CELEX: 51978PC0619
Language: en
Date: 1978-11-23
Title: Proposal for a COUNCIL REGULATION (EEC) on the opening, allocation and administration of a Community tariff quota for processing work in respect of certain textile products under Community outward processing arrangements (submitted to the Council by the Commission)

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DE LA COMMISSION
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DOCUMENTS "COM"
COM (78) 619
Vol. 1978/0240
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 ---pagebreak---   COMMISSION OF THE EUROPEAN COMMUNITIES
                                                COM(78)619 final
                                                Brussels , 23 November 1978
                               Proposal for a
                          COUNCIL REGULATION ( EEC )
             on the opening , allocation and administration of a
             Community tariff quota for processing work in respect
             of certain textile products under Community outward
                              processing arrangements
                  ( submitted to the Council by the Commission )
C0M(78 ) 619 final
 ---pagebreak---                                      EXPLANATORY MEMORANDUM
                                 (1)
      1.     In an Arrangement        concluded with the Swiss Federation on 1 August 1969 ,
             the European Economic Community undertook to open an annual duty-free
             Community tariff quota of 1 870 000 units of account of added value in
             respect of various kinds of processing work for certain textile products
             under the outward processing traffic arrangements between the Community
             and Switzerland .
             Under the terms of the memorandum agreed at the time the Arrangement was
             made , this annual tariff quota is divided into three categories of pro­
             cessing , based on the quantities recorded under the former bilateral
             agreements ( concluded with Switzerland by , France , Germany and Italy ),,
             but taking into account' the possibilities of extending it to the Benelux
             countries .
             On the basis of that division the total quota amount of 1 870 000 units
             of account is allocated following certain amendments , as follows :
             a ) 1 520 000 units of account for processing work on woven fabrics falling
                 within Chapters 50 to 57 of the Common Customs tariff ;
             b ) 123 000 units of account for twisting or throwing , re-twisting , cabling ,
                 texturizing ( whether or not . combined with other processing work ) of yarns
                 falling within Chapters 50 to 57 of the Common Customs Tariff ;
             c ) 227 000 units of account for processing work on articles falling within
                 headings N°s 58.04 , 58.05 , 58.07 , 58.08, 58.09 and 60.01 of the Common
                 Customs Tariff , subject to the setting up of a Community reserve of
                 230 000 u.a . to be drawn from the above quotas , i.e." 160 000 u.a .,
                                                                                    Φ
                 13 000 u.a . and 57 000 u.a . respectively .
      2.     The question whether this Arrangement should continue beyond 31 August 1977
             has been examined on several occasions , notably at the meeting of the
             EEC-Swiss Joint Committee held on 3 November 1976 , in regard to the quota
             amounts which should be adopted thenceforth , account being taken of the
             fact that the transitional period in the Free Trade Agreement concluded
( 1 ) 0J N° L 240, 24' September 1969 .
 ---pagebreak---                                                - 2 -
                 y
              with Switzerland , under which textile products qualifying for Swiss origin
              status by reason of the processing work they have undergone can enter
              duty-free , expires on 1 July 1977 .
              It was decided by common accord that until such time as the economic
              data required for calculating these amounts are available the currently
              open quota amounts should surely, and simply be renewed for a transitional
              period , during which time the contracting parties will endeavour to obtain
              the required data .
            . The data currently available do not yet permit a rough estimate to be
              formed of the size of the reduction to be made in the quota amounts .
              It was therefore agreed that the tariff quota opened for the period
              up to 31 August 1978 be renewed for a further year .          -
      3.      To take account of the application from 1 January 1979 onwards of the
              European unit of account to Acts adopted by the institutions of the
              European Communities , the Council , when adopting Regulation ( EEC ) N° 1926/
                                  (1)
              78 of 25 July 1978      , decided to divide the quota period into two parts ,
              one covering the period 1 September to 31 December 1978 and the other the
              period 1 January to 31 August 1979 .
              The annexed proposal for a Regulation therefore serves no other purpose
              than to open , in European units of account , the tariff quota provided
                                                           /
              for in the Arrangement in question for the period from 1 January to 31
           ■ August 1979 and to allocate it among the Member States along the lines
              set out in the Memorandum covering the Arrangement , account being taken
              of the changes occuring meanwhile and of the need to ensure that the
              new Member States share . in the allocation of this tariff quota .
( 1 ) OJ'N0 L 225 , 16.8.1978, p. 11 . ,
 ---pagebreak---                                                                                                     ANNEX
                                     COUNCIL REGULATION (EEC)
                on the opening, allocation and administration of a Community tariff quota for processing
                work in respect of certain textile products under Community outward processing arrange­
                                                           ments
THE COUNCIL OF THE EUROPEAN COMMUNITIES,
Having regard to the Treaty establishing the European
Economic Community, and in particular Article 113 .
thereof,
Having regard to the proposal from the Commission,
Whereas on 1 August 1969 the Community concluded '
an arrangement with Switzerland on processing traffic .
in "textiles ; whereas under that arrangement the Com­
munity undertook to open on 1 September of every year
an annual duty-free Community tariff quota for                                                   "
processed goods of 1 870 000 units of account of added
value, apportioned as follows:
(a) 1 650 000 units of account for processing work on
      woven fabrics falling within Chapters 50 to 57 of
      the Common Customs Tariff,
(b) 143 000 units of account for the twisting or throw­
      ing, cabling and texturizing (whether or not com­
      bined with other processing works) of yarns falling
      within Chapters 50 to 57 of the Common Customs
      Tariff,                                                   ^
(c) 77 000 units of account for processing work on ■
      products falling within headinggNos 58.04, 58.05 , .                                            /
      58.07, 58.08 , 58.09 and 60.01 of the Common                   :
      Customs Tariff; •                                              \
Whereas, in order that the division of the whole quota
into the three categories referred to above shall corre­
spond more exactly with the actual movement of trade
during the reference year or during previous quota
 periods as well as with the foreseeable movement of
 trade during future quota periods, it has been decided to
 adjust the said allocation between the three categories
 by giving them 1 520 000. 123 000 and 227 000 units
 of account respectively;
 ---pagebreak---                                                - 2 -
                                                                                      (1)
    Whereas , by its Regulation ( EEC ) N° 1926/ 78 of 25 July 1978                       the
    Council has already opened the tariff quota concerned for the period
    1 September to 31 December 1978 to cover four-twelfths of the arnnual
    amounts ; whereas the remainder of the quota in question should therefore
    be opened for the period 1 January to 31 August 1979 , in accordance with
    the detailed rules laid down in the arrangement referred to above and
    amendments thereto , and in accordance with the provisions of Regulation
  '            on the application of the European unit of account to Acts           1
    adopted by the institutions of the European Communities , and in particu­
    lar Article 14 thereof ; whereas on this basis the total quota volume
    and the amounts allocated to each category are 1" 2^6 666, 1 013 333 ,
    82 000 and 151 333 European units of account respectively ;
    Whereas the Community 's commitment is annual while re-imports of products
    after processing are seasonal and provision should therefore be made for
    the unused parts of the quota opened for the period 1 ^ September to
                                                                     <-                       •
    31 December 1978 to be carried over with a view to their possible use
    during the period for which this Regulation is applicable
                      Whereas provision should be made in particular to
                      ensure equal and continuous access for those concerned
         v            with this quota and consistent application of the rate of
                  . duty prescribed for the said quota until the quota is
                      exhausted, to all goods reimported into any of the
                      Member States and which have received one or other of     ,
                      the treatments listed above; whereas, in the light of
                      these principles, arrangements for the utilization of the
      «            i quota based on an allocation among the Member States
                      would seem to be consistent with the Community
                      character of the said quota; whereas it therefore seems
                       appropriate to make the allocation on the basis of the
                       amount of the traffic under the previous bilateral
                      agreements, but without precluding participation by
            I          Member States not previously involved in such traffic,
                       among which the new Member States are included;
                       whereas, to safeguard the Community character of the •
                       quota, provision should be made to meet requirements
                 . which may arise in those Member States in the future by
           -,'         permitting them to draw adequate amounts from the         /
                     ■ Community reserve;                                 •       ;
                                                                        \
( 1 ) 0J No L
 ---pagebreak---                                     – 3 –
  Whereas to take account of future trends in the traffic
  in question in the various Member States, the total
  quota volume of 1 246 666 European units of account
  divided into two tranches, the first being allocated
  among certain Member States and the second held as a
  reserve to cover the subsequent requirements of
  Member States when one of their initial shares has been              '
  exhausted and also, requirements which may arise in
  certain Member States in respect of processing work for
  which no initial share of the quota was allocated;
  whereas, in order to give the parties concerned in each
  Member State some degree of certainty, it would seem
 appropriate to fix the first tranche of the Community
 quota at a relatively high level, namely 1 no-* -z -z -z p ^       ..     ,
 account; where* the total CommuLv,icr»e                        UmtS °f
   153 333 European units of account shall consist of amounts dr
    °m the allocations in respect of each category," that is
- 106 666 , 8 667 and 38 000 Europe an unit s
  of account respectively :
                                                              I
 Whereas the Member States may exhaust their initial
 shares at different rates ; whereas to avoid disruption of                  ' [ .  -
 supplies on this account it should be provided that any
  Member State which has almost used up one of its in-                            -
  itial shares should draw an additional share from the
  reserve; whereas each time its additional share is almost
  exhausted a Member State should draw a further share,
  and so on, as many times as the reserve allows; whereas
  the initial and additional shares should be valid until the /
  end of the quota period; whereas this form of adminis­
  tration requires close collaboration between the
  Member States and the Commission, and the Com­
   mission must be in a position to keep account of the                  '
  extent to which thc quota has been used up and to in­
   form the Member States accordingly;
  Whereas if at a given date during the quota period a
  considerable quantity of a Member State's initial share
  remains unused it is essential, to prevent a part of the
  quota from remaining unused in one Member State
  while it could be used in others, that the State in question
  return a significant proportion thereof to the reserve;
 Whereas, since the Kingdom of Belgium, the Kingdom '
 of the Netherlands and the Grand Duchy of Luxem-                ■>
 bourg are united in and jointly represented by thc
 Bénélux Economie Union, any transaction in connection
 with the administration of the shares allocated to that
 economic union may be carried out by any one of its
 members,                                                                       •
 ---pagebreak---  1 HAS ADOPTED THIS REGULATION:
                              Article 1
  1.         From 1 January until 31 August 1979 , a Com­
  munity tariff quota of 1 246 666 European units of account ( EUA)of value
  added shall be opened in the European Economic .
  Community in respect of goods resulting from process­
  ing work as provided for in the arrangement with Swit-                    ■ ' ,
  zerland on processing traffic in textiles. Such quota shall
  be apportioned as follows :
 (a) 1 013 333 EUA for processing work on                             s"'
        woven fabrics falling within Chapters 50 to 57 of'
        the Common Customs Tariff;
(b) 82 000 EUA for twisting of throwing ,
        cabling and texturizing (whether or not combined
        with other processing work) of yarns falling within
        Chapters 50 to 57 of the Common Customs Tariff;
(c) . 151 333 EUA for processing work on
        articles falling within the following headings of the
        Common Customs Tariff:                                    -       ■
      58.04 Woven pile fabrics and chenille fabrics (other                       >
                than terry towelling or similar terry fabrics ' ■
                of cotton falling within heading No 55.08
                and fabrics falling within heading No 58.05),                  .
     58.05 Narrow woven fabrics, and narrow fabrics                 '
               (bolduc) consisting of warp without weft
               assembled by means of an adhesive, other "
               than goods falling within heading No 58.06, *
     58.07 Chenille yarn (including flock chenille yarn)
              gimped yarn (other than metallized yarn of >
                ea ing No 52.01 and gimped horsehair
      ,       yarn); braids and ornamental trimmings in
              the piece; tassels, pompons and the like,
    58.08 Tulle and other net fabrics (but not including
              woven, knitted or crocheted fabrics), plain,.
    58.09 Tulle and other net fabrics (but not including
              woven, knitted or crocheted fabrics), figured;
              hand or mechanically made lace, in the piece, '
              m strips or in motifs,
    60.01 Knitted or crocheted fabric, not elastic or '
             n 1 hh#»rt taA
 ---pagebreak---                                   - 5 -
 2. For the purposes of this Regulation :
 (a) *proccssing work* means:
       – for the purposes of paragraph 1 (a) and (c):
             bleaching, dyeing, printing, flocking, impregnat­
             ing, dressing and other work which changes the
             appearance or quality of the goods, without
             however changing their nature,
       – for the purposes of paragraph 1 (b): twisting or
             throwing, cabling and texturizing, whether or
             not combined with reeling, dyeing or other
             work which changes the appearance, quality or
             finish of the goods, without however changing
             their nature ;
(b) 'value added' means : the difference between the
       value for customs purposes as defined in Regu- '
       lation ( EEC) No 803 /68 ( ' ) at the time of re-im- •
       portation and the value for customs purposes as it •
       would be if the products were re-imported in the
       state in which they were exported.
3 . Each portion as laid down in paragraph 1 shall be
divided into two tranches , the first being allocated
among certain Member States in accordance with
Article 2(1 ) and the second being used to constitute a
reserve which shall be common to the three categories
of processing.
4. Within this tariff quota, the Common Customs
Tariff duties shall be totally suspended.
5. Re-imports of products resulting from this pro­
cessing work may not be charged to the tariff quota if
they ire already free of customs duties under other
preferential tariff arrangements.
                             Article 2
   1 . The first tranche of each portion of the quota as laid
  down in Article 1(1 ) shall be allocated as set out below
  among the Member States listed in the above arrange­
  ment; the shares, 'subject to Article 6, shall be valid
  from 1 January to 31 August 1979 .
  (a) Germany:
       120.000 EUA , apportioned as follows
             566 666 EUR for processing work
              on woven fabrics falling within Chapters 50 to
           • 57 of the Common Customs Tariff,
             66 667 EUA for twisting or throw­
             ing, cabling and texturizing (whether or not
             combined with other processing work) of yarns
             falling within Chapters 50 to 57 of the Common
             Customs Tariff,
             86 667 EUA for processing work on
             products falling within heading Nos 58.04,
             58.05, 58.07, 58.08 , 58.09 and 60.01 of the
             Common Customs Tariff;
 ---pagebreak--- (b) France:
        346 666 EUA apportioned as follows :
      – 333 333 - EUA for processing work
           on fabrics falling within Chapters 50 to 57 of
,          the Common Customs Tariff,
       – 13 333 EUA for processing work on
           products falling within heading Nos 58.04,
           58.05 , 58.07, 58.08, 58.09 and 60.01 of the
           Common Customs Tariff;
(c) Italy:
   .     13 334 EUA i.e . ha.lf for twisting or
       throwing, cabling and texturizing (whether or not
       combined with other processing work) of yarns fal-.
       ling within Chapters 50 to 57 of the Common
       Customs Tariff, and half for processing work on ..
       products falling within heading Nos 58.04, 58.05,,.
     1 58.07, 58.08, 58.09 and 60.01 of the Common
       Customs Tariff;
(d)' Bénélux :                   1 '         .
      13 334 EUA for processing work on
      yarns and wovert fabrics falling within Chapters
       50 to 57 or for products falling within headings N° S
       58.04, 58.05, 58.07 , 58.08 , 58.09 and 60.01 of the
       Common Customs Tariff.                               ■>
2. The second tranche which amounts to .153 333 EUA
               shall constitute a Community reserve which
may be used for the three categories of processing. .
 ---pagebreak---                                             - 7 -
To these amounts shall be added , without prejudice to Article 6, any
portions of the stares allocated to Member States or of the reserve
set up under Article 2 of Regulation ( EEC ) N° 1926/78 remaining unused
on 31 December 1978 .
Member States shall notify the Commission, not later than 1 February
1979, of any portions of the shares allocated to them under the above
Regulation remaining unused on 31 December 1978 .
                                        •       *
                                  <•
                                       Article 3                          i   ' ....
             In case of need, either in France in respect of the pro­
             cessing work referred to in Article 1 ( 1 ) (b), or in any of
             the new Member States in respect of any, of the
             categories of processing work, the State concerned shall,
             to the extent that the reserve so permits, draw from
             such reserve an appropriate share of the
              quota .
                                       Article 4
             1 . If a Member State has used 90 % or more of one of
             its initial shares as fixed in Article 2 ( 1 ), or of that share
           • minus any portion returned to the reserve pursuant to
             Article 6, it shall forthwith, by notifying the Com­
             mission, draw a second share, to the extent that the
   .          relevant reserve so permits, equal to 10 % of its initial              y
     ^       share, rounded up as necessary to the next whole •
              number.
             2. If a Member State, after exhausting one of its initial
              shares, has used 90 % or more of the second share
              drawn, by it, that Member States shall , in accordance
              with the conditions laid down in paragraph 1 , draw a
              third share equal to 5 % of its initial share.
             3 . If a Member State, after exhausting its second share,
              has used 90 % or more of the third share drawn by it,
              that Member State shall, in accordance with the same
              condition, draw a fourth share equal to the third.
              This process shall continue to apply until the reserve is
              exhausted .
             4. Notwithstanding paragraphs 1 to 3, a Member State
              may draw shares lower than those specified in those
              paragraphs if there are grounds for believing that those
              specified may not be used in full. Any Member State
              applying this paragraph shall infqrm the Commission of
              its grounds for so doing.
 ---pagebreak---                                     - a -
                 •           Article S
  Additional shares drawn pursuant to Article 4 shall be
  valid until 31 August 1979 .
                             Article 6
  The Member States referred to in Article 2 aiall, not
    later than 1 July 1979 , return to the reserve the
    unused portion of their initial share which, on
    15 June 1979 ,, is in excess of 20 % of the initial -
    volume. They may return a greater portion if there are
    grounds for believing that it may not be used in full.
     Member States shall, not later than 1 July _1 979 _.J
     notify the Commission of the total quantities of 'the
     product in question re-imported, up to and including
     15 June 1979 \ and charged against the Com­
     munity quota and of any portion of their initial quotas
     returned to the reserve.
                              Article 7
     The Commission shall keep an account of the shares
     opened by the Member States pursuant to Articles 2, 3
     and 4 and shall, as soon as the information reaches it,
     inform each State of the extent to which the reserve has
     been used up.                         -
     It shall , not later than 5 July 1979 ,. inform the
     Member States of the amounts still in reserve following^
     any return of shares pursuant to Article 6.              ■ '
     It shall ensure that when an amount exhausting this
     reserve is drawn the amount so drawn does not exceed
     the balance available, and to this end shall notify the
     amount of that balance to the Member State making the
     last drawing.         •    '
          • s       ,                    -                     /•••
  ■                           Article 8 .
      1 . Member States shall take all appropriate measures
      to ensure that additional shares drawn pursuant to
,, Article 4 are opened in such a way that re-importation
      may be charged without interruptioit against their
      accumulated shares of the quota.              >
      2. Every Member State shall ensure that all persons
      established in its territory involved in the processing
      traffic have free access to the shares allocated to it.
       3 . The extent to which a Member State has used up its
       shares shall be determined on the basis of the value
       added, as established when upon re-importation the
       products concerned are entered with the customs
       authorities for home use.
 ---pagebreak---                                            - 9 -
                                  Article 9
          At the request of the Commission, the Member States
          shall inform it of re-importations charged against their .
          shares.
                                 Article 10
          Member States and the Commission shall cooperate
          closely to ensure that this Regulation is complied with.
                                  Article ÎÎ
          Thi« Regulation shall enter into force on 1 January
         , 1979 .
This Regulation shall be binding in its entirety and directly
applicable in all Member States .
Done at Brussels ,
                                                                 For the Council
                                                                 The President
 ---pagebreak--- FINANCIAL MEMORANDUM                                         Date
1 . ■ Number of relevant budget heading : Chap . 12 Art . 120
2.     Legal basis : Art . 113
3.     Title of tariff measure :
       Proposal for a Council regulation on the opening , allocation and
       administration of a Community tariff quota for processing work in
       respect of certain textile products under Community outward processing
       arrangements .     '                                            ■
4.     Aim of measure : To give effect to Community undertakings .
5.     Method of calcultation :
       - CCT heading N°       : various
       - Volume of quota(s ) :  1 246 666 EUA
             .■       . \             .
       - Duties applicable    : 0%
       - CCT duties           : various ( average duty 10% )
6.     Loss of revenue :
       - in the event of full use of quota : 10% of 1 246 666 EUA =      124 667 EUA
       - on basis of foresee-able use        : 10% of 200 000 EUA =  '    20 000 EUA
     y ( loss of revenue already included in the financial memorandum of
   .   Document C0M(78)269 of 19 June 1978 ).