CELEX: 51988PC0502
Language: en
Date: 1988-09-15
Title: Proposal for a COUNCIL REGULATION (EEC) temporarily suspending import duties on certain weapons and military equipment (presented by the Commission)

ARCHIVES HISTORIQUES
DE LA COMMISSION
COLLECTION RELIEE DES
DOCUMENTS "COM"
COM (88) 502
Vol. 1988/0181
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Conformément au règlement (CEE, Euratom) n° 354/83 du Conseil du 1er février 1983 concernant
l'ouverture au public des archives historiques de la Communauté économique européenne et de
la Communauté européenne de l'énergie atomique (JO L 43 du 15.2.1983, p. 1) modifié en dernier
lieu par le règlement (UE) 2015/496 du Conseil du 17 mars 2015 (JO L79 du 25. 3.2015, p. 1), ce
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In accordance with Council Regulation (EEC, Euratom) No 354/83 of 1 February 1983 concerning
the opening to the public of the historical archives of the European Economic Community and the
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Articles (26.3) and 59(2) of the Commission Decision (EU, Euratom) 2015/444 of 13 March 2015
on the security rules for protecting EU classified information.
In Übereinstimmung mit der Verordnung (EWG, Euratom) Nr. 354/83 des Rates vom 1. Februar
1983 über die Freigabe der historischen Archive der Europäischen Wirtschaftsgemeinschaft und
der Europäischen Atomgemeinschaft (ABI. L 43 vom 15.2.1983, S. 1), zuletzt geändert durch die
Verordnung (EU) Nr. 2015/496 vom 17. März 2015 (ABI. L 79 vom 25.3.2015, S. 1), ist dieser Akt
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2015/444 vom      13.   März 2015     über die   Sicherheitsvorschriften für den Schutz von  EU-
Verschlusssachen als herabgestuft angesehen.
 ---pagebreak--- COMMISSION OF THE EUROPEAN COMMUNITIES
                                                  COM ( 88 ) 502 final
                                                  Brussels , 15 September 1988
   Le présent document annule
   et remplace le document
   SEC ( 88 ) 697 final du 28.6.88
                                 Proposal for a
                              COUNCIL REGULATION ( EEC )
                   temporarily suspending import duties on
                   certain weapons and military equipment
                        ( presented by the Commission )
 ---pagebreak---                         EXPLANATORY MEMORANDUM
                                   Proposal for a
                             COUNCIL REGULATION ( EEC )
                              TEMPORARIL.T SUSPEW6IN6
             liiEORT DUTIES OH CERTAIN MILITARY EQUIPMENT
INTRODUCTION .
T.  The annexed proposal provides a coherent Community framework
for the suspension of the duties of the common customs tariff on
imports of specified items of military equipment for the use of
the armed forces of the Member States . Its adoption will bring to
an end divergent national practices which prejudice the
Community 's industrial policy , create budgetary inequalities and
whose legality is contested by the Commission .
BACKGROUND .
2.   Since 1968 , the Community has had a common customs tariff .
This tariff is designed to ensure a fair basis for competition
for Community producers and is intended to be applied to all
imports of goods from third countries unless specific Community
measures provide otherwise . In practice , the normal third country
tariff has been waived or reduced by a considerable number of
Community     measures        providing      for    tariff preferences or
suspensions of duty in cases where this is justified by
commercial or industrial policy reasons . These measures have been
adopted under Articles 28 , 43 or 113 of the Treaty .
3.    Article 223 ( 1)(b ) of the Treaty enables any Member State to
” . take such measures as it considers necessary for the
protection of the essential interests of it security which are
connected with the production of or trade in arms , munitions and
war material ; . ". Paragraph ( 2 ) of the same Article required
the Council to draw up a list of products to which the provisions
of paragraph 1 ( b ) apply .      This list was drawn up in 1958 and has
not been modified since , although an amendment procedure is laid
down in Article 223 .
 ---pagebreak---                                                                  2
4.     Certain . Member States have interpreted Article 223 as
enabling them to waive the duties of the common customs tariff on
military equipment covered by the 1958 list . The extent of duty
waivers varies considerably between Member States and some do not
allow any such relief at all . The Commission has contested the
interpretation that Article 223 allows Member States to give
relief from import duty .     It considers that the application of
customs duties to imported military equipment is not inconsistent
with the interests of national security .          Furthermore , it
considers that nothing in Article 223 provides a legal basis for
the waiver of customs duties and that if a duty waiver is to be
provided it must be based on the appropriate Treaty provision -
Article 28 .
5.  In addition ,   the Commission cannot ignore the fact that the
amounts of duty foregone are considerable .         Although it is
notoriously difficult to make valid calculations , the losses of
duty have been estimated at around 200 Mio ECU per annum .
Furthermore , the divergent application of duty waivers produces
inequities in so far as the Community budget is concerned . The
duties foregone by certain Member States have to be made up by
additional VAT-based contributions from others .
6.    In view of the infringements of the Treaty inherent in the
situation described above , the Commission has initiated actions
against the Member States in question under Article 169 of the
Treaty . These procedures have been suspended pending the adoption
of this Regulation . The Commission reserves the right to review
the situation in the light of discussion in the Council of this
proposal . Furthermore , the Commission reserves the position it
will adopt on the issue of own resources .
 ---pagebreak---                                                                     3
POLICY CONSIDERATIONS .
7.   In   considering   whether   a   Community    scheme  of   tariff
suspensions for military equipment should be introduced , due
regard needs to be paid to industrial and commercial policy
considerations as well as those of defence . The tariff treatment
accorded by the Community’s trading partners - particularly the
United States - to our exports of military equipment is also an
important factor to weigh in consideration . In the Single
European Act , the High Contracting Parties have expressed their
determination to maintain the technological and industrial
conditions necessary for their security and to work to that end
both at national level and , where appropriate , within the
framework of the competent institutions and bodies .
8 . It is clearly in the interest of the defence of the Community
as a whole that Member States should be enabled to procure the
most technologically advanced and suitable weapons and military
equipment for the use of their armed forces . It is also clear
that the   imposition of customs duties on imported weapons and
equipment   may , to a certain extent , reduce the funds which are
available   for procurement of weapons not only from outside but
also from  within the Community .
9 . On the other hand , the customs tariff is designed to provide
Community manufacturers with a fair basis for competition amongst
themselves and with foreign suppliers and is part of a whole
range of measures aimed at promoting an efficient and
internationally     competitive    industrial   sector    within   the
Community . The markets for the Community defence industries have
tended to be restricted by national standards and procurement
policies . Although this situation should change after 1992 with
the introduction of the Single Market , the defence industries
have not yet achieved the economies of scale essential to enable
them to compete on even terms with major defence suppliers , such
as those of the United States .       Furthermore , much of the more
advanced equipment is produced by the high technology electronics
and communications sectors which are striving hard to compete
with their United States and Far Eastern competitors .          It is ,
 ---pagebreak---                                                                  4
consequently ,  important that any measures taken to relieve
imports of military equipment from import duties should not
prejudice the development of strong defence industries within the
Community .
10 .    Account also   needs to be   taken  of  the fact  that since
Article 223 was first adopted there has been a fundamental change
in the tariff situation .    In 1958 import duties were payable on
virtually all imported military equipment . Now such equipment can
be procured free of customs duties not only in any Member State
but also in any of the EFTA countries . In addition , the level of
import duties which are payable has been substantially reduced in
successive GATT Rounds . Furthermore , the following items of
military equipment are already free of duty in the Common Customs
Tariff :
     8906 00 10 :   warships
     9301 00 00 :   military weapons , other than revolvers ,
                    pistols and arms of heading No 9307
     9305 90 10 :   parts and accessories for military
                    weapons falling within heading
                    No  9301
In addition , customs duties are already suspended in respect of
goods intended for incorporation in warships for the purposes of
their construction , repair , maintenance or conversion , and in
respect of goods intended for fitting to or equipping such ships .
11 .   The existence of divergent practices in Member States also
has implications for the creation of the Single Market . Goods
which are imported free of duty into one Member State but are not
entitled to duty free importation           into another cannot be
regarded as being in free circulation . Consequently , in order to
meet the requirements of the Single Market , harmonized Community
rules will have to be adopted by the end of 1992 at the very
latest .
 ---pagebreak---                                                                5
TARIFF  SUSPENSIONS .
12 . The Commission has come to the conclusion that there is a
case , at least at present , for providing some measure of relief
from import duties on weapons and military equipment required by
the armed forces of the Member States . However , in the light of
the foregoing policy considerations , the Commission considers
that the list of products should be strictly limited and that it
should cover only major items of military procurement .
13 . In providing for tariff suspensions for military equipment it
is not possible to follow normal practice . Normally , proposals
for duty suspensions on industrial products are expressed in very
precise and detailed terms to limit their scope and to enable
Community producers to contest them on the grounds that they can
produce such goods .      Given the generally secret nature of
specifications of military equipment ,      the use of detailed
descriptions of the products and the practice of committee
discussion of the capacity of Community firms to produce them are
excluded .    As a consequence ,    in this case ,    the list of
suspensions has to be couched in more general terms .
14 .  Taking account of the policy considerations and the
principles set out above , the Commission has prepared a proposed
list of tariff suspensions . In addition to weapons and equipment
themselves , it is proposed that the suspensions should cover
parts and components for manufacture , and spare parts for the
refurbishment , repair and maintenance of such weapons and
equipment . It is also proposed that the suspensions should be
extended to goods necessary for the manufacture and testing of
weapons and equipment on the suspensions list .
15 .    Since surplus military equipment may be sold for non ¬
military use or as scrap , provision has been made for the payment
of duty in the event of any diversion to civil use .
 ---pagebreak---                                                                                    6
PROCEDURAL REQUIREMENTS
16 . As indicated in para . 13 , the list of military equipment
eligible for duty suspension has necessarily been defined in
general     terms .    Consequently ,       a  customs    control   system will     be
required to ensure that           the conditions for duty relief are met .
The     proposed      arrangements         are     based     upon   a    system     of
certification by the competent authority of the importing Member
State .    They have been kept as simple as possible and follow well
tried and tested procedures for the customs control of imports by
defence departments .
17 .   The proposal      includes a       requirement      that  the Member States
shall provide annual estimates of the total amount of duty waived
under    these   arrangements .           The    security    implications    of  such
information       are    recognised        and     it   is    provided     that    the
information      may    be    furnished        in   such    a   way   as   to   avoid
prejudicing military secrecy .
PERIOD    OF VALIDITY AND REVIEW .
18 .    As   a  general    rule ,   tariff      suspensions     are  adopted    for  a
period     of  one    year   or    less .       In   this   case ,  the   Commission
considers that they should apply for three years .
19 .   The Commission also considers that it should report on the
operation of the regulation before 31 December 1990 to enable it
to make such proposals as it may deem appropriate for the period
after the expiry of the regulation .
 ---pagebreak---                                                                  7
CONCLUSIONS .
20 .   The Commission considers that its proposals for a limited
scheme of duty suspensions for major items of military
procurement provide a reasonable balance between the requirements
of the defence of the Community as a whole and the economic
interests of Community producers of military equipment . It also
meets the Single Market requirement to establish Community rules
to replace divergent national ones . Once adopted , the regulation
will put an end to irregularities which have existed for many
years as well as eliminating certain inequities on the income
side of the Community budget .
21 . The Council is , accordingly , invited to treat these proposals
as a matter of priority and to adopt them without undue delay .
 ---pagebreak---                                    Proposai for a
                               COUNCIL REGULATION ( EEC )                    8
    temporarily suspending import duties on certain weapons and military equipment
THE COUNCIL OF THE EUROPEAN COMMUNITIES ,
                                                   1
Having regard to the Treaty establishing the European Economic
Community and , in particular Article 28 thereof ,
Having regard to the proposal from the Commission ,
Having regard to the opinion of the European Parliament ,
Whereas in the Single European Act ,            the High Contracting Parties
expressed         . their determination to maintain the technological
and industrial conditions necessary for their security and to
work to that end both at national level and ,                where appropriate ,
within the framework of the competent institutions and bodies ;
Whereas     the    Community    is    based   upon   a    customs  union   which
requires the application of a common customs tariff in relations
with third countries ;
Whereas      the    common   customs     tariff    is'    designed  to   provide
Community manufacturers with a fair basis for competition amongst
themselves and with         foreign suppliers and         it  is essential  that
the   said    tariff be    applied to     all   imports    of goods  from third
countries unless specific Community measures provide otherwise;.
Whereas it is in the interests of the defence of the Community as
a whole that Member States should be enabled to procure for the
use of their armed forces the most technologically advanced and
suitable weapons and military equipment and that Community
manufacturers should be able to meet the greater part of these
needs ; whereas it is compatible with the interests of the
Community that certain of these weapons and equipment
may       be       imported free of import duties ; whereas it is
appropriate to suspend the charging of import duties on such
weapons and equipment and to this end a common list of duty
suspensions       for    weapons     and   military      equipment   should    be
established ; whereas uniform measures are required for the
purpose      of creating the Single Market ;
 ---pagebreak---                                                                  9
Whereas it is necessary to lay down conditions for the granting
of the benefit of the suspension of duties ; whereas a declaration
by the competent authority of the Member State for whose forces
the weapons or military equipment are destined would constitute
an appropriate guarantee that these conditions are fulfilled ;
whereas the declaration should be given in the form of a
certificate ; whereas it is appropriate to specify the form which
such certificates must take ;
Whereas it is necessary that the Member States should provide
information on the amount of import duties foregone as a result
of the application of this Regulation , having due regard to the
requirements of military security ;
Whereas it is necessary to provide procedures for the application
of this Regulation ;
Whereas   it  is appropriate   that the Commission  should  make   a
report on the working of this Regulation after an initial period ,
HAS ADOPTED THIS REGULATION :
                              Article 1
 1.  This Regulation lays down the conditions for the suspension
 of  import duties on certain weapons and military equipment
 imported from third countries .
 2.    Imports of weapons and military equipment not covered by
 this Regulation shall continue to be subject to the appropriate
 duties of the common customs tariff .
 ---pagebreak---                                      Artide 2
1 .   The autonomous duties of the common customs tariff applicable
to   imports of the goods listed at Annex 1 imported shall be
suspended at 0 per cent .
2 . Such duties shall also be suspended .at o per cent for ;
      (a)     parts ,   components    or  sub-assemblies     imported     for
      incorporation in or fitting to goods included in the list
       at Annex 1 or for the repair , refurbishment or maintenance of such goods ;
      ( b ) goods imported for use in the manufacture and testing
     of goods included in the list at Annex 1 .
                                     Article 3
1 .  Entry ,     for      free circulation of goods for which the benefit
of a duty suspension under the provisions of Article 2 is claimed
shall      be   accompanied    by  a certificate    issued by    the   competent
authority of         the Member   State for whose armed      forces    the  goods
are    destined .     The   certificate  shall  be   in the   form   set   out  in
Annex 2       and shall be submitted to the customs authorities of             the
importing        Member    State  together   with   the   goods   to    which   it
refers .
2.  The competent authority issuing the certificate shall notify
the customs authorities of           its Member State of any diversion of
goods from military use to civil use .
3.  In case of such diversion ,          the competent authority shall pay
the import duties applicable to the goods in question .
 ---pagebreak---                                 Article 4
1 . Each Member State shall communicate to the Commission the name
of the authority which is competent to issue the certificate
referred to in Article 3 together with a specimen of the stamp
used by the said authority . The Commission shall forward this
information to the customs authorities of the other Member States .
2 . Each Member State shall        take     such measures ,  r as may be
necessary for the application of this Regulation .
3.   Where the goods are entered for free circulation in a Member
State other than that         in which the certificate was issued , a
copy of     the     certificate     shall    be    forwarded     by   the
customs authorities of the importing Member State to the customs
administration     of  the  Member   State  whose   competent   authority
 issued the certificate .
                                Article 5
 1 . The Member States shall communicate        to the Commission all
 relevant     information   concerning     the   application    of   this
 Regulation .
 2.    They shall also transmit to the Commission no later than
 three months after the end of each calendar year information on
 the total amount of import duties foregone in respect of goods
 imported under the provisions of this Regulation . The information
 shall be provided in such form as may be necessary to avoid the
 disclosure of military secrets .
 ---pagebreak---                                     Article 6
The   Commission    shall ,   on the basis of the information referred
to   in   Article    5,  report     to   the   European    Parliament    and    the
Council     before    31    December    1 990    on   the   operation   of     this
Regulation     and    shall     make   such     proposals     as  it   may    deem
appropriate for the period after the expiry of this Regulation .
                                     Article   7
This    Regulation    shall    enter   into   force     on 1  January   1989 -
 It shall apply until 31 December 1991 .
This    Regulation    shall    be  binding    in    its  entirety  and  directly
applicable in all Member States .
 Done at Brussels ,                              For the Council
 ---pagebreak---                                                         ANNEX 1
           LIST OF     WEAPONS AND MILITARV EQUIPMENT ON WHICH IMPORT
                            DUTIES ARE SUSPENDED .
    CN Code                      Description
 ex  8710 00 00     :   Tanks and other armoured fighting
                        vehicles , motorized
     8802  11  90   :   helicopters , of an unladen weight not
                        exceeding 2000 kg
     8802  12  90   :   helicopters , of an unladen weight
                        exceeding 2000 kg
     8802  20 90     :  aeroplanes and other aircraft , of an
                        unladen weight not exceeding 2000 kg
     8802  30  90    :  aeroplanes and other aircraft , of an
                        unladen weight exceeding 2000 kg but
                        not exceeding 15 000 kg
     8802  40  90    :  aeroplanes and other aircraft , of an
                        unladen weight exceeding 15000 kg
ex  9306  90  10  :     bombs , grenades , torpedoes , mines and
                        missiles
 ---pagebreak---                                          1 4
                                 ANNEX 2
CERTIFICATE FROM COMPETENT AUTHORITY
 ---pagebreak--- E U R 0 P E A N C 0 H H U NI T Y
  1 Export er(Fidl nue and address including country ]
                                                                                             CERT IFICAT.E
                                                                                  FOR MILITARY ECU 1 P H E N T
                                                                      No                                                        ORIGIN»!.
  2 iaport«r(Full na·· and address including Hender State]           3 1 SoG ihG AUTHORITY (preprinted )
  4 Consignee (Full mao and address including Heao»* State)
  NOTES
  A. The erlglnal and a copy af this certificate oust be presented in sipport of the entry for free circulation of the goods.
  & The Custeas affice cammed oust ke*i the copy of this certificateli endorse the original and sent it back te the issuing
       authority .                                                 (
                                                                   1                                                               ·  ·
  5 Harks and ntabers - Hurt·* and kind ef packages - Cenerai descript ten ef goods                      6 loanjaity code            .
                           1 *
           .               *              *        4                                             ·
                                                                                                         7 Lu>ntity(l )
  5 Harks and nunders · ktaber and kind ef packages - General description of goods                       6 Comodi ty code
                                                                                               /
                                                                                                         7 Cu»ntity(l )
   b Harks and motors « Ntaber and kind of packages - General description of goods          ?            b Coneoaity code
                                                                                                          7 uuantity(l )
   5 Harks and ntabers - Htaber and kind ef packages - General description of goods                      b Comodi ty code
                                                                                                          7 Giunti ty
   d QISTUKS EitbORSEHENT                                             Ο Last (by ef validity                                 1
       ktaber and date of entry for free circulation :                                                                Day    iHonth     Year
                                                                     10 This is to certify that the goads described above are for the
       Naee of Cuftoas office :                                         exclusive use of the aroed forces of
                                                                                                                        (Hortor State)
      Place and date :                                                 Place and date :
       Signature of Custoas officer :                Staap :           Si gnatire of authorized person :              ¿tæp :
                                -   ··· - · - ·- '    ■ '· ..   '■
  (1 ) Gross aass(kg) or medier ef Itens .
                                                                                                                                             /U~