CELEX: 51973PC2042
Language: en
Date: 1973-11-30
Title: Proposal for a REGULATION (EEC) OF THE COUNCIL opening, allocating and providing for the administration of a Community tariff quota for unmanufactured tobacco of the type "flue-cured Virginia" originating in developing countries (presented by the Commission to the Council)

ARCHIVES HISTORIQUES
DE LA COMMISSION
COLLECTION RELIEE DES
DOCUMENTS "COM"
COM (73) 2042
Vol. 1973/0366
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 ---pagebreak---     CUMM155IUN Oh IHfcC EUROPEAN COMMUNITIES
  ι .          ΐ ■ ' ν ·Γ >  ·'                   · ■                 ■   ,
                                                              COM(73)2042 final
                                                         Brussels , 30 November 1973
        '                         -          ■                                 I , "
                                      Proposal for a
                                REGULATION ( EEC ) OF THE COUNCIL
               opening , allocating and providing for the administration
               of a Community tariff quota for unmanufactured tobacco of
               the type " flue-cured Virginia " originating in developing
                                          countries                          ,
                       ( presented by the Commission to the Council )
                                           •                        .   V. -       ^■
COM ( 73 ) 20k2 final
 ---pagebreak---                                EXPLANATORY MEMORANDUM
1 . The Joint Declaration of Intent , appended to the Pinal Act of the Treaty of
     Accession , concerning the development of trading relations with the Common­
     wealth developing countries in Asia - Ceylon ( Sri Lanka ), India, Malaysia
     and Singapore ( l ) - spells out inter inter alia that "The European Economic
     Community is ready , from the date of accession , to examine with these
     countries such problems as may arise in the field of trade with a view to
     seeking appropriate solutions , taking into account the effect of the gene­
     ralized tariff preferences scheme ...."
     Such problems will result principally from the progressive elimination , be­
     ginning 1 January 1974 » of "the preference hitherto enjoyed on the United
     Kingdom market by the countries concerned for a very large range of products .
     Moreover , this loss of preference will be simultaneous with the maintenance
     of preferential advantages on the U.K. market in favour of the countries of
     EPTA and with the dismantling of the tariff protection against the original
     Member States of the Community . In addition , until such time as the nego­
     tiation provided for by Protocol 22 appended to the Act of Accession are included , the
     Commonwealth countries concerned by this Protocol will enjoy a tariff stand­
     still . ( 2 ).
2 . In the course of its examination of these problems with the interested
     countries , the Commission focussed its attention on the consequences of the
     first move towards alignment of the British tari-ff towards the C.C.T. , with a
     view to isolating those cases where action seemed absolutely necessary in
     order to avoid excessive repercussions on trade flows .
3 . Unmanufactured tcbpqco was found to constitute such a case : it is an impor­
     tant export item for Commonwealth Asia and particularly for India whose ex­
     ports of this commodity to the United Kingdom were valued some $ 25 million
     in 1971 , equivalent to roughly 10$ of total Indian exports to that country.
     Various types of tobacco are exported by countries of this region , but in the
     opinion of      the Commission the most urgent problem arises in regard to a par­
     ticular quality , that described as " flue-cured Virginia", which is exported
     mostly by India - third supplier of the U.K. after .the United States and
   . Canada - but also by Pakistan and Sri Lanka . It should further be noted that
     heavy dependance on export receipts was identified in the case of this type
     of tobacco .
     ( 1 ) O.J. No . L. 73 of 27.3.1972 , p. 195
      ( 2 ) O.J. No . L. 73 of 27.3.1972 . p. 177
                                                                               • /• • •
 ---pagebreak---                                                                                        2.
4 . When imported into the U.K. from Commonwealth countries , flue-cured Virginia
    tobacco is liable to a Bpecifio preferential duty of £ 0.008 per pound ( l ).
    In the case of Indian flue-cured tobacco , the incidence of this     duty is
    around 2.8$ (average for the years 1970 and 197l ) and it is of a comparable
    order for similar qualities from Pakistan and Sri Lanka . For the same pro­
    duct , and calculated on the basis of prices ruling on the British market in
    1970/71 * the incidence of C.C.T. duty rates ( 23$ ad valorem with a minimum
    charge of 28 U.A. and a maximum of 33 U.A. per 100 kg ) would be approximately
    21 . 4$. Thus , as a result of the first move of the U.K. tariff towards C.C^T .
    on 1 January 1974 » "the duty chargeable on imports of this commodity into
    Britain would rise to about 10 . 3% (viz . 2.8$ plus 40$ of the difference be­
    tween 2,8 and 21.4$).
    Considering the tobacco market is extremely price-sensitive and , moreover ,
    tobacco from Asian Commonwealth countries will have to face a serious aggra­
    vation of the already considerable competition at present encountered, these
    countries are in fear of being driven out of the British market . All things
    considered , such a fear would seem to be not unfounded.
5 . The Commission considers that, so defined, the problem is one which calls for
    an urgent solution , if only provisionally, if one is to meet the objectives
    of the Declaration of Intent . For evident reasons , such a solution must be
    looked for within the generalized preferences Bcheme , as explicitly envisaged
    in the J.D.I.
    Having regard , however , to the very special character of the product concerned
    - from the point of view both of market structures and regulations and of the
    Community 's external commitments (with particular emphasis on the various asso­
    ciation agreements ) - the Commission is led to put forward an ad hoc measure
    which deviates somewhat from the usual course of arrangements for generalized
    tariff preferences in the agricultural sector .
    Briefly, the measures would ccnsist in setting up a Community tariff quota of
    30 million units of account , without a maximum country amount for beneficiary
    countries (butoir ), but allocating to the United Kingdom an 80$ share of the
    total . The Commission does not propose , for this cfuota, to set aside a Com­
    munity reserve share . This is , in fact , an exceptional and transitional ar­
    rangement where the special allocation key selected cannot be fully effective
    ( l ) This rate represents the protective element of a mixed duty also comprising
          a fiscal element ( excise ).
                                                                              • /• • •
 ---pagebreak---  unless it applies from the very start to the whole quota ; besides , this system
 of allocation is "based on the assumption that all quota-shares are likely to
 he used up throughout the quota period at an approximately even rate in pro­
 portion to size . This attitude is to be interpreted in the light of the solu­
 tion adopted by the Council in the matter of introducing reserve shares for
 tariff quotas under generalized preferences . Moreover , when the possible
 need for extending this measure in future years is considered in due course ,
 account may be taken of new market trends and export flows affecting the pro-
 duct .
 Furthermore , any regulation in this area must take into account Protocol 10
 appended to the Athens Agreement . Indeed , paragraph 3 of this Protocol lays
 down in particular that the prior approval of the Council of Association is
 required before setting up , in favour of non-associated third countries , tariff
 quotas exceeding a yearly quantity, where tobacco is concerned , of 22.000 tonnes
 Yet , following the established usage in the case of generalized preferences ,
 the proposed quota is expressed in terms of units of account ; according, however
 to the data available on current price trends , the figure of 30 million U.A.
 attributed to the quota would correspond closely enough with the maximum
 quantity provided for under the Protocol . Moreover , the validity of the Protocol
 - saving possible renewal - is linked with the duration of the transitional
 period of the Accord , viz . a period of twelve years beginning 1 November 19&2 .
 Consequently , as a measure of legal precaution , for the period running to 31
 October 1974 ; it seems appropriate to limit imports chargeable against the
 quota to the same maximum quantity of 22.000 tonnes .
 The proposed measure pays due regard to the interests of producers both with­
 in the CoEnmnity and within the associated and " associable " countries in the
 Mediterranean and African areas . These - with the exception of certain East
 African countries who are Commonwealth members and whq under Protocol 22
 appended to the Act of Accession , enjoy tariff standstill terms on the British
                                                                     «
 market - do not supply tobacco of the type covered by this measure*. ' Simulta­
 neously, the proposal would largely alleviate the risk of any sudden and ir­
 reparable distorsion of trade which might materialize on the market of the
 United Kingdom , to the detriment of the Commonwealth countries concerned ; at
 the same time , in view of its limited scope , it could hardly do more , in the'
 best of cases , than help these countries to maintain their present position *
(") The procedure for informing the Associated States laid down in
    Article 15 of the Yaounde ConventiQn and Article Ik of the Arusha
    Convention has been activated .
 ---pagebreak---                                 Proposal for a
                    REGULATION (EEC ) OF THE COUNCIL
 opening , alloca-tin ,"; and providing for the administration of a Community tariff
rruota for unmanufactured tobacco of the type "flue–cured Virginia" ori .'-inatinp-
 in developing countries
THE COTTWCTL OP THE EUROPEAN COW^INTTTES ,
Wp.vin «• regard to the Treaty establ 1 shin^ the "European Ticonomic Oonmmriity , anfl
in particular Articles 43 and 113 thereof ;
Having regard to the proposal from the Commission ;
Having regard to the Opinion of the European Parliament :
VHerea.s , wi-thin the context of TWCTAD , the European Economic Community offered,
to /rant tariff preferences on certain processed a^ri cultural product ?? of
Chapters 1 to 2/j. of the Common Customs Tariff which originate in deve 1 onin ;f
countries ; whereas the preferential treatment proposed in that offer consists ,
i.n respect of certain foods which are subject to the trade arrangements laid
down in Re/rulation (EEC ) TST O 10^9/^9 , of a reduction in the fired component of .
the char. applicable to such foods by virtue of that Pe.p-ula.ti on , and , in re­
spect of "products which are subject to the single customs duty , of a reduction
in such duty ; whereas rreferenti •'•1 i reports of the products concerned could be
effected witbotrt rmartitativo restrictions ; whereas it appears appropriate ,
                                     however , in view of the sensitiveness of the
tobacco sector n^neral l .y , to lay down for raw c* unmanufactured tobacco of the
" flue-cured Virginia" typ® special conditions consisting in a reduction of the
customs duty applicable to that product within the limits of a. Community tariff
rruota.;
Whereas the offer made by the Community includes a clause stating that the Com­
munity drew up the offer on the assumption that all the main industrialized
countries which are members of the OECD would participate in prantinp prefe­
rences and would make similar efforts in this direction ; whereas , moreover , it
is evident from the conclusions worked out in UNCTAD that this offer , while
beinpr of a temporary nature , does not constitute a binding commitment andt in
particular , may be withdrawn wholly or in part at a later date ; whereas this
 ---pagebreak--- possibility may "be adopted inter alia with a view to remedying any unfavourable
situations which might arise in the associated countries following the imple­
mentation of the generalized preference scheme ;
Whereas , in the " Joint Declaration of Intent concerning the development of
trade relations with Ceylon ( Sri Lanka ), India , Malaysia , Pakistan and Singapore ,
the Community declared its readiness to seek solutions to the problems which
might arise in the field of trade for the countries referred to ; whereas for
several Asian Commonwealth countries and particularly for India the type of to­
bacco concerned is an important erport product , the trade in which might suffer
          as a result of enlargement ; whereas the above "Decl ara.ti on mentions the
generalized preferences scheme as a suitable solution for problems of this kind
and it seems appropriate , therefore , to include this type of unmanufactured to­
bacco tmder the scheme of generalized preferences at least for a transitory
peri od of one year ;
Whereas tariff preferences have been applied from the second half of 1971
whereas these preferences should continue to be applied throughout 1974 ?
                                                  t
Whereas under Protocol 23 to the Act concerning the conditions of accession and
the pdp-vfcation of treaties (2 ) the new Member States are obliged to apply , as
fr<">»p 1st January 1974 » the Comrmmity scheme of generalised preferences ; whereas ,
however , for certain products of Chapters 1 to 24 of the Common Customs Tariff ,
the scheme would entai l, the ami i cat i on in 1974 of customs duti es higher than
those to be applied by J-, hp. rerr Farther States to third countries in general wider
the provisions of the Act aforesaid ; whereas such a. situation would be consonant
neither with the spirit of Protocol 2 ^ nor with the very nature of the scheme of
generalized 'preferen^osj
Whereas , in order to maintain , in conformity with Protocol 23 , a. preferential
margin for these products also , it is necessary to provide that the new Member
States shall apply on these products reduced, rates of duty calculated , in rela­
tion to the rates normally applicable tinder the scheme , according to a method
derived from that laid down by Article 59 of the Act aforesaid ;
Whereas it is expedient , therefore , that the Community should set up in the year
1974 , for raw or unmanufactured, tobacco of the "flue-cured Virginia " type , ori­
ginating in the. countries and territories listed in appendix A , a Community ta­
riff Tuota limited to 30 million units of account , at a customs duty rate of
 ?.i ,   with a minimum charge of 14 units of account and a maximum charge of
 ( 1 ) O.J. No !.. 73 of 27 . 3 . 1972, p. 195
  (2 ) O.J. Ho L. 73 of 27.3.197^ P- 178                                          ./•••
 ---pagebreak---                                                                                               3.
 1.6 . c       of account per TOO kilorrnms net weight ; whereas , however , in pur­
 suance of Protocol 10 concerning alterations to tine Common Customs Tariff ,
 appended to the Agreement setting up an Association "between the "European ^co-
nonic Community and Greece , the prior assent of the Association Council is re-
miired during the transitional period , viz . until 31st October 1971 > f°T
 opening of a tariff quota in favour of third countries not associated with the
 Community , exceeding in the case of unmanufactured tobacco a quantity of 2 ?. 000
metric tonnes per year ; whereas it is necessary that the Community take appro­
priate steps to facilitate identification of these types of tobacco ;
Whereas the benefit of such tariff rmota               should "be reserved for products ori –
jTin^tirir in the countries and territories under consideration , the concent of
" orifinatinflf products " "bein^ determined in accordance with the -procedure laid
down in Article 14 of Council Peculation (ETCC ) No 802/68 ( l ) of ?7th.J"ne 19^ 8
on the common definition of the concept of the origin of foods ;
Hhereas it is necessary to ensure ermal and continuous access for all Community
importers to the        aforesaid       rmota      and. the uninterrupted application of the
rate laid down for       this rroota    to all imports of the products concerned into
al 1 Fember States until the         rrvota     is   used up ; whereas , having refard to the
■principles set out above , the Communi-jjy nature of the rmota " can be respected
by allocating the          quota shares among              : Member States ; whereas , moreover ,
to this end and in the context of the utilization system , the actual chpr°*5S
against the ^nots       may re 1 ate only to products '-rbich p..vn presented for customs
clearance under coi^r of dec ! arationn that they have "been • entered for home use
and which arc accomrari ed by a. certificate of origin ;
"terras , en the "basis of the available statistical data which cover only a re–
 ls+iw 1 '!1 brief -period and must be ''~ i Hited , in order to meet with the foreseeable
 demand in the course of the 'quota period , "the percentages for the shares in the
quota amount may be set out as follows :
                     Germany
                     France              3 , 8^
                     Italy               0.?%
                     Danemark            ?, 6%
                     Ireland             0 , 8%
                     United Kingdom      80%
 ( l ) O.J. ïïo L 1*6 of 28.6.1968 . p. 1
 ---pagebreak--- T,Fhereas , without affecting the Comnunity nature of the tariff «~uote          wrier con­
st derati on , it appears possible for the time "being, to provide for a utili­
zation scheme "based on a single n.1 location amon/r the Member States - whereas ,
moreover , the allocation set out hy this Reflation in no way pre .ittdi c»s the
possibility of adopting          the general     •\* ' r ' "
method of allocation of Community tariff rmotas comprising the setting up of
a r^perve share ; whereas , at this transitional stage , it appears feasible for
such allocation        to     be made according to the percentages set out in the tahle
above ;
Whereas the percentages of the cruota shares of the Member States in . the Com­
munity tariff ruota ,         in view of the duration and amounts thereof , dc       not
appear in this instance to compromise the errual access for Community importers
to      the said         L rruotsj  whereas for this same reason it would appear ex­
pedient to allow each Member State to choose the system for administering its
uuota share ;
Whereas , moreover , in order to take account of the" provisions of the Agreement
with Greece 'j it is necessary that the Community should be in a position to re- _
  sume . levying of the normal duties as soon as a total quantity of 22.000 tonnes
  of the above-specified tobacco has been charged against the said quota.
Whereas , since the Kingdom of "Belgium , the Kingdom of the Netherlands and the
Grand-Duchy of Luyemburr: ereunit^d in and represented "by the Benelux Economic
Union for the allocation of the tariff miot ?            concerned , any measure concerning
the administration of the ruota share , allocated to that Economic Union may he
carried out by any one of its Members ;
                     j . . HAS ADOPTED. THIS REGULATION :
                                     Arti rip 1
1 . ""V oid 1st .January to >1 pt "December 1 97?, a Community tariff fnnt " o** ?0 mil­
lion units of account shall he opened hy the European Economic CoRtmm'' ty fty
the imports of raw or unmanufactured tobacco of the "fl. no–cured Virginia" type
included under item ?4.01 B of the Common Customs Tariff . Within this tariff
ruota the customs duty shall he suspended to 11 .             with a mini mum char,"© of
1 ^ twits , of aecovnt and a maximum charge of 16 .^ units of account per 100 k,«r
net weight .
 ---pagebreak---                                                                                      5.
 Admission under this tariff quota shall "be subject to the production of a cer­
tificate of authenticity made out in such a manner as shall "be determined "by
the competent authorities of the Community.
 Tf , however , during the period running from 1st January to 31st October 1 °7/1 ,
 the total rruantity expressed in metric tonnes charged against the ConrnniHity
 tariff ruota mentioned in the first subparagraph should reach 2 ?. 000 tonnes ,
 the aforesaid suspension of duty shall cease .
"Dcr.marV , Ireland and the United Kingdom shall approximate the duties of thei ^
national tariff schedules towards the above-mentioned preferential rate , in
accordance with the timing laid down in Article 59 of the Ant of Accession .
 P. Admission under this tariff ^nota is limited to products originating in
 noimtri es and territories enumerated in Appendix A. Imports already entitled
to exemption from customs duties under other preferential tariff arrangements
 conceded "by the Community may not , however , he charged against this
tiiota . For the purposes of this Regulation , the concept of ori.gi.nat in." products
 shall he determined in accordance with the procedure laid down in Article 14
 of Regulation (WO ) TTo . 80? /68 .
The Community tariff ruota mentioned in Article 1 shall he allocated i.n shares
which , for each Member State , shall he of the amount indieated "below .
                    ,nnv          9 . loo . 000 nni ts of account
              Pen e lux           1.680.000 units of account
                                  i.l.^o.ooo unit s of account
              Italy                      60.000 units of account
              Penmark                  ''80.000 units of account
              Ireland                  P/J0.000 units of account
              United TTino-dom  7 /1 . OOO.OOO units of account
                                  Article 3
1 . The Member States shall ensure free access to the rruota shares . which have been
 Allocated to them for importers of the product concerned who are established on
their respective territories .
 2 . The extent to which the rruota shares of Member States have been actually
 ---pagebreak--- used up shall be recorded on the "basis of imports of the specified product
which have "been presented, for customs clearance under cover' of declarations
that they have been made available for home consumption , on the "basis of the customs
value of the product concerned , and which are accompanied "by a certificate of
 origin in accordance with the rules referred to in Article 1 (?). For . the pur­
poses of applying the provisions of Article 1 ( l ) subparagraph 3 , the ertent
to which the nuota-shares have been used up shall also be recorded in tonnage .
 3 . An item of foods may mialify for a tariff miota only if the certificate of
origin referred to in paragraph 2 iss/bmitted before the date on which the
levying of duties is reintroduced .
                                Arti ele A
Fember States shall inform the Commission at regular intervals of imports, of
the specified product actually charged against their <ruota shares . This infor­
mation shall show both the value expressed in units of account and the quantity
expressed in metric tonnes .
Once a quantity, of 22.000 metric tonnes is reached               at Community
 level for the specified tobacco , originating in the countries and territories
 listed in Appendix A, and has been charged against the Community tariff quota in the
manner set out in Article 1 ( l ) subparagraph 3 and in Article 2 ( 2 ), thf> Com­
mission shall without delay notify t^e Fember States of the date on vrhich , as
a result of this factor , the charge of normal tariff duties is to be reintro­
duced . Such notification shall be published in the Official Journal of the
TCuronean Communities .
                                Ari:"' r*' p r»
Member States and the Commission shall cooperate closely to see that the revi­
 sions of the above Articles are observed .
                                Ar+irlo 6
This Regulation shall enter into force on 1st January 1974 .
             Done at Brussels ,
                                                For the Council
                                                The President
 ---pagebreak---                                       ΑΡΡΞΕΠΙΧ Α.
                List of developing countries enjoying generalized
                generalized tariff preferences
                              TNDEPEN'TMTT COUNTRIES
Afghanistan                     Honduras                          Qatar
Algeria                         India                             Rwanda
Argentine.                      Indonesia                         Saudi Arabia
Bahamas
Bahrain                         Iran                              Sénégal
Bangladesh                      Iraq                              Sierra Leone
Bar Dados                       Ivory Coast                       Singapore
Bhutan                          Jamaica                           Somalia
Bolivia                         Jordan
Botswana                        Kenya                              Southern Yemen
Brazil                          Khmer Republic                     Sri Lanka
Burma                           Korea ( South)                     Sudan
Burundi                         Kuwait                             Swaziland
Cameroon                        Laos                               Syria
Central African Republic        Le*banon                           Tanzania
Chad                            Lesotho                            Thailand
Chile                           Liberia                            Togo
Colombia                        Libya                              Tonga
Congo , People 's Republic of   Malagasy Republic                  Trinidad and Tobago
Costa Rica.                     Malawi                              Tunisia
Cuba                            Malaysia                           Uga.nda
Cyprus                          Maldive Islands                    United Arab Emirates:
Dahomey                                                           •.     Abu. Ehabi
Dominican Republic       /      Mauritania                          . ' Dubai
Ecuador                /         Mauritius                               Ras-al-Xihaimah
                     /
Egypt , Arab Republic of         Mexico                           ...... Sharjah
El Salvador       /              Morocco                                 A jraan
Equatorial Guinea                Nauru                                   Umm-al–Qaiwain
Ethiopia     /                  Nepal                                    Pa jairah
Fiji                            Nicaragua                           Upper Volta
Gabon                           Niger                               Uruguay
Gambia                           Nigeria                             Venezuela
                                 Oman                                Vietnam ( South)
Ghana                            Pakistan                           Western Samoa
 Guatemala                       Panama                              Yemen
 Guinea                          Paraguay                            Yugoslavia
 Guyana                          Peru                                Zaire
 Haiti                           Phillippines                        Zambia
 ---pagebreak---                               COUNTRIES AND TERRITORIES
                dependent or administered , or for whose external relations
                Member States of the Community or third countries are wholly
                 or partly responsible
Afars and Issas ( Territory of the)
Angola (including Cabinda)
Bernruda
British Honduras
British Indian Ocean Territories (Chagos Archipelago^ Des Roches)
British Pacific Ocean (Territories under the jurisdiction of"the Western Pacific High
   Commission) ( l )
Brunei
Ca.pe Verde Islands
Cayman Islands and Dependencies
Comoro Archpelago
Cook Islands
Falkland Islands (Malvinas ) and Dependencies
French Polynesia
French Southern and Antarctic Territories
Gibraltar
Hong Kong
Macao
Mozambique
Netherlands Antilles
New Caledonia and Dependencies
Pacific Islands administered by the United States of America or under United States
   trusteeship ( 2 )
Papua-New Guinea
Portuguese Guinea
Portuguese Timor
St Helena ( including Ascension , Gough Island , and Tristan da Cunha.)
Saint Pierre and Miquelon
Sao Tome and Principe
Seychelles ( including Amirantes)
Sikkim
Spanish territories in Africa
Surinam
Territories for which New Zealand is responsible (Niue Island , Tokelau Islands)
Turks and Caicos Islands
Virgin Islands" of the United States (St Croix , St Thomas , St John etc .)
wall is and Futuna Islands
West Indies (3 )
Note :   The above lists may be amended subsequently to take account of changes in the
         international status of countries or territories
  Gilbert and Ellice Islands , British Solomon Islands , New Hebrides Condominium , Canton ,
 Enderbury and Pi"fccairn Islands .
2
  The Pacific Islands administered by the United States of American include : Guam ,
  American Samoa ( including Swain 's Island), Midway Islands , Johnston and Sand Islands ,
 Wake Island and the Trust Territory of the Pacific Islands (the Carolines, Marianas and
  Marshall Islands ) .
^Leeward Islands (Antigua, Monstserrat , St Kitts–Nevis–Anguilla, British Virgin Islands
 Windward Islands ( Dominica , Grenada , St. Lucia , St. Vincent ).