CELEX: 51998PC0389(01)
Language: en
Date: 1998-07-17
Title: Proposal for a Council Decision on a Community position on an amendment to Protocol 4 on the definition of the concept of 'originating products' and methods of administrative cooperation set out in the Europe Agreement between the European Communities and Bulgaria

COMMISSION OF THE EUROPEAN COMMUNITIES
                                                                              Brussels, 17.07.1998
                                                                              COM(1998) 389 final
                                                                              98/ 0254 (ACC)
                                                                              98/0255 (ACQ
                                                                              98/ 0256 (ACC)
                                                                              98/ 0257 (ACC)
                                                                              98/ 0258 (ACC)
                                                                              98/ 0259 (ACC)
                                                                              98/ 0260 (ACC)
                                                                              98/0261 (ACC)
                                                                              98/0262 (ACC)
                                                                              98/ 0263 (ACC)
                                                             Proposals for
                                                       COUNCIL DECISIONS
              on a Community position on an amendment to Protocol 4 on the definition of the concept of "originating
 ,.w        products" and methods of administrative cooperation set out in the Europe Agreement between the European
                Communities and Bulgaria, the Czech Republic, Poland, Hungary, the Slovak Republic and Romania
                                                             Proposals for
                                                       COUNCIL DECISIONS
              on a Community position on an amendment to Protocol 3 on the definition of the concept of "originating
            products" and methods of administrative cooperation set out in the Europe Agreement between the European
                   Communities and the Republic of Estonia, the Republic of Latvia and the Republic of Lithuania
                                                            Proposal for a
                                                        COUNCIL DECISION
              on a Community position on an amendment to Protocol 4 on the definition of the concept of "originating
             products" and methods of administrative cooperation set out in the Interim Agreement on trade and trade-
                         related matters between the European Communities and the Republic of Slovenia
                                                                 Draft
                             DECISION N° .../ OF THE EC-SWITZERLAND JOINT COMMITTEE
                 amending Protocol 3 to the Agreement between the European Economic Community and the Swiss
           Confederation concerning the definition of the concept of "originating products" and methods of administrative
   '•                                                         cooperation
                                                                 Draft
                                 DECISION N° .../ OF THE EC-NORWAY JOINT COMMITTEE
              amending Protocol 3 to the Agreement between the European Economic Community and the Kingdom of
              Norway concerning the definition of the concept of "originating products" and methods of administrative
                                                              cooperation
                                                                 Draft
                                 DECISION N° .../ OF THE EC-ICELAND JOINT COMMITTEE
              amending Protocol 3 to the Agreement between the European Economic Community and the Republic of
              Iceland concerning the definition of the concept of "originating products" and methods of administrative
                                                              cooperation
    -.". i
                                                                 Draft
                                   DECISION N° .../ OF THE EEA JOINT COMMITTEE No ..
                                   amending Protocol 4 to the EEA Agreement on rules of origin
                                             Drafts common position of the Community -
m.-f                                                    (presented by the Commission)
 ---pagebreak---  ---pagebreak---                        EXPLANATORY MEMORANDUM
1.  GENERAL
1.1 The rules of origin are essential to the correct functioning of the free trade
    agreements between the Community and its trading partners.
1.2 The European Council meeting in Essen in December 1994 drew attention to the
    fact that variations in the origin rules included in the different agreements signed
    by the Community constituted a barrier to trade.            Therefore it initiated a
    programme aimed at applying identical origin rules and thereby putting trade
    between the Community, the CEECs, the Baltic States, the EFTA and the EEA
    countries on the same footing. It also decided that other countries in a situation
    similar to those mentioned above could be similarly integrated into the system
    when the time came,.
1.3 Between 1 January and 1 July 1997 the text of the protocols on the rules of origin
    annexed to the agreements the Community has concluded with the countries
    mentioned at 1.2 above and with Slovenia was replaced by a standard text which
    also provides that all those countries can apply arrangements for cumulation of
    working and processing in trade with each other. This created a vast zone in
    which "originating products" could move around and obtain preferential tariff
    treatment.
1.4 The origin rules are not immutable. They must be adaptable to the political and
    economic requirements of the free trade area in which they apply. Some changes
    have, therefore, already been deemed necessary to the rules which entered into
    force in 1997.
2.  AMENDMENTS TO THE RULES OF ORIGIN IN THE EU-CEECS, EU-
     BALTIC STATES, EU-EFTA, EU-SLOVENIA AND EEA AGREEMENTS
2.1 The EC/Turkey Association Council meeting of 29 April 1997 granted Turkey's
    request be integrated into the above system of standardised rules of origin.
    However, for the present, that integration will only apply to industrial goods, i.e.
    products not covered by Annex II to the Treaty. The attached texts have been
    completed as a consequence.
                                                                                         A
 ---pagebreak--- 2.2  Amongst other things, the standard origin rules provide, that imtil, 3^ .December
     1998 flat rates may be used where drawback is prohibited or exemptions from
     customs duty are granted. Recently Bulgaria and Hungary asked for this option to
     be prolonged for a further two years. This will not give rise to any economic
     difficulties for the Community. It is there§?re proposed to grant that request
     which only concerns the agreements with the CEECs, the Baltic States and
     Slovenia.
2.3  Since the entry into force of the standard protocol on rules of origin some Articles
     have given rise to difficulties of interpretation or application. Such is the case of
     Articles 3 and 4 for which new wording is proposed. That amendment has no
     impact on determining whether or not a given product has originating status, but
     only concerns the matter of how to determine which country should be taken as
     the country of origin. That amendment has no impact on preferential treatment
     for most sectors In those cases where preferential treatment is distinguished
     according to the country of origin the economic consequences for the Community
     are negligible compared with the total number of transactions. That amendment
      represents an administrative simplification important both to administrations and
      economic operators.
 2.4  As a preliminary response to the Community's undertaking on trade with the
      successor republics to the former Yugoslavia it is proposed that the principle of
      territoriality provided for in Article 12 of the EEA Agreement be extended to the
      CEECs, the Baltic States and Slovenia.
 2.5  A few technical amendments to Annexes I and II to the protocols are also
      proposed. Those amendments concern products whose raw materials are in short
      supply in the trade zone.
 3.    CONCLUSION
       The purpose of the annexed 14 proposals is to improve the functioning of the
       common system of origin rules. They should be taken as a single package. If the
       current arrangements allowing cumulation of working and processing are to
       remain in force, it is essential that they enter into force at the same time, i.e. on 1
       January 1999.
                                                                                               3
 ---pagebreak--- The Commission therefore calls on the Council to draw up a common position for
presentation to the committees provided for in each of the agreements.
                                                                               M
 ---pagebreak---                                       Proposal for a                       98/0254 (ACQ
                                 COUNCIL DECISION
               on a Community position on an amendment to Protocol 4
               on the definition of the concept of "originating products"
                 and methods of administrative cooperation set out in
                          the Europe Agreement between the
                         European Communities and Bulgaria
THE COUNCIL OF THE EUROPEAN UNION,
Having regard to the Treaty establishing the European Community, and in particular
Article 113 thereof,
Having regard to Article 2(1) of the Council and Commission Decision of 19 December
1994 on the conclusion of the Europe Agreement establishing an association between the
European Communities and their Member States, of the one part, and Bulgaria, of the
other part,
Having regard to the Commission proposal,
Whereas Article 38 of Protocol 4 to the said Europe Agreement provides that the
Association Council may amend the provisions of the Protocol,
HAS DECIDED:
The position to be adopted by the Community within the Association Council created by
virtue of Article 105 of the Europe Agreement establishing an association between the
European Communities and their Member States, of the one part, and Bulgaria, of the
other part, on an amendment to Protocol 4 on the definition of the concept of "originating
products" and methods of administrative cooperation set out in the Agreement shall be
based on the draft Association Council decision annexed to this Decision.
Done at Brussels,
                                                     For the Council
                                                     The President
                                                                                           b
 ---pagebreak---                                 EUROPE AGREEMENT
 establishing an association between the European Communities and their Member
                               States, of the one part, and
                       the Republic of Bulgaria, of the other part
                                             DRAFT
                      Decision No . . . / . . of the Association Council
                                               of...
 amending Protocol 4 on the definition of the concept of "originating products" and
                          methods of administrative cooperation
THE ASSOCIATION COUNCIL,
Having regard to the Europe Agreement establishing an association between the European
Communities and their Member States, of the one part, and Bulgaria, of the other part,
signed in Brussels on 8 march 1993 and in particular Article 38 of Protocol 4 thereof,
Whereas the definition of the term "originating products" needs to be amended to ensure
the proper operation of the extended system of cumulation which permits the use of
materials originating in the European Community, Poland, Hungary, the Czech Republic,
the Slovak Republic, Bulgaria, Romania, Latvia, Lithuania, Estonia, Slovenia, the
European Economic Area (hereinafter referred to as the EEA), Iceland, Norway and
Switzerland;
Whereas it would seem advisable to maintain in operation until 31 December 2000 the
system of flat rate charges provided for in Article 15 in connection with the prohibition of
drawback and exemption from customs duty;
Whereas, in view of the particular arrangement on industrial products obtaining between
the Community and Turkey, it would also be appropriate to extend the cumulation system
to such products originating in Turkey;
Whereas to facilitate trade and simplify administrative tasks it would be desirable to
amend the wording of Articles 3, 4 and 12;
Whereas, to take account of changes in processing techniques and shortages of certain
raw materials, some corrections must be made to the list of working and processing
requirements which non-originating materials have to fulfil to qualify for originating
status,
HAS DECIDED AS FOLLOWS:
                                              Article 1
Protocol 4 on the definition of the concept of "originating products" and methods of
administrative cooperation is hereby amended as follows:
                                                                                             G
 ---pagebreak--- 1.       Article l(i) shall be replaced by:
         "(i)    'added value' shall be taken to be the ex-works price minus the customs
                 value of each of the materials incorporated which originate in the other
                 countries referred to in Articles 3 and 4 or, where the customs value is not
                 known or cannot be ascertained, the first price verifiably paid for the
                 products in the Community or Bulgaria."
2.       Articles 3 and 4 shall be replaced by:
                                                 Article 3
                            Cumulation in the European Community
1. Without prejudice to the provisions of Article 2 paragraph 1, products shall be
considered as originating in the Community if such products are obtained there,
incorporating materials originating in the Community, Bulgaria, Poland, Hungary, the
Czech Republic, the Slovak Republic, Romania, Lithuania, Latvia, Estonia, Slovenia,
Iceland, Norway, Switzerland (including Liechtenstein)1 or Turkey2 in accordance with
the provisions of the Protocol on rules of origin annexed to the Agreements between the
Community and each of these countries, provided that the working or processing carried
out in the Community goes beyond that referred to in Article 7 of this Protocol. It shall
not be necessary that such materials have undergone sufficient working or processing.
2. Where the working or processing carried out in the Community does not go beyond the
operations referred to in Article 7, the product obtained shall be considered as originating
in the Community only where the value added there is greater than the value of the
materials used originating in any one of the other countries referred to in paragraph 1. If
this is not so, the product obtained shall be considered as originating in the country which
accounts for the highest value of originating materials used in the manufacture in the
Community.
 3. Products, originating in one of the countries referred to in paragraph 1, which do not
undergo any working or processing in the Community, retain their origin if exported into
 one of these countries.
4. The cumulation provided for in this Article may only be applied to materials and
 products which have acquired originating status by an application of rules of origin
 identical to those given in this Protocol.
 The Community shall provide Bulgaria, through the European Commission with details of
 the Agreements and their corresponding rules of origin, which are applied with the other
 countries referred to in paragraph 1. The European Commission shall publish in the
 Official Journal of the European Communities (C Series) the date on which the
 cumulation, provided for in this Article may be applied by those countries listed in
 paragraph 1 which have fulfilled the necessary requirements.
  i  The Principality of Liechtenstein has a customs union with Switzerland, and is a Contracting Party to
     the Agreement on the European Economic Area.
     Cumulation as provided for in this Article does not apply to materials originating in Turkey which
     are mentioned in the list at Annex V to this Protocol.
                                                                                                           )
 ---pagebreak---                                                  Article 4
                                       Cumulation in Bulgaria
1. Without prejudice to the provisions of Article 2 paragraph 2, products shall be
considered as originating in Bulgaria if such products are obtained there, incorporating
materials originating in the Community, Bulgaria, Poland, Hungary, the Czech Republic,
the Slovak Republic, Romania, Lithuania, Latvia, Estonia, Slovenia, Iceland, Norway,
Switzerland (including Liechtenstein)1 or Turkey2 in accordance with the provisions of
the Protocol on rules of origin annexed to the Agreements between Bulgaria and each of
these countries, provided that the working or processing carried out in Bulgaria goes
beyond that referred to in Article 7 of this Protocol. It shall not be necessary that such
materials have undergone sufficient working or processing.
2. Where the working or processing carried out in Bulgaria does not go beyond the
operations referred to in Article 7, the product obtained shall be considered as originating
in Bulgaria only where the value added there is greater than the value of the materials
used originating in any one of the other countries referred to in paragraph 1. If this is not
so, the product obtained shall be considered as originating in the country which accounts
for the highest value of originating materials used in the manufacture in Bulgaria.
3. Products, originating in one of the countries referred to in paragraph 1, which do not
undergo any working or processing in Bulgaria, retain their origin if exported into one of
these countries.
4. The cumulation provided for in this Article may only be. applied to materials and
products which have acquired originating status by an application of rules of origin
identical to those given in this Protocol.
Bulgaria shall provide the Community, through the European Commission with details of
the Agreements and their corresponding rules of origin, which are applied with the other
countries referred to in paragraph 1. The European Commission shall publish in the
Official Journal of the European Communities (C Series) the date on which the
cumulation, provided for in this Article may be applied by those countries listed in
paragraph 1 which have fulfilled the necessary requirements.
 3.       Article 12 shall be replaced by the following:
           "1. Except as provided for in Article 2(1 )(c), Articles 3 and 4 and paragraph 3 of
               this Article, the conditions for acquiring originating status set out in Title II
               must continue to be fulfilled at all times in the Community or Bulgaria.
          2.   Except as provided for in Articles 3 and 4, where originating goods exported
               from the Community or Bulgaria to another country return, they must be
 i   The Principality of Liechtenstein has a customs union with Switzerland, and is a Contracting Party to
     the Agreement on the European Economic Area.
 2
     Cumulation as provided for in this Article does not apply to materials originating in Turkey which
     are mentioned in the list at Annex V to this Protocol.
                                                                                                           7
 ---pagebreak---       considered as non-originating, unless it can be demonstrated to -tbe.satisfaction
      of the customs authorities that:
 (a)      the returning goods are the same as those that were exported; and
 (b)      they have not undergone any operation beyond that necessary to preserve
          them in good condition while in that country or while being exported.
3.    The acquisition of originating status in accordance with the conditions set out
      in Title II shall not be affected by working or processing done outside the
      Community or Bulgaria on materials exported from the Community or
      Bulgaria and subsequently reimported there, provided:
  (a)     the said materials are wholly obtained in the Community or Bulgaria or
          have undergone working or processing beyond the insufficient operations
          listed in Article 7 prior to being exported; and
  (b)     it can be demonstrated to the satisfaction of the customs authorities that:
          i)       the reimported goods have been obtained by working or processing
                   the exported materials; and
           ii)     the total added value acquired outside the Community or Bulgaria
                   by applying the provisions of this Article does not exceed 10% of
                   the ex-works price of the end product for which originating status is
                   claimed.
4.    For the purposes of paragraph 3, the conditions for acquiring originating
      status set out in Title II shall not apply to working or processing done outside
      the Community or Bulgaria. But where, in the list in Annex II, a rule setting a
      maximum value for all the non-originating materials incorporated is applied in
      determining the originating status of the end product, the total value of the
      non-originating materials incorporated in the territory of the party concerned,
      taken together with the total added value acquired outside the Community or
      Bulgaria by applying the provisions of this Article, shall not exceed the stated
       percentage.
5.    For the purposes of applying the provisions of paragraphs 3 and 4, "total
       added value" shall be taken to mean all costs arising outside the Community
       or Bulgaria, including the value of the materials incorporated there.
6.     The provisions of paragraphs 3 and 4 shall not apply to products which do not
       fulfil the conditions set out in the list in Annex II or which can be considered
       sufficiently worked or processed only if the general values fixed in Article 6(2)
       are applied.
7.     The provisions of paragraphs 3 and 4 shall not apply to products coming
       under Chapters 50 to 63 of the Harmonised System.
8.     Any working or processing of the kind covered by the provisions of this
       Article and done outside the Community or Bulgaria shall be done under the
       outward processing arrangements, or similar arrangements."
                                                                                         1
 ---pagebreak--- 4.      In Articles 13, 14, 15, 17, 21, 27, 30 and 32 the phrase "referred<t€t.in-Article 4"
        shall be replaced by "referred to in Articles 3 and 4".
5.      In the last paragraph of Article 15(6) the date "31 December 1998" shall be
        replaced by "31 December 2000".
6.      In Article 26 the reference "C2/CP3" shall be replaced by "CN22/CN23".
7.      In Annex I, Note 5.2, "current conducting filaments" shall be added between
        "artificial man-made filaments" and "synthetic man-made staple fibres of
        polypropylene".
8.      In Annex I, Note 5.2 the fifth example ("A carpet with tufts . . . are met") shall be
        deleted.
9.      In Annex II, between the rules for HS headings 2202 and 2208 the following rule
        shall be inserted:
    HS        Description of product      Working or processing of non-originating materials that
  Heading                                                  confers originating status
    No                   (2)
                                                            (3)           or          (4)
    (1)
 2207        Undenatured ethyl          Manufacture:
             alcohol of an alcoholic
             strength by volume of      - using materials not classified
             80% vol or higher;           in headings 2207 or 2208
             etiiyl alcohol and other
             spirits, denatured, of any
             strength.
                                                                                                  /Ù
 ---pagebreak--- 10.     In Annex II, the rule for Chapter 57 shall be replaced by:
    Chapter    Carpets and other textile
        57     floor coverings:
               - Of needleloom felt
                                            Manufacture from ( 1 ) :
                                            - natural fibres
                                            or
                                            - chemical materials or textile pulp
                                            However:
                                            - polypropylenefilamentof
                                               heading 5402,
                                            - polypropylene fibres of heading
                                               5503 or 5506,
                                            - polypropylenefilamenttow of
                                               heading 5501, of which the
                                               denomination in all cases of a
                                               single filament or fibre is less
                                               than 9 decitex, may be used
                                               provided their value does not
                                               exceed 40% of the ex-works
                                               price of the product
                                            - jute fabric may be used as
                                               backing
                  Of other felt             Manufacture from(l):
                                            - natural fibres not carded or
                                               combed or otherwise processed
                                               for spinning,
                                            or
                                            - chemical materials or textile pulp
                                            Manufacture from(l):
                  Other                      - coir or jute yarn(a),
                                             - synthetic or artificial filament yarn
                                             - naturalfibres,or
                                             - man-made staple fibres not
                                               carded or combed or otherwise
                                               processed for spinning
                                             But jute fabric may be used as
                                             backing
 (a)
     The use of jute yarn is authorised from 1.7.2000.
                                                                                     //
 ---pagebreak--- 11.    In Annex II, the rule for HS heading 7006 shall be replaced by:
7006       Glass of headings 7003,
           7004 or 7005, bent,
           edgeworked, engraved,
           drilled, enamelled or
           otherwise worked, but
           not framed or fitted with
           other materials :
           - glass plate substrate     Manufacture from materials
             coated with dielectric    (substrates) of heading 7006
             thin film, semi-
             conductor grade, in
             accordance with
             SEMII standards1
           - other                     Manufacture from materials
                                       of heading 7001
12.    In Annex II, the rule for HS heading 7601 shall be replaced by:
7601       Unwrought aluminium         Manufacture in which:
                                       - all the materials used are
                                         classified within a heading
                                         other than that of the
                                         product; and
                                       - the value of all the
                                         materials used does not
                                         exceed 50 % of the ex-
                                         works price of the product
                                       or
                                       Manufacture by thermal or
                                       electrolytic treatment from
                                       unalloyed aluminium or
                                       waste and scrap of
                                       aluminium
13.    The following is added after Annex IV:
                                               "Annex V
                              List of products originating in Turkey
                   to which the provisions of Articles 3 and 4 do not apply,
                        listed in the order of HS Chapters and Headings
Chapter 1
    SEMII- Semiconductor Equipment and Materials Institute Incorporated.
                                                                             JJL
 ---pagebreak--- Chapter 2
Chapter 3
0401 to 0402
ex 0403 -     Buttermilk, curdled milk and cream, yoghurt, képhir and other fermented
              or acidified milk and cream, whether or not concentrated or containing
              added sugar or other sweetening matter or flavoured or containing added
              fruit or cocoa
0404 to 0410
0504
0511
Chapter 6
0701 to 0709
ex 0710 -      Vegetables (uncooked or cooked by steaming or boiling in water), frozen
ex 0 7 1 1 -   Vegetables, except sweet corn of heading 0711 90 30, provisionally
              preserved (for example, by sulphur dioxide gas, in brine, in sulphur water
              or in other preservative solutions), but unsuitable in that state for
              immediate consumption
0712 to 0714
Chapter 8
ex Chapter 9 - Coffee, tea, and spices, excluding maté of heading 0903
Chapter 10
Chapter 11
Chapter 12
ex 1302-       Pectin
 1501tol514
ex 1515 -      Other fixed vegetable fats and oils (excluding jojoba oil and its fractions)
               and their fractions, whether or not refined, but not chemically modified
ex 1516-       Animal or vegetable fats and oils and their fractions, partly or wholly
               hydrogenated, inter-esterified, re-esterified or elaidinised, whether or not
               refined, but not further prepared, excluding hydrogenated castor oil known
               as 'opal-wax'
 ex 1517 and
 ex 1518 -     Margarines, imitation lard and other prepared edible fats
 ex 1522-      Residues resulting from the treatment of fatty substances or animal or
               vegetable waxes, excluding degras
 Chapter 16
 1701
 ex 1702-      Other sugars, including chemically pure lactose, maltose, glucose and
               fructose, in solid form; sugar syrups not containing added flavouring or
               colouring matter; artificial honey, whether or not mixed with natural
               honey; caramel excluding that of headings 1702 11 00, 1702 30 51,
               1702 30 59, 1702 50 00 and 1702 90 10
                                                                                            n
 ---pagebreak--- 1703
1801 and 1802
ex 1902-      Pasta, stuffed, containing more than 20% by weight offish, crustaceans,
              molluscs or other aquatic invertebrates, sausages and the like or meat and
             meat offal of any kind, including fats of all kinds
ex 2 0 0 1 -  Cucumbers and gherkins, onions, mango chutney, fruit of the genus
              Capsicum other than sweet peppers or pimentos, mushrooms and olives,
              prepared or preserved by vinegar or acetic acid
2002 and 2003
ex 2004 -     Other vegetables prepared or preserved otherwise than by vinegar or acetic
              acid, frozen, other than products of heading 2006, excluding potatoes in
              the form of flour or meal and flakes of sweet corn
ex 2005 -     Other vegetables prepared or preserved otherwise than by vinegar or acetic
              acid, not frozen, other than products of heading 2006, excluding potato
              and sweet corn products
2006 and 2007
ex 2008 -     Fruits, nuts and other edible parts of plants, otherwise prepared or
              preserved, whether or not containing added sugar or other sweetening
              matter or spirit, not elsewhere specified or included, excluding peanut
              butter, palm hearts, maize, yams, sweet potatoes and similar edible parts of
              plants containing 5% or more by weight of starch, vine leaves, hop shoots
              and other similar edible parts of plants
2009
ex 2106 -     Flavoured and coloured sugars, syrups and molasses
2204
2206
ex 2207 -      Undenatured ethyl alcohol of an alcoholic strength by volume of 80% vol
              or higher obtained from agricultural produce listed here
ex 2208 -      Undenatured ethyl alcohol of an alcoholic strength by volume of less than
              80% vol obtained from agricultural produce listed here.
2209
Chapter 23
2401
4501
5301 and 5302
                                                                                           h
 ---pagebreak---                                          Article 2
That Decision shall enter into force on 1 January 1999.
Done at
                                                        For the Association Council
                                                        The President
                                                                                    IS
 ---pagebreak---                             FINANCIAL STATEMENT
1. Budget heading:          Chapter 12, Article 120
2. Legal basis:             Article 113 of the Treaty
3. Titles of the agreements in question:
   Proposal for an amendment to the definition of the concept of "originating
   products" and the methods of administrative cooperation set out in Protocol 4 to
   the different Europe Agreements between the EC and the CEECs, the Baltic
   States and Slovenia and the Agreement on the European Economic Area, and in
   Protocol 3 to the free trade agreements between the EEC and the EFTA countries
4. Purpose:
   To allow Central and Eastern European countries to continue applying flat rates
   where drawback is prohibited or exemptionfromcustoms duties is granted.
   To extend the system to industrial products originating in Turkey and simplify or
   correct certain rules, particularly those on determining which country is to be
   considered the originating country.
5. Financial implications:
   As, for the purposes of industrial products, Turkey is already in a customs union
   with the Community and these products are therefore already zero rated when
   imported into the Community, and as the purpose of the amendments is essentially
   to facilitate trade or simplify administrative tasks, this proposal would not seem to
   have any major financial implications.
                                                                                         / &
 ---pagebreak---                                        Proposal for a
                                                                            98/ 0255 (ACC)
                                  COUNCIL DECISION
               on a Community position on an amendment to Protocol 4
                on the definition of the concept of "originating products"
                  and methods of administrative cooperation set out in
                           the Europe Agreement between the
                    European Communities and the Czech Republic
THE COUNCIL OF THE EUROPEAN UNION,
Having regard to the Treaty establishing the European Community, and in particular
Article 113 thereof,
Having regard to Article 2(1) of the Council and Commission Decision of 19 December
1994 on the conclusion of the Europe Agreement establishing an association between the
European Communities and their Member States, of the one part, and Czech Republic, of
the other part,
Having regard to the Commission proposal,
Whereas Article 38 of Protocol 4 to the said Europe Agreement provides that the
Association Council may amend the provisions of the Protocol,
HAS DECIDED:
The position to be adopted by the Community within the Association Council created by
virtue of Article 104 of the Europe Agreement establishing an association between the
European Communities and their Member States, of the one part, and the Czech Republic,
of the other part, on an amendment to Protocol 4 on the definition of the concept of
"originating products" and methods of administrative cooperation set out in the
Agreement shall be based on the draft Association Council decision annexed to this
Decision.
Done at Brussels,
                                                      For the Council
                                                      The President
                                                                                           n-
 ---pagebreak---                                 EUROPE AGREEMENT
 establishing an association between the European Communities and their Member
                                States, of the one part, and
                          the Czech Republic, of the other part
                                            DRAFT
                      Decision No      / . . of the Association Council
                                              of...
 amending Protocol 4 on the definition of the concept of "originating products" and
                          methods of administrative cooperation
THE ASSOCIATION COUNCIL,
Having regard to the Europe Agreement establishing an association between the European
Communities and their Member States, of the one part, and the Czech Republic, of the
other part, signed in Brussels on 4 October 1993 and in particular Article 38 of Protocol 4
thereof,
Whereas the definition of the term "originating products" needs to be amended to ensure
the proper operation of the extended system of cumulation which permits the use of
materials originating in the European Community, Poland, Hungary, the Czech Republic,
the Slovak Republic, Bulgaria, Romania, Latvia, Lithuania, Estonia, Slovenia, the
European Economic Area (hereinafter referred to as the EEA), Iceland, Norway and
Switzerland;
Whereas it would seem advisable to maintain in operation until 31 December 2000 the
system of flat rate charges provided for in Article 15 in connection with the prohibition of
drawback and exemption from customs duty;
Whereas, in view of the particular arrangement on industrial products obtaining between
the Community and Turkey, it would also be appropriate to extend the cumulation system
to such products originating in Turkey;
Whereas to facilitate trade and simplify administrative tasks it would be desirable to
amend the wording of Articles 3, 4 and 12;
Whereas, to take account of changes in processing techniques and shortages of certain
raw materials, some corrections must be made to the list of working and processing
requirements which non-originating materials have to fulfil to qualify for originating
 status,
HAS DECIDED AS FOLLOWS :
                                             Article 1
Protocol 4 on the definition of the concept of "originating products" and methods of
 administrative cooperation is hereby amended as follows:
                                                                                             19
 ---pagebreak--- 1.       Article l(i) shall be replaced by:
         "(i)    'added value' shall be taken to be the ex-works price minus the customs
                 value of each of the materials incorporated which originate in the other
                 countries referred to in Articles 3 and 4 or, where the customs value is not
                 known or cannot be ascertained, the first price verifiably paid for the
                 products in the Community or the Cz,^ph Republic."
2.       Articles 3 and 4 shall be replaced by:
                                                 Article 3
                            Cumulation in the European Community
1. Without prejudice to the provisions of Article 2 paragraph 1, products shall be
considered as originating in the Community if such products are obtained there,
incorporating materials originating in the Community, Bulgaria, Poland, Hungary, the
Czech Republic, the Slovak Republic, Romania, Lithuania, Latvia, Estonia, Slovenia,
Iceland, Norway, Switzerland (including Liechtenstein)1 or Turkey2 in accordance with
the provisions of the Protocol on rules of origin annexed to the Agreements between the
Community and each of these countries, provided that the working or processing carried
out in the Community goes beyond that referred to in Article 7 of this Protocol. It shall
not be necessary that such materials have undergone sufficient working or processing.
2. Where the working or processing carried out in the Community does not go beyond the
operations referred to in Article 7, the product obtained shall be considered as originating
in the Community only where the value added there is greater than the value of the
materials used originating in any one of the other countries referred to in paragraph 1. If
this is not so, the product obtained shall be considered as originating in the country which
accounts for the highest value of originating materials used in the manufacture in the
Community.
3. Products, originating in one of the countries referred to in paragraph 1, which do not
undergo any working or processing in the Community, retain their origin if exported into
 one of these countries.
 4. The cumulation provided for in this Article may only be applied to materials and
 products which have acquired originating status by an application of rules of origin
 identical to those given in this Protocol.
 The Community shall provide the Czech Republic, through the European Commission
 with details of the Agreements and their corresponding rules of origin, which are applied
 with the other countries referred to in paragraph 1. The European Commission shall
 publish in the Official Journal of the European Communities (C Series) the date on which
 the cumulation, provided for in this Article may be applied by those countries listed in
 paragraph 1 which have fulfilled the necessary requirements.
  1
     The Principality of Liechtenstein has a customs union with Switzerland, and is a Contracting Party to
     the Agreement on the European Economic Area.
 2
     Cumulation as provided for in this Article does not apply to materials originating in Turkey which
     are mentioned in the list at Annex V to this Protocol.
                                                                                                           K
 ---pagebreak---                                                 Article 4
                                 Cumulation in the Czech Republic
1. Without prejudice to the provisions of Article 2 paragraph 2, products shall be
considered as originating in the Czech Republic if such products are obtained there,
incorporating materials originating in the Community, Bulgaria, Poland, Hungary, the
Czech Republic, the Slovak Republic, Romania, Lithuania, Latvia, Estonia, Slovenia,
Iceland, Norway, Switzerland (including Liechtenstein)1 or Turkey2 in accordance with
the provisions of the Protocol on rules of origin annexed to the Agreements between the
Czech Republic and each of these countries, provided that the working or processing
carried out in the Czech Republic goes beyond that referred to in Article 7 of this
Protocol. It shall not be necessary that such materials have undergone sufficient working
or processing.
2. Where the working or processing carried out in the Czech Republic does not go beyond
the operations referred to in Article 7, the product obtained shall be considered as
originating in the Czech Republic only where the value added there is greater than the
value of the materials used originating in any one of the other countries referred to in
paragraph 1. If this is not so, the product obtained shall be considered as originating in the
country which accounts for the highest value of originating materials used in the
manufacture in the Czech Republic.
3. Products, originating in one of the countries referred to in paragraph 1, which do not
undergo any working or processing in the Czech Republic, retain their origin if exported
into one of these countries.
4. The cumulation provided for in this Article may only be applied to materials and
products which have acquired originating status by an application of rules of origin
identical to those given in this Protocol.
The Czech Republic shall provide the Community, through the European Commission
with details of the Agreements and their corresponding rules of origin, which are applied
with the other countries referred to in paragraph 1. The European Commission shall
publish in the Official Journal of the European Communities (C Series) the date on which
the cumulation, provided for in this Article may be applied by those countries listed in
paragraph 1 which have fulfilled the necessary requirements.
3.       Article 12 shall be replaced by the following:
         "1. Except as provided for in Article 2(1 )(c), Articles 3 and 4 and paragraph 3 of
             this Article, the conditions for acquiring originating status set out in Title II
             must continue to be fulfilled at all times in the Community or the Czech
             Republic.
 1
    The Principality of Liechtenstein has a customs union with Switzerland, and is a Contracting Party to
    the Agreement on the European Economic Area.
2
    Cumulation as provided for in this Article does not apply to materials originating in Turkey which
    are mentioned in the list at Annex V to this Protocol.
                                                                                                          o&>
 ---pagebreak--- 2.    Except as provided for in Articles 3 and 4, where originating goods exported
      from the Community or the Czech Republic to another country return, they
      must be considered as non-originating, unless it can be demonstrated to the
      satisfaction of the customs authorities that:
  (a)      the returning goods are the same as those that were exported; and
  (b)      they have not undergone any operatron beyond that necessary to preserve
           them in good condition while in that country or while being exported.
3.     The acquisition of originating status in accordance with the conditions set out
       in Title II shall not be affected by working or processing done outside the
       Community or the Czech Republic on materials exported from the Community
       or the Czech Republic and subsequently reimported there, provided:
   (a)     the said materials are wholly obtained in the Community or the Czech
           Republic or have undergone working or processing beyond the insufficient
           operations listed in Article 7 prior to being exported; and
   (b)      it can be demonstrated to the satisfaction of the customs authorities that:
            i)      the reimported goods have been obtained by working or processing
                    the exported materials; and
            ii)     the total added value acquired outside the Community or the Czech
                    Republic by applying the provisions of this Article does not exceed
                     10% of the ex-works price of the end product for which originating
                    status is claimed.
4.     For the purposes of paragraph 3, the conditions for acquiring originating
        status set out in Title II shall not apply to working or processing done outside
        the Community or the Czech Republic. But where, in the list in Annex II, a
        rule setting a maximum value for all the non-originating materials
        incorporated is applied in determining the originating status of the end
        product, the total value of the non-originating materials incorporated in the
        territory of the party concerned, taken together with the total added value
        acquired outside the Community or Bulgaria by applying the provisions of this
        Article, shall not exceed the stated percentage.
 5.     For the purposes of applying the provisions of paragraphs *3 and 4, "total
        added value" shall be taken to mean all costs arising outside the Community
        or the Czech Republic, including the value of the materials incorporated there.
 6.     The provisions of paragraphs 3 and 4 shall not apply to products which do not
        fulfil the conditions set out in the list in Annex II or which can be considered
        sufficiently worked or processed only if the general values fixed in Article 6(2)
        are applied.
 7.     The provisions of paragraphs 3 and 4 shall not apply to products coming
        under Chapters 50 to 63 of the Harmonised System.
 8.     Any working or processing of the kind covered by the provisions of this
        Article and done outside the Community or the Czech Republic shall be done
        under the outward processing arrangements, or similar arrangements."
                                                                                          *.(
 ---pagebreak--- 4.      In Articles 13, 14, 15, 17, 21, 27, 30 and 32 the phrase "referred* to4n-Article 4"
        shall be replaced by "referred to in Articles 3 and 4".
5.      In the last paragraph of Article 15(6) the date "31 December 1998" shall be
        replaced by "31 December 2000".
6.      In Article 26 the reference "C2/CP3" shall be replaced by "CN22/CN23".
7.      In Annex I, Note 5.2, "current conducting filaments" shall be added between
        "artificial man-made filaments" and "synthetic man-made staple fibres of
        polypropylene".
8.      In Annex I, Note 5.2 the fifth example ("A carpet with tufts . . . are met.") shall be
        deleted.
9.      In Annex II, between the rules for HS headings 2202 and 2208 the following rule
        shall be inserted:
    HS        Description of product       Working or processing of non-originating materials that
  Heading                                                  confers originating status
    No                   (2)
                                                            (3)           or          (4)
    (1)
 2207        Undenatured ethyl          Manufacture:
             alcohol of an alcoholic
             strength by volume of      - using materials not classified
             80% vol or higher;           in headings 2207 or 2208
             ethyl alcohol and other
             spirits, denatured, of any
             strength.
                                                                                                   fy
 ---pagebreak--- 10.      In Annex II, the rule for Chapter 57 shall be replaced by:
     Chapter    Carpets and other textile
         57     floor coverings:
                 - Of needleloom felt
                                            Manufacture from (1):
                                            - natural fibres
                                            or
                                            - chemical materials or texUle pulp
                                            However:
                                            - polypropylene filament of
                                               heading 5402,
                                            - polypropylene fibres of heading
                                               5503 or 5506,
                                            - polypropylenefilamenttow of
                                               heading 5501, of which the
                                               denomination in all cases of a
                                               single filament orfibreis less
                                               than 9 decitex, may be used
                                               provided their value does not
                                               exceed 40% of the ex-works
                                               price of die product
                                            - jute fabric may be used as
                                               backing
                   Of other felt            Manufacture from( 1 ) :
                                             - natural fibres not carded or
                                               combed or otherwise processed
                                               for spinning,
                                             or
                                             - chemical materials or textile pulp
                                             Manufacture from(l):
                   OUier                     -coir or jute yarn(a),
                                             - synthetic or artificialfilamentyam
                                             - natural fibres, or
                                             - man-made staple fibres not
                                               carded or combed or otherwise
                                               processed for spinning
                                             But jute fabric may be used as
                                             backing
 (a)
      The use of jute yam is authorised from 1.7.2000.
                                                                                  31
 ---pagebreak--- 11.    In Annex II, the rule for HS heading 7006 shall be replaced by:
7006       Glass of headings 7003,
           7004 or 7005, bent,
           edgeworked, engraved,
           drilled, enamelled or
           otherwise worked, but
           not framed or fitted with
           other materials:
           - glass plate substrate     Manufacture from materials
             coated with dielectric    (substrates) of heading 7006
             thin film, semi-
             conductor grade, in
             accordance with
             SEMII standards1
           - other                     Manufacture from materials
                                       of heading 7001
12.    In Annex II, the rule for HS heading 7601 shall be replaced by:
7601       Unwrought aluminium         Manufacture in which:
                                       - all the materials used are
                                         classified within a heading
                                         other than that of the
                                         product; and
                                       - the value of all the
                                         materials used does not
                                         exceed 50 % of the ex-
                                         works price of the product
                                       or
                                       Manufacture by thermal or
                                       electrolytic treatment from
                                       unalloyed aluminium or
                                       waste and scrap of
                                       aluminium
13.    The following is added after Annex IV:
                                               "Annex V
                              List of products originating in Turkey
                   to which the provisions of Articles 3 and 4 do not apply,
                        listed in the order of HS Chapters and Headings
Chapter 1
    SEMII- Semiconductor Equipment and Materials Institute Incorporated.
                                                                             o&f
 ---pagebreak--- Chapter 2
Chapter 3
0401 to 0402
ex 0403 -     Buttermilk, curdled milk and cream, yoghurt, képhir and other fermented
              or acidified milk and cream, whether or not concentrated or containing
              added sugar or other sweetening matter orflavouredor containing added
              fruit or cocoa
0404 to 0410
0504
0511
Chapter 6
0701 to 0709
ex 0710 -     Vegetables (uncooked or cooked by steaming or boiling in water), frozen
ex 0 7 1 1 -  Vegetables, except sweet corn of heading 0711 90 30, provisionally
              preserved (for example, by sulphur dioxide gas, in brine, in sulphur water
              or in other preservative solutions), but unsuitable in that state for
              immediate consumption
0712 to 0714
Chapter 8
ex Chapter 9 - Coffee, tea, and spices, excluding maté of heading 0903
 Chapter 10
 Chapter 11
 Chapter 12
 ex 1302 -     Pectin
 1501tol514
 ex 1515 -     Other fixed vegetable fats and oils (excluding jojoba oil and its fractions)
               and their fractions, whether or not refined, but not chemically modified
 ex 1516-      Animal or vegetable fats and oils and their fractions, partly or wholly
               hydrogenated, inter-esterified, re-esterified or elaidinised, whether or not
               refined, but not further prepared, excluding hydrogenated castor oil known
               as 'opal-wax'
 ex 1517 and
 ex 1518 -     Margarines, imitation lard and other prepared edible fats
 ex 1522-      Residues resulting from the treatment of fatty substances or animal or
               vegetable waxes, excluding degras
 Chapter 16
  1701
 ex 1702-      Other sugars, including chemically pure lactose, maltose, glucose and
               fructose, in solid form; sugar syrups not containing added flavouring or
               colouring matter; artificial honey, whether or not mixed with natural
               honey; caramel excluding that of headings 1702 11 00, 1702 30 51,
                1702 30 59, 1702 50 00 and 1702 90 10
                                                                                            o?<
 ---pagebreak--- 1703
1801 and 1802
ex 1902-      Pasta, stuffed, containing more than 20% by weight offish, crustaceans,
              molluscs or other aquatic invertebrates, sausages and the like or meat and
              meat offal of any kind, including fats of all kinds
ex 2 0 0 1 -  Cucumbers and gherkins, onions, mango chutney, fruit of the genus
              Capsicum other than sweet peppers or pimentos, mushrooms and olives,
              prepared or preserved by vinegar or acetic acid
2002 and 2003
ex 2004 -     Other vegetables prepared or preserved otherwise than by vinegar or acetic
              acid, frozen, other than products of heading 2006, excluding potatoes in
              the form of flour or meal and flakes of sweet corn
ex 2005 -      Other vegetables prepared or preserved otherwise than by vinegar or acetic
              acid, not frozen, other than products of heading 2006, excluding potato
              and sweet corn products
2006 and 2007
ex 2008 -     Fruits, nuts and other edible parts of plants, otherwise prepared or
              preserved, whether or not containing added sugar or other sweetening
              matter or spirit, not elsewhere specified or included, excluding peanut
              butter, palm hearts, maize, yams, sweet potatoes and similar edible parts of
              plants containing 5% or more by weight of starch, vine leaves, hop shoots
              and other similar edible parts of plants
2009
ex 2106 -     Flavoured and coloured sugars, syrups and molasses
2204
2206
ex 2207 -      Undenatured ethyl alcohol of an alcoholic strength by volume of 80% vol
              or higher obtained from agricultural produce listed here
ex 2208 -      Undenatured ethyl alcohol of an alcoholic strength by volume of less than
               80% vol obtained from agricultural produce listed here.
2209
Chapter 23
2401
4501
5301 and 5302
                                                                                           da
 ---pagebreak---                                          Article 2
That Decision shall enter into force on 1 January 1999.
Done at
                                                        For the Association Council
                                                        The President
                                                                                    ^
 ---pagebreak---                             FINANCIAL STATEMENT
1. Budget heading:          Chapter 12, Article 120
2. Legal basis:             Article 113 of the Treaty
3. Titles of the agreements in question:
   Proposal for an amendment to the definition of the concept of "originating
   products" and the methods of administrative cooperation set out in Protocol 4 to
   the different Europe Agreements between the EC and the CEECs, the Baltic
   States and Slovenia and the Agreement on the European Economic Area, and in
   Protocol 3 to the free trade agreements between the EEC and the EFTA countries
4. Purpose:
   To allow Central and Eastern European countries to continue applying flat rates
   where drawback is prohibited or exemptionfromcustoms duties is granted.
   To extend the system to industrial products originating in Turkey and simplify or
   correct certain rules, particularly those on determining which country is to be
   considered the originating country.
5. Financial implications:
   As, for the purposes of industrial products, Turkey is already in a customs union
   with the Community and these products are therefore already zero rated when
   imported into the Community, and as the purpose of the amendments is essentially
   to facilitate trade or simplify administrative tasks, this proposal would not seem to
   have any major financial implications.
                                                                                         M
 ---pagebreak---                                      Proposai for a                       98/0256 (ACQ
                                 COUNCIL DECISION
              on a Community position on an amendment to Protocol 4
              on the definition of the concept of "originating products' 9
                 and methods of administrative cooperation set out in
                           the Europe Agreement between the
                           European Communities and Poland
THE COUNCIL OF THE EUROPEAN UNION,
Having regard to the Treaty establishing the European Community, and in particular
Article 113 thereof,
Having regard to Article 2(1) of the Council and Commission Decision of 13 December
1993 on the conclusion of the Europe Agreement establishing an association between the
European Communities and their Member States, of the one part, and the Republic of
Poland, of the other part,
Having regard to the Commission proposal,
Whereas Article 38 of Protocol 4 to the said Europe Agreement provides that the
Association Council may amend the provisions of the Protocol,
HAS DECIDED:
The position to be adopted by the Community within the Association Council created by
virtue of Article 102 of the Europe Agreement establishing an association between the
European Communities and their Member States, of the one part, and the Republic of
Poland, of the other part, on an amendment to Protocol 4 on the definition of the concept
of "originating products" and methods of administrative cooperation set out in the
Agreement shall be based on the draft Association Council decision annexed to this
Decision.
Done at Brussels,
                                                    For the Council
                                                    The President
                                                                                          £<7
 ---pagebreak---                                 EUROPE AGREEMENT
 establishing an association between the European Communities and their Member
                               States, of the one part, and
                        the Republic of Poland, of the other part
                                             DRAFT
                      Decision No . . . / . . of the Association Council
                                               of...
 amending Protocol 4 on the definition of the concept of "originating products" and
                          methods of administrative cooperation
THE ASSOCIATION COUNCIL,
Having regard to the Europe Agreement establishing an association between the European
Communities and their Member States, of the one part, and the Republic of Poland, of the
other part, signed in Brussels on 16 December 1991 and in particular Article 38 of
Protocol 4 thereof,
Whereas the definition of the term "originating products" needs to be amended to ensure
the proper operation of the extended system of cumulation which permits the use of
materials originating in the European Community, Poland, Hungary, the Czech Republic,
the Slovak Republic, Bulgaria, Romania, Latvia, Lithuania, Estonia, Slovenia, the
European Economic Area (hereinafter referred to as the EEA), Iceland, Norway and
Switzerland;
Whereas it would seem advisable to maintain in operation until 31 December 2000 the
system of flat rate charges provided for in Article 15 in connection with the prohibition of
drawback and exemption from customs duty;
Whereas, in view of the particular arrangement on industrial products obtaining between
the Community and Turkey, it would also be appropriate to extend the cumulation system
to such products originating in Turkey;
Whereas to facilitate trade and simplify administrative tasks it would be desirable to
amend the wording of Articles 3, 4 and 12;
Whereas, to take account of changes in processing techniques and shortages of certain
raw materials, some corrections must be made to the list of working and processing
requirements which non-originating materials have to fulfil to qualify for originating
status,
HAS DECIDED AS FOLLOWS:
                                              Article 1
Protocol 4 on the definition of the concept of "originating products" and methods of
administrative cooperation is hereby amended as follows:
                                                                                             So
 ---pagebreak--- 1.      Article l(i) shall be replaced by:
        "(i)     * added value' shall be taken to be the ex-works price minus the customs
                value of each of the materials incorporated which originate in the other
                 countries referred to in Articles 3 and 4 or, where the customs value is not
                 known or cannot be ascertained, the first price verifiably paid for the
                 products in the Community or Poland."
2.       Articles 3 and 4 shall be replaced by:
                                                Article 3
                            Cumulation in the European Community
1. Without prejudice to the provisions of Article 2 paragraph 1, products shall be
considered as originating in the Community if such products are obtained there,
incorporating materials originating in the Community, Bulgaria, Poland, Hungary, the
Czech Republic, the Slovak Republic, Romania, Lithuania, Latvia, Estonia, Slovenia,
Iceland, Norway, Switzerland (including Liechtenstein)1 or Turkey2 in accordance with
the provisions of the Protocol on rules of origin annexed to the Agreements between the
Community and each of these countries, provided that the working or processing carried
out in the Community goes beyond that referred to in Article 7 of this Protocol. It shall
not be necessary that such materials have undergone sufficient working or processing.
2. Where the working or processing carried out in the Community does not go beyond the
operations referred to in Article 7, the product obtained shall be considered as originating
in the Community only where the value added there is greater than the value of the
materials used originating in any one of the other countries referred to in paragraph 1. If
this is not so, the product obtained shall be considered as originating in the country which
accounts for the highest value of originating materials used in the manufacture in the
 Community.
 3. Products, originating in one of the countries referred to in paragraph 1, which do not
 undergo any working or processing in the Community, retain their origin if exported into
 one of these countries.
 4. The cumulation provided for in this Article may only be applied to materials and
 products which have acquired originating status by an application of rules of origin
 identical to those given in this Protocol.
 The Community shall provide Poland, through the European Commission with details of
 the Agreements and their corresponding rules of origin, which are applied with the other
 countries referred to in paragraph 1. The European Commission shall publish in the
 Official Journal of the European Communities (C Series) the date on which the
 cumulation, provided for in this Article may be applied by those countries listed in
 paragraph 1 which have fulfilled the necessary requirements.
  1
     The Principality of Liechtenstein has a customs union with Switzerland, and is a Contracting Party to
     the Agreement on the European Economic Area.
 2
     Cumulation as provided for in this Article does not apply to materials originating in Turkey which
     are mentioned in the list at Annex V to this Protocol.
                                                                                                           3/
 ---pagebreak---                                               Article 4
                                     Cumulation in Poland
1. Without prejudice to the provisions of Article 2 paragraph 2, products shall be
considered as originating in Bulgaria if such products are obtained there, incorporating
materials originating in the Community, Bulgaria, Poland, Hungary, the Czech Republic,
the Slovak Republic, Romania, Lithuania, Latvia, Estonia, Slovenia, Iceland, Norway,
Switzerland (including Liechtenstein)1 or Turkey2 in accordance with the provisions of
the Protocol on rules of origin annexed to the Agreements between Poland and each of
these countries, provided that the working or processing carried out in Poland goes
beyond that referred to in Article 7 of this Protocol. It shall not be necessary that such
materials have undergone sufficient working or processing.
2. Where the working or processing carried out in Poland does not go beyond the
operations referred to in Article 7, the product obtained shall be considered as originating
in Poland only where the value added there is greater than the value of the materials used
originating in any one of the other countries referred to in paragraph 1. If this is not so,
the product obtained shall be considered as originating in the country which accounts for
the highest value of originating materials used in the manufacture in Poland.
3. Products, originating in one of the countries referred to in paragraph 1, which do not
undergo any working or processing in Poland, retain their origin if exported into one of
these countries.
4. The cumulation provided for in this Article may only be. applied to materials and
products which have acquired originating status by an application of rules of origin
identical to those given in this Protocol.
Poland shall provide the Community, through the European Commission with details of
the Agreements and their corresponding rules of origin, which are applied with the other
countries referred to in paragraph 1. The European Commission shall publish in the
Official Journal of the European Communities (C Series) the date on which the
cumulation, provided for in this Article may be applied by those countries listed in
paragraph 1 which have fulfilled the necessary requirements.
3.      Article 12 shall be replaced by the following:
         "1. Except as provided for in Article 2(1 )(c), Articles 3 and 4 and paragraph 3 of
             this Article, the conditions for acquiring originating status set out in Title II
             must continue to be fulfilled at all times in the Community or Poland.
        2.   Except as provided for in Articles 3 and 4, where originating goods exported
             from the Community or Poland to another country return, they must be
 1
    The Principality ofLiechtenstein has a customs union with Switzerland, and is a Contracting Party to
    the Agreement on the European Economic Area.
2
    Cumulation as provided for in this Article does not apply to materials originating in Turkey which
    are mentioned in the list at Annex V to this Protocol.
                                                                                                    3C
 ---pagebreak---       considered as non-originating, unless it can be demonstrated to the. satisfaction
      of the customs authorities that:
  (a)     the returning goods are the same as those that were exported; and
  (b)     they have not undergone any operation beyond that necessary to preserve
          them in good condition while in that country or while being exported.
3.    The acquisition of originating status in accordance with the conditions set out
      in Title II shall not be affected by working or processing done outside the
      Community or Poland on materials exported from the Community or Poland
      and subsequently reimported there, provided:
  (a)     the said materials are wholly obtained in the Community or Poland or have
          undergone working or processing beyond the insufficient operations listed
           in Article 7 prior to being exported; and
  (b)      it can be demonstrated to the satisfaction of the customs authorities that:
           i)      the reimported goods have been obtained by working or processing
                   the exported materials; and
           ii)     the total added value acquired outside the Community or Poland by
                   applying the provisions of this Article does not exceed 10% of the
                   ex-works price of the end product for which originating status is
                   claimed.
4.    For the purposes of paragraph 3, the conditions for acquiring originating
       status set out in Title II shall not apply to working or processing done outside
       the Community or Poland. But where, in the list in Annex II, a rule setting a
       maximum value for all the non-originating materials incorporated is applied in
       determining the originating status of the end product, the total value of the
       non-originating materials incorporated in the territory of the party concerned,
       taken together with the total added value acquired outside the Community or
       Poland by applying the provisions of this Article, shall not exceed the stated
       percentage.
5.     For the purposes of applying the provisions of paragraphs 3 and 4, "total
       added value" shall be taken to mean all costs arising outside the Community
       or Poland, including the value of the materials incorporated there.
6.     The provisions of paragraphs 3 and 4 shall not apply to products which do not
       fulfil the conditions set out in the list in Annex II or which can be considered
       sufficiently worked or processed only if the general values fixed in Article 6(2)
       are applied.
7.     The provisions of paragraphs 3 and 4 shall not apply to products coming
       under Chapters 50 to 63 of the Harmonised System.
 8.    Any working or processing of the kind covered by the provisions of this
       Article and done outside the Community or Poland shall be done under the
       outward processing arrangements, or similar arrangements."
                                                                                         33
 ---pagebreak--- 4.      In Articles 13, 14, 15, 17, 21, 27, 30 and 32 the phrase "referred 4Q .in* Article 4"
                                                                                           v
        shall be replaced by "referred to in Articles 3 and 4".                                *
5.      In the last paragraph of Article 15(6) the date "31 December 1998" shall be
        replaced by "31 December 2000".
6.      In Article 26 the reference "C2/CP3" shall be replaced by "CN22/CN23".
7.      In Annex I, Note 5.2, "current conducting filaments" shall be added between
        "artificial man-made filaments" and "synthetic man-made staple fibres of
        polypropylene".
8.      In Annex I, Note 5.2 the fifth example ("A carpet with tufts . . . are met.") shall be
        deleted.
9.      In Annex II, between the rules for HS headings 2202 and 2208 the following rule
        shall be inserted:
    HS        Description of product       Working or processing of non-originating materials that
  Heading                                                  confers originating status
    No                   (2)
                                                            (3)          ' or         (4)
    (1)
 2207        Undenatured ethyl          Manufacture:
             alcohol of an alcoholic
             strength by volume of      - using materials not classified
             80% vol or higher;           in headings 2207 or 2208
             ethyl alcohol and other
             spirits, denatured, of any
             strength.
                                                                                                   J^r
 ---pagebreak--- 10.     In Annex II, the rule for Chapter 57 shall be replaced by:
    Chapter    Carpets and other textile
        57     floor coverings:
               - Of needleloom felt
                                           Manufacture from (1):
                                           - natural fibres
                                           or
                                           - chemical materials or textile pulp
                                           However:
                                           - polypropylene filament of
                                              heading 5402,
                                           - polypropylene fibres of heading
                                              5503 or 5506,
                                           - polypropylene filament tow of
                                              heading 5501, of which the
                                              denomination in all cases of a
                                              single filament or fibre is less
                                              than 9 decitex, may be used
                                              provided their value does not
                                              exceed 40% of the ex-works
                                              price of the product
                                           - jute fabric may be used as
                                              backing
                  Of other felt            Manufacture from(l):
                                           - natural fibres not carded or
                                              combed or otherwise processed
                                              for spinning,
                                           or
                                            - chemical materials or textile pulp
                                            Manufacture from(l):
                  OUier                     - coir or jute yarn (a) ,
                                            - syndietic or artificial filament yam
                                            - natural fibres, or
                                            - man-made staple fibres not
                                              carded or combed or otherwise
                                              processed for spinning
                                            But jute fabric may be used as
                                            backing
 *a' The use of jute yam is authorised from 1.7.2000.
                                                                                   -T>
 ---pagebreak--- 11.    In Annex II, the rule for HS heading 7006 shall be replaced by:
7006       Glass of headings 7003,
           7004 or 7005, bent,
           edgeworked, engraved,
           drilled, enamelled or
           otherwise worked, but
           not framed or fitted with
           other materials :
           - glass plate substrate      Manufacture from materials
             coated with dielectric     (substrates) of heading 7006
             thin film, semi-
             conductor grade,in
             accordance with
             SEMII standards1
           - other                      Manufacture from materials
                                        of heading 7001
12.    In Annex II, the rule for HS heading 7601 shall be replaced by:
7601       Unwrought aluminium          Manufacture in which:
                                        - all the materials used are
                                          classified within a heading
                                          other than that of the
                                          product; and
                                        - the value of all the
                                          materials used does not
                                          exceed 50 % of the ex-
                                          works price of the product
                                        or
                                        Manufacture by thermal or
                                        electrolytic treatment from
                                        unalloyed aluminium or
                                        waste and scrap of
                                        aluminium
13.    The following is added after Annex IV:
                                                "Annex V
                               List of products originating in Turkey
                   to which the provisions of Articles 3 and 4 do not apply,
                         listed in the order of HS Chapters and Headings
Chapter 1
    SEMIl- Semiconductor Equipment and Materials Institute Incorporated.
                                                                             3C
 ---pagebreak--- Chapter 2
Chapter 3
0401 to 0402
ex 0403 -     Buttermilk, curdled milk and cream, yoghurt, képhir and other fermented
              or acidified milk and cream, whether or not concentrated or containing
              added sugar or other sweetening matter or flavoured or containing added
              fruit or cocoa
0404 to 0410
0504
0511
Chapter 6
0701 to 0709
ex 0710 -      Vegetables (uncooked or cooked by steaming or boiling in water), frozen
ex 0 7 1 1 -   Vegetables, except sweet corn of heading 0711 90 30, provisionally
              preserved (for example, by sulphur dioxide gas, in brine, in sulphur water
              or in other preservative solutions), but unsuitable in that state for
              immediate consumption
0712 to 0714
Chapter 8
ex Chapter 9 - Coffee, tea, and spices, excluding maté of heading 0903
Chapter 10
Chapter 11
Chapter 12
ex 1302 -      Pectin
 1501tpl514
ex 1515 -      Other fixed vegetable fats and oils (excluding jojoba oil and its fractions)
              and their fractions, whether or not refined, but not chemically modified
ex 1516-       Animal or vegetable fats and oils and their fractions, partly or wholly
               hydrogenated, inter-esterified, re-esterified or elaidinised, whether or not
               refined, but not further prepared, excluding hydrogenated castor oil known
               as 'opal-wax'
 ex 1517 and
 ex 1518 -     Margarines, imitation lard and other prepared edible fats
 ex 1522-      Residues resulting from the treatment of fatty substances or animal or
               vegetable waxes, excluding degras
 Chapter 16
 1701
 ex 1702-      Other sugars, including chemically pure lactose, maltose, glucose and
               fructose, in solid form; sugar syrups not containing added flavouring or
               colouring matter; artificial honey, whether or not mixed with natural
               honey; caramel excluding that of headings 1702 11 00, 1702 30 51,
                1702 30 59, 1702 50 00 and 1702 90 10
                                                                                            3?-
 ---pagebreak--- 1703
1801 and 1802
ex 1902 -     Pasta, stuffed, containing more than 20% by weight of fish, crustaceans,
              molluscs or other aquatic invertebrates, sausages and the like or meat and
              meat offal of any kind, including fats of all kinds
ex 2 0 0 1 -  Cucumbers and gherkins, onions, mango chutney, fruit of the genus
              Capsicum other than sweet peppers or pimentos, mushrooms and olives,
              prepared or preserved by vinegar or acetic acid
2002 and 2003
ex 2004 -     Other vegetables prepared or preserved otherwise than by vinegar or acetic
              acid, frozen, other than products of heading 2006, excluding potatoes in
              the form of flour or meal and flakes of sweet corn
ex 2005 -     Other vegetables prepared or preserved otherwise than by vinegar or acetic
              acid, not frozen, other than products of heading 2006, excluding potato
              and sweet corn products
2006 and 2007
ex 2008 -     Fruits, nuts and other edible parts of plants, otherwise prepared or
              preserved, whether or not containing added sugar or other sweetening
              matter or spirit, not elsewhere specified or included, excluding peanut
              butter, palm hearts, maize, yams, sweet potatoes and similar edible parts of
              plants containing 5% or more by weight of starch, vine leaves, hop shoots
              and other similar edible parts of plants
2009
ex 2106 -     Flavoured and coloured sugars, syrups and molasses
2204
2206
ex 2207 -     Undenatured ethyl alcohol of an alcoholic strength by volume of 80% vol
              or higher obtained from agricultural produce listed here
ex 2208 -     Undenatured ethyl alcohol of an alcoholic strength by volume of less than
              80% vol obtained from agricultural produce listed here.
2209
Chapter 23
2401
4501
5301 and 5302
                                                                                           3?
 ---pagebreak---                                          Article 2
That Decision shall enter into force on 1 January 1999.
Done at
                                                        For the Association Council
                                                        The President
                                                                                    31
 ---pagebreak---                             FINANCIAL STATEMENT
1- Budget heading:          Chapter 12, Article 120
2. Legal basis:             Article 113 of the Treaty
3. Titles of the agreements in question:
   Proposal for an amendment to the definition of the concept of "originating
   products" and the methods of administrative cooperation set out in Protocol 4 to
   the different Europe Agreements between the EC and the CEECs, the Baltic
   States and Slovenia and the Agreement on the European Economic Area, and in
   Protocol 3 to the free trade agreements between the EEC and the EFTA countries
4. Purpose:
   To allow Central and Eastern European countries to continue applying flat rates
   where drawback is prohibited or exemption from customs duties is granted.
   To extend the system to industrial products originating in Turkey and simplify or
   correct certain rules, particularly those on determining which country is to be
   considered the originating country.
5. Financial implications:
   As, for the purposes of industrial products, Turkey is already in a customs union
   with the Community and these products are therefore already zero rated when
   imported into the Community, and as the purpose of the amendments is essentially
   to facilitate trade or simplify administrative tasks, this proposal would not seem to
   have any majorfinancialimplications.
                                                                                         Hà
 ---pagebreak---                                       Proposal for a                       98/0257 (ACC)
                                  COUNCIL DECISION
               on a Community position on an amendment to Protocol 3
               on the definition of the concept of "originating products"
                 and methods of administrative cooperation set out in
                           the Europe Agreement between the
                  European Communities and the Republic of Estonia
THE COUNCIL OF THE EUROPEAN UNION,
Having regard to the Treaty establishing the European Community, and in particular
Article 113 thereof,
Having regard to Article 2(1) of the Council and Commission Decision of 19 December
1997 on the conclusion of the Europe Agreement establishing an association between the
European Communities and their Member States, of the one part, and Estonia, of the
other part,
Having regard to the Commission proposal,
Whereas Article 38 of Protocol 3 to the said Europe Agreement provides that the
Association Council may amend the provisions of the Protocol,
HAS DECIDED:
The position to be adopted by the Community within the Association Council created by
virtue of Article 109 of the Europe Agreement establishing an association between the
European Communities and their Member States, of the one part, and the Republic of
Estonia, of the other part, on an amendment to Protocol 3 on the definition of the concept
of "originating products" and methods of administrative cooperation set out in the
Agreement shall be based on the draft Association Council decision annexed to this
Decision.
Done at Brussels,
                                                     For the Council
                                                     The President
                                                                                           <*
 ---pagebreak---                                 EUROPE AGREEMENT
 establishing an association between the European Communities and their Member
                               States, of the one part, and
                        the Republic of Estonia, of the other part
                                             DRAFT
                      Decision No . . . / . . of the Association Council
                                               of...
 amending Protocol 3 on the definition of the concept of "originating products" and
                          methods of administrative cooperation
THE ASSOCIATION COUNCIL,
Having regard to the Europe Agreement establishing an association between the European
Communities and their Member States, of the one part, and the Republic of Estonia, of
the other part, signed in Brussels on 12 June 1995 and in particular Article 38 of Protocol
4 thereof,
Whereas the definition of the term "originating products" needs to be amended to ensure
the proper operation of the extended system of cumulation which permits the use of
materials originating in the European Community, Poland, Hungary, the Czech Republic,
the Slovak Republic, Bulgaria, Romania, Latvia, Lithuania, Estonia, Slovenia, the
European Economic Area (hereinafter referred to as the EEA), Iceland, Norway and
Switzerland;
Whereas it would seem advisable to maintain in operation until 31 December 2000 the
system of flat rate charges provided for in Article 15 in connection with the prohibition of
drawback and exemption from customs duty;
Whereas, in view of the particular arrangement on industrial products obtaining between
the Community and Turkey, it would also be appropriate to extend the cumulation system
to such products originating in Turkey;
Whereas to facilitate trade and simplify administrative tasks it would be desirable to
amend the wording of Articles 3, 4 and 12;
Whereas, to take account of changes in processing techniques and shortages of certain
raw materials, some corrections must be made to the list of working and processing
requirements which non-originating materials have to fulfil to qualify for originating
status,
HAS DECIDED AS FOLLOWS:
                                             Article 1
Protocol 3 on the definition of the concept of "originating products" and methods of
administrative cooperation is hereby amended as follows:
                                                                                             <a
 ---pagebreak--- 1.      Article l(i) shall be replaced by:
        "(i)    'added value' shall be taken to be the ex-works price minus the customs
                value of each of the materials incorporated which originate in the other
                countries referred to in Articles 3 and 4 or, where the customs value is not
                known or cannot be ascertained, the first price verifiably paid for the
                products in the Community or Estonia."
2.      Articles 3 and 4 shall be replaced by:
                                                Article 3
                            Cumulation in the European Community
1. Without prejudice to the provisions of Article 2 paragraph 1, products shall be
considered as originating in the Community if such products are obtained there,
incorporating materials originating in the Community, Bulgaria, Poland, Hungary, the
Czech Republic, the Slovak Republic, Romania, Lithuania, Latvia, Estonia, Slovenia,
Iceland, Norway, Switzerland (including Liechtenstein)1 or Turkey2 in accordance with
the provisions of the Protocol on rules of origin annexed to the Agreements between the
Community and each of these countries, provided that the working or processing carried
out in the Community goes beyond that referred to in Article 7 of this Protocol. It shall
not be necessary that such materials have undergone sufficient working or processing.
2. Where the working or processing carried out in the Community does not go beyond the
operations referred to in Article 7, the product obtained shall be considered as originating
in the Community only where the value added there is greater than the value of the
 materials used originating in any one of the other countries referred to in paragraph 1. If
this is not so, the product obtained shall be considered as originating in the country which
 accounts for the highest value of originating materials used in the manufacture in the
 Community.
 3. Products, originating in one of the countries referred to in paragraph 1, which do not
 undergo any working or processing in the Community, retain their origin if exported into
 one of these countries.
 4. The cumulation provided for in this Article may only be applied to materials and
 products which have acquired originating status by an application of rules of origin
 identical to those given in this Protocol.
 The Community shall provide Estonia, through the European Commission with details of
 the Agreements and their corresponding rules of origin, which are applied with the other
 countries referred to in paragraph 1. The European Commission shall publish in the
 Official Journal of the European Communities (C Series) the date on which the
 cumulation, provided for in this Article may be applied by those countries listed in
 paragraph 1 which have fulfilled the necessary requirements.
  1  The Principality of Liechtenstein has a customs union with Switzerland, and is a Contracting Party to
     the Agreement on the European Economic Area.
  2
     Cumulation as provided for in this Article does not apply to materials originating in Turkey which
     are mentioned in the list at Annex V to this Protocol.
                                                                                                           (43
 ---pagebreak---                                                  Article 4
                                       Cumulation in Estonia
1. Without prejudice to the provisions of Article 2 paragraph 2, products shall be
considered as originating in Estonia if such products are obtained there, incorporating
materials originating in the Community, Bulgaria, Poland, Hungary, the Czech Republic,
the Slovak Republic, Romania, Lithuania, Latvia, Estonia, Slovenia, Iceland, Norway,
Switzerland (including Liechtenstein)1 or Turkey2 in accordance with the provisions of
the Protocol on rules of origin annexed to the Agreements between Estonia and each of
these countries, provided that the working or processing carried out in Estonia goes
beyond that referred to in Article 7 of this Protocol. It shall not be necessary that such
materials have undergone sufficient working or processing.
2. Where the working or processing carried out in Estonia does not go beyond the
operations referred to in Article 7, the product obtained shall be considered as originating
in Estonia only where the value added there is greater than the value of the materials used
originating in any one of the other countries referred to in paragraph 1. If this is not so,
the product obtained shall be considered as originating in the country which accounts for
the highest value of originating materials used in the manufacture in Estonia.
3. Products, originating in one of the countries referred to in paragraph 1, which do not
undergo any working or processing in Estonia, retain their origin if exported into one of
these countries.
4. The cumulation provided for in this Article may only be. applied to materials and
products which have acquired originating status by an application of rules of origin
identical to those given in this Protocol.
Estonia shall provide the Community, through the European Commission with details of
the Agreements and their corresponding rules of origin, which are applied with the other
 countries referred to in paragraph 1. The European Commission shall publish in the
 Official Journal of the European Communities (C Series) the date on which the
 cumulation, provided for in this Article may be applied by those countries listed in
 paragraph 1 which have fulfilled the necessary requirements.
 3.       Article 12 shall be replaced by the following:
          "1. Except as provided for in Article 2(1 )(c), Articles 3 and 4 and paragraph 3 of
              this Article, the conditions for acquiring originating status set out in Title II
              must continue to be fulfilled at all times in the Community or Estonia.
          2.  Except as provided for in Articles 3 and 4, where originating goods exported
              from the Community or Estonia to another country return, they must be
 1
     The Principality of Liechtenstein has a customs union with Switzerland, and is a Contracting Party to
     the Agreement on the European Economic Area.
 2
     Cumulation as provided for in this Article does not apply to materials originating in Turkey which
     are mentioned in the list at Annex V to this Protocol.
                                                                                                           Hi
 ---pagebreak---       considered as non-originating, unless it can be demonstrated ta the -satisfaction
      of the customs authorities that:
  (a)     the returning goods are the same as those that were exported; and
  (b)     they have not undergone any operation beyond that necessary to preserve
          them in good condition while in that country or while being exported.
3.    The acquisition of originating status in accordance with the conditions set out
      in Title II shall not be affected by working or processing done outside the
      Community or Estonia on materials exported from the Community or Estonia
      and subsequently reimported there, provided:
  (a)     the said materials are wholly obtained in the Community or Estonia or have
          undergone working or processing beyond the insufficient operations listed
          in Article 7 prior to being exported; and
  (b)     it can be demonstrated to the satisfaction of the customs authorities that:
          i)       the reimported goods have been obtained by working or processing
                   the exported materials; and
           ii)     the total added value acquired outside the Community or Estonia by
                   applying the provisions of this Article does not exceed 10% of the
                   ex-works price of the end product for which originating status is
                   claimed.
4.     For the purposes of paragraph 3, the conditions for acquiring originating
       status set out in Title II shall not apply to working or processing done outside
       the Community or Estonia. But where, in the list in Annex II, a rule setting a
       maximum value for all the non-originating materials incorporated is applied in
       determining the originating status of the end product, the total value of the
       non-originating materials incorporated in the territory of the party concerned,
       taken together with the total added value acquired outside the Community or
       Estonia by applying the provisions of this Article, shall not exceed the stated
       percentage.
 5.    For the purposes of applying the provisions of paragraphs 3 and 4, "total
       added value" shall be taken to mean all costs arising outside the Community
       or Estonia, including the value of the materials incorporated there.
 6.    The provisions of paragraphs 3 and 4 shall not apply to products which do not
       fulfil the conditions set out in the list in Annex II or which can be considered
       sufficiently worked or processed only if the general values fixed in Article 6(2)
       are applied.
 7.    The provisions of paragraphs 3 and 4 shall not apply to products coming
       under Chapters 50 to 63 of the Harmonised System.
 8.    Any working or processing of the kind covered by the provisions of this
        Article and done outside the Community or Estonia shall be done under the
        outward processing arrangements, or similar arrangements."
                                                                                         ff
 ---pagebreak--- 4.       In Articles 13, 14, 15, 17, 21, 27, 30 and 32 the phrase "referred to in Article 4"
         shall be replaced by "referred to in Articles 3 and 4".
5.       In the last paragraph of Article 15(6) the date "31 December 1998" shall be
         replaced by "31 December 2000".
6.       In Article 26 the reference "C2/CP3" shall be replaced by "CN22/CN23".
7.       In Annex I, Note 5.2, "current conducting filaments" shall be added between
         "artificial man-made filaments" and "synthetic man-made staple fibres of
         polypropylene".
8.       In Annex I, Note 5.2 thefifthexample ("A carpet with tufts . . . are met.") shall be
         deleted.
9.       In Annex II, between the rules for HS headings 2202 and 2208 the following rule
         shall be inserted:
     HS        Description of product       Working or processing of non-originating materials that
   Heading                                                  confers originating status
     No                   (2)
                                                             (3)           or          (4)
     (1)
  2207        Undenatured ethyl          Manufacture:
              alcohol of an alcoholic
              strength by volume of      - using materials not classified
              80% vol or higher;           in headings 2207 or 2208
              ethyl alcohol and other
              spirits, denatured, of any
              strength.
                                                                                                    H(,
 ---pagebreak--- 10.     In Annex II, the rule for Chapter 57 shall be replaced by:
    Chapter    Carpets and other textile
        57     floor coverings:
               - Of needleloom felt
                                           Manufacture from (1):
                                           - natural fibres
                                           or
                                           - chemical materials or textile pulp
                                           However:
                                           - polypropylene filament of
                                              heading 5402,
                                           - polypropylene fibres of heading
                                              5503 or 5506,
                                           - polypropylene filament tow of
                                              heading 5501, of which the
                                              denomination in all cases of a
                                              singlefilamentor fibre is less
                                              than 9 decitex, may be used
                                              provided their value does not
                                              exceed 40% of the ex-works
                                              price of the product
                                           - jute fabric may be used as
                                              backing
                -Of other felt             Manufacture from(l):
                                           - natural fibres not carded or
                                              combed or otherwise processed
                                              for spinning,
                                            or
                                            - chemical materials or textile pulp
                                            Manufacture from(l):
                -Other                      - coir or jute yarn(a),
                                            - syndietic or artificialfilamentyarn
                                            - natural fibres, or
                                            - man-made staple fibres not
                                               carded or combed or otherwise
                                               processed for spinning
                                            But jute fabric may be used as
                                            backing
 (a)
     The use of jute yam is authorised from 1.7.2000.
                                                                                  ^
 ---pagebreak--- 11.    In Annex II, the rule for HS heading 7006 shall be replaced by:
7006        Glass of headings 7003,
            7004 or 7005, bent,
            edgeworked, engraved,
            drilled, enamelled or
            otherwise worked, but
            not framed or fitted with
            other materials :
            - glass plate substrate     Manufacture from materials
              coated with dielectric    (substrates) of heading 7006
              thinfilm,semi-
              conductor grade, in
              accordance with
              SEMII standards1
            - other                     Manufacture from materials
                                        of heading 7001
12.    In Annex II, the rule for HS heading 7601 shall be replaced by:
7601        Unwrought aluminium         Manufacture in which:
                                        - all the materials used are
                                          classified within a heading
                                          other than that of the
                                          product; and
                                        - the value of all the
                                          materials used does not
                                          exceed 50 % of the ex-
                                          works price of the product
                                        or
                                        Manufacture by thermal or
                                        electrolytic treatment from
                                        unalloyed aluminium or
                                        waste and scrap of
                                        aluminium
13.    The following is added after Annex IV:
                                                "Annex V
                               List of products originating in Turkey
                    to which the provisions of Articles 3 and 4 do not apply,
                         listed in the order of HS Chapters and Headings
Chapter 1
    SEMI I- Semiconductor Equipment and Materials Institute Incorporated.
                                                                              ^
 ---pagebreak--- Chapter 2
Chapter 3
0401 to 0402
ex 0403 -      Buttermilk, curdled milk and cream, yoghurt, képhir and other fermented
               or acidified milk and cream, whether or not concentrated or containing
               added sugar or other sweetening matter or flavoured or containing added
               fruit or cocoa
0404 to 0410
0504
0511
Chapter 6
0701 to 0709
ex 0710 -      Vegetables (uncooked or cooked by steaming or boiling in water), frozen
ex 0 7 1 1 -   Vegetables, except sweet corn of heading 0711 90 30, provisionally
               preserved (for example, by sulphur dioxide gas, in brine, in sulphur water
               or in other preservative solutions), but unsuitable in that state for
               immediate consumption
0712 to 0714
Chapter 8
 ex Chapter 9 - Coffee, tea, and spices, excluding maté of heading 0903
 Chapter 10
 Chapter 11
 Chapter 12
 ex 1302-       Pectin
 1501to!514
 ex 1515-       Other fixed vegetable fats and oils (excluding jojoba oil and its fractions)
                and their fractions, whether or not refined, but not chemically modified
 exl516-        Animal or vegetable fats and oils and their fractions, partly or wholly
                hydrogenated, inter-esterified, re-esterified or elaidinised, whether or not
                refined, but not further prepared, excluding hydrogenated castor oil known
                as 'opal-wax'
 ex 1517 and
 ex 1518-       Margarines, imitation lard and other prepared edible fats
 ex 1522-       Residues resulting from the treatment of fatty substances or animal or
                vegetable waxes, excluding degras
 Chapter 16
  1701
  ex 1702-       Other sugars, including chemically pure lactose, maltose, glucose and
                fructose, in solid form; sugar syrups not containing added flavouring or
                colouring matter; artificial honey, whether or not mixed with natural
                honey; caramel excluding that of headings 1702 11 00, 1702 30 51,
                 1702 30 59, 1702 50 00 and 1702 90 10
                                                                                             HI
 ---pagebreak--- 1703
1801 and 1802
ex 1902 -     Pasta, stuffed, containing more than 20% by weight of fish, crustaceans,
              molluscs or other aquatic invertebrates, sausages and the like or meat and
              meat offal of any kind, including fats of all kinds
ex 2001 -     Cucumbers and gherkins, onions, mango chutney, fruit of the genus
              Capsicum other than sweet peppers or pimentos, mushrooms and olives,
              prepared or preserved by vinegar or acetic acid
2002 and 2003
ex 2004 -     Other vegetables prepared or preserved otherwise than by vinegar or acetic
              acid, frozen, other than products of heading 2006, excluding potatoes in
              the form of flour or meal and flakes of sweet corn
ex 2005 -     Other vegetables prepared or preserved otherwise than by vinegar or acetic
              acid, not frozen, other than products of heading 2006, excluding potato
              and sweet corn products
2006 and 2007
ex 2008 -     Fruits, nuts and other edible parts of plants, otherwise prepared or
              preserved, whether or not containing added sugar or other sweetening
              matter or spirit, not elsewhere specified or included, excluding peanut
              butter, palm hearts, maize, yarns, sweet potatoes and similar edible parts of
              plants containing 5% or more by weight of starch, vine leaves, hop shoots
              and other similar edible parts of plants
2009
ex 2106 -     Flavoured and coloured sugars, syrups and molasses
2204
2206
ex 2207 -      Undenatured ethyl alcohol of an alcoholic strength by volume of 80% vol
              or higher obtained from agricultural produce listed here
ex 2208 -      Undenatured ethyl alcohol of an alcoholic strength by volume of less than
               80% vol obtained from agricultural produce listed here.
2209
Chapter 23
2401
4501
 5301 and 5302
                                                                                            9>
 ---pagebreak---                                          Article 2
That Decision shall enter into force on 1 January 1999.
Done at
                                                        For the Association Council
                                                        The President
                                                                                    57
 ---pagebreak---                             FINANCIAL STATEMENT
1. Budget heading:          Chapter 12, Article 120
2. Legal basis:             Article 113 of the Treaty
3. Titles of the agreements in question:
   Proposal for an amendment to the definition of the concept of "originating
   products" and the methods of administrative cooperation set out in Protocol 4 to
   the different Europe Agreements between the EC and the CEECs, the Baltic
   States and Slovenia and the Agreement on the European Economic Area, and in
   Protocol 3 to the free trade agreements between the EEC and the EFTA countries
4. Purpose:
   To allow Central and Eastern European countries to continue applying flat rates
   where drawback is prohibited or exemption from customs duties is granted.
   To extend the system to industrial products originating in Turkey and simplify or
   correct certain rules, particularly those on determining which country is to be
   considered the originating country.
5. Financial implications:
   As, for the purposes of industrial products, Turkey is already in a customs union
   with the Community and these products are therefore already zero rated when
   imported into the Community, and as the purpose of the amendments is essentially
   to facilitate trade or simplify administrative tasks, this proposal would not seem to
   have any major financial implications.
                                                                                         fZ
 ---pagebreak---                                                                             98/ 0258 (ACC)
                                      Proposal for a
                                 COUNCIL DECISION
               on a Community position on an amendment to Protocol 3
               on the definition of the concept of ^'originating products"
                 and methods of administrative cooperation set out in
                           the Europe Agreement between the
                  European Communities and the Republic of Latvia
THE COUNCIL OF THE EUROPEAN UNION,
Having regard to the Treaty establishing the European Community, and in particular
Article 113 thereof,
Having regard to Article 2(1) of the Council and Commission Decision of 19 December
1997 on the conclusion of the Europe Agreement establishing an association between the
European Communities and their Member States, of the one part, and the Republic of
Latvia, of the other part,
Having regard to the Commission proposal,
Whereas Article 38 of Protocol 3 to the said Europe Agreement provides that the
Association Council may amend the provisions of the Protocol,
HAS DECIDED:
The position to be adopted by the Community within the Association Council created by
virtue of Article 110 of the Europe Agreement establishing an association between the
European Communities and their Member States, of the one part, and the Republic of
Latvia, of the other part, on an amendment to Protocol 3 on the definition of the concept
of "originating products" and methods of administrative cooperation set out in the
Agreement shall be based on the draft Association Council decision annexed to this
Decision.
Done at Brussels,
                                                      For the Council
                                                      The President
                                                                                           f*
 ---pagebreak---                                 EUROPE AGREEMENT
 establishing an association between the European Communities and their Member
                               States, of the one part, and
                         the Republic of Latvia, of the other part
                                             DRAFT
                      Decision No . . . / . . of the Association Council
                                               of...
 amending Protocol 3 on the definition of the concept of "originating products" and
                          methods of administrative cooperation
THE ASSOCIATION COUNCIL,
Having regard to the Europe Agreement establishing an association between the European
Communities and their Member States, of the one part, and the Republic of Latvia, of the
other part, signed in Brussels on 12 June 1995 and in particular Article 38 of Protocol 3
thereof,
Whereas the definition of the term "originating products" needs to be amended to ensure
the proper operation of the extended system of cumulation which permits the use of
materials originating in the European Community, Poland, Hungary, the Czech Republic,
the Slovak Republic, Bulgaria, Romania, Latvia, Lithuania, Estonia, Slovenia, the
European Economic Area (hereinafter referred to as the EEA), Iceland, Norway and
Switzerland;
Whereas it would seem advisable to maintain in operation until 31 December 2000 the
system of flat rate charges provided for in Article 15 in connection with the prohibition of
drawback and exemption from customs duty;
Whereas, in view of the particular arrangement on industrial products obtaining between
the Community and Turkey, it would also be appropriate to extend the cumulation system
to such products originating in Turkey;
Whereas to facilitate trade and simplify administrative tasks it would be desirable to
amend the wording of Articles 3, 4 and 12;
Whereas, to take account of changes in processing techniques and shortages of certain
raw materials, some corrections must be made to the list of working and processing
requirements which non-originating materials have to fulfil to qualify for originating
status,
HAS DECIDED AS FOLLOWS:
                                              Article 1
Protocol 3 on the definition of the concept of "originating products" and methods of
administrative cooperation is hereby amended as follows:
                                                                                             sy.
 ---pagebreak--- 1.       Article l(i) shall be replaced by:
         "(i)    'added value' shall be taken to be the ex-works price minus the customs
                 value of each of the materials incorporated which originate in the other
                 countries referred to in Articles 3 and 4 or, where the customs value is not
                 known or cannot be ascertained, the first price verifiably paid for the
                 products in the Community or Latvia."
2.       Articles 3 and 4 shall be replaced by:
                                                Article 3
                            Cumulation in the European Community
1. Without prejudice to the provisions of Article 2 paragraph 1, products shall be
considered as originating in the Community if such products are obtained there,
incorporating materials originating in the Community, Bulgaria, Poland, Hungary, the
Czech Republic, the Slovak Republic, Romania, Lithuania, Latvia, Estonia, Slovenia,
Iceland, Norway, Switzerland (including Liechtenstein)1 or Turkey2 in accordance with
the provisions of the Protocol on rules of origin annexed to the Agreements between the
Community and each of these countries, provided that the working or processing carried
out in the Community goes beyond that referred to in Article 7 of this Protocol. It shall
not be necessary that such materials have undergone sufficient working or processing.
2. Where the working or processing carried out in the Community does not go beyond the
operations referred to in Article 7, the product obtained shall be considered as originating
in the Community only where the value added there is greater than the value of the
materials used originating in any one of the other countries referred to in paragraph 1. If
this is not so, the product obtained shall be considered as originating in the country which
accounts for the highest value of originating materials used in the manufacture in the
Community.
3. Products, originating in one of the countries referred to in paragraph 1, which do not
undergo any working or processing in the Community, retain their origin if exported into
 one of these countries.
 4. The cumulation provided for in this Article may only be applied to materials and
 products which have acquired originating status by an application of rules of origin
 identical to those given in this Protocol.
 The Community shall provide Latvia, through the European Commission with details of
 the Agreements and their corresponding rules of origin, which are applied with the other
 countries referred to in paragraph 1. The European Commission shall publish in the
 Official Journal of the European Communities (C Series) the date on which the
 cumulation, provided for in this Article may be applied by those countries listed in
 paragraph 1 which have fulfilled the necessary requirements.
 1   The Principality of Liechtenstein has a customs union with Switzerland, and is a Contracting Party to
     the Agreement on the European Economic Area.
     Cumulation as provided for in this Article does not apply to materials originating in Turkey which
     are mentioned in the list at Annex V to this Protocol.
                                                                                                           Ç*
 ---pagebreak---                                                 Article 4
                                        Cumulation in Latvia
1. Without prejudice to the provisions of Article 2 paragraph 2, products shall be
considered as originating in Latvia if such products are obtained there, incorporating
materials originating in the Community, Bulgaria, Poland, Hungary, the Czech Republic,
the Slovak Republic, Romania, Lithuania, Latvia, Estonia, Slovenia, Iceland, Norway,
Switzerland (including Liechtenstein)1 or Turkey2 in accordance with the provisions of
the Protocol on rules of origin annexed to the Agreements between Latvia and each of
these countries, provided that the working or processing carried out in Latvia goes
beyond that referred to in Article 7 of this Protocol. It shall not be necessary that such
materials have undergone sufficient working or processing.
2. Where the working or processing carried out in Latvia does not go beyond the
operations referred to in Article 7, the product obtained shall be considered as originating
in Latvia only where the value added there is greater than the value of the materials used
originating in any one of the other countries referred to in paragraph 1. If this is not so,
the product obtained shall be considered as originating in the country which accounts for
the highest value of originating materials used in the manufacture in Latvia.
3. Products, originating in one of the countries referred to in paragraph 1, which do not
undergo any working or processing in Latvia, retain their origin if exported into one of
these countries.
4. The cumulation provided for in this Article may only be. applied to materials and
 products which have acquired originating status by an application of rules of origin
 identical to those given in this Protocol.
Latvia shall provide the Community, through the European Commission with details of
 the Agreements and their corresponding rules of origin, which are applied with the other
 countries referred to in paragraph 1. The European Commission shall publish in the
 Official Journal of the European Communities (C Series) the date on which the
 cumulation, provided for in this Article may be applied by those countries listed in
 paragraph 1 which have fulfilled the necessary requirements.
 3.      Article 12 shall be replaced by the following:
          "1. Except as provided for in Article 2(1 )(c), Articles 3 and 4 and paragraph 3 of
              this Article, the conditions for acquiring originating status set out in Title II
               must continue to be fulfilled at all times in the Community or Latvia.
         2.   Except as provided for in Articles 3 and 4, where originating goods exported
               from the Community or Latvia to another country return, they must be
  1
     The Principality of Liechtenstein has a customs union with Switzerland, and is a Contracting Party to
     the Agreement on the European Economic Area.
  2
     Cumulation as provided for in this Article does not apply to materials originating in Turkey which
     are mentioned in the list at Annex V to this Protocol.
                                                                                                           ^
 ---pagebreak---      considered as non-originating, unless it can be demonstrated to the-satisfaction
     of the customs authorities that:
 (a)      the returning goods are the same as those that were exported; and
 (b)      they have not undergone any operation beyond that necessary to preserve
          them in good condition while in that country or while being exported.
3.    The acquisition of originating status in accordance with the conditions set out
      in Title II shall not be affected by working or processing done outside the
      Community or Latvia on materials exported from the Community or Latvia
      and subsequently reimported there, provided:
  (a)     the said materials are wholly obtained in the Community or Latvia or have
          undergone working or processing beyond the insufficient operations listed
          in Article 7 prior to being exported; and
  (b)     it can be demonstrated to the satisfaction of the customs authorities that:
          i)       the reimported goods have been obtained by working or processing
                   the exported materials; and
          ii)      the total added value acquired outside the Community or Latvia by
                   applying the provisions of this Article does not exceed 10% of the
                   ex-works price of the end product for which originating status is
                   claimed.
4.    For the purposes of paragraph 3, the conditions for acquiring originating
       status set out in Title II shall not apply to working or processing done outside
      the Community or Latvia. But where, in the list in Annex II, a rule setting a
       maximum value for all the non-originating materials incorporated is applied in
       determining the originating status of the end product, the total value of the
       non-originating materials incorporated in the territory of the party concerned,
       taken together with the total added value acquired outside the Community or
       Latvia by applying the provisions of this Article, shall not exceed the stated
       percentage.
5. For the purposes of applying the provisions of paragraphs 3 and 4, "total
       added value" shall be taken to mean all costs arising outside the Community
       or Latvia, including the value of the materials incorporated there.
6.     The provisions of paragraphs 3 and 4 shall not apply to products which do not
       fulfil the conditions set out in the list in Annex II or which can be considered
       sufficiently worked or processed only if the general values fixed in Article 6(2)
       are applied.
7.     The provisions of paragraphs 3 and 4 shall not apply to products coming
       under Chapters 50 to 63 of the Harmonised System.
8.     Any working or processing of the kind covered by the provisions of this
       Article and done outside the Community or Latvia shall be done under the
       outward processing arrangements, or similar arrangements."
                                                                                         f>
 ---pagebreak--- 4.      In Articles 13, 14, 15, 17, 21, 27, 30 and 32 the phrase "referred-to*irr Article 4"
        shall be replaced by "referred to in Articles 3 and 4".
5.      In the last paragraph of Article 15(6) the date "31 December 1998" shall be
        replaced by "31 December 2000".
6.      In Article 26 the reference "C2/CP3" shall be replaced by "CN22/CN23".
7.      In Annex I, Note 5.2, "current conducting filaments" shall be added between
        "artificial man-made filaments" and "synthetic man-made staple fibres of
        polypropylene".
8.      In Annex I, Note 5.2 the fifth example ("A carpet with tufts . . . are met.") shall be
        deleted.
9.      In Annex II, between the rules for HS headings 2202 and 2208 the following rule
        shall be inserted:
    HS        Description of product       Working or processing of non-originating materials that
  Heading                                                  confers originating status
    No                   (2)
                                                            (3)           or          (4)
    (1)
 2207        Undenatured ethyl          Manufacture:
             alcohol of an alcoholic
             strength by volume of      - using materials not classified
             80% vol or higher;           in headings 2207 or 2208
             ethyl alcohol and odier
             spirits, denatured, of any
             strength.
                                                                                                   #
 ---pagebreak--- 10.      In Annex II, the rule for Chapter 57 shall be replaced by:
     Chapter    Carpets and other textile
         57     floor coverings:
                -Ofneedleloomfelt
                                            Manufacture from (1):
                                            - natural fibres
                                            or
                                            - chemical materials or textile pulp
                                            However:
                                            - polypropylenefilamentof
                                               heading 5402,
                                            - polypropylenefibresof heading
                                               5503 or 5506,
                                            - polypropylenefilamenttow of
                                               heading 5501, of which the
                                               denomination in all cases of a
                                               singlefilamentorfibreis less
                                               than 9 decitex, may be used
                                               provided their value does not
                                               exceed 40% of the ex-works
                                               price of the product
                                            - jute fabric may be used as
                                               backing
                   Ofodierfelt              Manufacture from(l):
                                            - naturalfibresnot carded or
                                               combed or otherwise processed
                                               for spinning,
                                             or
                                             - chemical materials or textile pulp
                                             Manufacture from(l):
                  -Other                     - coir or jute yarn(a),
                                             - synthetic or artificialfilamentyam
                                             - natural fibres, or
                                             - man-made staplefibresnot
                                               carded or combed or otherwise
                                               processed for spinning
                                             But jute fabric may be used as
                                             backing
 (a)
      The use of jute yam is authorised from 1.7.2000.
                                                                                  n
 ---pagebreak--- 11.    In Annex II, the rule for HS heading 7006 shall be replaced by:
7006       Glass of headings 7003,
           7004 or 7005, bent,
           edgeworked, engraved,
           drilled, enamelled or
           otherwise worked, but
           not framed orfittedwith
           other materials:
           - glass plate substrate      Manufacture from materials
             coated with dielectric     (substrates) of heading 7006
             thinfilm,semi-
             conductor grade, in
             accordance with
             SEMII standards1
           - other                      Manufacture from materials
                                        of heading 7001
12.    In Annex II, the rule for HS heading 7601 shall be replaced by:
7601       Unwrought aluminium          Manufacture in which:
                                        - all the materials used are
                                          classified within a heading
                                          other than that of the
                                          product; and
                                        - the value of all the
                                          materials used does not
                                          exceed 50 % of the ex-
                                          works price of the product
                                        or
                                        Manufacture by thermal or
                                                                      •
                                        electrolytic treatment from
                                        unalloyed aluminium or
                                        waste and scrap of
                                        aluminium
13.    The following is added after Annex IV:
                                                "Annex V
                               List of products originating in Turkey
                   to which the provisions of Articles 3 and 4 do not apply,
                         listed in the order of HS Chapters and Headings
Chapter 1
    SEMII- Semiconductor Equipment and Materials Institute Incorporated.
                                                                             £o
 ---pagebreak--- Chapter 2
Chapter 3
0401 to 0402
ex 0403 -     Buttermilk, curdled milk and cream, yoghurt, képhir and other fermented
              or acidified milk and cream, whether or not concentrated or containing
              added sugar or other sweetening matter or flavoured or containing added
              fruit or cocoa
0404 to 0410
0504
0511
Chapter 6
0701 to 0709
ex 0710 -     Vegetables (uncooked or cooked by steaming or boiling in water), frozen
ex 0 7 1 1 -  Vegetables, except sweet corn of heading 0711 90 30, provisionally
              preserved (for example, by sulphur dioxide gas, in brine, in sulphur water
              or in other preservative solutions), but unsuitable in that state for
              immediate consumption
0712 to 0714
Chapter 8
ex Chapter 9 - Coffee, tea, and spices, excluding maté of heading 0903
Chapter 10
Chapter 11
Chapter 12
ex 1302 -      Pectin
 1501tol514
ex 1515 -      Other fixed vegetable fats and oils (excluding jojoba oil and its fractions)
              and their fractions, whether or not refined, but not chemically modified
 ex 1516-      Animal or vegetable fats and oils and their fractions, partly or wholly
               hydrogenated, inter-esterified, re-esterified or elaidinised, whether or not
               refined, but not further prepared, excluding hydrogenated castor oil known
               as 'opal-wax'
 ex 1517 and
 ex 1518 -     Margarines, imitation lard and other prepared edible fats
 ex 1522-      Residues resulting from the treatment of fatty substances or animal or
               vegetable waxes, excluding degras
 Chapter 16
 1701
 ex 1702-      Other sugars, including chemically pure lactose, maltose, glucose and
               fructose, in solid form; sugar syrups not containing added flavouring or
               colouring matter; artificial honey, whether or not mixed with natural
               honey; caramel excluding that of headings 1702 11 00, 1702 30 51,
               1702 30 59, 1702 50 00 and 1702 90 10
                                                                                            1er
 ---pagebreak--- 1703
1801 and 1802
ex 1902 -     Pasta, stuffed, containing more than 20% by weight of fish, crustaceans,
              molluscs or other aquatic invertebrates, sausages and the like or meat and
              meat offal of any kind, including fats of all kinds
ex 2 0 0 1 -  Cucumbers and gherkins, onions, mango chutney, fruit of the genus
              Capsicum other than sweet peppers or pimentos, mushrooms and olives,
              prepared or preserved by vinegar or acetic acid
2002 and 2003
ex 2004 -      Other vegetables prepared or preserved otherwise than by vinegar or acetic
              acid, frozen, other than products of heading 2006, excluding potatoes in
              the form offlouror meal and flakes of sweet corn
ex 2005 -      Other vegetables prepared or preserved otherwise than by vinegar or acetic
              acid, not frozen, other than products of heading 2006, excluding potato
              and sweet corn products
2006 and 2007
ex 2008 -     Fruits, nuts and other edible parts of plants, otherwise prepared or
              preserved, whether or not containing added sugar or other sweetening
              matter or spirit, not elsewhere specified or included, excluding peanut
              butter, palm hearts, maize, yams, sweet potatoes and similar edible parts of
              plants containing 5% or more by weight of starch, vine leaves, hop shoots
              and other similar edible parts of plants
2009
ex 2106 -     Flavoured and coloured sugars, syrups and molasses
2204
2206
ex 2207 -      Undenatured ethyl alcohol of an alcoholic strength by volume of 80% vol
              or higher obtained from agricultural produce listed here
ex 2208 -      Undenatured ethyl alcohol of an alcoholic strength by volume of less than
              80% vol obtained from agricultural produce listed here.
2209
Chapter 23
2401
4501
5301 and 5302
                                                                                           bi.
 ---pagebreak---                                          Article 2
That Decision shall enter into force on 1 January 1999.
Done at
                                                        For the Association Council
                                                        The President
                                                                                    (*3
 ---pagebreak---                               FINANCIAL STATEMENT
1.  Budget heading:           Chapter 12, Article 120
2.  Legal basis:              Article 113 of the Treaty
3.  Titles of the agreements in question:
    Proposal for an amendment to the definition of the concept of "originating
    products" and the methods of administrative cooperation set out in Protocol 4 to
    the different Europe Agreements between the EC and the CEECs, the Baltic
    States and Slovenia and the Agreement on the European Economic Area, and in
    Protocol 3 to the free trade agreements between the EEC and the EFTA countries
4.  Purpose:
    To allow Central and Eastern European countries to continue applying flat rates
    where drawback is prohibited or exemption from customs duties is granted.
    To extend the system to industrial products originating in Turkey and simplify or
    correct certain rules, particularly those on determining which country is to be
    considered the originating country.
 5. Financial implications:
     As, for the purposes of industrial products, Turkey is already in a customs union
     with the Community and these products are therefore already zero rated when
     imported into the Community, and as the purpose of the amendments is essentially
     to facilitate trade or simplify administrative tasks, this proposal would not seem to
     have any major financial implications.
                                                                                           hi
 ---pagebreak---                                       Proposal for a                 98/0259 (ACQ
                                 COUNCIL DECISION
               on a Community position on an amendment to Protocol 3
               on the definition of the concept of "originating products"
                 and methods of administrative cooperation set out in
                           the Europe Agreement between the
                European Communities and the Republic of Lithuania
THE COUNCIL OF THE EUROPEAN UNION,
Having regard to the Treaty establishing the European Community, and in particular
Article 113 thereof,
Having regard to Article 2(1) of the Council and Commission Decision of 19 December
1997 on the conclusion of the Europe Agreement establishing an association between the
European Communities and their Member States, of the one part, and the Republic of
Lithuania, of the other part,
Having regard to the Commission proposal,
Whereas Article 38 of Protocol 3 to the said Europe Agreement provides that the
Association Council may amend the provisions of the Protocol,
HAS DECIDED:
The position to be adopted by the Community within the Association Council created by
virtue of Article 111 of the Europe Agreement establishing an association between the
European Communities and their Member States, of the one part, and the Republic of
Lithuania, of the other part, on an amendment to Protocol 3 on the definition of the
concept of "originating products" and methods of administrative cooperation set out in
the Agreement shall be based on the draft Association Council decision annexed to this
Decision.
Done at Brussels,
                                                     For the Council
                                                     The President
                                                                                       fa
 ---pagebreak---                                 EUROPE AGREEMENT
 establishing an association between the European Communities and their Member
                               States, of the one part, and
                                                                                       n
                       the Republic of Lithuania, of the other part
                                             DRAFT
                      Decision No . . . / . . of the Association Council
                                               of...
 amending Protocol 3 on the definition of the concept of "originating products" and
                          methods of administrative cooperation
THE ASSOCIATION COUNCIL,
Having regard to the Europe Agreement establishing an association between the European
Communities and their Member States, of the one part, and the Republic of Lithuania, of
the other part, signed in Brussels on 12 June 1995 and in particular Article 38 of Protocol
3 thereof,
Whereas the definition of the term "originating products" needs to be amended to ensure
the proper operation of the extended system of cumulation which permits the use of
materials originating in the European Community, Poland, Hungary, the Czech Republic,
the Slovak Republic, Bulgaria, Romania, Latvia, Lithuania, Estonia, Slovenia, the
European Economic Area (hereinafter referred to as the EEA), Iceland, Norway and
Switzerland;
Whereas it would seem advisable to maintain in operation until 31 December 2000 the
system of flat rate charges provided for in Article 15 in connection with the prohibition of
drawback and exemption from customs duty;
Whereas, in view of the particular arrangement on industrial products obtaining between
the Community and Turkey, it would also be appropriate to extend the cumulation system
to such products originating in Turkey;
Whereas to facilitate trade and simplify administrative tasks it would be desirable to
amend the wording of Articles 3, 4 and 12;
Whereas, to take account of changes in processing techniques and shortages of certain
raw materials, some corrections must be made to the list of working and processing
requirements which non-originating materials have to fulfil to qualify for originating
status,
HAS DECIDED AS FOLLOWS :
                                              Article 1
Protocol 3 on the definition of the concept of "originating products" and methods of
administrative cooperation is hereby amended as follows:
                                                                                             &&
 ---pagebreak--- 1.       Article l(i) shall be replaced by:
         "(i)    'added value' shall be taken to be the ex-works price minus the customs
                 value of each of the materials incorporated which originate in the other
                 countries referred to in Articles 3 and 4 or, where the customs value is not
                 known or cannot be ascertained, the first price verifiably paid for the
                 products in the Community or LithuaiÉia."
2.       Articles 3 and 4 shall be replaced by:
                                                 Article 3
                            Cumulation in the European Community
1. Without prejudice to the provisions of Article 2 paragraph 1, products shall be
considered as originating in the Community if such products are obtained there,
incorporating materials originating in the Community, Bulgaria, Poland, Hungary, the
Czech Republic, the Slovak Republic, Romania, Lithuania, Latvia, Estonia, Slovenia,
Iceland, Norway, Switzerland (including Liechtenstein)1 or Turkey2 in accordance with
the provisions of the Protocol on rules of origin annexed to the Agreements between the
Community and each of these countries, provided that the working or processing carried
out in the Community goes beyond that referred to in Article 7 of this Protocol. It shall
not be necessary that such materials have undergone sufficient working or processing.
2. Where the working or processing carried out in the Community does not go beyond the
operations referred to in Article 7, the product obtained shall be considered as originating
in the Community only where the value added there is greater than the value of the
materials used originating in any one of the other countries referred to in paragraph 1. If
this is not so, the product obtained shall be considered as originating in the country which
accounts for the highest value of originating materials used in the manufacture in the
Community.
3. Products, originating in one of the countries referred to in paragraph 1, which do not
undergo any working or processing in the Community, retain their origin if exported into
 one of these countries.
4. The cumulation provided for in this Article may only be applied to materials and
 products which have acquired originating status by an application of rules of origin
 identical to those given in this Protocol.
 The Community shall provide Lithuania, through the European Commission with details
 of the Agreements and their corresponding rules of origin, which are applied with the
 other countries referred to in paragraph 1. The European Commission shall publish in the
 Official Journal of the European Communities (C Series) the date on which the
 cumulation, provided for in this Article may be applied by those countries listed in
 paragraph 1 which have fulfilled the necessary requirements.
 l   The Principality of Liechtenstein has a customs union with Switzerland, and is a Contracting Party to
     the Agreement on the European Economic Area.
 2
     Cumulation as provided for in this Article does not apply to materials originating in Turkey which
     are mentioned in the list at Annex V to this Protocol.
                                                                                                           OP-
 ---pagebreak---                                                  Article 4
                                      Cumulation in Lithuania
1. Without prejudice to the provisions of Article 2 paragraph 2, products shall be
considered as originating in Lithuania if such products are obtained there, incorporating
materials originating in the Community, Bulgaria, Poland, Hungary, the Czech Republic,
the Slovak Republic, Romania, Lithuania, Latvia, Estonia, Slovenia, Iceland, Norway,
Switzerland (including Liechtenstein)1 or Turkey2 in accordance with the provisions of
the Protocol on rules of origin annexed to the Agreements between Lithuania and each of
these countries, provided that the working or processing carried out in Lithuania goes
beyond that referred to in Article 7 of this Protocol. It shall not be necessary that such
materials have undergone sufficient working or processing.
2. Where the working or processing carried out in Lithuania does not go beyond the
operations referred to in Article 7, the product obtained shall be considered as originating
in Lithuania only where the value added there is greater than the value of the materials
used originating in any one of the other countries referred to in paragraph 1. If this is not
so, the product obtained shall be considered as originating in the country which accounts
for the highest value of originating materials used in the manufacture in Lithuania.
3. Products, originating in one of the countries referred to in paragraph 1, which do not
undergo any working or processing in Lithuania, retain their origin if exported into one of
these countries.
4. The cumulation provided for in this Article may only be applied to materials and
products which have acquired originating status by an application of rules of origin
 identical to those given in this Protocol.
Lithuania shall provide the Community, through the European Commission with details of
the Agreements and their corresponding rules of origin, which are applied with the other
 countries referred to in paragraph 1. The European Commission shall publish in the
 Official Journal of the European Communities (C Series) the date on which the
 cumulation, provided for in this Article may. be applied by those countries listed in
 paragraph 1 which have fulfilled the necessary requirements.
 3.       Article 12 shall be replaced by the following:
           "1. Except as provided for in Article 2(1 )(c), Articles 3 and 4 and paragraph 3 of
               this Article, the conditions for acquiring originating status set out in Title II
               must continue to be fulfilled at all times in the Community or Lithuania.
          2.   Except as provided for in Articles 3 and 4, where originating goods exported
               from the Community or Lithuania to another country return, they must be
  1
     The Principality of Liechtenstein has a customs union with Switzerland, and is a Contracting Party to
     the Agreement on the European Economic Area.
  2
     Cumulation as provided for in this Article does not apply to materials originating in Turkey which
     are mentioned in the list at Annex V to this Protocol.
                                                                                                           G>J>
 ---pagebreak---       considered as non-originating, unless it can be demonstrafed to-the-satisfaction
      of the customs authorities that:
  (a)     the returning goods are the same as those that were exported; and
  (b)     they have not undergone any operation beyond that necessary to preserve
          them in good condition while in that country or while being exported.
3.    The acquisition of originating status in accordance with the conditions set out
      in Title II shall not be affected by working or processing done outside the
      Community or Lithuania on materials exported from the Community or
      Lithuania and subsequently reimported there, provided:
  (a)     the said materials are wholly obtained in the Community or Lithuania or
          have undergone working or processing beyond the insufficient operations
          listed in Article 7 prior to being exported; and
  (b)     it can be demonstrated to the satisfaction of the customs authorities that:
           i)      the reimported goods have been obtained by working or processing
                   the exported materials; and
           ii)     the total added value acquired outside the Community or Lithuania
                   by applying the provisions of this Article does not exceed 10% of
                   the ex-works price of the end product for which originating status is
                   claimed.
4.     For the purposes of paragraph 3, the conditions for acquiring originating
       status set out in Title II shall not apply to working or processing done outside
       the Community or Lithuania. But where, in the list in Annex II, a rule setting
       a maximum value for all the non-originating materials incorporated is applied
       in determining the originating status of the end product, the total value of the
       non-originating materials incorporated in the territory of the party concerned,
       taken together with the total added value acquired outside the Community or
       Lithuania by applying the provisions of this Article, shall not exceed the stated
       percentage.
 5.    For the purposes of applying the provisions of paragraphs 3 and 4, "total
       added value" shall be taken to mean all costs arising outside the Community
       or Lithuania, including the value of the materials incorporated there.
 6.    The provisions of paragraphs 3 and 4 shall not apply to products which do not
       fulfil the conditions set out in the list in Annex II or which can be considered
       sufficiently worked or processed only if the general values fixed in Article 6(2)
       are applied.
 7.    The provisions of paragraphs 3 and 4 shall not apply to products coming
       under Chapters 50 to 63 of the Harmonised System.
 8.     Any working or processing of the kind covered by the provisions of this
        Article and done outside the Community or Lithuania shall be done under the
        outward processing arrangements, or similar arrangements."
                                                                                         &j
 ---pagebreak--- 4.      In Articles 13, 14, 15, 17, 21, 27, 30 and 32 the phrase "referred <to, in -Article 4"
        shall be replaced by "referred to in Articles 3 and 4".
5.      In the last paragraph of Article 15(6) the date "31 December 1998" shall be
        replaced by "31 December 2000".
6.      In Article 26 the reference "C2/CP3" shall be replaced by "CN22/CN23".
7.      In Annex I, Note 5.2, "current conducting filaments" shall be added between
        "artificial man-made filaments" and "synthetic man-made staple fibres of
        polypropylene".
8.      In Annex I, Note 5.2 the fifth example ("A carpet with tufts . . . are met.") shall be
        deleted.
9.      In Annex II, between the rules for HS headings 2202 and 2208 the following rule
        shall be inserted:
    HS        Description of product      Working or processing of non-originating materials that
  Heading                                                  confers originating status
    No                   (2)
                                                            (3)           or          (4)
    (1)
 2207        Undenatured ethyl          Manufacture:
             alcohol of an alcoholic
             strength by volume of      - using materials not classified
             80% vol or higher;           in headings 2207 or 2208
             ethyl alcohol and other
             spirits, denatured, of any
             strength.
                                                                                                  A?
 ---pagebreak--- 10.     In Annex II, the rule for Chapter 57 shall be replaced by:
    Chapter    Carpets and other texUle
        57     floor coverings:
               - Of needleloom felt
                                            Manufacture from (1):
                                            - natural fibres
                                            or
                                            - chemical materials or textile pulp
                                            However:
                                            - polypropylene filament of
                                               heading 5402,
                                            - polypropylene fibres of heading
                                               5503 or 5506,
                                            - polypropylenefilamenttow of
                                               heading 5501, of which die
                                               denomination in all cases of a
                                               single filament or fibre is less
                                               than 9 decitex, may be used
                                               provided their value does not
                                               exceed 40% of die ex-works
                                               price of the product
                                            - jute fabric may be used as
                                               backing
                   Of other felt            Manufacture from(l):
                                            - natural fibres not carded or
                                               combed or otherwise processed
                                               for spinning,
                                            or
                                             - chemical materials or textile pulp
                                             Manufacture from(l):
                 - Other                     - coir or jute yarn<a),
                                             - synthetic or artificial filament yarn
                                             - natural fibres, or
                                             - man-made staple fibres not
                                                carded or combed or otherwise
                                                processed for spinning
                                             But jute fabric may be used as
                                             backing
 {a)
     The use of jute yarn is authorised from 1.7.2000.
                                                                                     ?f
 ---pagebreak--- 11.    In Annex II, the rule for HS heading 7006 shall be replaced by:
7006       Glass of headings 7003,
           7004 or 7005, bent,
           edgeworked, engraved,
           drilled, enamelled or
           otherwise worked, but
           not framed or fitted with
           other materials :
           - glass plate substrate      Manufacture from materials
             coated with dielectric     (substrates) of heading 7006
             thin film, semi-
             conductor grade, in
             accordance with
             SEMII standards1
           - other                      Manufacture from materials
                                        of heading 7001
12.    In Annex II, the rule for HS heading 7601 shall be replaced by:
7601       Unwrought aluminium          Manufacture in which:
                                        - all the materials used are
                                          classified within a heading
                                          other than that of the
                                          product; and
                                        - the value of all the
                                          materials used does not
                                          exceed 50 % of the ex-
                                          works price of the product
                                        or
                                        Manufacture by thermal or
                                        electrolytic treatment from
                                        unalloyed aluminium or
                                        waste and scrap of
                                        aluminium
13.     The following is added after Annex IV:
                                                "Annex V
                               List of products originating in Turkey
                    to which the provisions of Articles 3 and 4 do not apply,
                         listed in the order of HS Chapters and Headings
 Chapter 1
 1
     SEMII- Semiconductor Equipment and Materials Institute Incorporated.
                                                                              %
 ---pagebreak--- Chapter 2
Chapter 3
0401 to 0402
ex 0403 -     Buttermilk, curdled milk and cream, yoghurt, képhir and other fermented
              or acidified milk and cream, whether or not concentrated or containing
              added sugar or other sweetening matter or flavoured or containing added
              fruit or cocoa
0404 to 0410
0504
0511
Chapter 6
0701 to 0709
ex 0710 -      Vegetables (uncooked or cooked by steaming or boiling in water), frozen
ex 0 7 1 1 -   Vegetables, except sweet corn of heading 0711 90 30, provisionally
              preserved (for example, by sulphur dioxide gas, in brine, in sulphur water
              or in other preservative solutions), but unsuitable in that state for
              immediate consumption
0712 to 0714
Chapter 8
ex Chapter 9 - Coffee, tea, and spices, excluding maté of heading 0903
Chapter 10
Chapter 11
Chapter 12
ex 1302 -      Pectin
 1501tol514
ex 1515 -      Other fixed vegetable fats and oils (excluding jojoba oil and its fractions)
              and their fractions, whether or not refined, but not chemically modified
ex 1516-       Animal or vegetable fats and oils and their fractions, partly or wholly
              hydrogenated, inter-esterified, re-esterified or elaidinised, whether or not
               refined, but not further prepared, excluding hydrogenated castor oil known
               as 'opal-wax'
ex 1517 and
ex 1518 -      Margarines, imitation lard and other prepared edible fats
ex 1522-       Residues resulting from the treatment of fatty substances or animal or
              vegetable waxes, excluding degras
Chapter 16
 1701
ex 1702 -      Other sugars, including chemically pure lactose, maltose, glucose and
               fructose, in solid form; sugar syrups not containing added flavouring or
               colouring matter; artificial honey, whether or not mixed with natural
               honey; caramel excluding that of headings 1702 11 00, 1702 30 51,
               1702 30 59, 1702 50 00 and 1702 90 10
                                                                                            Ï3
 ---pagebreak--- 1703
1801 and 1802
ex 1902 -     Pasta, stuffed, containing more than 20% by weight of fish, crustaceans,
              molluscs or other aquatic invertebrates, sausages and the like or meat and
              meat offal of any kind, including fats of all kinds
ex 2 0 0 1 -  Cucumbers and gherkins, onions, mango chutney, fruit of the genus
              Capsicum other than sweet peppers or pimentos, mushrooms and olives,
              prepared or preserved by vinegar or acetic acid
2002 and 2003
ex 2004 -     Other vegetables prepared or preserved otherwise than by vinegar or acetic
              acid, frozen, other than products of heading 2006, excluding potatoes in
              the form of flour or meal and flakes of sweet corn
ex 2005 -      Other vegetables prepared or preserved otherwise than by vinegar or acetic
              acid, not frozen, other than products of heading 2006, excluding potato
              and sweet corn products
2006 and 2007
ex 2008 -     Fruits, nuts and other edible parts of plants, otherwise prepared or
              preserved, whether or not containing added sugar or other sweetening
              matter or spirit, not elsewhere specified or included, excluding peanut
              butter, palm hearts, maize, yams, sweet potatoes and similar edible parts of
              plants containing 5% or more by weight of starch, vine leaves, hop shoots
              and other similar edible parts of plants
2009
ex 2106 -     Flavoured and coloured sugars, syrups and molasses
2204
2206
ex 2207 -      Undenatured ethyl alcohol of an alcoholic strength by volume of 80% vol
              or higher obtained from agricultural produce listed here
ex 2208 -      Undenatured ethyl alcohol of an alcoholic strength by volume of less than
               80% vol obtained from agricultural produce listed here.
2209
Chapter 23
2401
4501
 5301 and 5302
                                                                                           ïh
 ---pagebreak---                                          Article 2
That Decision shall enter into force on 1 January 1999.
Done at
                                                        For the Association Council
                                                        The President
                                                                                    tf
 ---pagebreak---                             FINANCIAL STATEMENT
1. Budget heading:          Chapter 12, Article 120
2. Legal basis:             Article 113 of the Treaty
3. Titles of the agreements in question:
   Proposal for an amendment to the definition of the concept of "originating
   products" and the methods of administrative cooperation set out in Protocol 4 to
   the different Europe Agreements between the EC and the CEECs, the Baltic
   States and Slovenia and the Agreement on the European Economic Area, and in
   Protocol 3 to the free trade agreements between the EEC and the EFTA countries
4. Purpose:
   To allow Central and Eastern European countries to continue applying flat rates
   where drawback is prohibited or exemption from customs duties is granted.
   To extend the system to industrial products originating in Turkey and simplify or
   correct certain rules, particularly those on determining which country is to be
   considered the originating country.
5. Financial implications:
   As, for the purposes of industrial products, Turkey is already in a customs union
   with the Community and these products are therefore already zero rated when
   imported into the Community, and as the purpose of the amendments is essentially
   to facilitate trade or simplify administrative tasks, this proposal would not seem to
   have any major financial implications.
                                                                                         M
 ---pagebreak---                                       Proposai for a                  98/0260 (ACQ
                                 COUNCIL DECISION
              on a Community position on an amendment to Protocol 4
               on the definition of the concept of "originating products"
                 and methods of administrative cooperation set out in
                          the Europe Agreement between the
                         European Communities and Hungary
THE COUNCIL OF THE EUROPEAN UNION,
Having regard to the Treaty establishing the European Community, and in particular
Article 113 thereof,
Having regard to Article 2(1) of the Council and Commission Decision of 13 December
1993 on the conclusion of the Europe Agreement establishing an association between the
European Communities and their Member States, of the one part, and the Republic of
Hungary, of the other part,
Having regard to the Commission proposal,
Whereas Article 38 of Protocol 4 to the said Europe Agreement provides that the
Association Council may amend the provisions of the Protocol,
HAS DECIDED:
The position to be adopted by the Community within the Association Council created by
virtue of Article 104 of the Europe Agreement establishing an association between the
European Communities and their Member States, of the one part, and the Republic of
Hungary, of the other part, on an amendment to Protocol 4 on the definition of the
concept of "originating products" and methods of administrative cooperation set out in
the Agreement shall be based on the draft Association Council decision annexed to this
Decision.
Done at Brussels,
                                                     For the Council
                                                     The President
                                                                                       ?•?•
 ---pagebreak---                                 EUROPE AGREEMENT
 establishing an association between the European Communities and their Member
                                States, of the one part, and
                       the Republic of Hungary, of the other part
                                             DRAFT
                      Decision No . . . / . . of the Association Council
                                               of...
 amending Protocol 4 on the definition of the concept of "originating products" and
                          methods of administrative cooperation
THE ASSOCIATION COUNCIL,
Having regard to the Europe Agreement establishing an association between the European
Communities and their Member States, of the one part, and the Republic of Hungary, of
the other part, signed in Brussels on 16 December 1991 and in particular Article 38 of
Protocol 4 thereof,
Whereas the definition of the term "originating products" needs to be amended to ensure
the proper operation of the extended system of cumulation which permits the use of
materials originating in the European Community, Poland, Hungary, the Czech Republic,
the Slovak Republic, Bulgaria, Romania, Latvia, Lithuania, Estonia, Slovenia, the
European Economic Area (hereinafter referred to as the EEA), Iceland, Norway and
Switzerland;
Whereas it would seem advisable to maintain in operation until 31 December 2000 the
system of flat rate charges provided for in Article 15 in connection with the prohibition of
drawback and exemption from customs duty;
Whereas, in view of the particular arrangement on industrial products obtaining between
the Community and Turkey, it would also be appropriate to extend the cumulation system
to such products originating in Turkey;
Whereas to facilitate trade and simplify administrative tasks it would be desirable to
amend the wording of Articles 3, 4 and 12;
Whereas, to take account of changes in processing techniques and shortages of certain
raw materials, some corrections must be made to the list of working and processing
requirements which non-originating materials have to fulfil to qualify for originating
 status,
HAS DECIDED AS FOLLOWS:
                                              Article 1
 Protocol 4 on the definition of the concept of "originating products" and methods of
 administrative cooperation is hereby amended as follows:
                                                                                             ?f
 ---pagebreak--- 1.       Article l(i) shall be replaced by:
         "(i)    'added value' shall be taken to be the ex-works price minus the customs
                 value of each of the materials incorporated which originate in the other
                 countries referred to in Articles 3 and 4 or, where the customs value is not
                 known or cannot be ascertained, the first price verifiably paid for the
                 products in the Community or Hungary."
2.       Articles 3 and 4 shall be replaced by:
                                                 Article 3
                            Cumulation in the European Community
1. Without prejudice to the provisions of Article 2 paragraph 1, products shall be
considered as originating in the Community if such products are obtained there,
incorporating materials originating in the Community, Bulgaria, Poland, Hungary, the
Czech Republic, the Slovak Republic, Romania, Lithuania, Latvia, Estonia, Slovenia,
Iceland, Norway, Switzerland (including Liechtenstein)1 or Turkey2 in accordance with
the provisions of the Protocol on rules of origin annexed to the Agreements between the
Community and each of these countries, provided that the working or processing carried
out in the Community goes beyond that referred to in Article 7 of this Protocol. It shall
not be necessary that such materials have undergone sufficient working or processing.
2. Where the working or processing carried out in the Community does not go beyond the
operations referred to in Article 7, the product obtained shall be considered as originating
in the Community only where the value added there is greater than the value of the
materials used originating in any one of the other countries referred to in paragraph 1. If
this is not so, the product obtained shall be considered as originating in the country which
accounts for the highest value of originating materials used in the manufacture in the
Community.
3. Products, originating in one of the countries referred to in paragraph 1, which do not
undergo any working or processing in the Community, retain their origin if exported into
one of these countries.
4. The cumulation provided for in this Article may only be applied to materials and
products which have acquired originating status by an application of rules of origin
identical to those given in this Protocol.
The Community shall provide Hungary, through the European Commission with details of
the Agreements and their corresponding rules of origin, which are applied with the other
 countries referred to in paragraph 1. The European Commission shall publish in the
 Official Journal of the European Communities (C Series) the date on which the
 cumulation, provided for in this Article may be applied by those countries listed in
 paragraph 1 which have fulfilled the necessary requirements.
 l   The Principality of Liechtenstein has a customs union with Switzerland, and is a Contracting Party to
     the Agreement on the European Economic Area.
 2
     Cumulation as provided for in this Article does not apply to materials originating in Turkey which
     are mentioned in the list at Annex V to this Protocol.
                                                                                                           &
 ---pagebreak---                                                  Article 4
                                       Cumulation in Hungary
1. Without prejudice to the provisions of Article 2 paragraph 2, products shall be
considered as originating in Hungary if such products are obtained there, incorporating
materials originating in the Community, Bulgaria, Poland, Hungary, the Czech Republic,
the Slovak Republic, Romania, Lithuania, Latvia, Estonia, Slovenia, Iceland, Norway,
Switzerland (including Liechtenstein)1 or Turkey2 in accordance with the provisions of
the Protocol on rules of origin annexed to the Agreements between Bulgaria and each of
these countries, provided that the working or processing carried out in Hungary goes
beyond that referred to in Article 7 of this Protocol. It shall not be necessary that such
materials have undergone sufficient working or processing.
2. Where the working or processing carried out in Hungary does not go beyond the
operations referred to in Article 7, the product obtained shall be considered as originating
in Hungary only where the value added there is greater than the value of the materials
used originating in any one of the other countries referred to in paragraph 1. If this is not
so, the product obtained shall be considered as originating in the country which accounts
for the highest value of originating materials used in the manufacture in Hungary.
3. Products, originating in one of the countries referred to in paragraph 1, which do not
undergo any working or processing in Hungary, retain their origin if exported into one of
these countries.
4. The cumulation provided for in this Article may only be applied to materials and
 products which have acquired originating status by an application of rules of origin
 identical to those given in this Protocol.
Hungary shall provide the Community, through the European Commission with details of
 the Agreements and their corresponding rules of origin, which are applied with the other
 countries referred to in paragraph 1. The European Commission shall publish in the
 Official Journal of the European Communities (C Series) the date on which the
 cumulation, provided for in this Article may be applied by those countries listed in
 paragraph 1 which have fulfilled the necessary requirements.
 3.       Article 12 shall be replaced by the following:
           "1. Except as provided for in Article 2(1 )(c), Articles 3 and 4 and paragraph 3 of
               this Article, the conditions for acquiring originating status set out in Title II
               must continue to be fulfilled at all times in the Community or Hungary.
          2.   Except as provided for in Articles 3 and 4, where originating goods exported
               from the Community or Hungary to another country return, they must be
  1
     The Principality of Liechtenstein has a customs union with Switzerland, and is a Contracting Party to
     the Agreement on the European Economic Area.
  2
     Cumulation as provided for in this Article does not apply to materials originating in Turkey which
     are mentioned in the list at Annex V to this Protocol.
                                                                                                           &D
 ---pagebreak---       considered as non-originating, unless it can be demonstrated to-the-satisfaction
      of the customs authorities that:
 (a)      the returning goods are the same as those that were exported; and
 (b)      they have not undergone any operation beyond that necessary to preserve
          them in good condition while in that country or while being exported.
3.    The acquisition of originating status in accordance with the conditions set out
      in Title II shall not be affected by working or processing done outside the
      Community or Hungary on materials exported from the Community or
      Bulgaria and subsequently reimported there, provided:
  (a)     the said materials are wholly obtained in the Community or Hungary or
          have undergone working or processing beyond the insufficient operations
          listed in Article 7 prior to being exported; and
  (b)     it can be demonstrated to the satisfaction of the customs authorities that:
          i)       the reimported goods have been obtained by working or processing
                   the exported materials; and
          ii)      the total added value acquired outside the Community or Hungary
                   by applying the provisions of this Article does not exceed 10% of
                   the ex-works price of the end product for which originating status is
                   claimed.
4.    For the purposes of paragraph 3, the conditions for acquiring originating
      status set out in Title II shall not apply to working or processing done outside
      the Community or Hungary. But where, in the list in Annex II, a rule setting a
    . maximum value for all the non-originating materials incorporated is applied in
      determining the originating status of the end product, the total value of the
      non-originating materials incorporated in the territory of the party concerned,
      taken together with the total added value acquired outside the Community or
      Hungary by applying the provisions of this Article, shall not exceed the stated
      percentage.
5.    For the purposes of applying the provisions of paragraphs 3 and 4, "total
      added value" shall be taken to mean all costs arising outside the Community
      or Hungary, including the value of the materials incorporated there.
6.    The provisions of paragraphs 3 and 4 shall not apply to products which do not
      fulfil the conditions set out in the list in Annex II or which can be considered
      sufficiently worked or processed only if the general values fixed in Article 6(2)
      are applied
7.    The provisions of paragraphs 3 and 4 shall not apply to products coming
      under Chapters 50 to 63 of the Harmonised System.
8.    Any working or processing of the kind covered by the provisions of this
      Article and done outside the Community or Hungary shall be done under the
      outward processing arrangements, or similar arrangements."
                                                                                         *V
 ---pagebreak--- 4.       In Articles 13, 14, 15, 17, 21, 27, 30 and 32 the phrase "refeYred<te*in*Article 4"
         shall be replaced by "referred to in Articles 3 and 4".
5.       In the last paragraph of Article 15(6) the date "31 December 1998" shall be
         replaced by "31 December 2000".
6.       In Article 26 the reference "C2/CP3" shall be replaced by "CN22/CN23".
7.       In Annex I, Note 5.2, "current conducting filaments" shall be added between
         "artificial man-made filaments" and "synthetic man-made staple fibres of
         polypropylene".
8.       In Annex I, Note 5.2 the fifth example ("A carpet with tufts . . . are met.") shall be
         deleted.
9.       In Annex II, between the rules for HS headings 2202 and 2208 the following rule
         shall be inserted:
     HS         Description of product      Working or processing of non-originating materials that
   Heading                                                   confers originating status
     No                    (2)
                                                              (3)           or          (4)
     (1)
  2207         Undenatured ethyl          Manufacture:
               alcohol of an alcoholic
               strength by volume of      - using materials not classified
               80% vol or higher;           in headings 2207 or 2208
               ethyl alcohol and other
               spirits, denatured, of any
               strength.
                                                                                                    <f£
 ---pagebreak--- 10.     In Annex II, the rule for Chapter 57 shall be replaced by:
    Chapter     Carpets and other textile
        57      floor coverings:
                - Of needleloom felt
                                             Manufacture from (1):
                                             - natural fibres
                                             or
                                             - chemical materials or textile pulp
                                             However;
                                             - polypropylenefilamentof
                                                heading 5402,
                                             - polypropylene fibres of heading
                                                5503 or 5506,
                                             - polypropylene filament tow of
                                                heading 5501, of which the
                                                denomination in all cases of a
                                                single filament orfibreis less
                                                than 9 decitex, may be used
                                               provided their value does not
                                                exceed 40% of the ex-works
                                                price of the product
                                             - jute fabric may be used as
                                                backing
                 -OfoUierfelt                Manufacture from(l):
                                             - natural fibres not carded or
                                                combed or otherwise processed
                                                for spinning,
                                             or
                                             - chemical materials or textile pulp
                                             Manufacture from(l):
                 - Other                     - coir or jute yarn(a),
                                             - synthetic or artificial filament yarn
                                             - natural fibres, or
                                             - man-made staple fibres not
                                                carded or combed or otherwise
                                                processed for spinning
                                             But jute fabric may be used as
                                             backing
(a)
     The use of jute yarn is authorised from 1.7.2000.
                                                                                     ^
 ---pagebreak--- 11.    In Annex II, the rule for HS heading 7006 shall be replaced by:
7006       Glass of headings 7003,
           7004 or 7005, bent,
           edgeworked, engraved,
           drilled, enamelled or
           otherwise worked, but
           not framed or fitted with
           other materials :
           - glass plate substrate      Manufacture from materials
             coated with dielectric     (substrates) of heading 7006
             thin film, semi-
             conductor grade, in
             accordance with
             SEMII standards1
           - other                      Manufacture from materials
                                        of heading 7001
12.    In Annex II, the rule for HS heading 7601 shall be replaced by:
7601       Unwrought aluminium          Manufacture in which:
                                        - all the materials used are
                                          classified within a heading
                                          other than that of the
                                          product; and
                                        - the value of all the
                                          materials used does not
                                          exceed 50 % of the ex-
                                          works price of the product
                                        or
                                        Manufacture by thermal or
                                        electrolytic treatment from
                                        unalloyed aluminium or
                                        waste and scrap of
                                        aluminium
13.    The following is added after Annex IV:
                                                "Annex V
                               List of products originating in Turkey
                   to which the provisions of Articles 3 and 4 do not apply,
                         listed in the order of HS Chapters and Headings
Chapter 1
    SEMIl- Semiconductor Equipment and Materials Institute Incorporated.
                                                                             f*f
 ---pagebreak--- Chapter 2
Chapter 3
0401 to 0402
ex 0403 -     Buttermilk, curdled milk and cream, yoghurt, képhir and other fermented
              or acidified milk and cream, whether or not concentrated or containing
              added sugar or other sweetening master or flavoured or containing added
              fruit or cocoa
0404 to 0410
0504
0511
Chapter 6
0701 to 0709
ex 0710 -      Vegetables (uncooked or cooked by steaming or boiling in water), frozen
ex 0 7 1 1 -   Vegetables, except sweet corn of heading 0711 90 30, provisionally
              preserved (for example, by sulphur dioxide gas, in brine, in sulphur water
              or in other preservative solutions), but unsuitable in that state for
              immediate consumption
0712 to 0714
Chapter 8
ex Chapter 9 - Coffee, tea, and spices, excluding maté of heading 0903
Chapter 10
Chapter 11
Chapter 12
ex 1302-       Pectin
 1501tol514
ex 1515 -      Other fixed vegetable fats and oils (excluding jojoba oil and its fractions)
              and their fractions, whether or not refined, but not chemically modified
ex 1516-       Animal or vegetable fats and oils and their fractions, partly or wholly
               hydrogenated, inter-esterified, re-esterified or elaidinised, whether or not
               refined, but not further prepared, excluding hydrogenated castor oil known
               as 'opal-wax'
ex 1517 and
ex 1518 -      Margarines, imitation lard and other prepared edible fats
ex 1522-       Residues resulting from the treatment of fatty substances or animal or
               vegetable waxes, excluding degras
Chapter 16
 1701
ex 1702-       Other sugars, including chemically pure lactose, maltose, glucose and
               fructose, in solid form; sugar syrups not containing added flavouring or
               colouring matter; artificial honey, whether or not mixed with natural
               honey; caramel excluding that of headings 1702 11 00, 1702 30 51,
               1702 30 59, 1702 50 00 and 1702 90 10
                                                                                            «Y
 ---pagebreak--- 1703
1801 and 1802
ex 1902-      Pasta, stuffed, containing more than 20% by weight offish, crustaceans,
              molluscs or other aquatic invertebrates, sausages and the like or meat and
              meat offal of any kind, including fats of all kinds
ex 2001 -     Cucumbers and gherkins, onions, mango chutney, fruit of the genus
              Capsicum other than sweet peppers or pimentos, mushrooms and olives,
              prepared or preserved by vinegar or acetic acid
2002 and 2003
ex 2004 -     Other vegetables prepared or preserved otherwise than by vinegar or acetic
              acid, frozen, other than products of heading 2006, excluding potatoes in
              the form of flour or meal and flakes of sweet corn
ex 2005 -     Other vegetables prepared or preserved otherwise than by vinegar or acetic
              acid, not frozen, other than products of heading 2006, excluding potato
              and sweet corn products
2006 and 2007
ex 2008 -     Fruits, nuts and other edible parts of plants, otherwise prepared or
              preserved, whether or not containing added sugar or other sweetening
              matter or spirit, not elsewhere specified or included, excluding peanut
              butter, palm hearts, maize, yams, sweet potatoes and similar edible parts of
              plants containing 5% or more by weight of starch, vine leaves, hop shoots
              and other similar edible parts of plants
2009
ex 2106 -     Flavoured and coloured sugars, syrups and molasses
2204
2206
ex 2207 -      Undenatured ethyl alcohol of an alcoholic strength by volume of 80% vol
              or higher obtained from agricultural produce listed here
ex 2208 -      Undenatured ethyl alcohol of an alcoholic strength by volume of less than
              80% vol obtained from agricultural produce listed here.
2209
Chapter 23
2401
4501
5301 and 5302
                                                                                           ft.
 ---pagebreak---                                          Article 2
That Decision shall enter into force on 1 January 1999.
Done at
                                                        For the Association Council
                                                        The President
                                                                                    *?
 ---pagebreak---                             FINANCIAL STATEMENT
1. Budge- wading:           Chapter 12, Article 120
2. Legal s asis:            Article 113 of the Treaty
3. Titles of the agreements in question:
   Proposal for an amendment to the definition of the concept of "originating
   products" and the methods of administrative cooperation set out in Protocol 4 to
   the different Europe Agreements between the EC and the CEECs, the Baltic
   States and Slovenia and the Agreement on the European Economic Area, and in
   Protocol 3 to the free trade agreements between the EEC and the EFTA countries
4. Purpose:
   To allow Central and Eastern European countries to continue applying flat rates
   where drawback is prohibited or exemption from customs duties is granted.
   To extend the system to industrial products originating in Turkey and simplify or
   correct certain rules, particularly those on determining which country is to be
   considered the originating country.
5. Financial implications:
   As, for the purposes of industrial products, Turkey is already in a customs union
   with the Community and these products are therefore already zero rated when
    imported into the Community, and as the purpose of the amendments is essentially
   to facilitate trade or simplify administrative tasks, this proposal would not seem to
    have any major financial implications.
                                                                                         <ts
 ---pagebreak---                                       Proposal for a                  98/ 0261 (ACQ
                                 COUNCIL DECISION
               on a Community position on an amendment to Protocol 4
               on the definition of the concept of "originating products"
                 and methods of administrative cooperation set out in
                           the Europe Agreement between the
                   European Communities and the Slovak Republic
THE COUNCIL OF THE EUROPEAN UNION,
Having regard to the Treaty establishing the European Community, and in particular
Article 113 thereof,
Having regard to Article 2(1) of the Council and Commission Decision of 19 December
1994 on the conclusion of the Europe Agreement establishing an association between the
European Communities and their Member States, of the one part, and the Slovak
Republic, of the other part,
Having regard to the Commission proposal,
Whereas Article 38 of Protocol 4 to the said Europe Agreement provides, that the
Association Council may amend the provisions of the Protocol,
HAS DECIDED:
The position to be adopted by the Community within the Association Council created by
virtue of Article 104 of the Europe Agreement establishing an association between the
European Communities and their Member States, of the one part, and the Slovak
Republic, of the other part, on an amendment to Protocol 4 on the definition of the
concept of "originating products" and methods of administrative cooperation set out in
the Agreement shall be based on the draft Association Council decision annexed to this
Decision.
Done at Brussels,
                                                     For the Council
                                                     The President
                                                                                       ST
 ---pagebreak---                                 EUROPE AGREEMENT
 establishing an association between the European Communities and their Member
                                States, of the one part, and
                          the Slovak Republic, of the other part
                                             DRAFT
                      Decision No . . . / . . of the Association Council
                                               of...
 amending Protocol 4 on the definition of the concept of "originating products" and
                          methods of administrative cooperation
THE ASSOCIATION COUNCIL,
Having regard to the Europe Agreement establishing an association between the European
Communities and their Member States, of the one part, and the Slovak Republic, of the
other part, signed in Brussels on 4 October 1993 and in particular Article 38 of Protocol 4
thereof,
Whereas the definition of the term "originating products" needs to be amended to ensure
the proper operation of the extended system of cumulation which permits the use of
materials originating in the European Community, Poland, Hungary, the Czech Republic,
the Slovak Republic, Bulgaria, Romania, Latvia, Lithuania, Estonia, Slovenia, the
European Economic Area (hereinafter referred to as the EEA), Iceland, Norway and
Switzerland;
Whereas it would seem advisable to maintain in operation until 31 December 2000 the
system of flat rate charges provided for in Article 15 in connection with the prohibition of
drawback and exemption from customs duty;
Whereas, in view of the particular arrangement on industrial products obtaining between
the Community and Turkey, it would also be appropriate to extend the cumulation system
to such products originating in Turkey;
Whereas to facilitate trade and simplify administrative tasks it would be desirable to
amend the wording of Articles 3, 4 and 12;
Whereas, to take account of changes in processing techniques and shortages of certain
raw materials, some corrections must be made to the list of working and processing
requirements which non-originating materials have to fulfil to qualify for originating
status,
HAS DECIDED AS FOLLOWS:
                                              Article 1
Protocol 4 on the definition of the concept of "originating products" and methods of
administrative cooperation is hereby amended as follows:
                                                                                             9b
 ---pagebreak--- 1.       Article l(i) shall be replaced by:
        "(i)     'added value' shall be taken to be the ex-works price minus the customs
                 value of each of the materials incorporated which originate in the other
                 countries referred to in Articles 3 and 4 or, where the customs value is not
                 known or cannot be ascertained, the first price verifiably paid for the
                 products in the Community or the Slovak Republic."
2.       Articles 3 and 4 shall be replaced by:
                                                Article 3
                            Cumulation in the European Community
1. Without prejudice to the provisions of Article 2 paragraph 1, products shall be
considered as originating in the Community if such products are obtained there,
incorporating materials originating in the Community, Bulgaria, Poland, Hungary, the
Czech Republic, the Slovak Republic, Romania, Lithuania, Latvia, Estonia, Slovenia,
Iceland, Norway, Switzerland (including Liechtenstein)1 or Turkey2 in accordance with
the provisions of the Protocol on rules of origin annexed to the Agreements between the
Community and each of these countries, provided that the working or processing carried
out in the Community goes beyond that referred to in Article 7 of this Protocol. It shall
not be necessary that such materials have undergone sufficient working or processing.
2. Where the working or processing carried out in the Community does not go beyond the
operations referred to in Article 7, the product obtained shall be considered as originating
in the Community only where the value added there is greater than the value of the
materials used originating in any one of the other countries referred to in paragraph 1. If
this is not so, the product obtained shall be considered as originating in the country which
accounts for the highest value of originating materials used in the manufacture in the
Community.
3. Products, originating in one of the countries referred to in paragraph 1, which do not
undergo any working or processing in the Community, retain their origin if exported into
one of these countries.
4. The cumulation provided for in this Article may only be applied to materials and
products which have acquired originating status by an application of rules of origin
identical to those given in this Protocol.
The Community shall provide the Slovak Republic, through the European Commission
with details of the Agreements and their corresponding rules of origin, which are applied
with the other countries referred to in paragraph 1. The European Commission shall
publish in the Official Journal of the European Communities (C Series) the date on which
the cumulation, provided for in this Article may be applied by those countries listed in
paragraph 1 which have fulfilled the necessary requirements.
 1
     The Principality of Liechtenstein has a customs union with Switzerland, and is a Contracting Party to
    the Agreement on the European Economic Area.
2
    Cumulation as provided for in this Article does not apply to materials originating in Turkey which
    are mentioned in the list at Annex V to this Protocol.
                                                                                                           $r
 ---pagebreak---                                                  Article 4
                                Cumulation in the Slovak Republic
1. Without prejudice to the provisions of Article 2 paragraph 2, products shall be
considered as originating in the Slovak Republic if such products are obtained there,
incorporating materials originating in the Community, Bulgaria, Poland, Hungary, the
Czech Republic, the Slovak Republic, Romania, Lithuania, Latvia, Estonia, Slovenia,
Iceland, Norway, Switzerland (including Liechtenstein)1 or Turkey2 in accordance with
the provisions of the Protocol on rules of origin annexed to the Agreements between the
Slovak Republic and each of these countries, provided that the working or processing
carried out in the Slovak Republic goes beyond that referred to in Article 7 of this
Protocol. It shall not be necessary that such materials have undergone sufficient working
or processing.
2. Where the working or processing carried out in the Slovak Republic does not go
beyond the operations referred to in Article 7, the product obtained shall be considered as
originating in the Slovak Republic only where the value added there is greater than the
value of the materials used originating in any one of the other countries referred to in
paragraph 1. If this is not so, the product obtained shall be considered as originating in the
country which accounts for the highest value of originating materials used in the
manufacture in the Slovak Republic.
 3. Products, originating in one of the countries referred to in paragraph 1, which do not
undergo any working or processing in the Slovak Republic, retain their origin if exported
 into one of these countries.
 4. The cumulation provided for in this Article may only be applied to materials and
 products which have acquired originating status by an application of rules of origin
 identical to those given in this Protocol.
 The Slovak Republic shall provide the Community, through the European Commission
 with details of the Agreements and their corresponding rules of origin, which are applied
 with the other countries referred to in paragraph 1. The European Commission shall
 publish in the Official Journal of the European Communities (C Series) the date on which
 the cumulation, provided for in this Article may be applied by those countries listed in
 paragraph 1 which have fulfilled the necessary requirements.
 3.       Article 12 shall be replaced by the following:
          "1. Except as provided for in Article 2(1 )(c), Articles 3 and 4 and paragraph 3 of
              this Article, the conditions for acquiring originating status set out in Title II
              must continue to be fulfilled at all times in the Community or the Slovak
              Republic.
  1  The Principality of Liechtenstein has a customs union with Switzerland, and is a Contracting Party to
     the Agreement on the European Economic Area.
     Cumulation as provided for in this Article does not apply to materials originating in Turkey which
     are mentioned in the list at Annex V to this Protocol.
                                                                                                           <u~
 ---pagebreak--- 2.    Except as provided for in Articles 3 and 4, where originating'goods exported
      from the Community or the Slovak Republic to another country return, they
      must be considered as non-originating, unless it can be demonstrated to the
      satisfaction of the customs authorities that:
  (a)     the returning goods are the same as those that were exported; and
  (b)     they have not undergone any operation beyond that necessary to preserve
           them in good condition while in that country or while being exported.
3.    The acquisition of originating status in accordance with the conditions set out
      in Title II shall not be affected by working or processing done outside the
      Community or the Slovak Republic on materials exported from the
      Community or Bulgaria and subsequently reimported there, provided:
  (a)      the said materials are wholly obtained in the Community or the Slovak
           Republic or have undergone working or processing beyond the insufficient
           operations listed in Article 7 prior to being exported; and
  (b)      it can be demonstrated to the satisfaction of the customs authorities that:
           i)      the reimported goods have been obtained by working or processing
                   the exported materials; and
           ii)     the total added value acquired outside the Community or the
                   Slovak Republic by applying the provisions of this Article does not
                   exceed 10% of the ex-works price of the end product for which
                   originating status is claimed.
4.    For the purposes of paragraph 3, the conditions for acquiring originating
       status set out in Title II shall not apply to working or processing done outside
      the Community or the Slovak Republic. But where, in the list in Annex II, a
       rule setting a maximum value for all the non-originating materials
       incorporated is applied in determining the originating status of the end
       product, the total value of the non-originating materials incorporated in the
       territory of the party concerned, taken together with the total added value
       acquired outside the Community or the Slovak Republic by applying the
       provisions of this Article, shall not exceed the stated percentage.
5.     For the purposes of applying the provisions of paragraphs 3 and 4, "total
       added value" shall be taken to mean all costs arising outside the Community
       or the Slovak Republic, including the value of the materials incorporated
       there.
6.     The provisions of paragraphs 3 and 4 shall not apply to products which do not
       fulfil the conditions set out in the list in Annex II or which can be considered
       sufficiently worked or processed only if the general values fixed in Article 6(2)
       are applied.
7.     The provisions of paragraphs 3 and 4 shall not apply to products coming
       under Chapters 50 to 63 of the Harmonised System.
                                                                                         13
 ---pagebreak---         8.   Any working or processing of the kind covered by the provisions of this
             Article and done outside the Community or the Slovak Republic shall be done
             under the outward processing arrangements, or similar arrangements."
4.      In Articles 13, 14, 15, 17, 21, 27, 30 and 32 the phrase "referred to in Article 4"
        shall be replaced by "referred to in Articles 3 and 4".
5.      In the last paragraph of Article 15(6) the date "31 December 1998" shall be
        replaced by "31 December 2000".
6.      In Article 26 the reference "C2/CP3" shall be replaced by "CN22/CN23".
7.      In Annex I, Note 5.2, "current conducting filaments" shall be added between
        "artificial man-made filaments" and "synthetic man-made staple fibres of
        polypropylene".
8.      In Annex I, Note 5.2 the fifth example ("A carpet with tufts . . . are met.") shall be
        deleted.
9.      In Annex II, between the rules for HS headings 2202 and 2208 the following rule
        shall be inserted:
    HS         Description of product       Working or processing of non-originating materials that
  Heading                                                   confers originating status
    No                    (2)
                                                             (3)           or          (4)
    (1)
 2207         Undenatured ethyl          Manufacture:
              alcohol of an alcoholic
              strength by volume of      - using materials not classified
              80% vol or higher;           in headings 2207 or 2208
              ethyl alcohol and other
              spirits, denatured, of any
              strength.
                                                                                                    ^
 ---pagebreak--- 10.     In Annex II, the rule for Chapter 57 shall be replaced by:
    Chapter     Carpets and other textile
        57      floor coverings:
                - Of needleloom felt
                                            Manufacture from (1):
                                            - natural fibres
                                            or
                                            - chemical materials or textile pulp
                                            However:
                                            - polypropylene filament of
                                               heading 5402,
                                            - polypropylene fibres of heading
                                                5503 or 5506,
                                            - polypropylene filament tow of
                                                heading 5501, of which the
                                                denomination in all cases of a
                                                single filament or fibre is less
                                                than 9 decitex, may be used
                                                provided their value does not
                                                exceed 40% of the ex-works
                                                price of the product
                                             - jute fabric may be used as
                                                backing
                 -Of other felt              Manufacture from( 1):
                                             - natural fibres not carded or
                                                combed or otherwise processed
                                                for spinning,
                                             or
                                             - chemical materials or textile pulp
                                             Manufacture from(l):
                 -Other                      - coir or jute yarn(a),
                                             - synthetic or artificialfilamentyarn
                                             - natural fibres, or
                                             - man-made staple fibres not
                                                carded or combed or otherwise
                                                processed for spinning
                                             But jute fabric may be used as
                                             backing
(a)
     The use of jute yarn is authorised from 1.7.2000.
                                                                                   Rh
 ---pagebreak--- 11.    In Annex II, the rule for HS heading 7006 shall be replaced by
7006       Glass of headings 7003,
           7004 or 7005, bent,
           edgeworked, engraved,
           drilled, enamelled or
           otherwise worked, but
           not framed or fitted with
           other materials :
           - glass plate substrate      Manufacture from materials
             coated with dielectric     (substrates) of heading 7006
             thin film, semi-
             conductor grade, in
             accordance with
             SEMII standards1
           - other                      Manufacture from materials
                                        of heading 7001
12.    In Annex II, the rule for HS heading 7601 shall be replaced by
7601       Unwrought aluminium          Manufacture in which:
                                        - all the materials used are
                                          classified within a heading
                                          other than that of the
                                          product; and
                                        - the value of all the
                                          materials used does not
                                          exceed 50 % of the ex-
                                          works price of the product
                                        or
                                        Manufacture by thermal or
                                        electrolytic treatment from
                                        unalloyed aluminium or
                                        waste and scrap of
                                        aluminium
13.    The following is added after Annex IV:
                                                "Annex V
                               List of products originating in Turkey
                   to which the provisions of Articles 3 and 4 do not apply
                         listed in the order of HS Chapters and Headings
Chapter 1
    SEMII- Semiconductor Equipment and Materials Institute Incorporated.
                                                                            9c
 ---pagebreak--- Chapter 2
Chapter 3
0401 to 0402
ex 0403 -     Buttermilk, curdled milk and cream, yoghurt, képhir and other fermented
              or acidified milk and cream, whether or not concentrated or containing
              added sugar or other sweetening matter or flavoured or containing added
              fruit or cocoa
0404 to 0410
0504
0511
Chapter 6
0701 to 0709
ex 0710 -      Vegetables (uncooked or cooked by steaming or boiling in water), frozen
ex 0 7 1 1 -   Vegetables, except sweet corn of heading 0711 90 30, provisionally
              preserved (for example, by sulphur dioxide gas, in brine, in sulphur water
              or in other preservative solutions), but unsuitable in that state for
              immediate consumption
0712 to 0714
Chapter 8
ex Chapter 9 - Coffee, tea, and spices, excluding maté of heading 0903
Chapter 10
Chapter 11
Chapter 12
ex 1302 -      Pectin
 1501tol514
ex 1515 -      Other fixed vegetable fats and oils (excluding jojoba oil and its fractions)
               and their fractions, whether or not refined, but not chemically modified
ex 1516-       Animal or vegetable fats and oils and their fractions, partly or wholly
              hydrogenated, inter-esterified, re-esterified or elaidinised, whether or not
               refined, but not further prepared, excluding hydrogenated castor oil known
               as 'opal-wax'
ex 1517 and
ex 1518 -      Margarines, imitation lard and other prepared edible fats
ex 1522-       Residues resulting from the treatment of fatty substances or animal or
               vegetable waxes, excluding degras
Chapter 16
 1701
ex 1702-       Other sugars, including chemically pure lactose, maltose, glucose and
               fructose, in solid form; sugar syrups not containing added flavouring or
               colouring matter; artificial honey, whether or not mixed with natural
               honey; caramel excluding that of headings 1702 11 00, 1702 30 51,
               1702 30 59, 1702 50 00 and 1702 90 10
                                                                                            ^
 ---pagebreak--- 1703
1801 and 1802
ex 1902 -     Pasta, stuffed, containing more than 20% by weight of fish, crustaceans,
              molluscs or other aquatic invertebrates, sausages and the like or meat and
              meat offal of any kind, including fats of all kinds
ex 2 0 0 1 -  Cucumbers and gherkins, onions, mango chutney, fruit of the genus
              Capsicum other than sweet peppers or pimentos, mushrooms and olives,
              prepared or preserved by vinegar or acetic acid
2002 and 2003
ex 2004 -     Other vegetables prepared or preserved otherwise than by vinegar or acetic
              acid, frozen, other than products of heading 2006, excluding potatoes in
              the form of flour or meal and flakes of sweet corn
ex 2005 -     Other vegetables prepared or preserved otherwise than by vinegar or acetic
              acid, not frozen, other than products of heading 2006, excluding potato
              and sweet corn products
2006 and 2007
ex 2008 -     Fruits, nuts and other edible parts of plants, otherwise prepared or
              preserved, whether or not containing added sugar or other sweetening
              matter or spirit, not elsewhere specified or included, excluding peanut
              butter, palm hearts, maize, yams, sweet potatoes and similar edible parts of
              plants containing 5% or more by weight of starch, vine leaves, hop shoots
              and other similar edible parts of plants
2009
ex 2106 -     Flavoured and coloured sugars, syrups and molasses
2204
2206
ex 2207 -      Undenatured ethyl alcohol 'of an alcoholic strength by volume of 80% vol
              or higher obtained from agricultural produce listed here
ex 2208 -      Undenatured ethyl alcohol of an alcoholic strength by volume of less than
              80% vol obtained from agricultural produce listed here.
2209
Chapter 23
2401
4501
5301 and 5302
                                                                                           <&
 ---pagebreak---                                          Article 2
That Decision shall enter into force on 1 January 1999.
Done at
                                                        For the Association Council
                                                        The President
                                                                                    <??
 ---pagebreak---                             FINANCIAL STATEMENT
1. Budget heading:          Chapter 12, Article 120
2. Legal basis:             Article 113 of the Treaty
3. Titles of the agreements in question:
   Proposal for an amendment to the definition of the concept of "originating
   products" and the methods of administrative cooperation set out in Protocol 4 to
   the different Europe Agreements between the EC and the CEECs, the Baltic
   States and Slovenia and the Agreement on the European Economic Area, and in
   Protocol 3 to the free trade agreements between the EEC and the EFTA countries
4. Purpose:
   To allow Central and Eastern European countries to continue applyingflatrates
   where drawback is prohibited or exemption from customs duties is granted.
   To extend the system to industrial products originating in Turkey and simplify or
   correct certain rules, particularly those on determining which country is to be
   considered the originating country.
5. Financial implications:
   As, for the purposes of industrial products, Turkey is already in a customs union
   with the Community and these products are therefore already zero rated when
   imported into the Community, and as the purpose of the amendments is essentially
   to facilitate trade or simplify administrative tasks, this proposal would not seem to
   have any major financial implications.
                                                                                         /66
 ---pagebreak---                                       Proposai for a                   98/0262 (ACQ
                                 COUNCIL DECISION
               on a Community position on an amendment to Protocol 4
               on the definition of the concept of "originating products"
                 and methods of administrative cooperation set out in
                          the Europe Agreement between the
                         European Communities and Romania
THE COUNCIL OF THE EUROPEAN UNION,
Having regard to the Treaty establishing the European Community, and in particular
Article 113 thereof,
Having regard to Article 2(1) of the Council and Commission Decision of 19 December
1994 on the conclusion of the Europe Agreement establishing an association between the
European Communities and their Member States, of the one part, and Romania, of the
other part,
Having regard to the Commission proposal,
Whereas Article 38 of Protocol 4 to the said Europe Agreement provides that the
Association Council may amend the provisions of the Protocol,
HAS DECIDED:
The position to be adopted by the Community within the Association Council created by
virtue of Article 106 of the Europe Agreement establishing an association between the
European Communities and their Member States, of the one part, and Romania, of the
other part, on an amendment to Protocol 4 on the definition of the concept of "originating
products" and methods of administrative cooperation set out in the Agreement shall be
based on the draft Association Council decision annexed to this Decision.
Done at Brussels,
                                                     For the Council
                                                     The President
                                                                                           /6/
 ---pagebreak---                                 EUROPE AGREEMENT
 establishing an association between the EuropeanjCommunities and their Member
                               States, of the one part, and
                               Romania, of the other part
                                            DRAFT
                     Decision No . . . / . . of the Association Council
                                              of...
 amending Protocol 4 on the definition of the concept of "originating products" and
                         methods of administrative cooperation
THE ASSOCIATION COUNCIL,
Having regard to the Europe Agreement establishing an association between the European
Communities and their Member States, of the one part, and Romania, of the other part,
signed in Brussels on 1 February 1993 and in particular Article 38 of Protocol 4 thereof,
Whereas the definition of the term "originating products" needs to be amended to ensure
the proper operation of the extended system of cumulation which permits the use of
materials originating in the European Community, Poland, Hungary, the Czech Republic,
the Slovak Republic, Bulgaria, Romania, Latvia, Lithuania, Estonia, Slovenia, the
European Economic Area (hereinafter referred to as the EEA), Iceland, Norway and
Switzerland;
Whereas it would seem advisable to maintain in operation until 31 December 2000 the
system of flat rate charges provided for in Article 15 in connection with the prohibition of
drawback and exemption from customs duty;
Whereas, in view of the particular arrangement on industrial products obtaining between
the Community and Turkey, it would also be appropriate to extend the cumulation system
to such products originating in Turkey;
Whereas to facilitate trade and simplify administrative tasks it would be desirable to
 amend the wording of Articles 3, 4 and 12;
Whereas, to take account of changes in processing techniques and shortages of certain
 raw materials, some corrections must be mad tc the list of working and processing
 requirements which non-originating materials have to fulfil to qualify for originating
 status,
 HAS DECIDED AS FOLLOWS:
                                             Article 1
 Protocol 4 on the definition of the concept of "originating products" and methods of
 administrative cooperation is hereby amended as follows:
                                                                                             /oz-
 ---pagebreak--- 1.       Article l(i) shall be replaced by:
         "(i)    'added value' shall be taken to be the ex-works price minus the customs
                 value of each of the materials incorporated which originate in the other
                 countries referred to in Articles 3 and 4 or, where the customs value is not
                 known or cannot be ascertained, the first price verifiably paid for the
                 products in the Community or Romania."
2.       Articles 3 and 4 shall be replaced by:
                                                Article 3
                            Cumulation in the European Community
1. Without prejudice to the provisions of Article 2 paragraph 1, products shall be
considered as originating in the Community if such products are obtained there,
incorporating materials originating in the Community, Bulgaria, Poland, Hungary,, the
Czech Republic, the Slovak Republic, Romania, Lithuania, Latvia, Estonia, Slovenia,
Iceland, Norway, Switzerland (including Liechtenstein)1 or Turkey2 in accordance with
the provisions of the Protocol on rules of origin annexed to the Agreements between the
Community and each of these countries, provided that the working or processing carried
out in the Community goes beyond that referred to in Article 7 of this Protocol. It shall
not be necessary that such materials have undergone sufficient working or processing.
2. Where the working or processing carried out in the Community does not go beyond the
operations referred to in Article 7, the product obtained shall be considered as originating
in the Community only where the value added there is greater than the value of the
materials used originating in any one of the other countries referred to in paragraph 1. If
this is not so, the product obtained shall be considered as originating in the country which
accounts for the highest value of originating materials used in the manufacture in the
Community.
3. Products, originating in one of the countries referred to in paragraph 1, which do not
undergo any working or processing in the Community, retain their origin if exported into
one of these countries.
4. The cumulation provided for in this Article may only be applied to materials and
products which have acquired originating status by an application of rules of origin
identical to those given in this Protocol.
The Community shall provide Romania, through the European Commission with details of
the Agreements and their corresponding rules of origin, which are applied with the other
countries referred to in paragraph 1. The European Commission shall publish in the
Official Journal of the European Communities (C Series) the date on which the
cumulation, provided for in this Article may be applied by those countries listed in
paragraph 1 which have fulfilled the necessary requirements.
 1  The Principality of Liechtenstein has a customs union with Switzerland, and is a Contracting Party to
    the Agreement on the European Economic Area.
2
    Cumulation as provided for in this Article does not apply to materials originating in Turkey which
    are mentioned in the list at Annex V to this Protocol.
                                                                                                          ioz
 ---pagebreak---                                                  Article 4
                                       Cumulation in Romania
1. Without prejudice to the provisions of Article 2 paragraph 2, products shall be
considered as originating in Romania if^uch products are obtained there, incorporating
materials originating in the Community, Bulgaria, Poland, Hungary, the Czech Republic,
the Slovak Republic, Romania, Lithuania, Latvia, Estonia, Slovenia, Iceland, Norway,
Switzerland (including Liechtenstein)1 or Turkey2 in accordance with the provisions of
the Protocol on rules of origin annexed to the Agreements between Romania and each of
these countries, provided that the working or processing carried out in Romania goes
beyond that referred to in Article 7 of this Protocol. It shall not be necessary that such
materials have undergone sufficient working or processing.
2. Where the working or processing carried out in Romania does not go beyond the
operations referred to in Article 7, the product obtained shall be considered as originating
in Romania only where the value added there is greater than the value of the materials
used originating in any one of the other countries referred to in paragraph 1. If this is not
 so, the product obtained shall be considered as originating in the country which accounts
for the highest value of originating materials used in the manufacture in Romania.
 3. Products, originating in one of the countries referred to in paragraph 1, which do not
undergo any working or processing in Romania, retain their origin if exported into one of
these countries.
 4. The cumulation provided for in this Article may only be applied to materials and
 products which have acquired originating status by an application of rules of origin
 identical to those given in this Protocol.
 Romania shall provide the Community, through the European Commission with details of
 the Agreements and their corresponding rules of origin, which are applied with the other
 countries referred to in paragraph 1. The European Commission shall publish in the
 Official Journal of the European Communities (C Series) the date on which the
 cumulation, provided for in this Article may be applied by those countries listed in
 paragraph 1 which have fulfilled the necessary requirements.
 3.        Article 12 shall be replaced by the following:
           "1. Except as provided for in Article 2(l)(c), Articles 3 and 4 and paragraph 3 of
               this Article, the conditions for acquiring originating status set out in Title II
               must continue to be fulfilled at all times in the Community or Romania.
           2.  Except as provided for in Articles 3 and 4, where originating goods exported
               from the Community or Romania to another country return, they must be
  i   The Principality of Liechtenstein has a customs union with Switzerland, and is a Contracting Party to
      the Agreement on the European Economic Area.
  2
      Cumulation as provided for in this Article does not apply to materials originating in Turkey which
      are mentioned in the list at Annex V to this Protocol.
                                                                                                            m
 ---pagebreak---       considered as non-originating, unless it can be demonstrated to 4he-satisfaction
      of the customs authorities that:
 (a)      the returning goods are the same as those that were exported; and
 (b)      they have not undergone any operation beyond that necessary to preserve
          them in good condition while in that country or while being exported.
3.    The acquisition of originating status in accordance with the conditions set out
      in Title II shall not be affected by working or processing done outside the
      Community or Romania on materials exported from the Community or
      Romania and subsequently reimported there, provided:
  (a)      the said materials are wholly obtained in the Community or Romania or
           have undergone working or processing beyond the insufficient operations
           listed in Article 7 prior to being exported; and
  (b)      it can be demonstrated to the satisfaction of the customs authorities that:
           i)       the reimported goods have been obtained by working or processing
                    the exported materials; and
           ii)      the total added value acquired outside the Community or Romania
                    by applying the provisions of this Article does not exceed 10% of
                    the ex-works price of the end product for which originating status is
                    claimed.
4.    For the purposes of paragraph.3, the conditions for acquiring originating
      status set out in Title II shall not apply to working or processing done outside
      the Community or Romania. But where, in the list in Annex II, a rule setting a
      maximum value for all the non-originating materials incorporated is applied in
      determining the originating status of the end product, the total value of the
      non-originating materials incorporated in the territory of the party concerned,
      taken together with the total added value acquired outside the Community or
      Romania by applying the provisions of this Article, shall not exceed the stated
      percentage.
5. For the purposes of applying the provisions of paragraphs 3 and 4, "total
      added value" shall be taken to mean all costs arising outside the Community
       or Romania, including the value of the materials incorporated there.
6.    The provisions of paragraphs 3 and 4 shall not apply to products which do not
       fulfil the conditions set out in the list in Annex II or which can be considered
       sufficiently worked or processed only if the general values fixed in Article 6(2)
       are applied.
7.     The provisions of paragraphs 3 and 4 shall not apply to products coming
      under Chapters 50 to 63 of the Harmonised System.
8.     Any working or processing of the kind covered by the provisions of this
       Article and done outside the Community or Romania shall be done under the
       outward processing arrangements, or similar arrangements."
                                                                                          /of
 ---pagebreak--- 4.       In Articles 13, 14, 15, 17, 21, 27, 30 and 32 the phrase "referred te-in-Article 4"
         shall be replaced by "referred to in Articles 3 and 4".
5.       In the last paragraph of Article 15(6) the date "31 December 1998" shall be
         replaced by "31 December 2000".
6.       In Article 26 the reference "C2/CP3" shall be replaced by "CN22/CN23".
7.       In Annex I, Note 5.2, "current conducting filaments" shall be added between
         "artificial man-made filaments" and "synthetic man-made staple fibres of
         polypropylene".
8.       In Annex I, Note 5.2 thefifthexample ("A carpet with tufts . . . are met.") shall be
         deleted.
9.       In Annex II, between the rules for HS headings 2202 and 2208 the following rule
         shall be inserted:
     HS         Description of product      Working or processing of non-originating materials that
   Heading                                                   confers originating status
     No                    (2)
                                                              (3)           or          (4)
     (1)
  2207         Undenatured ethyl          Manufacture:
               alcohol of an alcoholic
               strength by volume of      - using materials not classified
               80% vol or higher;           in headings 2207 or 2208
               ethyl alcohol and other
               spirits, denatured, of any
               strength.
                                                                                                    /ÔQ
 ---pagebreak--- 10.     In Annex II, the rule for Chapter 57 shall be replaced by:
    Chapter     Carpets and other textile
        57      floor coverings:
                - Of needleloom felt
                                            Manufacture from (1):
                                            - natural fibres
                                            or
                                            - chemical materials or textile pulp
                                            However:
                                            - polypropylene filament of
                                              heading 5402,
                                            - polypropylene fibres of heading
                                              5503 or 5506,
                                            - polypropylene filament tow of
                                              heading 5501, of which the
                                              denomination in all cases of a
                                              single filament or fibre is less
                                              than 9 decitex, may be used
                                              provided their value does not
                                              exceed 40% of the ex-works
                                              price of the product
                                            - jute fabric may be used as
                                               backing
                -Of other felt              Manufacture from(l):
                                            - natural fibres not carded or
                                               combed or otherwise processed
                                               for spinning,
                                            or
                                            - chemical materials or textile pulp
                                            Manufacture from(l):                    -
                 - Other                    - coir or jute yarn(a),
                                            - synthetic or artificial filament yarn
                                            - natural fibres, or
                                            - man-made staple fibres not
                                               carded or combed or otherwise
                                               processed for spinning
                                            But jute fabric may be used as
                                            backing
<a)
     The use of jute yarn is auUiorised from 1.7.2000.
                                                                                      /o/
 ---pagebreak--- 11.    In Annex II, the rule for HS heading 7006 shall be replaced by:
7006       Glass of headings 7003,
           7004 or 7005, bent,
           edgeworked, engraved,
           drilled, enamelled or
           otherwise worked, but
           notframedorfittedwith
           other materials:
           - glass plate substrate      Manufacture from materials
             coated with dielectric     (substrates) of heading 7006
             thin film, semi-
             conductor grade, in
             accordance with
             SEMII standards1
           - other                      Manufacture from materials
                                        of heading 7001
12.    In Annex II, the rule for HS heading 7601 shall be replaced by:
7601       Unwrought aluminium          Manufacture in which:
                                        - all the materials used are
                                          classified within a heading
                                          other than that of the
                                          product; and
                                        - the value of all the
                                          materials used does not
                                          exceed 50 % of the ex-
                                          works price of the product
                                        or
                                        Manufacture by thermal or
                                        electrolytic treatment from
                                        unalloyed aluminium or
                                        waste and scrap of
                                        aluminium
13.    The following is added after Annex IV:
                                                "Annex V
                               List of products originating in Turkey
                   to which the provisions of Articles 3 and 4 do not apply,
                         listed in the order of HS Chapters and Headings
Chapter 1
    SEMII- Semiconductor Equipment and Materials Institute Incorporated.
                                                                             JoT
 ---pagebreak--- Chapter 2
Chapter 3
0401 to 0402
ex 0403 -     Buttermilk, curdled milk and cream, yoghurt, képhir and other fermented
              or acidified milk and cream, whether or not concentrated or containing
              added sugar or other sweetening matter or flavoured or containing added
              fruit or cocoa
0404 to 0410
0504
0511
Chapter 6
0701 to 0709
ex 0710 -     Vegetables (uncooked or cooked by steaming or boiling in water), frozen
ex 0 7 1 1 -   Vegetables, except sweet corn of heading 0711 90 30, provisionally
              preserved (for example, by sulphur dioxide gas, in brine, in sulphur water
              or in other preservative solutions), but unsuitable in that state for
              immediate consumption
0712 to 0714
Chapter 8
ex Chapter 9 - Coffee, tea, and spices, excluding maté of heading 0903
Chapter 10
Chapter 11
Chapter 12
ex 1302-       Pectin
 1501tol514
ex 1515 -      Other fixed vegetable fats and oils (excluding jojoba oil and its fractions)
              and their fractions, whether or not refined, but not chemically modified
ex 1516-       Animal or vegetable fats and oils and their fractions, partly or wholly
              hydrogenated, inter-esterified, re-esterified or elaidinised, whether or not
              refined, but not further prepared, excluding hydrogenated castor oil known
              as 'opal-wax'
ex 1517 and
ex 1518 -      Margarines, imitation lard and other prepared edible fats
ex 1522-       Residues resulting from the treatment of fatty substances or animal or
              vegetable waxes, excluding degras
Chapter 16
 1701
ex 1702 -      Other sugars, including chemically pure lactose, maltose, glucose and
               fructose, in solid form; sugar syrups not containing added flavouring or
               colouring matter; artificial honey, whether or not mixed with natural
               honey; caramel excluding that of headings 1702 11 00, 1702 30 51,
               1702 30 59, 1702 50 00 and 1702 90 10
                                                                                            m
 ---pagebreak--- 1703
1801 and 1802
ex 1902-      Pasta, stuffed, containing more than 20% by weight offish, crustaceans,
              molluscs or other aquatic invertebrates, sausages and the like or meat and
              meat offal of any kind, including fats of all kinds
ex 2001 -     Cucumbers and gherkins, onions, mango chutney, fruit of the genus
              Capsicum other than sweet peppers or pimentos, mushrooms and olives,
              prepared or preserved by vinegar or acetic acid
2002 and 2003
ex 2004 -     Other vegetables prepared or preserved otherwise than by vinegar or acetic
              acid, frozen, other than products of heading 2006, excluding potatoes in
              the form of flour or meal and flakes of sweet corn
ex 2005 -     Other vegetables prepared or preserved otherwise than by vinegar or acetic
              acid, not frozen, other than products of heading 2006, excluding potato
              and sweet corn products
2006 and 2007
ex 2008 -     Fruits, nuts and other edible parts of plants, otherwise prepared or
              preserved, whether or not containing added sugar or other sweetening
              matter or spirit, not elsewhere specified or included, excluding peanut
              butter, palm hearts, maize, yams, sweet potatoes and similar edible parts of
              plants containing 5% or more by weight of starch, vine leaves, hop shoots
              and other similar edible parts of plants
2009
ex 2106 -     Flavoured and coloured sugars, syrups and molasses
2204
2206
ex 2207 -      Undenatured ethyl alcohol of an alcoholic strength by volume of 80% vol
              or higher obtained from agricultural produce listed here
ex 2208 -'     Undenatured ethyl alcohol of an alcoholic strength by volume of less than
              80% vol obtained from agricultural produce listed here.
2209
Chapter 23
2401
4501
5301 and 5302
                                                                                           Uà
 ---pagebreak---                                          Article 2
That Decision shall enter into force on 1 January 1999.
Done at
                                                        For the Association Council
                                                        The President
                                                                                    ///
 ---pagebreak---                              FINANCIAL STATEMENT
1. Budget heading:           Chapter 12, Article 120
2. Legal basis:              Article 113 of the Treaty
3. Titles of the agreements in question:
   Proposal for an amendment to the definition of the concept of "originating
   products" and the methods of administrative cooperation set out in Protocol 4 to
   the different Europe Agreements between the EC and the CEECs, the Baltic
   States and Slovenia and the Agreement on the European Economic Area, and in
   Protocol 3 to the free trade agreements between the EEC and the EFTA countries
4. Purpose:
   To allow Central and Eastern European countries to continue applying flat rates
   where drawback is prohibited or exemption from customs duties is granted.
   To extend the system to industrial products originating in Turkey and simplify or
   correct certain rules, particularly those on determining which country is to be
   considered the originating country.
5. Financial implications:
    As, for the purposes of industrial products, Turkey is already in a customs union
    with the Community and these products are therefore already zero rated when
    imported into the Community, and as the purpose of the amendments is essentially
    to facilitate trade or simplify administrative tasks, this proposal would not seem to
    have any major financial implications.
                                                                                          lit
 ---pagebreak---                                                                            98/ 0263 (ACC)
                                      Proposal for a
                                 COUNCIL DECISION
               on a Community position on an amendment to Protocol 4
               on the definition of the concept of "originating products"
                 and methods of administrative cooperation set out in
              the Interim Agreement on trade and trade-related matters
                                        between the
                 European Communities and the Republic of Slovenia
THE COUNCIL OF THE EUROPEAN UNION,
Having regard to the Treaty establishing the European Community, and in particular
Article 113 thereof,
Having regard to Article 1 of the Council and Commission Decision of 25 November
1996 on the conclusion of the Interim Agreement on trade and trade-related matters
between the European Communities and their Member States, of the one part, and the
Republic of Slovenia, of the other part,
Having regard to the Commission proposal,
Whereas Article 38 of Protocol 4 to the said Interim Agreement provides that the
Association Council may amend the provisions of the Protocol,
HAS DECIDED:
The position to be adopted by the Community within the Cooperation Council which
performs the duties of the Association Council according to Article 38 of the Interim
Agreement on trade and trade-related matters between the European Communities and
their Member States, of the one part, and the Republic of Slovenia, of the other part, on
an amendment to Protocol 4 on the definition of the concept of "originating products"
and methods of administrative cooperation set out in the Agreement shall be based on the
draft Cooperation Council decision annexed to this Decision.
Done at Brussels,
                                                     For the Council
                                                     The President
                                                                                          nz
 ---pagebreak---                                INTERIM AGREEMENT
 on trade and trade-related matters between the European Communities and their
                      Member States and the Republic of Slovenia
                                             DRAFT
                     Decision No . . . / . . of the Cooperation Council
                                              of...
 amending Protocol 4 on the definition of the concept of "originating products" and
                         methods of administrative cooperation
THE COOPERATION COUNCIL,
Having regard to the Interim Agreement on trade and trade-related matters between the
European Communities and the Republic of Slovenia, of the other part, signed in
Brussels on 11 November 1996 and in particular Article 38 of Protocol 4 thereof,
Whereas the definition of the term "originating products" needs to be amended to ensure
the proper operation of the extended system of cumulation which permits the use of
materials originating in the European Community, Poland, Hungary, the Czech Republic,
the Slovak Republic, Bulgaria, Romania, Latvia, Lithuania, Estonia, Slovenia, the
European Economic Area (hereinafter referred to as the EEA), Iceland, Norway and
Switzerland;
Whereas it would seem advisable to maintain in operation until 31 December 2000 the
system of flat rate charges provided for in Article 15 in connection with the prohibition
of drawback and exemption from customs duty;
Whereas, in view of the particular arrangement on industrial products obtaining between
the Community and Turkey, it would also be appropriate to extend the cumulation
system to such products originating in Turkey;
Whereas to facilitate trade and simplify administrative tasks it would be desirable to
amend the wording of Articles 3, 4 and 12;
Whereas, to take account of changes in processing techniques and shortages of certain
raw materials, some corrections must be made to the list of working and processing
requirements which non-originating materials have to fulfil to qualify for originating
status,
HAS DECIDED AS FOLLOWS:
                                             Article 1
Protocol 4 on the definition of the concept of "originating products" and methods of
administrative cooperation is hereby amended as follows:
                                                                                          ttY
 ---pagebreak--- 1.       Article l(i) shall be replaced by:
         "(i)    'added value' shall be taken to be the ex-works price minus the customs
                 value of each of the materials incorporated which originate in the other
                 countries referred to in Articles 3 and 4 or, where the customs value is not
                 known or cannot be ascertained, the first price verifiably paid for the
                 products in the Community or Slovenia."
2.       Articles 3 and 4 shall be replaced by:
                                                 Article 3
                             Cumulation in the European Community
1. Without prejudice to the provisions of Article 2 paragraph 1, products shall be
considered as originating in the Community if such products are obtained there,
incorporating materials originating in the Community, Bulgaria, Poland, Hungary, the
Czech Republic, the Slovak Republic, Romania, Lithuania, Latvia, Estonia, Slovenia,
Iceland, Norway, Switzerland (including Liechtenstein)1 or Turkey2 in accordance with
the provisions of the Protocol on rules of origin annexed to the Agreements between the
Community and each of these countries, provided that the working or processing carried
out in the Community goes beyond that referred to in Article 7 of this Protocol. It shall
not be necessary that such materials have undergone sufficient working or processing.
2. Where the working or processing carried out in the Community does not go beyond the
operations referred to in Article 7, the product obtained shall be considered as originating
in the Community only where the value added there is greater than the value of the
materials used originating in any one of the other countries referred to in paragraph 1. If
this is not so, the product obtained shall be considered as originating in the country which
accounts for the highest value of originating materials used in the manufacture in the
Community.
3. Products, originating in one of the countries referred to in paragraph 1, which do not
undergo any working or processing in the Community, retain their origin if exported into
one of these countries.
4. The cumulation provided for in this Article may only be applied to materials and
products which have acquired originating status by an application of rules of origin
identical to those given in this Protocol.
The Community shall provide Slovenia, through the European Commission with details
of the Agreements and their corresponding rules of origin, which are applied with the
other countries referred to in paragraph 1. The European Commission shall publish in the
Official Journal of the European Communities (C Series) the date on which the
1
    The Principality of Liechtenstein has a customs union with Switzerland, and is a Contracting Party to
    the Agreement on the European Economic Area.
2
    Cumulation as provided for in this Article does not apply to materials originating in Turkey which are
    mentioned in the list at Annex V to this Protocol.
                                                                                                           //*
 ---pagebreak--- cumulation, provided for in this Article may be applied by those .countries listed in
paragraph 1 which have fulfilled the necessary requirements.
                                                  Article 4
                                        Cumulation in Slovenia
1. Without prejudice to the provisions of Article 2 paragraph 2, products shall be
considered as originating in Slovenia if such products are obtained there, incorporating
materials originating in the Community, Bulgaria, Poland, Hungary, the Czech Republic,
the Slovak Republic, Romania, Lithuania, Latvia, Estonia, Slovenia, Iceland, Norway,
Switzerland (including Liechtenstein)1 or Turkey2 in accordance with the provisions of
the Protocol on rules of origin annexed to the Agreements between Slovenia and each of
these countries, provided that the working or processing carried out in Slovenia goes
beyond that referred to in Article 7 of this Protocol. It shall not be necessary that such
materials have undergone sufficient working or processing.
2. Where the working or processing carried out in Slovenia does not go beyond the
operations referred to in Article 7, the product obtained shall be considered as originating
in Slovenia only where the value added there is greater than the value of the materials
used originating in any one of the other countries referred to in paragraph 1. If this is not
 so, the product obtained shall be considered as originating in the country which accounts
 for the highest value of originating materials used in the manufacture in Slovenia.
 3. Products, originating in one of the countries referred to in paragraph 1, which do not
 undergo any working or processing in Slovenia, retain their origin if exported into one of
 these countries.
 4. The cumulation provided for in this Article may only be applied to materials and
 products which have acquired originating status by an application of rules of origin
 identical to those given in this Protocol.
 Slovenia shall provide the Community, through the European Commission with details of
 the Agreements and their corresponding rules of origin, which are applied with the other
 countries referred to in paragraph 1. The European Commission shall publish in the
 Official Journal of the European Communities (C Series) the date on which the
 cumulation, provided for in this Article may be applied by those countries listed in
 paragraph 1 which have fulfilled the necessary requirements.
 3.       Article 12 shall be replaced by the following:
  1   The Principality of Liechtenstein has a customs union with Switzerland, and is a Contracting Party to
      the Agreement on the European Economic Area.
  2
      Cumulation as provided for in this Article does not apply to materials originating in Turkey which are
      mentioned in the list at Annex V to this Protocol.
                                                                                                             UG
 ---pagebreak--- "1. Except as provided for in Article 2(1 )(c), Articles 3 and 4 and paragraph 3 of
      this Article, the conditions for acquiring originating status set out in Title. II
      must continue to be fulfilled at all times in the Community or Slovenia.
2.    Except as provided for in Articles 3 and 4, where originating goods exported
      from the Community or Slovenia to another country return, they must be
      considered as non-originating, unless it can be demonstrated to the
      satisfaction of the customs authorities thaï
  (a)    the returning goods are the same as those that were exported; and
  (b)    they have not undergone any operation beyond that necessary to preserve
         them in good condition while in that country or while being exported.
3.    The acquisition of originating status in accordance with the conditions set out
      in Title II shall not be affected by working or processing done outside the
      Community or Slovenia on materials exported from the Community or
      Slovenia and subsequently reimported there, provided:
  (a)    the said materials are wholly obtained in the Community or Slovenia or
         have undergone working or processing beyond the insufficient operations
          listed in Article 7 prior to being exported; and
  (b)     it can be demonstrated to the satisfaction of the customs authorities that:
          i)       the reimported goods have been obtained by working or processing
                   the exported materials; and
          ii)      the total added value acquired outside the Community or* Slovenia
                   by applying the provisions of this Article does not exceed 10% of
                   the ex-works price of the end product for which originating status
                   is claimed.
4.    For the purposes of paragraph 3, the conditions for acquiring originating
      status set out in Title II shall not apply to working or processing done outside
      the Community or Slovenia. But where, in the list in Annex II, a rule setting
      a maximum value for all the non-originating materials incorporated is applied
      in determining the originating status of the end product, the total value of the
      non-originating materials incorporated in the territory of the party concerned,
      taken together with the total added value acquired outside the Community or
      Slovenia by applying the provisions of this Article, shall not exceed the stated
      percentage.
5.    For the purposes of applying the provisions of paragraphs 3 and 4, "total
      added value" shall be taken to mean all costs arising outside the Community
      or Slovenia, including the value of the materials incorporated there.
6.    The provisions of paragraphs 3 and 4 shall not apply to products which do
      not fulfil the conditions set out in the list in Annex II or which can be
      considered sufficiently worked or processed only if the general values fixed
      in Article 6(2) are applied.
                                                                                         //^
 ---pagebreak---        7.   The provisions of paragraphs 3 and 4 shall not apply to products' c o r ! lg
            under Chapters 50 to 63 of the Harmonised System.
       8.   Any working or processing of the kind covered by the provisions of this
            Article and done outside the Community or Slovenia shall be done under the
            outward processing arrangements, or similar arrangements."
       In Articles 13, 14, 15, 17, 21, 27, 30 and 32 the phrase "referred to in Article 4"
       shall be replaced by "referred to in Articles 3 and 4".
       In the last paragraph of Article 15(6) the date "31 December 1998" shall be
       replaced by "31 December 2000".
       In Article 26 the reference "C2/CP3" shall be replaced by "CN22/CN23".
       In Annex I, Note 5.2, "current conducting filaments" shall be added between
       "artificial man-made filaments" and "synthetic man-made staple fibres of
       polypropylene".
       In Annex I, Note 5.2 the fifth example ("A carpet with tufts . . . are met.") shall be
       deleted.
       In Annex II, between the rules for HS headings 2202 and 2208 the following rule
       shall be inserted:
   HS        Description of product       Working or processing of non-originating materials that
Heading                                                   confers originating status
   No                  (2)
                                                            (3)          or          (4)
   (1)
2207        Undenatured ethyl          Manufacture:
            alcohol of an alcoholic
            strength by volume of      - using materials not classified
            80% vol or higher; ethyl     in headings 2207 or 2208
            alcohol and other spirits,
            denatured, of any
            strength.
                                                                                                  //T
 ---pagebreak--- 10.    In Annex II, the rule for Chapter 57 shall be replaced by:
   Chapter     Carpets and other textile
       57      floor coverings:
               -Ofneedleloom felt
                                           Manufacture from (1):
                                           - natural fibres
                                           or
                                           - chemical materials or textile pulp
                                           However:
                                           - polypropylene filament of
                                             heading 5402,
                                           - polypropylene fibres of heading
                                              5503 or 5506,
                                           - polypropylene filament tow of
                                             heading 5501, of which the
                                             denomination in all cases of a
                                              single filament or fibre is less
                                              than 9 decitex, may be used
                                              provided their value does not
                                              exceed 40% of the ex-works
                                              price of the product
                                           - jute fabric may be used as
                                              backing
               -Of other felt              Manufacture from(l):
                                           - natural fibres not carded or
                                              combed or otherwise processed
                                              for spinning,
                                           or
                                           - chemical materials or textile pulp
                                           Manufacture from(l):
                - Other                    - coir or jute yam^ a \
                                           - synthetic or artificial filament yam,
                                           - natural fibres, or
                                           - man-made staple fibres not carded
                                              or combed or otherwise
                                              processed for spinning
                                            But jute fabric may be used as
                                            backing
<a) The use of jute yam is authorised from 1.7.2000.
                                                                                   //<;
 ---pagebreak--- 11.    In Annex II, the rule for HS heading 7006 shall be replaced by:
7006       Glass of headings 7003,
           7004 or 7005, bent,
           edgeworked, engraved,
           drilled, enamelled or
           otherwise worked, but
           not framed or fitted with
           other materials :
           - glass plate substrate      Manufacture from materials
             coated with dielectric     (substrates) of heading 7006
             thin film, semi-
             conductor grade, in
             accordance with
             SEMII standards1
           - other                      Manufacture from materials
                                        of heading 7001
12.    In Annex II, the rule for HS heading 7601 shall be replaced by:
7601       Unwrought aluminium          Manufacture in which:
                                        - all the materials used are
                                          classified within a heading
                                          other than that of the
                                          product; and
                                        - the value of all the
                                          materials used does not
                                          exceed 50 % of the ex-
                                          works price of the product
                                        or
                                        Manufacture by thermal or
                                        electrolytic treatment from
                                        unalloyed aluminium or
                                        waste and scrap of
                                        aluminium
13.    The following is added after Annex IV:
                                                "Annex V
                               List of products originating in Turkey
                   to which the provisions of Articles 3 and 4 do not apply,
                         listed in the order of HS Chapters and Headings
Chapter 1
    SEMII- Semiconductor Equipment and Materials Institute Incorporated.
                                                                             Uo
 ---pagebreak--- Chapter 2
Chapter 3
0401 to 0402
ex 0403 -     Buttermilk, curdled milk and cream, yoghurt, képhir and other fermented
              or acidified milk and cream, whether or not concentrated or containing
              added sugar or other sweetening matter or flavoured or containing added
              fruit or cocoa
0404 to 0410
0504
0511
Chapter 6
0701 to 0709
ex 0 7 1 0 -  Vegetables (uncooked or cooked by steaming or boiling in water), frozen
ex 0 7 1 1 -  Vegetables, except sweet corn of heading 0711 90 30, provisionally
              preserved (for example, by sulphur dioxide gas, in brine, in sulphur water
              or in other preservative solutions), but unsuitable in that state for
              immediate consumption
0712 to 0714
Chapter 8
ex Chapter 9 - Coffee, tea, and spices, excluding maté of heading 0903
Chapter 10
Chapter 11
 Chapter 12
 ex 1302-      Pectin
 1501tol514
 ex 1515-      Other fixed vegetable fats and oils (excluding jojoba oil and its fractions)
               and their fractions, whether or not refined, but not chemically modified
exl516-        Animal or vegetable fats and oils and their fractions, partly or wholly
               hydrogenated, inter-esterified, re-esterified or elaidinised, whether or not
               refined, but not further prepared, excluding hydrogenated castor oil known
               as 'opal-wax'
ex 1517 and
 ex 1518-      Margarines, imitation lard and other prepared edible fats
 exl522-       Residues resulting from the treatment of fatty substances or animal or
               vegetable waxes, excluding degras
 Chapter 16
 1701
 ex 1702 -     Other sugars, including chemically pure lactose, maltose, glucose and
               fructose, in solid form; sugar syrups not containing added flavouring or
               colouring matter; artificial honey, whether or not mixed with natural
               honey; caramel excluding that of headings 1702 11 00, 1702 30-51,
               1702 30 59, 1702 50 00 and 1702 90 10
                                                                                            /z/
 ---pagebreak--- 1703
1801 and 1802
ex 1902 -     Pasta, stuffed, containing more than 20% by weight of fish, crustaceans,
             molluscs or other aquatic invertebrates, sausages and the like or meat and
             meat offal of any kind, including fats of all kinds
ex 2 0 0 1 -  Cucumbers and gherkins, onions, mango chutney, fruit of the genus
              Capsicum other than sweet peppers or pimentos, mushrooms and olives,
             prepared or preserved by vinegar or acetic acid
2002 and 2003
ex 2004 -     Other vegetables prepared or preserved otherwise than by vinegar or acetic
              acid, frozen, other than products of heading 2006, excluding potatoes in
             the form of flour or meal and flakes of sweet corn
ex 2005 -     Other vegetables prepared or preserved otherwise than by vinegar or acetic
              acid, not frozen, other than products of heading 2006, excluding potato
              and sweet corn products
2006 and 2007
ex 2008 -     Fruits, nuts and other edible parts of plants, otherwise prepared or
              preserved, whether or not containing added sugar or other sweetening
              matter or spirit, not elsewhere specified or included, excluding peanut
              butter, palm hearts, maize, yams, sweet potatoes and similar edible parts of
             plants containing 5% or more by weight of starch, vine leaves, hop shoots
              and other similar edible parts of plants
2009
ex 2106 -     Flavoured and coloured sugars, syrups and molasses
2204
2206
ex 2207 -     Undenatured ethyl alcohol of an alcoholic strength by volume of 80% vol
              or higher obtained from agricultural produce listed here
ex 2208 -     Undenatured ethyl alcohol of an alcoholic strength by volume of less than
              80% vol obtained from agricultural produce listed here.
2209
Chapter 23
2401
4501
5301 and 5302
                                                                                           /Zl
 ---pagebreak---                                          Article 2
That Decision shall enter into force on 1 January 1999.
Done at
                                                        For the Cooperation Council
                                                        The President
                                                                                    /£.
 ---pagebreak---                             FINANCIAL STATEMENT
1. Budget heading:          Chapter 12, Article 120
2- Legal basis:             Article 113 of the Treaty
3. Titles of the agreements in question:
   Proposal for an amendment to the definition of the concept of "originating
   products" and the methods of administrative cooperation set out in Protocol 4 to
   the different Europe Agreements between the EC and the CEECs, the Baltic
   States and Slovenia and the Agreement on the European Economic Area, and in
   Protocol 3 to the free trade agreements between the EEC and the EFT A countries
4. Purpose:
   To allow Central and Eastern European countries to continue applying flat rates
   where drawback is prohibited or exemption from customs duties is granted.
   To extend the system to industrial products originating in Turkey and simplify or
   correct certain rules, particularly those on determining which country is to be
   considered the originating country.
5. Financial implications:
   As, for the purposes of industrial products, Turkey is already in a customs union
   with the Community and these products are therefore already zero rated when
   imported into the Community, and as the purpose of the amendments is
   essentially to facilitate trade or simplify administrative tasks, this proposal would
   not seem to have any major financial implications.
                                                                                         /£<?
 ---pagebreak---          DECISION N° .../ OF THE EC-SWITZERLAND JOINT COMMITTEE
                                                  of
          amending Protocol 3 to the Agreement between the European Economic
Community and the Swiss Confederation 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
Swiss Confederation1, hereinafter referred to as "the Agreement", signed in Brussels on
22 July 1972,
Having regard to Protocol 3 concerning the definition of the concept of originating
products and methods of administrative cooperation, hereinafter referred to as "Protocol
3", and in particular Article 38 thereof,
Whereas the definition of the term "originating products" needs to be amended to ensure
the proper operation of the extended system of cumulation which permits the use of
materials originating in the European Community, Poland, Hungary, the Czech Republic,
the Slovak Republic, Bulgaria, Romania, Latvia, Lithuania, Estonia, Slovenia, the
European Economic Area (hereinafter referred to as the EEA), Iceland, Norway and
Switzerland;
Whereas, in view of the particular arrangement on industrial products obtaining between
the Community and Turkey, it would also be appropriate to extend the cumulation
system to such products originating in Turkey;
Whereas to facilitate trade and simplify administrative tasks it would be desirable to
amend the wording of Articles 3 and 4;
Whereas, to take account of changes in processing techniques and shortages of certain
raw materials, some corrections must be made to the list of working and processing
requirements which non-originating materials have to fulfil to qualify for originating
status,
HAS DECIDED AS FOLLOWS:
                                               Article 1
Protocol 3 is hereby amended as follows:
 1.         Article l(i) shall be replaced by:
            "(i)    'added value' shall be taken to be the ex-works price minus the customs
                    value of each of the materials incorporated which originate in the other
                    countries referred to in Articles 3 and 4 or, where the customs value is not
 1 OJN°L300,
   r\ i xr°       31.12.1972, p. 189
                                                                                                 Mf
 ---pagebreak---                  known or cannot be ascertained, the first price verifiably paid for the
                 products in the Community or Switzerland."
2.       Articles 3 and 4 shall be replaced by:
                                                 Article 3
                             Cumulation in the European Community
1. Without prejudice to the provisions of Article 2 paragraph 1, products shall be
considered as originating in the Community if such products are obtained there,
incorporating materials originating in the Community, Bulgaria, Poland, Hungary, the
Czech Republic, the Slovak Republic, Romania, Lithuania, Latvia, Estonia, Slovenia,
Iceland, Norway, Switzerland (including Liechtenstein)1 or Turkey2 in accordance with
the provisions of the Protocol on rules of origin annexed to the Agreements between the
Community and each of these countries, provided that the working or processing carried
out in the Community goes beyond that referred to in Article 7 of this Protocol. It shall
not be necessary that such materials have undergone sufficient working or processing.
2. Where the working or processing carried out in the Community does not go beyond the
operations referred to in Article 7, the product obtained shall be considered as originating
in the Community only where the value added there is greater than the value of the
materials used originating in any one of the other countries referred to in paragraph 1. If
this is not so, the product obtained shall be considered as originating in the country which
accounts for the highest value of originating materials used in the manufacture in the
Community.
3. Products,' originating in one of the countries referred to in paragraph 1, which do not
undergo any working or processing in the Community, retain their origin if exported into
one of these countries.
4. The cumulation provided for in this Article may only be applied to materials and
products which have acquired originating status by an application of rules of origin
identical to those given in this Protocol.
The Community shall provide Switzerland, through the European Commission with
details of the Agreements and their corresponding rules of origin, which are applied with
the other countries referred to in paragraph 1. The European Commission shall publish in
the Official Journal of the European Communities (C Series) the date on which the
cumulation, provided for in this Article may be applied by those countries listed in
paragraph 1 which have fulfilled the necessary requirements.
                                                 Article 4
                                      Cumulation in Switzerland
1
     The Principality of Liechtenstein has a customs union with Switzerland, and is a Contracting Party to
    the Agreement on the European Economic Area.
2
    Cumulation as provided for in this Article does not apply to materials originating in Turkey which are
    mentioned in the list at Annex V to this Protocol.
                                                                                                           '°V
 ---pagebreak--- 1. Without prejudice to the provisions of Article 2 paragraph 2, products; shall be
considered as originating in Switzerland if such products are obtained ^here,
incorporating materials originating in the Community, Bulgaria, Poland, Hungary, the
Czech Republic, the Slovak Republic, Romania, Lithuania, Latvia, Estonia, Slovenia,
Iceland, Norway, Switzerland (including Liechtenstein)1 or Turkey2 in accordance with
the provisions of the Protocol on rules of origin annexed to the Agreements between
Switzerland and each of these countries, provided that the working or processing carried
out in Switzerland goes beyond that referred to in Article 7 of this Protocol. It shall not
be necessary that such materials have undergone sufficient working or processing.
2. Where the working or processing carried out in Switzerland does not go beyond the
operations referred to in Article 7, the product obtained shall be considered as originating
in Switzerland only where the value added there is greater than the value of the materials
used originating in any one of the other countries referred to in paragraph 1. If this is not
so, the product obtained shall be considered as originating in the country which accounts
for the highest value of originating materials used in the manufacture in Switzerland.
3. Products, originating in one of the countries referred to in paragraph 1, which do not
undergo any working or processing in Switzerland, retain their origin if exported into one
of these countries.
4. The cumulation provided for in this Article may only be applied to materials and
products which have acquired originating status by an application of rules of origin
identical to those given in this Protocol.
Switzerland shall provide the Community, through the European Commission with
details of the Agreements and their corresponding rules of origin, which are applied with
the other countries referred to in paragraph 1. The European Commission shall publish in
the Official Journal of the European Communities (C Series) the date on which the
cumulation, provided for in this Article may be applied by those countries listed in
paragraph 1 which have fulfilled the necessary requirements.
3.       In Articles 13, 14, 15, 17, 21, 27, 30 and 32 the phrase "referred to in Article 4"
         shall be replaced by "referred to in Articles 3 and 4".
4.       In Article 26 the reference "C2/CP3" shall be replaced by "CN22/CN23".
5.       In Annex I, Note 5.2, "current conducting filaments" shall be added between
         "artificial man-made filaments" and "synthetic man-made staple fibres of
         polypropylene".
 6.       In Annex I, Note 5.2 the fifth example ("A carpet with tufts . . . are met.") shall be
          deleted.
 1   The Principality of Liechtenstein has a customs union with Switzerland, and is a Contracting Party to
     the Agreement on the European Economic Area.
 2
     Cumulation as provided for in this Article does not apply to materials originating in Turkey which are
     mentioned in the list at Annex V to this Protocol.
                                                                                                            u.
 ---pagebreak--- 7.      In Annex II, between the rules for HS headings 2202 and 2208 the following rule
        shall be inserted:                                                            *'      •<• .
    HS        Description of product       Working or processing of non-originating materials that
  Heading                                                  confers originating status
    No                  (2)
                                                             (3)          or          (4)
    (1)
 2207        Undenatured ethyl          Manufacture:
             alcohol of an alcoholic
             strength by volume of      - using materials not classified
             80% vol or higher; ethyl     in headings 2207 or 2208
             alcohol and other spirits,
             denatured, of any
             strength.
                                                                                                    / &
 ---pagebreak--- 8.      In Annex II, the rule for Chapter 57 shall be replaced by:
    Chapter   Carpets and other textile
        57     floor coverings:
              - Of needleloom felt
                                           Manufacture from (1):
                                          - natural fibres
                                           or
                                           - chemical materials or textile pulp
                                           However:
                                           - polypropylene filament of
                                             heading 5402,
                                           - polypropylene fibres of heading
                                             5503 or 5506,
  i
                                           - polypropylene filament tow of
                                             heading 5501, of which the
                                              denomination in all cases of a
                                              single filament or fibre is less
                                              than 9 decitex, may be used
                                              provided their value does not
                                              exceed 40% of the ex-works
                                              price of the product
                                           - jute fabric may be used as
                                              backing
               -Of other felt              Manufacture from(l):
                                           - natural fibres not carded or
                                              combed or otherwise processed
                                              for spinning,
                                           or
                                           - chemical materials or textile pulp
                                           Manufacture from(l):
               - Other                     - coir or jute yarn*3),
                                           - synthetic or artificial filament yam,
                                           - natural fibres, or
                                           - man-made staple fibres not carded
                                              or combed or otherwise
                                              processed for spinning
                                           But jute fabric may be used as
                                           backing
<a) The use of jute yam is authorised from 1.7.2000.
                                                                                   II
 ---pagebreak--- 9.     In Annex II, the rule for HS heading 7006 shall be replaced by:
7006       Glass of headings 7003,
           7004 or 7005, bent,
           edgeworked, engraved,
           drilled, enamelled or
           otherwise worked, but
           not framed or fitted with
           other materials :
           - glass plate substrate     Manufacture from materials
             coated with dielectric    (substrates) of heading 7006
             thin film, semi-
             conductor grade, in
             accordance with
             SEMII standards1
           - other                     Manufacture from materials
                                       of heading 7001
10.    In Annex II, the rule for HS heading 7601 shall be replaced by:
7601       Unwrought aluminium         Manufacture in which:
                                       - all the materials used are
                                         classified within a heading
                                         other than that of the
                                         product; and
                                       - the value of all the
                                         materials used does not
                                         exceed 50 % of the ex-
                                         works price of the product
                                       or
                                       Manufacture by thermal or
                                       electrolytic treatment from
                                       unalloyed aluminium or
                                       waste and scrap of
                                       aluminium
11.    The following is added after Annex IV:
                                               "Annex V
                              List of products originating in Turkey
                   to which the provisions of Articles 3 and 4 do not apply,
                        listed in the order of HS Chapters and Headings
    SEMIl- Semiconductor Equipment and Materials Institute Incorporated.
                                                                             /3O
 ---pagebreak---                                                                                     x
Chapter 1                                                                               -.
Chapter 2
Chapter 3
0401 to 0402
ex 0403 -      Buttermilk, curdled milk and cream, Yoghurt, képhir and other fermented
               or acidified milk and cream, whether or not concentrated or containing
               added sugar or other sweetening matter or flavoured or containing added
               fruit or cocoa
0404 to 0410
0504
0511
Chapter 6
0701 to 0709
ex 0710 -      Vegetables (uncooked or cooked by steaming or boiling in water), frozen
ex 0 7 1 1 -   Vegetables, except sweet corn of heading 0711 90 30, provisionally
              preserved (for example, by sulphur dioxide gas, in brine, in sulphur water
              or in other preservative solutions), but unsuitable in that state for
              immediate consumption
0712 to 0714
Chapter 8
ex Chapter 9 - Coffee, tea, and spices, excluding maté of heading 0903
Chapter 10
Chapter 11
Chapter 12
ex 1302-       Pectin
1501tol514
ex 1515 -      Other fixed vegetable fats and oils (excluding jojoba oil and its fractions)
              and their fractions, whether or not refined, but not chemically modified
ex 1516-       Animal or vegetable fats and oils and their fractions, partly or wholly
              hydrogenated, inter-esterified, re-esterified or elaidinised, whether or not
              refined, but not further prepared, excluding hydrogenated castor oil known
              as 'opal-wax'
ex 1517 and
ex 1518 -      Margarines, imitation lard and other prepared edible fats
ex 1522-       Residues resulting from the treatment of fatty substances or animal or
              vegetable waxes, excluding degras
Chapter 16
1701
ex 1702-       Other sugars, including chemically pure lactose, maltose, glucose and
              fructose, in solid form; sugar syrups not containing added flavouring or
                                                                                            IS/
 ---pagebreak---               colouring matter; artificial honey, whether or not mixed with natural
              honey; caramel excluding that of headings 1702 11 00, Ï702 30 51,
              1702 30 59, 1702 50 00 and 1702 90 10
1703
1801 and 1802
ex 1902 -     Pasta, stuffed, containing more than 20% by weight of fish, crustaceans,
              molluscs or other aquatic invertebrates, sausages and the like or meat and
              meat offal of any kind, including fats of all kinds
ex 2001 -     Cucumbers and gherkins, onions, mango chutney, fruit of the genus
              Capsicum other than sweet peppers or pimentos, mushrooms and olives,
              prepared or preserved by vinegar or acetic acid
2002 and 2003
ex 2004 -     Other vegetables prepared or preserved otherwise than by vinegar or acetic
              acid, frozen, other than products of heading 2006, excluding potatoes in
              the form of flour or meal and flakes of sweet corn
ex 2005 -      Other vegetables prepared or preserved otherwise than by vinegar or acetic
              acid, not frozen, other than products of heading 2006, excluding potato
              and sweet corn products
2006 and 2007
ex 2 0 0 8 -  Fruits, nuts and other edible parts of plants, otherwise prepared or
              preserved, whether or not containing added sugar or other sweetening
              matter or spirit, not elsewhere specified or included, excluding peanut
              butter, palm hearts, maize, yams, sweet potatoes and similar edible parts of
              plants containing 5% or more by weight of starch, vine leaves, hop shoots
              and other similar edible parts of plants
2009
ex 2106 -     Flavoured and coloured sugars, syrups and molasses
2204
2206
ex 2207 -      Undenatured ethyl alcohol of an alcoholic strength by volume of 80% vol
              or higher obtained from agricultural produce listed here
ex 2208 -      Undenatured ethyl alcohol of an alcoholic strength by volume of less than
               80% vol obtained from agricultural produce listed here.
2209
Chapter 23
2401
4501
 5301 and 5302
                                                                                           131
 ---pagebreak---                                          Article 2
That Decision shall enter into force on 1 January 1999.
Done at
                                                        For the Joint Committee
                                                        The President
                                                                                133
 ---pagebreak---                             FINANCIAL STATEMENT
1. Budget heading:          Chapter 12, Article 120
2. Legal basis:             Article 113 of the Treaty
3. Titles of the agreements in question:
   Proposal for an amendment to the definition of the concept of "originating
   products" and the methods of administrative cooperation set out in Protocol 4 to
   the different Europe Agreements between the EC and the CEECs, the Baltic
   States and Slovenia and the Agreement on the European Economic Area, and in
   Protocol 3 to the free trade agreements between the EEC and the EFTA countries
4. Purpose:
   To allow Central and Eastern European countries to continue applying flat rates
   where drawback is prohibited or exemption from customs duties is granted.
   To extend the system to industrial products originating in Turkey and simplify or
   correct certain rules, particularly those on determining which country is to be
   considered the originating country.
5. Financial implications:
   As, for the purposes of industrial products, Turkey is already in a customs union
   with the Community and these products are therefore already zero rated when
   imported into the Community, and as the purpose of the amendments is
   essentially to facilitate trade or simplify administrative tasks, this proposal would
   not seem to have any major financial implications.
                                                                                         m
 ---pagebreak---             DECISION N° .../ OF THE EC-NORWAY JOINT COMMITTEE
                                                 of                             '"' *'
         amending Protocol 3 to the Agreement between the European Economic
Community and the Kingdom of Norway 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
Kingdom of Norway1, hereinafter referred to as "the Agreement", signed in Brussels on
14 May 1973,
Having regard to Protocol 3 concerning the definition of the concept of originating
products and methods of administrative cooperation, hereinafter referred to as "Protocol
3", and in particular Article 38 thereof,
Whereas the definition of the term "originating products" needs to be amended to ensure
the proper operation of the extended system of cumulation which permits the use of
materials originating in the European Community, Poland, Hungary, the Czech Republic,
the Slovak Republic, Bulgaria, Romania, Latvia, Lithuania, Estonia, Slovenia, the
European Economic Area (hereinafter referred to as the EEA), Iceland, Norway and
Switzerland;
Whereas, in view of the particular arrangement "on industrial products obtaining between
the Community and Turkey, it would also be appropriate to extend the cumulation
system to such products originating in Turkey;
Whereas to facilitate trade and simplify administrative tasks it would be desirable to
amend the wording of Articles 3 and 4;
Whereas, to take account of changes in processing techniques and shortages of certain
raw materials, some corrections must be made to the list of working and processing
requirements which non-originating materials have to fulfil to qualify for originating
status,
HAS DECIDED AS FOLLOWS:
                                              Article 1
Protocol 3 is hereby amended as follows:
 1.        Article l(i) shall be replaced by:
           "(i)     'added value' shall be taken to be the ex-works price minus the customs
                   value of each of the materials incorporated which originate in the other
                   countries referred to in Articles 3 and 4 or, where the customs value is not
 1
   O J N ° L 171, 27.6.1973, p. 2
                                                                                                W
 ---pagebreak---                  known or cannot be ascertained, the first price verifiably paid for the
                 products in the Community or Norway."
2.       Articles 3 and 4 shall be replaced by:
                                                 Article 3
                             Cumulation in the European Community
1. Without prejudice to the provisions of Article 2 paragraph 1, products shall be
considered as originating in the Community if such products are obtained there,
incorporating materials originating in the Community, Bulgaria, Poland, Hungary, the
Czech Republic, the Slovak Republic, Romania, Lithuania, Latvia, Estonia, Slovenia,
Iceland, Norway, Switzerland (including Liechtenstein)1 or Turkey2 in accordance with
the provisions of the Protocol on rules of origin annexed to the Agreements between the
Community and each of these countries, provided that the working or processing carried
out in the Community goes beyond that referred to in Article 7 of this Protocol. It shall
not be necessary that such materials have undergone sufficient working or processing.
2. Where the working or processing carried out in the Community does not go beyond the
operations referred to in Article 7, the product obtained shall be considered as originating
in the Community only where the value added there is greater than the value of the
materials used originating in any one of the other countries referred to in paragraph 1. If
this is not so, the product obtained shall be considered as originating in the country which
accounts for the highest value of originating materials used in the manufacture in the
Community.
3. Products, originating in one of the countries referred to in paragraph 1, which do not
undergo any working or processing in the Community, retain their origin if exported into
one of these countries.
4. The cumulation provided for in this Article may only be applied to materials and
products which have acquired originating status by an application of rules of origin
identical to those given in this Protocol.
The Community shall provide Norway, through the European Commission with details
of the Agreements and their corresponding rules of origin, which are applied with the
other countries referred to in paragraph 1. The European Commission shall publish in the
Official Journal of the European Communities (C Series) the date on which the
cumulation, provided for in this Article may be applied by those countries listed in
paragraph 1 which have fulfilled the necessary requirements.
                                                 Article 4
                                        Cumulation in Norway
1   The Principality of Liechtenstein has a customs union with Switzerland, and is a Contracting Party to
    the Agreement on the European Economic Area.
2
    Cumulation as provided for in this Article does not apply to materials originating in Turkey which are
    mentioned in the list at Annex V to this Protocol.
                                                                                                           IH
 ---pagebreak---  1. Without prejudice to the provisions of Article 2 paragraph 2, products'shall be
considered as originating in Norway if such products are obtained there, Incorporating
materials originating in the Community, Bulgaria, Poland, Hungary, the Czech Republic,
the Slovak Republic, Romania, Lithuania, Latvia, Estonia, Slovenia, Iceland, Norway,
Switzerland (including Liechtenstein)1 or Turkey2 in accordance with the provisions of
the Protocol on rules of origin annexed to the Agreements between Norway and each of
these countries, provided that the working or processing carried out in Norway goes
beyond that referred to in Article 7 of this Protocol. It shall not be necessary that such
materials have undergone sufficient working or processing.
2. Where the working or processing carried out in Norway does not go beyond the
operations referred to in Article 7, the product obtained shall be considered as originating
in Norway only where the value added there is greater than the value of the materials
used originating in any one of the other countries referred to in paragraph 1. If this is not
so, the product obtained shall be considered as originating in the country which accounts
for the highest value of originating materials used in the manufacture in Norway.
3. Products, originating in one of the countries referred to in paragraph 1, which do not
undergo any working or processing in Norway, retain their origin if exported into one of
these countries.
4. The cumulation provided for in this Article may only be applied to materials and
products which have acquired originating status by an application of rules of origin
identical to those given in this Protocol.
Norway shall provide the Community, through the European Commission with details of
the Agreements and their corresponding rules of origin, which are applied with the other
countries referred to in paragraph 1. The European Commission shall publish in the
Official Journal of the European Communities (C Series) the date on which the
cumulation, provided for in this Article may be applied by those countries listed in
paragraph 1 which have fulfilled the necessary requirements.
3.       In Articles 13, 14, 15, 17, 21, 27, 30 and 32 the phrase "referred to in Article 4"
         shall be replaced by "referred to in Articles 3 and 4".
4.       In Article 26 the reference "C2/CP3" shall be replaced by "CN22/CN23".
5.       In Annex I, Note 5.2, "current conducting filaments" shall be added between
         "artificial man-made filaments" and "synthetic man-made staple fibres of
         polypropylene".
6.       In Annex I, Note 5.2 the fifth example ("A carpet with tufts . . . are met.") shall be
         deleted.
1
     The Principality of Liechtenstein has a customs union with Switzerland, and is a Contracting Party to
    the Agreement on the European Economic Area.
2
    Cumulation as provided for in this Article does not apply to materials originating in Turkey which are
    mentioned in the list at Annex V to this Protocol.
                                                                                                           (31
 ---pagebreak--- 7.      In Annex II, between the rules for HS headings 2202 and 2208 the following rule
        shall be inserted:
    HS        Description of product       Working or processing of non-originating materials that
  Heading                                                  confers originating status
    No                  (2)
                                                             (3)          or          (4)
    (1)
 2207        Undenatured ethyl          Manufacture:
             alcohol of an alcoholic
             strength by volume of      - using materials not classified
             80% vol or higher; ethyl     in headings 2207 or 2208
             alcohol and other spirits,
             denatured, of any
             strength.
                                                                                                   132
 ---pagebreak--- 8.     In Annex II, the rule for Chapter 57 shall be replaced by:
   Chapter     Carpets and other textile
       57      floor coverings:
               -Ofneedleloomfelt
                                           Manufacture from (1):
                                           - natural fibres
                                           or
                                           - chemical materials or textile pulp
                                           However:
                                           - polypropylene filament of
                                             heading 5402,
                                           - polypropylene fibres of heading
                                              5503 or 5506,
                                           - polypropylene filament tow of
                                              heading 5501, of which the
                                              denomination in all cases of a
                                              single filament or fibre is less
                                             than 9 decitex, may be used
                                              provided their value does not
                                              exceed 40% of the ex-works
                                              price of the product
                                           - jute fabric may be used as
                                              backing
               -Of other felt              Manufacture from(l):
                                           - natural fibres not carded or
                                              combed or otherwise processed
                                              for spinning,
                                           or
                                           - chemical materials or textile pulp
                                           Manufacture from(l):
                - Other                    - coir or jute yam^ a \
                                           - synthetic or artificial filament yam,
                                           - natural fibres, or
                                           - man-made staple fibres not carded
                                              or combed or otherwise
                                              processed for spinning
                                           But jute fabric may be used as
                                           backing
(a) The use of jute yam is authorised from 1.7.2000.
                                                                                   I3*i
 ---pagebreak--- 9.     In Annex II, the rule for HS heading 7006 shall be replaced by:
7006       Glass of headings 7003,
           7004 or 7005, bent,
           edgeworked, engraved,
           drilled, enamelled or
           otherwise worked, but
           not framed or fitted with
           other materials :
           - glass plate substrate      Manufacture from materials
             coated with dielectric     (substrates) of heading 7006
             thin film, semi-
             conductor grade, in
             accordance with
             SEMll standards1
           - other                      Manufacture from materials
                                        of heading 7001
10.    In Annex II, the rule for HS heading 7601 shall be replaced by:
7601       Unwrought aluminium          Manufacture in which:
                                        - all the materials used are
                                          classified within a heading
                                          other than that of the
                                          product; and
                                        - the value of all the
                                          materials used does not
                                          exceed 50 % of the ex-
                                          works price of the product
                                        or
                                        Manufacture by thermal or
                                        electrolytic treatment from
                                        unalloyed aluminium or
                                        waste and scrap of
                                        aluminium
11.    The following is added after Annex IV:
                                                "Annex V
                               List of products originating in Turkey
                   to which the provisions of Articles 3 and 4 do not apply,
                         listed in the order of HS Chapters and Headings
    SEMII- Semiconductor Equipment and Materials Institute Incorporated.
                                                                             l^O
 ---pagebreak--- Chapter 1
Chapter 2
Chapter 3
0401 to 0402
ex 0403 -     Buttermilk, curdled milk and cream, yoghurt, képhir and other fermented
              or acidified milk and cream, whether or not concentrated or containing
              added sugar or other sweetening matter or flavoured or containing added
              fruit or cocoa
0404 to 0410
0504
0511
Chapter 6
0701 to 0709
ex 0710 -     Vegetables (uncooked or cooked by steaming or boiling in water), frozen
ex 0 7 1 1 -   Vegetables, except sweet corn of heading 0711 90 30, provisionally
              preserved (for example, by sulphur dioxide gas, in brine, in sulphur water
              or in other preservative solutions), but unsuitable in that state for
              immediate consumption
0712 to 0714
Chapter 8
ex Chapter 9 - Coffee, tea, and spices, excluding maté of heading 0903
Chapter 10
Chapter 11
Chapter 12
ex 1302-       Pectin
1501tol514
ex 1515 -      Other fixed vegetable fats and oils (excluding jojoba oil and its fractions)
               and their fractions, whether or not refined, but not chemically modified
ex 1516 -      Animal or vegetable fats and oils and their fractions, partly or wholly
               hydrogenated, inter-esterified, re-esterified or elaidinised, whether or not
               refined, but not further prepared, excluding hydrogenated castor oil known
               as 'opal-wax'
ex 1517 and
ex 1518 -      Margarines, imitation lard and other prepared edible fats
ex 1522 -      Residues resulting from the treatment of fatty substances or animal or
               vegetable waxes, excluding degras
Chapter 16
 1701
ex 1702 -      Other sugars, including chemically pure lactose, maltose, glucose and
               fructose, in solid form; sugar syrups not containing added flavouring or
                                                                                            Mr
 ---pagebreak---              colouring matter; artificial honey, whether or not mixed with natural
             honey; caramel excluding that of headings 1702 11 00, 1702 30 51,
              1702 30 59, 1702 50 00 and 1702 90 10
1703
1801 and 1802
ex 1902 -     Pasta, stuffed, containing more than 20% by weight of fish, crustaceans,
              molluscs or other aquatic invertebrates, sausages and the like or meat and
              meat offal of any kind, including fats of all kinds
ex 2001 -     Cucumbers and gherkins, onions, mango chutney, fruit of the genus
              Capsicum other than sweet peppers or pimentos, mushrooms and olives,
              prepared or preserved by vinegar or acetic acid
2002 and 2003
ex 2004 -     Other vegetables prepared or preserved otherwise than by vinegar or acetic
              acid, frozen, other than products of heading 2006, excluding potatoes in
              the form of flour or meal and flakes of sweet corn
ex 2005 -     Other vegetables prepared or preserved otherwise than by vinegar or acetic
              acid, not frozen, other than products of heading 2006, excluding potato
              and sweet corn products
2006 and 2007
ex 2008 -     Fruits, nuts and other edible parts of plants, otherwise prepared or
              preserved, whether or not containing added sugar or other sweetening
              matter or spirit, not elsewhere specified or included, excluding peanut
              butter, palm hearts, maize, yams, sweet potatoes and similar edible parts of
              plants containing 5% or more by weight of starch, vine leaves, hop shoots
              and other similar edible parts of plants
2009
ex 2106 -     Flavoured and coloured sugars, syrups and molasses
2204
2206
ex 2207 -      Undenatured ethyl alcohol of an alcoholic strength by volume of 80% vol
              or higher obtained from agricultural produce listed here
ex 2208 -      Undenatured ethyl alcohol of an alcoholic strength by volume of less than
              80% vol obtained from agricultural produce listed here.
2209
Chapter 23
2401
4501
5301 and 5302
                                                                                           Ml
 ---pagebreak---                                          Article 2
That Decision shall enter into force on 1 January 1999.
Done at
                                                        For the Joint Committee
                                                        The President
                                                                                H3
 ---pagebreak---                               FINANCIAL STATEMENT
1
   • Budget heading:           Chapter 12, Article 120
2
  -  Legal basis:             Article 113 of the Treaty
3.   Titles of the agreements in question:
     Proposal for an amendment to the definition of the concept of "originating
     products" and the methods of administrative cooperation set out in Protocol 4 to
     the different Europe Agreements between the EC and the CEECs, the Baltic
     States and Slovenia and the Agreement on the European Economic Area, and in
     Protocol 3 to the free trade agreements between the EEC and the EFTA countries
4.   Purpose:
     To allow Central and Eastern European countries to continue applying flat rates
     where drawback is prohibited or exemption from customs duties is granted.
     To extend the system to industrial products originating in Turkey and simplify or
     correct certain rules, particularly those on determining which country is to be
     considered the originating country.
5.   Financial implications:
     As, for the purposes of industrial products, Turkey is already in a customs union
     with the Community and these products are therefore already zero rated when
     imported into the Community, and as the purpose of the amendments is
     essentially to facilitate trade or simplify administrative tasks, this proposal would
     not seem to have any major financial implications.
                                                                                           M°j
 ---pagebreak---              DECISION N° .../ OF THE EC-ICELAND JOINT COMMITTEE
                                                  of
         amending Protocol 3 to the Agreement between the European Economic
 Community and the Republic of Iceland 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 Iceland1, hereinafter referred to as "the Agreement", signed in Brussels on 22
July 1972,
Having regard to Protocol 3 concerning the definition of the concept of originating
products and methods of administrative cooperation, hereinafter referred to as "Protocol
3", and in particular Article 38 thereof,
Whereas the definition of the term "originating products" needs to be amended to ensure
the proper operation of the extended system of cumulation which permits the use of
materials originating in the European Community, Poland, Hungary, the Czech Republic,
the Slovak Republic, Bulgaria, Romania, Latvia, Lithuania, Estonia, Slovenia, the
European Economic Area (hereinafter referred to as the EEA), Iceland, Norway and
Switzerland;
Whereas, in view of the particular arrangement on industrial products obtaining between
the Community and Turkey, it would also be appropriate to extend the cumulation
system to such products originating in Turkey;
Whereas to facilitate trade and simplify administrative tasks it would be desirable to
amend the wording of Articles 3 and 4;
Whereas, to take account of changes in processing techniques and shortages of certain
raw materials, some corrections must be made to the list of working and processing
requirements which non-originating materials have to fulfil to qualify for originating
status,
HAS DECIDED AS FOLLOWS:
                                               Article 1
Protocol 3 is hereby amended as follows:
 1.        Article 1 (i) shall be replaced by:
           "(i)    'added value' shall be taken to be the ex-works price minus the customs
                   value of each of the materials incorporated which originate in the other
                   countries referred to in Articles 3 and 4 or, where the customs value is not
 1
   O J N ° L 301, 31.12.1972, p.2.
                                                                                                Mf
 ---pagebreak---                  known or cannot be ascertained, the first price verifiably paid for the
                 products in the Community or Iceland."
2.       Articles 3 and 4 shall be replaced by:
                                                 Article 3
                             Cumulation in the European Community
1. Without prejudice to the provisions of Article 2 paragraph 1, products shall be
considered as originating in the Community if such products are obtained there,
incorporating materials originating in the Community, Bulgaria, Poland, Hungary, the
Czech Republic, the Slovak Republic, Romania, Lithuania, Latvia, Estonia, Slovenia,
Iceland, Norway, Switzerland (including Liechtenstein)1 or Turkey2 in accordance with                          KM
the provisions of the Protocol on rules of origin annexed to the Agreements between the
Community and each of these countries, provided that the working or processing carried
out in the Community goes beyond that referred to in Article 7 of this Protocol. It shall
not be necessary that such materials have undergone sufficient working or processing.
2. Where the working or processing carried out in the Community does not go beyond the
operations referred to in Article 7, the product obtained shall be considered as originating
in the Community only where the value added there is greater than the value of the
materials used originating in any one of the other countries referred to in paragraph 1. If
this is not so, the product obtained shall be considered as originating in the country which
accounts for the highest value of originating materials used in the manufacture in the
Community.
3. Products, originating in one of the countries referred to in paragraph 1, which do not
undergo any working or processing in the Community, retain their origin if exported into
one of these countries.
4. The cumulation provided for in this Article may only be applied to materials and
products which have acquired originating status by an application of rules of origin
identical to those given in this Protocol.
The Community shall provide Iceland, through the European Commission with details of
the Agreements and their corresponding rules of origin, which are applied with the other
countries referred to in paragraph 1. The European Commission shall publish in the
Official Journal of the European Communities (C Series) the date on which the
cumulation, provided for in this Article may be applied by those countries listed in
paragraph 1 which have fulfilled the necessary requirements.
                                                 Article 4
                                        Cumulation in Iceland
1
     The Principality of Liechtenstein has a customs union with Switzerland, and is a Contracting Party to
    the Agreement on the European Economic Area.
2
    Cumulation as provided for in this Article does not apply to materials originating in Turkey which are
    mentioned in the list at Annex V to this Protocol.
                                                                                                           N<o
 ---pagebreak--- 1. Without prejudice to the provisions of Article 2 paragraph 2, products,'shall be
considered as originating in Iceland if such products are obtained there, incorporating
materials originating in the Community, Bulgaria, Poland, Hungary, the Czech Republic,
the Slovak Republic, Romania, Lithuania, Latvia, Estonia, Slovenia, Iceland, Norway,
Switzerland (including Liechtenstein)1 or Turkey2 in accordance with the provisions of
the Protocol on rules of origin annexed to the Agreements between Iceland and each of
these countries, provided that the working or processing carried out in Iceland goes
beyond that referred to in Article 7 of this Protocol. It shall not be necessary that such
materials have undergone sufficient working or processing.
2. Where the working or processing carried out in Iceland does not go beyond the
operations referred to in Article 7, the product obtained shall be considered as originating
in Iceland only where the value added there is greater than the value of the materials used
originating in any one of the other countries referred to in paragraph 1. If this is not so,
the product obtained shall be considered as originating in the country which accounts for
the highest value of originating materials used in the manufacture in Iceland.
 3. Products, originating in one of the countries referred to in paragraph 1, which do not
undergo any working or processing in Iceland, retain their origin if exported into one of
these countries.
 4. The cumulation provided for in this Article may only be applied to materials and
products which have acquired originating status by an application of rules of origin
 identical to those given in this Protocol.
 Iceland shall provide the Community, through the European Commission with details of
 the Agreements and their corresponding rules of origin, which are applied with the other
 countries referred to in paragraph 1. The European Commission shall publish in the
 Official Journal of the European Communities (C Series) the date on which the
 cumulation, provided for in this Article may be applied by those countries listed in
 paragraph 1 which have fulfilled the necessary requirements.
 3.      In Articles 13, 14, 15, 17, 21, 27, 30 and 32 the phrase "referred to in Article 4"
         shall be replaced by "referred to in Articles 3 and 4".
 4.      In Article 26 the reference "C2/CP3" shall be replaced by "CN22/CN23".
 5.      In Annex I, Note 5.2, "current conducting filaments" shall be added between
         "artificial man-made filaments" and "synthetic man-made staple fibres of
         polypropylene".
 6.       In Annex I, Note 5.2 the fifth example ("A carpet with tufts . . . are met.") shall be
         deleted.
  1
      The Principality of Liechtenstein has a customs union with Switzerland, and is a Contracting Party to
     the Agreement on the European Economic Area.
  2
      Cumulation as provided for in this Article does not apply to materials originating in Turkey which are
     mentioned in the list at Annex V to this Protocol.
                                                                                                             Ml
 ---pagebreak--- 7.      In Annex II, between the rules for HS headings 2202 and 2208 the following rule
        shall be inserted:                                                                    • .
    HS        Description of product       Working or processing of non-originating materials that
  Heading                                                  confers originating status
    No                  (2)
                                                             (3)          or          (4)
    (1)
 2207        Undenatured ethyl          Manufacture:
             alcohol of an alcoholic
             strength by volume of      - using materials not classified
             80% vol or higher; ethyl     in headings 2207 or 2208
             alcohol and other spirits,
             denatured, of any
             strength.
                                                                                                   H?
 ---pagebreak--- 8.      In Annex II, the rule for Chapter 57 shall be replaced by:
    Chapter    Carpets and other textile
        57     floor coverings:
                - Of needleloom felt
                                            Manufacture from (1):
                                            - natural fibres
                                            or
                                            - chemical materials or textile pulp
                                            However:
                                            - polypropylene filament of
                                               heading 5402,
                                            - polypropylene fibres of heading
                                               5503 or 5506,
                                            - polypropylene filament tow of
                                               heading 5501, of which the
                                               denomination in all cases of a
                                               single filament or fibre is less
                                               than 9 decitex, may be used
                                               provided their value does not
                                               exceed 40% of the ex-works
                                               price of the product
                                            - jute fabric may be used as
                                               backing
                -Of other felt              Manufacture from(l):
                                            - natural fibres not carded or
                                               combed or otherwise processed
                                               for spinning,
                                            or
                                            - chemical materials or textile pulp
                                            Manufacture from(l):
                 - Other                    - coir or jute yam( a \
                                            - synthetic or artificial filament yam,
                                            - natural fibres, or
                                             - man-made staple fibres not carded
                                               or combed or otherwise
                                               processed for spinning
                                             But jute fabric may be used as
                                             backing
(a)  The use of jute yam is authorised from 1.7.2000.
                                                                                    M
 ---pagebreak--- 9.     In Annex II, the rule for HS heading 7006 shall be replaced by:
7006       Glass of headings 7003,
           7004 or 7005, bent,
           edgeworked, engraved,
           drilled, enamelled or
           otherwise worked, but
           not framed or fitted with
           other materials :
           - glass plate substrate     Manufacture from materials
             coated with dielectric    (substrates) of heading 7006
             thin film, semi-
             conductor grade, in
             accordance with
             SEMII standards1
           - other                     Manufacture from materials
                                       of heading 7001
10.    In Annex II, the rule for HS heading 7601 shall be replaced by:
7601       Unwrought aluminium         Manufacture in which:
                                       - all the materials used are
                                         classified within a heading
                                         other than that of the
                                         product; and
                                       - the value of all the
                                         materials used does not
                                         exceed 50 % of the ex-
                                         works price of the product
                                       or
                                       Manufacture by thermal or
                                       electrolytic treatment from
                                       unalloyed aluminium or
                                       waste and scrap of
                                       aluminium
11.    The following is added after Annex IV:
                                               "Annex V
                              List of products originating in Turkey
                   to which the provisions of Articles 3 and 4 do not apply,
                        listed in the order of HS Chapters and Headings
    SEMII- Semiconductor Equipment and Materials Institute Incorporated.
                                                                             > &
 ---pagebreak--- Chapter 1
Chapter 2
Chapter 3
0401 to 0402
ex 0403 -     Buttermilk, curdled milk and cream, yoghurt, képhir and other fermented
              or acidified milk and cream, whether or not concentrated or containing
              added sugar or other sweetening matter or flavoured or containing- added
              fruit or cocoa
0404 to 0410
0504
0511
Chapter 6
0701 to 0709
ex 0710 -     Vegetables (uncooked or cooked by steaming or boiling in water), frozen
ex 0 7 1 1 -  Vegetables, except sweet corn of heading 0711 90 30, provisionally
              preserved (for example, by sulphur dioxide gas, in brine, in sulphur water
              or in other preservative solutions), but unsuitable in that state for
              immediate consumption
0712 to 0714
Chapter 8
ex Chapter 9 - Coffee, tea, and spices, excluding maté of heading 0903
Chapter 10
Chapter 11
Chapter 12
ex 1302-       Pectin
1501tol514
ex 1515 -      Other fixed vegetable fats and oils (excluding jojoba oil and its fractions)
              and their fractions, whether or not refined, but not chemically modified
ex 1516 -      Animal or vegetable fats and oils and their fractions, partly or wholly
               hydrogenated, inter-esterified, re-esterified or elaidinised, whether or not
              refined, but not further prepared, excluding hydrogenated castor oil known
               as 'opal-wax'
ex 1517 and
ex 1518 -      Margarines, imitation lard and other prepared edible fats
ex 1522-       Residues resulting from the treatment of fatty substances or animal or
               vegetable waxes, excluding degras
Chapter 16
 1701
ex 1702 —      Other sugars, including chemically pure lactose, maltose, glucose and
               fructose, in solid form; sugar syrups not containing added flavouring or
                                                                                            in
 ---pagebreak---               colouring matter; artificial honey, whether or not mixed with natun
              honey; caramel excluding that of headings 1702 11 00, 1702 30 $\
              1702 30 59, 1702 50 00 and 1702 90 10
1703
1801 and 1802
ex 1902 -     Pasta, stuffed, containing more than 20% by weight of fish, crustaceans,
              molluscs or other aquatic invertebrates, sausages and the like or meat and
              meat offal of any kind, including fats of all kinds
ex 2 0 0 1 -  Cucumbers and gherkins, onions, mango chutney, fruit of the genus
              Capsicum other than sweet peppers or pimentos, mushrooms and olives,
              prepared or preserved by vinegar or acetic acid
2002 and 2003
ex 2004 -     Other vegetables prepared or preserved otherwise than by vinegar or acetic
              acid, frozen, other than products of heading 2006, excluding potatoes in
              the form of flour or meal and flakes of sweet corn
ex 2005 -     Other vegetables prepared or preserved otherwise than by vinegar or acetic
              acid, not frozen, other than products of heading 2006, excluding potato
              and sweet corn products
2006 and 2007
ex 2008 -      Fruits, nuts and other edible parts of plants, otherwise prepared or
              preserved, whether or not containing added sugar or other sweetening
              matter or spirit, not elsewhere specified or included, excluding peanut
              butter, palm hearts, maize, yams, sweet potatoes and similar edible parts of
              plants containing 5% or more by weight of starch, vine leaves, hop shoots
              and other similar edible parts of plants
2009
ex 2106 -     Flavoured and coloured sugars, syrups and molasses
2204
2206
ex 2207 -      Undenatured ethyl alcohol of an alcoholic strength by volume of 80% vol
              or higher obtained from agricultural produce listed here
ex 2208 -      Undenatured ethyl alcohol of an alcoholic strength by volume of less than
               80% vol obtained from agricultural produce listed here.
2209
Chapter 23
2401
4501
 5301 and 5302
                                                                                           /fl
 ---pagebreak---                                          Article 2
That Decision shall enter into force on 1 January 1999.
Done at
                                                        For the Joint Committee
                                                        The President
                                                                                lT3
 ---pagebreak---                             FINANCIAL STATEMENT
*• Budget heading:          Chapter 12, Article 120
2- Legal basis:             Article 113 of the Treaty
3. Titles of the agreements in question:
   Proposal for an amendment to the definition of the concept of "originating
   products" and the methods of administrative cooperation set out in Protocol 4 to
   the different Europe Agreements between the EC and the CEECs, the Baltic
   States and Slovenia and the Agreement on the European Economic Area, and in
   Protocol 3 to the free trade agreements between the EEC and the EFTA countries
4. Purpose:
   To allow Central and Eastern European countries to continue applying flat rates
   where drawback is prohibited or exemption from customs duties is granted.
   To extend the system to industrial products originating in Turkey and simplify or
   correct certain rules, particularly those on determining which country is to be
   considered the originating country.
5. Financial implications:
   As, for the purposes of industrial products, Turkey is already in a customs union
   with the Community and these products are therefore already zero rated when
   imported into the Community, and as the purpose of the amendments is
   essentially to facilitate trade or simplify administrative tasks, this proposal would
   not seem to have any major financial implications.
                                                                                         IPI
 ---pagebreak---                DECISION N° .../ OF THE EEA JOINT COMMITTEE
                                              No ..
                                                of
             amending Protocol 4 to the EEA Agreement on rules of origin
THE EEA JOINT COMMITTEE,
Having regard to the Agreement on the European Economic Area, as adjusted by the
Protocol adjusting that Agreement, hereinafter referred to as the Agreement, and in
particular Article 98 thereof,
Whereas the definition of the term "originating products" needs to be amended to ensure
the proper operation of the extended system of cumulation which permits the use of
materials originating in the European Community, Poland, Hungary, the Czech Republic,
the Slovak Republic, Bulgaria, Romania, Latvia, Lithuania, Estonia, Slovenia, the
European Economic Area (hereinafter referred to as the EEA), Iceland, Norway and
Switzerland;
Whereas, in view of the particular arrangement on industrial products obtaining between
the Community and Turkey, it would also be appropriate to extend the cumulation
system to such products originating in Turkey;
Whereas to facilitate trade and simplify administrative tasks it would be desirable to
amend the wording of Article 3;
Whereas, to take account of changes in processing techniques and shortages of certain
raw materials, some corrections must be made to the list of working and processing
requirements which non-originating materials have to fulfil to qualify for originating
status,
HAS DECIDED AS FOLLOWS:
                                             Article 1
Protocol 4 is hereby amended as follows:
 1.     Article 1 (i) shall be replaced by :
        "(i)    'added value' shall be taken to be the ex-works price minus the customs
                value of each of the materials incorporated which originate in the other
                countries referred to in Articles 3 and 4 or, where the customs value is not
                known or cannot be ascertained, the first price verifiably paid for the
                products in the EEA."
2.      Article 3 shall be replaced by:
                                                                                             AT
 ---pagebreak---                                                  Article 3
                               Cumulation with originating materials
1. Without prejudice to the provisions of Article 2 paragraph 1, products shall be
considered as originating in the EEA if such products are obtained there, incorporating
materials originating in the Community, Bulgaria, Poland, Hungary, the Czech Republic,
the Slovak Republic, Romania, Lithuania, Latvia, Estonia, Slovenia, Iceland, Norway,
Switzerland (including Liechtenstein)1 or Turkey2 in accordance with the provisions of
the Protocol on rules of origin annexed to the Agreements between the Contracting
Parties and these countries, provided that the working or processing carried out in the
EEA goes beyond that referred to in Article 6 of this Protocol. It shall not be necessary
that such materials have undergone sufficient working or processing.
2. Where the working or processing carried out in the EEA does not go beyond the
operations referred to in Article 6, the product obtained shall be considered as originating
in the EEA only where the value added there is greater than the value of the materials
used originating in any one of the other countries referred to in paragraph 1. If this is not
so, the product obtained shall be considered as originating in the country which accounts
for the highest value of originating materials used in the manufacture in the EEA.
3. Products, originating in one of the countries referred to in paragraph 1, which do not
undergo any working or processing in the EEA, retain their origin if exported into one of
these countries.
4. The cumulation provided for in this Article may only be applied to materials and
products which have acquired originating status by an application of rules of origin
identical to those given in this Protocol.
The Contracting Parties shall provide each other, through the European Commission with
details of the Agreements and their corresponding rules of origin, which are applied with
the other countries referred to in paragraph 1. The European Commission shall publish in
the Official Journal of the European Communities (C Series) the date on which the
cumulation, provided for in this Article may be applied by those countries listed in
paragraph 1 which have fulfilled the necessary requirements.
3.        In Article 25 the reference "C2/CP3" shall be replaced by "CN22/CN23".
4.        In Annex I, Note 5.2, "current conducting filaments" shall be added between
          "artificial man-made filaments" and "synthetic man-made staple fibres of
          polypropylene".
 1
      The Principality of Liechtenstein has a customs union with Switzerland, and is a Contracting Party to
     the Agreement on the European Economic Area.
 2
     Cumulation as provided for in this Article does not apply to materials originating in Turkey which are
     mentioned in the list at Annex V to this Protocol.
                                                                                                            ICI
 ---pagebreak--- 5.      In Annex I, Note 5.2 the fifth example ("A carpet with tufts . . . are met."} shall be
        deleted.
6.      In Annex II, between the rules for HS headings 2202 and 2208 the following rule
        shall be inserted:
    HS        Description of product       Working or processing of non-originating materials that
  Heading                                                  confers originating status
    No                  (2)
                                                             (3)          or          (4)
    (1)
 2207        Undenatured ethyl          Manufacture:
             alcohol of an alcoholic
             strength by volume of      - using materials not classified
             80% vol or higher; ethyl     in headings 2207 or 2208
             alcohol and other spirits,
             denatured, of any
             strength.
                                                                                                   m
 ---pagebreak--- 7.      In Annex II, the rule for Chapter 57 shall be replaced by:
   Chapter     Carpets and other textile
       57      floor coverings:
               - Of needleloom felt
                                           Manufacture from (1):
                                           - natural fibres
                                           or
                                           - chemical materials or textile pulp
                                           However:
                                           - polypropylene filament of
                                              heading 5402,
                                           - polypropylene fibres of heading
                                              5503 or 5506,
                                           - polypropylene filament tow of
                                              heading 5501, of which the
                                              denomination in all cases of a
                                              single filament or fibre is less
                                              than 9 decitex, may be used
                                              provided their value does not
                                              exceed 40% of the ex-works
                                              price of the product
                                           - jute fabric may be used as
                                              backing
               -Of other felt              Manufacture from(l):
                                           - natural fibres not carded or
                                              combed or otherwise processed
                                              for spinning,
                                           or
                                           - chemical materials or textile pulp
                                           Manufacture from(l):
               - Other                     - coir or jute yarn(a),
                                           - synthetic or artificial filament yam,
                                           - natural fibres, or
                                           - man-made staple fibres not carded
                                              or combed or otherwise
                                              processed for spinning
                                           But jute fabric may be used as
                                           backing
<a) The use of jute yam is authorised from 1.7.2000.
                                                                                   / f f
 ---pagebreak--- 8.       In Annex II, the rule for HS heading 7006 shall be replaced by
7'J J 6       Glass of headings 7003,
              7004 or 7005, bent,
              edgeworked, engraved,
              drilled, enamelled or
              otherwise worked, but
              not framed or fitted with
              other materials :
              - glass plate substrate      Manufacture from materials
                coated with dielectric     (substrates) of heading 7006
                thin film, semi-
                conductor grade, in
                accordance with
                SEMI1 standards1
              - other                      Manufacture from materials
                                           of heading 7001
         In Annex II. the rule for HS heading 7601 shall be replaced by
7601          L'nwrought aluminium         Manufacture in which:
                                           - all the materials used are
                                             classified within a heading
                                             other than lhat of the
                                             product; and
                                           - the value of all the
                                             materials used does not
                                             exceed 50 % of the ex-
                                             works price of the product
                                           or
                                           Manufacture by thermal or
                                           electrolytic treatment from
                                           unalloyed aluminium or
                                           waste and scrap of
                                           aluminium
10.      The following is added after Annex VI:
                                                  "Annex VII
                                  List of products originating in Turkey
                           to which the provisions of Article 3 do not apply.
                            listed in the order of HS Chapters and Headings
      SEMI I- Semiconductor Equipment and Materials Institute Incorporated.
                                                                              >*?
 ---pagebreak--- Chapter 1
Chapter 2
Chapter 3
0401 to 0402
ex 0403 -     Buttermilk, curdled milk and cream, yoghurt, képhir and other fermented
              or acidified milk and cream, whether or not concentrated or containing
              added sugar or other sweetening matter or flavoured or containing added
              fruit or cocoa
0404 to 0410
0504
0511
Chapter 6
0701 to 0709
ex 0710 -      Vegetables (uncooked or cooked by steaming or boiling in water), frozen
ex 0 7 1 1 -   Vegetables, except sweet com of heading 0711 90 30, provisionally
              preserved (for example, by sulphur dioxide gas, in brine, in sulphur water
              or in other preservative solutions), but unsuitable in that state for
              immediate consumption
0712 to 0714
Chapter 8
ex Chapter 9 - Coffee, tea, and spices, excluding maté of heading 0903
Chapter 10
Chapter 11
Chapter 12
ex 1302-       Pectin
 1501tol514
ex 1515 -      Other fixed vegetable fats and oils (excluding jojoba oil and its fractions)
               and their fractions, whether or not refined, but not chemically modified
ex 1516 -      Animal or vegetable fats and oils and their fractions, partly or wholly
               hydrogenated, inter-esterified, re-esterified or elaidinised, whether or not
               refined, but not further prepared, excluding hydrogenated castor oil known
               as 'opal-wax'
ex 1517 and
ex 1518 -      Margarines, imitation lard and other prepared edible fats
ex 1522-       Residues resulting from the treatment of fatty substances or animal or
               vegetable waxes, excluding degras
 Chapter 16
 1701
 ex 1702 -     Other sugars, including chemically pure lactose, maltose, glucose and
               fructose, in solid form; sugar syrups not containing added flavouring or
                                                                                            /QÔ
 ---pagebreak---               colouring matter; artificial honey, whether or not mixed with natural
              honey; caramel excluding that of headings 1702 11 00, 1702 30 51,
              1702 30 59, 1702 50 00 and 1702 90 10
1703
1801 and 1802
ex 1902 -     Pasta, stuffed, containing more than 20% by weight of fish, crustaceans,
              molluscs or other aquatic invertebrates, sausages and the like or meat and
              meat offal of any kind, including fats of all kinds
ex 2 0 0 1 -  Cucumbers and gherkins, onions, mango chutney, fruit of the genus
              Capsicum other than sweet peppers or pimentos, mushrooms and olives,
              prepared or preserved by vinegar or acetic acid
2002 and 2003
ex 2004 -     Other vegetables prepared or preserved otherwise than by vinegar or acetic
              acid, frozen, other than products of heading 2006, excluding potatoes in
             the form of flour or meal and flakes of sweet corn
ex 2005 -     Other vegetables prepared or preserved otherwise than by vinegar or acetic
              acid, not frozen, other than products of heading 2006, excluding potato
              and sweet corn products
2006 and 2007
ex 2008 -     Fruits, nuts and other edible parts of plants, otherwise prepared or
              preserved, whether or not containing added sugar or other sweetening
             matter or spirit, not elsewhere specified or included, excluding peanut
             butter, palm hearts, maize, yams, sweet potatoes and similar edible parts of
             plants containing 5% or more by weight of starch, vine leaves, hop shoots
              and other similar edible parts of plants
2009
ex 2106-      Flavoured and coloured sugars, syrups and molasses
2204
2206
ex 2207 -     Undenatured ethyl alcohol of an alcoholic strength by volume of 80% vol
              or higher obtained from agricultural produce listed here
ex 2208 -     Undenatured ethyl alcohol of an alcoholic strength by volume of less than
              80%) vol obtained from agricultural produce listed here.
2209
Chapter 23
2401
4501
5301 and 5302
                                                                                          %{
 ---pagebreak---                                          Article 2
That Decision shall enter into force on 1 January 1999.
Done at
                                                        For the EEAJoint Committee
                                                        The President
                                                                                   /(el
 ---pagebreak---                             FINANCIAL STATEMENT
1. Budget heading:           Chapter 12, Article 120
2. Legal basis:             Article 113 of the Treaty
3. Titles of the agreements in question:
   Proposal for an amendment to the definition of the concept of "originating
   products" and the methods of administrative cooperation set out in Protocol 4 to
   the different Europe Agreements between the EC and the CEECs, the Baltic
   States and Slovenia and the Agreement on the European Economic Area, and in
   Protocol 3 to the free trade agreements between the EEC and the EFTA countries
4. Purpose:
   To allow Central and Eastern European countries to continue applying flat rates
   where drawback is prohibited or exemption from customs duties is granted.
   To extend the system to industrial products originating in Turkey and simplify or
   correct certain rules, particularly those on determining which country is to be
   considered the originating country.
5. Financial implications:
   As, for the purposes of industrial products, Turkey is already in a customs union
   with the Community and these products are therefore already zero rated when
   imported into the Community, and as the purpose of the amendments is
   essentially to facilitate trade or simplify administrative tasks, this proposal would
   not seem to have any major financial implications.
                                                                                         IQ>3
 ---pagebreak---  ---pagebreak---  ---pagebreak---  ---pagebreak---                                                                   ISSN 0254-1475
                                                           COM(98) 389 final
                                              DOCUMENTS
EN                                                            02 10 11 06
                                    Catalogue number : CB-CO-98-404-EN-C
                                                             ISBN 92-78-37371-0
Office for Official Publications of the European Communities
L-2985 Luxembourg
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