CELEX: 51990PC0105
Language: en
Date: 1990-03-30
Title: PROPOSAL FOR A COUNCIL REGULATION ( EEC ) DEROGATING FROM THE DEFINITION OF THE CONCEPT OF " ORIGINATING PRODUCTS " TO TAKE ACCOUNT OF THE SPECIAL SITUATION OF THE NETHERLANDS' ANTILLES WITH REGARD TO CIGARETTES OF CN CODE 2402 20 00

COMMISSION OF THE EUROPEAN COMMUNITIES
                                          COM(90) 105 final
                                          Brussels, 30 March 1990
                               Proposal for a
                         COUNCIL REGULATION (EEC)
              derogating from the definition of the concept of
   'originating products" to take account of the special situation of the
              Netherlands' Antilles with regard to cigarettes
                              of CN code 2402 20 00
                       (presented by the Commission)
 ---pagebreak---                                  EXPLANATORY NOTE
Irtroductior
The' Government   of  tne  Netnerlards,   or   behalf  of  the   Government   of  the
Netherlands*   Antilles, has suomitted a request       for a derogation     from  the
rules of origin for cigarettes applicable to trade between the associated
overseas   countries   and  territories    (O.C.T.)   and  the    European   Economic
Community.
If the derogation is granted, tnus allowing the cigarettes manufactured in
the Netnerlands' Antilles to oenefit from tne preferential tariff treatment
granted oy tne Community to O.C.T originating products           (1), it would make
possible important industrial investments necessary to start the production
of these cigarettes.
Nature of the problem
Under  tne   current  rules,   cigarettes    can  oenefit   from    tne  preferential
treatment if 70* or more in weight of tne tobacco used is originating in the
O.C.T, ACPs or in the Community and its processing is only carried out in
these territories , any otner oeing excluded.
The Netnerlands Antilles do intend to use tobacco of ACP origin up to at
least tne percentage required oy the origin rule (70 % ) ,         but for technical
and financial reasons a first phase of processing nas to be carried out in
Brazil, wnich would normally     cause the final product       to   lose  originating
status.
(1) Council Decision 8ô/2«33/££C of 30 June 1936.
    OJ No. L 175, 01.07.19do.
                                                                                      2
 ---pagebreak---                                       - 2 -
Legal aspects
Tne rei^uest is oased on article 26 oi    Annex II to Council Decision 3o/26 3,
due to expire on 2d r'eoruary 1990.
Tne successor provisions expected to come into force on 1 ilarcn 1990, taking
intb account tne outcome of     the negotiation   for tne  renewal of the Lomé
Convention, specify tnat a derogation shall oe granted if it would not cause
serious injury to an economic sector of tne Community.     In the present case,
tne quantities involved exclude any risx of tnis Kind.
Additional criteria for granting a derogation wnich are particularly relevant
in this case are tne geographical situation of the territory concerned and
the            effect of tne normal rules on possiole investments.
For   tne  complete  supporting   information  submitted  by   tne  Netherlands'
Government in accordance with Article 2d(1) see Annex A to tnis Explanatory
Note.
Temporary nature of tne derogation
Tne derogation   is requested  for five years, after wnicn period     additional
investments ana diversification are expected      to have  enaole-i a permanent
solution to the prooiem to oe found.
Community trade in the sector concerned
See Anrex o to tnis explanatory Note fcr statistical information.
Conclusion
Tne Commission proposes to tne Council to grant tne requested derogation oy
adopting tne attacned draft Regulation.
                                                                                 3
 ---pagebreak---                                                             AMNÉJ fl.
sybject           Request for dérogation fro» the rules of origin
                  (arc. 28 annex II, Council Decision on CTO, 30.6.86)
finished product; cigarettes of a standard or custom-made blend,' filter
                  tipped, 83 or 100 mas length.
company :         COMPANHXA SUDAN DI PRODUT08 OS TABACO
                  Bus 28 de Scteabro no. 823
                  Caixà Postal 63
                  Santa Crut do Sul
                  BRAZIL
reason for non-    for financial and technical reaaons part of the
compliance vith   production process (preparation of tobacco) takes
rules of origin    place in Brazil.
nature and        prepared tobacco from Brazil (of which 701 of ACP-
origin of         origina 30* of Brazilian origin),
used materials    packing materials from ACP/KEC origin.
manufacturing-    producing and packing of cigarettes
procès :
value added:      270 I
number of         20 to 40 (if working in two ahifta)
employes:
eatimated         OS $ 3 million 1st year
export value      US $ 7 million 2nd year
to EC:            US $ 10 million 3rd year
other possible     (Origin of raw materials does not conflict vith rules
supplies of raw   of origin)
materials;
period of         five years: within this period it should be possible
derogation        to make e well-founded decision on further investment
                   in the N.A. in order to manufacture a product that
                  complies with the rules' of origin.
for further       Nrs. M. Grubben
information:      Ministry of Economic Affairs
                  Division External EEC Affaira
                  P.O. Box 20101
                  2500 EC THE HAGUE
                  Phone 31.70.796260
                  FAX    31.70.797392
                  Telex 31099 ECZA NL
                                                                         4
 ---pagebreak---                                                           AN.sEX S
                           Statistical information
Imports into tne Community of cigarettes (C.tf. code 2402 20 00) in 1988:
-    including intra-Community trade: 157 554 million pieces
     from extra-Community sources: 38 604 million pieces
The proposed derogation would cover a quantity corresponding to 0.15% and
0.62% respectively of these amounts.
(Source: Eurostat)
                                                                          S~
 ---pagebreak---                                                                       fîN'A/ÉX L
                                       REPORT
                             from tne Origin Committee
                                   to tne Council
(estaolisned   in  conformity   witn  Article  2d   (7}, of  Annex  II   to   Council
Decision 86/283/c£C of 30 June 1986 (1).
Subject:   Request   for  derogation    from  the  origin   rules  entered    by  the
           Netnerlands for certain cigarettes manufactured in the Netherlands'
           Antilles
1.  The Origin Committee discussed tne request referred to aoove at its 180th
    and 1d7th meetings, whicn took place in Brussels from 23 to 26 January and
    from 23 to 27 October 19d^ respectively.
2.  At tne   180tn meeting tne Commission     and  Memoer  States'  representatives
    indicated   tnat additional   information   to tnat contained   in the request
    suomitted oy tne Dutcn government was necessary to permit them to carry
    out an evaluation of tne request itself.
    The relevant information was suosequently received oy tne Commission on 13
    Septemoer 1:>d9 and made availaole to the Origin Committee delegates.
4.  At tne   187th meeting the 3ritish, Danish, German and Dutch         delegations
    stated tnat tney were in favour of granting the requested derogation.         The
    otner delegations were opposed, except Luxembourg wnich was aosent.
Tne Chairman
J. rtATTrilàS
(1) OJ No. L 175, 1.7.193c, z>. 47.
                                                                                      £
 ---pagebreak---                      COUNCIL REGULATION (EEC) No.        /90
                           of                      1990
               derogating from the definition of the concept of
    •originating products" to take account of the special situation of the
               Netherlands' Antilles with regard to cigarettes
                                of CN code 2402 20 00
THE COUNCIL OF TriE EJROPEAN COiMdWITIES,
Having regard to tne Treaty estaolishing tne European Economic Community, and
in particular Article 113 thereof,
Having  regard  to   Council   Decision  dô/283/EEC  of   30   June  1936  on  the
association of tne overseas countries and territories, hereinafter        referred
to as U.C.T., with the European Economic Community (1);
Having regard to tne proposal from the Commission,
Whereas Article 28 of Annex II to tne said Council Decision, concerning the
definition  of   the   concept   of  "originating   products"    and  methods   of
administrative cooperation provides that derogations from the rules of origin
may oe adopted oy the Council where the development of existing industries or
the creation of new industries in a country or territory justifies them;
Wnereas tne Dutcn Government has requested, on benalf of the Netherlands'
Antilles, a derogation from tne rules of origin for cigarettes manufactured
there, which for a temporary period could not satisfy        the rules of origin
laid down in the aoove-mentioned Annex II;
(1)  OJ No. L 175, 01.07.1986, p. 1.
                                                                                   h
 ---pagebreak--- Wnereas the saia Article 28 sets out tne conditions which must oe fulfilled
in order for a derogation to be granted; whereas the derogation is not likely
to cause serious injury to an estaDlished Community industry;
Whereas tne content of ACP originating raw materials would confer originating
status  to  the  final   product,   except   for   one  processing   operation   being
carried out in a third      country   for technical, financial      and   geographical
reasons;
Whereas a derogation    is indispensaole for the realization of an           important
investment programme    and   to  enaDle   the  company   concerned   to   investigate
diversification   possibilities    in   tne   near   future;  whereas    the  relevant
conditions of Article 28 are therefore respected in the present case;
HAS ADOPTED THIS REGULATION:
                                      Article 1
By  way  of  derogation   from   tne  provisions    of  Annex  II   to   the  Decision
86/283/EEC,   cigarettes   of  NC  heading   2402   20  00 snail   be   considered  as
originating in the Netherlands' Antilles when they are manufactured there,
subject to the conditions set out in this Regulation.
                                      Article 2
1. Tne derogation provided for in Article 1 snail relate to an annual global
   quantity of 240 million cigarettes, exported from the Netherlands Antilles
   during the period from      1 January   1990 to 31 December     1994 and ootained
   from tobacco processed in Brazil.
2. The derogation is granted subject to the condition that on an annual basis
   at least 70 *> in weight of the tobacco is originating in the ACP States,
   in the O.C.T. or in the Community.
                                                                                       y
 ---pagebreak---                                        - 3 -
3. For tne purpose of implementing paragrapns          1 and 2, a proof of origin
   snail  oe   suomitted  on   import   into   Brazil    oy  means    of   a  movement
   certificate EUR.1 issued oy the competent         autnorities   of   the  exporting
   state for toDacco intended to oe processed in Brazil prior to its further
   manufacture in tne Netherlands' Antilles.
4. For eacn subsequent re-export      of processed     tooacco from Brazil      to the
   Netherlands' Antilles the exporter      shall draw up a declaration          on the
   invoice in accordance with tne layout in tne Annex to tnis Regulation.
   The  declaration   shall  oe  authenticated     oy   the  "Carteira    de  Comercio
   Exterior do Banco do Brésil S.A." subject to tne conditions laid down in
   paragrapns 2 and 3 of tnis Article.
   This declaration snail oe submitted to tne autnorities in the Netherlands
   Antilles wnicn are competent for issuing movement certificates EUR.1.
                                     Article 3
1.   The competent autnorities of the Netherlands' Antilles shall carry out
    quantitative checxs on exports as referred to in Article 2 ( 1 ) and shall
    forward   to  the  Commission    every   three    montns  a  statement     of  the
    quantities   in respect  of   wnicn  movement    certificates   EJR.1 have oeen
    issued on tne oasis of this Regulation.
2.  Not later tnan tnree montns after the end of eacn year of application of
    tne derogation, they shall also forward to the Commission a statement of
    the quantities of tooacco      imported, with     the references     to the EUR. 1
    certificates presented    in Brazil and     to  the   declarations    referred  to
    respectively in Article 2 (3) and 2 (4).
                                     Article 4
1.  Tnis Regulation shall enter into force on the date of its publication in
    the Official Journal of the European Communities.
                                                                                       A
 ---pagebreak--- 2. It snail apply only where the government of the Netherlands' Antilles and
   the   "Carteira   de   Comercio   Exterior  do  Banco  do  Brésil   S.A."  nave
   undertaken to comply with the terms of this Regulation and to provide the
   administrative cooperation     oetween themselves and with the Community in
   order   to  ensure   the  correct   issue  and verification  of   the  relevant
   documentation.
3. Notwithstanding Article 2, tnis Regulation shall cease to apply at the
   latest on the date of expiry of Decision 86/283/EEC or of any equivalent
   trade provisions which may replace that Decision.
This Regulation shall be binding in its entirety and directly applicable in
all Memoer States.
Done at Brussels,
                                              For tne Council
                                              The President
                                                                                   yio
 ---pagebreak---                                                                 ANNEX
                     DECLARATION ti£FEtiR£û TO IN ARTICLc 2(4)
    I, tne undersigned, exporter of tne tobacco covered by this invoice (1),
    declare tnat tnis tobacco was processed in Brazil in conformity with the
   provisions of Article 2{2) and 2(3) of Council Regulation (EEC) No.               /90
    of                  1990.
    I undertaxe to maKe availaole to tne competent autnorities, if required,
    evidence in support of tnis declaration.
                                   (2)                                               (3)
                                                                                     (4)
  ENDORSEMENT Bi THE CARTEIRA J E COrlERCIO EXTERIOR    DO àk.lZj  DO B R £ S I L S.A,
  Declaration certified
                                 (2)               (:>)
                                 (4)
(1)    If a document otner than tne invoice or an annex to the invoice is used,
      tne name of the document snail oe mentioned instead of the word
       "invoice".
(2)   Place and date.
(3)   Name and function in tne company.
(4)   Signature.
(5)    Stamp.
                                                                                         cS<A
 ---pagebreak---                          FIGMB FIHANCIERS
Il n'est pas possible d'établir un lien direct entre l'ootroi
d'une dérogation et une perte de recettes. Si la dérogation
n'est pas acoordée, il n'est pas possible de déterminer à
l'avance auprès de quels fournisseurs (préférentiels ou non) le
marohé oommunautaire s'approvisionnera.
Toutefois, à titre indicatif» il peut être mentionné que le taux
des droits de douane applicable aux produits en question
originaires de pays tiers est de 90 % en valeur.
                                                                 M,
 ---pagebreak---                          Etat d'imact aur loa PME
La présente proposition concerne une dérogation aux régies d'origine
applicables aux Pays et Territoires d'Outre-Mer pour les produits du tabac
exportés vers la Communauté et importés en franchise de droits de douane.
La dérogation serait applicable pendant cinq ans et limitée à une quantité
susceptible de ne causer aucune perturbation dans le Marché Commun.
Cette proposition n'aurait donc aucun effet perceptible sur l'emploi et la
compétitivité dans la Communauté.
                                                                           /O
 ---pagebreak---  ---pagebreak---                                                                      ISSN 0254-1475
                                                              COM (90) 105 final
                                                      DOCUMENTS
EN                                                                         i l 02
                                 Catalogue number : CB-CO-90-135-EN-C
                                                             ISBN 92-77-59027-0
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