CELEX: 51974PC1749
Language: en
Date: 1974-10-30
Title: Draft of JOINT COMMITTEE DECISION suspending the application of the provisions of Article 23 (1) cf Protocol No 3 concerning the definition of the concept of "originating products" and methods of administrative cooperation (submitted to the Council by the Commission)

ARCHIVES HISTORIQUES
DE LA COMMISSION
COLLECTION RELIEE DES
DOCUMENTS "COM"
COM (74) 1749
Vol. 1974/0278
 ---pagebreak--- Disclaimer
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concernant l'ouverture au public des archives historiques de la Communauté économique
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p. 1), tel que modifié par le règlement (CE, Euratom) n° 1700/2003 du 22 septembre 2003
(JO L 243 du 27.9.2003, p. 1), ce dossier est ouvert au public. Le cas échéant, les documents
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In accordance with Council Regulation (EEC, Euratom) No 354/83 of 1 February 1983
concerning the opening to the public of the historical archives of the European Economic
Community and the European Atomic Energy Community (OJ L 43, 15.2.1983, p. 1), as
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file have been declassified in conformity with Article 5 of the aforementioned regulation.
In Übereinstimmung mit der Verordnung (EWG, Euratom) Nr. 354/83 des Rates vom 1.
Februar 1983 über die Freigabe der historischen Archive der Europäischen
Wirtschaftsgemeinschaft und der Europäischen Atomgemeinschaft (ABI. L 43 vom 15.2.1983,
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 ---pagebreak--- ? COMMISSION OF THE EUROPEAN COMMUNITIES
                                          COM ( 74 ) 1749 final .
                                          Brussels , 30 October 1974
                                      Draft or
                             JOINT COMMITTEE DECISION
                suspending the application of the provisions of
                Article 23 ( l ) of Protocol No 3 concerning the
                definition of the concept of "originating products"
                and methods of administrative cooperation
                  ( submitted to the Council "by the Commission )
     COM ( 74) I749 final
 ---pagebreak---                 COMMUNICATION OF THE COMMISSION TO THE COUNCIL
       The present rale contained in Article 23 of the Protocols No 3
to the Agreements EEC - EFTA eo^atsies sets cut the principle according
to which the third country products used in the obtention of an
" originating product " benefiting from preferences may not be the subjec
of a remission of customs duties or repayment of customs duties of any
form (" drawback1' ) from the moment when the duty applicable in the conte
of the agreement concerned to originating products of the same kind has
been reduced to kO % of the basic duty .
       This rule was inserted , in its time , in the Protocol No 3 with the
aim of preventing third country products used being able indirectly to
benefit from a substantial reduction in duty , a reduction which they
would have no right to if directly imported into the country of destine
tion .
       She system chosen seemed , at the time , logical and appropriate to
its objective .
       But the feeling has arisen , since then , in the minds of numerous
delegations of the Member States and EFTA countries , as well as in that
of the Commission , that it involves major inconveniences that it is
necessary to eliminate at the approach of the effective date for putti
the system into force , 1 January 1975 ( because for the majority of
products the reduction at that date will be ^0 % of the basic duty ).
                                     *
                               *           *
       The inconveniences spotlighted at present are of two types : one
kind affecting the base of the rule , the other one of a more formal
and practical kind .
 ---pagebreak---           Concerning the basi c criticisms , these bear on the fact that
   the banning of '''drawback" is applicable ey reference to the duty appli­
   cable to the product used and net by reference to the final pruduct .
   This causes , the following anomalies :
, (a)        The run-down is longer for the products said to be " sensitive ",
       these being able to be subject to " drawback" after 1 January 1975 ev
       though the final product in which thoy are incorporated is itself
       the subject of a normal reduction .
       Example :
             A manufacturer produces playing cards from non-originating paps
       and exports the finished cards to an EFTA country . Given that paper-
       is a " sensitive " product in the Community , the manufacturer may bene
       from the remission of duty in the Community until 1 January 1931 and
       at the same time , the normal reduction in the EFTA country ( free
       from 1 July 1977 ).
  (b )       In the opposite case , the products benefiting from a normal
       reduction may not by the subject of drawback from 1 January 1975 » wh:
       the final . product in which they are incorporated itself is the sub­
    •  j est of a larger run-down penod .
             .1 paper maker in an 5LTTA. country may not ask for remission of d
       from 1 January 1975 for the chemical products used for paper making
       at the time cf export of paper to the Community while at that moment
       the Customs daty in the Community has only been reduced to 85 % of
       the basic duty .
  (c)        The right to benefit from remission of duty continues to exist
       without limit for all the products used which are not covered by the
 ---pagebreak---    Free Trade Agreements , notably agricultural products , given that
   there do not exist originating products of the same kind for which
   the customs duty will have been reduced to *f0 % of the basic duty .
      Concerning the incovenxences of the practical kind , these stem
directly from the basic observations made above . It is not , in effect ,
doubted that the running down of the tariffs on the products used and
the differences of treatment between them will result in extra adminis­
tration and investigation work both for the customs administrations
and traders .
                               *        *
      Taking into account the implications of the problems described
above , the Commission fe«ls that it is necessary to continue the
consideration of the possibilities of introducing a new provision on
this question , especially in the Customs Committees .
     This necessity leads the Commission , in accordance with the
wishes expressed by the EFTA countries in the Customs Committees and
with the unanimous feeling of the Community 's Customs experts , to propo
the suspension for one year of the previsions of Article 23 of Proto­
col No 3 .
 ---pagebreak---                                    - b -
     It is therefore proposed that - the Council adopts the annexed
draft as the common position of the .Community for use in thg different
Joint Committees EEC - EETA countries . This draft , prepared for Austria ,
serves as a model for the others and will be identical for all the
other agreements .
     Additionally , it should be noted that this decision should enter
into force on 1 January 1975 at the latest and that therefore it is
absolutely necessary that the Community can present its official view­
point to the EFTA countries very soon,v;hich takes into account the
administrative delays involved in putting the text into force .
                        \
 ---pagebreak---  EEC-AUSTRIA AGREEMENT
- The Joint Committee -
                                      Draft of
                             JOINT COMMITTEE DECISION
                suspending the application of the provisions of
                Article 23 ( l ) of Protocol No 3 concerning the
                definition of the concept of " originating products"
                and methods of administrative cooperation
 THE JOINT COMMITTEE,
 Having regard to the Agreement "between the European Economic Community
 and the Republic of Austria , signed in Erussels on 22 July 1972 |
 Having regard to Protocol No 3 on the definition of the concept of
 "originating products" and methods of administrative cooperation ( hereafter
 referred to as "Protocol No 3")» and in particular Article 28 thereof|
 Whereas the present text of Article 23 ( l ) of Protocol No 3 provides that
 with effect from the date on which the duty applicable to originating
 products of the relevant kind has been reduced in the Community and in
 Austria to QCffo of the basic duty , no drawback or remission of any kind my
 be granted from customs duties in respect of the non-originating products
 used in the manufacture of those originating products ;
 Whereas , by reason principally of differences in the tariff regimes applied
 to the various products used in manufacture , the application of these pro­
 visions , which for most products would be on 1 January 1975 > would result
 in considerable difficulties as well as adding to the tasks of the Customs
 admini strati ons 5
 Whereas it is consequently desirable to suspend for one year the application
 of these provisions ;
 ---pagebreak--- HAS DECIDEE :
                                Article 1
     The application of Article 23 ( l ) of Protocol No 3 is suspended
until 31 December 1975 «
                               Article 2
     This Decision shall ento? into f'o^oe on 1 January 1975 *
                                                              /
                                          Done at Brussels ,
                                          For the Joint Committee ,
                                          The Chairman ,
      The Secretaries