concerned. The amount so

calculated which is attributable to the investigation period, inoiuding that

which derives from fixed assets acquired before this period, shall be

allocated as described in sub-paragraph 3(c).

Where the assets are non-depreciating, the subsidy shall be valued as an

interest-free loan, and be treated in accordance with paragraph 2(b) of this

Article.

(e) Where a subsidy cannot be linked to the acquisition of fixed assets, the

amount of the benefit received during the investigation period shall in

principle be attributed to this period, and allocated as described in sub
paragraph 3(c), unless special circumstances arise justifying attribution over

a different period.

**21**

_llfC_

**Article 5**

**Determination of Injury**

1. Under this Regulation, the term "injury" shall, unless otherwise specified, be

taken to mean material injury to the Community industry, threat of material injury to the

Community industry or material retardation of the establishment of such an industry,

and shall be interpreted in accordance with the provisions of this Article.

2. A determination of injury shall be based on positive evidence and involve an

objective examination of both (a) the volume of the subsidised imports and the effect of

the subsidised imports on prices in the Community market for like products, and (b) the

consequent impact of these imports on the Community industry.

3. With regard to the volume of the subsidised imports, consideration shall be given

as to whether there has been a significant increase in subsidised imports, either in

absolute-terms or relative to production or consumption in the Community. With regard

to the effect of the subsidised imports on prices, consideration shall be given as to

whether there has been a significant price undercutting by the subsidised imports as

compared with the price of a like product of the Community, or whether the effect of

such imports is otherwise to depress prices to a significant degree or prevent price

increases, which otherwise would have occurred, to a significant degree. No one or

several of these factors can necessarily give decisive guidance.

4. Where imports of a product from more than one country are simultaneously

subject to countervailing duty investigations, the effects of such imports shall be

cumulatively assessed only if it is determined that (1) the amount of countervailable

subsidies established in relation

**22**

**M**

to the imports from each country is more than _de minimis_ as defined in paragraph 3 of

Article 11 and that the volume of imports from each country is not negligible and (2) a

cumulative assessment of the effects of the imports is appropriate in light of the

conditions of competition between imported products and the conditions of competition

between the imported products and the like Community product.

5. The examination of the impact of the subsidised imports on the Community

industry concerned shall include an evaluation of all relevant economic factors and

indices having a bearing on the state of the industry, including: the fact that an industry

is still in the process of recovering from the effects of past subsidisation or dumping, the

magnitude of the amount of countervailable subsidies, actual and potential decline in

sales, profits, output, market share, productivity, return on investments, utilisation of

capacity; factors affecting Community prices; actual and potential negative effects on

cash flow, inventories, employment, wages, growth, ability to raise capital or

investments and, in the case of agriculture, whether there has been an increased burden

on Government support programmes. This list is not exhaustive, nor can one or several

of these factors necessarily give decisive guidance.

6. It must be demonstrated, from all the relevant evidence presented in relation to

paragraph 2, that the subsidised imports are causing injury within the meaning of this

Regulation. Specifically, this shall entail a demonstration that the volume and/or price

levels identified under paragraph 3 are responsible for an impact on the Community

industry as provided for in paragraph 5, and that this impact exists to a degree which

enables it to be classified as material.

7. Known factors other than the subsidised imports which at the same time are

injuring the Community industry shall also be examined to ensure that injury caused by

these other factors is not attributed to the subsidised imports under paragraph 6. Factors

which may be considered in this respect include, inter alia, the volume and prices of

non-subsidised imports, contraction in demand or changes in the patterns of

consumption, trade restrictive practices of and competition between the foreign and

Community producers, developments in technology and the export performance and

productivity of the Community industry.

**23**

lip.

8. The effect of the subsidised imports shall be assessed in relation to the production

of the Community industry of the like product when available data permit the separate

identification of that production on the basis of such criteria as the production process,

producers' sales and profits. If such separate identification of that production is not

possible, the effects of the subsidised imports shall be assessed by the examination of

the production of the narrowest group or range of products, which includes the like

product, for which the necessary information can be provided.

9. A determination of a threat of material injury shall be based on facts and not

merely on allegation, conjecture or remote possibility. The change in circumstances

which would create a situation in which the subsidy would cause injury must be clearly

foreseen and imminent.

10. In making a determination regarding the existence of a threat of material injury,

consideration should be given to, inter alia, such factors as:

(i) the nature of the subsidy or subsidies in question and the trade effects likely

to arise therefrom;

(ii) a significant rate of increase of subsidised imports into the Community

market indicating the likelihood of substantially increased imports;

(iii) sufficient freely disposable or an imminent, substantial increase in capacity

of the exporter indicating the likelihood of substantially increased

subsidised exports to the Community market, taking into account the

availability of other export markets to absorb any additional exports;

(iv) whether imports are entering at prices that would, to a significant degree,

depress prices or prevent price increases which otherwise would have

occurred, and would likely increase demand for further imports; and

**24**

**ilfi**

(v) inventories of the product being investigated.

11. No one of the factors listed above by itself can necessarily give decisive guidance

but the totality of the factors considered must lead to the conclusion that further

subsidised exports are imminent and that, unless protective action is taken, material

injury would occur.

**25**

**2-1,3**

Article 6

Definition of Community Industry

1. For the purposes of this Regulation, the term "Community industry" shall be

interpreted as referring to the Community producers as a whole of the like product or to

those of them whose collective output of the products constitutes a major proportion, as

defined in paragraph 8 of Article 7, of the total Community production of those

products, except that

(i) when producers are related to the exporters or importers or are themselves

importers of the allegedly subsidised product, the term "the Community

industry" may be interpreted as referring to the rest of the producers;

(ii) in exceptional circumstances the territory of the Community may, for the

production in question, be divided into two or more competitive markets

and the producers within each market may be regarded as a separate

industry if (a) the producers within such market sell all or almost all of their

production of the product in question in that market, and (b) the demand in

that market is not to any substantial degree supplied by producers of the

product in question located elsewhere in the Community. In such

circumstances, injury may be found to exist even where a major proportion

of the total Community industry is not injured, provided there is a

concentration of subsidised imports into such an isolated market and

provided further that the subsidised imports are causing injury to the

producers of all or almost all of the production within such market.

2. For the purpose of paragraph 1, producers shall be considered to be related to

exporters or importers only if (a) one of them directly or indirectly controls the other; or

(b) both of them are directly or indirectly controlled by a third person; or (c) together

they directly or indirectly control a third person, provided that there are grounds for

believing or suspecting

**26**

**2 ^**

that the effect of the relationship is such as to cause the producer concerned to behave

differently from non-related producers. For the purpose of this paragraph, one shall be

deemed to control another when the former is legally or operationally in a position to

exercise restraint or direction over the latter.

3. Where the Community industry has been interpreted as referring to the producers

in a certain region, the exporters or the Government granting countervailable subsidies

shall be given an opportunity to offer undertakings pursuant to Article 10 in respect of

the region concerned. If an adequate undertaking is not offered promptly or the

situations set out in paragraphs 9 and 10 of Article 10 apply, a provisional or definitive

countervailing duty may be imposed in respect of the Community as a whole. In such

cases the duties may, if practicable, be limited to specific products or exporters.

4. The provisions of paragraph 8 of Article 5 shall apply to this Article.

**27**

**2-l/A-**

**Article 7**

**Initiation of proceedings**

1. Except as provided for in paragraph 10 of this Article, an investigation to

determine the existence, degree and effect of any alleged subsidy shall be initiated upon

a written complaint by any natural or legal person, or any association not having legal

personality, acting on behalf of the Community industry.

(i) The complaint may be submitted to the Commission, or a Member State,

which shall forward it to the Commission. The Commission shall send

Member States a copy of any complaint it receives. The complaint shall be

deemed to have been lodged on the first working day following its delivery

to the Commission by registered mail or the issuing of an acknowledgement

of receipt by the Commission.

(ii) Where, in the absence of any complaint, a Member State is in possession of

sufficient evidence of subsidisation and of injury resulting therefrom for the

Community industry, it shall immediately communicate such evidence to

the Commission.

2. A complaint under paragraph 1 shall include sufficient evidence of the existence

of countervailable subsidies (including, if possible, of their amount), injury and a causal

link between the allegedly subsidised imports and the alleged injury. The complaint

shall contain such information as is reasonably available to the complainant on the

following:

(i) identity of the complainant and a description of the volume and value of the

Community production of the like product by the complainant. Where a

written complaint is made on behalf of the Community industry, the

complaint shall identify the industry on behalf of which the complaint is

made by a list of all

**28**

_**m,**_

known Community producers of the like product (or associations of

Community producers of the like product) and, to the extent possible, a

description of the volume and value of Community production of the like

product accounted for by such producers;

(ii) a complete description of the allegedly subsidised product, the names of the

country or countries of origin and/or export in question, the identity of each

known exporter or foreign producer and a list of known persons importing

the product in question;

(iii) evidence with regard to the existence, amount, nature and countervailability

of the subsidies in question;

(iv) information on the evolution of the volume of the allegedly subsidised

imports, the effect of these imports on prices of the like product in the

Community market and the consequent impact of the imports on the

Community industry, as demonstrated by relevant factors and indices

having a bearing on the state of the Community industry, such as those

listed in paragraphs 3 and 5 of Article 5.

3. The Commission shall, to the degree possible, examine the accuracy and adequacy

of the evidence provided in the complaint to determine whether there is sufficient

evidence to justify the initiation of an investigation.

4. An investigation may be initiated in order to determine whether or not the alleged

subsidies are specific within the meaning of paragraphs 2 and 3 of Article 3 of this

Regulation.

5. An investigation may also be initiated in respect of subsidies non-countervailable

according to paragraphs 7, 8 or 9 of Article 3 in order to determine whether or not the

conditions laid down in those paragraphs have been met.

**29**

**Ll<>**

6. If a subsidy is granted pursuant to a subsidy programme which has been notified

in advance of its implementation to the WTO Committee on Subsidies and

Countervailing Measures in accordance with the provisions of Article 8 of the Subsidies

Agreement, and in respect of which the Committee has failed to determine that the

relevant conditions laid down in Article 8 of the Subsidies Agreement have not been

met, an investigation shall not be initiated in respect of a subsidy granted pursuant to

such a programme, unless a violation of Article 8 of the Subsidies Agreement has been

ascertained by the competent WTO Dispute Settlement Body or through arbitration as

provided in paragraph 5 of Article 8 of the Subsidies Agreement.

7. An investigation may also be initiated in respect of measures of the type listed in

Annex IV to this Regulation, to the extent that they contain an element of subsidy as

defined by Article 2, in order to determine whether the measures in question fully

conform to the provisions of Annex IV.

8. An investigation shall not be initiated pursuant to paragraph 1 unless it has been

determined, on the basis of an examination of the degree of support for, or opposition

to, the complaint expressed by Community producers of the like product, that the

complaint has been made by or on behalf of the Community industry. The complaint

shall be considered to have been made "by or on behalf of the Community industry" if it

is supported by those Community producers whose collective output constitutes more

than 50 per cent of the total production of the like product produced by that portion of

the Community industry expressing either support for or opposition to the complaint.

However, no investigation shall be initiated when Community producers expressly

supporting the complaint account for less than 25 per cent of total production of the like

product produced by the Community industry.

**30**

**^u**

9. The Commission shall avoid, unless a decision has been made to initiate an

investigation, any publicising of the complaint for the initiation of an investigation.

However, as soon as possible after the receipt of a properly documented complaint

under this Article, and in any event before the initiation of an investigation, the

Commission shall notify the Government of the country of origin and/or export

concerned, and this Government shall be invited for consultations with the aim of

clarifying the situation as to matters referred to in Paragraph 2 above and arriving at a

mutually agreed solution.

10. If in special circumstances, the Commission decides to initiate an investigation

without having received a written complaint by or on behalf of the Community industry

for the initiation of such investigation, this shall be done on the basis of sufficient

evidence of the existence of countervailable subsidies, injury and causal link, as

described in paragraph 2, to justify the initiation of an investigation.

11. The evidence of both subsidies and injury shall be considered simultaneously in

the decision whether or not to initiate an investigation. A complaint shall be rejected

where there is insufficient evidence of either countervailable subsidies or of injury to

justify proceeding with the case.

12. The complaint may be withdrawn prior to initiation, in which case it shall be

considered not have been lodged.

13. Where, after consultation, it is apparent that there is sufficient evidence to justify

initiating proceedings the Commission shall initiate proceedings within one month of

the lodging of the complaint and publish a notice in the _Official Journal of the_

_European Communities._ Where insufficient evidence has been presented, the

complainant shall, after consultation, be so informed within one month of the date on

which the complaint is lodged with the Commission.

**31**

2l<5

**14.** **The notice of initiation of the proceeding shall announce the initiation of an**

**investigation, indicate the product and countries concerned, give a summary of the**

**information received and provide that all relevant information is to be communicated to**

**the Commission; it shall state the periods within which interested parties may make**

**themselves known, present their views in writing and submit information, if** **such** **views**

**and information are to be taken into account during the investigation; it shall also state**

**the period within which interested parties may apply to be heard by the Commission in**

**accordance with paragraph 5 of Article 8.**

**15.** **The Commission shall advise the exporters and importers known to it to be**

**concerned, as well as the Government of the country of origin** **and/or** **export and the**

**complainants, of the initiation of the proceedings and, with due regard to the protection**

**of confidential information, provide the full text of the written complaint received under**

**paragraph 1 to the known exporters, and to the authorities of the country of origin**

**and/or** **export, and make it available, upon request, to other interested parties involved.**

**Where the number of** **exporters** **involved is particularly high, the full text of the written**

**complaint should instead be** **prov»8©# $nly** **to the authorities of the country of origin**

**and/or** **export or to the relevant** **tradeassociation.**

**16.** **A countervailing duty investigation shall not hinder the procedures of customs**

**clearance.**

**32**

_**^yi**_

**Article 8**

**The investigation: information and procedure**

1. Following the initiation of the proceedings, the Commission, acting in co
operation with the Member States, shall commence an investigation at Community

level. Such investigation shall cover both subsidisation and injury and these shall be

investigated simultaneously. For the purpose of a representative finding, an

investigation period shall be selected which, in the case of subsidisation, shall normally

cover the investigation period provided for in paragraph 1 of Article 4. Information

relating to a period subsequent to the investigation period shall, normally, not be taken

into account.

2. Parties receiving questionnaires used in a countervailing duty investigation shall

be given at least thirty days for reply. The time4imit for exporters shall be counted from

the date of receipt of the questionnaire, which for this purpose shall be deemed to have

been received one week from the day on^whâfflai it was sent to the respondent or

transmitted to the appropriate diplomatic representative of the country of origin and/or

export. An extension to the thirty day period may be granted, taking due account of the

time limits of the investigation and provided the party gives a good reason, in terms of

its particular circumstances, for such extension.

3. The Commission may request Member States to supply information, and Member

States shall take whatever steps are necessary in order to give effect to such requests.

They shall send to the Commission the information requested together with the results

of all inspections, checks or investigations carried out. Where this information is of

general interest or where its transmission has been requested by a Member State, the

Commission shall forward it to the Member States, provided it is not confidential, in

which case a non-confidential summary shall be forwarded.

**33**

_3S1_

4. The Commission may request Member States to carry out all necessary checks

and inspections, particularly amongst importers, traders and Community producers, and

to carry out investigations in third countries, provided the firms concerned give their

consent and the government of the country in question has been officially notified and

raises no objection. Member States shall take whatever steps are necessary in order to

give effect to such requests from the Commission. Officials of the Commission shall be

authorised, if the Commission or a Member State so requests, to assist the officials of

Member States in carrying out their duties.

5. The interested parties, which have made themselves known in accordance with

paragraph 14 of Article 7, may be heard if they have, within the period prescribed in the

notice published in the _Official Journal of the European Communities,_ made a written

request for a hearing showing that they are an interested party likely to be affected by

the result of the proceedings and that there are particular reasons why they should be

heard.

6. Opportunities shall, on request, be provided for the importers, exporters and the

complainants, which have made themselves known in accordance with paragraph 14 of

Article 7, and the Government of the country of origin and/or export, to meet those

parties with adverse interests, so that opposing views may be presented and rebuttal

arguments offered. Provision of such opportunities must take account of the need to

preserve confidentiality and of the convenience to the parties. There shall be no

obligation on any party to attend a meeting, and failure to do so shall not be prejudicial

to that party's case. Oral information provided under this Paragraph shall be taken into

account by the Commission in so far as it is subsequently reproduced in writing.

7. The complainants, the Government of the country of origin and/or export,

importers, exporters, users and consumer organisations, which have made themselves

known in accordance with paragraph 14 of Article 7, may, upon written request, inspect

all information made available to the Commission by any party to an investigation, as

distinct from internal

**34**

_**^>ï**_

documents prepared by the authorities of the Community or its Member States,

provided that it is relevant to the defence of their interests and not confidential within

the meaning of Article 20, and that it is used in the investigation. Such parties may

respond to such information and their comments may be taken into consideration, to the

extent that they are sufficiently substantiated in the response.

8. Except in circumstances provided for in Article 19, the information supplied by

interested parties and upon which findings are based, shall be examined for accuracy to

the degree possible.

9. Investigations shall, except in special circumstances, be concluded within one

year, and in no case more than 18 months, after their initiation.

10. Throughout the investigation, the Commission shall afford the Government of the

country of origin and/or export a reasonable opportunity to continue consultations, with

a view to clarifying the factual situation and arriving at a mutually agreed solution.

**35**

2i"i

Article 9

Provisional measures

1. Provisional measures may be applied if proceedings have been initiated in

accordance with the provisions of Article 7, a public notice has been given to that effect

and interested parties have been given adequate opportunities to submit information and

make comments in accordance with paragraph 14 of Article 7, a provisional affirmative

determination has been made that the imported product benefits from countervailable

subsidies and of consequent injury to the Community industry, and the Community

interest calls for intervention to prevent such injury. The provisional measures shall be

imposed no sooner than 60 days from the initiation of the proceedings but no later than

nine months from the initiation of the proceedings.

2. The amount of the provisional countervailing duty shall not exceed the total

amount of countervailable subsidies as provisionally established but it should be less

than this amount, if such lesser duty would be adequate to remove the injury to the

Community industry.

3. Provisional measures shall take the form of a security and the release of the

products concerned for free circulation in the Community shall be conditional upon the

provision of such security.

4. The Commission shall take provisional action after consultation or, in cases of

extreme urgency, after informing the Member States. In this latter case, consultations

shall take place 10 days, at the latest, after notification to the Member States of the

action taken by the Commission.

5. Where à Member State requests immediate intervention by the Commission and

the conditions of paragraph 1 of Article 9 are met, the Commission shall, within a

maximum of five working days of receipt of the request, decide whether a provisional

countervailing duty should be imposed.

**36**

**^**

6. The Commission shall forthwith inform the Council and the Member States of any

decision taken under this Article. The Council, acting by qualified majority, may decide

differently.

7. Provisional countervailing duties shall have a maximum period of validity of four

months.

,iJOW y'JiJ

**37**

_2sr_

Article 10

Undertakings

1. Investigations may be terminated! without the imposition of provisional or

definitive duties upon acceptance of satisfactory voluntary undertakings under which

(i) the Government of the country of origin and/or export agrees to eliminate or

limit the subsidy or take other measures concerning its effects; or

(ii) any exporter undertakes to revise its prices or to cease exports to the area in

question as long as such exports benefit from countervailable subsidies, so

that the Commission, after consultation, is satisfied that the injurious effect

of the subsidies is eliminated. Price increases under such undertakings shall

not be higher than necessary to offset the amount of countervailable

subsidies, and should be less than the amount of countervailable subsidies if

such increases would be adequate to remove the injury to the Community

industry.

2. Undertakings may be suggested by the Commission, but no Government or

exporter shall be obliged to enter into such an undertaking. The fact that Governments

or exporters do not offer such undertakings, or do not accept an invitation to do so, shall

in no way prejudice the consideration of the case. However, it may be determined that a

threat of injury is more likely to be realised if the subsidised imports continue.

Undertakings shall not be sought or accepted from Governments or exporters unless a

provisional affirmative determination of subsidisation and injury caused by such

subsidisation has been made. Save in exceptional circumstances, undertakings may not

be offered later than the end of the period during which representations may be made

under Paragraph 5 of Article 21.

**38**

_**ls(j**_

3. Undertakings offered need not be accepted if their acceptance is considered

impractical, for example, if the number of actual or potential exporters is too great, or

for other reasons, including reasons of general policy. The exporter and/or the

Government of the country of origin and/or export concerned may be provided with the

basis on which it is intended to propose the rejection of the offer of an undertaking and

may be given an opportunity to make comments thereon. The reasons for rejection shall

be set out in the definitive decision.

4. Parties which offer an undertaking shall be required to provide a non-confidential

version of such undertaking, so that it may be made available to interested parties to the

investigation.

5. Where undertakings are, after consultation, accepted, and there is no objection

raised within the Advisory Committee, the investigation shall be terminated. In all other

cases, the Commission shall submit to the Council forthwith a report on the results of

the consultation, together with a proposal that the proceedings be terminated. The

proceedings shall stand terminated if, within one month, the Council, acting by qualified

majority, has not decided otherwise.

6. If the undertakings are accepted, the investigation of subsidisation and injury shall

normally be completed. In such a case, if a negative determination of subsidisation or

injury is made, the undertaking shall automatically lapse except in cases where such a

determination is due in large part to the existence of an undertaking. In such cases, the

authorities may require that an undertaking be maintained for a reasonable period. In

the event that an affirmative determination of subsidisation and injury is made, the

undertaking shall continue consistent with its terms and the provisions of this

Regulation.

7. The Commission shall require any Government or exporter from whom

undertakings have been accepted to provide, periodically, information relevant to the

fulfilment of such undertaking, and to permit verification of pertinent data. Non
compliance with such requirements shall be construed as a violation of the undertaking.

**39**

_**<ZÏ\**_

**8.** **Where undertakings are accepted from certain exporters during the course of an**

**investigation, they shall, for the purpose of Article** **13,** **deemed to take effect from the**

**date on which the investigation is concluded for the country of origin** **and/or** **export.**

**9.** **In case of violation or withdrawal of undertakings by any party, a definitive duty**

**shall be imposed in accordance with Article** **11,** **on the basis of the facts established**

**within the context of the investigation which led to the undertaking, provided that such**

**investigation was concluded with a final determination on subsidisation and injury, and**

**the exporter concerned, or the Government of the country of origin** **and/or** **export,**

**except in the case of withdrawal of undertakings by the exporter or such Government,**

**has been given an opportunity to comment.**

**10.** **A provisional duty may, after consultation, be imposed in accordance with Article**

**9 on the basis of the best information available, where there is reason to believe that an**

**undertaking is being violated, or in case of violation or withdrawal of undertakings**

**where the investigation which led to the undertaking was not concluded.**

**40**

**a** **il**

Article 11

Termination without measures and imposition of definitive duties

1. Where the complaint is be withdrawn, proceedings may be terminated unless such

termination would not be in the Community interest.

2. Where, after consultation, protective measures are unnecessary and there is no

objection raised within the Advisory Committee, the investigation or proceedings shall be

terminated. In all other cases, the Commission shall submit to the Council forthwith a

report on the results of the consultation, together with a proposal that the proceedings be

terminated. The proceedings shall stand terminated if, within one month, the Council,

acting by a qualified majority, has not decided otherwise.

3. Subject to and in accordance with the provisions of paragraphs 4 and 5 below,

there shall be immediate termination of the proceedings where it is determined that the

amount of countervailable subsidies is _de minimis,_ or where the volume of subsidised

imports, actual or potential, or the injury, is negligible.

4. With regard to investigations concerning imports from developing countries, the

volume of subsidised imports shall be considered negligible if it represents less than 4 per

cent of the total imports of the like product in the Community, unless imports from

developing countries whose individual shares of total imports represent less than 4 per

cent collectively account for more than 9 per cent of the total imports of the like product

in the Community.

**41**

**&3**

5. For the same investigations, the amount of the countervailable subsidies shall be

considered to be _de minimis_ if such amount is less than 1 per cent _ad valorem,_ except

that

(a) as regards investigations concerning imports from developing countries the

_de minimis_ threshold shall be 2% ad valorem; and

(b) for those developing countries Members of the WTO referred to in Annex

VII of the Subsidies Agreement as well as for developing countries

Members of the WTO which have completely eliminated export subsidies as

defined in paragraph 4(a) of Article 3 of this Regulation, the _de minimis_

subsidy threshold shall be 3 per cent _ad_ _valorem;_ where the application of

this provision depends on the elimination of export subsidies, it shall apply

from the date that the elimination of export subsidies is notified to the WTO

Committee on Subsidies and Countervailing Measures, and for so long as

export subsidies are not granted by the developing country concerned; this

provision shall expire eight years from the date of entry into force of the

WTO Agreement;

provided that it is only the investigation that shall be terminated where the amount of

the countervailable subsidies is below the relevant _de minimis_ level for individual

exporters and they shall remain subject to the proceedings and may be re-investigated in

any subsequent review carried out for the country concerned under Article 13.

6. Where the facts as finally established show the existence of countervailable

subsidies and injury caused thereby, and the Community interest calls for intervention

in accordance with Article 22, a definitive countervailing duty shall be imposed by the

Council, acting by simple majority on a proposal submitted by the Commission after

consultation of the Advisory Committee, unless the subsidy or subsidies are withdrawn

or it has been demonstrated that the subsidies no longer confer any benefit to the

exporters involved. Where provisional duties are in force, a proposal for definitive

action shall be submitted to the Council not later than one month before the expiry of

such duties. The amount of the countervailing duty shall not exceed the amount of

countervailable subsidies from which the exporters have been found to benefit,

established under this Regulation, but should be less than the total amount of

countervailable subsidies, if such lesser duty would be adequate to remove the injury to

the Community industry.

**42**

**•2&L**

7. A countervailing duty shall be imposed in the appropriate amounts in each case,

on a non-discriminatory basis, on imports of a product from all sources found to benefit

from countervailable subsidies and causing injury, except as to imports from those

sources from which undertakings under the terms of this Regulation have been accepted.

The Regulation shall specify the duty for each supplier, or, if that is impracticable, the

supplying country concerned.

8. When the Commission has limited its examination in accordance with Article 18,

any countervailing duty applied to imports from exporters or producers which have

made themselves known in accordance with Article 18 but were not included in the

examination shall not exceed the weighted average amount of countervailable subsidies

established for the parties in the sample. For the purpose of this paragraph, the

Commission shall disregard any zero and _de minimis_ amounts of countervailable

subsidies, and amounts of countervailable subsidies established under the circumstances

referred to in Article 19. The authorities shall apply individual duties to imports from

any exporter or producer which is granted individual treatment, as provided for in

Article 18.

**43**

_**%à-**_

**Article 12**

**Retroactivity**

**1.** **Provisional measures and definitive countervailing duties shall only be applied to**

**products which enter for consumption after the time when the decision taken under**

**Paragraph 1 of Article 9 and Paragraph 7 of Article** **11,** **respectively, enters into force,**

**subject to the exceptions set out in this Regulation.**

**2.** **Where a provisional duty has been applied and the facts as finally established**

**show the existence of countervailable subsidies** **and** **injury, the Council shall decide,**

**irrespective of whether a definitive countervailing duty is to be imposed, what**

**proportion of the provisional duty is to be definitively collected. For this purpose,**

**'injury'** **shall not include material retardation of the establishment of a Community**

**industry, nor threat of material injury, except where it is found that this would, in the**

**absence of provisional measures, have** **developed** **into material injury. In all other cases**

**involving such threat or retardation, any provisional amounts shall be released and**

**definitive duties can only be imposed from the date that a final determination of** **threat**

**or** **material retardation is made.**

**3.** **If the definitive countervailing duty is higher than the provisional duty, the**

**difference shall not be collected. If the definitive duty is lower** **than the** **provisional duty,**

**the duty shall be recalculated. Where a final deterrnination is negative, the provisional**

**duty shall not be confirmed.**

**44**

_**JJe'cà/**_

4. A definitive countervailing duty may be levied on products which were entered

for consumption not more than 90 days prior to the date of application of provisional

measures but not prior to the initiation of the investigation, provided that the imports

have been registered in accordance with paragraph 5 of Article 15, the importers

concerned have been given an opportunity to comment by the Commission, and that it is

found that:

(i) there exist critical circumstances where for the subsidised product in

question injury which is difficult to repair is caused by massive imports in a

relatively short period of a product benefiting from countervailable

subsidies under the terms of this Regulation; and,

(ii) where it is deemed necessary, in order to preclude the recurrence of such

.injury, to assess countervailing duties retroactively on those imports.

5. In cases of violation or withdrawal of undertakings, definitive duties may be

levied in accordance with this Regulation on goods entered for consumption not more

than ninety days before the application of provisional measures, provided than the

imports have been registered in accordance with paragraph 5 of Article 15, and that any

such retroactive assessment shall not apply to imports entered before the violation or

withdrawal of the undertaking.

**45**

_**%-b**_

Article 13

Duration, reviews and refunds

1. A countervailing measure shall remain in force only as long as and to the extent

necessary to counteract the countervailable subsidies which are causing injury.

A. Expiry reviews

2. A definitive countervailing measure shall expire five years from its imposition or

five years from the date of the most recent review which has covered both subsidisation

and injury, unless it is determined in a review that the expiry would be likely to lead to

continuation or recurrence of subsidisation and injury. Such an expiry review shall be

initiated on the initiative of the Commission, or upon a request made by or on behalf of

the Community producers and the measure shall remain in force pending the outcome of

such review.

3. An expiry review shall by initiated where the request contains sufficient evidence

that the removal of measures would be likely to result in a continuation or recurrence of

subsidisation and injury. Such a likelihood may, for example, be indicated by evidence

of continued subsidisation and injury or evidence that the removal of injury is partly or

solely due to the existence of measures or evidence that the circumstances of the

exporters, or market conditions, are such that they would indicate the likelihood of

further injurious subsidisation.

4. In carrying out investigations under this section, the exporters, importers, the

Government of the country of origin and/or export and the complainants shall be

provided with* the opportunity to amplify, rebut or comment on the matters set out in the

review request and conclusions shall be reached with due account taken of all relevant

and duly supported evidence presented in relation to the question of whether the

removal of measures would be likely, or unlikely, to lead to the continuation or

recurrence of subsidisation and injury.

**46**

_**>u**_

5. Under this section, a notice of impending expiry shall be published in the _Official_

_Journal of the European Communities_ at an appropriate time as defined in this

paragraph in the final year of the period of application of the measures. Thereafter, the

Community producers shall, no later than three months before the end of the five year

period, be entitled to lodge a review request in accordance with paragraph 3. A notice

announcing the actual expiry of measures under this section shall also be published.

**B.** **Interim** reviews

6. The need for the continued imposition of measures may also be reviewed, where

warranted on the initiative of the Commission or at the request of a Member State or,

provided that a reasonable period of time of at least 1 year has elapsed since the

imposition of the definitive measure, upon a request by any exporter, importer or the

Community producers or the Government of the country of origin and/or export which

contains sufficient evidence substantiating the need for such an interim review.

7. An interim review shall be initiated where the request contains sufficient evidence

that the continued imposition of the measure is no longer necessary to offset the

countervailable subsidy and/or the injury would be unlikely to continue or recur if the

measure were removed or varied, or that the existing measure is not, or is no longer,

sufficient to counteract the countervailable subsidy which is causing injury.

8. Where countervailing duties have been imposed in accordance with paragraph 7 of

Article 11, an interim review shall be initiated if the Community producers provide

sufficient evidence that the duties have led to no movement or insufficient movement of

resale prices of the imported product in the Community. If the investigation proves the

allegations to be correct, countervailing duties may be increased to achieve the price

increase required to remove injury, although the increased duty level shall not exceed

the amount of the countervailable subsidies.

**47**

**2Jtf**

9. In carrying out investigations under this section, the Commission may, _inter alia,_

consider whether the circumstances with regard to subsidisation and injury have

changed significantly, or whether existing measures are achieving the intended results in

removing the injury previously established in accordance with Article 5 of this

Regulation. In these respects, account shall be taken of all relevant and duly supported

evidence in the final determination.

C. **Accelerated reviews**

10. Any exporter whose exports are subject to a definitive countervailing duty but

who was not individually investigated during the original investigation for reasons other

than a refusal to co-operate with the Commission, shall be entitled, upon request, **to** an

accelerated review in order that the Commission promptly establish an individual

countervailing duty rate for that exporter. Such a review shall be initiated after

consultation of the Advisory Committee and Community producers have been given an

opportunity to comment.

**D.** **General provisions on reviews**

11. The relevant provisions of Article 7 and Article 8, excluding those relating to time

limits, shall apply to any review carried out under sections A, B and C of this Article.

Any such review shall be carried out expeditiously and shall normally be concluded

within twelve months of the date of initiation of the review.

12. Reviews under this Article shall be initiated by the Commission after **consultation**

of the Advisory Committee. Where warranted by reviews, measures shall **be repealed or**

maintained under section A, or repealed, maintained or amended under sections B **and**

C, by the Community institution responsible for their introduction. Where measures **are**

repealed for individual exporters, but not for the country as a whole, such **exporters**

shall remain subject to the proceedings and may be re-investigated in any subsequent

review carried out for that country under this Article.

**48**

**<3k>G**

13. Where a review of measures under section B is in progress at the end of the period

of application of measures as defined in section A, the measures shall also be

investigated under the provisions of section A.

E. Refunds

14. Notwithstanding section A, an importer may request reimbursement of duties

collected where it is shown that the amount of countervailable subsidies, on the basis of

which duties were paid, has been eliminated, or reduced to a level which is below the

level of the duty in force.

15. In order to request a refund of countervailing duties, the importer shall submit an

application to the Commission. The application shall be submitted via the Member State

in the territory of which the products were released for free circulation and within six

months of the date on which the amount of the definitive duties to be levied was duly

determined by the competent authorities or of the date on which a decision was made

definitively to collect the amounts secured by way of provisional duty. Member States

shall forward the request to the Commission forthwith.

16. An application for refund shall only be considered to be duly supported by

evidence where it contains precise information on the amount of refund of

countervailing duties claimed and all customs documentation relating to the calculation

and payment of such amount. It shall also include evidence, for a representative period,

on the amount of countervailable subsidies for the exporter or producer to which the

duty applies. In cases where the importer is not associated to the exporter or producer

concerned and such

**49**

_**XG^**_

information is not immediately available or the exporter or producer is unwilling to

release it to the importer, the application shall contain a statement from the exporter or

producer that the amount of countervailable subsidies has been reduced or eliminated, as

specified in this Article, and that the relevant supporting evidence shall be provided to

the Commission. It shall be understood that where such evidence is not forthcoming

from the exporter or producer, within a reasonable period of time, the application shall

be rejected.

17. The Commission shall, after consultation of the Advisory Committee, decide

whether and to what extent the application should be granted or it may decide at any

time to initiate an interim review and the information and findings from such review,

carried out in accordance with the provisions applicable for such reviews, shall be used

to determine whether and to what extent a refund is justified. Refunds of duties shall

normally take place within 12 months, and in no case more than 18 months after the

date on which a request for a refund, duly supported by evidence, has been made by an

importer of the product subject to the countervailing duty. The payment of any refund

authorised should normally be made by Member States within 90 days of the above
noted decision.

F. **Final provision**

18. In all review or refund investigations carried out under this Article, the

Commission shall apply, in so far as circumstances have not changed, the same

methodology as in the investigation which led to the duty, with due account taken of the

provisions set out in Article 4 and Article 18 of this Regulation.

**50**

OfoS

Article 14

Circumvention

1. Countervailing duties imposed under this Regulation may be extended to apply to

imports from third countries of like products, or parts thereof, when circumvention of

the measures in force is taking place. Circumvention shall be defined as a change in the

pattern of trade between third countries and the Community which stems from a

practice, process or work for which there is insufficient due cause or economic

justification, other than the imposition of the duty, and there is evidence that the

remedial effects of the duty are being undermined, in terms of the prices and/or

quantities of the assembled like product, and the imported like product and/or parts

thereof still benefit from the subsidy.

2. Investigations shall be initiated under this Article where the request contains

sufficient evidence on the factors set out in paragraph 1. Initiations shall be made, after

consultation of the Advisory Committee, by Commission Regulation which shall also

instruct the customs authorities to make imports subject to registration in accordance

with Paragraph 5 of Article 15 or request guarantees.. Investigations shall be carried out

by the Commission, which may be assisted by customs authorities, and shall be

concluded within nine months. When the facts, as finally ascertained, justify the

extension of measures, this shall be done by the Council, acting by simple majority and

on a proposal from the Commission, from the date that registration was imposed under

Paragraph 5 of Article 15 or guarantees were requested. The relevant procedural

provisions of this Regulation with regard to initiations and the conduct of investigations

shall apply under this Article.

3. Products shall not be subject to registration under Paragraph 5 of Article 15 or

measures where they are accompanied by a customs certificate declaring that the

importation of the goods does not constitute circumvention. These certificates may be

issued to importers, upon written application, by the authorities following authorisation

by a decision of the Commission after consultation of the Advisory Committee or the

decision of the Council imposing measures and they shall remain valid for the period,

and under the conditions, set down therein.

**51**

**Ate**

**4.** **Nothing in this Article shall preclude the normal application of** **the** **provisions in**

**force concerning customs duties.**

**52**

_**•A**_

Article 15

General provisions

1. Provisional or definitive countervailing duties shall be imposed by Regulation,

and collected by Member States in the form, at the rate specified and according to the

other criteria laid down in the Regulation imposing such duties. Such duties shall also

be collected independently of the customs duties, taxes and other charges normally

imposed on imports. No product shall be subject to both anti-dumping and

countervailing duties to compensate for the same situation arising from dumping or

export subsidisation.

2. Regulations imposing provisional or definitive countervailing duties, or

Regulations or Decisions accepting undertakings or terminating investigations or

proceedings, shall be published in the _Official Journal of the European Communities._

Such Regulations or Decisions shall contain, in particular, and with due regard to the

protection of confidential information the names of the exporters, if practical, or

countries involved, a description of the product and a summary the facts and

considerations relevant to the countervailable subsidies and injury determinations. In

each case, a copy of the Regulation or Decision shall be sent to known interested

parties. The provisions of this paragraph shall apply _mutatis mutandis_ to reviews.

3. Special provisions, in particular with regard to the common definition of the

concept of origin, as contained in Council Regulation (EEC) No 2913/92 of 12 October

1992, may be adopted in, or under, this Regulation.

4. In the Community interest, measures imposed under this Regulation may, after

consultation of the Advisory Committee, be suspended by a decision of the Commission

for a period of up to one year because of a change in market conditions in the

Community which

**53**

**•*u**

makes the application of such measures temporarily inappropriate, provided that the

Community industry has been given an opportunity to comment. The suspension may

be extended for a further period if the Council so decides, by simple majority, on a

proposal from the Commission. Measures may, at any time and after consultation, be re
instated if the reason for suspension is no longer applicable.

5. The Commission may, after consultation of the Advisory Committee, direct the

customs authorities to take the appropriate steps to register imports, so that measures

may subsequently be applied against these imports from the date of such registration.

Imports may be made subject to registration following a request from the Community

industry which contains sufficient evidence to justify such action. Registration shall be

introduced by Regulation which shall specify the purpose of the action and, if

appropriate, the estimated amount of possible future liability. Imports may not be made

subject to registration for a period longer than nine months.

6. Member States shall report to the Commission, on a monthly basis, the import

trade of products subject to investigation and subject to measures, and the amount of

duties collected under this Regulation.

**54**

_**k\b**_

**Article 16**

**Consultations**

1. Any consultations provided for in this Regulation shall take place within an

Advisory Committee, which shall consist of representatives of each Member State, with

a representative of the Commission as chairman. Consultations shall be held

immediately on request by a Member State or on the initiative of the Commission, and

in any event within a time frame which allows the time limits set by this Regulation to

be respected.

2. The Committee shall meet when convened by its chairman. He shall provide the

Member States, as promptly as possible, with all relevant information.

3. Where necessary, consultation may be in writing only; in such case the

Commission shall notify the Member States and shall specify a period within which

they shall be entitled to express their opinions or to request an oral consultation, which

the chairman shall arrange, provided that such oral consultation can be held within a

time frame which allows the time limits set by this Regulation to be respected.

4. Consultation shall in particular cover:

(i) the existence of countervailable subsidies and the methods of establishing

their amount;

(ii) the existence and extent of injury;

**55**

**J.}***

(iii) the causal link between the subsidised or dumped imports and injury;

(iv) the measures which, in the circumstances, are appropriate to prevent or

remedy the injury caused by the countervailable subsidies or the dumping

and the ways and means for putting such measures into effect.

**56**

**^**

**Article 17**

**Verification visits**

1. The Commission shall, where it considers it appropriate, carry out visits to

examine the records of importers, exporters, traders, agents, producers, trade

associations and organisations, to verify information provided on subsidisation and

injury. In the absence of a proper and timely reply, a verification visit may not be

carried out.

2. The Commission may carry out investigations in third countries as required,

provided it obtains the agreement of the firms concerned, it notifies the representatives

of the government of the country in question and the latter does not object to the

investigation. As soon as the agreement of the firms concerned has been obtained the

Commission should notify the authorities of the country of origin and/or export of the

names and addresses of the firms to be visited and the dates agreed.

3. The firms concerned shall be advised on the nature of the information to be

verified during verification visits and of any further information which needs to be

provided during such visits, though this should not preclude requests to be made during

the verification for further details to be provided in the light of information obtained.

4. In investigations carried out under this paragraph, the Commission shall be

assisted by officials of those Member States who so request.

**57**

**2qS**

**Article 18**

**Sampling**

1. In cases where the number of complainants, exporters or importers, types of

product or transactions is large, the investigation may be limited to a reasonable number

of parties, products or transactions by using samples which are statistically valid on the

basis of information available to it at the time of the selection, or to the largest

representative volume of the production, sales or exports which can reasonably be

investigated within the time limit available.

2. The final selection of parties, types of products or transactions made under these

sampling provisions shall rest with the Commission, though preference shall be given to

choosing a sample in consultation with, and with the consent of, the parties concerned,

provided such parties make themselves known and make sufficient information

available, within three weeks of initiation, to enable a representative sample to be

chosen.

3. In cases where the examination has been limited in accordance with this Article,

an individual amount of countervailable subsidisation shall, nevertheless, be calculated

for any exporter or producer not initially selected who submits the necessary

information within the time limits provided for in this Regulation, except where the

number of exporters or producers is so large that individual examinations would be

unduly burdensome and prevent the timely completion of the investigation.

4. Where it is decided to sample and there is a degree of non-co-operation by some

or all of the parties selected which is likely to materially affect the outcome of the

investigation, a new sample may be selected. However, if a material degree of non-co
operation persists or there is insufficient time to select a new sample, the relevant

provisions of Article 19 shall apply.

**58**

_**1***_

Article 19

Non-co-operation

1. In cases in which any interested party refuses access to, or otherwise does not

provide, necessary information within the time limits as provided for in this Regulation,

or significantly impedes the investigation, preliminary or final findings, affirmative or

negative, may be made on the basis of the facts available. Where the it is found that any

interested party has supplied false or misleading information, the information shall be

disregarded and use may be made of the facts available. Interested parties should be

made aware of the consequences of non-co-operation.

2. A lack of a computerised response shall not be deemed to constitute non-co
operation provided that the interested party shows that presenting the response as

requested would result in an unreasonable extra burden or unreasonable additional cost.

3. Where the information presented by an interested party may not be ideal in all

respects it should not be disregarded, provided that any deficiencies are not such as to

cause undue difficulty in arriving at a reasonably accurate finding and provided the

information is appropriately submitted in timely fashion, it is verifiable and the party

has acted to the best of its ability.

4. If evidence or information is not accepted, the supplying party should be informed

forthwith of the reasons thereof and have an opportunity to provide further explanations

within the time limit specified. If the explanations are considered unsatisfactory, the

reasons for rejection of such evidence or information should be disclosed and given in

any published findings.

**59**

_**2**_
_**^Ar**_

**5.** **If** **determinations,** **including those with respect to the amount of countervailable**

**subsidies, are based on the provisions of paragraph 1 of this Article, including the**

**information supplied in the complaint, it should, where practicable and with due regard**

**to the time limits of the investigation,** **be** **checked by reference to information from**

**other independent sources which may be available, such as published price lists, official**

**import statistics and customs returns, or information obtained from other interested**

**parties during the investigation.**

**6.** **If an interested party does not co-operate, or only co-operates partially, and thus**

**relevant information is being withheld, the result could be less favourable to the party**

**than if it had co-operated.**

**60**

_**l-)l**_

**Article 20**

**Confidentiality**

1. Any information which is by nature confidential, (for example, because its

disclosure would be of significant competitive advantage to a competitor or because its

disclosure would have a significantly adverse effect upon a person supplying the

information or upon a person from whom he acquired the information) or which is

provided on a confidential basis by parties to an investigation shall, upon good cause

shown, be treated as such by the authorities.

2. Interested parties providing confidential information shall be required to furnish

non-confidential summaries thereof. These summaries shall be in sufficient detail to

permit a reasonable understanding of the substance of the information submitted in

confidence. In exceptional circumstances, such parties may indicate that such

information is not susceptible of summary. In such exceptional circumstances, a

statement of the reasons why summarisation is not possible must be provided.

3. If it is considered that a request for confidentiality is not warranted and if the

supplier of the information is either unwilling to make the information available or to

authorise its disclosure in generalised or summary form, such information may be

disregarded unless it can be satisfactorily demonstrated from appropriate sources that

the information is correct. Requests for confidentiality should not be arbitrarily rejected.

4. This Article shall not preclude the disclosure of general information by the

Community authorities and in particular of the reasons on which decisions taken

pursuant to this Regulation are based, or disclosure of the evidence relied on by the

Community authorities is so far as necessary to explain those reasons in court

proceedings. Such disclosure must take into account the legitimate interest of the parties

concerned that their business or Governmental secrets should not be divulged.

**61**

**=2:p**

5. The Council, the Commission and the Member States, or the officials of any of

these, shall not reveal any information received pursuant to this Regulation for which

confidential treatment has been requested by its supplier, without specific permission

from the supplier. Exchanges of information between the Commission and Member

States, any information relating to consultations made pursuant to Article 16 or

consultations described in Paragraph 9 of Article 7 and Paragraph 10 of Article 8, or any

internal documents prepared by the authorities of the Community or its Member States,

shall be not be divulged except as specifically provided for in this Regulation.

6. Information received pursuant to this Regulation shall be used only for the

purpose for which it was requested.

**62**

### **_n_**

Article 21

Disclosure

1. The complainants, importers, exporters and representatives of the country or

origin and/or export may request disclosure of the details underlying the essential facts

and considerations, on the basis of which provisional measures have been imposed.

Requests for such disclosure shall be made in writing immediately following the

imposition of provisional measures and the disclosure shall be made in writing as soon

as possible thereafter.

2. The parties mentioned in paragraph 1, may request final disclosure of the essential

facts and considerations, on the basis of which it is intended to recommend the

imposition of definitive measures, or the termination of an investigation or proceedings

without the imposition of measures, with particular attention being paid to the

disclosure of any facts or considerations which are different from those used for any

provisional measures.

3. Requests for final disclosure, as defined in paragraph 2, shall be addressed to the

Commission in writing and be received, in cases where a provisional duty has been

applied, not later than one month after publication of the imposition of that duty. Where

a provisional duty has not been applied, parties shall be provided with an opportunity to

request final disclosure within time limits set by the Commission.

4. Final disclosure shall be given in writing. It shall be made, with due regard paid to

the protection of business or Governmental secrets, as soon as possible, and normally,

not later than one month prior to a definitive decision or the submission by the

Commission of any proposal for final action pursuant to Article 11. Where the

Commission is not in a position to disclose certain facts or considerations at that time,

these shall be disclosed as soon as possible thereafter. Disclosure shall not prejudice any

subsequent decision which may be taken by the Commission or the Council, but where

such decision is based on any different facts and considerations, these shall be disclosed

as soon as possible.

**63**

_**l ï \**_

**5.** **Representations** **made** **after final disclosure is given shall be taken into**

**consideration only if received within a period to be set by the Commission in each case,**

**which shall be at least** **10** **days, due consideration being given to the urgency of the**

**matter.**

**64**

_**£$X**_

**Article 22**

**Community interest**

1. Under this Regulation, a determination as to whether the Community interest calls

for intervention shall be based on an appreciation of all the various interests taken as a

whole, including the interests of the domestic industry and users and consumers, and a

determination under this Article shall only be made where all parties have been given

the opportunity to make their views known under paragraph 2. In such an examination,

the need to eliminate the trade distorting effects of injurious subsidisation and to restore

effective competition shall be given special consideration. Measures, as determined on

the basis of subsidization and injury found, may not be applied where the authorities, on

the basis of all the information submitted, can safely conclude that it is not in the

Community interest to apply such measures.

2. In order to provide a sound basis on which the authorities can take account of all

views and information in the decision on whether, or not, the imposition of measures is

in the Community interest, the complainants, importers, representative users and

representative consumer organisations may, within the time limits specified in the notice

of initiation of the countervailing duty investigation, make themselves known and

provide information to the Commission. Such information, or appropriate summaries

thereof, shall be made available to the other parties specified in this Article, and they

shall be entitled to respond to such information.

3. The parties which have acted in conformity with paragraph 2 may request a

hearing. Such requests shall be made in writing, within the time limits set in paragraph

2, and shall set out the particular reasons, in terms of the Community interest, why they

should be heard.

**65**

_Xîb_

4. The parties which have acted in conformity with paragraph 2 may provide

comments on the application of any provisional duties imposed. Such comments shall

be received within one month of the application of such measures if they are to be taken

into account and they, or appropriate summaries thereof, shall be made available to

other parties who shall be entitled to respond to such comments.

5. The Commission shall examine the information which is properly submitted, and

the extent to which it is representative, and the results of such analysis, together with an

opinion on its merits, shall be transmitted to the Advisory Committee. The balance of

views expressed in the Committee shall be taken into account by the Commission in any

proposal made under Article 11.

6. The parties which have acted in conformity with paragraph 2, may request the

facts and considerations on which final decisions are likely to be taken to be made

available to them. Such information shall be made available to the extent possible and

without prejudice to any subsequent decision taken by the Commission or the Council.

7. Under this Article, information shall only be taken into account where it is

supported by actual evidence which substantiates its validity.

**66**

_**Mlf**_

**Article 23**

**Relationships between countervailing duty** measures **and multilateral remedies**

If an imported product is made subject to any countermeasures imposed following

recourse to the dispute settlement procedures of the Subsidies Agreement, and such

measures are appropriate to remove the injury caused by the countervailable subsidies,

any countervailing duty imposed with regard to that product shall immediately be

suspended, or repealed, as appropriate.

**Article 24**

**Final** provisions

This Regulation shall not preclude the application of:

(i) any special rules laid down in agreements concluded between the Community and

third countries;

(ii) the Community Regulations in the agricultural sector and of Regulation (EEC) No
1059/69W, (EEC) No 2730/750) ; and (EEC) No 2783/75( [6] ) ; this Regulation shall

operate by way of complement to those Regulations and in derogation from any

provisions thereof which preclude the application of anti-dumping or

countervailing duties;

(iii) special measures, provided that such action does not run counter to obligations

under the GATT.

< [4] )OJNoL 141, 12.06.1969, p. 1.
< [5] ) OJNo L 281, 01.11.1975, p. 20.
< [6] )OJ No L 282, 01.11.1975, p. 104.

67

**^** **Si"**

**Article 25**

**Repeal of existing legislation**

Regulation (EEC) No 2423/88, as amended by Regulation (EC) No 521/94 and

Regulation (EC) No 522/94, is hereby repealed. References to the repealed Regulation

shall be construed as references to this Regulation.

**Article 26**

**Entry into force**

This Regulation shall enter into force on the date determined by a decision governing

the entry into force of the acts implementing the results of the Uruguay Round. It shall

apply to proceedings already initiated. However, the references to time limits for the

initiation of proceedings and the imposition of provisional duties shall only apply after a

date which the Council shall specify in a Decision to be adopted by a qualified majority

no later than 1 April 1995 on the basis of a Commission proposal to be submitted to the

Council once the necessary budgetary resources have been made available.

This Regulation shall be binding in its entirety and directly applicable in all Member

States.

Done at Brussels,

**68**

ANNEX I

ILLUSTRATIVE LIST OF EXPORT SUBSIDIES

(a) The provision by governments of direct subsidies to a firm or an industry

contingent upon export performance.

(b) Currency retention schemes or any similar practices which involve a bonus on

exports.

(c) Internal transport and freight charges on export shipments, provided or mandated

by governments, on terms more favourable than for domestic shipments.

(d) The provision by governments or their agencies either directly or indirectly

through government-mandated schemes, of imported or domestic products or services

for use in the production of exported goods, on terms or conditions more favourable

than for provision of like or directly competitive products or services for use in the

production of goods for domestic consumption, if (in the case of products) such terms or

conditions are more favourably than those commercially availableO) on world markets

to their exporters.

0) The term "commercially available" means that the choice between domestic and imported products is
unrestricted and depends only on commercial considerations.

**>**

(e) The full or partial exemption, remission, or deferral specifically related to exports,

of direct taxes(^) or social welfare charges paid or payable by industrial or commercial
enterprises^ [3] ).

(f) The allowance of special deductions directly related to exports or export

performance, over and above those granted in respect of production for domestic

consumption, in the calculation of the base on which direct taxes are charged.

(g) The exemption or remission, in respect of the production and distribution of

exported products, of indirect taxes(2) in excess of those levied in respect of the

production and distribution of like products when sold for domestic consumption.

(h) The exemption, remission or deferral of prior-stage cumulative indirect taxes (2)

on goods or services used in the production of exported products in excess of the

exemption, remission or deferral of like prior-stage cumulative indirect taxes on goods

or services used in the production of like products when sold for domestic consumption;

provided, however, that prior-stage cumulative indirect taxes may be exempted,

remitted or deferred on exported products even when not exempted, remitted or deferred

on like products when sold for domestic consumption, if the prior-stage cumulative

indirect taxes are levied on inputs that are consumed in the production of the exported
product (making normal allowance for waste)( [4] ) . This item shall be interpreted in

( [2] ) For the purpose of this Regulation and its annexes:

The term "direct taxes" shall mean tax on wages, profits, interests, rents, royalties, and all other
forms of income, and taxes on the ownership of real property;

The term "import charges" shall mean tariffs, duties, and other fiscal charges not elsewhere
enumerated that are levied on imports;

The term "indirect taxes" shall mean sales, excise, turnover, value added, franchise, stamp,
transfer, inventory and equipment taxes, border taxes and all taxes other than direct taxes and import
charges;

"Prior-stage" indirect taxes are those levied on goods or services used directly or indirectly in
making the product;

"Cumulative" indirect taxes are multi-staged taxes levied where there is no mechanism for
subsequent crediting of the tax if the goods or services subject to tax at one stage of production are used
in a succeeding state of production;

"Remission" of taxes includes the refund or rebate of taxes;
"Remission of drawback" includes the full or partial exemption or deferral of import charges.
< [3] ) Deferral may not amount to an export subsidy where, for example, appropriate interest charges are
collected.
( [4] ) Paragraph (h) does not apply to value-added tax systems and border-tax adjustment in lieu thereof; the
problem of the excessive remission of value-added taxes is exclusively covered by paragraph (g).

**70**

_**11**_
_**g.**_

accordance with the guidelines on consumption of inputs in the production process

contained in Annex II.

(i) The remission or drawback of import charges(2) in excess of those levied on

imported inputs that are consumed in the production of the exported product (making

normal allowance for waste); provided, however, that in particular cases a firm may use

a quantity of home market inputs equal to, and having the same quality and

characteristics as, the imported inputs as a substitute for them in order to benefit from

this provision if the import and the corresponding export operations both occur within a

reasonable time period, not to exceed two years. This item shall be interpreted in

accordance with the guidelines on consumption of inputs in the production process

contained in Annex II and the guidelines in the determination of substitution drawback

systems as export subsidies contained in Annex III.

(j) The provision by governments (or special institutions controlled by governments)

of export credit guarantee or insurance programmes, of insurance or guarantee

programmes against increases in the cost of exported products or of exchange risk

programmes, at premium rates which are inadequate to cover the long-term operating

costs and losses of the programmes.

(2) See previous reference.

**71**

_**Ztb**_

**(k)** **The grant by governments (or special institutions controlled by** **and/or** **acting**

**under the authority of governments) of export credits at rates below those which they**

**actually have to pay for the funds so employed (or would have to pay if** **they borrowed**

**on international capital markets in order to obtain funds of** **the** **same maturity and other**

**credit terms and denominated in the same currency at the export credit), or the payment**

**by them of all or part of the costs incurred by exporters or financial institutions in**

**obtaining credits, in so far as they are used to secure a material advantage in the field of**

**export credit terms.**

**Provided, however, that if a Member of the WTO is a party to an international**

**undertaking on official export credits to which at least twelve original such Members**

**are parties as of** **1** **January** **1979** **(or a successor undertaking which has been adopted by**

**those original Members), or if in practice a Member of the WTO applied the interest**

**rates provisions of the relevant undertaking, an export credit practice which is in**

**conformity with those** **provisions** **shall not be considered an export subsidy.**

**(1)** **Any other charge on the public account constituting an export subsidy in the sense**

**of Article XVI of GATT 1994.**

**72**

_**15**_ _**o**_

ANNEX II

GUIDELINES ON CONSUMPTION OF INPUTS IN THE PRODUCTION

PROCESS* [5] )

I

1. Indirect tax rebate schemes can allow for exemption, remission or deferral of

prior-stage cumulative indirect taxes levied on inputs that are consumed in the

production of the exported product (making normal allowance for waste). Similarly,

drawback schemes can allow for the remission or drawback of import charges levied on

inputs that are consumed in the production of the exported product (making normal

allowance for waste).

2. The Illustrative List of Export Subsidies in Annex I makes reference to the term

"inputs that are consumed in the production of the exported product" in paragraphs (h)

and (i). Pursuant to paragraph (h), indirect tax rebate schemes can constitute an export

subsidy to the extent that they result in exemption, remission or deferral of prior-stage

cumulative indirect taxes in excess of the amount of such taxes actually levied on inputs

that are consumed in the production of the exported product. Pursuant to paragraph (i),

drawback schemes can constitute an export subsidy to the extent that they result in a

remission or drawback of import charges in excess of those actually levied on inputs

that are consumed in the production of the exported product. Both paragraphs stipulate

that normal allowance for waste must be made in findings regarding consumption of

inputs in the production of the exported product. Paragraph (i) also provides for

substitution, where appropriate.

( [5] ) Inputs consumed in the production processes are inputs physically incorporated, energy, fuels and oil
used in the production process and catalysts which are consumed in the course of their use to obtain the
exported product.

**^**

**II**

**3.** **In examining whether inputs are consumed in the production of the exported**

**product, as part of a countervailing duty investigation, the Commission shall normally**

**proceed on the following basis:**

**4.** **Where it is alleged that an indirect tax rebate scheme, or a drawback scheme,**

**conveys a subsidy by reason of over-rebate or excess drawback of indirect taxes or**

**import charges on inputs consumed in the production of the exported product, the**

**Commission shall normally first determine whether the government of the exporting**

**country has in place and applies a system or procedure to confirm which inputs are**

**consumed in the production of the exported product and in what amounts. Where such a**

**system** **or procedure is determined to be applied, the Commission shall normally then**

**examine the system or procedure to** **see** **whether it is reasonable, effective** **for** **the**

**purpose intended, and based on generally accepted commercial practices in the country**

**of export. The Commission may deem it necessary to carry out, in accordance with**

**paragraph 2 of Article 17, certain practical tests in order to verify information or to**

**satisfy itself that** **the** **system** **or** **procedure is being effectively applied.**

**5.** **Where there is no such system** **or** **procedure,** **where it is not reasonable, or where it**

**is instituted and considered reasonable but is found not to be applied or not be applied**

**effectively, a further examination by the exporting country based on the actual inputs**

**involved will normally need to be carried out in the context of determining whether an**

**excess payment occurred. If the Commission deems it necessary, a further examination**

**may be carried out in accordance with paragraph 4.**

**6.** **The Commission shall normally treat inputs as physically incorporated if such**

**inputs are used in the production process and are physically present in the product**

**exported. An input need not be present in the** **final** **product in the same form in which it**

**entered the production process.**

**74**

7. In determining the amount of a particular input that is consumed in the production

of the exported product, a "normal allowance for waste" shall normally be taken into

account, and such waste shall normally be treated as consumed in the production of the

exported product. The term "waste" refers to that portion of a given input which does

not serve an independent function in the production process, is not consumed in the

production of the exported product (for reasons such as inefficiencies) and is not

recovered, used or sold by the same manufacturer.

8. The Commission's determination of whether the claimed allowance for waste is

"normal" shall normally take into account the production process, the average

experience of the industry in the country of export, and other technical factors, as

appropriate. The Commission shall bear in mind that an important question is whether

the authorities in the exporting country have reasonably calculated the amount of waste,

when such an amount is intended to be included in the tax or duty rebate or remission.

**75**

153

**ANNEX III**

**GUIDELINES IN THE DETERMINATION OF SUBSTITUTION**

**DRAWBACK SYSTEMS AS EXPORT SUBSIDIES**

**I**

**1.** **Drawback systems can allow for the refund or drawback of import charges on**

**inputs which are consumed in the production** **process** **of** **another** **product and where the**

**export of this latter product contains domestic inputs having the same quality and**

**characteristics as those submitted for the imported inputs. Pursuant to paragraph (i) of**

**the Illustrative List of Export Subsidies in Annex I, substitution drawback systems can**

**constitute an export subsidy to the extent that they result in an excess drawback of the**

**import charges levied initially on the imported inputs for which drawback is being**

**claimed.**

**II**

**2.** **In examining any substitution drawback system as part of a countervailing duty**

**investigation pursuant to this Regulation, the Commission shall normally proceed on the**

**following basis:**

**3.** **Paragraph (i) of the Illustrative List stipulates that home market inputs may be**

**substituted for** **imported** **inputs in the production of** **a** **product for export provided such**

**inputs are equal in quantity to, and have the same quality and characteristics as, the**

**imported inputs being substituted. The existence of** **a** **verification system or procedure is**

**important because it** **enables** **the government of the exporting country to ensure and**

**demonstrate that the quantity on inputs for which drawback is claimed does not exceed**

**the** **quantity** **of similar products exported, in whatever form, and that there is not**

**drawback of import charges in excess of those originally levied on the imported inputs**

**in question.**

**23**
_**H**_

4. Where it is alleged that a substitution drawback system conveys a subsidy, the

Commission shall normally first proceed to determine whether the government of the

exporting country has in place and applies a verification system or procedure. Where

such a system or procedure is determined to be applied, the Commission shall normally

then examine the verification procedures to see whether they are reasonable, effective

for the purpose intended, and based on generally accepted commercial practices in the

country of export. To the extent that the procedures are determined to meet this test and

are effectively applied, no subsidy will be presumed to exist. It may be deemed

necessary by the Commission to carry out, in accordance with paragraph 2 of Article 17,

certain practical tests in order to verify information or to satisfy itself that the

verification procedures are being effectively applied.

5. Where there are no verification procedures, where they are not reasonable, or

where such procedures are instituted and considered reasonable but are found not to be

actually applied or not be applied effectively, there may be a subsidy. In such cases,

further examination by the exporting country based on the actual transactions involved

would need to be carried out to determinate whether an excess payment occurred. If the

Commission deems it necessary, a further examination would be carried out in

accordance with paragraph 4.

6. The existence of a substitution drawback provision under which exporters are

allowed to select particular import shipments on which drawback is claimed should not

of itself be considered to convey a subsidy.

7. An excess drawback of import charges in the sense of paragraph (i) would be

deemed to exist where governments paid interest on any monies refunded under their

drawback schemes, to the extent of the interest actually paid or payable.

**77**

_**2A**_

ANNEX IV

(This Annex reproduces Annex 2 to the Agreement on Agriculture. Any terms or

expression which are not explained herein or which are not self-explanatory are to be

interpreted in the context of that Agreement)

DOMESTIC SUPPORT : THE BASIS OF EXEMPTION

FROM THE REDUCTION COMMITMENTS

1. Domestic support measures for which exemption from the reduction commitments

is claimed shall meet the fundamental requirement that they have no, or at most

minimal, trade-distorting effects of effects on production. Accordingly, all measures for

which exemption is claimed shall conform to the following basic criteria:

(a) the support in question shall be provided through a publicly-funded

government programme (including government revenue foregone) not

involving transfers from consumers; and,

(b) the support in question shall not have the effect of providing price support to

producers;

plus policy-specific criteria and conditions as set out below.

_2AL_

_Government Service_ _Programmes_

2. General Services

Policies in this category involve expenditures (or revenue foregone) in relation to

programmes which provide services or benefits to agriculture or the rural

community. They shall not involve direct payments to producers or processors.

Such programmes, which include but are not restricted to the following list, shall

meet the general criteria in paragraph 1 above and policy-specific conditions

where set out below:

(a) research, including general research, research in connection with

environmental programmes, and research programmes relating to particular

products;

(b) pest and disease control, including general and product-specific pest and

disease control measures, such as early-warning systems, quarantine and

eradication;

(c) training services, including both general and specific training facilities;

(d) extension and advisory services, including the provision of means to

facilitate the transfer of information and the results of research to producers

and consumers;

(e) inspection services, including general inspection services and the inspection

of particular products for health, safety, grading or standardization purposes;

(f) marketing and promotion services, including market information, advice and

promotion relating to particular products but excluding expenditure for

unspecified purposes that could be used by sellers to reduce their selling

price or confer a direct economic benefit to purchasers; and

**79**

(g) infrastructural services, including: electricity reticulation, roads and other

means of transport, market and port facilities, water supply facilities, dams

and drainage schemes, and infrastructural works associated with

environmental programmes. In all cases the expenditure shall be directed to

the provision or construction of capital works only, and shall exclude the

subsidized provision of on-farm facilities other than for the reticulation of

generally available public utilities. It shall not include subsidies to inputs or

operating costs, or preferential user charges.

3. Public stockholding for food security purposes* [6] )

Expenditures (or revenue foregone) in relation to the accumulation and holding of

stocks of products which form an integral part of a food security programme

identified in national legislation. This may include government aid to private

storage of products as part of such a programme.

_F.q_ rri _(A>_

The volume and accumulation of such stocks shall correspond to predetermined

targets related solely to food security. The process of stock accumulation and

disposal shall be financially transparent. Food purchases by the government shall

be made at current market prices and sales from food security stocks shall be

made at no less than the current domestic market price for the product and quality

in question.

4. Domestic food aid* [7] )

Expenditures (or revenue foregone) in relation to the provision of domestic food

aid to sections of the population in need.

( [6] ) For the purpose of paragraph 3 of this Annex, governmental stockholding programmes for food
security purposes in developing countries whose operation is transparent and conducted in accordance
with officially published objective criteria or guidelines shall be considered to be in conformity with the
provisions of this paragraph, including programmes under which stocks of foodstuffs for food security
purposes are acquired and released at administered prices, provided that the difference between the
acquisition price and the external reference price is accounted for in the AMS.
( [7] ) For the purposes of paragraphs 3 and 4 of this Annex, the provision of foodstuffs at subsidized prices
with the objective of meeting food requirements of urban and rural poor in developing countries on a
regular basis at reasonable prices shall be considered to be in conformity with the provisions of this
paragraph.

**80**

**•is** **2**

Eligibility to receive the food aid shall be subject to clearly-defined criteria related

to nutritional objectives. Such aid shall be in the form of direct provision of food

to those concerned or the provision of means to allow eligible recipients to buy

food either at market or a subsidized prices. Food purchases by the government

shall be made at current market prices and the financing and administration of the

aid shall be transparent.

Direct payments to producers

Support provided through direct payments (or revenue foregone, including

payments in kind) to producers for which exemption from reduction commitments

is claimed shall meet the basic criteria set out in paragraph 1 above, plus specific

criteria applying to individual types of direct payment as set out in paragraphs 6

through 13 below. Where exemption from reduction is claimed for any existing or

new type of direct payment other than those specified in paragraphs 6 through 13,

it shall conform to criteria (b) through (e) in paragraph 6, in addition to the general

criteria set out in paragraph 1.

Decoupled income support

(a) Eligibility for such payments shall be determined by clearly-defined criteria

such as income, status as a producer or landowner, factor use or production

level in a defined and fixed base period.

(b) The amount of such payments in any given year shall not be related to, or

based on, the type or volume of production (including livestock units)

undertaken by the producer in any year after the base period.

(c) The amount of such payments in any given year shall not be related to, or

based on, the prices, domestic or international, applying to any production

undertaken in any year after the base period.

**81**

253

(d) The amount of such payments in any given years shall not be related to, or

based on, the factors of production employed in any year after the base

period.

(e) No production shall be required in order to receive such payments.

7. Government financial participation in income insurance and income safety-net

programmes

(a) Eligibility for such payments shall be determined by an income loss, taking

into account only income derived from agriculture, which exceeds 30 per

cent of average gross income or the equivalent in net income terms

(excluding any payments from the same or similar schemes) in the

preceding three-year period or a three-year average based on the preceding

five-year period, excluding the highest and the lowest entry. Any producer

meeting this condition shall be eligible to receive the payments.

(b) The amount of such payments shall compensate for less than 70 per cent of

the producer's income loss in the year the producer becomes eligible to

receive this assistance.

(c) The amount of any such payments shall relate solely to income; it shall not

relate to the type or volume of production (including livestock units)

undertaken by the producer; or to the prices, domestic or international,

applying to such production; or to the factors of production employed.

(d) Where a producer receives in the same year payments under this paragraph

arid under paragraph 8 (relief from natural disasters), the total of such

payments shall be less than 100 per cent of the producer's total loss.

**82**

8. Payments (made either directly or by way of a government financial participation

in crop insurance schemes) for relief from natural disasters

(a) Eligibility for such payments shall arise only following a formal recognition

by government authorities that a natural or like disaster (including disease

outbreaks, pest infestations, nuclear accidents, and war on the territory of

the Member concerned) has occurred or is occurring; and shall be

determined by a production loss which exceeds 30 per cent of the average of

production in the preceding three-year period or a three-year average based

on the preceding five year period, excluding the highest and the lowest

entry.

(b) Payments made following a disaster shall be applied only in respect of

losses of income, livestock (including payments in connection with the

veterinary treatment of animals), land or other production factors due to the

. .. . .            - <•!•* unnatural disaster m question.

(c) Payments shall compensate for not more than the total cost of replacing such

losses and shall not require or specify the type or quantity of future

production.

(d) Payments made during a disaster shall not exceed the level required to

prevent or alleviate further loss as defined in criterion (b) above.

(e) Where a producer receives in the same year payments under this paragraph

and under paragraph 7(income insurance and income safety-net

programmes), the total of such payments shall be less than 100 per cent of

the producer's total loss.

**83**

**âo-1**

**9.** **Structural** **adjustment** **assistance** **provided through producer retirement**

**programmes**

**(a)** **Eligibility for such payments shall be determined by reference to clearly**

**defined criteria in programmes designed to** **facilitate** **the retirement of**

**persons engaged in marketable agricultural production,** **or** **their movement to**

**non-agricultural activities.**

**(b)** **Payments shall be conditional upon the total and permanent retirement of**

**the recipients** **from** **marketable agricultural production.**

**10.** **Structural** **adjustment** **assistance** **provided through resource** **retirement**

**programmes.**

**(a)** **Eligibility for such payments shall be determined by reference to clearly**

**defined criteria in programmes designed to remove land or other resources,**

**including livestock,** **from** **marketable agricultural production.**

**(b)** **Payments shall be conditional upon the retirement of** **land** **from marketable**

**agricultural production for a minimum of three years, and in the case of**

**livestock on its slaughter or definitive permanent disposal.**

**(c)** **Payments shall not require or specify any alternative use for such land or**

**'** **other resources which involves the production of marketable agricultural**

**products.**

**(d)** **Payments shall not be related to either type or quantity of production or to**

**the prices, domestic or international, applying** **to** **production undertaken**

**using the land or** **other** **resources remaining** **in** **production.**

**84**

**So>**

11. Structural adjustment assistance provided through investment aids

(a) Eligibility for such payments shall be determined by reference to clearly
defined criteria in government programmes designed to assist the financial

or physical restructuring of a producer's operations in response to

objectively demonstrated structural disadvantages. Eligibility for such

programmes may also be based on a clearly-defined government programme

for the reprivatization of agricultural land.

(b) The amount of such payments in any given year shall not be related to, or

based on, the type or volume of production (including livestock units)

undertaken by the producer in any year after the base period other than as

provided for under criterion (e) below.

(c) The amount of such payments in any given year shall not be related to, or

based on, the prices, domestic or international, applying to any production

undertaken in any year after the base period.

(d) The payments shall be given only for the period of time necessary for the

realisation of the investment in respect of which they are provided.

(e) The payments shall not mandate or in any way designate the agricultural

products to be produced by the recipients except to require them not to

produce a particular product.

(f) The payments shall be limited to the amount required to compensate for the

structural disadvantage.

**85**

**•3^3**

12. Payments under environmental programmes

(a) Eligibility for such payments shall be determined as part of a clearly-defined

government environmental or conservation programme and be dependent on

the fulfilment of specific conditions under the government programme,

including conditions related to production methods or inputs.

(b) The amount of payment shall be limited to the extra costs or loss of income

involved in complying with the government programme.

13. Payments under regional assistance programmes

(a) Eligibility for such payments shall be limited to producers in disadvantaged

regions. Each such region must be a clearly designated contiguous

geographical area with a definable economic and administrative identity,

considered as disadvantaged on the basis of neutral and objective criteria

clearly spelt out in a law or regulation and indicating that the region's

difficulties arise out of more than temporary circumstances.

(b) The amount of such payments in any given year shall not be related to, or

based on, the type or volume of production (including livestock units)

undertaken by the producer in any year after the base period other than to

reduce that production.

(c) The amount of such payments in any given year shall not be related to, or

based on, the prices, domestic or international, applying to any production

undertaken in any year after the base period.

(d) Payments shall be available only to producers in eligible regions, but

generally available to all producers within such regions.

**86**

**i*>L|**

(e) Where related to production factors, payments shall be made at a degressive

rate above a threshold level of the factor concerned.

(f) The payments shall be limited to the extra costs of loss of income involved

in undertaking agricultural production in the prescribed area.

**87**

**'^cl**

**Commercial** **defence:**

**Safeguards**

_**%**_ _**[(o ]**_

Explanatory memorandum

The Uruguay Round Safeguards Agreement clarifies and strengthens the disciplines of
GATT 1994, specifically those regarding the implementation of Article XIX.

The Agreement restores multilateral control over safeguards and requires the elimination of
any measures which escape such control.

Safeguard measures may be applied only in the circumstances and in the manner specified in
the Agreement. As a result, all grey area measures, i.e. arrangements for limiting imports
or exports, orderly-marketing arrangements or other similar arrangements, will be
prohibited and must be eliminated.

The only exception made is for the EC-Japan arrangement relating to certain types of motor
vehicle, which expires on 31 December 1999.

In the Community's case, adherence to the obligations stemming from the Safeguards
Agreement entails denouncing all grey-area measures by the deadline given in the
Agreement (180 days following the entry into force of the Agreement Establishing the
MTO) and reviewing or amending (where necessary) the common rules for imports
established by Council Regulation (EC) No 518/94, particularly in connection with
safeguards.

The attached draft Regulation is the product of such a review.

It should be pointed out, however, that Community legislation already contains precise rules
that often go beyond the more general provisions of the Safeguards Agreement. This is the
case, for example, with the strict investigation deadlines and the more detailed list of factors
to be considered in determining serious injury and the causal link between such injury and
imports.

**The main amendments to Council Regulation** **(EC)** **No 518/94 are therefore as follows:**

(a) Incorporation of definitions

Definitions of the terms "threat of serious injury", "serious injury" and "Community
producers".

_**Article 5(3);**_ _**Agreement**_ _**on**_ _**Safeguards Article**_ _**4(1)**_

(b) Causal link: other factors

The Article dealing with the factors to be considered in an investigation will have
added to it an extra paragraph on determining the presence of a causal link.
_**Article**_ _**10(1)**_ _**(d);**_ _**Agreement**_ _**on**_ _**Safeguards**_ _**Article 4(2)**_

_**%**_
_**\**_

(c) Rights of the interested parties

Explicitly expressed right of reply to other parties' arguments for the interested
parties.

_End of Article 6(2); Agreement on_ _Safeguards_ _Article 3(1)_

(d) Taking of provisional safeguard measures in critical circumstances

Adoption of the Safeguards Agreement's clauses on provisional measures
(conditions, duration and nature).

_Article 8; Agreement on_ _Safeguards_ _Article 6_

(e) Quota levels

Explicit provision on the setting of a quota at a level, in principle, no lower than
average imports over the last three representative years.

_Article_ _16(2)_ _(b);_ _Agreement on_ _Safeguards_ _Article 5(1)_

(f) Allocation of quotas among supplier countries

Arrangements for allocating quotas among supplier countries are now included
(agreement, share of previous imports, modulation).

_Article_ _16(3);_ _Agreement on_ _Safeguards_ _Article 5(2)_

(g) Duration of safeguard measures

No safeguard measure may now remain in force for longer than four years unless
extended after a further investigation. The extension may not be for longer than four

years.

_Article 20; Agreement on_ _Safeguards_ _Article 7(1) to 7(3)_

(h) Progressive liberalization and mid-term review

Any measure applying for longer than one year will have to be liberalized at regular
intervals and any measure applying for longer than three years will be subject to a
mid-term review.

_Articles 20(4) and_ _21_ _(1);_ _Agreement on_ _Safeguards_ _Article 7(4)_

(i) Reimposition of safeguard measures

There can now be no reimposition of safeguard measures on a particular product for
at least two years from the expiry of the previous such measure.
_Article 22; Agreement on_ _Safeguards_ _Article 7(5) and 7(6)_

(j) Developing countries

Adoption of the Safeguards Agreement's provisions prohibiting the imposition of
safeguard measures on products from developing country WTO Members if imports
of those products are below a certain level.

_Article 19; Agreement on_ _Safeguards_ _Article 9(1)_

COUNCIL REGULATION (EC) No .../94

9 4 / 0232(ACC)
of 1994
on common rules for imports and repealing Regulation (EC) No **518/94**

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community, and in particular

Article 113 thereof,

Having regard to the instruments establishing common organization of agricultural markets

and the instruments concerning processed agricultural products, in particular insofar as

they provide for derogation from the general principle that quantitative restrictions or

measures having equivalent effect may be replaced solely by the measures provided for in

the said instruments,

Having regard to the proposal from the Commission,

Having regard to the opinion of the European Parliament,

Whereas the common commercial policy should be based on uniform principles; whereas
Council Regulation (EC) No 518/94 [1] of 7 March 1994 on common rules for imports and
repealing Regulation (EEC) No 288/82 [2] is an important part of the policy;

Whereas due account was taken when Regulation (EC) No 518/94 was adopted of the

Community's international obligations, particularly those deriving from Article XIX of the

General Agreement on Tariffs and Trade (GATT);

Whereas the completion of the Uruguay Round has led to the foundation of the World

Trade Organization (WTO); whereas Annex 1A to the Agreement establishing the WTO

contains _inter alia_ the General Agreement on Tariffs and Trade 1994 (GATT 1994) and an

Agreement on Safeguards;

Whereas the Agreement on Safeguards meets the need to clarify and reinforce the

disciplines of GATT 1994, and specifically those of Article XIX; whereas that Agreement

requires the elimination of safeguard measures which escape those rules, such as voluntary

export restraints, orderly marketing arrangements and any other similar import or export

arrangements;

' OJL67, 10.3.1994, p.77.
2 OJL 35, 9.2.1982, p.l.
REG518/518fin-e (version définitive)

**5o9**

**2**

**Whereas in the light of these new multilateral rules the common rules for imports should**

**be made clearer and if** **necessary** **amended, particularly where the application of safeguard**

**measures is concerned;**

**Whereas the starting point for the common rules for imports is liberalization of imports,**

**namely the absence of any quantitative restrictions;**

**Whereas the Commission should be informed by the Member States of** **any** **danger created**

**by trends in imports which might call for Community surveillance or the application of**

**safeguard measures;**

**Whereas in such instances the Commission should examine the terms and conditions under**

**which imports occur, the trend in** **imports,** **the various aspects of** **the** **economic and trade**

**situations and, where appropriate, the measures** **to** **be applied;**

**Whereas if Community surveillance is applied, release for free circulation of the products**

**concerned should be made subject to presentation of** **an** **import document meeting uniform**

**criteria; whereas that document should, on simple application by the importer, be**

**endorsed by the authorities of** **the** **Member States within a certain period but without the**

**importer thereby acquiring any right to import; whereas the document should therefore be**

**valid** **only during such period as the import rules remain unchanged;**

**Whereas the Member States and the Commission should exchange the information resulting**

**from Community surveillance as fully as possible;**

**Whereas it falls to the Commission and the Council to adopt the safeguard measures**

**required by the interests of** **the** **Community; whereas those interests should be considered**

**as a whole and should in particular encompass the interest of Community producers, users**

**and** **consumers;**

**Whereas safeguard measures against a Member of** **the** **WTO may be considered only if the**

**product in question is imported into the Community in such greatly increased quantities**

**and on such terms or conditions as to cause, or threaten to cause, serious injury to**

**Community producers of like or directly competing products, unless international**

**obligations permit derogation from this rule;**

**3**

**Whereas the terms "serious injury", "threat of serious injury" and "Community producers"**

**should be defined and more precise criteria for determining injury be established;**

**Whereas an investigation must precede the application of any safeguard measure, subject to**

**the reservation that the Commission be allowed in urgent cases to apply provisional**

**measures;**

**Whereas there should be more detailed provisions on the opening of investigations, the**

**checks and inspections required, access by exporter countries and interested parties to the**

**information gathered, hearings for the parties involved and the opportunities for those**

**parties to submit their views;**

**Whereas the provisions on investigations introduced by this Regulation are without**

**prejudice to Community or national rules concerning professional secrecy;**

**Whereas it is also necessary to set time limits for the initiation of investigations and for**

**determinations as to whether or not measures are appropriate, with a view to ensuring that**

**such determinations are made quickly, in order to increase legal certainty for the economic**

**operators concerned;**

**Whereas in cases in which safeguard measures take the form of a quota the level of the**

**latter should be set in principle no lower than the average level of imports over a**

**representative period of at least three years;**

**Whereas in cases in which a quota is allocated among supplier countries each country's**

**quota may be determined by agreement with the countries themselves or by taking as a**

**reference the level of imports over a representative** **period;** **whereas derogations from these**

**rules should nevertheless be possible where there is a disproportionate increase in imports,**

**provided that due consultation under the auspices of** **the** **WTO Committee on Safeguards**

**takes place;** **"**

**Whereas the maximum duration of safeguard measures should be determined and specific**

**provisions regarding extension, progressive liberalization and reviews of such measures be**

**laid down;**

**Whereas the circumstances in which products originating in a developing country Member**

**of the WTO should be exempt from safeguard measures should be established;**

_**AA**_
4

Whereas surveillance or safeguard measures confined to one or more regions of the

Community may prove more suitable than measures applying to the whole Community;

whereas, however, such measures should be authorized only exceptionally and where no

alternative exists; whereas it is necessary to ensure that such measures are temporary and

cause the minimum of disruption to the operation of the internal market;

Whereas in the interests of uniformity in rules for imports, the formalities to be carried out

by importers should be simplified and made identical regardless of the place where the

goods clear customs; whereas it is therefore desirable to provide that any formalities

should be carried out using forms corresponding to the specimen annexed to the

Regulation;

Whereas import documents issued in connection with Community surveillance measures

should be valid throughout the Community irrespective of the Member State of issue;

Whereas the textile products covered by Regulation (EC) No 517/94 of 7 March 1994 on

common rules for imports of textile products from certain third countries not covered by

bilateral agreements, protocols or other arrangements or by other specific Community

import rules are subject to special treatment at Community and international level; whereas

they should therefore be completely excluded from the scope of this Regulation;

Whereas the provisions of this Regulation are applicable without prejudice to Articles 77,

81, 244, 249 and 280 of the Act of Accession of Spain and Portugal;

Whereas Regulation (EC) No 518/94 should consequently be repealed,

5

HAS ADOPTED THIS REGULATION:

TITLE I

General principles

Article 1

1. This Regulation applies to imports of products covered by the Treaty originating in

third countries, except for:

textile products covered by Regulation (EC) No 517/94,

the products originating in certain third countries listed in Regulation (EC)

No 519/94 on common rules for imports from certain third countries,

2. The products referred to in paragraph 1 shall be freely imported into the

Community and accordingly, without prejudice to the safeguard measures which

may be taken under Title V, shall not be subject to any quantitative restrictions.

TITLE II

Community **information and consultation procedure**

Article 2

The Commission shall be informed by the Member States should trends in imports appear

to call for surveillance or safeguard measures. This information shall contain the evidence

available, as determined on the basis of the criteria laid down in Article 10. The

Commission shall immediately pass this information on to all the Member States.

Article 3

Consultations may be held either at the request of a Member State or on the initiative of the

Commission. They shall take place within eight working days of the Commission receiving

the information provided for in Article 2 and, in any event, before the introduction of any

Community surveillance or safeguard measure.

_**M.X**_

**H3**

6

Article 4

1. Consultation shall take place within an advisory committee, hereinafter called 'the
Committee', made up of representatives of each Member State with a representative

of the Commission as chairman.

2. The Committee shall meet when convened by its chairman. He shall provide the

Member States with all relevant information as promptly as possible, .

3. Consultations shall cover in particular:

terms and conditions of import, import trends and the various aspects of the
economic and trade situation with regard to the product in question;

the measures, if any, to be taken.

4. Consultations may be conducted in writing if necessary. The Commission shall in
this event inform the Member States, which may express their opinion or request
oral consultations within a period of five to eight working days, to be decided by

the Commission.

TITLE **m**

**Community investigation procedure**

Article 5

1. Without prejudice to Article 8, the Community investigation procedure shall be
implemented before any safeguard measure is applied.

2. Using as a basis the factors described in Article 10, the investigation shall seek to
determine whether imports of the product in question are causing or threatening to
cause serious injury to the Community producers concerned.

3. The following definitions shall apply:

(a) "serious injury" means a significant overall impairment in the position of
Community producers,

**M-V**

**(b)** **"threat of serious injury" means serious injury that is clearly imminent;**

**(c)** **"Community producers" means the producers as a whole of the like or**

**directly competing products operating within the territory of the**

**Community, or those whose collective output of the like or directly**

**competing products constitutes a major proportion of** **the** **total Community**

**production of those products.**

**Article 6**

**1.** **Where after consultations referred to in Article 3, it is apparent to the Commission**

**that there is sufficient evidence to justify the initiation of** **an** **investigation, the**

**Commission shall:**

**(a)** **initiate an investigation within one month of receipt of information from a**

**Member State and publish a notice in the** _**Official Journal**_ _**of the**_ _**European**_

_**Communities',**_ **such notice shall give a summary of the information received,**

**and stipulate that all relevant information is to be communicated to the**

**Commission; it shall state the period within which interested parties may**

**make known their views in writing and submit** **information,** **if such views and**

**information are to be taken into account during** **the** **investigation; it shall also**

**state the period within which interested parties may apply to be heard orally**

**by the Commission in accordance with paragraph 4;**

**(b)** **commence the investigation, acting in cooperation with the Member States.**

**2.** **The Commission shall seek all information it deems to be necessary and, where it**

**considers it appropriate, after consulting the Committee, endeavour to check this**

**information with importers, traders, agents, producers, trade associations and**

**organizations.**

**The Commission shall be assisted in this task by staff of** **the** **Member State on**

**whose territory these checks are being carried out, provided that Member State so**

**wishes.**

**Interested parties which have come forward under paragraph (l)(a) and**

**representatives of** **the** **exporting country may, upon written request, inspect all**

**information made available to the Commission in connection with the investigation**

**other than internal documents prepared by the authorities of** **the** **Community or its**

**Member States, provided that that information is relevant to the presentation of**

**their case and not confidential within the meaning of Article 9, and that it is used by**

**the Commission in the investigation.**

_**MS**_

**Interested parties which have come forward may communicate their views on the** **-**

**information in** **question** **to the Commission; those views may be taken into**

**consideration where they are backed by sufficient evidence.**

**3.** **The Member States shall supply the Commission, at its request and following**

**procedures laid down by it, with the information at their disposal on developments**

**in the market of** **the** **product being investigated.**

**4.** **The Commission may hear the interested parties. Such parties must be heard where**

**they have made a written application within the period laid down in the notice**

**published in the** _**Official Journal**_ _**of**_ _**the European**_ _**Communities,**_ **showing that they**

**are actually likely to be affected by the outcome of** **the** **investigation and that there**

**are special reasons for them to be heard orally.**

**5.** **When information is not supplied within** **the** **time limits set by this Regulation or by**

**the Commission under this Regulation, or the investigation is significantly impeded,**

**findings may** **be** **made on the basis of** **the** **facts available. Where the Commission**

**finds that any interested party or third party has supplied it which false or**

**misleading information, it shall disregard the information and may make use of**

**facts available.**

**6.** **Where it appears to the Commission, after the consultation referred to in Article 3,**

**that there is insufficient evidence** **to** **justify** **an** **investigation, it shall inform the**

**Member States of its** **decision** **within one month of receipt of the information from**

**the Member States.**

**Article 7**

**1.** **At the end of** **the** **investigation, the Commission shall submit a report on the results**

**to the Committee.**

**2.** **Where the Commission considers, within nine months of** **the** **initiation of the**

**investigation, that no Community surveillance or safeguard measures are necessary,**

**the investigation shall be terminated within a month, the Committee having first**

**been consulted. The decision to terminate the investigation, stating the main**

**conclusions of the** **investigation** **and a summary of the reasons therefor, shall be**

**published in the** _**Official Journal**_ _**of the**_ _**European**_ _**Communities.**_

9

3. If the Commission considers that Community surveillance or safeguard measures

are necessary, it shall take the necessary decisions in accordance with Titles IV and

V, no later than nine months from the initiation of the investigation. In exceptional

circumstances, this time limit may be extended by a further maximum period of two

months; the Commission shall then publish a notice in the _Official_ _Journal of the_

_European Communities_ setting forth the duration of the extension and a summary of

the reasons therefor.

Article 8

1. The provisions of this Title shall not preclude the use, at any time, of surveillance

measures in accordance with Articles 11 to 15 or provisional safeguard measures in

accordance with Articles 16, 17 and 18.

Provisional safeguard measures shall be applied:

in critical circumstances where delay would cause damage which it would be

difficult to repair, making immediate action necessary;

where a preliminary determination provides clear evidence that increased

imports have caused or are threatening to cause serious injury.

2. The duration of such measures shall not exceed 200 days.

3. Provisional safeguard measures should take the form of an increase in the existing

level of customs duty (whether the latter is zero or higher) if such action is likely to

prevent or repair the serious injury.

4. The Commission shall immediately conduct whatever investigation measures are

still necessary.

5. Should the provisional safeguard measures be repealed because no serious injury or

threat of serious injury exists, the customs duties collected as a result of the

provisional measures shall be automatically refunded as soon as possible. The

procedure laid down in Article 235 _et seq_ of Council Regulation (EEC) No 2913/92

of 12 October 1992 shall apply.

_**A\**_

**10**

**Article 9**

**1.** **Information received pursuant to this Regulation shall be used only for the purpose**

**for which it was requested.**

**2.** **(a)** **Neither the Council,** **nor** **the Commission, nor the Member States, nor the**

**officials of any of these shall reveal any information of** **a** **confidential nature**

**received pursuant to this Regulation, or any information provided on a**

**confidential basis without specific permission from the supplier of such**

**information.**

**(b)** **Each request for confidentiality shall state the reasons why the information**

**is confidential.**

**However,** **if it appears that a request for confidentiality is unjustified and** **if**

**the supplier of** **the** **information wishes neither to make it public nor to**

**authorize its disclosure in general terms or in the form of** **a** **summary, the**

**information concerned may be disregarded.**

**3.** **Information** **shall in any case be considered to be confidential if its disclosure is**

**likely to have a** **significantly** **adverse effect upon the supplier or the source of such**

**information.**

**4.** **The preceding paragraphs shall not preclude reference by the Community**

**authorities to general information and in particular to reasons on which decisions**

**taken under this Regulation are based. The said authorities shall, however, take into**

**account the legitimate interest of** **the** **legal and natural persons concerned that their**

**business secrets should not be divulged.**

**Article 10**

**1.** **Examination of** **the** **trend of imports, of** **the** **conditions in which they take place and**

**of serious injury or threat of serious injury to Community producers resulting from**

**such imports shall cover in** **particular** **the following factors:**

**(a)** **the volume of imports, in particular where there has been a significant**

**increase, either in absolute terms or relative to production or consumption in**

**the Community;**

_**Mi**_
**H**

**(b)** **the price of the imports, in particular where there has been a significant**

**price undercutting as compared with the price of** **a** **like product in the**

**Community;**

**(c)** **the consequent impact on the Community producers as indicated by trends in**

**certain economic factors such as:**

**production,**

**capacity utilization,**

**stocks,**

**sales,**

**market share,**

**prices (i.e. depression of prices or prevention of price increases**

**which would normally have occurred),**

**profits,**

**return on capital employed,**

**cash flow,**

**employment.**

**(d)** **factors other than trends in imports which are causing or may have caused**

**injury to the Community producers concerned.**

**2.** **Where a threat of serious injury is alleged, the Commission shall also examine**

**whether it is clearly foreseeable that a particular situation is likely to develop into**

**actual injury. In this regard account may be taken of factors such as:**

**(a)** **the rate of increase of** **the** **exports to the Community;**

**(b)** **export capacity in the country of origin or export, as it stands or is likely to**

**be in the foreseeable future, and the likelihood that that capacity will be used**

***** **to export to the Community.**

**12**

**TITLE IV**

**Surveillance**

**Article** **11**

**1.** **Where the trend in imports of** **a** **product originating in a third country covered by**

**this Regulation threatens to cause injury to Community producers, and where the**

**interests of the Community so require, import of that product may be subject, as**

**appropriate, to:**

**(a)** **retrospective** **Community** **surveillance carried out in accordance with the**

**provisions laid down in the decision referred to in paragraph 2,**

**or**

**(b)** **prior Community surveillance** **carried** **out in accordance with Article 12.**

**2.** **The decision to impose** **surveillance** **shall be taken by the Commission according to**

**the procedure laid down in Article 16 (5) and (6).**

**3.** **The surveillance measures shall have a limited period of validity. Unless otherwise**

**provided, they shall cease to be valid at the end of** **the** **second six-month period**

**following the six months in which the measures were introduced.**

**Article 12**

**1.** **Products under prior Community surveillance may be put into free circulation only**

**on production of an import document.** **Such** **document shall be endorsed by the**

**competent authority designated by Member States, free of** **charge,** **for any quantity**

**requested and within a maximum of five working days of receipt by the national**

**competent authority of** **a** **declaration by any Community importer, regardless of his**

**place of business in the Community. This declaration shall be deemed to have been**

**received by the national competent authority no later than three working days after**

**submission, unless it is proven otherwise.**

**2.** **The import document and the declaration by the importer shall be made out on a**

**form corresponding to the model in the Annex.**

**^ 0**

13

Additional information to that provided for in the aforementioned form may be

required. Such information shall be specified in the decision to impose surveillance.

3. The import document shall be valid throughout the Community, regardless of the

Member State of issue.

4. A finding that the unit price at which the transaction is effected exceeds that

indicated in the import document by less than 5 % or that the total value or quantity

of the products presented for import exceeds the value or quantity given in the

import document by less than 5 _%_ shall not preclude the release for free circulation

of the product in question. The Commission, having heard the opinions expressed

in the Committee and taking account of the nature of the products and other special

features of the transactions concerned, may fix a different percentage, which,

however, should not normally exceed 10 %.

5. Import documents may be used only for such time as arrangements for liberalization

of imports remain in force in respect of the transactions concerned. Such import

documents may not in any event be used beyond the expiry of a period which shall

be laid down at the same time and by means of the same procedure as the

imposition of surveillance, and shall take account of the nature of the products and

other special features of the transactions.

6. Where the decision taken under Article 11 so requires, the origin of products under

Community surveillance must be proved by a certificate of origin. This paragraph

shall not affect other provisions concerning the production of any such certificate.

7. Where the product under prior Community surveillance is subject to regional

safeguard measures in a Member State, the import authorization granted by that

Member State may replace the import document.

Article 11

Where import of a product has not been made subject to prior Community surveillance

within eight working days of the end of consultations, the Commission, in accordance with

Article 18, may introduce surveillance confined to imports into one or more regions of the

Community.,

**b*l**

**14**

**Article 14**

**1.** **Products under regional surveillance may be put into free circulation in the region**

**concerned only on production of** **an** **import document. Such document shall be**

**endorsed by the competent authority designated by the Member State(s) concerned,**

**free of charge, for any quantity requested and within a maximum of five working**

**days of receipt by the national competent authority of** **a** **declaration by any**

**Community importer, regardless of** **his** **place of** **business** **in the Community. This**

**declaration shall be deemed to have been received by the national competent**

**authority no later than three working days after submission, unless it is proven**

**otherwise. Import documents may be used** **only** **for such time as arrangements for**

**imports remain liberalized in respect of the transactions concerned.**

**2.** **The import document and the declaration by the importer shall be made out on a**

**form corresponding** **to** **the model in the Annex.**

**Additional information to that provided in the aforementioned form may be**

**required. Such particulars shall be specified in the decision to impose surveillance.**

**Article 15**

**1.** **Member States shall communicate to the Commission within the first ten days of**

**each month in the case of Commumty or regional surveillance :**

**(a)** **in the case of prior surveillance, details of** **the** **sums of money (calculated**

**on the basis of cif** **prices)** **and quantities of goods in respect of which import**

**documents were issued or endorsed during the** **preceding** **period;**

**(b)** **in every case, details of imports during the period preceding the period**

**referred to in subparagraph (a).**

**The information supplied by Member States shall be broken down by product and**

**by country.**

**Different provisions may be laid down at the same time and by the same procedure**

**as the surveillance arrangements.**

**2.** **Where the nature of the products or special circumstances so require,** **the**

**Commission may, at the request of a Member State or on its own initiative, amend**

**the timetables for submitting this information.**

**3.** **The Commission shall inform the Member States accordingly.**

**3ix**

**15**

**TITLE V**

**Safeguard measures**

**Article** **16**

**Where a product is imported into the Community in such greatly increased**

**quantities and/or on such terms or conditions as to cause, or threaten to cause,**

**serious injury to Community producers, the Commission, in order to safeguard the**

**interests of the Community, may, acting at the request of** **a** **Member State or on its**

**own initiative:**

**(a)** **limit the period of validity of import documents within the meaning of**

**Article 12 to be endorsed after the entry into force of** **this** **measure;**

**(b)** **alter the import rules for the product in question by making its release for**

**free circulation conditional on production of** **an** **import authorization, the**

**granting of which shall be governed by such provisions and subject to such**

**limits as the Commission shall lay down.**

**The measures referred to in (a) and (b) shall take effect immediately.**

**(a)** **When establishing a quota, account shall be taken in particular of:**

**the desirability of maintaining, as far as possible, traditional trade**

**flows,**

**the volume of goods exported under contracts concluded on normal**

**terms and conditions before the entry into force of** **a** **safeguard**

**measure within the meaning of** **this** **Title, where such contracts have**

**been notified to the Commission by the Member State concerned,**

**the need to avoid jeopardizing achievement of** **the** **aim pursued in**

**establishing the quota.**

**(b)** **The quota shall not be set lower than the average level of imports over the**

**last three representative years for which statistics are available unless a**

**different level is necessary to prevent or remedy serious injury.**

**(a)** **In cases in which a quota is allocated among supplier countries, allocation**

**may be agreed with those of them having a substantial interest in supplying**

**the product concerned for import into the Community.**

_**lib**_

**16**

**Failing this, the quota shall be allocated among the supplier countries in**

**proportion to their share of imports into the Community of** **the** **product**

**concerned during a previous representative period, due account being taken**

**of any specific factors which** **may** **have affected or may be affecting the trade**

**in the product.**

**(b)** **Provided that its obligation to see that consultations are conducted under the**

**auspices of** **the** **WTO Committee on Safeguards is not disregarded, the**

**Community may nevertheless depart** **from** **this method of allocation if**

**imports originating in one or more supplier countries have increased in**

**disproportionate percentage in relation to the total increase of imports of the**

**product concerned over a previous representative period.**

**4.** **(a)** **The measures referred to in this Article shall apply to every product which**

**is put into free circulation after their entry into force. In accordance** **with**

**Article 18 they may be confined** **to** **one or more regions of the Community.**

**(b)** **However, such measures shall not prevent the release for free circulation of**

**products already on** **their** **way to the Community provided that the**

**destination of such products cannot be changed and that those products**

**which, under Articles 11 and 12, may be put into free circulation only on**

**production of an import document are in fact accompanied by such a**

**document.**

**5.** **Where intervention by the Commission has been requested by a Member State, the**

**Commission shall take a decision within a maximum of five working days of receipt**

**of such a request.**

**6.** **Any decision taken by the Commission under this Article shall be commumcated to**

**the Council and to the Member States. Any Member State may, within one month**

**following the day of such communication, refer the decision to the Council.**

**7.** **If** **a** **Member State refers the Commission's decision** **to** **the Council, the Council,**

**acting by a qualified majority,** **may** **confirm, amend or revoke that decision.**

**If, within three months of the referral of** **the** **matter to the Council, the Council has**

**not** **taken a decision, the decision taken by the Commission shall be deemed**

**revoked.**

17

Article 17

Where the interests of the Community so require, the Council, acting by a qualified

majority on a proposal from the Commission drawn up in accordance with the terms of

Title III, may adopt appropriate measures to prevent a product being imported into the

Community in such greatly increased quantities and/or on such terms or conditions as to

cause, or threaten to cause, serious injury to Community producers of like or directly

competing products.

Article 16 (2), (3) and (4) shall apply.

Article 18

Where it emerges, primarily on the basis of the factors referred to in Article 10, that the

conditions laid down for the adoption of measures under Articles 11 and 16 are met in one

or more regions of the Community, the Commission, after having examined alternative

solutions, may exceptionally authorize the application of surveillance or safeguard

measures limited to the region(s) concerned if it considers that such measures applied at

that level are more appropriate than measures applied throughout the Community.

These measures must be temporary and must disrupt the operation of the internal market as

little as possible.

The measures shall be adopted in accordance with the provisions laid down in Articles 11

and 16 respectively.

Article 19

No safeguard measure may be applied to a product originating in a developing country

Member of the WTO as long as that country's share of Community imports of the product

concerned does not exceed 3%, provided that developing country Members with less than a

3% import share collectively account for not more than 9% of total Community imports of

the product concerned.

l>a.r

**18**

**Article 20**

**1.** **The duration of safeguard measures must be limited to the period of** **time** **necessary**

**to prevent or remedy serious injury and to facilitate adjustment on the part of**

**Community producers. The period should not exceed four years, including the**

**duration of any provisional measure.**

**2.** **Such initial period may be extended, except in the case of** **the** **measures referred to**

**in Article 16(3)(b), provided it is determined that:**

**the safeguard measure continues** **to** **be necessary to prevent or remedy**

**serious injury,**

**and there is evidence that Community producers are adjusting.**

**3.** **Extensions shall be adopted in accordance with the terms of Title III and using the**

**same procedures as the initial measures. A measures so extended shall not be no**

**more restrictive than it was at the end of** **the** **initial period.**

**4.** **If the duration of** **the** **measure exceeds one year, the measure must be progressively**

**liberalized at regular intervals during the period of** **application,** **including the period**

**of extension.**

**5.** **The total period of application of** **a** **safeguard measure shall not exceed eight years.**

**Article 21**

**1.** **While** **any surveillance or safeguard measure applied in accordance with Titles IV**

**and V is in operation, consultations shall be held within the Committee, either at**

**the request of** **a** **Member State or on the initiative of** **the** **Commission. If** **the**

**duration of** **a** **safeguard measure exceeds three years, the Commission shall seek**

**such consultations no later than the mid-point of** **the** **period of application of that**

**measure.**

**The purpose of such consultations shall be:**

**(a)** **to examine the effects of** **the** **measure;**

**(b)** **to determine whether and in what manner it is appropriate to accelerate the**

**pace of liberalization;**

**(c)** **to ascertain whether its application is still necessary.**

î>2£

**19**

**2.** **Where, as a result of** **the** **consultations referred to in paragraph 1, the Commission**

**considers that any surveillance or safeguard measure referred to in Articles 11, 13,**

**16,** **17 and 18 should be revoked or amended, it shall proceed as follows:**

**(a)** **where the measure was enacted by the Council, the Commission shall**

**propose to the Council that it be revoked or amended. The Council shall act**

**by a qualified majority.**

**(b)** **in all other cases, the Commission shall amend or revoke Community**

**safeguard and surveillance measures.**

**Where the decision relates to regional surveillance measures, it shall apply from the**

**sixth day following that of** **its** **publication in the** _**Official Journal**_ _**of the**_ _**European**_

_**Communities.**_

**Article 22**

**1.** **Where imports of** **a** **product have already been subject to a safeguard measure no**

**further such measure shall be applied to that product until a period equal to the**

**duration of** **the** **previous measure has elapsed. Such period shall not be less than**

**two years.**

**2.** **Notwithstanding paragraph 1, a safeguard measure of 180 days or less may be**

**reimposed for a product if:**

**(a)** **at least one year has elapsed since the date of introduction of** **a** **safeguard**

**measure on the import of** **that** **product, and**

**(b)** **such a safeguard measure has not been applied to the same product more**

**than twice in the** **five-year** **period immediately preceding the date of**

**introduction of** **the** **measure.**

**20**

TITLE VI

Final provisions

Article 23

Where the interests of the Community so require, the Council, acting by a qualified

majority on a proposal from the Commission, may adopt appropriate measures to allow the

rights and obligations of the Community or of all its Member States, in particular those

relating to trade in commodities, to be exercised and fulfilled at international level.

Article 24

1 This Regulation shall not preclude the fulfilment of obligations arising from special

rules contained in agreements concluded between the Community and third

countries.

2. (a) Without prejudice to other Community provisions, this Regulation shall not

preclude the adoption or application by Member States:

(i) of prohibitions, quantitative restrictions or surveillance measures on

grounds of public morality, public policy or public security; the

protection of health and life of humans, animals or plants, the

protection of national treasures possessing artistic, historic or

archaeological value, or the protection of industrial and commercial

property;

(ii) of special formalities concerning foreign exchange;

(iii) of formalities introduced pursuant to international agreements in

accordance with the Treaty.

(b) The Member States shall inform the Commission of the measures or

formalities they intend to introduce or amend in accordance with this

paragraph. In the event of extreme urgency, the national measures or

formalities in question shall be communicated to the Commission

immediately upon their adoption.

21

Article 25

1. This Regulation shall be without prejudice to the operation of the instruments

establishing the common organization of agricultural markets or of Community or

national administrative provisions derived therefrom or of the specific instruments

applicable to goods resulting from the processing of agricultural products; it shall

operate by way of complement to those instruments.

2. However, in the case of products covered by the instruments referred to in

paragraph 1, Articles 11 to 15 and 22 shall not apply to those in respect of which

the Community rules on trade with third countries require the production of a

licence or other import document.

Articles 16, 18 and 21 to 24 shall not apply to those products in respect of which

such rules provide for the application of quantitative import restrictions.

Article 26

Until 31 December 1995, Spain and Portugal may maintain the quantitative restrictions on

agricultural products referred to in Articles 77, 81, 244, 249 and 280 of the Act of

Accession.

Article 27

Regulation (EC) No 518/94 is hereby repealed. References to the repealed Regulation shall

be understood as referring to this Regulation.

Article 28

This Regulation shall enter into force on a date determined by a decision on the entry into

force of the acts implementing the results of the Uruguay Round.

This Regulation shall be binding in its entirety and directly applicable in all Member

States.

**^2.3**

_**ANNEX**_

**List of particulars to be given in the boxes of the surveillance document**

**SURVEILLANCE DOCUMENT**

**1.** **Applicant**

**(name, full address, country)**

**2.** **Registration No**

**3.** **Consignor (name, address, country)**

**4.** **Competent authorities of issue**

**(name and address)**

**5. Declarant (name and address)**

**6. Last day of validity**

**7. Country of origin**

**8. Country of consignment**

**9. Proposed place and date of importation**

**10.** **Reference to** **Regulation** **(EC) which imposed** **surveillance**

**11.** **Description of** **goods,** **marks and** **numbers,** **number and kind of packages**

**12.** **Goods code (CN)**

**13.** **Gross mass (kg)**

**14.** **Net mass (kg)**

**15.** **Additional units**

**16.** **cif value EC frontier in ecu**

**17.** **Further particulars**

**18.** **Certification by the applicant:**

**I, the undersigned, certify that the information provided in this application is true and given in good**
**faith.**

**Date and place**

**(signature)** **(stamp)**

**19.** **Stamp of the competent authorities**

**Date**

**(signature)** **(stamp)**

**Original for the applicant**

**Copy for the competent authorities**

_13>O_

**EUROPEAN COMMUNITIES** **SURVEILLANCE DOCUMENT**

1. Applicant (name, full address, country) 2. Registration No

3. Consignor (name, address, country) 4. Competent authorities of issue (name and address)

S. Declarant (name and address)

6. Last day of validity

7. Country of origin 8. Country of consignment

x
**o**

- 9. Proposed place and date of importation 10. Reference to Regulation (EC) which imposed surveillance

11. Description of goods, marks and numbers, number and kind of packages 12. Goods code (CN)

13. Gross mass (kg)

14. Net mass (kg)

15. Additional units

16. cif value EC frontier in ecu

17. Further particulars

18. Certification by the applicant :

I. undersigned, certify that the information provided in this application is true and given in good faith

19. Stamp of the competent authorities

(signature)

Date:

(stamp)

Place and date

(signature) (stamp)

**3>%**
**EUROPEAN COMMUNITIES** **SURVEILLANCE DOCUMENT**

1. Applicant (name, full address, country] 2. Registration No

3. Consignor (name, address, country) 4. Competent authorities of issue (name and address)

5. Declarant (name and address) 6. Last day of validity

7. Country of origin 8. Country of consignment

9. Proposed place and date of importation 10. Reference to Regulation (EC) which imposed surveillance

11. Description of goods, marks and numbers, number and kind of packages 12. Goods code (CN)

13. Gross mass (kg)

14. Net mass (kg)

15. Additional units

16. cif value EC frontier in ecu

17. Further particulars

18. Certification by the applicant:

I. undersigned, certify that the information provided in this application is true and given in good faith

19. Stamp of the competent authorities

(signature)

Date:

(stamp)

Place and date

(signature) (stamp)

**Si** **2/**

**Commercial defence:**

**New Instrument**

**%^3**

**EXPLANATORY MEMORANDUM**

**This** **proposal amends Regulation 2641/84 on the strengthening of the common**
**commercial policy with regard in particular to protection against illicit commercial**
**practices. The Council has already amended this Regulation (with Regulation 522/94)**
**in order to strengthen the link between this instrument of commercial defence** **and** **the**
**improved dispute settlement mechanism of the WTO. This purpose has been achieved**
**at the procedural level: resort to Regulation 2641/84 (as already amended) will enable**
**Community industries and Member States to activate the Community institutions**
**(Commission and Council) for the purpose of WTO dispute settlement with all the**
**necessary guarantees of transparency and due process, and subject to the control of the**
**Court of Justice.**

**This new proposal is aimed at pursuing this process further, by making the instrument**
**better adapted to the changed nature of WTO dispute settlement (including, but not**
**limited to, its applicability to the GATS** **[1]** **and TRIPs Agreements). In particular, the**
**proposed amendments are aimed at dealing with problems created by third country**
**illicit commercial practices for Community exporters on foreign markets. A brief**
**explanation of the rationale for the proposed changes follows below, together with a**
**table summarising the possibilities of action which would exist under this proposed**
**Regulation if it were adopted.**

**No change is being proposed to the decision-making procedures resulting from the**
**amendments already adopted in 1994, except for re-grouping the relevant provisions in**
**a more logical order. Thus, this proposal would not result in any modification of the**
**respective roles of the Community institutions involved (Commission and Council) and**
**of** **the** **majority required for the Council to decide on these matters.**

**1.** **Reg. 2641/84 is currently based** **on** **two "tracks" : the first gives a Community**
**industry the right to complain against foreign "illicit practices" if it suffers**
**material injury; the second gives Member States the right to prompt the**
**Commumty to act in all cases (including, but not limited to, illicit practices) in**
**which the Community has rights under international rules.**

**2.** **The** **second** **"track" (i.e. referral of a matter by one or more Member States**
**invoking the defense of the Community's international rights) appears now**
**satisfactory, after the 1994 amendments. Any further changes should only be**

1 In particular, the notion of "providers of services" has been introduced within the concept of
"Community industry", to take into account the new rules of the GATS

**^**

envisaged after its effectiveness has been tested in practice (which will only
happen after the WTO has entered into force). The first "track" (complaint by a
Community industry against an "illicit practice"), instead, continues to suffer
from serious shortcomings, and the renewed interest that many sectors of
European industry are showing for the WTO and the new rules has highlighted
these shortcomings.

3. The first problem lies with the concepts of "Community industry" and of
"material injury". These were borrowed from existing commercial defence
instruments, and it continues to make sense to use them in the context of any
instrument of protection of the Community's domestic market, even though they
are stricter than what WTO/GATT requires from us. However, most GATT rules
are based on a test of "adverse effects on trade" which often does not coincide

with "injury": in general, GATT employs the concept of "nullification or
impairment" of benefits, which is even presumed (and the presumption is
practically irrefutable) in cases of violation of GATT rules. Some agreements go
even further: the new Subsidies Agreement, for instance, expressly provides that
"material injury" is only one of three possible types of "adverse effects on trade",
the other ones being "nullification or impairment" in the general GATT sense,
and "serious prejudice" to a country's interests (cf. Article 5 new Subsidies
Agreement).

4. Furthermore, if we consider the effect of foreign trade practices on Community
exports to third countries (whether to the country applying or maintaining the
practices in question or to another country), as opposed to imports into the
Community, very rarely the whole of a Community industry (or a major
proportion thereof) is concerned. Yet, this does not make the practices in
question any less objectionable or even illicit. Moreover, the effect of trade
barriers is often first and foremost to prevent trade from taking place (by
discouraging potential exporters), even before a trade distortion takes place.

5. In these circumstances, it makes sense to add a "third track", under which
Community exporters could prompt the Community to react against objectionable
or illicit foreign trade practice that affect them in third country markets, while
leaving untouched the existing "tracks" (the first one, notwithstanding its strict
limitations, could still be useful for Commumty industries, as regards the
Community's domestic market; the second "track" contains", of course, the
general "right of action" for Member States).

6. The objective of this exercice is not to create an easier way way of applying the
instrument, but a different one, better suited to a market opening strategy in
favour of our exporters. Thus, the question is not to relax the conditions for
standing of the complainant and for the trade effects suffered, but to adapt them
to an instrument for the opemng of third country market (as opposed to yet
another instrument for the defence of the Community market, which does not
appear appropriate in this context).

1.3S

Thus, while "Community enterprises", even individually, should have the right to
lodge a complaint under this new third "track", they would have to show that the
reasons for the Community to act go beyond the narrow advantage that the
complaining firm(s) could draw from the Community's international action.

Moreover, the concept of "material injury" can only be replaced (in respect of
Community exports) with another concept which also has in-built limitations, so
that not just any kind of effects would justify the Community's intervention. The
solution proposed here is to introduce the notion of "adverse trade effects",
which is strictly linked to how these effects are (or will) be defined through the
WTO (including through dispute settlement cases), in order to offer a sufficient
guarantee against "open-ended" actions. A requirement of "material impact" has
also been added, to enable the Community institutions to weed out frivolous
actions, and to concentrate on actions which benefit the Community and/or
Member States beyond the advantages they would bring to the complainant.

The considerations set out in points 6 through 8 above, together with the
Community's traditional and well-founded position that market opening and trade
liberalisation must be pursued within the context of the multilateral trading
system (as well as with the need to differentiate this instrument, in terms of
international legality, from section 301) strongly militate in favour of
strengthening even further the link between this commercial policy instrument
and international (essentially WTO) trade rules and dispute settlement.

**TABLE**

**Actions possible under the proposed commercial practices Regulation**

Effects to be shown

**material injury**

**only those necessary for the action**
**being requested**
(e.g. "nullification or impairment" or

other adverse trade effects in GATT

"non-violation" cases)

**adverse trade effects**

(defined by the international rules
being invoked: in GATT/WTO terms it
includes both "violation" and "non
violation" cases)
includes a requirement of "material
impact" on the Community

22 September 1994

Market where the effects

take place

Community market or a third
country market

Community market or a third
country market

market of a third country

(including that of the country

applying or maintaining the

practice complained of)

1st track

(complaint Art. 3)

2nd track

(referral Art. 4)

3rd track

(complaint Art. 3bis)

Complainant

**Community industry**
(or major proportion thereof)
it now includes providers of services,

as well **as** producers of goods

**Member States**

**Community enterprises**

(it includes _**a**_ _fortiori_ the Community

industry **as** **a** whole)
whether producers of goods

or providers of services

Practice complained of

**illicit practices**
(includes violations of
GATT/WTO rules)

**exercise of the Community's**
**international rights**
(includes any commercial
practice by a third country)

**any commercial practice**
**by a third country**

**0^**

_**~X\**_

**ANNEX**

**Description of the changes Article by Article**

**Article 1: Aims**

**The notion of "adverse trade effects" resulting from any commercial practice has been**
**introduced, alongside those of "injury" resulting from an illicit commercial practice**
**and of "exercise of Community's rights". The notion of "adverse trade effects" is**
**defined later on, in Article 2.**

**Article 2: Definitions**

**1.** **The notion of "providers of** **services"** **has been introduced within the concept of**
**"Community industry", to take into account the new rules of** **the** **GATS.**

**2.** **The concept of "regional injury" (paragraph 4 (b)) has been reduced to the case**
**of imports into a region of the Community because, apart from the fact that the**
**case of injury caused to a "regional exporting industry" is at best marginal, it**
**would in any event be taken care of** **by** **the new "track".**

**3.** **The notion of adverse trade effects" is defined (in paragraph 5), and strictly**
**linked to a "right of action"** **under** **international trade law (essentially WTO,**
**therefore) in respect of trade in goods and/or services. The fact that the effects**
**complained of must be "typified" under international rules offers a sufficient**
**guarantee against** **"open-ended"** **actions, and can therefore permit this right to**
**complain to encompass both "violation" cases ("illicit practices") and "non-**
**violation" cases (trade practices which are not "illicit" but which can**
**nevertheless be attacked through GATT/WTO dispute settlement on the basis of**
**their trade effects: a typical example are domestic subsidies).**

**The notion also includes a requirement of "material impact", which would**
**enable the Community institutions to weed** **out,** **frivolous actions, and to**
**concentrate on actions which benefit the Community and/or Member States**
**beyond the advantages they would bring to the complainant.**

**4.** **The** **notion of "Community enterprises", as those who have a right to lodge a**
**complaint under this "third** **track"** **when they have suffered from** **"adverse** **trade**
**effects",** **has been introduced (in paragraph 6). The actual** **language** **of this**
**provision may need to be reviewed in consultation with the Legal Service, to**
**make sure that it is consistent with the same concept as used in other areas of**
**Community law.**

**Article 3:** **Complaint**

This Article has been split, in fact, into three separate provisions :

Article 3 confirms the right of a Community industry to complain against illicit
practices which have caused it to suffer material injury ("first track").

Article 3bis introduces the right of Community enterprises to complain when
they have suffered from adverse trade effects in the two cases mentioned above
("third track").

Article 3ter lays down the procedures to be followed in respect of either of such
complaints when they are lodged with the Commission. The provision on the
deadline for a decision on whether to open an examination procedure or not has
been moved here (from the end of Article 6), and amended to shorten the
deadline to 45 days in all cases, except where the complainant itself prefers to
integrate the complaint with more information rather than risk a negative
decision.

**Article 4: Referral by a Member State**

**1.** This Article maintains the general right of complaint for Member States in all
circumstances ("second track") and clarifies that it includes the case of "adverse
trade effects".

2. It further clarifies that Member States must only supply "sufficient" evidence
(since this is a pre-initiation stage of the procedure), and that such evidence
must refer to all the elements of the referral: the commercial practice
complained of (whether or not it is an illicit one) and any resulting effects
which may be necessary to allege in an international action, e.g. under WTO
dispute settlement procedures.

3. Finally, a provision introducing a firm 45 days deadline (modelled on that
provided for complaints by the Community industry or Commumty enterprises)
has been added, to guarantee Member States prompt examination of their
requests.

**Article** _**5:**_ **Consultation procedure** (unchanged^

**Article** **6Î** **Community examination procedure**

Paragraph 8 has been deleted, and corresponding provisions have been inserted in
Articles 3 ter and 4.,

_**-llî**_

**Article 7: Confidentiality** (unchanged)

**Article 8:** Evidence

**1.** The existing provisions of the Article have been amended to conform to the
changes described above.

2. The meaning of "adverse trade effects", in terms of the economic impact of a
foreign trade practice, is further clarified (in paragraph 4).

3., The link between adverse trade effects and a GATT/WTO right of action is also

further clarified, in terms of evidence which has to be provided by the parties
and examined by the Commission (in paragraph 5). In particular, this
provisions is meant to ensure that when no evidence of adverse trade effects is
necessary for an international action (e T g. in a GATT/WTO "violation" case,
where such effects are presumed according to consolidated GATT
"jurisprudence"), the Commission can take this into account when evaluating
the evidence, either at the stage of a complaint/referral, or of the investigation.

4. The non-exhaustive nature of any evidentiary requirements listed in this Article
has been further clarified (in paragraph 6). The formula employed comes from
the provisions on injury in AD and CVD (under both the existing Codes and the
New Agreements).

5. The title has been changed to reflect the above;

**Article 9: Termination of the procedure**

**1.** Paragraph 2(a) has been amended to make it clear that this type of termination
of the procedure does not require any Community action. The reference to
Article 11 was confusing because, in fact, Article 11 provided for the
application of Article 12 to decisions under Article 9, paragraph 2(a).

2. The amendment to paragraph 2(c) is purely stylistical.

**Article** **10:** **Adoption of commercial policy measures**

**1.** A reference to the "third track" has been included (paragraph 1).

2. A link between the measures that the Commission would eventually propose to
the Council (if necessary) and those which can be authorised by the WTO
dispute settlement body ("DSB") in case of non-implementation of a panel's
report has been made more explicit (in paragraph 2).

_**\**_ _**^o**_

**Article 11: Decision-making procedures**

The text of this Article is that which results from Regulation 522/94, and the changes
proposed here are meant to clarify the language, but not to modify the substance of the
1994 amendment. The title of the Article has also been modified for the same reason.

**Article 12: Committee procedure**

A title has been introduced for case of reference to this Article. (The same has been
done for Articles 13 and 14).

**Article 13: General provisions**

Beside the introduction of a title, a provision has been added repealing the original
Regulation 2641/84 and its 1994 amendment (Reg. 522/94) and replacing them entirely
with this new Regulation.

**Article 14: Entry into force**

The formula employed here has been suggested by the Legal Service for all the
elements of the U.R. Implementing package.

#### **un**

**Proposal for a**

**Council Regulation (EC) No. ( )**

**94/** **0233(ACC)**

**on the strengthening of the common commercial policy, in particular with regard to protection**

**against illicit commercial practices and adverse trade effects suffered by Community enterprises,**

**and to the exercise of** **the** **Community's rights under international trade rules;**

**THE COUNCIL** **OF** **THE EUROPEAN UNION,**

**Having regard to the Treaty establishing the European Community, and in particular Article** **113** **thereof,**

**Having regard to the rules establishing the common organisation of agricultural markets and the rules**

**adopted under Article 235 of** **the** **Treaty, applicable to goods processed from agricultural products, and in**

**particular those provisions** **thereof,** **which allow for derogation from the general principle that any**

**quantitative restriction or measure having equivalent effect may be replaced solely by the measures**

**provided for in those instruments,**

**Having regard to the proposal** **from** **the Commission,**

**Having regard to the opinion of the European** **Parliament,**

**Whereas the common commercial policy must be based on uniform principles, notably with regard to**

**commercial defence;**

**Whereas Council Regulation (EC) No ( ) on protection against dumped imports from countries not**

**members of** **the** **European Community, Council Regulation (EC) No ( ) on** **protection** **against subsidised**

**imports** **from** **countries not members of the European Community, Council Regulation (EC) No** **518/94** **on**

**common rules for imports, and Council Regulation (EC) No** **519/94** **on common rules for imports from**

**certain third countries constitute important components of the Community's system of commercial**

**defence;**

**Whereas such instruments are based on common concepts, notably the injury caused to a Community**

**industry, and this concept appears appropriate in the context of** **any** **instrument of legitimate protection of**

**the Community's domestic market;**

Whereas the Council Regulation (EEC) No 2641/84 had provided the Community with procedures

enabling it :

to respond to any illicit commercial practice with a view to removing the injury resulting

therefrom, and

to ensure full exercise of the Community's rights with regard to the commercial practices

of third countries;

Whereas, following conclusion of the Uruguay Round Multilateral Trade Negotiations and the perspective

creation of a World Trade Organisation ("WTO") which lays down new and improved procedures for the

settlement of trade disputes among countries Members of the WTO, Council Regulation (EC) No 522/94

had made it clear that the procedures laid down in Regulation 2641/94 were the most appropriate for the

Community industry and for Member States to prompt Community action under the WTO dispute

settlement mechanism in order to respond to illicit commercial practices and/or to ensure full exercise of

the Community's rights (as appropriate);

Whereas the experience in the application of Regulation 2641/84 has shown that the concepts of

Community industry and of injury appear inadequate to enable the Community, its Member States and its

enterprises to react to commercial practices (whether or not illicit) of third countries when the effects of

such practices are felt on the market of any third country not member of the European Community (which

may be the market of the country applying or maintaining the practice in question pr the market of another

country);

Whereas the Uruguay Round Agreement establishing the WTO ("WTO Agreement") not only improves

and develops international rules concerning trade in goods, but establishes a General Agreement on Trade

m Services ("GATS") and an Agreement on Trade-Related Intellectual property matters ("TRIPs

Agreement"), and that such Agreements also fall within the scope of the WTO dispute settlement

mechanism;

Whereas for those reasons it appears appropriate to maintain and improve the procedures laid down in

Regulation 2641/84, as amended by Regulation 522/94;

Whereas in this context protection in relation to the Community's domestic market should continue to be

granted to a Community industry suffering from material injury caused by illicit commercial practices;

_**'^.ï**_

Whereas it is nevertheless appropriate to clarify that a Community industry can also be comprised of

providers of services, as well as producers of goods;

Whereas Member States should continue to have access to these procedures in respect of all matters

concerning commercial policy and the trade practices (whether or not illicit) of third countries, in order to

ensure full exercise of the Community's rights;

Whereas it is desirable to provide the Community with the means to operate effectively in the direction of

further trade liberalisation through the application of international trade rules, in particular those laid down

in the Annexes to the WTO Agreement;

Whereas, to this end, it is advisable to provide Community enterprises with the means to react to trade

practices which prevent them (wholly or partially) from trading with countries outside the Community,

provided that such practices give rise to the Community's right to action under applicable international

trade rules;

Whereas it appears therefore appropriate to further amend Regulation 2641/84 accordingly;

Whereas it is also appropriate to confirm that the Community must act in compliance with its international

obligations and, where such obligations result from agreements, maintain the balance of rights and

obligations which it is the purpose of those agreements to establish;

Whereas it is also appropriate to confirm that any measures taken under the procedures in question should

also be in conformity with the Community's international obligations, as well as being without prejudice to

other measures in cases not covered by this Regulation which might be adopted directly pursuant to Article

113 of the Treaty;

Whereas it should be confirmed that, for the purposes of implementing this Regulation, there should be

close co-operation between the Member States and the Commission, in particular through consultations

within the advisory committee, as well as through the information of the Committee established by Article

113 of the Treaty;

Whereas the rules of procedures to be followed during the examination procedure provided for in this

Regulation should also be confirmed, in particular as regards the rights and obligations of the Community

authorities and the parties involved, and the conditions under which interested parties may have access to

information and may ask to be informed of the essential facts and considerations resulting from the

examination procedure;

#### **"M**

Whereas in acting under this Regulation the Community has to bear in mind the need for rapid and

effective action, through the application of the decision-making procedures provided for in the Regulation;

HAS ADOPTED THIS REGULATION :

_Article 1_

Aims

This Regulation establishes procedures in the matter of commercial policy which, subject to compliance

with existing international obligations and procedures, are aimed at:

(a) responding to any illicit commercial practice with a view to removing the injury resulting therefrom;

(b) responding to any commercial practice (whether or not illicit) with a view to removing the adverse

trade effects resulting therefrom;

(c) ensuring full exercise of the Community's rights with regard to the commercial practices of third

countries.

7/ _shall be applied in particular to the initiation and_ _subsequent_ _conduct and_ _termination_ _of international_

_dispute settlement procedures in the area of common commercial policy._

_Article 2_

Definitions

1. For the purposes of this Regulation, illicit commercial practices shall be any international trade

practice attributable to third countries which are incompatible with international law or with the generally

accepted rules.

2. For the purposes of this Regulation, the Community's rights shall be those international trade rights of

which it may avail itself either under international law or under generally accepted rules.

**^**

3. For the purposes of this Regulation, injury shall be any material injury caused or threatened to

Community industry.

4. The term 'Community industry' shall be taken to mean all Community producers or providers,

respectively:

of products or services identical or similar to the product or service which is the subject of illicit

practices or

of products or services competing directly with that product or service, or

who are consumers or processors of the product or consumers or users of the service which is the

subject of illicit practices,

or all those producers or providers whose combined output constitutes a major proportion of total

Community production of the products or services in question; however:

(a) when producers or providers are related to the exporters or importers or are themselves importers of

the product or service alleged to be the subject of illicit practices, the term 'Community industry' may

be interpreted as referring to the rest of the producers or providers;

(b) in particular circumstances, the producers or providers within a region of the Community may be

regarded as the Community industry if their collective output constitutes the major proportion of the

output of the product or service in question in the Member State or Member State within which the

region is located provided that where the illicit practice concerns imports into the Community, their

effect is concentrated in that Member State or those Member States.

5. For the purposes of this Regulation, adverse trade effects shall be those

which are felt, in respect of a product or service, on the market of any country non Member of the

European Community, and

which could give rise to actions under relevant international rules, whether as a result of an illicit

commercial practice or otherwise,

and which have a material impact, actual or potential, on the economy of the Community or of a

region of the Community, or on a sector of economic activity therein.

Adverse trade effects shall also include cases where trade flows, concerning a product or service, are

prevented, impeded or diverted as a result of any commercial practice, as well as cases where any

commercial practice has materially affected the supply or inputs (e.g. parts and components or raw

materials) to Community enterprises. Adverse trade effects shall also include threat of such effects.

**2**
**V6**

6. The term "Community enterprise" shall be taken to mean any natural or legal person having an

established presence within the Community for the purpose of carrying out an economic activity

concerning the production of goods or the provision of services.

_**Article 3**_

Complaint on behalf of the. Community industry

1. Any natural or legal person, or any association not having legal personality, acting on behalf of a

Community industry which considers that it has suffered injury as a result of illicit commercial practices

may lodge a written complaint.

2. The complaint must contain sufficient evidence of the existence of illicit commercial practices and the

injury resulting therefrom. Evidence of injury must be given on the basis of the factors indicated in Article

8.

_**Article 3 bis**_

Complaint on behalf of Community enterprises

1. Any Community enterprise, or any association, having or not legal personality, acting on behalf of

one or more Community enterprises, which considers that such Community enterprises have been

materially affected by adverse trade effects within the meaning of paragraph 5 of Article 2 of this

Regulation, may lodge a written complaint.

2. The complaint must contain sufficient evidence of the existence of commercial practices (whether or

not illicit) and of adverse trade effects, resulting therefrom. Evidence of adverse trade effects must be given

on the basis of the factors indicated in Article 8.

**-o** _**i\uio**_

**^ >**

_Article 3 ter_

Complaint procedures

1. The complaint shall be submitted to the Commission, which shall send a copy thereof to the Member

States.

2 The complaint may be withdrawn, in which case the procedure may be terminated unless such

termination would not be in the interests of the Community.

3. Where it becomes apparent after consultation that the complaint does not provide sufficient evidence

to justify initiating an investigation, then the complainant shall be so informed.

4. The Commission shall take a decision as soon as possible on the opening of a Community

examination procedure following any complaint made in accordance with Articles 3 or 3 bis; the decision

shall normally be taken within 45 days of the lodging of the complaint; this period may be suspended at the

request, or with the agreement, of the complainant, in order to allow the provision of complementary

information which may be needed to fully assess the validity of the complainant's case.

_Article_ _4_

**Referral by a Member State**

**1** . Any Member State may ask the Commission to initiate the procedures referred to in Article 1.

2. It shall supply the Commission with sufficient evidence to support its request, as regards commercial

practices of third countries and, where appropriate, of any effects resulting therefrom. Where evidence of

injury or of adverse trade effects is appropriate, it must be given on the basis of the factors indicated in

Article 8.

3. The Commission shall notify the other Member States of the requests without delay.

4. Where it becomes apparent after consultation that the request does not provide sufficient evidence to

justify initiating an investigation, then the Member State shall be so informed.

_**A't**_

_5._ The Commission shall take a decision as soon as possible on the opening of a Community

examination procedure following any referral by a Member State made in accordance with Article 4; the

decision shall normally be taken within 45 days of the referral; this period may be suspended at the request,

or with the agreement, of the referring Member State, in order to allow the provision of complementary

information which may be needed to fully assess the validity of the case presented by the referring Member

State.

_Article 5_

Consultation procedure

1. For the purpose of consultations pursuant to this Regulation, an advisory committee, hereinafter

referred to as 'the Committee', is hereby set up and shall consist of representatives of each Member State,

with a representative of the Commission as chairman.

2. Consultations shall be initiated at the request of a Member State or on the initiative of the

Commission. The chairman of the Committee shall provide the Member States, as promptly as possible,

with all relevant information in his possession. _He shall also inform the Article_ _113_ _Special Committee_

_thereof._

3. The Committee shall meet when convened by its chairman.

4. Where necessary, consultations may be in writing. In such case the Commission shall notify in writing

the Member States who, within a period of eight working days from such notification, shall be entitled to

express their opinions in writing or to request oral consultations.

_Article 6_

**Community examination procedure**

1. Where, after consultation, it is apparent to the Commission that there is sufficient evidence to justify

initiating an examination procedure and that it is necessary in the interest of the Community, the

Commission shall act as follows:

_\if,5_

(a) it shall announce the initiation of an examination procedure in the _Official Journal of the European_

_Communities;_ such announcement shall indicate the product and countries concerned, give a summary

of the information received, and provide that all relevant information is to be communicated to the

Commission; it shall state the period within which interested parties may apply to be heard orally by

the Commission in accordance with paragraph 5;

_l£®_

10

(b) it shall so officially notify the representatives of the country or countries which are the subject of the

procedure, with whom, where appropriate, consultations may be held;

(c) it shall conduct the examination at Community level, acting in co-operation with the Member States.

2. (a) If necessary, and notably in cases of allegations of illicit commercial practices, the Commission

shall seek all the information it deems necessary and attempt to check this information with the

importers, traders, agents, producers, trade associations and organisations, provided that the

undertakings or organisations concerned give their consent.

(b) . Where necessary, the Commission shall carry out investigations in the territory of third countries,

provided that the governments of the countries concerned have been officially notified and raise

no objection within a reasonable period.

(c) The Commission shall be assisted in its investigation by officials of the Member State in whose

territory the checks are carried out, provided that the Member State in question so requests.

3. Member States shall supply the Commission, upon request, with all information necessary for the

examination, in accordance with the detailed arrangements laid down by the Commission.

4. (a) The complainants and the exporters and importers concerned, as well as the representatives of

the principal exporting or importing country or countries concerned, may inspect all information

made available to the Commission except for internal documents for the use of the Commission

and the administrations, provided that such information is relevant to the protection of their

interests and not confidential within the meaning of Article 7 and that it is used by the

Commission in its examination procedure. The persons concerned shall address a reasoned

request in writing to the Commission, indicating the information required.

(b) The complainants and the exporters and importers concerned and the representatives of the

principal exporting of importing country or countries concerned may ask to be informed of the

principal facts and considerations resulting from the examination procedure.

5. The Commission may hear the parties concerned. It shall hear them if they have, within the period

prescribed in the notice published in the _Official Journal of the European Communities,_ made a written

request for a hearing showing that they are a party primarily concerned by the result of the procedure.

11

6. Furthermore, the Commission shall, on request, give the parties primarily concerned an opportunity to

meet, so that opposing views may be presented and any rebuttal argument put forward. In providing this

opportunity the Commission shall take account of the wishes of the parties and of the need to preserve

confidentiality. There shall be no obligation on any party to attend a meeting and failure to do so shall not

be prejudicial to that party's case.

7. When the information requested by the Commission is not supplied within a reasonable time or where

the investigation is significantly impeded, findings may be made on the basis of the facts available.

8. When it has concluded its examination the Commission shall report to the Committee. The report

should normally be presented within five months of the announcement of initiation of the procedure, unless

the complexity of the examination is such that the Commission extends the period to seven months.

_Article 7_

Confidentiality

1. Information received pursuant to this Regulation shall be used only for the purpose for which it was

requested.

2. (a) Neither the Council, nor the Commission, nor Member States, nor the officials of any of these,

shall reveal any information of a confidential nature received pursuant to this Regulation, or any

information provided on a confidential basis by a party to an examination procedure, without

specific permission from the party submitting such information.

(b) Each request for confidential treatment shall indicate why the information is confidential and

shall be accompanied by a non-confidential summary of the information or a statement of the

reasons why the inforrnation in not susceptible of such summary.

3. Information will normally be considered to be confidential if its disclosure is likely to have a

significantly adverse effect upon the supplier or the source of such information.

4. However, if it appears that a request for confidentiality is not warranted and if the supplier is either

unwilling to make the information public or to authorise its disclosure in generalised or summary form, the

information in question may be disregarded.

_**kx**_

12

5. This Article shall not preclude the disclosure of general information by the Community authorities and

in particular of the reasons on which decisions taken pursuant to this Regulation are based. Such disclosure

must take into account the legitimate interest of the parties concerned that their business secrets should not

be divulged.

_**Article 8**_

Evidence

1. An examination of injury shall involve in particular the following factors:

(a) the volume of Community imports or exports concerned, notably where there has been a significant

increase or decrease, either in absolute terms or relative to production or consumption on the, market

in question;

(b) the prices of the Community industry's competitors, in particular in order to determine whether there

has been, either in the Community or on third country markets, significant undercutting of the prices

of the Community industry;

(c) the consequent impact on the Community industry and as indicated by trends in certain economic

factors such as:

production,

utilisation of capacity,

stocks,

sales,

market share,

prices (that is, depression of prices or prevention of price increases which would normally have

occurred),

profits,

    - return on capital, /

investment,

employment.

**^**

**13**

2. Where a threat of injury is alleged, the Commission shall also examine whether it is clearly

foreseeable that a particular situation is likely to develop into actual injury. In this regard, account may also

be taken of factors such as:

(a) the rate of increase of exports to the market where the competition with Community products is taking

place;

(b) export capacity in the country of origin or export, which is already in existence or will be operational

in the foreseeable future, and the likelihood that the exports resulting from that capacity will be to the

market referred to in point (a).

3. Injury caused by other factors which, either individually or in combination, are also adversely

affecting Community industry must not be attributed to the practices under consideration.

4. Where adverse trade effects within the meaning of paragraph 5 of Article 2 of this Regulation are

alleged, the Commission shall examine the impact of such adverse effects, actual or potential, on the

economy of the Community or of a region of the Community, or on a sector of economic activity therein.

To this effect, the Commission may take into account, where relevant, factors of the type listed in

paragraphs 1 and 2 above, as well as the impact on the current and future competitiveness of the

Community and of its Member States, including in terms of technological advance.

5. The Commission shall also, in examining evidence of adverse trade effects, have regard to the

provisions, principles or practice which govern the right of action under relevant international rules

referred to in paragraph 5 of Article 2 of this Regulation.

6. The Commission shall further examine any other relevant evidence contained in **the** complaint or in

the referral. In this respect, the list of factors and the indications given jn **paragraphs 1 to** 5 **above are not**

exhaustive, nor can one or several of such factors and indications necessarily give decisive **guidance as** to

the existence of injury or of adverse trade effects.

_**Article 9**_

**Termination of the procedure**

1. When it is found as a result of the examination procedure that the interests of **the** Community do not

require any action to be taken, the procedure shall be terminated in accordance with Article 12.

**3-</**

**14**

2. (a) When, after an examination procedure, the third country or countries concerned take(s) measures

which are considered satisfactory, and therefore no action by the Community is required, the

procedure may also be terminated in accordance with the provisions of Article 12.

(b) The Commission shall supervise the application of these measures, where appropriate on the

basis of information supplied at intervals, which it may request from the third countries

concerned and check as necessary.

(c) Where the measures taken by the third country or countries concerned have been rescinded,

suspended or improperly implemented or where the Commission has grounds for believing this

to be the case or, finally, where a request for information made by the Commission as provided

for by point (b) has not been granted, the Commission shall inform the Member States, and

where necessary and justified by the results of the investigation and the new facts available any

measures shall be taken in accordance with paragraph 3 of Article 11.

_**Article 10**_

Adoption of commercial policy measures

**1.** _**Unless the factual and legal situation is such that an**_ _**examination**_ _**procedure may not be**_ _**required,**_

_**where it is found as a result of the**_ _**examination**_ _**procedure,**_ _**that**_ _**action**_ _**is necessary in the interests of the**_

_**Community in**_ _**order to:**_

(a) respond to any illicit commercial practice with the aim of removing the injury resulting therefrom; or

(b) ensure the removal of adverse trade effects suffered by Community enterprises; or

(c) ensure full exercise of the Community's rights with regard to the commercial practices of third

countries.

the appropriate measures shall be determined in accordance with the procedure set out in Article 11.

3£T

15

2. Where the Community's international obligations require the prior discharge of an international

procedure for consultation or for the settlement of disputes, the measures referred to in paragraph 3 shall

only be decided on after that procedure has been terminated, and taking account of the results of the

procedure. In particular, where the Community has requested an international dispute settlement body to

indicate and authorize the measures which are appropriate for the implementation of the results of an

international dispute settlement procedure, the Community commercial policy measures which may be

needed in consequence of such authorization shall be compatible with those recommended by such

international dispute settlement body. \ t

3. Any commercial policy measures may be taken which are compatible with existing international

obligations and procedures, notably:

(a) suspension or withdrawal of any concession resulting from commercial policy negotiations;

(b) the raising of existing customs duties or the introduction of any other charge on imports;

(c) the introduction of quantitative restrictions or any other measures modifying import or export

conditions or otherwise affecting trade with the third country concerned.

4. The corresponding decisions shall state the reasons on which they are based and shall be published in

the _Official_ _Journal of the European Communities._ Publication shall also be deemed to constitute

notification to the countries and _**i**_ _**'**_ _**'**_ parties _**•**_ primarily concerned. _**.**_ _**.**_ _**.**_ _**.**_ _**-**_ _**•**_ _**-**_ **•**

_**Article**_ _**11**_ **,**

_**Decision-makingprocedures**_

_**1.**_ _**The**_ _**decisions referred**_ _**to**_ _**in**_ **paragraphs 1 and 2(a)** **of** _**Article 9 shall be**_ _**adopted**_ _**in accordance with**_

_**the provisions**_ **of Article** **12.**

_**2.**_ _**Where**_ _**the**_ _**Community**_ _**follows formal**_ _**international consultation or**_ _**dispute settlement procedures,**_

_**decisions**_ _**relating to the**_ _**initiation,**_ _**conductor termination**_ _**of**_ _**such**_ _**procedures**_ _**shall**_ _**be**_ _**taken**_ _**in accordance**_

_**with**_ _**Article!**_ _**2.**_

16

_3._ _Where_ _the_ _Community,_ _having acted_ _in accordance_ _with_ paragraph 2 _of Article 10 of_ _this_ _Regulation,_

_has to take_ _a_ _decision on the measures of commercial policy_ _to_ _be adopted_ **under** **paragraph 2(c) of Article**

**9 or under Article** 10, _thé_ _Council shall_ _act,_ _in accordance with Article_ _113_ _of the_ _Treaty,_ _by a qualified_

_majority, not later than 30 working days after_ _receiving_ _the proposal._ ^

_**Article**_ _**12**_

Committee procedure

Should reference be made to the procedure provided for in this Article, the matter shall be brought before

the Committee by its chairman.

The Commission representative shall submit to the Committee a draft of the decision to be taken. The

Committee shall discuss the matter within a period to be fixed by the chairman, depending on the urgency

of the matter.

The Commission shall adopt a decision which it shall communicate to the Member States and which shall

apply after a period of 10 days if during this period no Member State has referred the matter to the Council.

The Council may, at the request of a Member State and acting by a qualified majority revise the

Commission's decision.

The Commission's decision shall apply after a period of 30 days if the Council has not given a ruling within

this period, calculated from the day on which the matter was referred to the Council.

_**Article 13**_

General previsions

1. This Regulation shall not apply in cases covered by other existing rules in the common commercial

policy field. It shall operate by way of complement to the:

rules establishing the common organisation of agricultural markets and their implementing provisions;

*** >**

**17**

specific rules adopted under Article 235 of the Treaty, applicable to goods processed from agricultural

products.

It shall be without prejudice to other measures which may be taken pursuant to Article 113 of the Treaty.

2. Regulation (EEC) No. 2641/84, as amended by Regulation (EC) No. 522/94 is hereby repealed.

References to the repealed Regulation shall be construed as references to this Regulation.

_Article 14_

Entry into force

1. This Regulation shall enter into force on the date determined by a decision governing the entry into

force of the acts implementing the results of the Uruguay Round.

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

_**1st**_

**Part** **7**

**Intellectual property**

_iiA_

**TRIPs MODIFICATIONS** **IN** **COMMUNITY** **LAW**

****>(>:**

**EXPLANATORY MEMORANDUM**

**FOR TRIPs** **MODIFICATIONS** **IN COMMUNITY LAW**

**I.** **INTRODUCTION**

The Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs)
concluded within the framework of the Uruguay Round negotiations contains provisions
on the protection of intellectual property rights, in particular with the purpose of
establishing international disciplines in this area in order to promote international trade
and to prevent trade distortions due to the lack of adequate and effective intellectual
property protection.

The TRIPs Agreement, in addition to establishing general provisions and basic principles
on the protection of intellectual property rights, provides for standards concerning the
availability, scope and use of intellectual property rights, notably:

copyright and related rights;
trademarks;
geographical indications;
industrial designs;

patents;
layout-designs (topographies) of integrated circuits;
protection of undisclosed information; and
contains also provisions on the control of anti-competitive practices in contractual
licences.

These standards are to be enforced domestically on the basis of detailed provisions,
including special requirements related to border measures; the acquisition and
maintenance of intellectual property rights and related civel and criminal law procedures.

This proposal for a Council Regulation contains proposals to amend those Community
acts which have to be modified in order to implement in Community law the provisions
of the TRIPs Agreement. Reference is also made in this Explanatory Memorandum to
current proposals of Community acts submitted by the Commission to the
Council/Parliament which would also have to be amended in order to bring them into line
with the requirements of the TRIPs Agreement.

The present proposal does not concern those areas of current Member State legislation
which would have to be amended to implement the TRIPs Agreement. In this respect,
consultations between Member States and the Commission seem necessary in order to
ensure that such modifications of Member State legislation be undertaken against the
background of a common analysis of the implication and interpretation of the TRIPs
Agreement.

**T>H**

II. TRADEMARKS

Legislation: _Council Regulation (EC) 40/94 of 20 December 1993 on the Community_
_Trademark_ _[1]_ _._

Article 5 of Council Regulation 40/94 defines the "Persons who can be proprietors of
Community Trademarks". This Article, which notably refers to the Paris Convention for
the Protection of Industrial Property, implements in paragraph 1, subparagraphs (a) and
(b), the principle of national treatment as regards nationals and domiciliaries of a State
party to this Convention.

Nevertheless, Article 5, paragraph 1, subparagraph (d), of this Regulation basically
subjects the granting of national treatment to nationals of States not parties to the Paris
Convention to the requirement of reciprocal national treatment in their country of origin
for nationals of the Member States. Art. 29, paragraph 5, of this Regulation, concerning
the right of priority, contains a similar requirement in relation to filings made in a State
which is not a party to the Paris Convention..

In order to comply with the national treatment obligation in Article 3 of the TRIPs
Agreement, these provisions should be modified to ensure that nationals of all WTO
Members, even if the Member in question is not a party to the Paris Convention, receive a
treatment no less favourable than that accorded to nationals of Community Member
States.

**III.** **GEOGRAPHICAL INDICATIONS**

Insofar as the protection of geographical indications for wines and spirits as foreseen in
Article 23 TRIPs is concerned, the relevant amendments to Council Regulation 822/87 of
16 March 1987, Council Regulation 1601/91 of 10 June 1991, both of them concerning
wines, and Council Regulation 1576/89 of 29 May 1989 concerning spirit drinks, are
dealt with in the part on agriculture.

**IV.** **LAYOUT-DESIGNS OF INTEGRATED CIRCUITS**

Legislation: _Council Directive 87/54/EEC of 16 December 1986_ _on_ _the Legal_
_Protection of_ _Topographies_ _of Semiconductor Products_ _[2]_ _._

Articles 35 to 38 of the TRIPs Agreement set out the obligations of WTO Members in
relation to the protection of layout-designs (topographies) of integrated circuits. In
accordance with these Articles, the Community should ensure that nationals of all other
WTO Members benefit from such protection. The Commission proposes to extend the
protection of topographies of integrated circuits, as required by the TRIPs Agreement, to
nationals of all WTO Members.

1 OJL 1L 14.1.1994
2 OJ L24. 27.1.1987

_**ZG**_ _**L**_

**V.** **PROPOSED COMMUNITY LEGISLATION**

In addition to amending existing Community legislation in order to bring it in line with the
TRIPs Agreement, the Commission will need to ensure that current Community proposals
in the diferent fields of intellectual property rights protection are in conformity with the
TRIPs Agreement.

_**V**_

**•}É>3**

**PROPOSAL FOR A COUNCIL REGULATION (EC)** No /94

**of** **1994**

94/ **0234(CNS)**
**amending Council Regulation** (EC) No **40/94 of 20** December 1993
**on the Community trademark for the implementation of the agreements concluded**
**in the framework of the Uruguay Round**

THE COUNCIL OF THE EUROPEAN UNION

Having regard to the Treaty establishing the European Community and in particular
Article 235 thereof,

Having regard to the proposal by the Commission,

Having regard to the opinion of the European Parliament,

Whereas the Agreement establishing the World Trade Organization (hereinafter, the
WTO Agreement) was signed on behalf of the Community; whereas the Agreement on
Trade-Related Aspects of Intellectual Property Rights (hereinafter, the TRIPs
Agreement), annexed to the WTO Agreement, contains detailed provisions on the
protection of intellectual property rights whose purpose is the establishment of
international disciplines in this area in order to promote international trade and prevent
trade distortions and friction due to the lack of adequate and effective intellectual
property protection;

Whereas in order to ensure that all relevant Community legislation is in full compliance
with the TRIPs Agreement, the Community must take certain measures in relation to
current Community acts on the protection of intellectual property rights; whereas these
measures entail in some respects the amendment or modification of Community acts;
whereas these measures also entail complementing current community acts;

Whereas Council Regulation (EC) 40/94 of 20 December 1993 creates the Community
Trademark [1] ; whereas Article 5 of Council Regulation 40/94 defines the "Persons who can
be proprietors of Community Trademarks" by referring notably to the Paris Convention
for the Protection of Industrial Property and requires reciprocal national treatment fron*
countries which are not parties to the Paris Convention; whereas Article 29 of Regulation
40/94, concerning the right of priority, also needs to be amended in this respect; whereas
in order to comply with the national treatment obligation in Article 3 of the TRIPs
Agreement, these provisions should be modified to ensure that nationals of all WTO
Members, even if the Member in question is not a party to the Paris Convention, receive

1 OJL 11, 14.1.1994, p. 1

g:\raithra\public\ip\940726b

TJtL/

a treatment no less favourable than that accorded to nationals of Community Member
States.

HAS ADOPTED THIS REGULATION

Article 1

Article 5 of Council Regulation (EC) No 40/94 of 20 December 1993 on the Community
trade mark, paragraph 1, subparagraph (b), is replaced by the following text:

"(b) nationals of other States which are parties to the Paris Convention for the
protection of industrial property, hereinafter referred to as "the Paris Convention'/,
or to the Agreement establishing the World Trade Organisation;".

Article 2

Article 5 of Council Regulation (EC) No 40/94 of 20 December 1993 on the Community
trade mark, paragraph 1, subparagraph (d), is replaced by the following text:

"(d) nationals, other than those referred to under subparagraph (c), of any State
which is not party to the Paris convention or to the Agreement establishing the
World Trade Organisation and which, according to published findings, accords to
nationals of all the Member States the same protection for trade marks as it
accords to its own nationals and, if nationals of the Member States are required to
prove registration in the country of origin, recognises the registration of
Community trade marks as such proof.".

Article 3

~-                        - urnrnr                        -                        - "
Article 29 of Council Regulation (EC) No 40/94 of 20 December 1993 on the
Community trade mark, paragraph 1, is replaced by the following text:

" 1. A person who has duly filed an application for a trademark in or for any State
party to the Paris Convention or to the Agreement establishing the World Trade
Organisation, or his successors in title, shall enjoy, for the purpose of filing a
Community trade mark application for the same trade mark in respect of goods or
services which are identical with or contained within those for which the
application has been filed, a right of priority during a period of six months from
the date of filing of the first application".

Article 4

Article 29^ of Council Regulation (EC) No 40/94 of 20 December 1993 on die
Community trade mark, paragraph 5, is replaced by the following text:

"5. If the first filing has been made in a State which is not a party to the Pari *
Convention or to the Agreement establishing the World Trade Organisât iou,
paragraphs 1 to 4 shall apply only in so far as that State, according to pu!> ; !v .i

g:\raithra\public\ip\940726b

**} « •**

findings, grants, on the basis of the first filing made at the Office and subject to
conditions equivalent to those laid down in this Regulation, a right of priority
having equivalent effect".

**Article** 5

1. This regulation shall enter into force on the date determined by the decision on the
entry into force of the acts implementing the results of the Uruguay Round.

2. It shall be applicable as of 1 January 1996.

This Regulation shall be binding in its entirety and directly applicable in all Member

States.

Done in Brussels, _ _ 1994

For the Council

The President

i.nmu,m<'

g:\raithra\public\ip\940726b _~f~_

_**~l<4>**_

**PROPOSAL FOR A COUNCIL DECISION**

**on the extension of the legal protection of topographies of semiconductor products**
**to persons from a Member of** **the** **World Trade Organisation**

THE COUNCIL OF THE EUROPEAN UNION

Having regard to the Treaty establishing the European Community,

Having regard to Council Directive 87/54/EEC of 16 December 1986 on the legal
protection of topographies of semiconductor products, and in particular Article 3(7)
thereof,

Having regard to the proposal from the Commission,

Whereas the Agreement establishing the World Trade Organization (hereinafter, WTO)
was signed on behalf of the Community; whereas the Agreement on Trade-Related
Aspects of Intellectual Property Rights (hereinafter, the TRIPs Agreement), annexed to
the Agreement establishing the WTO, contains detailed provisions on the protection of
intellectual property rights whose purpose is the establishment of international disciplines
in this area in order to promote international trade and prevent trade distortions and
friction due to the lack of adequate and effective intellectual property protection;

Whereas in order to ensure that all relevant Community legislation is in full compliance
**with the TRIPs** Agreement; the Community must take certain measures in relation to
current Community acts on the protection of intellectual property rights; whereas these
measures entail in some respects the amendment or modification of Community acts;
whereas these measures also entail complementing current community acts;

Whereas Council Directive 87/54/EEC of 16 December 1986 concerns the legal
protection of topographies of semiconductor products [1] ; whereas Articles 35 to 38 of the
**TRIPs** Agreement set out the obligations of WTO Members in relation to the protection
of layout-designs (topographies) of integrated circuits; whereas iri accordance with
Article 1, paragraph 3, and Article 3 of the TRIPs Agreement, the Community must
ensure that nationals of all other WTO Members benefit from such protection and from
the application of national treatment; whereas it is therefore necessary to extend the
protection under Directive 87/54/EEC to nationals of WTO Members, without any
reciprocity requirement; whereas it is adequate to use the procedure of Article 3,
paragraph 7, of the Directive to this end;

**g:Vaithni\public\ip\94<)726d**

1 OJN°L24, 27.1.1987, p. 36

**?**

**3<4**

HAS ADOPTED THIS DECISION

Article 1

Member States shall extend the legal protection for topographies of semiconductor
products provided for under Directive 87/54/EEC as follows:

(a) natural persons who are nationals of, or are domiciled in the territory of, a
Member of the Agreement establishing the WTO, shall be treated as nationals of a
Member State;

(b) legal entities which or natural persons who have a real and effective establishment
for the creation of topographies or the production of integrated circuits in the
territory of a Member of the Agreement establishing the WTO shall be treated as
legal entities or natural persons having a real and effective industrial or
commercial establishment in the territory of a Member State.

**Article 2**

1. This Decision shall enter into force on the date determined by the decision on the
entry into force of the acts implementing the results of the Uruguay Round.

2. It shall be applicable as of 1 January 1996.

3. Decisions 90/510/EEC [2] and 93/17/EEC [3] are. abrogated, as of the date of
application of the present I Decision, in so far as they concern the extension of the
protection under Directive 87/54/EEC to countries or territories Members of the
Agreement establishing the WTO.

**Article** **3**

This Decision is addressed to the Member States.

Done in Brussels, : [-19.94 ]

For the Council

The President

2 OJ L N° 285, 17.10.1990, p. 29
3 OJN°L II, 19.1.1993, p. 22

ISSN 0254-1475

COM(94) 414 final

#### **DOCUMENTS**

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Catalogue number : CB-CO-94-451-EN-C

ISBN 92-77-80974-4

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