CELEX: 51978PC0406
Language: en
Date: 1978-08-02
Title: Proposal for a COUNCIL REGULATION (EEC) maintaining quantitative restrictions on the importation into Belgium, Luxembourg and the Netherlands of certain textile products originating in Greece (submitted to the Council by the Commission)

ARCHIVES HISTORIQUES
DE LA COMMISSION
COLLECTION RELIEE DES
DOCUMENTS "COM"
COM (78) 406
Vol. 1978/0156
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In accordance with Council Regulation (EEC, Euratom) No 354/83 of 1 February 1983
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In Übereinstimmung mit der Verordnung (EWG, Euratom) Nr. 354/83 des Rates vom 1.
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 ---pagebreak---  COMMISSION OF THE EUROPEAN COMMUNITIES
                                                    COM(78)406 final.
                                                    Brussels , 2 August 1978
                               Proposal for a
                          COUNCIL REGULATION (EEC )
                  maintaining quantitative restrictions on
                  the importation into Belgium , Luxembourg
                  and the Netherlands of certain textile
                       products originating in Greece
               ( submitted to the Council "by the Commission)
COM (78) 406 final .
                                                                             r
                                              1
 ---pagebreak---                           EXPLANATORY KSIOIiANDUM
 1.      As was established at tho boginning of 1977 ? all Groek exports of
textile products "benefit from various incentives , notably an interest rate
            '                    - -                1
subsidy on loans to the supplier , calculated as a variable proportion of
tho export price (Decision No 1574 of the Creek Monetary Committee ),
         The subsidy is aimed at oncouraging exports paid for in convertible
currency and takes the form of a repayment' of part of the fob prico on
exportation ; at the moment , this refund can be as high as twelve per cent on
textile products , depending on the amount of value added in Greece#       In the
case of cotton yarn , the avera.~e is 8.5 % of the price . A neacure of this
3:ini is equivalent to an export subsidy , and as such is contrary to the
very - principle of Article 92 of the Treaty. ' Article 5* j0 *" the Athens Agree­
ment states that the Contracting Tarties recognize that / the principles laid
down in Articlo $2 of tho Treaty should 'bo applied in thoir relations
within the Association . . To that end , Articlo . 52(l ) provides that tho Asso-
                                                                     }
ciation Council shall , by 1 November 1964 » adopt the rules and ooniitions
for the application of these principles . Since no decision has co far been
t-vken , Articlo 55 enables tho Community to adopt any protective measures
which it considers to be needed to overcome difficulties due to the absence
of a decision of the Association Council on the matter .
    , It should bo notod that the moasure concerned constitutes an aid
which under normal .Community practice would'never qualify for exemption
urider Articlo 92 ( 2 ) or ( 3 ).
                               \     V 1
         Thi 3 measure , which is prosented by Greece as a reimbursement of
indirect taxes on export , even though such a presentation cannot bo accepted
by the Commission , would , from that point of view, be contrary to the      •
provisions of Articlo 53 ( 2 ) which forbid f reimbursements on export greater
                        ;    .     . •   I                 ,
than the actual internal charges .
 ---pagebreak---             Even on the Creek interpretation, the details provided by Greece indicate
  a real level of tnx paid of no more than about 2.5 /«•      An examination of
  tho Creek calculations shows first of all that only 4 . 284      as against a re­
 imbursement rate of 8.5 % io accounted for and that ao to the rcm.ti.ilvr oven
 Croeco does not coen to be able to establish a brookdown of chargoc .        Out
 of the 4.234 £ a further 0.714 /'» representing a financing charge for tho true
 before it is reimbursed and 1.102 $ for otamp duty reimbursed by other racasuroo ,
 should be deducted leaving only 2.468
 2.         Another export incentive with a more limited effect should also be
 mentioned . It consists of a flatc–rate percentage deduction from tho exporter 's
 taxable income , for entertainment expenses etc ., irrespective of the value
of his exports (Article 35 of Law No 3323/1955 )*         '    •
            This concession is set at two per cent of export turnover ; no support­
ing evidence i3 required and the deduction is allowed in addition to any
expenditure on promotion duly substantiated and accepted by the tax authorities .
Its value as a proportion of tho prico depends on, the rate of direct tax
payable by the exporter, and may be as much as 0.8          .
                            > Γ-
            This measure is a remission of direct tax which constitutes an export
                        .                     )                              '
aid ;" the same considerations , therefore apply as for the first one . *          '  .
           .These matters were laid before the Association Council in January 1977
but no decision has so far been tiaken .     In October and December 1977 » however ,
a ^ – s ' vivcnli' was worked out between the parties with a view to remedying
tho cumulative market disruption caused by imports of the produots in
question .
      ■  '            '                 .                                       _
3*          Since tho beginning of 1978» this moihin vjvendi has been called into
question on the Greek side .      At tho same time a number of the agreed limits ,
have been exceeded at regional levol . . and the a priori surveillance system
reveals that others will be exceeded shortly .
                                          r
 ---pagebreak---            These developments aro causing tho , I'ombcr States considerable anxioty,
and several of them have lodged formal request for limits on various products
   originating in Greece . - These requests have obliged the Commission to carry
   out the undertakifigo As rejards Grceco given "to 'the Council on 20 7)ece:nbcr
   1^77 and subsequently reaffirmed on 6 and 27 June , when it promised to tnko
   without delay all appropriate political and economic measures consonant with ,
   tho Community 's international obligations in order to protect the interests 1
                                     . i        • •     '' . !  v .      v .  .> r
   of its textile sector *
   4.      However , before having rccourco to tho provisions of Articlo 53 tho.
   Coa-niscion made a final effort to resolve tho problem vi thin the U2C - Greece
   Association Committee at a meeting which took place on 30 Juno , but . no
 • solution was reached . ;                         ' i
   5*      ITornally , the - establishment of a countervailing / duty is sufficient
   to deal with a situation of abnormal . competition#         In tho present situation
   such a solution would be . totally inadequate because of technical difficulties
   involved and tho exceptionally larjo quantities of imports conccrnc'..            In
   these circumstances , tho 11103 b appropriate course of action is to limit iinpoi ls
   of products originatirg in Greece , which is possible under Articlo 53 since
' the type of noasure to bo invoked i3 not specific^,               '•       .1    •
         ■ The limits must however bo established at Guch a level that Crccco doe
   not suffer more than by the. application of o countervailing duty#                   '   '
           As the limits agreod in the mohir; vlvcn.li of December 1977 » which
   nxo based on traditional trade flox/s , al»o rcproucnt "acceptable " lovclu fur
   the Community, cinco they aro in line with- tho polipy of inlomal global
   ceilings,' they moot tho oriterion stated above *                                      .
 ---pagebreak---  6 9     . In viow of the foregoing , arid in viow of tho breaches alroa.ly rc^intoro^
   in respect of certain regional ilevels and requests received from tho T'ember
  States affected , tho Commission ha3 decided to use the procedure provided in
  Article 12 of Regulation ( EEC ) NO 1439/74 to introduce quantitative" restric­
  tions on some of these imports , by adopting Regulation ( EEC ) I858/78 .
7 .       Article 12 ( 6 ) of Regulation 143?/74 stipulates that within ten working
 d.-^rs of the entry into force of measures which it has adopted under that
 Article , tho Commission shall make a proposal to the Council on appropriate
 measures to be adopted by the Council to carry on from the Commission 's
 emergency measures .     In this connection it is pointod out that Commission regu­
 lations adopted pursuant to Article 12 of Regulation ( EEC ) No 1/J39/74 ^xpiro
 six weeks after their entry into force unless confirmed by the Council .
                    1      '
          Accordingly , the Commission proposes that the Council adopt tho
 proposal for a regulation set out in the Annex, which is aimed ut confirming
 tho measures adopted by the Commission regulation mentioned above .
 ---pagebreak---                                                                               ANNEX
               PR0P03AL FDR COUÍJCIL RECULATION ( SSC ) No
        maintaining quantitative restrictions on the importation
        into Belgium, Luxembourg and the Netherlands of certain ;
        textile produots originating in Greece. --v-- - –
 THE COUNCIL OF THE EUROPEAN COKMJNITIES , ,
 Having regard to the Treaty establishing the European Economic Community ,
 Having regard t<> Council Regulation ( EEC ) No 1439/74 of 4 June 1974 on oommon
 rules for imports ( l ) f and in particular Article 13 thereof,                ' ■ c '
After consultation within the Advisory Committee established by Article 5 of
 th.it Regulation ,                           : '  ■ .        .
                /  -     ' ,.    '                - '      ''      ' 1 ' \ '•       ' •.*
Having regard to the proposal from the Commission ,
V/hcreas by Rejulation ( EEC ) Nol858/78f 27.7*78 ( 2 ), the Commission introduced
quantitative restrictions on the importation into Belgium , Luxembourg and
the Netherlands of certain textile products originating in Greecej
Whereas the factors which caused these restrictions to be introduced 3till
 persist ; whereas it is accordingly necessai^y for them to remain in force •
until 31 December 1978 ;       ■ ' . :,        .                                    r
 HAS ADOPTED THIS REGULATION I              '                   . ' „ ,
 ( 1 ) OJ No' L 159, 15.^.1974, p : 1
  (2 ) OJ No L 212, 2.8.1978 , p.
 ---pagebreak---                                  - 2 -
                               Article 1
                               "                           \
         The quantitative reotrictions on the importation into Belgium , Luxem­
bourg and. the Netherlands of certain textile products originating in Greece ,
 introduced by Regulation ( ESC ) No 1858/78 chall remain applicable until
 31 December 1978 »         .
                               Article 2
         This Reflation shall enter into force on     2.8,1978 ,
                                                                               ♦
         This Regulation chall be binding in its entirety and direct In­
 applicable in all Member States .
 Do no at 3rur.ee la »                               Fbr tho Council
                                                     The Président