CELEX: 51997PC0301
Language: en
Date: 1997-06-17
Title: Proposal for a Council Regulation (EC) re-introducing a 12 % rate of duty to be applied by the Community on certain products falling within CN heading 5607

COMMISSION OF THE EUROPEAN COMMUNITIES
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                                             Brussels, 17.06 1997
                                             COM(97) 301 final
                                             97/0167 (ACC)
                              Proposal for a
                    COUNCIL REGULATION (EC)
          re-introducing a 12% rate of duty to be applied by the
        Community on certain products falling within CN heading 5607.
                     (presented by the Commission)
 ---pagebreak---  ---pagebreak---                                EXPLANATORY MEMORANDUM
1.   In January 1989 the Brazilian authorities imposed an export tax on sisal fibres at 13% of
     the fob price. Brazilian exporters of processed sisal products were exempt from the tax.
     Given the risk of injury to the EC processing industry the Community entered into
     consultations with Brazil in GATT under Article XXII(l) but failed to reach a mutually
     satisfactory solution. To encourage Brazil to change its discriminatory system, the
     Community therefore took action under Article XXVIII, suspending its 12% bound rate on
     the following products:
     5607                Twine, cordage, ropes and cables, whether or not plaited or braided and
                        whether or not impregnated, coated, covered or sheathed with rubber or
                        plastics:
                        - of sisal:
     5607 21 00         Binder or baler twine
     5607 29             Other:
     5607 29 10         Measuring more than 100 000 décitex (10 grammes per metre)
     5607 29 90          Measuring 100 000 décitex (10 grammes per metre) or less
     The Community opted to suspend the bound rates rather than change them permanently as
     this allowed it to continue negotiating with Brazil for a mutually satisfactory solution..
     Concomitantly, Council Regulation (EEC) No 283/911 set the Community's autonomous
     rate of duty for these products at 25%.
2.   During the Uruguay Round negotiations the Community offered to bind duties for sisal
     fibres at 12%. An exchange of letters between the EC and Brazil stipulated that this
     concession would apply once the Brazilian authorities eliminated export taxes on the
     products, and for such time as no further such taxes were imposed.
     The Community undertook to apply the 12% concession as soon as the Brazilian authorities
     could confirm that the export taxes applied by the States of Paraiba and Bahia, the main
     producers and exporters of sisal fibre, had been definitively eliminated.
     Brazil confirmed by letter its approval of "Convenio ICMS 33/94" and adoption of Decrees
     Nos 16293/94 and 3237 making sisal fibre exports from those two States definitively
     exempt from the export tax.
     However, these measures did not remove all tax discrimination against sisal fibre exports.
     As Brazil has confirmed by letter, only by supplementary law No 87/96 of 13 September
      1996 were exports of all primary products and semi-finished industrial products, including
     sisal fibres, made exempt from the ICMS in all States of Brazil.
  Council Regulation (EEC) N° 283/91 of 4.2.91, OJ No L 35 of 7.2.91, p.l
 ---pagebreak--- Conclusion
The Commission believes this arrangement constitutes a mutually satisfactory solution,
taking both sides back to the situation that existed before 1989. It recommends that the
Council restore the 12% duty concession on the products concerned forthwith.
The concession remains conditional on Brazil refraining from any future action to
reintroduce export taxes or charges having equivalent effect on sisal fibres.
 ---pagebreak---                                          Proposal for a
                                COUNCIL REGULATION (EC)
                     re-introducing a 12% rate of duty to be applied by the
                  Community on certain products falling within CN heading 5607.
The Council of the European Union
Having regard to the Treaty establishing the European Community and in particular Article 113.
Having regard to the proposal from the Commission,
Whereas the import duty on processed products of sisal or other textile fibres of the genus Agave
falling within CN headings 5607 21.00, 5607 29.10 and 5607 29.90 was reduced and bound at
12% by the Community in the context of the Tokyo Round of Multilateral Trade Negotiations.
Whereas the bound rate of 12% on these products was subsequently withdrawn in accordance
with the provisions of GATT Article XXVIII and replaced by an autonomous rate of 25% in
Council Regulation (EEC) 283/91.
Whereas, in the context of the Uruguay Round of Multilateral Trade Negotiations, the
Community undertook to reintroduce the 12% duty rate once Brazil had definitely eliminated
the tax applied on exports of sisal fibres by the States of Paraiba and Bahia; whereas the
Community made this undertaking on condition that no new export taxes or taxes having an
equivalent effect are applied to exports of these products by Brazil.
Whereas Brazil has confirmed that exports of sisal fibres are exempted from ICMS taxes in all
Brazilian States under Complementary Law 87/96 of 13 September 1996: whereas, as a
consequence it is now appropriate to reintroduce the 12% duty rate and to repeal Council
Regulation (EEC) 283/91 in order to take account of the above: whereas the condition
mentioned above remains valid.
HAS ADOPTED THIS REGULATION
 ---pagebreak---                                                      Article 1
     Annex I to Council Regulation (EEC) No. 2658/87 is modified as follows:
    CN                                                      Rate of Duty          Supplementary
   Code                Description                                                    unit
                                                   autonomous        conventional
                                                          (%)            (%)
     1                        2                          3                4             5
5607         Twine, cordage, ropes and cables,
             whether or not plaited or braided
             and whether or not impregnated,
             coated, covered or sheathed with
             rubber or plastics :
5607 10 00    - Unchanged                            Unchanged        Unchanged
             - Of sisal or other textile fibres of
             the genus Agave
5607 21 00   - - Binder or baler twine.                  16               12
5607 29      - - Other :
5607 2910    - - - Measuring more than 100
             000 decitex (10 g/m)                        16               12            -
5607 29 90   - - -Measuring 100 000 decitex
             (10 g/m) or less                            16               12
 ---pagebreak---                                              ArtMe I
Council Regulation (EEC) No. 283/91 is hereby repealed.
                                             Article 3
The present regulation shall enter into force the day following that of its publication in the
Official Journal of the European Communities.
This Regulation shall be binding in its entirety and directly applicable in all Member States.
Done at Brussels       1997                                   For the Council
                                                              The President
 ---pagebreak---                                   FINANCIAL STATEMENT
Section I.     Financial Implications
1.   Proposal for a Council Regulation reintroducing a 12% duty rate for certain sisal products.
2.   Budget heading:           (loss of revenue: not known)
3.   Legal basis:              Article 113
4.   Description
     The proposed regulation is a consequence of an undertaking made by the Community in the
     Uruguay Round to restore the original 12% duty once Brazil had eliminated their export
     taxes on sisal fibres which had caused the Community to increase the duty on sisal products
     to 25%.
5.   Type of revenue:          Loss of revenue for duties paid on third country imports.
6.   Change in level of revenue:
     The reduction of the existing 25% duty to 12% will result in a duty loss of around 0.2
     MECU.
 ---pagebreak---  ---pagebreak---                                                                   ISSN 0254-1475
                                                           COM(97) 301 final
                                              DOCUMENTS
EN                                                                  11 10 03
                                    Catalogue number : CB-CO-97-289-EN-C
                                                             ISBN 92-78-21432-9
Office for Official Publications of the European Communities
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