CELEX: 51997PC0533
Language: en
Date: 1997-11-05
Title: Proposal for a Council Regulation (EC) applying Article 6 of Council Regulations (EC) Nos 3281/94 and 1256/96 on multiannual generalised tariff preferences schemes in respect of certain industrial and agricultural products originating in developing countries, excluding the most advanced beneficiary countries from entitlement to generalised tariff preferences

COMMISSION OF THE EUROPEAN COMMUNITIES
                                                    Brussels, 05.11.1997
                                                    COM(97)533 final
                                                    97/ 0299 (CNS)
                                     Proposal for a
                          COUNCIL REGULATION (EC)
                                  applying Article 6
              of Council Regulations (EC) Nos 3281/94 and 1256/96
on multiannual generalised tariff preferences schemes in respect of certain industrial
 and agricultural products originating in developing countries, excluding the most
  advanced beneficiary countries from entitlement to generalised tariff preferences
                            (presented by the Commission)
 ---pagebreak---  ---pagebreak---                                 Explanatory Memorandum
 The proposal for withdrawing Hong Kong, Singapore and South Korea from the list of
 countries benefiting from generalised tariff preferences is based on Article 6 of
 Council Regulations (EC) Nos 3281/94 and 1256/96, under which the most advanced
 countries can be excluded as from 1 January 1998 on the basis of objective, clearly
 defined criteria.
 Under the proposal, beneficiary countries are to be excluded from the GSP if they
 have a per capita income exceeding 8 210 United States dollars,1 provided that their
 development index is greater than -1, in accordance with the formula and figures in
Part 2 of Annex II to the above-mentioned Regulations (EC) Nos 3281/94 and
 1256/96. Hong Kong, Singapore and South Korea meet these criteria.
This course of action is based on two main principles: on the one hand an objective,
non-discriminatory approach and on the other an overall approach which embraces the
implications of all the other measures taken or due to be taken under the GSP at
 1 January 1998.
As regards the objectiveness of the approach, a per capita income threshold set at the
lowest level for an EU Member State seemed to be the indicator which was the least
controversial, the most objective and the most representative of the current state of
affairs in the beneficiary countries. Nevertheless, since the objectives of the GSP
include diversification of the beneficiary countries' exports, it was advisable to ensure
that beneficiary countries which had not sufficiently developed their exports of
manufactures, despite having substantial income from their exports of raw materials
could continue to be encouraged by the GSP to seek more diversified industrial
develooment.
As for the overall approach, the moderate effects of the solution adopted suggest that
the principle of neutrality of the GSP offer will be respected in that the exclusion of
the three countries concerned can be offset by the specific concessions for the least
developed countries (LLDCs) provided for in the Council conclusions of 2 June
   World Bank figures for 1995
 ---pagebreak--- 1997, which should enter into force on 1 January 1998. The withdrawal of the three
countries will result in a relative increase in the preferential margin for non-excluded
countries, though the beneficial effects will inevitably take some time to be felt. As
part of this same overall approach, account must also be taken of the entry into force
on 1 January 1998 of the new systems of incentives (social and environmental
clauses), the positive effects of which must go beyond the offer level reflecting the
principle of neutrality.
However, the above benefits, particularly the long-term increase in preferences on
offer to the least developed countries, must not be counteracted by any undesirable
effects which exclusion may have on the advantages accruing to other countries under
the regional cumulation mechanism. Provision must therefore be made for
maintaining these advantages where they represent a long-held right by allowing
excluded countries to continue supplying their regional group members with semi-
finished products or working materials.
That is the purpose of this proposal, on which the Council is requested to give its
opinion in time for the traders concerned to be informed far enough in advance of
entry into force.
 ---pagebreak---                                         Proposal for a
                              Council Regulation (EC) No    /97
                                          of... 1997
                                      applying Article 6
                   of Council Regulations (EC) Nos 3281/94 and 1256/96
  on multiannual generalised tariff preferences schemes in respect of certain industrial
   and agricultural products originating in developing countries, excluding the most
    advanced beneficiary countries from entitlement to generalised tariff preferences
THE COUNCIL OF THE EUROPEAN UNION,
Having regard to the Treaty establishing the European Community,
Having regard to Council Regulation (EC) No 3281/94 of 19 December 1994 applying
a four-year scheme of generalised tariff preferences (1995 to 1998) in respect of
certain industrial products originating in developing countries,2 and in particular
Article 6 thereof,
Having regard to Council Regulation (EC) No 1256/96 of 20 June 1996 applying
multiannual schemes of generalised tariff preferences from 1 July 1996 to
30 June 1999 in respect of certain agricultural products originating in developing
countries,3 and in particular Article 6 thereof,
Having regard to the proposal from the Commission,
Having regard to the opinion of the European Parliament,4
Having regard to the opinion of the Economic and Social Committee,5
Whereas it is laid down in Article 6 of the above-mentioned Regulations that the most
advanced beneficiary countries shall be excluded from entitlement under those
Regulations from 1 January 1988 on the basis of objective, clearly defined criteria;
Whereas the reference threshold for excluding the most advanced countries should be
a per capita income equal to the lowest in an EU Member State, adjusted by reference
to the development index listed in Part 2 of Annex II to Council Regulations (EC) Nos
2
    OJ No L 348, 31.12.1994, p. 1.
3
   OJ No L I 60, 29.6.1996, p. 1.
4
   OJNoC        ,         ,p.
5
   OJNoC        ,          ,p.
                                                                                         A
 ---pagebreak--- 3281/94 and 1256/96 in order to allow for the fact that some countries need to develop
their exports of manufactures;
Whereas this approach is objective and clear in that it includes the indicator which is
the least controversial and the most representative of the current state of affairs in the
beneficiary countries, whiie at the same making it possible to maintain one of the
objectives of the GSP, namely diversification of the beneficiary countries' exports;
Whereas excluding some countries from the general system of preferences must not
have the effect of depriving other members of the same regional grouping of the
possibility, established in the past under the regional cumulation mechanism, of using
products originating in the excluded countries in their own manufacture; whereas
terminating this facility would run counter to the objective of the Article 6 provision
of the Regulations referred to above, namely to redistribute the benefits of the system
to less developed countries,
HAS ADOPTED THIS REGULATION:
                                         Article 1
The criteria referred to in Article 6 of Council Regulations (EC) Nos 3281/94 and
 1256/96 are as follows:
- a per capita gross national product exceeding 8 210 United States dollars for 1995 in
accordance with the most recent World Bank figures;
- a development index, calculated in accordance with the formula and figures given in
Part 2 of Annex H to Council Regulations (EC) Nos 3281/94 and 1256/96, greater
than-1.
These criteria shall be applicable cumulatively.
                                         Article 2
The withdrawal of one country or territory from the list of countries and territories
benefiting from generalised preferences by virtue of the criteria set out in Article 1
shall not affect the possibility of using products originating in that country under the
regional cumulation mechanism applicable to all regional groupings referred in Article
72(3) of Commission Regulation (EC) No 2454/93, as amended by Commission
Regulations (EC) Nos 3254/94 and 12/97, provided that the country has been a
member of the regional grouping since the multiannual system of preferences
applicable to the product concerned entered into force and is not considered to be the
country of origin of the final product within the meaning of Article 72(a) of the
abovementioned Regulation (EC) No 2454/93.
                                                                                           Ç
 ---pagebreak---                                         Article 3
Under the criteria listed in Article 1, the following territory and countries shall be
withdrawn from the list of countries and territories benefiting from the generalised
preferences set out in Annex EI to Council Regulations (EC) Nos 3281/94 and
1256/96:
                                      Kong Kong
                                       Singapore
                                      South Korea.
                                        Article 4
This Regulation shall enter into force on 1 January 1998.
This Regulation shall be binding in its entirety and directly applicable in all Member
States.
Done at Brussels,
                                                                    For the Council,
                                                                      The President
 ---pagebreak---                                          Financial statement
  Title
  Draft Proposal for a Regulation applying Article 5 of Council Regulations (EC) Nos
  3281/94 and Î 256/96 on multiannual generalised tariff preferences schemes in respect
  of certain industrial and agricultural products originating in developing countries,
  excluding the most advanced beneficiary ccontries from entitlement to generalised
  tariff preferences
  Legal basig
  Article 113 of the Treaty.
 Praroose
 To exclude the most advanced countries from the GSP on the basis of objective,
 clearly defined criteria.
 Estimated customs revenise
 Taking the preferences on offer, calculated on the basis of total imports of products
 eligible to benefit from the GSP and originating in Hong Kong, South Korea and
 Singapore in 1995, and the average for each of these countries under the scheme (for
 all products taken as a whole), the total increase in customs receipts resulting from the
 exclusion of these countries from the GSP mav be estimated at ECU 40.3 million.
                                                                               ('000 ECU)
                 1995 imports of       Estimated customs       Average rate of Estimate of
                products eligible      receipts lost in        use of GSP in   customs receipts
                for GSP in 1997         1997                   1995            again to be
                                                                               received (based on
                                                                               duty applicable in
                                                                               1997)
 South Korea"" "TToO 380           "~~ " 40 095 "          ~""~62.40%
 Singapore 71 * 204 852
"Hongkong"} 837~157
                                  J___ 42 488
                                      " 30 434
                                                        ______ 27.80%
                                                               11.40%
                                                                               11 812
                                                                                 3.469
                                                                                                -J
 Tout!          3 142 389      "     \ 113 017               '                 40 300
                                                                                                  I
                                                                                                    T
 ---pagebreak---  ---pagebreak---                                                                   ISSN 0254-1475
                                                           COM(97) 533 final
                                              DOCUMENTS
EN                                                             11 03 10 02
                                    Catalogue number : CB-CO-97-578-EN-C
                                                             ISBN 92-78-26725-2
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