CELEX: 51975PC0417
Language: en
Date: 1975-07-25
Title: COMMISSION COMMUNICATION TO THE COUNCIL DRAFT DECISION OF THE JOINT COMMITTEE modifying Article 23 of Protocol No 3 on the definition of originating products and methods of administrative cooperation

ARCHIVES HISTORIQUES
DE LA COMMISSION
COLLECTION RELIEE DES
DOCUMENTS "COM"
COM (75) 417
Vol. 1975/0161
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 ---pagebreak--- COMMISSION OF THE EUROPEAN COMMUNITIES
                                                      COM(75)417 final
                                                      Brussels . 25 July 1975
                                                                \
                COMMISSION COMMUNICATION TO THE COUNCIL
                                 DRAFT
                    DECISION OF THE JOINT COMMITTEE
             modifying Article 23 of Protocol No 3 on the
                   definition of originating products
              and methods of administrative cooperation
             r,
                 \
 COM(75) 417 final
 ---pagebreak---               COMMISSION COMMUNICATION TO THE COUNCIL
   v   The present provisions of Article 23 paragraph 1 of Protocol No 3
annexed to the agreements concluded with the EFTA-countries stipulate
that products not originating in contracting States which are used in
the manufacture of originating products benefiting under the . agreements
may not be granted drawback or remission of customs duty in any form as
from the date on which the duty applicable to originating products of the
same kind as the products used in manufacture has been reduced to ^0 % of
the basic duty .
       Application of this rule - generally known as the "no-drawback rule " -
which was to come into operation for most products on 1 January 1975 , has
been suspended for one year by Decision No b/jk of the Joint Committees
dated 2 December 197^ ( 1 ) i to allow time for drawing up a new and improved
text eliminating certain difficulties liable to arise in practical applica­
tion of the rule .
       This new version is the subject of the annexed draft decision of the
EEC-Austria Joint Committee ; it was prepared as a model and will be .
equally suitable , mutatis mutandis , for the other agreements .
       The new text proposed eliminates the principal difficulty likely to
arise in implementing the former text wherein the attainment of a certain
level of tariff dismantling was the determinant of the date of application
of the rule . This requirement would , in fact , give rise to quite serious
practical problems where differences existed between the tariff provisions
applicable on the one hand to the finished products and on the other hand
to the originating products of the same kind as those used in manufacture .
                                                                    • • • /• • •
( 1 ) Put into effect in the Community by Regulations ( EEC ) Nos 3278/7^,
      3303/7^, 330V7'S 3305/7**, 3306/7^ and 3307/7^ of the Council of
      19 December 197^, published in the OJ No L 355 of 31 December 197^.
 ---pagebreak---                                   - 2 -
      The proposed solution consists , therefore , in laying down a single
date of application of the no-drawback rule for the whole of the products
used in manufacture .
      Apart from the foregoing , it also became apparent when the new text
was being drawn up that it would be equally possible to simplify the
special rule laid down in the present Article 23 paragraphs 2 and 3 »
This special rule prohibits drawback for products - especially those from
the Community as originally constituted and Ireland - used in the manufactui
of originating products benefitting from the tariff provisions in force in
respect of trade between the former EFTA countries by virtue of Article - 3
paragraph 1 of the trade agreements .
      It transpires that the date of expiration of this rule for originating
products from the Community as originally constituted and Ireland - which
would ordinarily be the date on which the tariff provisions in force in
respect of trade between the former EFTA countries became identical with
the normal tariff provisions of the agreements - could be standardised , in
the interest of simplification , as 1 July 1977 , the date on which the two
systems will be identical for the majority of goods .
      Those are the principal elements of the annexed draft decision .
       It should be added that , as regards the basis of the no-drawback rule ,
 there has been no modification of Article 23 in its old form , especially wi'
 reference to the products to which the prohibition of drawback applies . The
 rule is therefore still confined , as in the past , to non-originating produc'
 of the same kind as those covered by the agreements . As a result , products
 not covered by the agreements and especially basic agricultural products
 may continue to be used under the inward processing arrangements .
       Accordingly , it is proposed that the Council adopt this draft decison
 as representing the common position of the Community in the Joint Committeei
 of the EFTA agreements , so that the new Article 23 of Protocol No 3 can
 enter into force on 1 January 1976 .
 ---pagebreak--- EEC-AUSTRIA AIREEMENT
 - Joint Committee -
                                 Draft
                DECISION No   /75 OF THE JOINT COMMITTEE
                  modifying Article 23 of Protocol No 3
                on the definition 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 Austria , signed in Brussels on 22 July 1972 ,. .
  Having regard to Protocol No 3 on the definition of originating products
  and methods of administrative cooperation ( hereinafter referred to Protocol
  No 3 ) in particular Article 28 thereof ,
  Whereas the present provisions of Article 23 ( l ) of Protocol No 3 , suspended
  by decision No        of the Joint Committee of 2 December 197^ until 31
  December 1975 , stipulate that the prohibition on the benefit of the repayment
  of customs duty or exemption from customs duty in whatever form , for non-
  originating products used in the manufacture of originating products , applies
  as from the date when the duty applicable to originating products of the
   same kind as the products used was , in the Community or in Austria , reduced
   to *f0 % of the basic duty ;                                         v;
  Whereas the reference to a certain level of tariff in order to determine
   the date of applicability of these provisions is likely to create practical
   difficulties , in particular because of the differences in tariff regimes
   applicable both to the finished products and to the originating products
   of the same kind as the products used ;
 ---pagebreak--- Whereas it is consequently appropriate to provide for a uniform date
of applicability for the whole of the products concerned ; whereas that
date may be the date of the entry into force of this decision ;
Whereas , in addition , the present provisions of Article 23 ( 2 ) and ( 3 ),
stipulate that , for the application of the tariff regime in force by virtue
of Article 3 ( 1 ) of the agreement , in trade between the former EFTA countriei
only those products refared to in Article 25 ( 1 ) of Protocol No 3 may .
benefit from a repayment of customs duty whatever the form in which it is
made ;
Whereas in practice it is a consequence of these provisions that the        '
benefit of the repayment of customs duty or the exemption from customs
duty in whatever form it takes , is prohibited for products originating
in the Community in its original composition or Ireland , used in the
manufacture of products which may benefit from the tariff regime resulting
from Article 3 ( 1 ) of the agreement ;
Whereas this prohibition must continue for as long as the tariff regime
resulting from Article 3 ( 1 ) of the agreement is not identical to that
resulting from Article 3 ( 2 ) of the agreement ;
Whereas however for the majority of the products concerned , this prohibitioi
will continue only until 1 July 1977 t whereas it is appropriate in a
desire for simplification , to provide the same date for the wholei of the
products in question ,
HAS DECIDED   !
                                  Article 1
     The text of Article 23 of Protocol No 3 shall be replaced by the
following :
 ---pagebreak---                                     - 3 -
                                "Article 23
1.       Without prejudice to Article 1 of Protocol No 2 products of the
   kind to which the agreement applies , used in the manufacture of products
   for which a movement certificate EUR.1 or a form EUR . 2 is issued or
   established , only "be the subject of a repayment of customs duty or
   benefit from an exemption of customs duty of whateverkind when
   products originating in the Community , Austria
   or one of the six countries mentioned in Article 2 of this Protocol are
   concerned#
2.        Without prejudice to the provisions of Article 1 of Protocol No 2 ,
   products originating in the Community in its original composition or
   Ireland , used in the manufacture of products obtained in accordance
   with the conditions provided for by Article 25 ( 1 ), may not be the subject
   in the Member State where such manufacture took place , of repayment of
    customs duties or benefit from an exemption of customs duties of whatever
   kind until 1 July 1977 *
3.        The term " customs duty ", when used in this and subsequent Articles ,
    shall also include taxes of equivalent effect to customs duties ."
                                       Article 2
       This decision shall enter into force on 1 January 1976 .
                                           Done at
                                           By the Joint Committee
                                           The Président
     The Secretaries