CELEX: 51994PC0414(04)
Language: en
Date: 1994-10-05
Title: Proposal for a COUNCIL REGULATION (EC) No...../94 of.....1994 on the adjustments and transitional arrangements required in the agriculture sector in order to implement the agreements concluded during the Uruguay Round of multilateral trade negociations

COMVIISSION OF THE EUROPEAN                   COMMUNITIES
                                 C0M(94) 4 14  finaI
                                                      94/  0225(ACC)
                                                      94/  0226(ACC)
                                                     94/  0227(ACC)
                                                     94/  0228(CNS)
                                                     94/  0229(C0D)
                                                     94/  0230(ACC)
                                                     94/  023KACC)
                                                     94/  0232(ACC)
                                                     94/  0233(ACC)
                                                     94/  0234(CNS)
    URUGUAY ROUND
      IMPLEMENTING
         LEGISLATION
             (presented by the Coaalssion)
 ---pagebreak---                            1
          Parti
Central Implementation Act
 ---pagebreak---                           EXPLANATORY MEMORANDUM
I       Political aspects
1.      Background
The European Community is one of the participating parties in the negotiations making
up the eighth round of multilateral trade negotiations held under the auspices of the
General Agreement on Tariffs and Trade (GATT). The Uruguay Round negotiations, as
they were known, were concluded by the Trade Negotiations Committee in Geneva on
15 December 1993. The Final Act embodying the results of the Uruguay Round
multilateral trade negotiations (hereinafter the Final Act) was formally signed on behalf
of the Community by the President of the Council, Mr Pangalos, and Sir Leon Brittan,
Member of the Commission, in Marrakesh on 15 April.
The Commission has officially presented the Council with a proposal for a decision on
the conclusion of the results of the Uruguay Round Trade Negotiations.1 The Council has
yet to act on this point.
Like its principal trading partners, the Community gave its official approval for the
establishment of the World Trade Organization and the other results of the Uruguay
Round to take effect at multilateral level at the earliest possible opportunity, i.e.
 1 January 1995.
An implementation conference will be held in Geneva early in December to this end.
The Commission is convinced that any further delay in fulfilling its international
obligations would be severely prejudicial to the Community's international prestige and
credibility.
2.      Grounds for the proposed approach
The Commission considers it appropriate, as matters now stand, to implement forthwith
all the additions and amendments to Community legislation required by the Final Act.
Aside from the Community's formal adoption of the results of the Uruguay Round and,
consequently, from its accession to the World Trade-Organization as a founder member,
the prompt adoption of this decision by the Council would also allow the Community to
honour its commitments to its international trading partners.
Pending lodging of the Community's official instruments of acceptance with the World
Trade Organization, the current state of affairs in GATT would thus continue.
        COM(94) 143 final, 15.4.1994.
 ---pagebreak---                                                                                            1/
Irrespective of the fulfilment of commitments made under its auspices, the General
Agreement has not been submitted for ratification by the parties.
II      Legislative aspects
Examination of the Final Act shows that several measures it contains are already
adequately covered by existing Community legislation.
However, other measures do require the Community either to adopt new legislative acts
or to amend existing Community law.
This memorandumssets out the reasons for the entry into force of all the acts required to
implement the results of the Uruguay Round and summarizes the main grounds justifying
the acts listed in the annex to the proposed implementing decision.
In addition, each of the acts listed in the annex is preceded by its own explanatory
memorandum giving detailed observations on the act concerned.
1.      Simultaneous entry into force
Mainly at the Community's insistence, the Punta Del Este Declaration, which launched
the Uruguay Round trade negotiations, established the principle of globality as one of the
"guiding principles of the negotiations".
From the point of view of the Community's objectives it was thought appropriate that
"the launching, the conduct and the implementation of the outcome of the negotiations
shall be treated as parts of a single undertaking".2
The Council was regularly informed of progress and consistently underlined the point that
the result of the Uruguay Rpund should be a "comprehensive and balanced outcome".
The Commission also believes that only a global assessment will allow the Uruguay
Round's contribution to the Community to be fairly judged.
Most of the Community's partners in the negotiations have adopted procedures aimed at
guaranteeing the "globality" of the outcome.
On the multilateral front, accession to the World Trade Organization is subject to
acceptance in full of the Final Act (see Agreement establishing the WTO, Articles XI and
XII).
Consideration of these factors led the Commission to propose at the Council meeting of
 15 April 1994 that the implementing legislation be presented as a whole in the form of
a single legislative act.
However, in order to facilitate discussion in the various Council committees, the
Commission decided on the approach outlined here in which the political unity of the
        GATT document, MIN. DEC of 20.9.1986, p. 2 and 3.
 ---pagebreak---                                                                                               ^
outcome is embodied in legal form by the attached decision on simultaneous entry into
force.
This decision lays down that all the acts required for the implementation of the results of
the Uruguay Round, which are listed in full in its annex, will come into force legally in
the Community simultaneously on 1 January 1995. The entry into force of each act is
therefore subject to the adoption of this decision simultaneously implementing all the
other acts.
2.       Commitments on customs duties for products not covered by the agriculture
         offer
The negotiations on customs duties in the Uruguay Round resulted in the deposit by the
Community of a new schedule of tariff concessions.
The commitments entered into represent in total an average 30% reduction in the rate of
customs duties applicable to imports from other GATT contracting parties.
The participating parties in the Uruguay Round agreed to implement the first stage of
reductions with effect from 1 January 1995.
Pursuant to Council Regulation (EEC) No 2658/87 of 25 July 1987 the tariff to be
applied as from 1 January of the following year must be published by 31 October at the
latest. It seems unlikely that procedural delays would allow adoption of the tariff resulting
from the Uruguay Round by that date, but publication of the pre-Uruguay Round tariff
on the prescribed date would probably cause some confusion amongst businesses and lead
to doubts inside and outside Europe as to the Community's determination to honour its
 commitments under the Uruguay Round.
 To avoid giving the wrong impression and damaging the Community's prestige
 internationally, the Commission considers it appropriate to waive the obligation to publish
 and, instead, to publish the tariff fixed in the Uruguay Round by way of information in
 the C series of the Official Journal on the prescribed date.
 The decision on tariffs is a key element and integral part of the overall outcome of the
 Uruguay Round. It is important, therefore, that it should be given due consideration
 along with the other results. Likewise, the tariff concessions granted by the Community
 in the Uruguay Round should take effect on the same date as the other commitments
 entered into during the negotiations.
 3.       Non-tariff commitments
 The results of the Uruguay Round multilateral trade negotiations also include important
 non-tariff provisions.
 (a) Customs valuation
 Leaving aside a small number of essentially technical amendments, the Agreement on
  Implementation of Article VII of the General Agreement (Rules on Customs Valuation)
  was further clarified in two Decisions on customs valuation formally adopted at the
 ---pagebreak---                                                                                              c
ministerial meeting in Marrakesh on 15 April 1994 and incorporated into the Final Act
embodying the results of the Uruguay Round.
The Decision on Texts Relating to Minimum Values and Imports by Sole Agents, Sole
Distributors and Sole Concessionnaires is mainly addressed to developing countries and
requires no action on the Community's part.
The Decision Regarding Cases where Customs Administrations Have Reason to Doubt the
Truth or Accuracy of the Declared Value, on the other hand, provides added protection
for importers by stipulating that customs administrations must give reasons in writing for
doubting the declared value, and giving importers a right of reply.
These safeguards do not exist in Community law as it stands. As a result, Commission
Regulation No 2454/93 of 2 July 1993, laying down provisions for the implementation
of the Community Customs Code, needs to be amended.
Since this is, however, a matter for the Commission, no amendments need be tabled for
adoption by the Council, so none are included in the Annexes to the Decision.
(b)     Preshipment Inspection
A number of developing countries lacking adequate customs facilities have given
private-sector companies the task of verifying the price, quality and quantity of goods sent
to them. This practice, with private firms exercising public authority, is known as
 preshipment inspection'.
Preshipment inspection was included in discussions on non-tariff matters at the
Community's suggestion.
The Agreement incorporated into the Final Act applies basic GATT tenets such as non-
discrimination and transparency to the practices of preshipment inspection companies. It
spells out in detail a set of obligations governing all aspects of preshipment inspection,
paying special attention to price verification. It also introduces a two-tier dispute
settlement system for private parties and Governments who are signatories to the GATT.
Disputes between the inspection bodies and exporters will be settled by binding
arbitration. Governments, however, will be fully liable, under the GATT dispute
settlement procedure, for seeing that the Agreement on Preshipment Inspection is
complied with.
Community law has no rules on preshipment inspection, although it does exist in some
of the Member States' national legislation.
In view of the nature of the commitments made under the Agreement on Preshipment
Inspection in the Uruguay Round, the various national authorities should implement the
provisions, with a Council Directive to guide them.
(c)      Rules of Origin
The Community entered negotiations with no specific demands of its own. It did,
however, successfully push for the principle of a single set of rules of origin at
 ---pagebreak--- international level, along with the notion that the last substantial transformation should
determine origin. The criteria listed in Annex II of the Agreement on Rules of Origin
correspond to current Community practice and do not affect the Community's preferential
rules of origin.
Part IV of the Agreement on Rules of Origin sets out a work programme for
harmonization entailing further negotiations under the GATT. Work will be started as
soon as the World Trade Organization is set up and is planned to last three years at this
stage.
The major changes to Community legislation will therefore not have to be introduced
until 1998 at the earliest. In the meantime, there are the procedural changes relating to
information on origin, which come under implementing arrangements for the Community
Customs Code.
The implementing regulation is Commission legislation and is being amended in line with
the results of the Uruguay Round. It could be brought into force whenever appropriate,
and does not need to be included among the proposals presented for adoption by the
Council.
 (d)      Import licences
The Agreement on Import Licensing Procedures reached in the Tokyo Round has been
 revised, though the changes are mainly technical.
 On the substantive side, the nature of trade-restricting effects is now spelled out. The
 transparency clauses and the non-automatic licensing procedures have also been markedly
 improved.
 Upon examination, however, these changes do not appear to entail any amendments to
 Community legislation as it currently stands.
 4.       Textiles and clothing
 The negotiations on bringing textiles and clothing under the GATT, subject to
 strengthened rules and disciplines, was one of the major issues of the Uruguay Round.
 The Agreement finally reached and incorporated into the Final Act meets the
 Community's objectives in this area via a twin process of liberalization and integration
 spread over three distinct phases.
  Some amendments to Council Regulation (EEC) No 3030/93 of 12 October 1993 on
  common rules for imports of certain textile products from third countries will be
  necessary to implement the Agreement. The details and the logic behind the amendments
  are discussed in the specific Explanatory Memorandum on textiles which is annexed to
  the attached Decision.
  5.       Agriculture
  The hopes and fears of the Uruguay Round, from start to finish, were largely bound up
  with one issue - agriculture.
 ---pagebreak--- The talks resulted in a string of provisions on agriculture which are largely, though not
exclusively, contained in the Agreement on Agriculture set out in the Final Act.
The Community's commitments in this sector will require a number of amendments to
Community legislation and certain transitional measures.
The changes, and the reasons for them, are detailed in a specific Explanatory
Memorandum annexed to the Decision.
6.      Rules and disciplines
(a)     Technical barriers to trade
The new'Agreement constitutes a major revision of the Code that emerged from the
Tokyo Round. It generally has a clearer structure, stronger disciplines, and wider coverage
in respect of those involved in standardization, drafting technical regulations, and
evaluating products' conformity with the standards in question.
More specifically, the new Agreement contains a Code of Practice setting out rules to be
observed in establishing voluntary standards, which apply to both public and private
bodies. It also takes an important step towards striking a better balance between rights and
obligations by applying GATT disciplines to large local authorities. The introduction of
the principle of proportionality is another major innovation, as is the inclusion of
production processes and methods in the scope of the agreement.
The changes made to the Agreement on Technical Barriers to Trade during the Uruguay
Round negotiations broadly reflect the Community approach to standardization as it has
emerged from work on the Single Market. No changes will therefore need to be made to
the Community legislation currently in force to ensure compliance with the Agreement.
(b)     Trade-related investment measures
The Uruguay Round Agreement on Trade-Related Investment Measures (TRIMs) clarifies
the GATT provisions in this area, in that the contracting parties undertake not to apply
any measures that are incompatible with Articles 111(4) and XI(1) of the GATT. There
is an illustrative, i.e. non-exhaustive, list of definitions of the measures covered by the
agreement.
The section in Article III on breaches of national treatment obligations defines local
content and limited manufacturing requirements, while the section in Article XI on
breaches of the obligation to abolish quantitative restrictions lists domestic sales, product
mandating and trade balancing requirements.
Article 5 of the TRIMs Agreement allows the industrialized countries a transitional period
of two years to dismantle measures covered by the Agreement. However, this period of
grace will be granted only for measures of which GATT is notified within 90 days of the
creation of the WTO.
Community legislation is unaffected by the TRIMs Agreement, although the Member
States are advised to take note of the terms of the agreement.
 ---pagebreak---                                                                                                S
(c)      Fair-trade provisions
The negotiations on dumping and subsidies produced far-reaching changes to the Codes
that emerged from the Tokyo Round. In order to comply with its commitments in this
area, the Community will have to adopt new legislation and amend Regulation (EEC) No
2423/88 and Regulations (EC) Nos 521/94 and 522/94.
The reasons for the proposed changes are set out in detail in the sections on dumping and
subsidies in the annex to this decision.
The Uruguay Round negotiations also produced a new agreement specifically on
safeguards. In order to comply with its commitments in this field, the Community will
have to adopt a new regulation and repeal Council Regulation (EC) No 518/94 on
common rules for imports. The grounds for this conclusion are set out in the annex.
The new GATT codes and the changes designed to streamline and rationalize the
Community's decision-making procedures should further strengthen our hand against
illicit commercial practices and resulting damage to trade. The procedures laid down in
Council Regulation (EEC) No 2641/84, as recently amended by Council Regulation (EC)
No 522/94, accordingly need to be tightened up.
7.       Services
The Uruguay Round produced two new developments in the field of international trade
in services.
The first is the General Agreement on Trade in Services (GATS), which establishes a
binding framework regulating all measures covered by the agreement. Underpinning the
rules in question are the GATT principles of non-discrimination and transparency.
The GATS contains sectoral annexes on the movement of natural persons, air transport,
telecommunications, financial services and maritime transport, which adapt the GATS
 provisions to the specific features of the sectors concerned.
 The schedule of initial liberalization commitments, which spells out the contracting
 parties' commitments as regards national treatment and/or market access in all services
 sectors, forms an integral part of the obligations imposed by the GATS.
 The Community approach in this area of negotiations was a function of progress in the
 creation of the Single Market, and consisted of translating its internal achievements in this
 field to the multilateral stage. The commitments into which it has entered do not exceed
 the obligations already imposed by the creation of the Single Market, and consequently
 do not entail any changes to current Community legislation.
 8.       Intellectual property
 The Community's other main priority for the Uruguay Round was the creation of an
 efficient instrument to ensure that those intellectual property rights with implications for
 trade are genuinely enforced.
 ---pagebreak---                                                                                              A
The Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs) fully
satisfies this requirement, in that it contains provisions on the protection of intellectual
property rights that together make up a body of multilateral rules designed to promote
international trade in products bearing such rights and to prevent the trade distortions and
frictions that arise from the lack of adequate and effective protection.
In addition to the general provisions and basic principles governing the protection of
intellectual property rights, the TRIPs Agreement contains binding rules guaranteeing the
existence, scope and protection of copyright and associated rights, trade marks,
geographical indications, industrial models and designs, patents, and semi-conductor lay-
out designs, plus rules for the protection of business secrets and the control of anti-
competitive licensing practices.
There are also detailed provisions on implementation of the TRIPs Agreement by national
authorities. These provisions cover border procedures, which must meet certain specific
requirements, the acquisition and retention of rights, and the procedures by which the
holders of such rights can ensure that they are enforced.
The obligations imposed by the TRIPs Agreement must be enforced by the contracting
parties within one year of the creation of the WTO.
In order to honour its commitments, the Community will have to amend its current
legislation in this area along the lines detailed in the annex, though compliance with some
of the obligations will be the responsibility of the Member States.
9.       Plurilateral agreements
The Final Act of the Uruguay Round also contains the plurilateral agreements concluded
under GATT auspices.
(a)      Sectoral agriculture agreements
The International Dairy Agreement and the International Bovine Meat Agreement were
not covered by the Uruguay Round negotiations. They appear in the Final Act unchanged
from their Tokyo Round formats of 1979.
The incorporation of plurilateral agreements into the WTO system, including its dispute
settlement procedures, is binding for members^who are party to the agreements concerned.
(b)      Civil aircraft
When the Uruguay Round proper was concluded, it was decided to prolong the
negotiations on the revision of the Agreement on Trade in Civil Aircraft by another year.
Pending the expiry of that deadline in May 1995, the 1979 Agreement produced by the
Tokyo Round will remain in force.
Needless to say, no changes in legislation are necessary at this stage.
(c)      Public procurement
A new Agreement on Government Procurement was successfully concluded.
                                                8
 ---pagebreak---                                                                                                 A-l
The main outcome of the negotiations was to extend the scope of the Agreement to
embrace procurement of supplies, works and services by national and local government
agencies, and by public undertakings operating in the utility sectors (ports, airports, water,
electricity and urban transport).
Here too, the Community approach was conditioned by the progress achieved in the
creation of the Single Market. Consequently, the revision of the Agreement on Public
Procurement does not entail any major changes to current Community legislation.
However, the Community is engaged in a series of bilateral negotiations on entities to be
subject to the disciplines. The results of these negotiations will be submitted to the
Council for adoption on a case-by-case basis, as the talks are concluded.
It is possible that some of these bilateral agreements will entail making some minor
changes to the legislation. Given that parties to the new Agreement on Public
Procurement will not be required to enforce its provisions until 1 January 1996, and that
the bilateral agreements will enter into force on the same date or even later, the
Commission reserves the right if necessary to return to the implementation of the public
procurement aspects of the Uruguay Round at a later date.
10.      Other agreements
Negotiations for the Multilateral Agreement for Steel are still continuing so no text is
included in the Final Act and no amendments to the legislation are therefore necessary
for the time being.
in.      Procedural aspects
The Commission proposal to the Council for a Decision concluding the Uruguay Round
agreements recommends referral to Parliament under the assent procedure, since the Final
Act, by virtue of the Agreement establishing the WTO, provides for a "specific
institutional framework" within the meaning of the second subparagraph of Article 228(3)
of the Union Treaty.
In any case, the Uruguay Round agreements undeniably constitute international
agreements of significant importance for the Community within the terms of the Stuttgart
Solemn Declaration.
In the interests of political and legislative consistency, therefore, it would also be sensible
to submit to Parliament for its opinion the acts implementing the agreements.
Since those acts are based on Article 113, however, that move is optional.
When the package of legislation is,sent to Parliament the attention of the House should
be drawn to the importance of enabling the Community to honour its international
commitments as from 1 January next year.
 ---pagebreak---                                                                                                43/
                                  COUNCIL DÉCISION                                  flfloe/Arn
                                                                        9 4 /
                                           f    10CM                           0225CACC)
                                          of... 1994
bringing into force simultaneously the acts implementing the results of the Uruguay
Round of multilateral trade negotiations
THE COUNCIL OF THE EUROPEAN UNION,
Having regard to the Treaty establishing the European Community, and in particular
Article 113 thereof,
Having regard to the proposal from the Commission,
Having regard to the opinion of the European Parliament,
Whereas the several acts giving effect to the results of the Uruguay Round should come
into force at the same time;
Whereas the said results should enter into force in the Community on the same day that
the Agreement establishing the World Trade Organization and its annexes enters into
force at multilateral level;
Whereas it was decided at the conference on implementation in Geneva in [December
1994] that the said results should take effect on [1 January 1995],
HAS DECIDED AS FOLLOWS:
                                           Article 1
The acts giving effect to the results of the Uruguay Round multilateral trade negotiations
listed in the annex to this Decision shall enter into force on [1 January 1995], except for
acts relating to agreements which specifically provide for a later date.
                                           Article 2
This Decision shall be published in the Official Journal of the European Communities.
It shall take effect on the date of its publication.
Done at Brussels,                                                             For the Council
                                                                                The President
                                               10
 ---pagebreak---                                                                                A3
                                    ANNEX
Council Decision amending the Combined Nomenclature and the             Common
Customs Tariff in the light of the results of the Uruguay Round.
Council Directive    on   Pre-Shipment  Inspections   for  Exports   from  the
Community.
Council Regulation amending Council Regulation No 3030/93 on common rules
for imports of certain textile products from third countries.
Council Regulation on the adjustments and transitional            arrangements
required in the agricultural sector in order to implement the agreements
concluded during the Uruguay Round of Multilateral Trade Negotiations.
Parliament and Council Regulation amending Council Regulation (EEC) No
1576/89 laying down general rules on the definition, description and
presentation of spirit drinks and Council Regulation (EEC) No 1601/91
laying down general rules on the definition, description and presentation
of aromatized wines, aromatized wine-based drinks and aromatized wine-
product cocktails following the Uruguay Round of the multilateral trade
negotiations.
Council Regulation on protection against      dumped  imports  from  countries
not members of the European Community.
Council   Regulation    on protection    against   subsidized   imports   from
countries not members of the European Community.
Council Regulation on common rules for imports, repealing Regulation (EC)
No 518/94.
Council Regulation on the strengthening of the common commercial policy,
 in particular with regard to protection against          illicit commercial
practices and adverse trade effects suffered by Community enterprises,
and to the exercise of the Community's rights under international trade
rules
Council Regulation concerning certain measures to be taken to implement
the Agreement on Trade-Related Aspects of Intellectual Property Rights in
relation to certain modifications of Council Regulation (EC) No 40/94 on
the Community trade mark.
Council Decision concerning certain measures on the extension of the
 legal protection of topographies of semiconductor products to persons
from a country of the World Trade Organisation.
 ---pagebreak---                y
                 'k
    Part 2
Customs Tariff
 ---pagebreak---                        „1f
        Part3
Preshipment Inspection
 ---pagebreak---                                                                                                ^
                                COUNCIL DIRECTIVE                                  94/ 0226(ACC)
              on pre-shipment inspections for exports from the Community
The Council of the European Union
Having regard to the Treaty establishing the European Community, and in particular
Article 113 thereof,
Having regard to the proposal from the Commission,
Having regard to the opinion of the European Parliament;
Whereas a number of developing countries have recourse to so-called pre-shipment
inspection programmes in order to ensure a proper distribution of limited foreign currency.
resources to importers and in order to combat such practices as over-invoicing and fraud;
whereas these developing countries have charged private companies with this task, which
includes a check on quality, as well as price of the goods intended for export to the
territory of these countries;
Whereas the Community recognises the right of the developing countries to have recourse
to pre-shipment inspection; whereas, however, pre-shipment inspections can give rise to
abusive interferences in the price freely agreed between parties to a contract and to other
practices which form unnecessary obstacles to trade;
Whereas the Uruguay Round final act, signed on 15 April 1994 in Marrakech (Morocco),
establishes an agreement on pre-shipment inspection between members of the World
Trade Organisation (WTO); whereas this agreement needs to be put into effect for the
Community;
Whereas, in view of the maintenance of a common commercial policy of the Community it
is necessary that the Member States regulate the activities of pre-shipment inspection
entities along uniform lines;
Whereas, to this end the Member States need to provide for a notification of pre-shipment
inspection activities
Whereas there is good reason to simplify procedures as much as possible, in particular
with respect to the review of prices; whereas exemptions, however, are not foreseen by
the agreement on pre-shipment inspection of the WTO and such exemptions can thus only
be applied with the agreement of the by pre-shipment inspection entities;
 Whereas the Member State should institute a quick and effective procedure for the
 settlement of disputes between exporters and pre-shipment inspection entities; whereas
 such a procedure is foreseen by the agreement on pre-shipment inspection of the WTO;
 ---pagebreak---                                                   2                                             A\
Whereas the non-compliance with conditions or non-observance with procedures by pre-
shipment inspection entities should be settled with the third countries making use of such
entities;
Whereas Article 3 paragraph 3 of the agreement on pre-shipment inspection of the WTO
provides for technical assistance to third countries;
HAS ADOPTED THIS DIRECTIVE:
                                              Article 1
This directive applies to activities, carried out on the customs territory of the European
Community, by pre-shipment inspection entity which, for the account of governments or
public entities of third countries, carry out controls on the quality, quantity or price of
goods destined for exports to the territory of these third countries (pre-shipment
inspection programmes).
                                              Article 2
 1. Member States shall make the activities of pre-shipment inspection entities as defined
     in Article 1 subject to a procedure for prior notification under the conditions set out in
     this directive. Modifications in the way pre-shipment inspection entities carry out these
     activities shall also be notified prior to their implementation
 2. This procedure shall be applied in a non-discriminatory manner
                                              Article 3
 The notification of activities mentioned in Article 2 shall cover the following activities:
 a.     physical inspection of the merchandise before it is exported in order to verify the
        conformity of the dispatch (quality, quantity) with the specifications of the contract
        and the respect of rules and standards foreseen by the importing country or
        recognised at the international level;
 b.     verification of the price, and where applicable, of currency exchange rate, on the
        basis of the contract between the exporter and the importer, the pro forma invoice
        and, where applicable, the application for import authorisation.
 ---pagebreak---                                                                                                 Ai
                                                3
                                            Article 4
With a view to facilitating the implementation of the agreement on pre-shipment
inspection of the WTO, Member States shall verify whether the notified activities meet at
least the following conditions:
a.     when they notify their activities, the pre-shipment entities shall communicate to the
       authorities of the Member State(s) the dispositions, with the exception of the
       remuneration, of the contract agreed with the governments or public entities of third
       countries for the account of which the pre-shipment inspection programmes have
       been put in place. They shall subsequently communicate all modifications regarding
       the conditions for control to these same authorities. The competent authorities of the
       Member States shall verify that the dispositions of the contract are not contrary to
       the conditions of this directive.
b.     Prior to any control, the pre-shipment inspection entity informs the exporter of the
       modalities of the inspection and the criteria that will be applied.
       The pre-shipment inspection entity shall carry out the appropriate controls in a time
       span that avoids unreasonable delays. They shall also, following receipt of the final
       documents and completion of the inspection, within five working days, either issue a
       Clean Report of Findings or provide a detailed written explanation specifying the
       reasons for non-issuance. In the latter case exporters shall be given the opportunity
       to present their views in writing and, if exporters so request, arrange for re-
       inspection at the earliest mutually convenient date.
       Pre-shipment inspection entities shall also undertake, whenever so requested by the
       exporter, prior to the date of physical inspection, a preliminary verification of price
       and, where applicable, of currency exchange rate, on the basis of the contract
       between exporter and importer, the pro forma invoice and, where applicable, the
       application for import authorisation. They shall, after a preliminary verification has
       taken place, immediately inform exporters in writing either of their acceptance or of
       their detailed reasons for non-acceptance of the price and/or currency exchange rate.
       In order to avoid delays in payment, pre-shipment inspection entities shall send to
       exporters or to designated representatives of the exporters a Clean Report of
       Findings as expeditiously as possible. They shall.also, in the event of a clerical error
       in the Clean Report of Findings, correct the error and forward the corrected
       information to the appropriate parties as expeditiously as possible.
c.     The pre-shipment inspections shall be carried out in a non-discriminatory manner,
        and the procedures and criteria employed in the conduct of these activities shall be
        objective and applied on an equal basis to all exporters affected by such activities.
d.     Pre-shipment inspection entities shall not request exporters to provide information
        regarding manufacturing data related to patented, licensed or undisclosed processes,
        or to processes for which a patent is pending; unpublished technical data other than
        data necessary to demonstrate compliance with technical regulations or standards;
        internal pricing, including manufacturing costs; profit levels; the terms of contracts
       between exporters and their suppliers unless it is not otherwise possible for the
        entity to conduct the inspection in question. (In such cases, the entity shall only
        request the information necessary for this purpose).
 ---pagebreak---                                                                                            ^\5
   In general, pre-shipment inspection entities shall treat all information provided by
   exporters as business confidential, to the extent that such information is not already
   published, generally available to third parties, or otherwise in the public domain.
   Such business confidential information shall be shared with the governments
   contracting or mandating the entity only to the extent that such information is
   customarily required for letters of credit or other forms or payment or for customs,
   import licensing or exchange control purposes.
e. Pre-shipment inspection entities shall establish procedures to receive, consider and
   render decisions concerning grievances raised by the exporters. These procedures
   shall be developed and maintained in accordance with the following guidelines:
   i.   pre-shipment inspection entities shall designate one or more officials who shall
        be available during normal business hours in each city or port in which they
        maintain a pre-shipment inspection an administrative office to receive, consider
        and render decisions on exporters' appeals or grievances;
   ii.  exporters shall provide in writing to the designated official(s) the facts
        concerning the specific transaction in question, the nature of the grievance and a
        suggested solution;
   iii. the designated official(s) shall afford sympathetic consideration to exporters'
        grievances and shall render a decision as soon as possible after receipt of the
        documentation referred to in sub-paragraph (ii).
 ---pagebreak---                                                                                                         OLD
                                                    5
                                                Article 5
In order to prevent over- and under-invoicing and fraud in the importing third country,
Member States shall verify that pre-shipment inspection entities conduct price verification1
according to the following conditions.
a.      pre-shipment inspection entities shall only reject a contract price agreed between an
        exporter and an importer if they can demonstrate that their findings of an
        unsatisfactory price are based on a; verification process which is in conformity with
        the criteria set out in sub-paragraphs (b) through (e),
b.      the pre-shipment inspection entity shall base its price comparison for the verification
        of the export price on the price(s) of identical or similar goods offered for export
        from the same country of exportation at or about the same time, under competitive
        and comparable conditions of ^sale, in conformity with customary commercial
        practices and net of any applicable standard discounts. Such comparison shall be
        based on the following:
        i.   only prices providing a valid basis of comparison shall be used, taking into
             account the relevant economic factors pertaining to the country of importation
             and a country or countries used for price comparison;
        ii.  the pre-shipment inspection entity shall not rely upon the price of goods offered
             for export to different countries of importation to arbitrarily impose the lowest
             price upon the shipment;
        iii. the pre-shipment inspection entity shall take into account the specific elements
             listed in sub-paragraph (c);
        iv. at any stage in the process described above, the pre-shipment inspection entity
             shall provide the exporter with an opportunity to explain the price;
c.      when conducting price verification, pre-shipment inspection entities shall make
        appropriate allowances for the terms of the sales contract and generally applicable
        adjusting factors pertaining to the transaction; these factors shall include but not be
        limited to the commercial level and quantity of the sale, delivery periods and
        conditions, price escalation clauses, quality specifications, special design features,
        special shipping or packing specifications, order size, spot sales, seasonal influences,
        licence or other intellectual property fees, and services rendered as part of the
        contract if these are not customarily invoiced separately; they shall also include
        certain elements relating to the exporter's price, such as the contractual relationship
        between the exporter and importer;
 1
   It should be remembered that the obligations of user Members with respect to the services of pre-
shipment entities in connection with customs valuation shall be the obligation which they have accepted
in GATT 1994 and the other Multilateral Trade Agreements included in Annex 1A of the WTO
Agreement (footnote 4 of the agreement on pre-shipment inspection of the WTO).
 ---pagebreak---                                                                                                Ad
                                                6
d.     the verification of transportation charges shall relate only to the agreed price of the
       mode of transport in the country of exportation as indicated in the sales contract;
e.     the following shall not be used for price verification purposes:
       i.   the selling price in the country of importation of goods produced in such
            country;
       ii.  the price off goods for export from a country other than the country of
            exportation;
       iii. the cost of production;
       iv. arbitrary or fictitious prices or values.
                                             Article 6
In order to avoid unnecessary delays for exporters, Member States shall incite pre-
shipment inspection entities to use simplified verification procedures, where appropriate,
in particular to exclude the review of prices in certain cases. In establishing these
simplified procedures, however, account shall be taken of the obligation by Member States
and pre-shipment inspection entities to carry out the activity in a non-discriminatory
manner.
                                             Article 7
 If the pre-shipment inspection entity does not observe the conditions set out in Articles 4
 and 5 of this Directive, or if the entity does not comply with the procedures set out in
 Article 9, the authorities of a Member State shall notify the Commission and the other
 Member States of such non-observance or non-compliance and may have recourse to the
 procedure foreseen by Article 4 of Council Regulation2641/84 (EC)2.
                                             Article 8
 Member States shall provide third countries, if requested, technical assistance directed
 towards the achievement of the objectives of the agreement on pre-shipment inspection in
 the WTO mutually agreed terms, or how to do without them.
  2
    OJL252of20.9.1984p. 1
 ---pagebreak---                                                                                               a^/
                                           Article 9
Member States shall encourage pre-shipment inspection entities and exporters mutually to
resolve their disputes. However, two working days after submission of the grievance in
accordance with the provisions of paragraph e of Article 4, either party may refer the
dispute to independent review entity as foreseen by Article 4 of the agreement on pre-
shipment inspection of the World Trade Organisation (WTO). The procedure shall be as
follows:
a.    an exporter or pre-shipment inspection entity wishing to raise a dispute shall contact
      the independent entity referred to above and request the formation of a panel. The
      independent entity shall be responsible for establishing a panel. This panel shall
      consist of three members. The members of the panel shall be chosen so as to avoid
      unnecessary costs and delays. The first member shall be chosen from section (i) of
      the hst foreseen in the WTO agreement on pre-shipment inspection by the pre-
      shipment inspection entity concerned, provided that this member is not affiliated to
      that entity. The second member shall be chosenfromsection (ii) of the list foreseen
      in the WTO agreement on pre-shipment inspection by the exporter concerned,
      provided that this member is not affiliated to that exporter. The third member shall
      be chosen from section (iii) of the list foreseen in the WTO agreement on pre-
      shipment inspection by the independent entity referred to above. No objections shall
      be made to any independent trade expert drawnfromsection (iii) of the list foreseen
      in the WTO agreement on pre-shipment inspection;
b.    the independent trade expert drawnfromsection (iii) of the list foreseen in the WTO
      agreement on pre-shipment inspection shall serve as the chairman of the panel. The
      independent trade expert shall take the necessary decisions to ensure an expeditious
      settlement of the dispute by the panel, for instance, whether the facts of the case
      require the panellists to meet and, if so, where such a meeting shall take place,
      taking into account the site of the inspection in question;
c.    if the parties of the dispute so agree, one independent trade expert could be selected
      from section (iii) of the list foreseen in the WTO agreement on pre-shipment
      inspection by the independent entity referred to in sub-paragraph (a) to review the
      dispute in question. This expert shall take the necessary decisions to ensure an
      expeditious settlement of the dispute, for instance taking into account the site of the
      inspection in question;
d.    the object of the review shall be to estabUsh whether, in the course of the inspection
      in dispute, the parties to the dispute have complied with the provisions of this
      directive. The procedures shall be expeditious and provide the opportunity for both
      parties to present their views in person or in writing;
 ---pagebreak---                                                                                              ^
                                               8
e.    decisions by a three-member panel shall be taken by majority vote. The decision on
      the dispute shall be rendered within eight working days of the request for
      independent review and be communicated to the parties of the dispute. This time-
      limit could be extended upon agreement by the parties to the dispute. The panel or
      independent trade expert shall apportion the costs, based on the merits of the case;
f.    the decision of the panel shall be binding upon the pre-shipment inspection entity and
      the exporter which are parties to the dispute.
                                          Article 10
This directive shall enter into force on the date determined bv the decision on the entry
into force of the acts implementing the Results of the Uruguay Round
They will inform the Commission of these measures or any modifications thereof.
Separately they will submit copies of these measures to the Secretariat of the WTO.
The measures or modifications thereof shall not be enforced before they have been
published.
                                           Article 11
This directive is addressed to Member States.
 ---pagebreak---                     'ÀLf
       Part 4
Textiles & clothing
 ---pagebreak---                                                                              d£
              Proposal for a Council Regulation amending
     COUNCIL REGULATION (EEC) No 3030/93 of 12 October 1993
on common rules for imports of certain textile products from third countries
 ---pagebreak---                                                                                             2(o
                                Explanatory Memorandum
 1.      The present proposal amending Regulation 3030/93 on common rules for imports
of textiles is designed to ensure effective implementation of the Agreement on Textiles
and Clothing of the World Trade Organization.
2.       The WTO Agreement on Textiles and Clothing necessitates three types of
changes to Regulation 3030/93:
         (i)    the safeguard provisions (Article 10) have to be brought into line with
those of the new WTO Agreement on Textiles and Clothing (Article 6);
         (ii)   the Community quantitative limits contained in Annex V affecting imports
from members of the WTO will have to be adjusted at the beginning of each of the 3
phases of the WTO Agreement on Textiles and Clothing to reflect the higher annual
quota growth rates foreseen; similarly at such time as the European Union integrates
products subject to quantitative limits such products should be deletedfromAnnex V;
         (iii) as and when certain of the third countries listed in Annex VIII (flexibility
provisions) become members of the WTO, the respective "cap" on cumulative use of
flexibility provisions indicated in column 8 of the table will have to be deleted since
Article 2 paragraph 16 of the WTO Agreement on Textiles and Clothing stipulates that
there shall be no limit to the "combined use of swing, carry over and carry forward".
Since it is not clear at this stage whether and when all the third countries listed in the
Annexes will become members of the WTO and thereby benefit from the Agreement on
Textiles and Clothing, the Commission will adopt the necessary technical amendments to
the Annexes to Regulation 3030/93 referred to in points (ii) and (iii) above via the
Textiles Committee procedure laid down in Article 17 of the Regulation.
To this end and for reasons of clarity it is proposed to delete the reference to the quota
years 1993-1995 in Article 2 paragraph 1 of the Regulation since for WTO Members the
quota increases will be automatic for the next 10 years.
3.       With regard to the safeguard clause, it is proposed to maintain the existing
language on the basket exit mechanism contained in the present paragraphs 1 and 2 of
Article 10 of the Regulation and to add clauses corresponding to the new provisions of
the WTO Agreement on Textiles and Clothing. The reason for this is that of the countries
listed in Annex IX which are currently subject to the basket exit mechanism a number of
important suppliers (eg China, Taïwan, Vietnam, ex USSR) will probably not be
members of the WTO upon the date of its entry into force but join in the near future.
Therefore, it will be necessary to maintain the current safeguard mechanism to cover the
interim period. The Commission proposes two parallel safeguard provisions in the
Regulation and as and when each of the third countries listed in Annex IX benefits from
the WTO Agreement on Textiles and Clothing, that country will be deleted from Annex
IX via the Textiles Committee procedure (Article 17 of the Regulation).
 ---pagebreak---                                                                                                  A>
                        Proposal for a Council Regulation amending                 * 94/ 0227 ( Acc}
           COUNCIL REGULATION (EEC) No 3030/93 of 12 October 1993
     on common rules for imports of certain textile products from third countries
THE COUNCIL OF THE EUROPEAN UNION,
Having regard to the Treaty establishing the European Community and in particular
Article 113 thereof,
Having regard to the proposalfromthe Commission,
Having regard to the opinion of the European Parliament,
Whereas the Community has signed the Final act of the Uruguay Round of GATT
negotiations setting up a World Trade Organization, (hereinafter referred to as the WTO);
Whereas it is necessary to amend the safeguard provisions laid down in Regulation
(EEC) No 3030/93 of 12 October 19931 on common rules for imports of certain textile
products from third countries, as last amended by Commission Regulation (EC) No.
195/94 of 12 January 19942, in order to bring them into line with the new safeguard
provisions contained in the WTO Agreement on Textiles and Clothing with regard to
importsfromWTO Members;
Whereas the WTO Agreement on Textiles and Clothing also stipulates the annual growth
rates which will be applied automatically to remaining Community quantitative limits on
imports from WTO Members for a period of 10 years following entry into force of the
WTO; whereas it is therefore appropriate that the Community quantitative limits foreseen
in Annex V of Regulation (EEC) No 3030/93 on importsfromWTO Members should be
amended at each stage of the WTO Agreement on Textiles and Clothing via the
procedure foreseen in Article 17 of the Regulation and paragraph i of Article 2 of the
Regulation should be amended to that effect.
 1
   OJ No L 275, 8.11.1993, p.l
2
   OJ No L 29, 2.2.1994, p. 1
 ---pagebreak---                                                                                              5Ï
HAS ADOPTED THIS REGULATION
                                           Article 1
Article 10 of Council Regulation (EEC) No 3030/93 is replaced by the following:
                                          "Article 10
                                     Safeguard measures
 1.     Should imports into the Community of products falling within any given
category, not subject to the quantitative limits set out in Annex V and originating in one
of the countries listed in Annex IX exceed, in relation to the preceding calendar year's
total imports into the Community of products in the same category, the percentages
indicated in the Table appearing in Annex IX, such imports may be made subject to
quantitative limits under the conditions laid down in this Article.
2.      Paragraph 1 shall not apply where the percentages specified therein have been
reached as a result of a fall in total imports into the Community, and not as a result of an
increase in exports of products originating in the supplier country concerned.
3.      Where the Commission, upon its own initiative or at the request of a Member
State, considers that the conditions set out in paragraph 1 are fulfilled and that a given
category of products should be made subject to a quantitative limit:
(a)     it shall open consultations with the supplier country concerned in accordance with
the procedure specified in Article 16 with a view to reaching an arrangement or joint
conclusions on a suitable level of restriction for the category or products in question;
(b)     pending a mutually satisfactory solution, the Commission shall, as a general rule,
request the supplier country concerned to limit exports of the products in the category
concerned to the Community, for a provisional period of three months from the date on
which the request for consultations is made. Such provisional limit shall be established at
25% of the level of imports during the previous calender year, or 25% of the level
resulting from the application of the formula set out in paragraph 1, whichever is the
higher;
(c)     it may, pending the outcome of the requested consultations, apply to the imports
of the category of products in question quantitative limits identical to those requested of
the supplier country pursuant to point (b). These measures shall be without prejudice to
the definitive arrangements to be made by the Community, taking into account the results
of the consultations.
4.      (a)      Should imports into the Community of textile products not subject to the
quantitative limits set out in Annex V and originating in Bulgaria, the Czech Republic,
Hungary, Poland, Romania or the Slovak Republic take place in such increased
quantities, or under such conditions, so as to cause serious damage or actual threat
thereof, to the Community's production of like or directly competitive products, such
imports may be made subject to quantitative limits under the conditions laid down in the
Additional Protocols with these countries.
 ---pagebreak---                                                                                              25
         (b)      The provisions of paragraph 3, shall also apply in such cases except that
the provisional limit referrred to in paragraph 3 (b) shall be established at 25%, at least,
of the level of imports during the twelve-month period terminating two months, or where
data is not available three months, preceding the month in which the request for
consultations is made.
5.       (a)      With regard to products not subject to the quantitative limits set out in
Annex V and originating in countries which are Members of the World Trade
Organization, safeguard action may be taken where it is demonstrated that a particular
product is being imported into the Comunity in such increased quantities as to cause
serious damage, or actual threat thereof, to the domestic industry producing like and/or
directly competitive products. Serious damage or actual threat thereof must demonstrably
be caused by such increased quantities in total imports of that product and not by such
other factors as technological changes or changes in consumer preference.
         (b) In making a determination of serious damage, or actual threat thereof, as
referrred to in paragraph (a) the effect of those imports on the state of the particular
industry shall be examined, as reflected in changes in such relevant economic variables
as output, productivity, utilization of capacity, inventories, market share, exports, wages,
employment, domestic prices, profits and investment.
         (c)      The third country or countries, Member(s) of the World Trade
Organization to whom serious damage, or actual threat thereof, as referred to in
paragraph (a) is attributed, shall be determined on the basis of a sharp and substantial
 increase in imports, actual or imminent and on the level of imports as compared with
 imports from other sources, market share and import and domestic prices at a comparable
 stage of commercial transaction.
 6.      Where the Commission, upon its own initiative or at the request of a Member
 State, considers that the conditions set out in paragraph 5 are fulfilled and that the
 products in question should be made subject to a quantitative limit:
 (a)     it shall open consultations with the supplier country concerned in accordance with
 the procedure specified in Article 16 with a view to reaching an arrangement or joint
 conclusions on a suitable level of restriction for the products in question;
 (b)      it may, pending the outcome of the consultations and in highly unusual and
 critical circumstances where delay would cause damage which could be difficult to
 repair, impose a provisional quantitative limit on the products in question. Such
 provisional limit shall not be lower than the actual level of imports from the supplier
 country during the twelve-month period terminating two months proceding the month in
 which the request for consultations was made.
 7.       (a)     Measures taken pursuant to paragraphs 3, 4 and 6 shall be the subject of a
 Commission communication published without delay in the Official Journal of the
 European Communities.
 ---pagebreak---                                                                                             Io
         (b)     The Commission shall refer urgent cases to the Committee provided for in
Article 17 either at its own initiative or within five working days of receipt of a request
from a Member State or States setting out the reasons for the urgency and shall take a
decision within five working days of the end of the Committee's deliberation.
8.      The consultations with the supplier country concerned which are provided for in
paragraphs 3, 4 and 6 may lead to an arrangement between that country and the
Community, on the introduction and the level of quantitative limits. Such arrangements
shall stipulate that the quantitative limits agreed be administered in accordance with a
double-checking system.
9.      Should the parties be unable to reach a satisfactory solution within 60 days
following notification of the request for consultations, the Community shall have the
right to introduce a definitive quantitative limit at an annual level not lower than:
(a)     in the case of supplier countries listed in Annex IX, the level resulting from the
application of the formula set out in paragraph 1 or 106% of the level of imports reached
during the calendar year preceding that in which imports exceeded the level resulting
from the application of the formula set out in paragraph 1 and gave rise to the request for
consultations, whichever is the higher.
(b)     in the case of Bulgaria, the Czech Republic, Hungary, Poland, Romania or the
Slovak Republic, 110% of the imports for the twelve-month period tenninating two
months, or where data is not available three months, preceding the month in which the
request for consultations is made.
(c)     in the case of supplier countries, members of the WTO, the actual level of imports
from the supplier country concerned during the twelve-month period terminating two
months preceding the month in which the request for consultations was made.
10.     The annual level of the quantitative limits established in accordance with
paragraphs 3 to 6 or 9 may not be less than the level of imports into the Community in
1985 for Argentina, Brazil, Hong Kong, Pakistan, Peru, Sri Lanka and Uruguay, and in
1986 for Bangladesh, India, Indonesia, Malaysia, Macao, Philippines, Singapore, South
Korea and Thailand, of products of the same category and originating in the same
supplier country.
11.     The quantitative limits established under this Article shall not apply to products
which have already been dispatched to the Community provided that they were shipped
from the supplier country in which they originate for export to the Community before the
date of notification of the request for consultations.
 ---pagebreak---                                                                                         u
12.     Measures taken in acordance with the provisions of paragraph 5 may remain in
place:
        (a)     for up to three years without extension, or
        (b)     until the product is integrated into GATT 1994, whichever comes first.
13.     The measures provided for in paragraphs 3, 4, 6 and 9 and the arrangements
referred to in paragraph 9 shall be adopted and implemented in accordance with the
procedure laid down in Article 17."
                                           Article 2
Article 2 paragraph 1 of Council Regulation (EEC) No. 3030/94 is replaced by the
following:
"The importation in the Community of the textile products listed in Annex V originating
in one of the supplier countries listed in that Annex shall be subject to the annual
quantitative limits laid down in that Annex".
                                           Article 3
This Regulation shall enter into force on date determined by the decision of entry into
force of the acts implementing the results of the Uruguay Round.
This Regulation shall be binding in its entirety and directly applicable in all Member
States.
Done at Brussels,                                            For the Council
 ---pagebreak---             l>
  Part5
Agriculture
 ---pagebreak---                                                                               V}
                             EXPLANATORY MEMORANDUM
I. INTRODUCTION
    Several of the agreements which the Community has negotiated under the
    Uruguay Round (hereinafter referred to as the "GATT Agreements")(*)
    involve adapting some of the legislation implementing the common
    agricultural policy. These are in particular:
    -  the Agreement on Agriculture (hereinafter referred to as the
       "Agreement"),
       the Agreement on the Application of Sanitary and Phytosanitary
       Measures,
       the Agreement on Safeguards, and
    -  the Agreement on Trade-Related Aspects of Intellectual Property Rights
        (hereinafter referred to as the "TRIPS Agreement").
    As regards agriculture, these Agreements cover the following aspects:
       the internal support arrangements,
       the arrangements on trade with third countries,
       a system for the protection of designations of origin (part of the
       TRIPS Agreement),
       arrangements concerning veterinary and plant health measures affecting
       international trade.
       The attached proposals for Regulations(2) contain the provisions
       necessary for incorporating into Community law the rules referred to
       in the last three indents above. As regards the arrangements for
       internal support, the Commission considers that specific provisions
       should not be introduced into the market organizations. The relevant
       rules in the Agreement should be taken into account when prices are
       fixed and aid measures are adopted for future marketing years.
       In order to safeguard the possibility of the necessary measures being
       taken in trade relations with third countries vis-à-vis which the
       Commission has no obligations under the GATT Agreements, the "GATT"
       proposal provides a suitable legal basis.
(1)    See proposal for a Council Decision con the conclusion of the results
       of the Uruguay Round of the multilateral trade negotiations (1986-94),
       COM(94) 143 final of 15 May 1994.
(2)    there are two draft Regulations: one covering all the amendments based
       on Article 43 of the EC Treaty (referred to as the "GATT" proposal)
       and one based on Articles 43 and 100a of the Treaty.
 ---pagebreak---                                                                             ^
      These proposals do not cover the following:
      - issues arising from the GATT Agreements and affecting the
        preferential agreements concluded with third countries (e.g. Lomé
        Convention) and the enlargement of the Community, which are still to
        be dealt with;
      - the agri-monetary arrangements for the new system; these will be
        dealt with in the report on the agri-monetary system which the
        Commission is to present to the Council before the end of 1994.
II.   TRADE ARRANGEMENTS
   A. General
      The GATT Agreements centre the trade arrangements on the following
      main points:
      - tarification,
      - access to the Community market,
      - safeguard provisions,
      - the export subsidy system.
      The "GATT" proposal is based on the following principles:
      - careful compliance with obligations under the GATT Agreements,
      - maximum flexibility for management,
      - full use of possibilities offered by the GATT Agreements,
      - as little change as possible to the organization of the markets in
        the various agricultural products.
      However, it has proved inevitable to make amendments to almost all the
      provisions in the basic Regulations relating to trade with third
      countries. The abolition of variable levies not only entails
      abolishing the rules for their calculation but also calls for the
      articles relating thereto to be adapted. This also holds true for
      export refunds, which can only be granted subject to the quantitative
      and financial limits laid down in the Agreement.
      Nevertheless, this proposal largely confines' itself to incorporating
      in the basic Regulations the main principles on the implementation of
      the GATT Agreements and entrusting the Commission with the task of
      implementing them in line with the needs of the various sectors. This
      approach, which is based in particular on the heed to preserve
      sufficient flexibility for day-to-day management, takes account in
      particular of the fact that most obligations to be met are defined
      precisely in the Agreements.
 ---pagebreak---                                                                          ir
   When making these amendments, the Commission has also held to the
   principle recognized at the time of the consolidation of the
   Regulation on the market organization for cereals (Regulation (EEC)
   No 1766/92) under the reform of the CAP and applied on several
   occasions since then, to the effect that competence for legislation
    should be shared between the Council and the Commission so as to
   result in two levels only: on the one hand the provisions adopted by
   the Council in accordance with the procedure laid down in
   Article 43(2) of the EC Treaty and, on the other, the detailed rules
   of application adopted by the Commission in accordance with the
   Management Committee procedure.
   As regards the implementation of the GATT Agreements in legislation,
   the Commission has opted for an approach by product group which
   preserves the traditional structure of the market organizations, as
    set out in particular in the basic Regulations, and at the same time
   ensures the transparency of the solutions chosen. The "GATT" proposal
   accordingly consists in concise substantive provisions covering all
   product groups and comprising in particular a legal basis for the
   adoption of the necessary transitional rules, the annexes to which
   contain the adjustments to be made for the various sectors. It also
   provides for the repeal of the regulations laying down general rules.
B. Import arrangements
1. Import charges (tarification)
   The fundamental change introduced by the new import arrangements is
   the replacement of variable charges (levies, compensatory amounts,
   etc.) and other types of non-tariff import restrictions (quantitative
   restrictions, voluntary restraint agreements, etc.) by stable,
   degressive tariffs. The introduction of such tariffs will be effected,
    in legal terms, by means of a suitable amendment to the Common Customs
   Tariff, the relevant figures being set out in the final schedules
   presented by the Community to the Director-General of GATT and forming
   a legal part of the Agreement. In the basic Regulations, it will
   accordingly be sufficient to refer to the duties entered in the CCT.
   The replacement of variable charges by the CCT duties implies the
   repeal of all the rules which refer to their calculation, i.e. in
   particular all provisions on the fixing of threshold prices, reference
   prices, etc. and the rules laid down for the calculation of variable
   •charges applying to derived products.
 ---pagebreak---                                                                      u
Certain special points should be mentioned:
(a) The "special safeguard provisions"
    These provisions allow a minimum level of protection to be
    maintained against the adverse effects on the market of the
    conversion of the former import restrictions into customs duties
    ("tarification"). They therefore only apply to products
    specifically identified in the final schedules. They must not be
    confused with the safeguard provisions traditionally appearing in
    all the basic Regulations; in fact, they involve a system which is
    additional to the import duty and allow the latter to be increased
    if certain conditions specified in the Agreement are met.
    Accordingly, a specific article has been introduced, providing a
    suitable legal basis for making use, at the right time, of the
    possibilities afforded by this system. The extent to which the
    system will be used depends on the market conditions applying for
    the various products.
(b) Standard safeguard provisions
    The standard safeguard provisions appearing hitherto in the basic
    Regulations are maintained. However, the Agreement on Safeguards
    contains reinforced all-sector arrangements specifying the
    conditions under which they may be applied. A reference to these
    rules has accordingly been included in the articles in question,
    which have also been adapted to take account of the division of
    competence mentioned in A.
(c) Specific arrangements for raw sugar for refining and molasses
    Tarification as provided for in the Agreement could result in raw
    sugar for refining and molasses being subject to an import charge
    which could jeopardize supplies of such products to processing
    industries in the Community. Accordingly, a special mechanism has
    been introduced to permit the application of the duty entered in
    the CCT to be suspended where the price recorded on the world
    market exceeds a certain level.
 ---pagebreak---                                                                        * >
    (d) Special arrangements on prices applying
        For certain products (e.g. some cereals and rice), the Agreement
        involves a level of protection, lower than that provided by the
        CCT, which is dependent on import prices. Similarly, for certain
        fruit and vegetables, must and grape juice, the import charge
        depends on the entry price. In this respect, certain special rules
        or necessary derogations from the CCT have been laid down,
        implementation and details being left to the detailed rules of
        application, which will have to deal in particular with the thorny
        problem of controls. The present system of minimum import prices
        remains in force for dried grapes and processed cherries until
        1 January 2000.
    (e) Management measures for beef and veal
        The Agreement's ban on quantitative import restrictions requires
        the repeal of Council Regulation (EEC) No 1157/92 of 28 April
        1992, which at present serves as a legal basis for the erga omnes
        limitation on imports of young bovine animals. As that measure is
        of special importance for maintaining balance on the market for
        beef and veal in the Community, the Commission will deal with the
        matter during the renegotiation of the Europe Agreements with
        certain East European countries.
2. Access to the Community market
    In this context, the term "market access" covers all the conditions
   under which imports may take place at reduced or zero duty. A
   distinction should be made in principle between agreements concluded
   with certain third countries containing preferential conditions
   granted by the Community, current access within the meaning of the
   Agreement (which includes part of the abovementioned agreements) and
   minimum access.
    In view of the high number of quotas in question and in order to
   ensure their implementation as effectively as possible, a uniform
    approach has been adopted for all cases, whatever their history. For
   the sake of simplification and efficiency, this approach provides
   that, on the basis of the international agreements concluded by the
   Council or of autonomous acts of the latter and in accordance with the
   conditions stipulated therein, the opening and administration of
   •tariff quotas are to be carried out by the Commission in accordance
   with the Management Committee procedure. A similar approach was
    adopted for the administration of the quotas opened recently as a
   result of the Soya Panel (Regulation (EC) No 774/94). Naturally, this
   uniform procedural approach does not imply that the detailed rules
   will be the same for all product groups.
 ---pagebreak---                                                                              M
        As regards the market organization for bananas, the "GATT" proposal
        involves taking over the framework agreement with certain countries in
        Latin America. In accordance with the general approach in Regulation
        (EEC) No 404/93, certain aspects of the allocation of tariff quotas
        are incorporated in the Regulation.
    C. Export arrangements
    1. General
        The export arrangements resulting from the Agreement provide for a
        reduction in forthcoming years in the subsidies which may be granted
        on agricultural products exported from the Community as such or after
       processing. The reduction is to be made in accordance with rules
        concerning the sums granted for all such exports and the quantities of
       products exported as such(3). The arrangements must be applied in
        such a way as to permit verification of compliance with those limits
        for a period of 12 months, to commence in principle on 1 July 1995
       and, in the case of other products (rice, wine, olive oil and sugar)
       at later dates.
       The Commission considers that compliance with limits on the value of
       refunds may be monitored:
       - when refunds are fixed,
       - on the basis of advance fixing authorized by the Commission or of
          tenders accepted in response to invitations to tender,
       - on the basis of information provided by the Member States on
          licences issued, refunds granted being compulsorily fixed in
          advance, and
       - on the basis of information provided to the EAGGF relating to
          payments made by national bodies. Using such information, it should
          be possible to charge each payment made to the EAGGF financial year
          during which export formalities were completed.
       As a result no other specific mechanisms need be introduced to ensure
       compliance with limits on value..
    2. Compliance with limits on quantity
       As regards limits on quantity, the Agreement provides that compliance
       must be demonstrated in terms of the quantities qualifying for export
      •refunds for which export licences have been issued during the
       marketing year in question.
(3)    Limits on quantity do not apply to non-Annex II products.
 ---pagebreak---                                                                      19
(a) The aim of the "GATT" proposal is to ensure monitoring of the
    quantities exported using export licences. Accordingly, such
    licences will become compulsory where products covered by a refund
    application are exported. This does not rule out the possibility
    that, for certain product groups where such arrangements already
    exist, export licences may also be required for purposes of
    statistical monitoring of trade where export takes place without
    any refund being granted. It remains to be decided whether
    monitoring of the quantities exported will mean limiting the
    duration of validity of export licences to the curent marketing
    year or whether monitoring can be based on licences issued during
    the marketing year. The detailed rules for the application of the
    licence arrangements, and in particular the conditions
    specifically relating to the issuing, term of validity and
    transferability of licences, will be laid down, as at present, in
    accordance with the Management Committee procedure for the product
    group concerned.
    Clearly, compliance with limits on quantity under the Agreement
    calls for mechanisms to prevent any overrun. As the choice of
    measures to be taken depends on the specific situation and the
    requirements of the market in each product, the "GATT" proposal
    does not dictate the methods to be used for checking quantities
    available.
(b) One possible option is to determine export refunds by invitation
    to tender. Here too, the "GATT" proposal does not dictate the
    procedures to be adopted; refunds could also be fixed periodically
    as they are now.
(c) It is the Commission's intention to select the approach which
    involves the least red tape and is best adapted to the specific
    situation of the product group concerned. This is why the "GATT"
    proposal lays down flexible legal bases which allow the most
    suitable solution to be sought for each product group, in
    particular to make maximum use of the latitude offered by the GATT
    Agreements and, where appropriate, for the arrangements to be
    amended in the light of experience in applying them. This approach
    is, moreover, in line with the way the Commission has hitherto
    exercised the competence it has enjoyed under the arrangements in
    force to date.
 ---pagebreak---                                                                           h
    (d) Some points should be mentioned:
        - there are exceptions from the general arrangements:
          * for exports under food-aid operations, which are not subject
            to any limits on quantity or value,
          * for agricultural products exported in the form of goods not
            listed in Annex II to the EC Treaty, such goods not being
            subject to any limit on quantity;
        - it is necessary to limit the scope for speculation and to create
          a linkage with limits on value; accordingly, it is proposed to
          make advance fixing compulsory, including reference to the
          destination but allowing changes to another destination within
          the same geographical area at the same refund rate;
        - for certain products, the Agreement sets the quantities which
          may be exported with payment of refunds at a level which, in the
          light of experience gained, is unlikely to be exceeded. The
          Regulation takes account of this by making provision for the
          Commission, in accordance with the Management Committee
          procedure, to relax the constraints laid down in this respect
          for the products concerned to the extent appropriate;
        - the pre-financing arrangements should be adapted at a later
          stage, in particular on account of negative experience in
          applying them and with a view to ruling out fraud when they are
          applied.
D. Other provisions on trade
1. The provisions on inward processing arrangements have been maintained
   without any substantial change.
2. The articles oh the prohibition of measures having an effect
   equivalent to customs duties and quantitative restrictions and
   measures having an equivalent effect have been adapted to the new
   arrangements.
3. The article on shortages in supply has been adapted to the extent
   necessary to take account of the abolition of threshold prices.
 ---pagebreak---                                                                            VI
III. INCLUSION OF THE TRIPS AGREEMENT
     For the first time the GATT Agreements lay down provisions on the
     protection of intellectual property rights. Under this heading there
     are specific provisions on the protection of designations of origin.
     The Community regulations in force lay down rules on designations of
     origin in several areas:
     - for wine (quality wine psr),
     - for spirituous beverages, and
     - more generally, for certain agricultural and food products (in
       Regulation (EEC) No 2081/92).
     All these Community regulations (except those on wine) contain a
     reservation relating to international agreements concluded by the
     Community. Since the TRIPS agreement contains special arrangements on
     wine and spirit drinks, specific provisions must be incorporated into
     the relevant regulations. As a result, when the various Community
     arrangements are applied, due account may be taken of the obligations
     and restrictions resulting from the TRIPS Agreement.
IV.  VETERINARY AND PLANT-HEALTH LEGISLATION
     In the veterinary and plant-health fields, the provisions in force
     permit the rules in the relevant Agreement to be applied. However,
     Directive 77/93/EEC on protective measures against the introduction
     into the Community of organisms harmful to plants or plant products
     must be amended to ensure uniform application of the arrangements with
     regard to third countries.
V.   ENTRY INTO FORCE
     In accordance with the Commission's policy decision that the results
     of the Uruguay Round should be implemented as a whole, the proposals
     refer to a Council decision on entry into force which will apply to
     all the sectors concerned.              ^
 ---pagebreak---                                                                              H i/
                                                              94/ 0228(CNS)
                                 Proposal for a
                      COUNCIL REGULATION (EC) No .     /94
                                  of
                                  Ul ..... 1994
                                            U 3 t
          on the adjustments and transitional arrangements required
  in the agriculture sector in order to implement the agreements concluded
         during the Uruguay Round of multilateral trade negotiations
THE COUNCIL OF THE EUROPEAN UNION,
Having regard to the Treaty establishing the European Community, and in
particular Article 43 thereof,
Having regard to Council Regulation (EEC) No 805/68 of 27 June 1968 on the
common organization of the market in beef and veal(^), as last amended by
Regulation (EC) No 1884/94( 2 ), and in particular Article 7(2) thereof,
Having regard to the proposal from the Commission,
Having regard to the opinion of the European Parliament,
Whereas the Community has adopted a set of rules governing the common
agricultural policy;
Whereas, under the Uruguay Round of multilateral trade negotiations, the
Community has negotiated various agreements (hereinafter referred to as the
"GATT agreements");, whereas several of those agreements concern agriculture,
in particular the Agreement on Agriculture (hereinafter referred to as "the
Agreement"); whereas the concessions relating to domestic support can be
complied with by setting prices and aid at a suitable level and specific
provisions need not be laid down on this subject; whereas the Agreement lays
down a six—year timetable for the extension of access to the Community
market for agricultural products from third countries on the one hand and
the gradual reduction in support granted by the Community on exports of
agricultural products on the other hand; whereas the agricultural
legislation on trade with third countries should be adapted accordingly;
(1)   OJ No L 148, 28.6.1968, p.24,
(2)   OJ No L 197, 27.7.1994, p.27,
 ---pagebreak---                                                                              te
Whereas, by converting all the measures restricting imports of agricultural
products into customs duties (tarification) and by prohibiting the
application of such measures in the future, the Agreement requires the
abolition of variable import levies and of the other measures and import
charges currently provided for under the market organizations; whereas the
rates of customs duty applicable to agricultural products in accordance with
the Agreement are to be fixed in the common customs tariff; whereas,
however, for certain product groups such as cereals, rice, wine and fruit
and vegetables, the introduction of supplementary or other trade mechanisms
that do not involve the collection of fixed customs duties calls for the
adoption of rules providing for derogations in the basic Regulations;
whereas, in addition, the measures to protect the Community market against
imports of dried grapes and processed cherries can, under the Agreement on
Safeguards, be maintained for a period of five years; whereas, moreover, in
order to avert problems of supply to the Community market, the suspension of
customs duties on certain sugar products should be permitted;
Whereas, in order to maintain a minimum level of protection against the
adverse effects on the market as a result of tarification, the Agreement
permits the application of additional customs duties under precisely defined
conditions but only to products subject to tarification; whereas the
corresponding provisions should accordingly be inserted into the basic
Regulations concerned;
Whereas the Agreement provides for a series of tariff quotas under
arrangements for current and minimum access; whereas the conditions
applicable to such quotas are spelled out in detail in the Agreement;
whereas the Community has undertaken to open other tariff quotas for certain
products under special arrangements; whereas, in view of the large number of
quotas and in order to ensure that they are implemented as effectively as
possible, the Commission should be responsible for opening and administering
them using the management committee procedure;
Whereas the amendments resulting from the framework agreement on bananas
concluded with certain countries in South America under the Uruguay Round
should be incorporated in Council Regulation (EEC) No 404/93 of 13 February
1993 on the common organization of the market in bananas^);
(3)   OJ No L 47, 25.02.1993, p.l.
 ---pagebreak---                                                                            Mt
Whereas, since the Agreement on Safeguards lays down clear rules on the
application of protective clauses as incorporated in the market
organizations, such clauses should be supplemented by a reference to the
obligations flowing from international agreements;
Whereas in its trading relations with third countries not subject to the
GATT agreements the Community is not bound by the constraints on access to
the Community market arising therefrom; whereas, in order to ensure that the
necessary measures may be taken where applicable with regard to products
from such countries, the Commission should be given the relevant powers, to
be exercised through the management committee procedure;
Whereas, by virtue of the Agreement, the granting of export subsidies is
limited henceforward to certain groups of agricultural products defined
therein; whereas, in addition, it is subject to limits in terms of quantity
and value;
Whereas compliance with the limits in terms of value can be ensured at the
time when refunds are fixed and through monitoring of payments under the
rules relating to the EAGGF; whereas monitoring may be facilitated by the
compulsory advance fixing of refunds, while allowing the possibility, in the
case of differentiated refunds, of changing the specified destination within
the same geographical area to which a single given rate of refund applies;
Whereas monitoring of constraints in terms of quantity calls for the
introduction of a reliable and effective system of monitoring; whereas, to
that end, the granting of refunds should be made subject to an export
licence; whereas refunds should be granted up to the limits available,
depending on the particular situation of each product concerned; whereas
exceptions to that rule can only be permitted in the case of processed
products not listed in Annex II to the Treaty, to which limits in value do
not apply, and in the case of food-aid operations, which are exempt from any
limitation; whereas provision should be made for derogations from strict
compliance with management rules where exports benefiting from refunds are
not likely to exceed the limits in quantity .laid down; whereas monitoring of
the quantities exported with refunds during the marketing years referred to
in the Agreement can be carried out on the basis of export licences issued
for each marketing year;
 ---pagebreak---                                                                             tf
Whereas compliance with the Agreement on Trade-Related Aspects of
Intellectual Property Rights must also be ensured; whereas, to that end, the
requisite stipulations must be inserted into Council Regulation (EEC)
No 822/87 of 16 March 1987 on the common organization of the market in
wine( 4 ), as last amended by Regulation (EEC) No 1891/94( 5 );
Whereas, with regard to plant health, Council Directive 77/93/EEC of
21 December 1976 on protective measures against the introduction into the
Member States of organisms harmful to plants or plant products and against
their spread within the Community(6), as last amended by Directive
94/13/EC^), should be amended in order to provide for uniform
arrangements vis-à-vis third countries precluding quantitative restrictions
or measures having equivalent effect;
Whereas, in the wake of the amendments to the legislation on agriculture
provided for in this Regulation, many Council Regulations deriving from the
basic Regulations no longer serve any purpose; whereas, for the sake of
legal clarity, they should be repealed; whereas certain provisions which
have lapsed although they are not directly connected with the GATT
Agreements should also be repealed;
Whereas the switchover from the existing arrangements to those resulting,
from the GATT agreements may give rise to difficulties of adaptation which
are not dealt with in this Regulation; whereas, in order to deal with that
eventuality, a general provision should be included enabling the Commission
to adopt the transitional measures necessary for a certain period,
HAS ADOPTED THIS REGULATION:
                                    Article 1
This Regulation lays down the adaptations and transitional measures
required in the agriculture sector in order to implement the agreements
concluded during the Uruguay Round of multilateral trade negotiations.
 (4)    OJ No L 84, 27.03.1987, p.l.
 (5)    OJ No L 197, 30.07.1994, p.42
 (6)    OJ No L 26, 31.01.1977, p.20.
 (7)    OJ No L 92, 9.4.1994, p. 27.
 ---pagebreak---                                                                             kh
                                  Article 2
The adaptations referred to in Article 1 are set out in the Annexes hereto.
                                  Article 3
1. Where transitional measures are necessary under the common agricultural
   policy in order to facilitate the switchover from the existing
   arrangements to those resulting from the requirements of the agreements
   referred to in Article 1, such measures shall be adopted in accordance
   with the procedure provided for in Article 38 of Regulation No 136/66/EEC
   or, as appropriate, the corresponding Articles in the other Regulations
   on the common organization of agricultural markets, or in Regulation (EC)
   No 3448/93.
   When such measures are adopted, account shall be taken of the special
   features of the various agricultural sectors, having due regard to the
   obligations arising from the agreements referred to in Article 1.
2. The measures referred to in paragraph 1 may be adopted during a period
   expiring on 31 December 1997 and shall not apply beyond that date. The
   Council, acting by a qualified majority on a proposal from the
   Commission, can extend that period.
                                  Article 4
1. Where, in view of the special circumstances affecting an agricultural
   product, compliance with the requirements on export support under the
   agreements referred to in Article 1 can be assured by means having a
   lesser effect than those provided for to that end, the Commission may, to
   the extent and for the period strictly necessary, exempt that product
   from the application of the provisions on export refunds covered by this
   Regulation.
2. Without prejudice to the provisions of this Regulation, the Commission
   may take any measures necessary to protect the Community market against
   imports of agricultural products from third countries towards which the
   Community has no binding obligations under the agreements referred to in
   Article 1.
3. Measures pursuant to paragraphs 1 and 2 shall be- adopted in accordance
   with the procedure provided for in Article 3(1).
 ---pagebreak---                                                                              '^
                                  Article 5
1. This Regulation shall enter into force on a date determined by a decision
   on the entry into force of the acts implementing the results of the
   Uruguay Round.
2. It shall apply from 1 July 1995.
   However :
   (a)  Article 3 and Article 4(2) shall apply from 1 January 1995;
   (b)  the provisions laid down in the Annexes on import duties and
        additional import duties which apply to products listed in
        Annex XIII and XVI for which an entry price is applicable before
        1 July 1995 shall apply as from the commencement during 1995 of the
        marketing year for the products concerned;
   (c)  the provisions on export refunds shall apply:
        - as from 1 September 1995 as regards Annexes II and XVI,
        - as from 1 October 1995 as regards Annex IV,
        - as from 1 November 1995 as regards Annex V;
   (d)  the provisions laid down in Annex XV shall apply as from [       ].
   (e)  the provisions laid down in Annex XVI, -1.2, shall apply as from
        1 January 1996.
This Regulation shall be binding in its entirety and directly applicable in
all Member States.
Done at                                          For the Council
 ---pagebreak---                                                                              tt-U5
                                      proposal for a
                                                                 94/ 0229CC0D)
                        PARLIAMENT AND COUNCIL REGULATION
                                   of       1994
           amending Council Regulation (EEC) No 1576/89 laying down
        general rules on the definition, description and presentation
       of spirit drinks and Council Regulation (EEC) No 1601/91 laying
             down general rules on the definition, description and
            presentation of aromatized wines, aromatized wine-based
          drinks and aromatized wine-product cocktails following the
              Uruguay Round of the multilateral trade negotiations
THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION,
Having regard to the Treaty establishing the European Community, and in
particular Articles 43 and 100a thereof,
Having regard to the proposal from the Commission,
Having regard to the opinion of the Economic and Social Committee,
Acting in accordance with the procedure referred to in Article 189b of the
Treaty,
Whereas Council Regulation (EEC) No 1576/89 of 29 May lgsg* 1 ), as amended
by Regulation (EEC) No 3280/92( 2 ), and Council Regulation (EEC) No 1601/91
of 10 June 1991( 3 ), as amended by Regulation (EEC) No 3fi79/92<4), lay down
general rules for the definition, description and presentation of spirit
drinks, aromatized wines, aromatized wine-based drinks and aromatized wine-
product cocktails; whereas in order to take account in the said Regulations
of the obligations arising, in particular, from Articles 23 and 24 of the
Agreement on Trade-Related Aspects of Intellectual Property Rights, which
forms an integral part of the Agreement establishing the World Trade
Organization, provision should be made therein for the parties concerned to
prevent, under certain* conditions, the unlawful use of geographical
designations protected by a third country member of the World Trade
Organization,
(1)  OJ No  L  160, 12.6.1989, p. 1.
(2)  OJ No  L  327, 13.11.1992, p. 3.
(3)  OJ No  L  149, 14.6.1991, p. 1.
(4)  OJ No  L  327, 13.11.1992, P. 1.
 ---pagebreak---                                                                             S"<
HAVE ADOPTED THE FOLLOWING REGULATION:
                                  Article 1
1.   The following Article is inserted after Article 11 of Regulation (EEC)
     No 1576/89:
                                "Article 11a
     1. Member States shall adopt all measures necessary to permit those
        concerned to prevent, under the conditions laid down in Articles 23
        and 24 of the Agreement on Trade-Related Aspects of Intellectual
        Property Rights, the use within the Community of a geographical
        designation identifying products covered by this Regulation for
        products which do not originate in the place referred to by the
        geographical designation in question, including in cases where the
        actual origin of the product is indicated or where the geographical
        designation is given in translation or accompanied by expressions
        such as "like", "type", "style", "imitation" or other.
        For the purposes of this Article, "geographical designation" shall
        mean any indication identifying a product as originating in the
        territory of a third country which is a member of the World Trade
        Organization, or in a region or locality of that territory, where a
        quality, reputation or other specific characteristic of that product
        can essentially be attributed to that geographical origin.
     2. Paragraph 1 shall apply notwithstanding Article 11 of this
        Regulation and other provisions of Community legislation laying down
        rules for the description and presentation of products covered by
        this Regulation.
     3. Detailed rules for the application of this Article, where necessary,
        shall be adopted in accordance with the procedure laid down in
        Article 14."
 ---pagebreak---                                                                            si
2.   The following Article is inserted after Article 10 of Regulation (EEC)
     No 1601/91:
                                "Article 10a
     1. Member States shall adopt all measures necessary to permit those
        concerned to prevent, under the conditions laid down in Articles 23
        and 24 of the Agreement on Trade-Related Aspects of Intellectual
        Property Rights, the use within the Community of a geographical
        designation identifying products covered by this Regulation for
        products which do not originate in the place referred to by the
        geographical designation in question, including in cases where the
        actual origin of the product is indicated or where the geographical
        designation is given in translation or accompanied by expressions
        such as "like", "type", "style", "imitation" or other.
        For the purposes of this Article, "geographical designation" shall
        mean any indication identifying a product as originating in the
        territory of a third country which is a member of the World Trade
        Organization, or in a region or locality of that territory, where a
        quality, reputation or other specific characteristic of that product
        can essentially be attributed to that geographical origin.
     2. Paragraph 1 shall apply notwithstanding Article 10 of this
        Regulation and other provisions of Community legislation laying down
        rules for the description and presentation of products covered by
        this Regulation.
     3. Detailed rules for the application of this Article, where necessary,
        shall be adopted in accordance with the procedure laid down in
        Article 13."
                                  Article 2
1.   This Regulation shall enter into force on a date determined by a
     decision on the entry into force of the acts implementing the results
     of the Uruguay Round.
2.   It shall apply from 1 January 1996.
This Regulation shall be binding in its entirety and directly applicable in
all Member States.
 ---pagebreak---                                        ^JL.
Done at
        For Parliament For the Council
 ---pagebreak---                                                   S3
            List of Annexes
ANNEX I          Cereals
ANNEX II         Rice
ANNEX III        Dried fodder
ANNEX IV         Sugar
ANNEX V         Oils and fats
ANNEX VI         Flax and hemp
ANNEX VII        Milk products
ANNEX VIII       Beef and veal
ANNEX IX         Sheepmeat and goatmeat
ANNEX X          Pigmeat
ANNEX XI         Poultrymeat
ANNEX XII        Eggs', ovalbumin and lactalbumin
ANNEX XIII       Fruit and vegetables
ANNEX XIV        Processed fruit and vegetables
ANNEX XV         Bananas
ANNEX XVI        Wine
ANNEX XVII       Tobacco
ANNEX XVIII      Hops
ANNEX XIX        Flowers and live plants
ANNEX XX         Seeds
ANNEX XXI       Miscellaneous regulations
ANNEX XXII      Most remote regions
ANNEX XXIII      Plant-health legislation
 ---pagebreak---                                                                         Çf
                                    ANNEX I
                                    CEREALS
I.   Council Regulation (EEC) No 1766/92 of 30 June 1992 (OJ No L 181,
      1.7.1992, p.21), as amended by Regulation (EEC) No 1866/94
      (OJ No L 197, 30.7.1994, p.l).
 (1) Article 3(2) is deleted.
 (2) The following subparagraph is added to Article 3(3):.
     "The intervention price valid for maize and grain sorghum in May shall
     remain valid in July, August and September of the following marketing
     year."
 (3) The first sentence of the second subparagraph of Article 3(4) is
     replaced by the following:
     "The intervention price shall be subject to monthly increases for the
     whole or part of the marketing year."
 (4) The first and last indents of Article 5 are deleted.
 (5) Title II is replaced by the following:
                                  "Title II
                                  Article 9
 1.  Imports into the Community, or exports therefrom, of any of the
     products listed in Article 1 shall be subject to presentation of an
     import or export licence.
     Licences shall be issued by the Member States to any applicant,
     irrespective of his place of establishment in the Community and without
     prejudice to measures taken for the application of Articles 12 and 13.
     Import and export licences shall be valid throughout the Community.
     Such licences shall be issued subject to the lodging of a security
     guaranteeing that the products are imported or exported during the term
     of validity of the licence; the security shall be forfeited in whole or
     in part if import or export is not carried out, or is only carried out
     partially, within that period.
 ---pagebreak---                                   - 18 -                              K~r-
2. The term of validity of licences and other detailed rules for the
   application of this Article shall be adopted in accordance with the
   procedure laid down in Article 23.           t
                               Article 10
1. Unless this Regulation provides otherwise, the rates of duty in the
   common customs tariff shall apply to the products listed in Article 1.
2. Notwithstanding paragraph 1, the import duty on products covered by
   CN codés ex 1001 other than meslin, 1002, 1003, ex 1005 other than
   hybrid seed, and ex 1007 other than hybrid for sowing, shall be equal,
                                 , to the intervention price valid for such
   products on importation and increased by 55%, minus the import price.
   However, that duty may not exceed the rate of duty in the common
   customs tariff.
3. Detailed rules for the application of this Article shall be adopted in
   accordance with the procedure laid down in Article 23. Such detailed
   rules shall cover in particular the measures necessary to determine and
   calculate import prices and to verify their authenticity.
                               Article 11
1. In order to prevent or counteract adverse effects on the market in the
   Community which may result from imports of certain products listed in
   Article 1, imports of one or more of such products at the rate of duty
   laid down in Article 10 may be subject to payment of an additional
   import duty under the conditions set out in Article 5 of the Agreement
   on Agriculture concluded in accordance with Article 228 of the Treaty
   in the framework of the Uruguay Round of multilateral trade
   negotiations.
2. The Commission shall adopt detailed rules for the application of this
   Article in accordance with the procedure laid down in Article 23. Such
   detailed rules shall specify in particular:
   (a)    the products to which additional import duties may be applied,
   (b)    the criteria for triggering the application of paragraph 1 and
          in particular the calculation and determination of the various
          quantities and prices.
 ---pagebreak---                                    - 19 -                            r  .
                                 Article 12
   Tariff quotas for the products listed in Article 1 resulting from
   agreements concluded in accordance with Article 228 of the Treaty or
    from any other act of the Council pursuant to the Treaty shall be
   opened and administered in accordance with detailed rules adopted under
   the procedure laid down in Article 23. Such detailed rules shall
   provide for annual quotas, suitably phased over the year, to be opened
   and, where appropriate, for:
    (a)    guarantees covering the nature, provenance and origin of the
           product,
    (b)    recognition of the document used for verifying the guarantees
           referred to in (a), and
    (c)    the conditions under which import licences are issued and their
           term of validity.
                                 Article 13
1. To the extent necessary to enable the products listed in Article 1 to
   be exported without further processing or in the form of goods listed
   in Annex B on the basis of quotations or prices for those products on
   the world market and within the limits resulting from agreements
   concluded in accordance with Article 228 of the Treaty, the difference
   between those quotations or prices and prices in the Community may be
   covered by export refunds.
   Export refunds on the products listed in Article 1 in the form of goods
   listed in Annex B may not be higher than those applicable to such
   products exported without further processing.
2. Refunds shall be the same for the whole Community. They may vary
   according to destination.
   Refunds shall be fixed in accordance with the procedure laid down in
   Article 23.
   Refunds may be fixed:
   (a)     at regular intervals,
   (b)     by invitation to tender.
   Refunds fixed at regular intervals may, where necessary, be adjusted in
   the intervenirig period by the Commission at the request of a Member
   State or its own initiative.
3. Refunds on products listed in Article 1 and exported without further
   processing shall only be granted on application and on presentation of
   the relevant export licence.
 ---pagebreak--- 4.  The refund applicable to exports of products listed in Article 1
    exported without further processing shall be that applicable on the day
    of application for the licence and, in the case of a differentiated
   -refund, that applicable on the same day for the destination indicated
    on the licence.
5.  Paragraphs 3 and 4 may be made to apply to products listed in Article 1
    and exported in the form of goods listed in Annex B in accordance with
    the procedure laid down in Article 16 of Regulation (EC) No 3448/93.
6.  Paragraphs 3 and 4 may be waived in the case of products listed in
    Article 1 on which refunds are paid under food-aid operations, in
    accordance with the procedure laid down in Article 23.
7.  Save as otherwise provided in accordance with the procedure laid down
    in Article 23, the refund on products listed in Article 1(1)(a) and (b)
    in accordance with paragraph 4 shall be adjusted, during the period
    from August to June of the same marketing year, in respect of each
    month elapsing prior to export, by an amount equal to the monthly
    increase applicable to the intervention price fixed.for that marketing
    year.
    A corrective amount may be fixed in accordance with the procedure laid
    down in Article 23. However, the Commission may, where necessary, alter
    corrective amounts.
    The first and second subparagraphs may be applied, in whole or in part,
    to products listed in Article 1(1)(c) and (d) and to products listed in
   Article 1 and exported in the form of goods listed in Annex B. In that
    case, the adjustment referred to in the first subparagraph shall be
    corrected by applying to the monthly increase a coefficient expressing
    the ratio between the quantity of basic product and the quantity of the
    latter contained in the processed product exported or used in the goods
    exported.
8.  In so far as is necessary to take account of the features of production
   peculiar to certain spirituous beverages obtained from cereals, the
    criteria for granting export refunds as provided for in paragraph 1 and
    the procedures for verification may be adapted to fit this particular
    situation.
9. Detailed rules for the application of this Article and in particular
    those on the adaptation provided for in paragraph 8 shall be adopted in
    accordance with the procedure laid down in Article 23. Annex B shall be
    amended in accordance with the same procedure.
 ---pagebreak---                                 Article 14
1. To the extent necessary for the proper working of the common
   organization of the market in cereals, the use of inward processing
   arrangements may be prohibited in whole or in part:
   -   in respect of products listed in Article 1 which are intended for
      the manufacture of products listed in Article 1(1)(c) and (d), and
      in special cases, in respect of products listed in Article 1 which
      are intended for the manufacture of goods listed in Annex B.
2. Measures adopted pursuant to this Article shall be decided on in
   accordance with the procedure laid down in Article 23.
                                Article 15
1. The general rules for the interpretation of the Combined Nomenclature
   and the special rules for its application shall apply to the tariff
   classification of products covered by this Regulation; the tariff
   nomenclature resulting from the application of this Regulation shall be
   incorporated in the common customs tariff.
2. Save as otherwise provided for in this Regulation or pursuant to a-
   provision thereof,, the following shall be prohibited in trade with
   third countries:
      the levying of any charge having equivalent effect to a customs
      duty,
      the application of any quantitative restriction or measure having
      equivalent effect.
                              1
                                Article 16
1. Where the quotations or prices on the world market for one or more of
   the products listed in Article 1 reach the level of Community prices
   and where that situation is likely to continue and to deteriorate,
   thereby disturbing or threatening to disturb the Community market,
   appropriate measures may be taken.
2. Detailed rules for the application of this Article shall be adopted in
   accordance with the procedure laid down in Article 23.
 ---pagebreak---                                    - 22 -
                                                                      Si
                                Article 17
 1. If, by reason of an increase in imports or exports, the Community
    market in one or more of the products listed in Article 1 is affected
    by, or is threatened with, serious disturbance likely to jeopardize the
    achievement of the objectives set out in Article 39 of the Treaty,
    appropriate measures may be applied in trade with third countries until
    such disturbance or threat of disturbance has ceased.
 2. If the situation referred to in paragraph 1 arises, the Commission
    shall, at the request of a Member State or on its own initiative,
    decide upon the necessary measures; the Member States shall be notified
    of such measures, which shall be immediately applicable. If the
    Commission receives a request from a Member State, it shall take a
    decision thereon within three working days following receipt of the
    request.
 3. Measures decided upon by the Commission may be referred to the Council
    by any Member State within three working days of the day on which they
    were notified. The Council shall meet without delay. It may, acting by
    a qualified majority, amend or annul the measure in question.
 4. The Commission shall adopt detailed rules for the application of this
    Article in accordance with the procedure laid down in Article 23. .
 5. This Article shall be applied having regard to the obligations arising
    from agreements concluded in accordance with Article 228(2) of the
    Treaty."
 6. The following is added to Annex A:
    "CN code           Description
    2306               Oil-cake and other solid residues, whether or not
                       ground or in the form of pellets, resulting from the
                       extraction of vegetable fats or oils, other than
                       those of headings 2304 and 2305
    2306 90            - other:
                       —  other
    2306 90 91         — - of germ of maize  "
II. Council Regulation (EEC) No 2729/75 of 29 October 1975 (OJ No L 281,
    1.11.1975, p.18).
    The terms "levy" and "levies" are replaced by "duty" and "duties"
    respectively.
 ---pagebreak---                                     - 23 -
                                   ANNEX II
                                     RICE
I.   Council Regulation (EEC) No 1418/76 of 21 June 1976 (OJ No L 166,
     25.6.1976, p.l), as last amended by Regulation (EEC) No 1869/94 (OJ
     No L 197, 30.7.1994, p.7).
 (1) Article 4(5) is replaced by the following:
 "5. The following shall be determined in accordance with the procedure
     provided for in Article 27:
     a) after consultation with the Member States, the intervention centres
        referred to in paragraph 4,
     b) the rate for converting husked rice into paddy rice, or vice versa,
        and
     c) processing costs and the value of by-products to be taken into
        consideration for the application of paragraph 3."
 (2) Title II is replaced by the following:
                                  "Title II
                         Trade with third,countries
                                 Article 10
 1.  Imports into the Community, or exports therefrom, of any of the
     products listed in Article 1 shall be subject to presentation of an
     import or export licence.
     Licences shall be issued by the Member States to any applicant,
     irrespective of his place of establishment in the Community and without
     prejudice to measures taken for the application of Articles 14 and 15.
     Import and export licences shall be valid throughout the Community.
     Such licences shall be issued subject to the lodging of a security
     guaranteeing that the products are imported or exported during the term
     of validity of the licence; the security shall be forfeited in whole or
     in part if import or export is not carried out, or is only carried out
     partially, within that period.
 ---pagebreak---                                   - 24
 2. The term of validity of licences and other detailed rules for the
    application of this Article shall be adopted in accordance with the
    procedure laid down in Article 27.
                                Article 11
1.  A subsidy may be fixed for consignments to the French overseas
    department of Réunion of products falling within CN code 1006
    (excluding code 1006 10 10) which come from the Member States and are
    in one of the situations referred to in Article 9(2) of the Treaty.
    That subsidy shall be fixed, taking into account the supply
    requirements of the Réunion market, on the basis of the difference
    between the quotations or prices of the relevant products on the world
    market and the quotations or prices of those products on the Community
    market, and, if necessary the price of those products delivered to
    Réunion.
    The subsidy shall be granted on application by the party concerned.
    The subsidy may be fixed, where appropriate, by tendering procedure.
    This tender shall involve the subsidy amount.
    The subsidy shall be fixed periodically in accordance with the
    procedure laid down in Article 27. However, where the need arises, the
    Commission may, at the request of a Member State or on its own
    initiative, alter the subsidy in the interval.
2.  The rules on the financing of the common agricultural policy shall
    apply to the subsidy provided for in paragraph 1.
3.  The detailed rules for the application of this Article shall be adopted
    in accordance with the procedure laid down in Article 27.
 ---pagebreak---                                      - 25 -
                                                                         u
                                   Article 12
  1.  Unless this Regulation provides otherwise, the rates of duty in the
      common customs tariff shall apply to the products listed in Article 1.
 2.  Notwithstanding paragraph 1, the import duty on:
      (a)    husked rice covered by CN code 1006 20 shall be equal,
                                    to the intervention price valid for indica
             rice and japonica rice respectively on importation increased by
             - 80% in the case of indica rice and
             - 88% in the case of japonica rice,
             minus the import price; and
      (b)    wholly milled rice covered by CN code NC 1006 30 shall be equal,
                                             to the intervention price at the
             time of importation plus a percentage to be calculated and minus
             the import price.
     However, that duty may not exceed the rate of duty in the common
     customs tariff.
     The percentage referred to in b) shall be calculated by adjusting the
     respective percentages referred to in a) by reference to the conversion
     rate, processing costs and the value of by-products, and then adding an
     amount for the protection of the industry.
3.   Notwithstanding paragraph 1:
     (a)     no duty shall be charged on imports of products falling within
             products covered by CN code 1006 10 10, CN 1006 20 or
             CN 1006 40 00 into the French overseas department of Réunion,
     (b)     the duty to be charged on imports of products falling within
             CN code 1006 30 into the French overseas department of Reunion
             shall be muliplied by a coefficient of 0,30.
4.   Detailed rules for the application   of this Article shall be adopted in
     accordance with the procedure laid   down in Article 27. Such detailed
     rules shall in particular lay down   the criteria for distinguishing the
     types of imported rice referred to   in paragraph 2, fix the amount for
     the protection of the industry and   include the necessary provisions for
     determining and calculating import   prices and checking their
     authenticity.
 ---pagebreak---                                   - 26 -
                                                                      lo3
                               A r t i c l e 13
1. In order to prevent or counteract adverse effects on the market in the
   Community which may result from imports of certain products listed in
   Article 1, imports of one or more of such products at the rate of duty
   laid down in Article 12 may be subject to payment of an additional
   import duty under the conditions set out in Article 5 of the Agreement
   on Agriculture concluded in accordance with Article 228 of the Treaty
   in the framework of the Uruguay Round of multilateral trade
   negotiations.
2. The Commission shall adopt detailed rules for the application of this
   Article in accordance with the procedure laid down in Article 27. Such
   detailed rules shall specify in particular:
   (a)    the products to which additional import duties may be applied,
   (b)    the criteria for triggering the application of paragraph 1 and
          in particular the calculation and determination of the various
          quantities and prices.
                               Article 14
   Tariff quotas for the products listed in Article 1 resulting from
   agreements concluded in accordance with Article 228 of the Treaty or
   from any other act of the Council pursuant to the Treaty shall be
   opened and administered in accordance with detailed rules established
   pursuant to Article 27. Such detailed rules shall provide for annual
   quotas, suitably phased over the year, to be opened and, where
   appropriate, for:
   (a)    guarantees covering the nature, provenance and origin of the
          product,
   (b)    recognition of the document used for verifying the guarantees
          referred to in (a), and
   (c)    the conditions under which import licences are issued and their
          term of validity.
                               Article 15
1. To the extent necessary to enable the products listed in Article 1 to
   be exported without further processing or in the form of goods listed
   in Annex B on the basis of quotations or prices for those products on
   the world market and within the limits resulting from agreements
   concluded in accordance.with Article 228 of the Treaty, the difference
   between those quotations or prices and prices in the Community may be
   covered by export refunds.
 ---pagebreak---                                   - 27
                                                                      Gt
    Export refunds on the products listed in Article 1 in the form of goods
    listed in Annex B may not be higher than those applicable to such
    products exported without further processing.
2.  Refunds shall be the same for the whole Community. They may vary
    according to destination.
    Refunds shall be fixed in accordance with the procedure laid down in
   Article 27.
   Refunds may be fixed:
    (a)    at regular intervals,
    (b)    by invitation to tender.
   Refunds fixed at regular intervals may, where necessary, be adjusted in
   the intervening period by the Commission at the request of a Member
   State or on its own initiative.
   When the amount of the refund is set, account shall be taken in
   particular of the need to establish a balance between the use of
   Community basic agricultural products for export as processed goods to
   third countries, and the use of products from these countries admitted
   for inward processing.
3. Refunds on products listed in Article 1 and exported without further
   processing shall only be granted on application and on presentation of
   the relevant export licence.
4. The refund applicable to exports of  products listed in Article 1
   exported without further processing  shall be that applicable on the day
   of application for the licence and,  in the case of a differentiated
   refund, that applicable on the same  day for the destination indicated
   on the licence.
5. Paragraphs 3 and 4 may be made to apply to products listed in Article 1
   and exported in the form of goods listed in Annex B in accordance with
   the procedure laid down in Article 16 of Regulation (EC) No 3448/93.
6. Paragraphs 3 and 4 may be waived in the case of products listed in
   Article 1 on which refunds are paid under food-aid operations, in
   accordance with the procedure laid down in Article 27.
7. Save as otherwise provided in accordance with the procedure laid down
   in Article 27, the refund on products listed in Article l(l)(a) and (b)
   in accordance with paragraph 4 shall be adjusted, during the period
   from October to July of the same marketing year, in respect of each
   month elapsing prior to export, by an amount equal to the monthly
   increase applicable to the intervention price fixed for that marketing
   year, adjusted according to the degree of processing using the
   applicable conversion rate.
 ---pagebreak---                                                                       us
   A corrective amount may be fixed in accordance with the procedure laid
   down in Article 27. However, the Commission may, where necessary, alt,er
   corrective amounts.
   The first and second subparagraphs may be applied, in whole or in part,
   to products listed in Article 1(1)(c) and to products listed in
   Article 1 and exported in the form of goods listed in Annex B. In that
   case, the adjustment referred to in the first subparagraph shall be
   corrected by applying to the monthly increase a coefficient expressing
   the ratio between the quantity of basic product and the quantity of the
   latter contained in the processed product exported or used in the goods
   exported.
8. Detailed rules for the application of this Article shall be adopted in
   accordance with the procedure laid down in Article 27. Annex B shall be
   amended in accordance with the same procedure.
                                Article 16
1. To the extent necessary for the proper working of the common
   organization of the market in rice, the use of inward processing
   arrangements may be prohibited in whole or in part in respect of
   products listed in Article 1.
2. Measures adopted pursuant to this Article shall be decided on in
   accordance with the procedure laid down in Article 27.
                                Article 17
1. The general rules for the interpretation of the Combined Nomenclature
   and the special rules for its application shall apply to the tariff
   classification of products covered by this Regulation; the tariff
   nomenclature resulting from the* application of this Regulation,
   including the definitions listed in Annex A, shall be incorporated in
   the common customs tariff.
2. Save as otherwise^ provided for in this Regulation or pursuant to a
   provision thereof, the following shall be prohibited:
      the. levying of any charge having equivalent effect to a customs
      duty,
      the application of any quantitative restriction on imports or
      measure having equivalent effect.
 ---pagebreak---                                   - 29 -
                                                                        Ok
                                Article 18
 1. Where the quotations or prices on the world market for one or more of
    the products listed in Article 1(a) or (b) reach the level of Community
    prices and where that situation is likely to continue and to
    deteriorate, thereby disturbing or threatening to disturb the Community
    market, appropriate measures may be taken.
 2. Detailed rules for the application of this Article shall be adopted in
    accordance with the procedure laid down in Article 27.
                                Article 19
 1. If, by reason of an increase in imports or exports, the Community
    market in one or more of the products listed in Article 1 is affected
    by, or is threatened with, serious disturbance likely to jeopardize the
    achievement of the objectives set out in Article 39 of the Treaty,
    appropriate measures may be applied in trade with third countries until
    such disturbance or threat of disturbance has ceased.
 2. If the situation referred to in paragraph 1 arises, the Commission
    shall, at the request of a Member State or on its own initiative,
    decide upon the necessary measures; the Member States shall be notified
    of such measures, which shall be immediately applicable. If the
    Commission receives a request from a Member State, it shall take a
    decision thereon within three working days following receipt of the
    request.
 3. Measures decided upon by the Commission may be referred to the Council
    by any Member State within three working days of the day on which they
    were notified. The Council shall meet without delay. It may, acting by
    a qualified majority, amend or annul the measure in question.
 4. The Commission shall adopt detailed rules for the application of this
    Article in accordance with the procedure laid down in Article 27.
 5. This Article shall be applied having regard to the obligations arising
    from agreements concluded in accordance with Article 228(2) of the v
    Treaty."
II. Council Regulation (EEC) No 1423/76 of 21 June 1976 (OJ No L 166,
    25.6.1976, p.20).
    Article 3 is deleted.
 ---pagebreak---                                     - 30 -
                                                                        U
III. Council Regulation (EEC) No 1428/76 of 21 June 1976 (OJ No L 166,
     25.6.1976, p.30).
     Council Regulation* (EEC) No 1431/76 of 21 June 1976 (OJ No L 166,
     25.6.1976, p.36).
     Council Regulation (EEC) No 1432/76 of 21 June 1976 (OJ No L 166,
     25.6.1976, p.39).
     Council Regulation (EEC) No 1433/76 of 21 June 1976 (OJ No L 166,
     25.6.1976, p.42).
     Council Regulation (EEC) No 1263/78 of 12 June 1978 (OJ No L 156,
     14.6.1976, p.14).
     The above Regulations are repealed.
 ---pagebreak---                                     - 31 -
                                  ANNEX III
                                DRIED FODDER
Council Regulation (EEC) No 117/78 of 22 May 1978 (OJ No L 142, 30.5.1978,
p.2), as last amended by Regulation (EEC) No 3496/93 (OJ No L 319,
21.12.1993, p.17)
(1)  In Title II the following Article is inserted before Article 7:
                                 "Article 6a
 Unless this Regulation provides otherwise, the rates of duty in the common
 customs tariff shall apply to the products listed in Article 1."
(2)  Article 7(2) is replaced by the following:
 "Save as otherwise provided for in this Regulation or pursuant to a
 provision thereof, the following shall be prohibited in trade with third
 countries:
        the levying of any charge having equivalent effect to a customs
        duty,
     -  the application of any quantitative restriction or measure having
        equivalent effect".
(3)  After Article 7 the following Article is inserted:
                                 "Article 7a
 Tariff quotas for the products listed in Article 1 resulting from
 agreements concluded in accordance with Article 228 of the Treaty or from
 any other act of the Council pursuant to the Treaty shall be opened and
 administered in accordance with detailed rules adopted according to the
 procedure laid down in Article 12. Such detailed rules shall provide for
 annual quotas, suitably phased over the year, to be opened and, where
 appropriate, for:
 ---pagebreak---                                    - 32 -                               /n
                                                                        O "i
    (a)    guarantees covering the nature, provenance and origin of the
           product,
    (b)    recognition of the document used for verifying the guarantees
           referred to in (a), and
    (c)    the conditions under which import licences are issued and their
           term of validity."
(4) Article 8 is replaced by the following:
                                 "Article 8
 1. If, by reason of an increase in imports or exports, the Community •
    market in one or more of the products listed in Article 1 is affected
    by, or is threatened with, serious disturbance likely to jeopardize the
    achievement of the objectives set out in Article 39 of the Treaty,
    appropriate measures may be applied in trade with third countries until
    such disturbance or threat of disturbance has ceased.
 2. If the situation referred to in paragraph 1 arises, the Commission
    shall, at the request of a Member State or on its own initiative,
    decide upon the necessary measures; the Member States shall be notified
    of such measures, which shall be immediately applicable. If the
    Commission receives, a request from a Member State, it shall take a
    decision thereon within three working days following receipt of the
    request.
 3. Measures decided upon by the Commission may be referred to the Council
    by any Member State within three working days of the day on which they
    were notified. The Council shall meet without delay. It•may, acting by
    a qualified majority, amend or annul the measure in question.
 4. The Commission shall adopt detailed rules for the application of this
    Article in accordance with the procedure laid down in Article 12.
 5. This Article shall be applied in compliance with the obligations
    arising from agreements concluded in accordance with Article 228(2) of
    the Treaty. ••
 ---pagebreak---                                     - 33 -
                                                                        1o
                                   ANNEX IV
                                     SUGAR
I.   Council Regulation (EEC) No 1785/81 of 30 June 1981 (OJ No L 177,
     1.7.1981, p.4), as last amended by Regulation (EC) No 133/94
     (OJ No L 22, 27.1.1994, p.7).
 (1) Title II is replaced by the following:
                                  "Title II
                         Trade with third countries
                                 Article 13
 1.  Imports into the Community, or exports therefrom, of any of the
     products listed in Article 1(1)(a), (b), (c), (d), (f), (g) and (h)
     shall be subject to presentation'of an import or export licence.
     Licences shall be issued by the Member States to any applicant,
     irrespective of his place of establishment in the Community and without
     prejudice to measures taken for the application of Articles 16 and. 17.
     Import and export licences shall be valid throughout the Community.
     Such licences shall be issued subject to the lodging of a security
     guaranteeing that the products are imported or exported during the term
     of validity of the licence; the security shall be forfeited in whole or
     in part if import or export is not carried out, or is only carried out
     partially, within that period.
 2.  In accordance with the procedure laid down in Article 41:
     (a)    the scheme provided for by this Article may be extended to cover,
            the products listed in Article 1(1)(e),
     (b)    the term of validity of licences and other detailed rules for
            the application of this Article, which may lay down in
            particular a time limit for the issue of licences, shall be
            adopted.
 ---pagebreak---                                  - 34
                                                                     V
                               Article 14
1. Unless this Regulation provides otherwise, the rates of duty in the
   common customs tariff shall apply to the products listed in Article 1.
2. Notwithstanding paragraph 1, to ensure that the Community market is
   adequately supplied with the products listed in Article 1(1)(a) (raw
   sugar for refining falling within CN codes 1701 11 10 and 1701 12 10)
   and Article 1(1)(c) (molasses) by means of imports from third
   countries, the Commission may, in accordance with the procedure laid
   down in Article 41, suspend in whole or in part the application of
   import duties on these products, and establish the arrangements for any
   such suspension.
                               Article 15
1. In order to prevent or counteract adverse effects on the market in the
   Community which may result from imports of certain agricultural
   products, imports of one or more of such products at the rate of duty
   laid down in the common customs tariff may be subject to payment of an
   additional import duty under the conditions set out in Article 5 of the
   Agreement on Agriculture concluded in accordance with Article 228 of
   the Treaty in the framework of the Uruguay Round of multilateral trade
   negotiations.
2. The Commission shall adopt detailed rules for the application of this
   Article in accordance with the procedure laid down in Article 41. Such
   detailed rules shall specify in particular:
   (a)    the products to which additional import duties may be applied,
   (b)    the criteria for triggering the application of paragraph 1 and
          in particular the calculation and determination of the various
          quantities and prices.
 ---pagebreak---                                                                       n
                                Article 16
1. Tariff quotas for the products listed in Article 1 resulting from
   agreements concluded in accordance with Article 228 of the Treaty or
   from any other act of the Council pursuant to the Treaty shall be
   opened and administered in accordance with detailed rules adopted under
   the procedure laid down in Article 41. Such detailed rules shall
   provide for annual quotas, suitably phased over the year, to be opened
   and, where appropriate, for:
    (a)   guarantees covering the nature, provenance and origin of the
          product,
    (b)   recognition of the document used for verifying the guarantees
          referred to in (a), and
    (c)   the conditions under which import licences are issued and their
          term of validity.
                               Article 17
1. To the extent necessary to enable the products listed in
   Article 1(1)(a), (c) and (d) to be exported without further processing
   or in the form of goods listed in Annex I, on the basis of quotations
   or prices on the world market for those products listed in
   Article 1(1)(a) and (c), and within the limits resulting from
   agreements concluded in accordance wit,h Article 228 of the Treaty, the
   difference between those quotations or prices and prices in the
   Community may be covered by export refunds.
   The export refund granted for raw sugar may not exceed that granted for
   white sugar.
2. Provision may be made for export refunds in respect of the products
   listed in Article 1(1)(f), (g) and (h) and exported without further
   processing or in the form of goods mentioned in Annex I.
   When determining the amount of the refund, for each 100 kg of dry
   matter particular account shall be taken of:
   (a)    the refund applicable to exports of products falling within
          subheading 1702 30 91 of the Combined Nomenclature,
   (b)    the refund applicable to exports of the products referred to in
          Article 1(1)(d),
   (C)    the economic aspects of the planned exports.
 ---pagebreak---                                    - 36
                                                                       11
3.  The refund applicable to products listed in Article 1 exported in the
    form of good listed in Annex I shall not be greater than that
    applicable to these products exported without further processing.
4.  When the amount of the refund is set, account shall be taken in
    particular of the need to establish.a balance between the use of
    Community basic agricultural products for export as processed goods to
    third countries, and the use of products from these countries admitted
    for inward processing.
    Refunds shall be the same for the whole Community.   They may vary
    according to destination.
    Refunds shall be fixed in accordance with the procedure laid down in
    Article 41. Refunds may- be fixed:
    (a)    at regular intervals,
    (b)    by invitation to tender.
    Refunds fixed at regular intervals may, where necessary, be adjusted in
    the intervening period by the Commission at the request of a Member
    State or on its own initiative.
5.  Refunds on products listed in Article 1 and exported without further
    processing shall only be granted on application and on presentation of
    the relevant export licence.
6.  The refund applicable to- exports of products listed in Article 1
    exported without further processing  shall be that applicable on the day
    of application for the licence and,  in the case of a differentiated
    refund, that applicable on the same  day for the destination indicated
    on the licence.
7.  Paragraphs 5 and 6 may be made to apply to products listed in Article 1
    and exported in the form of goods listed in Annex I, in accordance with
    the procedure laid down in Article 16 of Regulation (EC) No 3448/93.
8.  Paragraphs 5 and 6 may be waived in the case of products listed in
   Article 1 on which refunds are paid under food-aid operations, in
    accordance with the procedure laid down in Article 41.
9. Detailed rules for the application of this Article and the amendment of
   Annex I shall be adopted in accordance with the procedure laid down in
   •Article 41.
 ---pagebreak---                                        - 37 -
                                                                           ^
                                   Article 18
1. To the extent necessary for the proper working of the common
   organization of the market in sugar, the use of inward processing
   arrangements may be prohibited in whole or in part:
       in respect of products listed in Article 1(a) and (d), and
       in special cases, in si^i&pjejg^t 1(of products listed in Article 1(1)
      which are intended for the manufacture of goods listed in Annex I.
2. Measures adopted pursuant to this Article shall be decided on in
   accordance with the procedure laid down in Article 41.
                                   Article 19
1. The general rules for the interpretation of the Combined Nomenclature
   and the special rules for its application shall apply to the tariff
   classification of products covered by this Regulation; the tariff
   nomenclature resulting from the application of this Regulatiort shall be
   incorporated in the common customs tariff.
2. Save as otherwise provided for in this Regulation or pursuant to a
   provision thereof, the following shall be prohibited in trade with
   third countries:
   (a)     the levying of any charge having equivalent effect to a customs
           duty,
   (b)     the application of any quantitative restriction or measure
           having equivalent effect.
                                   Article 20
1. Where the price of sugar on the world market exceeds the intervention
   price, provision may be made to apply an export levy in respect of the
   sugar in question. This levy must be applied when the cif price of
   white sugar or raw sugar is greater than the reference price.
   Save as otherwise provided in accordance with the procedure laid down
   in Article 41, the levy payable shall be that applicable on the date of
   export.
2. Where the cif price of white or raw sugar is greater than a reference
   price to be determined, a decision may be made to suspend the
   applicable import duty and/or grant an import subsidy for the product
   in question.
 ---pagebreak---                                  - 38 -
                                                                     1C
3. The following shall be adopted in accordance with the procedure laid
   down in Article 41:
   (a)    the detailed rules for establishing the cif prices referred to .
          in paragraph 2,
   (b)    the reference price referred to in paragraphs 1 and 2,
   (c)    the decisions referred to in-pa-r&qr^aphs 1 and 2,
   (d)    the detailed rules for the application of this Article.
   In the case of the products referred to in Article 1(1)(b), (c), (d),
   (f), (g) and (h) provisions similar to those in paragraphs 1 and 2 and
   to the rules for their application may be adopted using the same
   procedure.
4. The levies stemming from the application of this Article shall be fixed
   by the Commission.
                               Article 21
1. If, by reason of an increase in imports or exports, the Community
   market in one or more of the products listed in Article 1 is affected
   by, or is threatened with, serious disturbance likely to jeopardize the
   achievement of the objectives set out in Article 39 of the Treaty,
   appropriate measures may be applied in trade with third countries until
   such disturbance or threat of disturbance has ceased.
2. If the situation referred to in paragraph 1 arises, the Commission
   shall, at the request of a Member State or on its own initiative,
   decide upon the necessary measures; the Member States shall be notified
   of such measures, which shall be immediately applicable. If the
   Commission receives a request from a Member State, it shall take a
   decision thereon within three working days following receipt of the
   request.
3. Measures decided upon by the Commission may be referred to the Council
   by any Member State within three working days of the day on which they
   were notified. The Council shall meet without delay. It may, acting by
   a qualified majority, amend or annul the measure in question.
4. The Commission shall adopt detailed rules for the application of this
   Article in accordance with the procedure laid down in Article 41.
5. This Article shall be applied having regard to the obligations arising
   from agreements concluded in accordance with Article 228(2) of the
   Treaty."
 ---pagebreak---                                    - 39 -
                                                                    y,
(2) Article 26 is amended as follows:
 (a) In paragraph 1 the last sentence is replaced by:
     "Articles 8, 9, 17 and 20 shall not apply to such sugar and Articles 9,
     17 and 20 to such isoglucose and inulin sirop."
 (b) The reference to "Article 18" in paragraph 2 is replaced by a reference
     to "Article 20".
(3) Article 35(1) is replaced by the following:
     "1.    No import duty shall apply to imports of preferential sugar."
II.  Council Regulation (EEC) No 431/68 of 9 April 1968 (OJ No L 89,
     10.4.1968, p.3)
     Article 2 is deleted.
III. Council Regulation (EEC) No 766/68 of 18 June 1968 (OJ No L 143,
     25.6.1968, p.6), as last amended by Regulation (EEC) No 1489/76 (OJ
     No L 167, 26.6.1976, p.13)
     Council Regulation (EEC) No 770/68 of 18 June 1968 (OJ No L 143,
     25.6.1968, p.16)
     Council Regulation (EEC) No 226/72 of 31 January 1972 (OJ No L 28,
     1.2.1972, p.3)
     Council Regulation (EEC) No 608/72 of 23 March 1972 (OJ No L 75,
     28.3.1972, p.5)
     The above Regulations are repealed.
 ---pagebreak---                                      - 40 -
                                                                      11
                                    ANNEX V
                                OILS AND FATS
:.   Council Regulation No 136/66/EEC of 22 September 1966 (OJ No 172,
     30.9.1966, p.3025/66), as last amended by Regulation (EC) No 3179/93
     (OJ No L 285, 20.11.1993, p.9).
 (1) Title I is replaced by the following:
                                    "Title I
                                     Trade
                                   Article 2
 1.  Imports into the Community, or exports therefrom, of any of the
     products listed in Article 1(2) shall be subject to presentation of an
     import or export licence.
     Licences shall be issued by the Member States to any applicant,
     irrespective of his place of establishment in the Community and without
     prejudice to measures taken for the application of Articles 2c and 3.
     Import and export licences shall be valid throughout the Community.
     Such licences shall be issued subject to the lodging of a security
     guaranteeing that the products are imported or exported during the term
     of validity of the licence; the security shall be forfeited in whole or
     in part if import or export is not carried out, or is only carried out
     partially, within that period.
 2.  The term of validity of licences and other detailed rules for the
     application of this Article shall be adopted in accordance with the
     procedure laid down in Article 38.
                                  Article 2a
     Save where this Regulation provides otherwise, the rates of duty in the
     common customs tariff shall apply to the products listed in
     Article 1(2).
                                  Article 2b
 1.  In order to prevent or counteract adverse effects on the market in the
     Community which may result from imports of certain products listed in
     Article 1(2)(c), (d) and (e), imports of one or more of such products
     at the rate of duty laid down in the common customs tariff may be
     subject to payment of an additional import duty under the conditions
     set out in Article 5 of the Agreement on Agriculture concluded in
     accordance with Article 228 of the Treaty in the framework of the
     Uruguay Round of multilateral trade negotiations.
 ---pagebreak---                                                                          u
 2.  The Commission shall adopt detailed rules for the application of this
     Article in accordance with the procedure laid down in Article 38. Such
     detailed rules shall specify in particular:
     (a)     the products to which additional import duties may be applied,
     (b)     the criteria for triggering the application of paragraph 1 and
             in particular the calculation and determination of the various
             quantities and prices.
                                  Article 2c
 1. Tariff quotas for the products listed in Article 1(2) resulting from
     agreements concluded in accordance with Article 228 of the Treaty or
     from any other act of the Council pursuant to the Treaty shall be
    opened and administered in accordance with detailed rules adopted under
    the procedure laid down in Article 38. Such detailed rules shall
    provide for annual quotas, suitably phased over the year, to be opened
    and, where appropriate, for:
     (a)    guarantees covering the nature, provenance and origin of the
            product,
     (b)    recognition of the document used for verifying the guarantees
            referred to in (a), and
     (c)    the conditions under which import licences are issued and their
            term of validity.
                                  Article 3
1.  To the extent necessary to enable the olive oil and oilseeds harvested
    in the Community to be exported on the basis of quotations or prices
    for those products on the world market and within the limits resulting
    from agreements concluded in accordance with Article 228 of the Treaty,
    the difference between those quotations or prices and prices in the
    Community may be covered by export refunds.
2.  Refunds shall be the same for the whole Community. They may vary
    according to destination.•      .
    Refunds shall be fixed in accordance w,ith the procedure laid down in
    Article 38.
    Refunds may be fixed:
    (a)     at regular intervals,
    (b)     by invitation to tender.
    Refunds fixed at regular intervals may, where necessary, be adjusted in
    the intervening period by the Commission at the request of a Member
    State or on its own initiative.
3.  Refunds shall only be granted on request and on presentation of the
    relevant export licence.
 ---pagebreak---                                  - 42 -                              Zj G
4. The refund applicable to exports of products listed in paragraph 1
   shall be that applicable on the day of application for the licence and,
   in the case of a differentiated refund, that applicable on the same day
   for the destination indicated on the licence.
5. Paragraphs 3 and 4 may be waived in the case of olive oil and oilseeds
   on which refunds are paid under food-aid operations, in accordance with
   the procedure laid down in Article -3^; •
                                         « 3 3 01 "5
6. Detailed rules for the application of this Article shall be adopted in
   accordance with the procedure laid down in Article 38.
                               Article 3a
1. The general rules for the interpretation of the Combined Nomenclature
   and the special rules for its application shall apply to the tariff
   classification of products covered by this Regulation; the tariff
   nomenclature resulting from the application of this Regulation shall be
   incorporated in the common customs tariff.
2. Save as otherwise provided for in this Regulation or pursuant to a
   provision thereof, the following shall be prohibited, in trade with
   third countries:
      the levying of any charge having equivalent effect to a customs
      duty,
      the application of any quantitative restriction or measure having
      equivalent effect.
                               Article 3b
1. If, by reason of an increase in imports or exports, the Community
   market in one or more of the products listed in Article 1(2) is
   affected by, or is threatened with, serious disturbance likely to
   jeopardize the achievement of the objectives set out in Article 39 of
   the Treaty, appropriate measures may be applied in trade with third
   countries until such disturbance or threat of disturbance has ceased.
2. If the situation referred to in paragraph 1 arises, the Commission
   shall, at the request of a Member State or on its own initiative,
   decide upon the necessary measures; the Member States shall be notified
   of such measures, which shall be immediately applicable. If the
   Commission receives a request from a Member State, it shall take a
   decision thereon within three working days following receipt of the
   request.
3. Measures decided upon by the Commission may be referred to the Council
   by any Member State within three working days of the day on which they
   were notified. The Council shall meet without delay. It may, acting by
   a qualified majority, amend or annul the measure in question.
4. The Commission shall adopt detailed rules for the application of this
   Article in accordance with the procedure laid down in Article 38.
 ---pagebreak---  5.   This Article shall be applied having regard to the obligations arising
      from agreements concluded in accordance with Article 228(2) of the
      Treaty."
(2)   Article 4(1) is replaced by the following:
 "1. A production target price, an intervention price and a representative
     market price for olive oil shall be fixed each year for the Community.
      However, when during the marketing year the factors which are used to
      determine the representative market price for olive oil undergo a
      change which, on the basis of the criterion to be established under the
     procedure laid down in Article 38, may be considered as substantial, a
      decision may be taken under the said procedure to adjust the
      representative market price during the marketing year.
      In such cases, the level of consumption aid referred to in
     Article 11(5) and (6) may be adjusted in accordance with the same
     procedure."
(3)  Articles 9, 14, 15, 16, 17, 18 and 19 are deleted.
(4)  Article 20 is replaced by the following:
                                  "Article 20
 1.  Where olive oil is exported to third countries and world prices are
     higher than the Community price, a levy to cover the difference may be
     charged.
 2.  The general rules for the application of this Article shall be adopted
     in accordance with the procedure laid down in Article 38."
(5)  Article 20a is replaced by the following:
                                 "Article 20a
     Olive oil used for the manufacture of preserved foods shall benefit
     from a system of production refunds.
     The general rules for the application of this Article and the list of
     preserved foods in question shall be adopted in accordance with the
     procedure laid down in Article 38."
(6)  Articles 20c and 28 are deleted.
 ---pagebreak---                                    - 44 -                                9
II. Regulation (EEC) No 142/67 of 21 June 1967 (OJ No L 125,' 26.6.1967,
    p.2461/67), as last amended by Regulation (EEC) No 2429/72
    (OJ No L 264, 23.11.1972, p.l.)
    Regulation (EEC) No 143/67 of 21 June 1967 (OJ No L 125, 26.6.1967,
    p.2463/67), as last amended by Regulation (EEC) No 2077/71
    (OJ No L 220, 30.9.1971, p.l.)
    Regulation (EEC) No 19/69 of 20 December 1968 (OJ No L 3, 7.1.1969,
    p.2), as last amended by Regulation (EEC) No 2429/72 (OJ No L 264,
    23.11.1972, p.l.)
    Regulation (EEC) No 2596/69 of 18 December 1969 (OJ No L 324,
    27.12.1969, p.12)
    Regulation (EEC) No 1076/71 of 25 May 1971 (OJ No L 116, 28.5.1971,
    p.2)
    Regulation (EEC) No 443/72 of 29 February 1972 (OJ No L 54, 3.3.1972,
    p.3), as last amended by Regulation (EEC) No 2560/77 (OJ No L 303,
    28.11.1977, p.l.)
    Regulation (EEC) No 1569/72 of 20 July 1972 (OJ No L 167, 25.7.1972,
    p.9), as last amended by Regulation (EEC) No 2206/90 (OJ No L 201,
    31.1.1990, p.11.)
    Regulation (EEC) No 2751/78 of 23 November 1978 (OJ No L 331,
    28.11.1978, p.5)
    Regulation (EEC) No 591/79 of 26 March 1979 (OJ No L 78, 30^3.1979,
    p.2), as last amended by Regulation (EEC) No 2903/89 (OJ No L 280,
    29.9.1989, p.3.)
    Regulation (EEC) No 1594/83 of 14 June 1983 (OJ No L 163, 22.6.1983,
    p.44), as last amended by Regulation (EEC) No 1321/90 (OJ No L 132,
    23.5.1990, p.15.)
 ---pagebreak---                               -45-
                                                                    a
                                                                    Q
Regulation (EEC) No 1491/85 of 23 May 1985 (OJ No L 151, 10.6.1985,
p.15), as last amended by Regulation (EEC) No 1724/91 (OJ No L 162,
26.6.1991, p.35.)
Regulation (EEC) No 2194/85 of 25 July 1985 (OJ No L 204, 2.8.1985,
p.7), as last amended by Regulation (EEC) No 1725/91 (OJ No L 162,
26.6.1991, p.37.)
Regulation (EEC) No 1650/86 of 26 May 1986 (OJ No L 145, 30.5.1986,
p.8).
The above Regulations are repealed.
 ---pagebreak---                                     - 46 -
                                                                      s?
                                   ANNEX VI
                                FLAX AND HEMP
I.   Council Regulation (EEC) No 1308/70 of 29 June 1970 (OJ No L 146,
     4.7.1970, p.l), as last amended by Regulation (EEC) No 1557/93 (OJ No
     L 154, 25.6.1993, p.26).
     Articles 7 and 8 are replaced by the following:
                                  "Article 7
 Save as otherwise provided for in this Regulation or pursuant to a
 provision thereof, the following shall be prohibited in trade with third
 countries:
     the levying of any charge having equivalent effect to a customs duty,
 -   the application of any quantitative restriction or measure having
     equivalent effect.
                                  Article 8
 1.  The importation of raw hemp falling within CN code 5302 10 00 is
     permitted only if the product meets the conditions laid down in
     Article 4(1).
 2.  The importation of hemp seed falling within CN code 1207 99 10 is
     permitted only if the seed offers the guarantees laid down in
     Article 4(1).
 3.  The importation of hemp seed, not broken, falling within CN code
     1207 99 91 is permitted only if it undergoes a check guaranteeing that
     the seed will be used other than for sowing.
 4.  Detailed rules for the application of this Article shall be adopted in
     accordance with the procedure laid down in Article 12.
                                 Article 8a
 1.  If, by reason of an increase in imports or exports, the Community
     market in one or more of the products listed in Article 1 is affected
     by, or is threatened with, serious disturbance likely to jeopardize the
     achievement of the objectives set out in Article 39 of the Treaty,
     appropriate measures may be applied in trade with third countries until
     such disturbance or threat of disturbance has ceased.
 ---pagebreak---                                   - 47 -
                                                                       iy
 2. If the situation referred to in paragraph 1 arises, the Commission
    shall, at the request of a Member State or on its own initiative,
    decide upon the necessary measures; the Member States shall be notified
    of such measures, which shall be immediately applicable. If the
    Commission receives a request from a Member State, it shall take a
    decision thereon within three working days following receipt of the
    request.
 3. Measures decided upon by the Commission may be referred to the Council
    by any Member State within three working days of the day on which they
    were notified. The Council shall meet without delay. It may, acting by
    a qualified majority, amend or annul the measure in question.
 4. The Commission shall adopt detailed rules for the application of this
    Article in accordance with the procedure laid down in Article 12.
 5. This Article shall be applied having regard to the obligations arising
    from agreements concluded in accordance with Article 228(2) of the
    Treaty."
II. Council Regulation (EEC) No 1054/72 of 18 May 1972 (OJ No L 120,
    25.5.1972, p.l).
    The above Regulation is repealed.
 ---pagebreak---                                     - 48 -
                                                                       fc
                                  ANNEX VII
                                MILK PRODUCTS
I.  Council Regulation (EEC) No 804/68 of 27 June 1968 (OJ No L 148,
    28.6.1968, p.13), as last amended by Regulation (EC) No 1880/94 (OJ No
    L 197, 30.7.1994, p.21).
(1) Article 4 is deleted.
(2) Title III is replaced by the following:
                                  "Title III
                         Trade with third countries
                                 Article 13
 1. Imports into the Community of any of the products listed in Article 1
    shall be subject to the presentation of an import licence. Exports from
    the Community of any such products may be made subject to presentation
    of an export licence.
 2. Licences shall be issued by Member States to any applicant,
    irrespective of his place of establishment in the Community and without
    prejudice to the measures taken for the application of Articles 16
    and 17.
    Import and export licences shall be valid throughout the Community.
    Such licences shall be issued subject to the lodging of a security
    guaranteeing that the products are imported or exported during the term
    of validity of the licence; the security shall be forfeited in whole or
    in part if import or export is not carried out, or is only carried out
    partially, within that period.
 3. The following shall be adopted in accordance with the procedure laid
    down in Article 30:
    (a)    the list of products in respect of which import and export
            licences are required,
    (b)    the term of validity of the licences, and
    (c)    the other detailed rules for the application of this Article.
 ---pagebreak---                                    - 49 -
                                 Article 14
Unless this Regulation provides otherwise, the rates of duty in the common
customs tariff shall apply to the products listed in Article 1.
                                 Article 15
1.   In order to prevent or counteract adverse effects on the market in the
     Community which may result from imports of certain products listed in
     Article 1, imports of one or more of such products at the rate of duty
     laid down in the common customs tariff may be subject to payment of an
     additional import duty under the conditions set out in Article 5 of the
     Agreement on Agriculture concluded in accordance with Article 228 of
     the Treaty in the framework of the Uruguay Round of multilateral trade
     negotiations.
2.   The Commission shall adopt detailed rules for the application of this
     Article in accordance with the procedure laid down in Article 30. Such
     detailed rules shall specify in particular:
     (a)    the products to which additional import duties may be applied,
     (b)    the criteria for triggering the application of paragraph 1 and
            in particular the calculation and determination of the various
            quantities and prices.
                                 Article 16
Tariff quotas for the products listed in Article 1 resulting from
agreements concluded in accordance with Article 228 of the Treaty or from
any other act of the Council pursuant to the Treaty shall be opened and
administered in accordance with detailed rules adopted under the procedure
laid down in Article 30. Such detailed rules shall provide for annual
quotas, suitably phased over the year, to be opened and, where appropriate,
for:
(a) guarantees covering the nature, provenance and origin of the product,
(b) recognition of the document used for verifying the guarantees referred
     to in (a), and
(c) the conditions under which import licences are issued and their term of
    validity.
 ---pagebreak---                                   - 50
                                Article 17
1. To the extent necessary to enable the products listed in Article 1 to
   be exported without further processing or in the form of goods listed
   in the Annex if they are products listed in Article 1(a), (b), (c),
   (d), (e) and (g), on the basis of prices for those products on the
   world market and within the limits resulting from agreements concluded
   in accordance with Article 228 of the Treaty, the difference between
   those prices and prices in the Community may be covered by export
   refunds.
   Export refunds on the products listed in Article 1 in the form of goods
   listed in the Annex may not be higher than those applicable to such
   products exported without further processing.
2. Refunds shall be the same for the whole Community. They may vary
   according to destination.
   Refunds shall be fixed in accordance with the procedure laid down in
   Article 30.
   Refunds may be fixed:
   (a)    at regular intervals,
   (b)    by invitation to tender.
   Refunds fixed at regular intervals may, where necessary, be adjusted in
   the intervening period by the Commission at the request of a Member
   State or on its own initiative.
   When the refund is.being fixed particular account shall be taken of the
   need to establish a balance between the use of Community basic products
   in the manufacture of processed goods to third countries and the use of
   products from these countries admitted for processing.
3. Refunds on products listed in Article 1 and exported without further
   processing shall only be granted on application and on presentation of
   the relevant export licence.
 ---pagebreak---                                    - 51 -
                                                                         u
4.  The refund applicable to exports of  products listed in Article 1
    exported without further processing  shall be that applicable on the day
    of application for the licence and,  in the case of a differentiated
    refund, that applicable on the same  day for the destination indicated
    on the licence.
5.  Paragraphs 3 and 4 may be made to apply to products listed in Article 1
    and exported in the form of goods listed in the Annex in accordance
    with the procedure laid down in Article 16 of Regulation (EC)
    No 3448/93.
6.  Paragraphs 3 and 4 may be waived in the case of products listed in
    Article 1 on which refunds are paid under food-aid operations, in
    accordance with the procedure laid down in Article 30.
7.  Detailed rules for the application of this Article shall be adopted in
    accordance with the procedure laid down in Article 30.
                                 Article 18
To the extent necessary for the proper working of the common organization
of the market in milk and milk products the Commission may in special
cases, in accordance with the procedure laid down in Article 30, prohibit
in whole or in part the use of inward processing arrangements,in respect of
products listed in Article 1 which are intended for the manufacture of
products listed in that Article or of goods listed in the Annex.
                                 Article 19
1.  The general rules for the interpretation of the combined nomenclature
    and tfhe special rules for its application shall apply to the tariff
    classification of products covered by this Regulation; the tariff
    nomenclature resulting from the application of this Regulation shall be
    incorporated in the common customs tariff.
2.  Save as otherwise provided for in this Regulation or pursuant to a
    provision thereof, the following shall be prohibited in trade with
    third countries:
    -  the levying of any charge having equivalent effect to a customs
       duty,
       the application of any quantitative restriction or measure having
       equivalent effect.
 ---pagebreak---                                    - 52 -
                                                                       ri
                                Article 20
 1. Where the quotations or prices on the world market for one or more of
    the products listed in Article 1 reach the level of Community prices
    and where that situation is likely to continue and to deteriorate,
    thereby disturbing or threatening to disturb the Community market,
    appropriate measures may be taken.
 2. Detailed rules for the application of this Article shall be adopted in
    accordance with the procedure laid down in Article 30.
                                Article 21
 1. If, by reason of an increase in imports or exports, the Community
    market in one or more of the products listed in Article 1 is affected
    by, or is threatened with, serious disturbance likely to jeopardize the
    achievement of the objectives set out in Article 39 of the Treaty,
    appropriate measures may be applied in trade with third countries until
    such disturbance or threat of disturbance has ceased.
 2. If the situation referred to in paragraph 1 arises, the Commission
    shall, at the request of a Member State or on its own initiative,
    decide upon the necessary measures; the Member States shall be notified
    of such measures, which shall be immediately applicable. If the
    Commission receives a request from a Member State, it shall take a
    decision thereon within three working days following receipt of the
    request.
 3. Measures decided upon by the Commission may be referred to the Council
    by any Member State within three working days of the day on which they
    were notified. The Council shall meet without delay. It may, acting by
    a qualified majority, amend or annul the measure in question.
 4. The Commission shall adopt detailed rules for the application of this
    Article in accordance with the procedure laid down in Article 30.
 5. This Article shall be applied having regard to the obligations arising
    from agreements concluded in accordance with Article 228(2) of the
    Treaty."
II. Council Regulation (EEC) No 876/68 of 28 June 1968 (OJ No L 155,
    3.7.1968, p.l), as last amended by Regulation (EEC) No 1344/86
    (OJ No L 119, 8.5.1986, p.36).
    Council Regulation (EEC) No 2115/71 of 28 September 1971 (OJ No L 222,
    2.10.1971, p.5).
    Council Regulation (EEC) No 2180/71 of 12 October 1971 (OJ No L 231,
    14.10.1971, p.l).
 ---pagebreak---                               - 53 -                               q
Council Regulation (EEC) No 1603/74 of 25 June 1974 (OJ No L 172,
27.6.1974, p.9).
Council Regulation (EEC) No 2915/79 of 18 December 1979 (OJ No L 329,
24.12.1979, p.l), as last amended by Regulation (EEC) No 3798/91
(OJ No L 357, 28.12.1991, p.3).
The above Regulations are repealed.
 ---pagebreak---                                     - 54 -
                                                                   <\l
                                 ANNEX VIII
                                BEEF AND VEAL
I.   Council Regulation (EEC) No 805/68 of 27 June 1968 (OJ No L 148,
     28.6.1968, p.24), as last amended by Regulation (EC) No 1884/94
     (OJ No L 197, 30.7.1994, p.27).
 (1) Article 3 is deleted.
 (2) Title II is replaced by the following:
                                  "Title II
                         Trade with third countries
                                  Article 9
 1.  Imports into the Community of any of the products listed in
     Article 1(1)(a) shall be subject to presentation of an import licence.
     Imports into the Community of any of the products listed in
     Article 1(1)(b) and exports from the Community of products listed in
     Article 1(1)(a) and (b) may be subject to presentation of an import or
     export licence.
     Licences shall be issued by the Member States to any applicant,
     irrespective of his place of establishment in the Community and without
     prejudice to measures taken for the application of Articles 12 and 13.
     Import and export licences shall be valid throughout the Community.
     Such licences shall be issued subject to the lodging of a security
     guaranteeing that the products are imported or exported during the term
     of validity of the licence; the security shall be forfeited in whole or
     in part if import or export is not carried out, or is only carried out
     partially, within that period.
 ---pagebreak---                                  - 55 -
                                                                        n
2. The term of validity of licences and other detailed rules for the
   application of this Article shall be adopted in accordance with the
   procedure laid down in Article 27.
                               Article 10
   Unless this Regulation provides otherwise, the rates of duty in the
   common customs tariff shall apply to the products listed in Article 1.
                               Article 11
1. In order to prevent or counteract adverse effects on the market in the
   Community which may result from imports of certain agricultural
   products listed in Article 1, imports of one or more of such products
   at the rate of duty laid down in the common customs tariff may be
   subject to payment of an additional import duty under the conditions
   set out in Article 5 of the Agreement on Agriculture concluded in
   accordance with Article 228 of the Treaty in the framework of the
   Uruguay Round of multilateral trade negotiations.
2. The Commission shall adopt detailed rules for the application of this
   Article in accordance with the procedure laid down in Article 27. Such
   detailed rules shall specify in particular:
   (a)    the products to which additional import duties may be applied,
   (b)    the criteria for triggering the application of paragraph 1 and
          in particular the calculation and determination of the various
          quantities and prices.
 ---pagebreak---                                   Article 12
Tariff quotas for the products listed in Article 1 resulting from
agreements concluded in accordance with Article 228 of the Treaty or from
any other act of the Council pursuant to the Treaty shall be opened and
administered in accordance with detailed rules adopted under the procedure
laid down in Article 27. Such detailed rules shall provide for annual
quotas, suitably phased over the year, to be opened and, where appropriate,
for:
(a) guarantees covering the nature, provenance and origin of the product,
(b) recognition of the document used for verifying the guarantees referred
    to in (a), and
(c) the conditions under which import licences are issued and their term of
     validity.
                                  Article 13
1.   To the extent necessary to enable the products listed in Article 1 to
     be exported on the basis of quotations or prices for. those products on
     the world market and within the limits resulting from agreements
     concluded in accordance with Article 228 of the Treaty, the difference
     between those quotations or prices and prices in the Community may be
     covered by export refunds.
2.   Refunds shall be the same for the whole Community. They may vary
     according to destination.
    Refunds shall be fixed in accordance with the procedure laid down in
    Article 27.
    Refunds may be fixed:
     (a)    at regular intervals,
     (b)    by invitation to tender.
 ---pagebreak---                                    - 57 -                             O.LI
                                                                        I I
    Refunds fixed at regular intervals may, where necessary, be adjusted in
    the intervening period by the Commission at the request of a Member
     State or on its own initiative.
3.  When the amount of the refund is set, account shall be taken in
    particular of the need to establish a balance between the use of
    Community basic agricultural products for export as processed goods to
    third countries and the use of products from these countries admitted
    for inward processing.
4.  Refunds shall be granted only on application and on presentation of the
    relevant export licence.
5.  The refund applicable to exports of products listed in Article 1
    exported shall be that applicable on the day of application for the
    licence and, in the case of a differentiated refund, that applicable on
    the same day for the destination indicated on the licence.
6.  Paragraphs 3 and 4 may be waived in the case of products listed in
    Article 1 on which refunds are paid under food-aid operations, in
    accordance with the procedure laid down in Article 27.
7.  Detailed rules for the application of this Article shall be adopted in
    accordance with the procedure laid down in Article 27.
                                 Article 14
To the extent necessary for the proper working of the common organization
of the market in beef and veal, the Commission, acting in accordance with
the procedure laid down in Article 27, may prohibit the use of inward or
outward processing arrangements in whole or in part for the products listed
in Article 1.
 ---pagebreak---                             Article 15
The general rules for the interpretation of the Combined Nomenclature
and the detailed rules for its application shall apply to the tariff
classification of products covered by this Regulation; the tariff
nomenclature resulting from the application of this Regulation shall be
incorporated in the common customs tariff.
Save as otherwise provided for in this Regulation or pursuant to a
provision thereof, the following shall be prohibited in trade with
third countries:
-  the levying of any charge having equivalent effect to a customs
   duty,
-  the application of any quantitative restriction or measure having
   equivalent effect.
                            Article 16
If, by reason of an increase in imports or exports, the Community
market in one or more of the products listed in Article 1 is affected
by, or is threatened with, serious disturbance likely to jeopardize the
achievement of the objectives set out in Article 39 of the Treaty,
appropriate measures may be applied in trade with third countries until
such disturbance or threat of disturbance has ceased.
If the situation referred to in paragraph 1 arises, the Commission
shall, at the request of a Member State or on its own initiative,
decide upon the necessary measures; the Member States shall be notified
of such measures, which shall be immediately applicable. If the
Commission receives a request from a Member State, it shall take a
decision thereon within three working days following receipt of the
request.
 ---pagebreak---                                    - 59 -                             %
 3. Measures decided upon by the Commission may be referred to the Council
    by any Member State within three working days of the day on which they
    were notified. The Council shall meet without delay. It may, acting by
    a qualified majority, amend or annul the measure in question.
 4. The Commission shall adopt detailed rules for the application of this
    Article in accordance with the procedure laid down in Article 27.
 5. This Article shall be applied having regard to the obligations arising
    from agreements concluded in accordance with Article 228(2) of the
    Treaty."
(3) Article 22a is amended as follows:
    (a)    paragraph 2 is deleted.
    (b)    paragraph 3 becomes paragraph 2.
II. Council Regulation (EEC) No 98/69 of 16 January 1969 (OJ No L 14,
    21.1.1969, p.2), as amended by Regulation (EEC) No 429/77 (OJ No L 61,
    5.3.1977, p.18)
    Article 1 is replaced by the following:
                                "Article 1
 1. Disposal of the products held by intervention agencies may be
    undertaken only:
    (a)    where the products are intended for a particular use, or
    (b)    where the products are intended for export, or
    (c)    in the case of disposal without a specific destination, if no
           risk of disturbance of the market results, having regard in
           particular to the level of average market prices for adult
           bovine animals in the Community and in the Member States, as
           recorded in accordance with Regulation (EEC) No 1982/87, or
 ---pagebreak---                                        - 60 -
                                                                        S3
     (d)    where removal from storage is necessary for technical reasons.
     In the cases referred to in paragraph 1(a) and (b), special conditions
     may be laid down to ensure that the products are not used for a purpose
     other than that for which they were intended and to take- account of the
     particular requirements of such sales.
     To ensure that the obligations entered into are fulfilled, such
     conditions may include the provision of a security which shall be
     forfeited in whole or in part if the said obligations are not or are
     only partially fulfilled."
III. Council Regulation (EEC) No 885/68 of 28 June 1968 (OJ No L 156,
     4.7.1968, p . 2 ) , as last amended by Regulation (EEC) No 427/77
     (OJ No L 61, 5.3.1977, p.16)
     Council Regulation (EEC) No 1157/92 of 28 April 1992 (OJ No L 122,
     7.5.1992, p.4)
     The above Regulations are repealed.
 ---pagebreak---                                       61
                                    -    -
                                                                        11
                                   ANNEX IX
                           SHEEPMEAT AND GOATMEAT
I.  Council Regulation (EEC) No 3013/89 of 25 September 1989 (OJ No L 289,
    7.10.1989, p.l), as last amended by Regulation (EC) No 1886/94 (OJ No L
    197, 30.7.1994, p.30).
    Title II is replaced by the following:
                                  "Title II
                         Trade with third countries
                                  Article 9
 1. Imports into the Community, or exports therefrom, of any of the
    products listed in Article 1 may be subject to presentation of an
    import or export licence.
    Licences shall be issued by the Member States to any applicant,
    irrespective of. his place of establishment in the Community and without
    prejudice to measures taken for the application of Article 12.
    Import and export licences shall be valid throughout the Community. The
    issuing of such licences may be subject to the lodging of a security
    guaranteeing that the products are imported or exported during the term
    of validity of the licence; the security shall be forfeited in whole or
    in part if import or export is not carried out, or is only carried out
    partially, within that period.
 2. The term of validity of licences and other detailed rules for the
    application of this Article shall be adopted in accordance with the
    procedure laid down in Article 30.
 ---pagebreak---                                   - 62 -
                                                                     T]
                               Article 10
   Unless this Regulation provides otherwise, the rates of duty in the
   common customs tariff shall apply to the products listed in Article 1
                               Article 11
1. In order to prevent or counteract adverse effects on the market in the
   Community which may result from imports of certain products listed in
   Article 1, imports of one or more of such products at the rate of duty
   laid down in the common customs tariff may be subject to payment of an
   additional import duty under the conditions set out in Article 5 of the
   Agreement on Agriculture concluded in accordance with Article 228 of
   the Treaty in the framework of the Uruguay Round of multilateral trade
   negotiations.
2. The Commission shall adopt detailed rules for the application of this
   Article in accordance with the procedure laid down in Article 30. Such
   detailed rules shall specify in particular:
   (a)    the products to which additional import duties may be applied,
   (b)    the criteria for triggering the application of paragraph 1 and
          in particular the calculation and determination of the various
          quantities and prices.
                                Article 12
   Tariff quotas for the products listed in Article 1 resulting from
   agreements concluded in accordance with Article 228 of the Treaty or
   from any other act of the Council pursuant to the Treaty shall be
   opened and administered in accordance with detailed rules adopted under
   the procedure laid down in Article 30. Such detailed rules shall
   provide for annual quotas, suitably phased over the year, to be opened
   and, where appropriate, for:
   (a)    guarantees covering the nature, provenance and origin of the
          product,
 ---pagebreak---                                     - 63 -
                                                                       \oo
    (b)     recognition of the document used for verifying the guarantees
            referred to in (a), and
    (c)    the conditions under which import licences are issued and their
           term of validity.
                                 Article 13
1. To the extent necessary for the proper working of the common
   organization of the market in sheepmeat and goatmeat, the use of inward
   or outward processing arrangements may be prohibited in whole or in
   part for the products listed in Article 1.
2. Measures adopted pursuant to this Article shall be decided on in
   accordance with the procedure laid down in Article 23.
                                 Article 14
1. The general rules for the interpretation of the Combined Nomenclature
   and the detailed rules for its application shall apply to the tariff
   classification of products covered by this Regulation; the tariff
   nomenclature resulting from the application of this Regulation shall be
   incorporated in the common customs tariff.
2. Save as otherwise provided for in this Regulation or pursuant to a
   provision thereof, the following shall be prohibited in trade with
   third countries:
   -   the levying of any charge having equivalent effect to a customs
       duty,
       the application of any quantitative restriction or measure having
       equivalent effect.
 ---pagebreak---                                    - 64 -
                                Article 15
 1. If, by reason of an increase in imports or exports, the Community
    market in one or more of the products listed in Article 1 is affected
    by, or is threatened with, serious disturbance likely to jeopardize the
    achievement of the objectives set out in Article 39 of the Treaty,
    appropriate measures may be applied in trade with third countries until
    such disturbance or threat of disturbance has ceased.
 2. If the situation referred to in paragraph 1 arises, the Commission
    shall, at the request of a Member State or on its own initiative,
    decide upon the necessary measures; the Member States shall be notified
    of such measures, which shall be immediately applicable. If the
    Commission receives a request from a Member State, it shall take a
    decision thereon within three working days following receipt of the
    request.
 3. Measures decided upon by the Commission may be referred to the Council
    by any Member State within three working days of the day on which they
    were notified. The Council shall meet without delay. It may, acting by
    a qualified majority, amend or annul the measure in question.
 4. The Commission shall adopt detailed rules for the application of this
    Article in accordance with the procedure laid down in Article 30.
 5. This Article shall be applied having regard to the obligations arising
    from agreements concluded in accordance with Article 228(2) of the
    Treaty."
II. Council Regulation (EEC) No 2641/80 of 14 October 1980 (OJ No L 275,
    18.10.1980, p.2), as last amended by Regulation (EEC) No 3890/92
    (OJ No L 391, 31.12.1992, p.51)
    Council Regulation (EEC) No 2642/80 of 14 October 1980 (OJ No L 275,
    18.10.1980, p.4), as last amended by Regulation (EEC) No 3939/87
    (OJ No L 373, 31.12.1987, p.l)
 ---pagebreak---                               - 65 -                          J  „
Council Regulation (EEC) No 3643/85 of 19 December 1985 (OJ No L 348,
24.12.1985, p.2), as last amended by Regulation (EEC) No 3890/92
(OJ No L 391, 31.12.1992, p.51)
The above Regulations are repealed.
 ---pagebreak---                                     - 66 -
                                   ANNEX X
                                   PIGMEAT
    Council Regulation (EEC) No 2759/75 of 29 October 1975 (OJ No L 282,
    1.11.1975, p.l), as last amended by Regulation (EEC) No 1249/89
    (OJ No L 129, 11.5.1989, p.12).
(1) The second subparagraph of Article 4(1) is replaced by the following:
    "The basic price shall be fixed taking account, in particular, of the
    need to fix this price at a level which contributes towards stabilizing
    market prices without, however, leading to the formation of structural
    surpluses in the Community."
(2) Article 5(2) is replaced by the following:
    "For products of standard quality other than pig carcases, buying-in
    prices shall be derived from the buying-in price for pig carcases on
    the basis of the ratio existing between the commercial value of these
    products to the commercial value of pig carcases."
(3) The following point is added to Article 5(4):
    "(d)   fixing the coefficient expressing the ratio referred to in
           paragraph 2."
(4) Title II is replaced by the following:
                                  "Title II
                         Trade with third countries
                                 Article 8
1.  Imports into the Community, or exports therefrom, of any of the
    products listed in Article 1(1) may be subject to presentation of an
    import or export licence.
    Licences shall be issued by the Member States to any applicant,
    irrespective of his place of establishment in the Community and without
    prejudice to measures taken for the application of Articles 11 and 13.
    Import and export licences shall be valid throughout the Community.
    Such licences shall be issued subject to the lodging of a security
    guaranteeing that the products are imported or exported during the term
    of validity of the licence; the security shall be forfeited in whole or
    in part if import or export is not carried out, or is only carried out
    partially, within that period.
2.  The term of validity of licences and other detailed rules for the
    application of this Article shall be adopted in accordance with the
    procedure laid down in Article 24.
 ---pagebreak---                                    - 67 -
                                                                      An
                                 Article 9
1. Unless this Regulation provides otherwise, the rates of duty in the
    common customs tariff shall apply to the products listed in
   Article 1(1).
                                Article 10
1.  In order to prevent or counteract adverse effects on the market in the
   Community which may result from imports of certain products listed in
   Article 1(1), imports of one or more of such products at the rate of
   duty laid down in the common customs tariff may be subject to payment
   of an additional import duty under the conditions set out in Article 5
   of the Agreement on Agriculture concluded in accordance with
   Article 228 of the Treaty in the framework of the Uruguay Round of
   multilateral trade negotiations.
2. The Commission shall adopt detailed rules for the application of this
   Article in accordance with the procedure laid down in Article 24. Such
   detailed rules shall specify in particular:
    (a)    the products to which additional import duties may be applied,
    (b)    the criteria for triggering the application of paragraph 1 and
           in particular the calculation and determination of the various
           quantities and prices.
                                Article 11
   Tariff quotas for the products listed in Article 1(1) resulting from
   agreements concluded in accordance with Article 228 of the Treaty or
   from any other act of the Council pursuant to the Treaty shall be
   opened and administered in accordance with detailed rules adopted under
   the procedure laid down in Article 24. Such detailed rules shall
   provide for annual quotas, suitably phased over the year, to be opened
   and, where appropriate, for:
   (a)     guarantees covering the nature, provenance and origin of the
           product,
   (b)     recognition of the document used for verifying the guarantees
           referred to in (a), and
   (c)     the conditions under which import licences are issued and their
           term of validity.
                                Article 12
   Where prices on the Community market rise significantly and where that
   situation is likely to continue, thereby disturbing or threatening to
   disturb that market, appropriate measures may be taken.
   Detailed rules for the application of this Article shall be adopted in
   accordance with the procedure laid down in Article 24.
 ---pagebreak---                                   - 68 -
                                Article 13
1. To the extent necessary to enable the products listed in Article 1(1)
   to be exported on the basis of quotations or prices for those products
   on the world market and within the limits resulting from agreements
   concluded in accordance with Article 228 of the Treaty, the difference
   between those quotations or prices and prices in the Community may be
   covered by export refunds.
2. Refunds shall be the same for the whole Community. They may vary
   according to destination.
   Refunds shall be fixed in accordance with the procedure laid down in
   Article 24.
   Refunds may be fixed:
    (a)   at regular intervals,
    (b)   by invitation to tender.
   Refunds fixed at regular intervals may, where necessary, be adjusted in
   the intervening period by the Commission at the request of a Member
   State or on its own initiative.
3. When the amount of the refund is set, account shall be taken in
   particular of the need to establish a balance between the use of
   Community basic agricultural products for export as processed goods to
   third countries, and the use of products from these countries admitted
   for inward processing.
4. Refunds shall only be granted on application and on presentation of the
   relevant export licence.
5. The refund applicable to exports of products listed in Article 1(1)
   shall be that applicable on the day of application for the licence and,
   in the case of a differentiated refund, that applicable on the same day
   for the destination indicated on the licence.
6. Paragraphs 4 and 5 may be waived in the case of products listed in
   Article 1(1) on which refunds are paid under food-aid operations, in
   accordance with the procedure laid down in Article 24.
7. Detailed rules for the application of this Article shall be adopted in
   accordance with the procedure laid down in Article 24.
                               Article 14
1. To the extent necessary for the proper working of the common
   organization of the market in pigmeat, the use of inward processing
   arrangements may be prohibited in whole or in part in respect of
   products listed in Article 1(1) which are intended for the manufacture
   of products listed in that same paragraph.
2. Measures adopted pursuant to this Article shall be decided on in
   accordance with the procedure laid down in Article 24.
 ---pagebreak---                                     - JS -
                                 Article 15
 1.  The general rules for the interpretation of the Combined Nomenclature
     and the special rules for its application shall apply to the
     classification of products covered by this Regulation; the tariff
     nomenclature resulting from the application of this Regulation shall be
     incorporated in the common customs tariff.
 2.  Save as otherwise provided for in this Regulation or pursuant to a
     provision thereof, the following shall be prohibited in trade with
     third countries:
     -  the levying of any charge having equivalent effect to a customs
        duty,
     -  the application of any quantitative restriction or measure having
        equivalent effect.
                                 Article 16
 1.  If, by reason of an increase in imports or exports, the Community
     market in one or more of the products listed in Article 1(1) is
     affected by, or is threatened with, serious disturbance likely to
     jeopardize the achievement of the objectives set out in Article 39 of
     the Treaty, appropriate measures may be applied in trade with third
     countries until such disturbance or threat of disturbance has ceased.
 2.  If the situation referred to in paragraph 1 arises, the Commission
     shall, at the request of a Member State or on its own initiative,
     decide upon the necessary measures; the Member States shall be notified
     of such measures, which shall be immediately applicable. If the     »
     Commission receives a request from a Member State, it shall take a
     decision thereon within three working days following receipt of the
     request.
 3. Measures decided upon by the Commission may be referred to the Council
     by any Member State within three working days of the day on which they
    were notified. The Council shall meet without delay. It may, acting by
     a qualified majority, amend or annul the measure in question.
 4. The Commission sl>all adopt detailed rules for the application of this
    Article in accordance with the procedure laid down in Article 24.
 5. This Article shall be applied having regard to the obligations arising
    .from agreements concluded in accordance with Article 228 of the
    Treaty."
II. Council Regulation (EEC) No 2764/75 of 29 October 1975 (OJ No L 282,
     1.11.1975, p.21), as last amended by Regulation (EEC) No 4160/87 (OJ No
    L 392, 31.12.1987, p. 46)
    Council Regulation (EEC) No 2765/75 of 29 October 1975 (OJ No L 282,
     1.11.1975, p. 23)
    Council Regulation (EEC)' No 2766/75 of 29 October 1975 (OJ No L 282,
     1.11.1975, p. 25), as last amended by Regulation (EEC) No 3906/87 (OJ
    No L 370, 30.12.1987, p. 11)
 ---pagebreak---                               - 70 -                           ÀO'l
Council Regulation (EEC) No 2768/75 of 29 October 1975 (OJ No L 282,
1.11.1975, p. 39)
Council Regulation (EEC) No 2769/75 of 29 October 1975 (OJ No L 282,
1.11.1975, p. 43)
The above Regulations are repealed.
 ---pagebreak---                                          - 71 -
                                                                     AQ%
                                        ANNEX XI
                                      POULTRYMEAT
I.   Council Regulation (EEC) No 2777/75 of 29 October 1975 (OJ No L 282,
     1.11.1975, p.77), as last amended by Regulation (EEC) No 1574/93
      (OJ No L 52, 24.6.1993, p.l).
 (1) Articles 3 to 11 are replaced by the following:
                                       "Tùrticle 3
 1.  Imports into the Community, or exports therefrom, of any of the
     products listed in Article 1(1) may be subject to presentation of an
     import or export licence.
     Licences shall be issued by tlVe Member States to any applicant,
     irrespective of his place of establishment in the Community and without
     prejudice to measures taken for the application of Articles 6 and 8.
     Import and export licences shall be valid throughout the Community.
     Such licences shall be issued subject to the lodging of a security
     guaranteeing that the products are imported or exported during the term
     of validity of the licence; the security shall be forfeited in whole or
     in part if import or export is not carried out, or is only carried out
     partially, within that period.
 2.  The term of validity of licences and pther detailed rules for the
     application of this Article shall be adopted in accordance with the
     procedure laid down in Article 17.                         i
                                       Article 4
     Unless this Regulation pr<5videFs otherwise, the rates of duty in the
     common customs tariff shall apply to the products listed in
                              ri
     Article 1(1) .              ° ' ~~'~''
                                       Article 5
 1.  In order to prevent or counteract adverse effects on the market in the
     Community which may result from imports of certain products listed in
     Article 1(1), imports of one or more of such products at the rate of
     duty laid down in the common customs tariff may be subject to payment
     of an additional import duty under the conditions set out in Article 5
     of the Agreement on Agriculture concluded in accordance with
     Article 228 of the Treaty in the framework of the Uruguay Round of
     multilateral trade negotiations.
 2.  The Commission shall adopt detailed rules for the application of this
     Article in accordance with the procedure laid down in Article 17. Such
     detailed rules shall specify in particular:
     (a)     the products to which additional import duties may be applied,
     (b)     the criteria for triggering the application of paragraph 1 and
             in particular the calculation and determination of the various
             quantities and prices.
 ---pagebreak---                                     -72-                                 y{Qo
                                  Article 6
Tariff quotas for the products listed in Article 1(1) resulting from
agreements concluded in accordance with Article 228 of the Treaty or from
any other act of the Council pursuant to the Treaty shall be opened and
administered in accordance with detailed rules adopted under the procedure
laid down in Article 17. Such detailed rules shall provide for annual
quotas, suitably phased over the year, to be opened and, where appropriate,
for:
(a) guarantees covering the nature, provenance and origin of the product,
(b) recognition of the document used for verifying the guarantees referred
     to in (a), and
(c) the conditions under which import licences are issued and their term of
     validity.
                                  Article 7
     Where prices on the Community market rise significantly and where that
     situation is likely to continue, thereby disturbing or threatening to
     disturb that market, appropriate measures may be taken.
     Detailed rules for the application of this Article shall be adopted in
     accordance with the procedure laid down in Article 17
                                  Article 8
1.   To the extent necessary to enable the products listed in Article 1(1)
     to be exported on the basis of prices for those products on the world
     market and within the limits resulting from agreements concluded in
     accordance with Article 228 of the Treaty, the difference between those
     prices and prices in the Community ma,y, be_.covered by export refunds.
2.   Refunds shall be the same for the whole Community. They may vary
     according to destination.
     Refunds shall be fixed in accordance with the procedure laid down in
     Article 17.
     Refunds may be fixed:                                               /
     (a)    at regular intervals,
     (b)    by invitation to tender.
     Refunds fixed at regular intervals may, where necessary, be adjusted in
     the intervening period by the Commission at the request of a Member
     State or on its own initiative.
3.   When the amount of the refund is set, account shall be taken in
     particular of the need to establish a balance between the use of
     Community basic agricultural products for export as processed goods to
     third countries, and the use of products from those countries admitted
     for inward processing.
4.   Refunds shall only be granted on application and on presentation of the
     relevant export licence.
 ---pagebreak---                                      - 73 -                            i 40
 5.   The refund applicable to exports of products listed in Article 1(1)
      shall be that applicable on the day of application for the licence and,
      in the case of a differentiated refund, that applicable on the same day
      for the destination indicated on the licence.
 6.   Paragraphs 4 and 5 may be waived in the case of products listed in
      Article 1(1) on which refunds are paid under food-aid operations, in
      accordance with the procedure laid down in Article 17.
7.   Detailed rules for the applàcafc&on of this Article shall be adopted in
      accordance with the procedure laid down in Article 17.
                                   Article 9
To the extent necessary for the proper working of the common organization
of the market in poultrymeat, the use of inward processing arrangements may
be prohibited in whole or in part in respect of products listed in
Article 1 which are intended for the manufacture of products listed in
Article 1(1).
Measures adopted pursuant to this Article shall be decided on in accordance
with the procedure laid down in Article 17.
                                  Article 10
1.   The general rules for the interpretation of the Combined Nomenclature
     and the special rules for its application shall apply to the
     classification of products covered by this Regulation; the tariff
     nomenclature resulting from the application of this Regulation shall be
     incorporated in the common customs tariff.
2.   Save as otherwise provided for in this Regulation or pursuant to a
     provision thereof, the following shall be prohibited in trade with
     third countries:
     -   the levying of any charge having equivalent effect to a customs
         duty,
         the application of any quantitative restriction or measure having
         equivalent effect.
                                  Article 11
1.   If, by reason of an increase in imports or exports, the Community
    •market in one or more of the products listed in Article 1(1) is
     affected by, or is threatened with, serious disturbance likely to
     jeopardize the achievement of the objectives set out in Article 39 of
     the Treaty, appropriate measures may be applied in trade with third
     countries until such disturbance or threat of disturbance has ceased.
2.   If the situation referred to in paragraph 1 arises, the Commission
     shall, at the request of a Member State or on its own initiative,
     decide upon the necessary measures; the Member States shall be notified
     of such measures, which shall be immediately applicable. If the
     Commission receives a request from a Member State, it shall take a
     decision thereon within three working days following receipt of the
     request.
 ---pagebreak---  3.  Measures decided upon by the Commission may be referred to the Council
     by any Member State within three working days of the day on which they
     were notified. The Council shall meet without delay. It may, acting by
     a qualified majority, amend or annul the measure in question.
 4.  The Commission shall adopt detailed rules for the application of this
     Article in accordance with the procedure laid down in Article 17.
 5.  This Article shall be applied having regard to the obligations arising
     from agreements concluded in accordance! «yqt h Article 228(2) of the
     Treaty. "                          = r- .••;..-
 (2) Article 12 is deleted.
II.  Council Regulation (EEC) No 2778/75 of 29 October 1975 (OJ No L 282,
     1.11.1975, p.84), as last amended by Regulation (EEC) No 3714/92 (OJ No
     L 378, 23.12.1992, p.23).
     Council Regulation (EEC) No 2779/75 of 29 October 1975 (OJ No L 282,
     1.11.1975, p.90).
     Council Regulation (EEC) No 2780/75 of 29 October 1975 (OJ No L 282,
     1.11.1975, p.94).
     The above Regulations are repealed.
 ---pagebreak---                                        7 5
                                     -     - -                       J A -
                                   ANNEX XII
                                      EGGS,
                          OVALBUMIN AND LACTALBUMIN
      Council Regulation (EEC) No 2771/75 of 29 October 1975 (OJ No L 282,
      1.11.1975, p.49), as last amended by Regulation (EEC) No 1574/93
      (OJ No L 152, 24.6.1993, p.l).
(1)  Articles 3 to 11 (inclusive) are replaced by the following:
                                  "Article 3
 1.  Imports into the Community, or exports therefrom, of any of the
     products listed in Article 1(1) shall be subject to presentation of an
     import or export licence.
     Licences shall be issued by the Member States to any applicant,
     irrespective of his place of establishment in the Community and without
     prejudice to measures taken for the application of Articles 6 and 8.
     Import and export licences shall be valid throughout the Community.
     Such licences shall be issued subject to the lodging of a security
     guaranteeing that the products are imported or exported during the term
     of validity of the licence; the security shall be forfeited in whole or
     in part if import or export is not carried out, or is only carried out
     partially, within that period.
 2.  The term of validity of licences and other detailed rules for the
     application of this Article shall be adopted in accordance with the
     procedure laid down in Article 17.
                                  Article 4
Unless this Regulation provides otherwise, the rates of duty in the common
 customs tariff shall apply to the products listed in Article 1(1).
                                  Article 5
 1.  In order to prevent or counteract adverse effects on the market in the
     Community which may result from imports of certain products listed in
     Article 1(1), imports of one or more of such products at the rate of
     duty laid down in the common customs tariff may be subject to payment
     pf an additional import duty under the conditions set out in Article 5
     of the Agreement on Agriculture concluded in accordance with
     Article 228 of the Treaty in the framework of the Uruguay Round of
     multilateral trade negotiations.
 ---pagebreak---                                     - 76 -                             A V i
2.   The Commission shall adopt detailed rules for the application of this
    Article in accordance with the procedure laid down in Article 17. Such
     detailed rules shall specify in particular:
     (a)    the products to which additional import duties, may be applied,
     (b)    the criteria for triggering the application of paragraph 1 and
            in particular the calculation and determination of the various
            quantities and prices.
                *                 Article 6
Tariff quotas for the products listed in Article 1(1) resulting from
agreements concluded in accordance with Article 228 of the Treaty or from
any other act of the Council pursuant to the Treaty shall be opened and
administered in accordance with detailed rules adopted under the procedure
laid down in Article 17. Such detailed rules shall provide for annual
quotas, suitably phased over the year, to be opened and, where appropriate,
for:
(a) guarantees covering the nature, provenance and origin of the product,
(b) recognition of the document used for verifying the guarantees referred
     to in (a), and
     (c)    the conditions under which import licences are issued and their
            term of validity.
                                  Article 7
Where prices on the Community market rise significantly and where that
situation is likely to continue, thereby disturbing or threatening to
disturb that market, appropriate measures may be taken.
Detailed rules for the application of this Article shall be adopted in
accordance with the procedure laid down in Article 17.
                                  Article 8
1.   To the extent necessary to enable the products listed in Article 1(1)
     to be exported without further processing or in the form of goods
     listed in Annex I on the basis of quotations or prices for those
     products on the world market and within the limits resulting from
     agreements concluded in accordance with Article 228 of the Treaty, the
     difference between those quotations or prices and prices in the
     Community may be covered by export refunds.
 ---pagebreak---                                    - 77 -
                                                                     4-H
2. Refunds shall be the same for the whole Community. They may vary
   according to destination.
   Refunds shall be fixed in accordance with the procedure laid down in
   Article 17.
   Refunds may be fixed:
    (a)    at regular intervals,
    (b)    by invitation to tender.                         •
   Refunds fixed at regular intervals may, where necessary, be adjusted in
   the intervening period by the Commission at the request of a Member
   State or on its own initiative.
3. When the amount of the  refund is set, account shall be taken in
   particular of the need  to establish a balance between the use of basic
   Community agricultural  products for export as processed goods to third
   countries, and the use  of basic agricultural products from these
   countries admitted for  inward processing.
4. Refunds on products listed in Article 1(1) and exported without further
   processing shall only be granted on application and on presentation of
   the relevant export licence.
5. The refund applicable to exports of   products listed in Article 1(1)
   exported without further processing   shall be that applicable on the day
   of application for the licence and,   in the case of a differentiated
   refund, that applicable on the same   day for the destination indicated
   on the licence.
6. Paragraphs 4 and 5 may be made to apply to products listed in
   Article 1(1) and exported in the form of goods listed in Annex I in
   accordance with the procedure laid down in Article 16 of Regulation
   (EC) No 3448/93.
7. Paragraphs 4 and 5 may be waived in the case of products listed in
   Article 1(1) on which refunds are paid under food-aid operations, in
   accordance with the procedure laid down in Article 17.
8. Detailed rules for the application of this Article shall be adopted in
   accordance with the procedure laid down in Article 17. Annex I shall be
   amended in accordance with the same procedure.
                                 Article 9
1. To the extent necessary for the proper working of the common
   organization of the market in eggs, the use of inward processing
   arrangements may be prohibited in whole or in part:
       in respect of products listed in Article 1(1) which are intended for
       the manufacture of products listed in Article 1(1)(b), and
   -   in special cases, in respect of products listed in Article 1(1)
       which are intended for the manufacture of goods listed in Annex I.
 ---pagebreak---                                      78 -                            * /* ;—
                                                                     ^ »b .
 2. Measures adopted pursuant to this Article shall be decided on in
    accordance with the procedure laid down in Article 17.
                                 Article 10
 1. The general rules for the interpretation of the Combined Nomenclature
    and the special rules for its application shall apply to the
    classification of products covered by this Regulation; the tariff
    nomenclature resulting from the application of this Regulation shall be
     incorporated in the common customs tariff.
 2. Save as otherwise provided for in this Regulation or pursuant to a
    provision thereof, the following shall be prohibited in trade with
    third countries:
    -   the levying of any charge having equivalent effect to a customs
        duty,
        the application of any quantitative restriction or measure having
        equivalent effect.
                                 Article 11
 1. If, by reason of an increase in imports or exports, the Community
    market in one or more of the products listed in Article 1(1) is
    affected by, or is threatened with, serious disturbance likely to
    jeopardize the achievement of the objectives set out in Article 39 of
    the Treaty, appropriate measures may be applied in trade with third
    countries until such disturbance or threat of disturbance has ceased.
 2. If the situation referred to in paragraph 1 arises, the Commission
    shall, at the request of a Member State or on its own initiative,
    decide upon the necessary measures; the Member States shall be notified
    of such measures, which shall be immediately applicable. If the
    Commission receives a request from a Member State, it shall take a
    decision thereon within three working days following receipt of the
    request.
 3. Measures decided upon by the Commission may be referred to the Council
    by any Member State within three working days of the day on which they
    were notified. The Council shall meet without delay. It may, acting by
    a qualified majority, amend or annul the measure in question.
 4. The Commission shall adopt detailed rules for the application of this
    .Article in accordance with the procedure laid down in Article 17.
 5. This Article shall be applied having regard to the obligations arising
    from agreements concluded in accordance with Article 228(2) of the
    Treaty."
(2) Article 12 is deleted.
 ---pagebreak---                                    - 79 -
                                                                    A Ab
II. Council Regulation (EEC) No 2783/75 of 29 October 1975 (OJ No L 282,
    1.11.1975, p.104), as last amended by Regulation (EEC) No 4001/87
     (OJ No L 377, 31.12.1987, p.44).
(1) The introductory sentence in Article 1 is replaced by the following:
    "Unless this Regulation provides otherwise, the rates of duty in the
    common customs tariff shall apply to the following products:"
(2) Article 2 is replaced by the following:
                                 "Article 2
 1. Imports into the Community, or exports therefrom, of any of the
    products listed in Article 1 shall be subject to presentation of an
    import or export licence.
    Licences shall be issued by the Member States to any applicant,
    irrespective of his place of establishment in the Community and without
    prejudice to measures taken for the application of Article 4.
    Import and export licences shall be valid throughout the Community.
    Such licences shall be issued subject to the lodging of a security
    guaranteeing that the products are imported or exported during the term
    of validity of the licence; the security shall be forfeited in whole or
    in part if import or export is not carried out, or is only carried out
    partially, within that period.
 2. The term of validity of licences and other detailed rules for the
    application of this Article shall be adopted in accordance with the
    procedure laid down in Article 17 of Regulation (EEC) No 2771/75.".
 ---pagebreak---                                     - 80 -
                                                                      À  a
(3)  Article 3 is replaced by the following:
                                 "Article 3
 1.  In order to prevent or counteract adverse effects on the market in the
     Community which may result from imports of certain products listed in
     Article 1, imports of one or more of such products at the rate of duty
     laid down in the common customs tariff may be subject to payment of an
     additional import duty under the conditions set out in Article 5 of the
     Agreement on Agriculture concluded in accordance with Article 228 of
     the Treaty in the framework of the Uruguay Round of multilateral trade
     negotiations.
 2.  The Commission shall adopt detailed rules for the application of this .
     Article in accordance with the procedure laid down in Article 17 of
     Regulation (EEC) No 2771/75. Such detailed rules shall specify in
     particular:
     (a)    the products to which additional import duties may be applied,
     (b)    the criteria for triggering the application of paragraph 1 and
            in particular the calculation and determination of the various
            quantities and prices."
(4)  Article 4 is replaced by the following:
                                 "Article 4
 Tariff quotas for the products listed in Article 1 resulting from
 agreements concluded in accordance with Article 228 of the Treaty or from
 any other act of the Council pursuant to the Treaty shall be opened and
 administered in accordance with detailed, rules adopted under the procedure
 laid down in Article 17 of Regulation (EEC) No 2771/75. Such detailed rules
 shall provide for annual quotas, suitably phased over the year, to be
 opened and, where appropriate, for:
 (a) guarantees covering the nature, provenance and origin of the product,
 (b) recognition of the document used for verifying the guarantees referred
     to in (a), and
 (c) the conditions under which import licences are issued and their term of
     validity."
 ---pagebreak---                                      -81-                              A Al
 (5)  Article 5 is replaced by the following:
                                   "Article 5
  Where prices on the Community market rise significantly and where that
  situation is likely to continue, thereby disturbing or threatening to
  disturb that market, appropriate measures may be taken.
  Detailed rules for the application of this Article shall be adopted in
  accordance with the procedure laid down in Article 17 of Regulation (EEC)
  No 2771/75."
(6)   Article 7 is replaced by the following:
                                   "Article 7
  To the extent necessary for the proper working of the common organization
  of the market in eggs and this Regulation, the use of inward processing
  arrangements may be prohibited in whole or in part in respect of products
  listed in Article 1 which are intended for the manufacture of products
  listed in that same Article.
 Measures adopted pursuant to this Article shall be decided on in accordance
 with the procedure laid down in Article 17 of Regulation (EEC) No 2771/75."
(7)   Article 8 is replaced by thé following:
                                  "Article 8
  1.  The general rules for the interpretation of the Combined Nomenclature
      and the special rules for its application shall apply to the
      classification of products covered by this Regulation; the tariff
      nomenclature resulting from the application of this Regulation shall be
      incorporated in the common customs tariff.
 2.   Save as otherwise provided for in this Regulation or pursuant to a
      provision thereof, the following shall be prohibited in trade with
      third countries:
      -  the levying of any charge having equivalent effect to a customs
         duty,
      -  the application of any quantitative restriction or measure having
         equivalent effect."
III. Council Regulation (EEC) No 2773/75 of 29 October 1975 (OJ No L 282,
      1.11.1975, p.64), as last amended by Regulation (EEC) No 4155/87
      (OJ No L 392, 31.12.1987, p.29)
      Council Regulation (EEC) No 2774/75 of 29 October 1975 (OJ No L 282,
      1.11.1975, p.68)
      Council Regulation (EEC) No 2775/75 of 1 October 1975 (OJ No L 282,
      1.11.1975, p.72)
      The above Regulations are repealed.
 ---pagebreak---                                   -  82 -
                                                                      /Ml
                                ANNEX X I I I
                           FRUIT AND VEGETABLES
    Council Regulation (EEC) No 1035/72 of 18 May 1972 (OJ No L 118,
    20.5.1972, p.l), as last amended by Regulation (EC) No 3669/93
    (OJ No L 338, 31.12.1993, p.26)
    Title IV is replaced by the following:
                                 "Title IV
                        Trade with third countries
                                Article 22
1.  Imports into the Community, or exports therefrom, of any of the
    products listed in Article 1(2) shall be subject to presentation of an
    import or export licence.
    Licences shall be issued by the Member States to any applicant,
    irrespective of his place of establishment in the Community and without
    prejudice to measures taken for the application of Articles 25 and 26.
    Import and export licences shall be valid throughout the Community.
    Such licences shall be issued subject to the lodging of a security
    guaranteeing that the products are imported or exported during the term
    of validity of the licence; excep.in cases of force majeure, the
    security shall be forfeited in whole or in part if import or export is
    not carried out, or is only carried out partially, within that period.
2.  The term of validity of licences and other detailed rules for the
    application of this Article shall be adopted in accordance with the
    procedure laid down in Article 33.
                                Article 23
1.  Unless this Regulation provides otherwise, the rates of duty in the
    common Customs tariff shall apply to the products listed in
   Article 1(2).
2.  Detailed rules for the application of this Article shall be adopted in
    accordance with the procedure laid down in Article 33. Such detailed
   .rules shall cover in particular the measures necessary to check on
    import prices.
 ---pagebreak---                                                                       42o
                                 A r t i c l e 24
1.  In order to prevent or counteract adverse effects on the market in the
    Community which may result from imports of certain products listed in
    Article 1(2), imports of one or more of such products at the rate of
    duty laid down in the common customs tariff may be subject to payment
    of an additional import duty under the conditions set out in Article 5
    of the Agreement on Agriculture concluded in accordance with
    Article 228 of the Treaty in the framework of the Uruguay Round of
    multilateral trade negotiations.
2.  The Commission shall adopt detailed rules for the application of this
    Article in accordance with the procedure laid down in Article 33. Such
    detailed rules shall specify in particular:
    (a)    the products to which additional import duties may be applied,
    (b)    the criteria for triggering the application of paragraph 1 and
            in particular the calculation and determination of the various
           quantities and prices.
                                 Article 25
    Tariff quotas for the products listed in Article 1(2) resulting from
    agreements concluded in accordance with Article 228 of the Treaty or
    from any other act of the Council pursuant to the Treaty shall be
    opened and administered in accordance with detailed rules adopted under
   the procedure laid down in Article 33. Such detailed rules shall
   provide for annual quotas, suitably phased over the year, to be opened
    and, where appropriate, for:
    (a)    guarantees covering the nature, provenance and origin of the
           product,
    (b)    recognition of the document used for verifying the guarantees
           referred to in (a), and
    (c)    the conditions under which import licences are issued and their
           term of validity.
                             /   Article 26
1. To the extent necessary to enable the products listed in Article 1(2)
   to be exported on the basis of the prices of these products in
   •international trade and within the limits resulting from agreements
   concluded in accordance with Article 228 of the Treaty, the difference
   between those prices and.prices in the Community may be covered by
   export refunds.
2. Refunds shall be the same for the whole Community. They may vary
   according to destination.
   Refunds shall be fixed,in accordance with the procedure laid down in
   Article 33.
   Refunds may be fixed:
    (a)    at regular intervals,                   >    '    '    '    ' '
    (b)    by invitation to tender.
 ---pagebreak---                                  -84-                               J, £ i
   Refunds fixed at regular intervals may, where necessary, be adjusted in
   the intervening period by the Commission at the request of a Member
   State or on its own initiative.
3. The refund shall be granted only on request and on presentation of the
   relevant export licence.
4. The refund applicable to exports of products listed in Article 1(2)
   shall be that applicable on the day of application for the licence and,
   in the case of a differentiated refund, that applicable on the same day
   for the destination indicated on the licence.
5. Paragraphs 3 and 4 may be waived in the case of products listed in
   Article 1(2) on which refunds are paid under food-aid operations, in
   accordance with the procedure laid down in Article 33.
6. Detailed rules for the application of this Article shall be adopted in
   accordance with the procedure laid down in Article 33.
                               Article 27
1. Save as otherwise provided for in this Regulation or pursuant to a
   provision thereof, the following shall be prohibited when importing the
   products listed in Article 1(2) from third countries:
   -  the levying of any charge having equivalent effect to a customs
      duty,
   -  the application of any quantitative restriction or measure having
      equivalent effect.
2. The general rules for the interpretation of the Combined Nomenclature
   and the special rules for its application shall apply to the
   classification of products covered by this Regulation; the tariff
   nomenclature resulting from the application of this Regulation shall be
   incorporated in the common customs tariff.
                               Article 28
1. Appropriate measures may be taken when trading with third countries:
      if, by reason of an increase in imports or exports, the Community
      market in one or more of the products listed in Article 1(2) is
      affected by, or is threatened with, serious disturbance likely to
      jeopardize the achievement of the objectives set out in Article 39
      of the Treaty,
      or if, in the case of the products listed in Annex Ilia, the
      withdrawal or buying-in operations undertaken pursuant to
      Articles 18 and 19 involve significant quantities.
 ---pagebreak---                                  - 85 -                              lit
   Such measures may be applied only until, depending on the case, the
   disturbance or threat of disturbance has ceased or the quantities
   withdrawn or bought in have diminished appreciably.
2. If the situation referred to in paragraph 1 arises, the Commission
   shall, at the request of a Member State or on its own initiative,
   decide upon the necessary measures; the Member States shall be notified
   of such measures, which shall be immediately applicable. If the
   Commission receives a request from a Member State, it shall take a
   decision thereon within three working days following receipt of the
   request.
3. Measures decided upon by the Commission may be referred to the Council
   by any Member State within three working days of the day on which they
   were notified. The Council shall meet without delay. It may, acting by
   a qualified majority, amend or annul the measure in question.
4. The Commission shall adopt detailed rules for the application of this
   Article in accordance with the procedure laid down in Article 33.
5. This Article shall be applied having regard to the obligations arising
   from agreements concluded in accordance with Article 228(2) of the
   Treaty."
 ---pagebreak---                                   - 86 -                               423
II. Council Regulation (EEC) No 2518/69 of 9 December 1969 (OJ No L 318,
    18.12.1969, p.17), as last amended by Regulation (EEC) No 2455/72
    (OJ No L 266, 14.11.1972, p.7)
    Council Regulation (EEC) No 2707/72 of 19 December 1972 (OJ No L 291,
    28.12.1972, p.3)
    Council Regulation (EEC) No 1200/88 of 28 April 1988 (OJ No L 115,
    3.5.1988, p.7), as last amended by Regulation (EEC) No 3821/90
    (OJ No L 366, 29.12.1990, p.45)
    The above Regulations are repealed.
                                        ::r.'.i-;j nil
 ---pagebreak---                                       " 8? ~                           A2-H
                                    ANNEX XIV
                       PROCESSED FRUIT AND VEGETABLES
I.  Council Regulation (EEC) No 426/86 of 24 February 1986 (OJ No L 49,
    27.2.1986, p.l), as last amended by Regulation (EC) No 1490/94
     (OJ No L 161, 29.6.1994, p.13).
(1) Title II is replaced by èhé'following:
                             ">noo sri J
                                    "Title II
                         Trade with third countries
                                    Article 9
 1. Imports into the Community, or exports therefrom, of any of the
    products listed in Article 1(1) may be subject to presentation of an
    import or export licence.
    Licences shall be issued by the Member States to any applicant,
    irrespective of his place of establishment in the Community and without
    prejudice to measures taken for the application of Articles 12 and 15.
    Import and export licences shall be valid throughout the Community. The
    issue of such licences may be subject to the lodging of a security
    guaranteeing that the products are imported or exported during the term
    of validity of the licence;'"excep.in cases of force majeure, the
                              T erf:* o"
    security shall be forfeited in whole or in part if import or export is
    not carried out, or is only carried out partially, within that period.
 2. The term of validity of licences and other detailed rules for the
    application of this Article shall be adopted in accordance with the
    procedure laid down in Article 22.
                                   Article 10
 1. Unless this Regulation provides otherwise, the rates of duty in the
    common customs tariff shall apply to the products listed in
    Article 1(1).
 2. A minimum import price for the 1995, 1996, 1997, 1998 and 1999
    marketing years shall be fixed for the products listed in Part B of
    Annex I. The minimum import price shall be determined having regard in
    particular to:
    -   the free-at-frontier prices on import into the Community,
    -   the prices obtaining on world markets,
    -   the situation on the internal Community market,
        the trend of trade with third countries.
    Where the minimum import price is not observed, a countervailing charge
    in addition to customs duty shall be imposed, based on the prices of
    the main supplier third countries.
 ---pagebreak--- 3.  Minimum import prices and other detailed rules for the application of
    this Article shall be adopted in accordance with the procedure provided
     for in Article 22.
                                 Article 11
1.   In order to prevent or counteract adverse effects on the market in the
    Community which may result from imports of certain products listed in
    Article 1(1), imports of one or more of such products at the rate of
    duty laid down in the common customs tariff may be subject to payment
    of an additional import duty under the conditions set out in Article 5
    of the Agreement on Agriculture concluded in accordance with
    Article 228 of the Treaty in the framework of the Uruguay Round of
    multilateral trade negotiations.
2.  The Commission shall adopt detailed rules for the application of this
    Article in accordance with the procedure laid down in Article 22. Such
    detailed rules shall specify in particular:
     (a)    the products to which additional import duties may be applied,
     (b)    the criteria for triggering the application of paragraph 1 and
            in particular the calculation and determination of the various
            quantities and prices.
                                 Article 12
Tariff quotas for the products listed in Article 1(2) resulting from
agreements concluded in accordance with .Article 228 of the Treaty or from
any other act of the Council pursuant to 'the Treaty shall be opened and
administered in accordance with detailed rules adopted under the procedure
laid down in Article 22. Such detailed rules shall provide for annual
quotas, suitably phased over the year, to be opened and, where appropriate,
for:
(a) guarantees covering the nature, provenance and origin of the product,
(b) recognition of the document used for verifying the guarantees referred
     to in (a), and
(c) the conditions under which import licences are issued and their term of
    validity.
                                 Article 13
To the extent necessary to enable the export of:
(a) the products not containing added sugar listed in Article 1(1),
 ---pagebreak---                                      -89 -                             \Uo
 (b) -   white sugar and raw sugar falling within heading 1701,
     -   glucose and glucose syrup falling within subheadings 1702 30 51,
         1702 30 59, 1702 30 91, 1702 30 99 and 1702 40 90,
     -   isoglucose falling within subheadings 1702 30 10, 1702 40 10,
         1702 60 10 and 1702 90 30, and
         beet and cane syrup.falling within subheading 1702 90 90,
     used in the products listed in Article 1(1)(b),
     on the basis of prices for those products on the world market and
     within the limits resultâligsfrrbm agreements concluded in accordance
     with Article 228 of the Treaty, the difference between those prices and
     prices in the Communityjuta^i^e covered by export refunds.
                                   Article 14
1.   Refunds shall be the same for the whole Community. They may vary
     according to destination.
     Refunds shall be fixed in accordance with the procedure laid down in
     Article 22.
     Refunds may be fixed:
     (a)     at regular intervals,
     (b)     by invitation to tender.
     Refunds fixed at regular4iintecv>als may, where necessary, be adjusted in
     the intervening period by the Commission at the request of a Member
     State or on its own initiative.
2.   The refund referred to in Article 13(b) shall be equal:
        in the case of raw sugar, white sugar and beet and cane syrup, to
        the amount of refund for export of these products unprocessed as
        fixed in accordance with Article 19 of Council Regulation (EEC)
        No 1785/81 of 30 June 1981 on the common organization of the markets
        in the sugar sector and with the provisions adopted for its
        application,
    -   in the case of isoglucose, to the amount of the refund for export
        of this product unprocessed as fixed in accordance with Article 19
        of Regulation (EEC) No 1785/81 and with the provisions adopted for
        its application,
    -   in the case of glucose and glucose syrup, to the amount of the
        refund for export of these products unprocessed as fixed for each of
        these products in accordance with Article 16 of Council Regulation
        (EEC) No 1766/92 of 30 June 1992 on the common organization of the
        market in cereals and with the provisions adopted for its
        application.
 ---pagebreak---                                   - 90 -                             /J 1 ^
3. To qualify for the refund referred to in Article 13(b), the products
   listed in Article 1(1)(b) must, on export, be accompanied by a
   declaration from the applicant indicating the amounts of raw sugar,
   white sugar and beet and cane sugar, isoglucose, glucose and glucose
   syrup used in their manufacture.
   The accuracy of the declaration referred to in the first subparagraph
   shall be subject to checks by the competent authorities of the Member
   State concerned.
                                      ••'....„' io i
4. Where the refund referred to in ArtiTcleprl&Kb) is not sufficient to
   permit exports of the products listed in Article 1(1)(b), the
   provisions laid down for the refund refeapired to in Article 13(a) shall
   apply to those products instead of those laid down in Article 13(b).
5. Refunds shall only be granted on request and on presentation of the
   relevant export licence.
6. The refund shall be that applicable on the day of application for the
   licence and, in the case of a differentiated refund, that applicable on
   the same day for the destination indicated on the licence.
7. Paragraphs 5 and 6 may be waived in the case of the refunds referred to
   in Article 13(b) and products listed in Article 1(1) on which refunds
   are paid under food-aid operations, in accordance with the procedure
   laid down in Article 22.
8. Detailed rules for the application of this Article shall be adopted in
   accordance with the procedure laid down in Article 22.
    *                                 :0 art!     '{-•
                                Article 15
1. To the extent necessary for the proper working of the common
   organizations of the market in cereals, sugar and fruit and vegetables,
   the use of inward processing arrangements may, in special cases, be
   prohibited in whole or in part in respect of:
      products listed in Article 13(b), and
   -   fruit and vegetables
   intended for the manufacture of products listed in Article 1(1)
2. Measures adopted pursuant to this Article shall be decided on in
   •accordance with the procedure laid down in Article 22.
                                Article 16
1. The general rules for the interpretation of the Combined Nomenclature
   and the special rules for its application shall apply to the
   classification of products covered by this Regulation; the tariff
   nomenclature resulting from the application of this Regulation shall be
   incorporated in the common customs tariff.
 ---pagebreak---                                   - 91 -                            y,
2. Save as otherwise provided for in this Regulation or pursuant to a
   provision thereof, the following shall be prohibited with regard to
    imports from third countries:
       the levying of any charge having equivalent effect to a customs
       duty,
       the application of any quantitative restriction or measure having
       equivalent effect.
                                Article 17
1. If, by reason of an increase in imports or exports, the Community
   market in one or more of the products listed in Article 1(1) is
   affected by, or is threatened with, serious disturbance likely to
   jeopardize the achievement of the objectives set out in Article 39 of
   the Treaty, appropriate measures may be applied in trade with third
   countries until such disturbance or threat of disturbance has ceased.
2. If the situation referred to in paragraph 1 arises, the Commission
   shall, at the request of a Member State or on its own initiative,
   decide upon the necessary measures; the Member States shall be notified
   of such measures, which shall be immediately applicable. If the
   Commission receives a request from a Member State, it shall take a
   decision thereon within three working days following receipt of the
   request.
3. Measures decided upon by the Commission may be referred to the Council
   by any Member State within three working days of the day on which they
   were notified. The Council shall meet without delay. It may, acting by
   a qualified majority, amend or annul the measure in question.
4. The Commission shalr adopt detailed rules for the application of this
   Article in accordance with the procedure laid down in Article 22.
5. This Article shall be applied having regard to the obligations arising
   from agreements concluded in accordance with Article 228(2) of the
   Treaty."
 ---pagebreak---                                     - 92 -                               A  ^
(2) Annexes II, III and IV are deleted.
II. Council Regulation (EEC) No 518/77 of 14 March 1977 (OJ No L 73,
    21.3.1977, p.22).
    Council Regulation (EEC) No 519/77 of 14 March 1977 (OJ No L 73,
    21.3.1977, p.24).
    Council Regulation (EEC) No 520/77 of 14 March 1977 (OJ No L 73,
    21.3.1977, p.26).
    Council Regulation (EEC) No 521/77 of 14 March 1977 (OJ No L 73,
    21.3.1977, p.28).
    Council Regulation (EEC) No 1796/81 of 30 June 1981 (OJ No L 183,
    4.7.1981), as last amended by Regulation (EEC) No 1122/92 (OJ No L 117,
    1.5.1992, p. 98).
    Council Regulation (EEC) No 2089/85 of 23 July 1985 (OJ No L 197,
    27.7.1985, p. 10).
    Council Regulation (EEC) No 3225/88 of 17 October 1988 (OJ No L 288,
    21.10.1988, p. 11).
    Council Regulation (EEC) No 1201/88 of 28 April 1988 (OJ No L 115,
    3.5.1988, p. 9 ) , as last amended by Regulation (EEC) No 2781/90 (OJ No
    L 265, 28.9.1990, p. 3 ) .
    The above Regulations are repealed.
 ---pagebreak---                                       - 93 -
                                                                      13O
                                    ANNEX XV
                                     BANANAS
Council Regulation (EEC) No 404/93 of 13 February 1993 (OJ No L 47,
25.2.1993, p.l), as last amended by Regulation (EC) No 3518/93 (OJ No L 320,
22.12.1993, p. 15).
(1)  Article 15 is replaced by the following:
                                   "Article 15
 1.  Unless this Regulation provides otherwise, the rates of duty in the
     common customs tariff shall apply to the products listed in
     Article 1(2).
 2.  In order to prevent or counteract adverse effects on the market in the
     Community which may result from imports of certain products listed in
     Article 1(2), imports of one or more of such products at the rate of
     duty laid down in the common customs tariff may be subject to payment
     of an additional import duty within the limits set out in Article 5 of
     the Agreement on Agriculture concluded in accordance with Article 228
     of the Treaty in the framework of the Uruguay Round of multilateral
     trade negotiations.
 2.  The Commission shall adopt detailed rules for the application of
     paragraph 2 in accordance with the procedure laid down in Article 27.
     Such detailed rules shall specify in particular:
     (a)     the products to which additional import duties may be applied,
     (b)     the criteria for. triggering the application of paragraph 2 and
             in particular the calculation and determination of the various
            .quantities and prices."
(2). The following Article is inserted:
                                  "Article 15a
 Articles 15a to 20 inclusive of this Title shall apply only to fresh
 products falling within CN code ex 0803, excluding plantains.
 For the purposes of this Title:
 1.  'traditional imports from ACP States' means the quantities of bananas
     set out in the Annex exported by each ACP State which has traditionally
     exported bananas to the Community; such bananas shall be referred to as
     'traditional ACP bananas';
 ---pagebreak---                                   - 94 -                               A * .
                                                                      A ÎA
 2. 'non-traditional imports from ACP States* means the quantities of
    bananas exported by the ACP States which exceed the quantity defined at
    1 above; such bananas shall be referred to as 'non-traditional ACP
    bananas';
 3. "imports from non-ACP third countries' means quantities exported by
    other third countries; such bananas shall be referred to as 'third-
    country bananas';
 4. 'Community bananas' means bananas produced in the Community;
 5. 'to market' and 'marketing' mean placing on the market, not including
    making the product available to the final consumer."
(3) Article 18 is replaced by the following:
                                "Article 18
 1. A tariff quota of 2.2 million tonnes (net weight) shall be opened each
    year for imports of third-country bananas and non-traditional ACP
    bananas.
    Within the framework of the tariff quota, imports of third-country
    bananas shall be subject to a levy of ECU 75 per tonne and imports of
    non-traditional ACP bananas shall be subject to a zero duty.
    For 1994, the tariff quota shall be 2.1 million tonnes (net weight).
    Where Community demand determined on the basis of the supply balance
    referred to in Article 16 increases, the volume of the quota shall be
    increased in consequence, in accordance with the procedure laid down in
    Article 27. Any such adjustment shall be made before 30 November
    preceding the marketing year concerned.
 2. By derogation from Article 15(1), non-traditional AÇP bananas imported
    outside the tariff quota referred to in paragraph 1 of this Article
    shall be subject to a customs duty per tonne equal to the duty referred
    to in Article 15(1) less ECU 100.
 3. The quantities of third-country bananas and non-traditional ACP bananas
    re-exported from the Community shall not be charged to the quota
    referred to in paragraph 1.
4.  The amounts referred to in this Article shall be converted into
    national currency at the rate applicable to the products concerned in
    connection with the common customs tariff."
 ---pagebreak---                                     - 95 -                          All
(4) The following indents, are added to Article 20:
     "- measures guaranteeing the provenance and origin of bananas imported
        within the tariff quota provided for in Article 18(1),
      - measures necessary to fulfil obligations arising from agreements
        concluded by the Community in accordance with Article 228 of the
        Treaty."
(5) Article 23 is replaced by the following:
                                 "Article 22
    The general rules for the interpretation of the Combined Nomenclature
    and the special rules for its application, shall apply to the
    classification of products covered by this Regulation; the tariff
    nomenclature resulting from the application of this Regulation shall be
    incorporated in the common customs tariff."
(6) Article 23 is replaced by the following:
                                 "Article 23
 1. If, by reason of an increase in imports or exports, the Community
    market in one or more of the products listed in Article 1 is affected
    by, or is threatened with, serious disturbance likely likely to
    jeopardize the achievement of the objectives set out in Article 39 of
    the Treaty, appropriate measures may be taken in trade with third
    countries until such disturbance or threat of disturbance has ceased.
 2. If the situation referred to in paragraph 1 arises, the Commission
    shall, at the request of a Member State or on its own initiative,
    decide upon the necessary measures; the Member States shall be notified
    of such measures, which shall be immediately applicable. If the
    Commission receives a request from a Member State, it shall take a
    decision thereon within three working days following receipt of the
    request.
 3. Measures decided upon by the Commission may be referred to the Council
    by any Member State within three working days of the day on which they
    were notified. The Council shall meet without delay. It may, acting by
    a qualified majority, amend or annul the measure in question.
 4. Detailed rules for the application of this Article shall be adopted in
    accordance with the procedure laid down in Article 27.
 5. This Article shall be applied having regard to the obligations arising
    from international agreements concluded in accordance with
    Article 228(2) of the Treaty."
 ---pagebreak---                                    - 96 -
                                                                   ^1 33
                                 ANNEX XVI
                                    WINE
I.  Council Regulation (EEC) No 822/87 of 16 March 1987 (OJ No L 84,
    27.3.1987, p.l), as last amended by Regulation (EEC) No 1891/94
    (OJ No L 197, 30.7.1994, p.42).
(1) Title IV is replaced by the following:
                                 "Title IV
                        Trade with third countries
                                Article 52
 1. Imports into the Community of any of the products listed in
    Article 1(2)(a) and (b) shall be subject to presentation of an import
    licence. Imports into the Community of any other products listed in
    Article 1^2) and exports from the Community of any products listed in
    Article 1(2) may be subject to presentation of an export licence.
 2. Licences shall be issued by Member States to any applicant,
    irrespective of his place of establishment in the Community and without
    prejudice to measures taken for the application of Articles 55 and 56.
    Licences shall be valid throughout the Community.
    Such licences shall be issued subject to the lodging of a security
    guaranteeing that the products are imported or exported during the term
    of validity of the licence; the security shall be forfeited in whole or
    in part if import or export is not carried out, or is only carried out
    partially, within that period.
 3. The following shall be adopted in accordance with the procedure laid
    down in Article 83:
    (a)    the list of products in respect of which export licences are
           required,
    (b)    the term of validity of the licences and other detailed rules
           for the application of this Article.
 ---pagebreak---                                  - 97 -
                                                                /Î3</
                               Article 53
1. Unless this Regulation provides otherwise, the rates of duty in the
   common customs tariff shall apply to the products listed in Article 1.
2. The detailed rules for the application of this Article shall be adopted
   in accordance with the procedure laid down in Article 83. Such detailed
   rules shall include the provisions necessary for the verification of
   import prices.
                               Article 54
1. In order to prevent or counteract adverse effects on the market in the
   Community which may result from imports of certain agricultural
   products, imports of one or more such products at the rate of duty laid
   down in the common customs tariff may be subject to payment of an
   additional import duty under the conditions set out in Article 5 of the
   Agreement on Agriculture concluded in accordance with Article 228 of
   the Treaty in the framework of the Uruguay Round of multilateral trade
   hegotiations.
2. The Commission shall adopt detailed rules for the application of this
   Article in accordance with the procedure laid down in Article 83. Such
   detailed rules shall specify in particular:
   (a)    the products to which additional import duties may be applied,
   (b)    the criteria for triggering the application of paragraph 1 and
          in particular the calculation and determination of the various
          quantities and prices.
 ---pagebreak---                                     98 -
                                                                    13s~
                                Article 55
Tariff quotas for the products listed in Article 1 resulting from
agreements concluded in accordance with Article 228 of the Treaty or from
any other act of the Council pursuant to the Treaty shall be opened and
administered in accordance with detailed rules adopted under the procedure
laid down in Article 83. Such detailed rules shall provide for annual
quotas, suitably phased over the year, to be opened and, where appropriate,
for:
(a) guarantees covering the nature, provenance and origin of the product,
(b) recognition of the document used for verifying the guarantees referred
    to in (a), and
(c) the conditions under which import licences are issued and their term of
    validity.
 ---pagebreak---                                   " 9 -~                            4%
                                Article 56
1. To the extent necessary to enable the export of:
    (a)   products listed in Article 1(2),
    (b)   sugars falling within Combined Nomenclature code 1701, glucose
          and glucose syrup falling within CN subheadings 1702 30 91, 1702
          30 99, 1702 40 90 and 1702 90 50, including in the form of
          products falling within subheadings 1702 30 51 and 1702 30 59,
          incorporated into the products falling within subheadings 2009
          60 11, 2009 60 71, 2009 60 79 and 2204 30 99,
   on the basis of prices for those products on the world market and
   within the limits resulting from agreements concluded in accordance
   with Article 228 of the Treaty, the difference between those prices and
   prices in the Community may be covered by export refunds.
2. Refunds shall be the same for the^whole Community. They may vary
   according to destination.
   The refunds referred to in paragraph 1(a) shall be fixed in accordance
   with the procedure laid down in Article 83. They may be fixed:
   (a)    at regular intervals,
   (b)    by invitation to tender.
   Refunds fixed at regular intervals may, where necessary, be adjusted in
   the intervening period by the Commission at the request of a Member
   State or on its own initiative.
 ---pagebreak---                                  - 100 -                             /\ n 1
                                                                    y\
3. The amount of the refund referred to in paragraph 1(b) shall be:
      in the case of raw sugar and white sugar, to the amount of refund
      for export of these products unprocessed as fixed in accordance with
      Article 19 of Council Regulation (EEC) No 1785/81 of 30 June 1981 on
      the common organization of the markets in the sugar sector and with
      the provisions adopted for its application,
   -  in the case of glucose and glucose syrup, to the amount of the
      refund for export of these products unprocessed as fixed for each of
      these products in accordance with Article 17 of Council Regulation
      (EEC) No 1766/92 of 30 June 1992 on the common organization of the
      market in cereals and with the provisions adopted for its
      application.
4. To qualify for the refund referred to in paragraph 1(b), processed
   products must, on export, be accompanied by a declaration from the
   applicant indicating the amounts of raw sugar, white sugar, glucose and
   glucose syrup used in their manufacture.
   The accuracy of this declaration shall be subject to checks by the
   competent authorities of the Member State concerned.
5. Refunds shall only be granted on application and on presentation of the
   relevant export licence.
6. The refund applicable to exports of products listed in Article 1 shall
   be that applicable on the day of application for the licence and, in
   the case of a differentiated refund, that applicable on the same day
   for the destination indicated on the licence.
7. Paragraphs 4 and 5 may be waived in the case of products listed in
   Article 1 on which refunds are paid under food-aid operations, in
   accordance with the procedure laid down in Article 83.
8. Detailed rules for the application of this Article shall be adopted in
   accordance with the procedure laid down in Article 83.
                               Article 57
1. To the extent necessary for the proper working of the common
   organization of the market in wine the use of inward processing
   arrangements may be prohibited .wholly or partially in respect of all or
   some of the products listed in Article 1(2).
2. The measures taken pursuant to this Article shall be adopted in
   accordance with the procedure laid down in Article 83.
 ---pagebreak---                                      - 101 -                           „ ^ ,-
                                  Article 58
1. The general rules for the interpretation of the Combined Nomenclature
   and the special rules for its application shall apply to the
   classification of products covered by this Regulation; the tariff
   nomenclature resulting from the application of this Regulation shall be
   incorporated in the common customs tariff.
2. Save as otherwise provided for in this Regulation or pursuant to a
   provision thereof, the following shall be prohibited:
       the levying of any charge having equivalent effect to a customs
       duty,
   -   the application of any quantitative restriction or measure having
       equivalent effect.
                                 Article 59
1. The import of the products referred to in Article 1.(2) to which alcohol
   has been added, with the exception of those products equivalent to
   products originating in the Community in respect of which such an
   admixture is permitted p-ujr^uant to Article 25(1) and (2), shall be
   prohibited.              , ,: ..,
2. Detailed rules for the application of this Article, and in particular
   the conditions for the equivalence of products, shall be adopted in
   accordance with the procedure laid down in Article 83.
                                 Article 60
1. If, by reason of an increase in imports or exports, the Community
   market in one or more of the products listed in Article 1(2) is
   affected by, or is threatened with, serious disturbance likely to
   jeopardize the achievement of the objectives set out in Article 39 of    t
   the Treaty, appropriate measures may be applied in trade with third
   countries until such disturbance or threat of disturbance has ceased.
   In order to assess whether the situation justifies the application of
   such measures, the following must be taken into account:
   (a)     the quantities in respect of which import licences have been
           issued or applied for and the figures given in the forecast
           supply balance;
   (b)     where appropriate, the scale of the intervention.
 ---pagebreak---                                    - 102                                  AZ°i
 2. If the situation referred to in paragraph 1 arises, the Commission
    shall, at the request of a Member State or on its own initiative,
    decide upon the necessary measures; the Member States shall be notified
    of such measures, which shall be immediately applicable. If the
    Commission receives a request from a Member State, it shall take a
    decision thereon within three working days following receipt of the
    request.
 3. Measures decided upon by the Commission may be referred to the Council
    by any Member State within three working days of the day on which they
    were notified. The Council shall meet without delay. It may, acting by
    a qualified majority, amend or annul the measure in question.
 4. The Commission shall adopt detailed rules for the application of this
    Article in accordance with the procedure laid down in Article 83.
 5. This Article shall be applied having regard to the obligations arising
    from agreements concluded in accordance with Article 228(2) of the
    Treaty.
                                 Article 61
 1. Imported wine intended for direct human consumption and described with
    the aid of a geographical ascription^hta^iie~ eligible, with regard to
    its marketing in the Community and with the proviso that reciprocity
    exists, for the control and protection arrangements referred to in
    Article 16 of Regulation (EEC) No 823/87-i fcir quality wines produced in
    specified regions.
 2. The provision laid down in paragraph 1 shall be implemented by means of
    agreements with interested third countries to be negotiated and
    concluded in accordance with the procedure laid down in Article 113 of
    the Treaty.
 3. Detailed rules for the application of this Article shall be adopted in
    accordance with the procedure laid down in Article 83."
(2) The following is inserted after Article 72:
                                "Article 72a
 1. The Member States shall take all necessary measures to enable
    interested parties to prevent, on the terms stipulated in Articles 23
    and 24 of the Agreement on Tirade-related Aspects of Intellectual
    Property Rights, the use in the Community of a geographical indication
    attached to the products referred to in Article 1(2)(b) for products
    not originating in the place indicated by the geographical indication
    in question, even where the true origin of the goods is indicated or
    the geographical indication is used in translation or accompanied by
    expressions such as "kind", "type", "style", "imitation" or the like.
    For the purposes of this Article, "geographical indications" is taken
    to, mean indications which identify a product as originating in the
    territory of a third country which is a member of the World Trade
    Organization or in a region or locality within that territory, in cases
    where a certain quality, reputation or other given characteristic of
    the product may be attributed essentially to that geographic place of
    origin.
 2. Paragraph 1 shall apply notwithstanding other specific provisions in
    Community legislation laying down rules for the designation and
 ---pagebreak---                                   - 103 -                           , ,
    presentation of the products referred to in Article 1(2)(b).
 3. Detailed rules for the application of this Article shall be adopted in
    accordance with the procedure laid down in Article 83."
(3) Annex VII is deleted.
 ---pagebreak---                                   - 104
                                                                   >H1
II. Council Regulation (EEC) No 344/79 of 5 February 1979 (OJ No L 54,
    5.3.1979, p.67)
    Council Regulation (EEC) No 345/79 of 5 February 1979 (OJ No L 54,
    5.3.1979, p.69), as amended by Regulation (EEC) No 2009/81
    (OJ No L 195, 18.7.1981, p.6)
    The above Regulations are repealed.
 ---pagebreak---                                       - 105 -
                                                                        AHl
                                    ANNEX XVII
                                      TOBACCO
Council Regulation (EEC) No 2075/92 of 30 June 1992 (OJ No L 215, 30.7.1992,
p.70)
Title IV is replaced by the following:
                                     "Title IV
                          Trade with third countries
                                   Article 15
 Unless this Regulation provides otherwise, the rates of duty in the common
 customs tariff shall apply to the products listed in Article 1.
                                   Article 16
 Tariff quotas for the products listed in Article 1 resulting from
 agreements concluded in accordance with Article 228 of the Treaty or from
 any other act of the Council!qataisiEant to the Treaty shall be opened and
 administered in accordance with detailed rules adopted under the procedure
 laid down in Article 23. Such detailed rules shall provide for annual
 quotas, suitably phased over the year, to be opened and, where appropriate,
 for:
 (a) guarantees covering the nature, provenance and origin of the product,
 (b) recognition of the document used for verifying the guarantees referred
     to in (a), and
 (c) the conditions under which import licences are issued and their terra of
     validity.
                                  Article 16a
                        »                                 -
 1.  The general rules for the interpretation of the Combined Nomenclature
     and the special rules for its application shall apply to the tariff
     classification of products covered by this Regulation. -
 ---pagebreak---                                                                       /jH1
2. Save as otherwise provided for in this Regulation or pursuant to a
   provision thereof, the following shall be prohibited in trade with
   third countries:
   (a)    the levying of any charge having equivalent effect to a customs
          duty,
   (b)    the application of any quantitative restriction or measure
          having equivalent effect.
                               Article 16c
1. If, by reason of an increase in imports or exports, the Community
   market in one or more of the products listed in Article 1 is affected
   by, or is threatened with, serious disturbance likely to jeopardize the
   achievement of the objectives set out in Article 39 of the Treaty,
   appropriate measures may be applied in trade with third countries until
   such disturbance or threat of disturbance has ceased.
2. If the situation referred to in paragraph 1 arises, the Commission
   shall, at the request of a Member State or on its own initiative,
   decide upon the necessary measures; the Member States shall be notified
   of such measures, which shall be imraadabafcply applicable. If the
   Commission receives a request from a Member State, it shall take a
   decision thereon within three working days! following receipt of the
   request.                                -v-:.-+
3. Measures decided upon by the Commission may be referred to the Council
   by any Member State within three working days of the day on which they
   were notified. The Council shall meet without delay. It may, acting by
   a qualified majority, amend or annul the measure in question.
4. The Commission shall adopt detailed rules for the application of this
   Article in accordance with the procedure laid down in Article 23.
5. This Article shall be applied having regard to the obligations arising
   from agreements concluded in accordance with Article 228(2) of the
   Treaty."
 ---pagebreak---                                    - 107 -•                           AH4
                              ,  ANNEX XVIII
                                     HOPS
Council Regulation (EEC) No 1696/71 of 26 July 1971 (OJ No L 175, 4.8.1971,
p.l), as last amended by Regulation (EEC) No 3124/92 (OJ No L 313,
30.10.1992, p.l)
Title V is replaced by the following:
                                  "Title V
                         Trade with third countries
                                 Article 14
 Unless this Regulation provides otherwise, the rates of duty in the common
 customs tariff shall apply to the products listed in Article 1.
                                 Article 15
 Tariff quotas for the products listed in Article 1 resulting from
 agreements concluded in accordance with Article 228 of the Treaty or from
 any other act of the Council pursuant to the Treaty shall be opened and
 administered in accordance with detailed rules adopted under the procedure
 laid down in Article 20. Such detailed rules shall provide for annual
 quotas, suitably phased over the year, to be opened and, where appropriate,
 for:
 (a) guarantees covering the nature, provenance and origin of the product,
 (b) recognition of the document used for verifying the guarantees referred
     to in (a), and
 (c) the conditions under which import licences are issued and their term of
     validity.
 ---pagebreak---                                    108 -                           ^-K
                               Article 15a
1. The general rules for the interpretation of the Combined Nomenclature
   and the special rules for its application shall apply to the tariff
   classification of products covered by this Regulation.
2. Save as otherwise provided for in this Regulation or pursuant to a
   provision thereof, the following shall be prohibited:
          the levying of any charge having equivalent effect to a customs
          duty,
          the application of any quantitative restriction or measure
          having equivalent effect.
                               Article 15c
1. If, by reason of an increase in imports or exports, the Community
   market in one or more of the products listed in Article 1 is affected
   by, or is threatened with, serious disturbance likely to jeopardize the
   achievement of the objectives set out in Article 39 of the Treaty,
   appropriate measures may be applied in trade with third countries until
   such disturbance or threat of disturbance has ceased.
2. If the situation referred to in paragraph 1 arises, the Commission
   shall, at the request of a Member State or on its own initiative,
   decide upon the necessary measures; the Member States'shall be notified
   of such measures, which shall be immediately applicable. If the
   Commission receives a request from a Member State, it shall take a
   decision thereon within three working days following receipt of the
   request.
3. Measures decided upon by the Commission may be referred to the Council
   by any Member State within three working days of the day on which they
   were notified. The Council shall meet without delay. It may, acting by
   a qualified majority, amend or annul the measure in question.
4. The Commission shall adopt detailed rules for the application of this
   Article in accordance with the procedure laid down in Article 20.
5. This Article shall be applied having regard to the obligations arising
   from agreements concluded in accordance with Article 228(2) of the
   Treaty."
 ---pagebreak---                                       - 109 -                              A H(n
                                     ANNEX XIX
             LIVE TREES AND OTHER PLANTS, BULBS, ROOTS AND THE LIKE,
                        CUT FLOWERS AND ORNAMENTAL FOLIAGE
I.     Council Regulation (EEC). No 234/68 of 27 February 1968 (OJ No L 55,
       2.3.1968, p.l), as last amended by Regulation (EEC) No 3336/92
       (OJ No L 336, 20.11.1992, p.l).
       Articles 8, 9 and 10 are replaced by the following:
                                    "Article 8
  1.   Imports into the Community of any of the products listed in Article 1
       may be subject to presentation of an import licence.
       Licences shall be issued by the Member States to any applicant,
       irrespective of his place of establishment in the Community.
       Import licences shall be valid throughout the Community. Such licences
       shall be issued subject to the lodging of a security guaranteeing that
       the products are imported during the term of validity of the licence;
       the security shall be forfeited in whole or in part if import is not
       carried out, or. is only carried out partially, within that period.
  2.   The term of validity of licences and other detailed rules for the
       application of this Article shall be adopted in accordance with the
       procedure laid down in Article 14.
i                                    Article 9
  Unless this Regulation provides otherwise, the rates of duty in the common
  customs tariff shall apply to the products listed in Article 1.
                                    Article 10
  Tariff quotas for the products listed in Article 1 resulting from
  agreements concluded in accordance with Article 228 of the Treaty or from
  any other act of the Council pursuant to the Treaty shall be opened and
  administered in accordance with detailed rules adopted under the procedure
  laid down in Article 14, Such detailed rules shall provide for annual
  quotas, suitably phased over the year, to be opened and, where appropriate,
  for:
 ---pagebreak---                                   - 110 -                           AHl
(a) guarantees covering the nature, provenance and origin of the product,
(b) recognition of the document used for verifying the guarantees referred
    to in (a), and
(c) the conditions under which import licences are issued and their term of
    validity.
                                Article 10a
1.  The general rules for the interpretation of the Combined Nomenclature
    and the special rules for its application shall apply to the tariff
    classification of products covered by this Regulation; the tariff
    nomenclature resulting from the application of this Regulation shall be
    incorporated in the common customs tariff.
2.  Save as otherwise provided for in this Regulation or pursuant to a
    provision thereof, the following shall be prohibited in trade with
    third countries:
       the levying of any charge having equivalent effect to a customs
       duty,
       the application of any quantitative restriction or measure having
       equivalent effect.
                                Article 10b
1.  If, by reason of an increase in imports or exports, the Community
    market in one or more of the products listed in Article 1 is affected
    by, or is threatened with, serious disturbance likely to jeopardize the
    achievement of the objectives set out in Article 39 of the Treaty,
    appropriate measures may be applied in trade with third countries until
    such disturbance or threat of disturbance has ceased.
2.  If the situation referred to in paragraph 1 arises, the Commission
    shall, at the request of a Member State or on its own initiative,
    decide upon the necessary measures; the Member States shall be notified
    of such measures, which shall be immediately applicable. If the
    Commission receives a request from a Member State, it shall take a
    decision thereon within three working days following receipt of the
    request.
3.  Measures decided upon by the Commission may be referred to the Council
    by any Member State within three working days of the day on which they
    were notified. The Council shall meet without delay. It may, acting by '
    a qualified majority, amend or annul the measure in question.
 ---pagebreak---                                     Ill -                              n
 4. The Commission shall adopt detailed rules for the application of this
    Article in accordance with the procedure laid down in Article 14.
 5. This Article shall be applied having regard to the obligations arising
    from agreements concluded in accordance with Article 228(2) of the
    Treaty."
II. Council Regulation (EEC) No 3290/75 of 16 December 1975 (OJ No L 326,
    18.12.1975, p.4).
    The above Regulation is repealed.
 ---pagebreak---                                     - 112 -                           AH °)
                                   ANNEX XX
                                     SEEDS
I.    Council Regulation (EEC) No 2358/71 of 26 October 1971 (OJ No L 246,
      5.11.1971, p.l), as last amended by Regulation (EC) No 3375/93 (OJ No
      L 303, 10.12.1993, p.9).
(1)  Articles 5, 6 and 7 are replaced by the following:
                                  "Article 5
 1.   Unless this Regulation provides otherwise, the rates of duty in the
      common customs tariff shall apply to the products listed in Article 1.
 2.   The general rules for the interpretation of the Combined Nomenclature
      and the special rules for its application shall apply to the
      classification of products covered by this Regulation; the tariff
      nomenclature resulting from the application of this Regulation shall be
      incorporated in the common customs tariff.
                                   Article 6
 Tariff quotas for the products listed in Article 1 resulting from
 agreements concluded in accordance with Article 228 of the Treaty or from
 any other act of the Council pursuant to the Treaty shall be opened and
 administered in accordance with detailed rules adopted under the procedure
 laid down in Article 11. Such detailed rules shall provide for annual
 quotas, suitably phased over the year, to be opened and, where appropriate,
 for:
 (a) guarantees covering the nature, provenance and origin of the product,
 (b) recognition of the document used for verifying the guarantees referred
     to in (a), and
 (c) the conditions under which import licences are issued and their term of
     validity.
 ---pagebreak---                                     - 113 -
                                                                   ACQ
                                   Article 7
 Save as otherwise provided for in this Regulation or pursuant to a
 provision thereof, the following shall be prohibited in trade with third
 countries:
 -    the levying of any charge having equivalent effect to a customs duty,
 -   the application of any quantitative restriction or measure having
     equivalent effect.
                                  Article 7a
 1.  If, by reason of an increase in imports or exports, the Community
     market in one or more of the products listed in Article 1 is affected
     by, or is threatened with, serious disturbance likely to jeopardize the
     achievement of the objectives set out in Article 39 of the Treaty,
     appropriate measures may be applied in trade with third countries until
     such disturbance or threat of disturbance has ceased.
 2.  If the situation referred to in paragraph 1 arises, the Commission
     shall, at the request of a Member. State or on its own initiative,
     decide upon the necessary measures; the Member States shall be notified
     of such measures, which shall be immediately applicable. If the
     Commission receives a request from a Member State, it shall take a
     decision thereon within three working days following receipt of the
     request.
 3.  Measures decided upon by the Commission may be referred to the Council
     by any Member State within three working days of the day on which they
     were notified. The Council shall meet without delay. It may, acting by
     a qualified majority, amend or annul the measure in question.
 4.  The Commission shall adopt detailed rules for the application of this
     Article in accordance with the procedure laid down in Article 11.
 5.  This Article shall be applied having regard to the obligations arising
     from agreements concluded in accordance with Article 228(2) of the
     Treaty."
(2)  Article 8a is deleted.
II.  Council Regulation (EEC) No 1578/72 of 20 July 1972 (OJ No L 168,
    .26.7.1972, p.l), as amended by Regulation (EEC) No 1984/86
     (OJ No L 171, 28.6.1986, p.3).
     The above Regulation is repealed.
 ---pagebreak---                                                                        4&L
                                   ANNEX XXI
                           MISCELLANEOUS REGULATIONS
I. Council Regulation (EEC) No 827/68 of 28 June 1968 (OJ No L 151,
   30.6.1968, p.16), as last amended by Regulation (EEC) No 794/94
    (OJ No L 92, 9.4.1994, p.15).
(1)    Articles 2 and 3 are replaced by the following:
                                   "Article 2
   1. Unless this Regulation provides otherwise, the rates of duty in the
       common customs tariff shall apply to the products listed in the Annex.
   2. The general rules for the interpretation of the Combined Nomenclature
       and the special rules for its application shall apply to the
       classification of products covered by this Regulation; the tariff
       nomenclature resulting from the application of this Regulation shall
       be incorporated in the common customs tariff.
   3. Save as otherwise provided for in this Regulation or pursuant to a
       provision thereof, and subject to the obligations arising from
       international agreements concerning the products listed in the Annex,
       the following shall be prohibited in trade with third countries:
       - the levying of any charge having equivalent effect to a customs
         duty,
       - the application of any quantitative restriction or measure having
         equivalent effect.
                                   Article 3
   Tariff quotas for the products listed in the Annex resulting from
   agreements concluded in accordance with Article 228 of the Treaty or from
   any other act of the Council pursuant to the Treaty shall be opened and
   administered in accordance with detailed rules adopted under the
   procedure laid down in Article 14. Such detailed rules shall provide for
   annual quotas, suitably phased over the year, to be opened and, where
   appropriate, for:
 ---pagebreak---                                                                         ASsu
    (a)  guarantees covering the nature, provenance and origin of the
         product,
    (b)  recognition of the document used for verifying the guarantees
         referred to in (a), and
    (c)  the conditions under which import licences are issued and their term
         of validity.
                                  Article 3a
    1. If, by reason of an increase in imports or exports, the Community
       market in one or more of the products listed in the Annex is affected
       by, or is threatened with, serious disturbance likely to jeopardize
       the achievement of the objectives set out in Article 39 of the Treaty,
       appropriate measures may be applied in trade with third countries
       until such disturbance or threat of disturbance has ceased.
    2. If the situation referred to in paragraph 1 arises, the Commission
       shall, at the request of a Member State or on its own initiative,
       decide upon the necessary measures; the Member States shall be
       notified of such measures, which shall be immediately applicable. If
       the Commission receives a request from a Member State, it shall take a
       decision thereon within three working days following receipt of the
       request.
    3. Measures decided upon by the Commission may be referred to the Council
       by any Member State within three working days of the day on which they
       were notified. The Council shall meet without delay. It may, acting by
       a qualified majority, amend or annul the measure in question.
   4. The Commission shall adopt detailed rules for the application of this
       Article in accordance with the procedure laid down in Article 6.
   5. This Article shall be applied having regard to the obligations arising
       from agreements concluded in accordance with Article 228(2) of the
       Treaty."
(2)    Article 6 is replaced by the following:
                                  "Article 6
   Where reference is made to this Article, mesures shall be adopted in
   accordance with the procedures laid down in Article 38 of Regulation
   No 136/66/EEC and the corresponding articles of the other regulations on
   the common organizations of agricultural markets."
 ---pagebreak--- II. Council Regulation (EEC) No 234/79 of 5 February 1979 (OJ No L 34,
    9.2.1979, p . 2 ) , as last amended by Regulation (EEC) No 3209/89
    (OJ No L 312, 27.10.1989, p . 5 ) .
    Article 2(2) is deleted.
 ---pagebreak---                                      - 117 -                             ^S"f
                                   ANNEX XXII
                            THE MOST REMOTE REGIONS
I.   Council Regulation (EEC) No 3763/91 of 16 December 1991 (OJ No L 356,
     24.12.1991, p.l), as amended by Regulation (EEC) No 3714/92 (OJ No
     L 378, 23.12.1992, p.23).
     Article 2(2) is amended as follows:
      (a)    In the first subparagraph, the part of the sentence which reads:
             "The levies fixed pursuant to Article 13(1) of Council
             Regulation (EEC) No 2727/75 of 29 October 1975 on the common
             organization of the market in cereals" is replaced by:
         "The import duties provided for in the common customs tariff".
     (b)     In the second subparagraph, the words "the levy (exemption)" are
             replaced by "(exemption from) import duty".
II.  Council Regulation (EEC) No 1600/92 of 15 June 1992 (OJ No L 173,
     27.6.1992, p.l), as amended by Regulation (EEC) No 3714/92 (OJ No
     L 378, 23.12.1992, p.23).
(1)  In Article 3(1), the words "Levies and/or" are deleted.
(2)  In Article 5(1)(a), the words "and/or levies referred to in Article 9
     of Council Regulation (EEC) No 805/68 on the common organization of the
     market in beef and veal" are deleted.
III. Council Regulation (EEC) No 1601/92 of 15 June 1992 (OJ No L 173,
     27.6.1992, p.13), as amended by Regulation (EEC) No 3714/92 (OJ No L
     378, 23.12.1992, p.23).
(1)  In Article 3(1), the words "Levies and/or" are deleted.
(2)  In Article 5(1)(a), the words "and/or levies referred to in Article 9
     of Council Regulation (EEC) No 805/68" are deleted.
 ---pagebreak---                                     - 118 -
                                  ANNEX XXIII
                           PLANT HEALTH LEGISLATION
Council Directive 77/93/EEC of 21 December 1977 (OJ No L 26, 31.1.1977,
p.20), as last amended by Directive 94/13/EC (OJ No L 92, 9.4.1994, p.27).
In Article 14(1), the introductory part of the first subparagraph is
replaced by the following:
 "In accordance with the procedure laid down in Article 16 or, in cases of
 emergency, in accordance with that laid down in Article 17, provision shall
 be made for derogations:".
 ---pagebreak---                    .4 re-
    Part 6
Commercial defence
 ---pagebreak---                     -'M
Commercial defence:
  Anti-dumping
 ---pagebreak---                                                                                           As?
                                        Proposal for a
                               Council Regulation (EC)
on protection against dumped imports from countries not members of the European Community
                                    -"•- ?Mm 9b
 ---pagebreak---                                                                                                               Aï °)
                                     Explanatory Memorandum
A.        Introduction
The Uruguay Round trade negotiations, concluded in 1994, have led to a new agreement on anti-dumping
which requires to be implemented into Community legislation in order that, as agreed at Marrakech, it can
come into effect on 1 January 1995.
The new Agreement, namely, the Agreement on Implementation of Article VI of the General Agreement
on Tariffs and Trade 1994 (the Agreement), contains new arid detailed rules on almost every aspect of anti-
dumping and in view of the extent of the changes and to ensure an adequate and transparent
implementation of the new rules, it is considered necessary to transpose the language of the Agreement
into Community legislation to the extent possible and for this purpose the Agreement, rather than the
existing Community legislation, Regulation (EC) No 2423/88*, has been taken as the basis for the
proposed legislation.
Additions to the Agreement are few and they have, for the most part, been restricted to: clarifications
where the Agreement is unclear; incorporation of existing provisions on EU's rather unique procedures and
decision-making, amended to take account of Court judgements; and the amendment or incorporation of
EU specific rules on issues, such as negligible import volumes, absorption, circumvention and Community
interest, on which the Agreement is silent, imprecise or where it merely gives an indication of minima.
The Agreement sets tougher standards for the imposition of anti-dumping measures with its new and
detailed rules on the calculation of dumping, its increased procedural requirements for initiation and
subsequent investigation, its restrictions on the imposition of provisional duties and the restriction on the
application of duty absorption rules. Its implementation into Community legislation will, of course,
produce the same result.
 Moreover, the adoption of these new rules, would at the same time, achieve one of the key objectives set
by the Community at the outset of these negotiations, i.e., to improve legal certainty through greater
 precision, to extend transparency and to increase therightof parties.
 In the same vein, some of the new rules, such as on negligible import volumes and Community interest,
 should further reinforce this effect of transparency and legal certainty. Community industries would have a
 clear idea of the minimum level of import volumes required both for complaints and final action.
 Moreover, all interested parties would be made aware of their rights and obligations with regard to the
 Community interest aspects of these cases, in that a structured framework would be provided for the
 provision and treatment of information by the authorities.
 Another key objective in the Uruguay round negotiations was that measures, once taken, should be more
 effectively enforced and the suggested amendments on retroactivity, absorption and circumvention are
 aimed at achieving this objective. In this regard, it should be noted that these enforcement provisions are
 not new concepts since they are specifically provided for in existing EU legislation and the amendments
 proposed are simply to make them more workable and/or more compatible with GATT rules.
 It should be noted that the proposed text does not include rules on subsidies as this matter shall be dealt
 with in a separate proposal.
           OJ No L 209,2.9.1988, p.l
 ---pagebreak---                                                                                                                Aùa
B.        T h e main changes
This section details the main areas where the transposition of the text of the Agreement into Community
legislation involves changes or clarifications to that text.
1.        Start-up costs
a)         The problem
This new Code ( Article 2.2.1.1) provides for an allowance for the exporter in a start-up situation which,
unfortunately, it does not define, e.g. it does not give any guidance on whether start-up refers to a new
product or a new factory, or both, or give any guidance with regard to the length of the start-up phase. In
considering this problem, it has to be borne in mind that the Agreement already provides for costs, be they
high or low, to be allocated in accordance with normal accounting principles, which means that, even
without a specific start-up allowance, high start-up costs would still be allocated over a reasonable number
of years. Therefore, the situation for which an adjustment has to be made is the low production volume
which may prevail during start-up and which may give rise to abnormally high unit costs.
b)         The solution
As can be seen in Article 2.5.2 of the proposal, the existence of a start-up situation can be defined
relatively easily by providing for it to include all situations where there is significant investment and new
production facilities and this would cover both new products or new factories.
However, it is a lot more difficult to define the length of a start-up period. Consideration has been given to
specifying a normal sales quantity or setting a precise duration for the length of a start-up phase, e.g. 6
months. Such specific definitions would, however, be controversial and could take no account of
differences between products and industries. It also has to be borne in mind that the rules on start-up
cannot be defined in isolation from the other Code rules and, in this respect, account has to be taken of the
fact that the Agreement states that the normal period for cost recovery for a product is 12 months.
Logically, therefore, a start-up phase can only constitute a part of that period of cost recovery and this is
made clear in the proposed text. While the above suggestion leaves a certain imprecision, the alternatives
are even less palatable. Moreover, it would permit some flexibility to cater for situations which differ from
product to product and industry to industry.
2.        Normal value for non-market economy countries
a)         The problem
The problem here is that with the introduction of time limits, it may not always be possible, in the
restricted time available, to find a suitable market economy analogue country which is willing to
cooperate. Under the wording of the existing legislation, such circumstances would require the use of
Community prices and costs, a situation which should be avoided except in exceptional circumstances.
Consequently, provision has to be made to permit the use of other reasonable methods in such situations.
Moreover, as the choice of analogue country is sometimes a matter of controversy, the proposal provides
for the exporters to be consulted before a final selection is made.
b)         The solution
In Article 2.7 of the proposed text, provision is made for normal value to be based "on any reasonable
basis" and this would permit the application of methods other than Community prices and costs.
At the same time, the proposed text would require that exporters are given 10 days to comment on the
choice of analogue country. Also, mention is made of time limits and, for the choice of analogue country,
preference may be given to a country subject to the same investigation though it would, of course, have to
fulfil the "reasonable" criteria.
 ---pagebreak---                                                                                                                 AUl
3.         Fair comparison
a)         The problem
In existing Community legislation, level of trade is dealt with under the section dealing with the
establishment of prices (Article 2.3), rather than under fair comparison as is the case in the Agreement.
Moreover, as "quantities" are also dealt with in the Agreement under "fair comparison" it is difficult for the
EU to continue to deal with the related factors, namely discounts and rebates, under the above-mentioned
Article 2.3.
b)         The solution
In order to keep strict consistency with the Agreement it is proposed to cater for level of trade under the
heading "fair comparison" (Article 2.10) in the draft text. In the same manner, it appears necessary to treat
discounts and rebates, alongside quantities, under the same heading.
Furthermore, with the new emphasis on level of trade adjustments, it is no longer rational to grant an
adjustment for a fixed overhead like salesmen salaries outside the context of a level of trade adjustment. It
is, therefore, proposed to give this adjustment under level of trade, in accordance with the Agreement.
4.         Conclusion of investigations
a)         The problem
The Agreement (Article 5.10) provides that investigations should normally be concluded within 12 months
which conflicts with the 15 months which is envisaged for EU investigations next year
b)         The solution
 It is proposed to incorporate the provisions of the Agreement into EU legislation (Article 6.9). This shall
permit complex cases to be completed in 18 months as set out in the Agreement but, of course, provisional
 duties would still have to be applied within 9 months.
 5.        Violation or withdrawal of undertakings
 a)        The problem
 Over the years, there have been continual problems on what to do in cases where exporters have violated
 or withdrawn undertakings. In such circumstances, it is considered that the Community should be entitled
 to impose definitive duties based on the findings of the previous investigation, otherwise an exporter which
 is violating its undertaking could end up in a more advantageous position than its rivals which may be
 faithfully applying the undertakings. Moreover, carrying out a completely new investigation based on new
 facts is a time-consuming affair which should only be carried where the circumstances justify it. Violation
 does not appear to be one of these circumstances.
 b)         The solution
 The new provisions set out in article 8.9 and 8.10 of the draft text would permit the imposition of definitive
 duties in cases of proven violation or withdrawal though, of course, the exporter's rights would be
 safeguarded in that he would be entitled to a ask for a review if the circumstances with regard to dumping
 or injury have changed. Moreover, the change in measures would not generate a new 5 year "sunset"
  period. Where violation is only suspected, the remedy is a provisional duty while the matter is under
  investigation.
 ---pagebreak---                                                                                                              dd'x
6.        Negligible volume of imports
a)        The problem
The Agreement ( Article 5.8 ) fixes negligible import volumes below which action could not normally be
taken, i.e., where the dumped imports are less than 3% of total imports and where those less than 3%
collectively account for more than 7%. These minima are set in relation to volume of imports rather than
in relation to consumption which is the usual Commumty practice.
b)        The solution
Simply to transpose the Agreement provision into EU legislation
7.        Retroactivity
a)        The problem
The retroactivity provisions in the Agreement (Article 10.4) need to be defined to deal with situations
where importers, in order to avoid the impact of provisional duties, import a substantial quantity just prior
to the imposition of such duties. The Agreement requires the investigating authority to show a "history of
dumping" or "awareness" of dumping and "massive" imports before action can be taken. This problem
also exists in the existing Code but because of the imprecise nature of these terms, and the fact that
customs have had no means of imposing duties retroactively because the goods were not marked on entry,
it was not possible to use the provisions.
b)        The solution
It is proposed (Article 10.4 of proposal) that a history of dumping could be considered to be established
where it has been taking place over an extended period and "awareness" would be established where the
margins alleged or found are high. The requirement "massive" would be achieved where, in addition to
the level of the dumped imports during the investigation period, there was a further substantial increase in
imports just prior to the imposition of provisional duties. Thus, both combined would satisfy the
requirement of the term "massive" in the Agreement.
 ---pagebreak--- 8.         Refund of anti-dumping duties
a)          The problem
The Community's calculations for refund claims, concerning importers which are related to exporters, have
to be changed to reflect the Agreement provisions on "duty as a cost" as set out in its Article 9.3.3.
To grasp the full implications of the change it should be recalled that, in any dumping calculation, export
prices between related parties are deemed to be unreliable because of the relationship. Thus, it is necessary
to re-construct a reliable export price and this is done by taking the first independent price charged by the
related importer in the Community and deductingfromit the costs and profit of the related importer, a
process which gives a reliable Communityfrontierexport price.
The implications of the above for related importers in refund claims is that, as clearly specified in existing
EU legislation, an anti-dumping duty is one of the costs which must be deducted to arrive at a reliable
export price and, therefore, a related importer has to do more than just reflect the cost of the duty in its
resale price to obtain a refund. It would also, for example, have to reduce normal values or in fact increase
its resale prices by more than the level of the duty. This is equivalent to the treatment given to independent
importers, who need to do more than just pay the duty before they can obtain a refund.
The Agreement, however, restricts the application of "duty as a cost" by stating that this principle cannot -•
apply where resale prices and subsequent selling prices in the Community have increased to reflect the cost
of the duty.
b)          The solution
 The simple solution is to incorporate the Agreement provision into Community legislation. The Agreement
 provision has been added at the end of Article 11 in the proposed text so that the restrictions placed on its
 use by GATT would be extended to all cases where export prices may have to be reconstructed, e.g. in
 reviews.
 9.         Absorption of anti-dumping duties
 a)         The problem
 The existing Community legislation (Article 13.11) has provisions to deal with cases where duties do not
 have any price effects on the goods subject to measures. These provisions have been criticised because
 they appear to permit the imposition of additional duties because duties have not led to price increases and
 without a new calculation of dumping being made. In fact, their underlying rationale is that the lack of a
 price increase must mean that the exporter is bearing the cost of the duty, an occurrence which
 automatically increases the margin of dumping.
 b)         The solution
 The draft text includes a radical re-draft in Article 12 of the absorption provisions and they now
 specifically require a re-assessment of export prices and a new calculation of dumping margins, where
 measures have had no impact on the prices of the goods subject to duty. In contrast to the existing
 provisions they also permit an investigation to take account of changes in the normal values where
 evidence of this is produced by the exporter.
 In common with the refund provisions, duties cannot, in contrast to the position now, be treated as a cost
 incurred between importation and resale in cases of a re-construction of export prices, where measures
 have impacted on prices or where there is legitimate reason why prices have not increased following the
 measures.
 The new provisions may be slightly less wide-ranging than those set out in Article 13.11 of existing
  legislation but they can now be considered safe in that they are compatible with GATT.
 ---pagebreak--- 10.       Circumvention
a)        The problem
Circumvention can occur in several forms rangingfromassembly operations, in the importing country or
in third countries, to more direct instances of duty avoidance, such as wrong origin declarations, imports of
knockdown kits and slightly altered products, etc. The Community has encountered all these forms of
circumvention in the recent past, e.g. cameras, bicycles and compact discs and, as such, there appears to be
an immediate problem which requires attention.
At present, however, our existing circumvention legislation (Article 13.10), which only deals with
assembly operations in the Community, has been criticised by a GATT panel. Moreover, origin rules are
proving increasingly inadequate to deal even with cases of blatant circumvention, such as is apparently
occurring, or has occurred, in the above-mentioned cases. Also, the result of the Uruguay does not give any
guidance. Negotiations in this area failed and there is nothing in the Agreement, though Marrakech
produced a Ministerial Declaration on this subject which appears, for the first time, to permit individual
Members to deal with problem unilaterally, pending a multilateral solution via
the GATT Anti-Dumping Committee. In this respect, the Community has always made it clear that its
acceptance of the above-mentioned panel report was conditional on a satisfactory solution in the Uruguay
Round, a condition that has not been realised.
b)        The solution
New circumvention provisions are set out in Article 13 of the proposal. The classic circumvention
provisions, i.e. assembly in the importing country or a third country, are to the degree possible, modelled
on the importing country provision set out in the "Dunkel Draft" of December 1991, which was later
dropped in the last days of the negotiations in December 1993, while the rules set out for other forms of
circumvention have been inspired by concepts set out in customs law.
(i)       Classic circumvention
          The proposal maintains the existing Community rules on the percentage of parts which must
          originate in the exporting country before action can be taken, i.e. at least 60% as compared to
          70% in the Dunkel Draft. These levels equate to those set out in Community legislation and there
          seems little reason to change them as they have proved workable for all parties concerned when
          they have been applied. Moreover, it would be unwise to lower the percentages given that this
          would undermine the EU's negotiating position in Geneva, when the problem of circumvention
          comes up for negotiation.
          Some of the more burdensome and, in some cases, illogical conditions contained in the Dunkel
          Draft, including an additional dumping test, have been omitted. The aim is to combat the
          circumvention of existing measures quickly and not to carry out lengthy de novo investigations of
          dumping and injury. However, the proposal maintains the "Dunkel" provision that measures may
          only be extended where their remedial effects are being undermined and this will ensure that these
          provisions are only used in truly deserving cases.
 ---pagebreak--- (ii)   Other forms of circumvention
       The proposed draft would also permit action to be taken against other forms of circumvention
       which, nowadays, are probably more important than classic circumvention in terms of
       undermining measures. This would allow quick investigation of changes in the pattern of trade
       which coincide with anti-dumping investigations, to check whether such practices have been set
       up to circumvent measures. In the same way as for classic circumvention, an injury test would be
       undertaken and no measures could be applied unless it was shown that the remedial effects of the
       measures were being undermined. This is a very important restriction which would limit the use
       of this provision.
       The provisions may appear wide-ranging, in that investigations can be opened following distinct
       changes in the pattern of trade which coincide with anti-dumping action. It should be noted,
       however, that measures could only be imposed under narrowly defined circumstances, with the
       underlying rationale stemming from the Customs Code, which does not grant legal recognition to
       acts whose only economic justification is to avoid payment of duties. It could be argued that these
       problems should be dealt with by customs authorities but this would not be practical or effective
       for three reasons;
       (i) customs do not appear to have the means, or the necessary legal provisions, to carry these
       investigations, certainly not as quickly as would be necessary; (ii) the circumvention provisions
       would need to cover undertakings which are outside the remit of customs; and most, importantly
       (iii) these provisions require injury investigations to be carried out and this can only be done by
       the anti-dumping services of the Commission.
       Provisions to deal with these other forms of circumvention are important for another reason. They
       are almost always practised via third countries and, unless effective measures are taken to deal
       with them, there will always be an incentive for investment to go to these other third countries
       rather than the Community.
 (iii) How these provisions will operate in practice
       A circumvention investigation can only be opened following receipt of a complaint by the
       Community industry and appraisement would be withheld, or imports would be registered,
       pending the outcome of the investigation which would be completed within a time limit of 9
       months.
       The withholding of appraisement, or registration of imports, which is a mechanism under which
       neither cash deposits or guaranties are collected but the imports are recorded, is necessary in order
        to be able to impose and collect duties at the Community frontier, in accordance with the panel
        report, should circumvention be found.
        The proposals have been deliberately left open with regard to certain aspects of product coverage,
        both for initiation and the imposition of measures as it considered that questions relating to
        product or country coverage can only be addressed on a case-by-case basis. In any event, once a
        circumvention investigation is initiated, the proposal envisages a flexible certificate system under
        which certain products, parts or exporters could be exempted from the scope of the investigation,
        from the moment it becomes clear that they should be so exempted. These certificates could easily
        be obtained by traders from the authorities in order to avoid payment of duties. In fact, this type
        of certificate system is not new to customs as they operate them in other areas and they are
        considered indispensable here to be able to comply with the findings of the GATT panel.
 ---pagebreak---                                                                                                                   y\bk;
11.       Suspension of anti-dumping measures
a)        The problem
There are times during the application of measures where market conditions may indicate that such
measures are temporarily inappropriate, yet at the moment there is no way of dealing with this problem
short of lifting the measures altogether, and this is something that cannot easily be done at present if it is
suspected that the lack of injury is only temporary.
b)        The solution
Provide specifically for such an eventuality in the legislation and this is done in its Article 14.4. The ability
to place measures in suspension, which would only take place after consultation of the Community
industry, would be of great value and would mean that duties are only collected where necessary. The
suspension would be fora limited period and measures could be re-instated swiftly should the need arise.
12.       Withholding of appraisement (Registration of imports)
a)        The problem
This concept of withholding of appraisement is one of the important innovations introduced by the
Agreement in its Article 7. It is a mechanism under which imports would not be subject to either cash
deposit or guarantee but they would be recorded by customs until a decision was taken on the matter which
led to such withholding, e.g. investigations for new exporters, retroactivity and circumvention. The
mechanics of the system would be identical to those used for provisional measures, except that importers
would be in a better position because they would not pay cash or have to give guarantees on importation.
Customs may well have some reservations about not being able to require guarantees but that is not a
sufficient reason not to apply a concept which is now firmly embedded in the Agreement and which is
considered absolutely essential for circumvention.
b)        The solution
The solution is simple and it is to cater for a system of withholding of appraisement as set out in Article
14.5 of the proposal. Note that the term "withholding of appraisement" has been substituted by the more
understandable term "registration of imports" in the text.
13.       Community interest
The proposal contains an Article 21 which would formalise the way in which the Community interest is to
be taken into account in anti-dumping investigations. This would have the advantage that it would permit
the examination of this aspect to be carried out within a structured framework which is considered to be
absolutely essential when time limits come into operation.
Paragraph 1 of the above-mentioned Article sets out the principles relating to Community interest and an
attempt has been made to highlight the two basic interests which have to be taken into account, i.e. the
need, on the one hand, to eliminate injurious dumping and restore effective competition and, on the other
hand, to grant certainrightsto users and consumers. This will, for the first time, give users and consumers
a comprehensive set ofrights,under which they will be entitled to provide information, to see information
provided by other parties and to comment on it, to haye their information taken into account and presented
to Member States, and to have proper disclosurerightsfor both provisional and definitive measures.
However, when rights are obtained, obligations inevitably also arise and these are inherent in the time
limits within which all parties have to work and in the fact that information presented has to be
substantiated to a sufficient degree.
 ---pagebreak--- C.        Conclusion
In order to implement the 1994 Anti-Dumping agreement as concluded as a result of the Uruguay Round
of multilateral trade negotiations, and to take account of the issues set out in section B above, the
Commission submits to the Council.
          a proposal to replace the Community's basic anti-dumping legislation.
                                                                                                      10
 ---pagebreak---                                                                                       /uy
      Proposal for implementation of Uruguay Round results
                               on Anti-Dumping
                                        Regulation
[Underlining indicates text which differs from new Agreement or existing legislation]
 ---pagebreak---                                                                                                              A^5
                                     Council Regulation (EC) No                                      94/ o2ao(ACO
      on protection against dumped imports from countries not members of the European
                                                Community
The Council of the European Union,
Having regard to the Treaty establishing the European Community, and in particular Article 113 thereof,
Having regard to the Regulations establishing the common organisation of agricultural markets and the
Regulations adopted under Article 235 of the Treaty applicable to goods manufactured from agricultural
products, and in particular the provisions of those Regulations which allow for derogation from the
general principle that protective measures at frontiers may be replaced solely by the measures provided
for in those Regulations,
Having regard to the proposal from the Commission,
Having regard to the opinion of the European parliament,
Whereas, by Regulation (EC) No 2423/88 (*), as amended by Regulation (EC) No 521/94(2) and
Regulation (EC) No 522/94 (3 ), the Council adopted common rules for protection against dumped or
subsidised imports from countries which are not members of the European Economic Community;
Whereas, these rules were adopted in accordance with existing international obligations, in particular
those arising from Article VI of the General Agreement on Tariffs and Trade, from the Agreement on
Implementation of Article VI of the GATT (1979 Anti-Dumping Code) and from the Agreement on
Interpretation and Application of Articles VI, XVI and XXIII of the GATT (Code on Subsidies and
Countervailing Duties);
Whereas, the multilateral trade negotiations concluded in 1994 have led to new Agreements on the
implementation of Article VI of GATT and it is therefore appropriate to amend the Community rules in
the light of these new Agreements; whereas it is also desirable, in the light of the different nature of the
new rules for dumping and subsidies, to have separate Community rules in these two areas and,
consequently, the new rules on protection against subsidies and countervailing duties are dealt with in a
separate Regulation;
Whereas, in applying these rules it is essential, in order to maintain the balance of rights and obligations
which the GATT Agreement establishes, that the Community takes account of their interpretation by the
Community's major trading partners;
Whereas, the new agreement on dumping, namely, the Agreement on Implementation of Article VI of
the General Agreement on Tariffs and Trade 1994 (1994 Anti-Dumping Agreement), contains new and
detailed rules, in particular, with regard to the calculation of dumping, procedures for initiation and the
subsequent investigation, including the establishment and treatment of the facts, the imposition of
provisional measures, the imposition and collection of anti-dumping duties, the duration and review of
anti-dumping measures and the public disclosure of information relating to anti-dumping investigations;
whereas, in view of the extent of the changes and to ensure an adequate and transparent implementation
of the new rules, it is appropriate to transpose the language of the new agreements into Community
legislation to the extent possible;
(]) OJ No L 209, 2.8.1988, p. 1.
H OJ No L 66, 10.3.1994, p. 7.
 ( 3 )OJNoL66, 10.3.1994, p. 10.
 ---pagebreak---                                                                                                               A\o
 Whereas, it is desirable to lay down clear and detailed rules on the calculation of normal value, in
 particular that in all cases it should be based on representative sales in the ordinary course of trade in the
 exporting country; whereas, it is expedient to define the circumstances in which domestic sales may be
 considered to be made at a loss and disregarded and that recourse may be made to remaining sales or
 constructed value or sales to a third country; whereas it is also desirable to provide for a proper
 allocation of costs, including in start-up situations, where it is also appropriate to lay down guidance on
 the definition of start-up and the extent and method of allocation; whereas it is also necessary, when
 constructing normal value, to indicate the methodology that shall be applied to determine the amounts for
 selling, general and administrative costs and the profit that shall be included in such value.
 Whereas, when determining normal value for non-market economy countries, it appears prudent to set
out rules of procedure for choosing the appropriate market economy third country that shall be used for
 such purpose and, where it is not possible to find a suitable third country, to provide that normal value
may be established on any reasonable basis.
Whereas, it is expedient to define the export price and to enumerate the adjustments which shall be made
in those cases where a reconstruction of this pricefromthefirstopen-market price is deemed necessary;
Whereas, for the purpose of ensuring a fair comparison between export price and normal value, it is
advisable to list the factors which may affect prices and price comparability and to lay down specific
rules on when and how the adjustments shall be made, including the fact that any duplication of
adjustments has to be avoided; whereas, it is also necessary to provide that comparison may be made
using average prices though individual export prices may be compared to an average normal value where
the former vary by customer, region ortimeperiod;
Whereas, it is desirable to lay down clear and detailed guidance on the factors which may be relevant for
the determination of whether the dumped imports have caused material injury or are threatening to cause
injury; whereas, in demonstrating that the volume and price levels of the imports concerned are
responsible for injury sustained by a Community industry, attention should be given to the effect of other
factors and in particular existing market conditions in the Community.
Whereas, it is advisable to define the term "Community industry" and provide that parties related to
exporters may be excludedfromsuch industry and to define the term "related"; whereas, it is also
necessary to provide for anti-dumping action to be taken on behalf of producers in a region of the
Commumty and to lay down guidelines on the definition of such a region.
Whereas, it is necessary to set down who may lodge an anti-dumping complaint, including the extent to
wiiich it should be supported by the Community industry, and the information on dumping, injury and
causality which such complaint should contain; whereas, it is also expedient to specify the procedures
with regard to the rejection of complaints or the initiation of proceedings.
Whereas, it is necessary to lav down how interested parties shall be given notice of the information
which the authorities require, ample opportunity to present all relevant evidence and a full opportunity
for the defence of their interests: whereas, it is also desirable to set out clearly the rules and procedures
to be followed during the investigation, in particular that interested parties have to make themselves
known, present their views and submit information within specified time limits, if such views and
information are to be taken into account; whereas, it is also appropriate to set out the conditions under
which an interested party may have access to, and comment on, information presented by other interested
parties; whereas, there should also be cooperation between the Member States and the Commission with
regard to the collection of information.
 ---pagebreak---                                                                                                            A-\l
Whereas, it is necessary to lay down the conditions under which provisional duties may be imposed,
including that they may not be imposed sooner than 60 days from initiation and no later than 9 months
from initiation; whereas, for administrative reasons, it is also necessary to provide that such duties may
in all cases be imposed by the Commission either directly for a nine month period or in two stages of six
and three months.
Whereas, it is necessary to specify procedures for the acceptance of undertakings which eliminate the
dumping and injury instead of the imposition of provisional or definitive duties; whereas, it is also
appropriate to lay down the consequences of violation or withdrawal of undertakings and that
provisional duties may be imposed in cases of suspected violation or where further investigation is
necessary to complete the findings; whereas, in accepting undertakings, care should be taken that the
proposed undertakings, and their enforcement, do not lead to anti-competitive behaviour.
Whereas, in order to reflect the provisions of the Agreement, it is necessary to provide for the
termination of cases, with or without measures, normally within twelve months, and in no case later than
eighteen months, from the initiation of the investigation; whereas, investigations or proceedings should
be terminated where the dumping is de-minimis or the injury is negligible and it is appropriate to define
these terms; whereas, where measures are to be imposed, it is necessary to provide for the termination of
investigations and to lay down that measures should be less than the margin of dumping if such lesser
amount would remove the injury, as well as to specify the method of calculating the level of measures in
cases of sampling.
Whereas, it is necessary to provide for the retroactive collection of provisional duties as deemed
appropriate and to define the circumstances which may trigger the retroactive application of duties to
avoid the undermining of the definitive measures to be applied; whereas it is also necessary to provide
that duties may be applied retroactively in cases of violation or withdrawal of undertakings.
Whereas, it is necessary to provide that measures shall lapse after five years unless a review
investigation indicates that they should be maintained; whereas, it is also necessary to provide, in cases
where sufficient evidence is submitted of changed circumstances, for interim reviews or for
investigations to determine whether refunds of anti-dumping duties are warranted; whereas it is also
appropriate to lay down that in any re-calculation of dumping which necessitates a reconstruction of
export prices, duties shall not be treated as a cost mcurred between importation and resale where the said
duty is being reflected in the prices of the products subject to measures in the Community.
Whereas, it is necessary to specifically provide for the re-assessment of export prices and dumping
margins where the duty is being absorbed by the exporter through a form of compensatory arrangement
and the measures are not being reflected in the prices of the products subject to measures in the
 Community.
Whereas, the 1994 Anti-Dumping Agreement does not contain provisions with regard to the
 circumvention of anti-dumping measures, though a separate GATT Ministerial Decision recognises
 circumvention as a problem and has referred it to the GATT Anti-dumping Committee for resolution;
whereas given the failure of the multilateral negotiations so far and pending the outcome of the referral to
the GATT Anti-Dumping Committee, it is necessary to introduce new provisions into Community
 legislation to deal with practices, including simple assembly in the Community or a third country, which
have as their main aim the circumvention of anti-dumping measures.
Whereas, it is expedient to pennit the suspension of anti-dumping measures where there is a temporary
 change in market conditions which make the continued imposition of such measures temporarily
 inappropriate.
 ---pagebreak---                                                                                                          A '} X»
WTiereas, it is necessary to provide that imports under investigation may be made subject to registration
upon importation to enable measures to be subsequently applied against such imports.
Whereas, to ensure a proper enforcement of measures, it is necessary that Member States monitor and
report to the Commission the import trade of products subject to investigation and subject to measures
and the amount of duties collected under this regulation.
Whereas, it is necessary to provide for consultations of an Advisory Committee at regular and specified
stages of the investigation; whereas, the comrnittee shall consist of representatives of Member States
with a representative of the Commission as chairman.
Whereas, it is expedient to provide for verification visits to check information submitted on dumping and
injury, though such visits should be dependent on proper replies to questionnaires being received.
Whereas, it is essential to provide for sampling in cases where the number of parties or transactions are
large in order to permit a timely completion of investigations.
Whereas, it is necessary to provide that for parties who do not cooperate satisfactorily other information
may be used to estabhshfindingsand such information may be less favourable to the party than if it had
cooperated.
Whereas, provision should be made for the treatment of confidential information so that business secrets
are not divulged.
Whereas, it is essential that provision is made for the proper disclosure of the essential facts and
considerations to parties which qualify for such treatment and that such disclosure is made, with due
regard to the decision-making process in the Community, within a time period which permits parties to
détend their interests.
Whereas, it is prudent to provide for an administrative system under which arguments can be presented
in relation to whether measures are in the Community interest, including the consumer interest, and to
lay down the time periods within which such information has to be presented as well as the disclosure
rights of the parties concerned.
Whereas, it is imperative to link the implementation of time limits for the lodging of complaints, the
initiation of proceedings and the imposition of provisional duties to the establishment of the necessary
administrative structure within the Commission's services; whereas, the Council, therefore, should
specify, in a decision to be adopted by qualified majority no later than 1 April 1995, when these time
limits shall apply.
Has Adopted This Regulation:
 ---pagebreak---                                                                                                              A"j ">
Article 1
Principles
1.1     An anti-dumping duty may be applied to any dumped product whose release for free circulation
in the Community causes injury.
1.2     A product is to be considered as being dumped if its export price to the Community is less than a
comparable price for the like product, in the ordinary course of trade, as established for the exporting
country.
 1.3    The exporting country shall normally be the country of origin. However, it may be an
intermediate country, except where, for example, the products are merely trans-shipped through that
country, or the products concerned are not produced in that country, or there is no comparable price for
them in that country.
 1.4     For the purpose of this Regulation, the term "like product" shall be interpreted to mean a product
which is identical, i.e., alike in all respects to the product under consideration, or in the absence of such a
product, another product which although not alike in all respects, has characteristics closely resembling
those of the product under consideration.
 ---pagebreak--- Article 2
Determination of dumping
A.        Normal value
2.1       The normal value shall normally be based on the prices paid or payable, in the ordinary course
of trade, bv independent customers in the exporting country.
    2.1.1         Where the producer or exporter in the exporting country neither produces nor sells the
    like product the normal value may be established on the basis of prices of other sellers or producers.
    2.1.2          Prices between parties which appear to be associated or to have a compensatory
    arrangement with each other may be considered as being in the ordinary course of trade and may be
    used to establish normal value only if it is determined that they are not affected by the relationship.
2.2       Sales of the like product destined for domestic consumption, shall normally be used to determine
normal value if such sales volume constitute 5 per cent or more of the sales volume of the product under
consideration to the Community. However, a lower volume of sales may be used when, for example, the
prices charged are considered representative for die market concerned.
2.3       When there are no or insufficient sales of the like product in the ordinary course of trade, or
where because of the particular market situation such sales do not permit a proper comparison, the
normal value of the like product shall be calculated on the basis of the cost of production in the country
of origin plus a reasonable amount for selling, general and administrative costs and for profits, or based
on the export prices, in the ordinary course of trade, to an appropriate third country, provided that these
prices are representative.
2.4       Sales of the like product in the domestic market of the exporting country, or export sales to a
third country, at prices below per unit (fixed and variable) costs of production plus selling, general and
administrative costs may be treated as not being in the ordinary course of trade by reason of price and
may be disregarded in determining normal value only if it is determined that such sales are made within
an extended period of time in substantial quantities, and are at prices which do not provide for the
recovery of all costs within a reasonable period of time.
    2.4.1         If prices which are below costs at the time of sale are above weighted average costs for
    the period of investigation, such prices shall be considered to provide for recovery of costs within a
    reasonable period of time.
    2.4.2         The extended period of time should normally be one year but shall in no case be less
    than six months and sales below per unit cost shall be considered to be made in substantial quantities
    within such a period when it is established that die weighted average selling price is below the
    weighted average unit cost, or that the volume of sales below unit cost is not less than 20 per cent of
    sales being used to determine normal value.
 ---pagebreak---                                                                                                              •A A\
2.5       For the purpose of Article 2, Section A, costs shall normally be calculated on the basis of
records kept by the party under investigation, provided that such records are in accordance with the
generally accepted accounting principles of the country concerned and it is shown that the records
reasonably reflect the costs associated with the production and sale of the product under consideration.
    2.5.1         Consideration shall be given to evidence submitted on the proper allocation of costs,
    provided that it is shown that such allocations have been historically utilised. In the absence of a more
    appropriate method, preference shall be given to the allocation of costs on the basis of turnover.
    Unless already reflected in the cost allocations under this paragraph, costs shall be adjusted
    appropriately for those non-recurring items of cost which benefit future and/or current production.
    2.5.2         Where the costs for part of the period for cost recovery are affected bv the use of new
    production facilities requiring substantial additional investment and bv low capacity utilisation rates,
    which are the result of start-up operations which take place within or during part of the investigation
    period, the average costs for the start-up phase shall be those applicable, under the above-mentioned
    allocation rules, at the end of such a phase, and shall be included at that level, for the period
    concerned, in the weighted average costs referred to in paragraph 4.1. The length of a start-up phase
    shall be determined in relation to the circumstances of the producer or exporter concerned, but shall
    not exceed an appropriate initial portion of the period for cost recovery. For this adjustment to costs
    applicable during the investigation period, information relating to a start-up phase which extends
    beyond that period shall be taken into account in so far as it is submitted prior to verification visits
    and within three months of the initiation of the investigation.
2.6       For the purpose of Article 2, Section A, the amounts for selling, general and administrative costs
and for profits shall be based on actual data pertaining to production and sales, in the ordinary course of
trade, of the hke product, by the exporter or producer under investigation. When such amounts cannot be
determined on this basis, the amounts may be determined, on the basis of:
    (i) the weighted average of the actual amounts determined for other exporters or producers subject
    to investigation in respect of production and sales of the like product, or individual types thereof, in
    the domestic market of the country of origin;
    (ii) the actual amounts applicable to production and sales, in the ordinary course of trade, of the
    same general category of products for the exporter or producer in question in the domestic market of
    the country of origin;
    (iii) any other reasonable method, provided that the amount for profit so established shall not exceed
    the profit normally realised by other exporters or producers on sales of products of the same general
    category in the domestic market of the country of origin.
 ---pagebreak---                                                                                                                 Al H
2.7        In the case of imports from non-market economy countries and, in particular, those to which
Regulation (EC) No 519/94^ applies, normal value shall be determined on the basis of the price or
constructed value in a market economy third country, or the price from such a third country to other
countries, including the Community, or where these are not possible, on any other reasonable basis.
including the price actually paid or payable in the Community for the like product, duly adjusted, if
necessary, to include a reasonable profit margin.
     2.7.1            For the purpose of this paragraph, an appropriate market economy third country shall
     be selected in a not unreasonable manner, with due account taken of any reliable information made
     available at the time of selection. Account shall also be taken of time lunits and, where appropriate, a
     market economy third country which is subject to the same investigation shall be used.
     2.7.2            The parties to the investigation shall be informed shortly after initiation of the market
     economy third country envisaged and shall be given 10 days to comment.
(4) OJ No L 67, 10.3.1994, p. 89.
 ---pagebreak---                                                                                                              AA\
B.       Export price                                                                                            '
2.8      The export price shall be the price actually paid or payable for the product when sold from the
exporting country to the Community.
2.9       In cases where there is no export price or where it appears that the export price is unreliable
because of association or a compensatory arrangement between the exporter and the importer or a third
party, the export price may be constructed on the basis of the price at which the imported products are
first resold to an independent buyer, or if the products are not resold to an independent buyer, or not
resold in the condition as imported, on any reasonable basis.
    2.9.1          In these cases, adjustment for all costs, including duties and taxes, incurred between
    importation and resale, and for profits accruing, shall be made to establish a reliable export price, at
    the Community frontier level.
    2.9.2          The costs for which adjustment shall be made include those normally bome by an
    importer but paid by any party, either in or outside the Community, which appears to be associated or
    to have a compensatory arrangement with the importer or exporter, including: usual transport,
    insurance, handling, loading and ancillary costs; customs duties, any anti-dumping duties, and other
    taxes payable in the importing country by reason of the importation or sale of the goods; and a
    reasonable margin for selling, general and administrative costs and profit.
                                                        10
 ---pagebreak--- C.        Comparison                                                                                         n?
2.10 A fair comparison shall be made between the export price and the normal value. This
comparison shall be made at the same level of trade and in respect of sales made at as nearly as possible
the same time and with due account taken of other differences. Where the normal value and the export
price as established are not on such a comparable basis due allowance, in the form of adjustments, shall
be made in each case, on its merits, for differences in factors which are claimed, and demonstrated to
affect prices and, therefore, price comparability. Any duplication when making adjustments shall be
avoided, in particular in relation to discounts, rebates, quantities and level of trade. When the specified
conditions are met, the factors for which adjustments can be made are listed hereafter:
    (a) Physical characteristics
    An adjustment shall be made for differences in the physical characteristics of the product concerned.
    The amount of the adjustment shall correspond to a reasonable estimate of the market value of the
    difference.
    (b) Import charges and indirect taxes
    An adjustment shall be made to normal value for an amount corresponding to any import charges or
    indirect taxes borne by the like product and by materials physically incorporated therein, when
    destined for consumption in the exporting country and not collected or refunded in respect of the
    product exported to the Community.
    (c) Discounts, rebates and quantities
    An adjustment shall be made for differences in discounts and rebates, including those given for
    differences in quantities, if these are properly quantified and are directly linked to the sales under
    consideration. An adjustment may also be made for deferred discounts and rebates if the claim is
    based on consistent practice in prior periods, including compliance with the conditions required to
    qualify for the discount or rebates.
    (d) Level of trade
    An adjustment for differences in levels of trade shall be granted where, in relation to the distribution
    chain in both markets, it is shown that the export price, including a constructed export price, is at a
    different level of trade to the normal value and the difference has affected price comparability which
    is demonstrated bv consistent and distinct differences in functions and prices of the seller for the
    different levels of trade in the domestic market of the exporting country. The amount of the
    adjustment shall be based on the market value of the difference.
    (e) Transport, insurance, handling, loading, and ancillary costs
    An adjustment shall be made for differences in the directly related costs incurred for conveying the
    product concerned from the premises of the exporter to an independent buyer, where such costs are
    included in the prices charged. These costs comprise transport, insurance, handling, loading and
    ancillary costs.
                                                        11
 ---pagebreak--- (f) Packing:                                                                                              '
An adjustment shall be made for differences in the respective, directly related costs of the packing for
the product concerned.
(g) Credit
An adjustment shall be made for differences in the cost of any credit granted for the sales under
consideration, provided that it is a factor taken into account in the determination of the prices
charged.
 (h) After-sales costs
An adjustment shall be made for differences in the direct costs of providing warranties, guarantees,
technical assistance and services, as provided for bv law and/or in the sales contract.
 (i)   Commissions
 An adjustment shall be made for differences in commissions paid in respect of the sales under
consideration.
 (j)  Currency conversions
 When the price comparison requires a conversion of currencies, such conversion should be made
 using the rate of exchange on the date of sale, provided that when a sale of foreign currency on
 forward markets is directly linked to the export sale involved, the rate of exchange in the forward sale
 shall be used. Normally, the date of sale should be the date of invoice but the date of contract,
 purchase order or order confirmation, may be used if these more appropriately establish the material
terms of sale. Fluctuations in exchange rates shall be ignored and exporters shall be granted 60 days
to reflect a sustained movement in exchange rates during the period of investigation.
                                                    12
 ---pagebreak--- ~         ~      .         .                                                                               A~bo
D.        Dumping margin
2.11      Subject to the releyant prpyisietis governing fair comparison, the existence of margins of
dumping during the investigation period.shall normally be established on the basis of a comparison of a
weighted average normal value with a weighted average of prices of all export transactions to the
Cornrniuirtv or by a comparison of individual normal vaines and individual export prices to the
Community on a transaction to transaction basis. However, a normal value established on a weighted
average basis may be compared to prices of all individual export transactions to the Community, if there
is a pattern of export prices which differ significantly among different purchasers, regions or time
periods and the methods specified m foe first sentence of this paragraph would not reflect the full degree
of dumping being practised. This paragraph shall not preclude the use of sampling in accordance with
Article 17.
2.12     The dumping margin shall be the amount by which the normal value exceeds the export price.
Where dumping margins vary, a weighted average dumping margin may be established.
                                                       13
 ---pagebreak--- Article 3                                                         ,                                             A»'l
Determination of Injury
3.1       Under this Regulation, the term "injury" shall, unless otherwise specified, be taken to mean
material injury to the Community industry, threat of material injury to the Community industry or
material retardation of the establishment of such an industry and shall be interpreted in accordance with
the provisions of this Article.
3.2       A determination of injury shall be based on positive evidence and involve an objective
examination of both (a) the volume of the dumped imports and the effect of the dumped imports on
prices in the Community market for like products, and (b) the consequent impact of these imports on the
Community industry.
3.3       With regard to the volume of the dumped imports, consideration shall be given as to whether
there has been a significant increase in dumped imports, either in absolute terms or relative to production
or consumption in the Community. With regard to the effect of the dumped imports on prices,
consideration shall be given as to whether there has been a significant price undercutting by the dumped
imports as compared with the price of a like product of the Community industry, or whether the effect of
 such imports is otherwise to depress prices to a significant degree or prevent price increases, which
 otherwise would have occurred, to a significant degree. No one or several of these factors can necessarily
 give decisive guidance.
 3.4      Where imports of a product from more than one country are simultaneously subject to anti-
 dumping investigations, the effects of such imports shall be cumulatively assessed only if it is determined
that (a) the margin of dumping established in relation to the imports from each country is more than de
 minimis as defined in Article 9.3 and that the volume of imports from each country is not negligible and
 (b) a cumulative assessment of the effects of the imports is appropriate in light of the conditions of
 competition between imported products and the conditions of compétition between the imported products
 and the like Community product.
 3.5      The examination of the impact of the dumped imports on the Community industry concerned
 shall include an evaluation of all relevant economic factors and indices having a bearing on the state of
 the industry including: the fact that an industry is still in the process of recovering from the effects of
 past dumping or subsidisation, the magnitude of the actual margin of dumping, actual and potential
 decline in sales, profits, output, market share, productivity, return on investments, utilisation of capacity;
 factors affecting Community prices; actual and potential negative effects on cash flow, inventories,
 employment, wages, growth, ability to raise capital or investments. This list is not exhaustive, nor can
 one or several of these factors necessarily give decisive guidance.
 3.6      It must be demonstrated, from all the relevant evidence presented in relation to paragraph 2. that
 the dumped imports are causing injury within the meaning of this Regulation. Specifically, this shall
 entail a demonstration that the volume and/or price levels identified under paragraph 3 are responsible
 for an impact on the Community industry as provided for in paragraph 5. and that this impact exists to a
 degree which enables it to be classified as material.
                                                         14
 ---pagebreak---                                                                                                             A Y)
3.7        Known factors other than the dumped imports, which at the same time are injuring the               ' ' "^
Community industry shall also be examined to ensure that injury caused by these other factors is not
attributed to the dumped imports under paragraph 6. Factors which may be considered in this respect
include, inter alia, the volume and prices of imports not sold at dumping prices, contraction in demand or
changes in the patterns of consumption, trade restrictive practices of and competition between the foreign
and Community producers, developments in technology and the export performance and productivity of
the Community industry.
3.8       The effect of the dumped imports shall be assessed in relation to the production of the
Community industry of the like product when available data permit the separate identification of that
production on the basis of such criteria as the production process, producers' sales and profits. If such
separate identification of that production is not possible, the effects of the dumped imports shall be
assessed by the examination of the production of the narrowest group or range of products, which
includes the like product, for which the necessary information can be provided.
3.9        A determination of a threat of material injury shall be based on facts and not merely on
allegation, conjecture or remote possibility. The change in circumstances which would create a situation
in which the dumping would cause injury must be clearly foreseen and imminent.
    3.9.1          In making a determination regarding the existence of a threat of material injury,
    consideration should be given to, inter aha, such factors as:
      (i) a significant rate of increase of dumped imports into the Community market indicating the
      likelihood of substantially increased imports;
      (ii)         sufficient freely disposable or an imminent, substantial increase in capacity of the
      exporter indicating the likelihood of substantially increased dumped exports to the Community,
      taking into account the availability of other export markets to absorb any additional exports;
      (iii)        whether imports are entering at prices that would, to a significant degree, depress prices
      or prevent price increases which otherwise would have occurred, and would likely increase demand
      for further imports; and
      (îv)         inventories of the product being investigated.
    3.9.2          No one of the factors listed above by itself can necessarily give decisive guidance but
    the totality of the factors considered must lead to the conclusion that further dumped exports are
    imminent and that, unless protective action is taken, material injury would occur.
                                                        15
 ---pagebreak--- Article 4                                                                                                       Ah
Definition of Community industry
4.1       For the purposes of this Regulation, the term " the Community industry" shall be interpreted as
referring to the Community producers as a whole of the like products or to those of them whose
collective output of the products constitutes a major proportion, as defined in Article 5.4. of the total
Community production of those products, except that
    (i) when producers are related to the exporters or importers or are themselves importers of the
    allegedly dumped product, the term "the Community industry" may be interpreted as referring to the
    rest of the producers;
    (ii) in exceptional circumstances the territory of the Community may, for the production in question,
    be divided into two or more competitive markets and the producers within each market may be
    regarded as a separate industry if (a) the producers within such market sell all or almost all of their
    production of the product in question in that market, and (b) the demand in that market is not to any
    substantial degree supplied by producers of the product in question located elsewhere in the
    Community. In such circumstances, injury may be found to exist even where a major portion of the
    total Community industry is not injured, provided there is a concentration of dumped imports into
    such an isolated market and provided further that the dumped imports are causing injury to the
    producers of all or almost all of the production within such market.
4.2       For the purpose of paragraph 1, producers shall be considered to be related to exporters or
importers only if (a) one of them directly or mdirectly controls the other: or (b) both of them are directly
or indirectly controlled by a third person; or (c) together they directly or indirectly control a third person,
provided that there are grounds for behevmg or suspecting that the effect of the relationship is such as to
cause the producer concerned to behave differently from non-related producers. For the purpose of this
paragraph, one shall be deemed to control another when the former is legally or operationally in a
position to exercise restraint or direction over the latter.
4.3       Where the Community industry has been interpreted as referring to the producers in a certain
 region, the exporters shall be given an opportunity to offer undertakings pursuant to Article 8 in respect
of the region concerned. If an adequate undertaking is not offered promptly or the situations set out in
 Article 8.9 and Article 8.10 apply, a provisional or definitive duty may be imposed in respect of the
 Community as a whole. In such cases, the duties may, if practicable, be limited to specific products or
 exporters.
 4.4      The provisions of Article 3.8 shall be applicable to this Article.
                                                        16
 ---pagebreak--- Article 5                                                                                                 1
Initiation of proceedings
5.1       Except as provided for in Article 5.6, an investigation to determine the existence, degree and
effect of any alleged dumping shall be initiated upon a written complaint by any natural or legal person,
or any association not having legal personality, acting on behalf of the Community industry.
    5.1.1           The complaint may be submitted to the Commission, or a Member State, which shall
    forward it to the Commission. The Commission shall send Member States a copy of any complaint it
    receives. The complaint shall be deemed to have been lodged on the first working day following
    its delivery to the Commission by registered mail or the issuing of an acknowledgement of receipt
    by the Commission.
    5.1.2          Where, in the absence of any complaint, a Member State is in possession of sufficient
    evidence of dumping and of injury resulting therefrom for the Community industry, it shall
    immediately communicate such evidence to the Commission.
5.2       A complaint under paragraph 1 shall include evidence of dumping, injury and à causal link
between the allegedly dumped imports and the alleged injury. The complaint shall contain such
information as is reasonably available to the complainant on the following:
    (i) identity of the complainant and a description of the volume and value of the Community
    production of the like product by the complainant. Wfaere a written complaint is made on behalf of
    the Community industry, the complaint shall identify the industry on behalf of which the complaint is
    made by a list of all known Community producers of the like product (or associations of Community
    producers of the hke product) and, to the extent possible, a description of the volume and value of
    Community production of the like product accounted for by such producers;
    (ii) a complete description of the allegedly dumped product, the names of the country or countries of
    origin or export in question, the identity of each known exporter or foreign producer and a list of
    known persons importing the product in question;
    (iii) information on prices at which the product in question is sold when destined for consumption in
    the domestic markets of the country or countries of origin or export (or, where appropriate,
    information on the prices at which the product is sold from the country or countries of origin or
    export to a third country or countries or on the constructed value of the product) and information on
    export prices or, where appropriate, on the prices at which the product is first resold to an
    independent buyer in the Community;
    (iv) information on the evolution of the volume of the allegedly dumped imports, the effect of these
    imports on prices of the like product on the Community market and the consequent impact of the
    imports on the Community industry, as demonstrated by relevant factors and indices having a bearing
    on the state of the Community industry, such as those listed in Article 3.3 and 3.5.
5.3       The Commission shall, to the degree possible, examine the accuracy and adequacy of the
evidence provided in the complaint to determine whether there is sufficient evidence to justify the
initiation of an investigation.
                                                       17
 ---pagebreak---                                                                                                              A ;\f
5.4       An investigation shall not be initiated pursuant to paragraph I unless it has been determined, on
the basis of an examination of the degree of support for, or opposition to, the complaint expressed by
Community producers of the like product, that the complaint has been made by or on behalf of the
Community industry. The complaint shall be considered to have been made "by or on behalf of the
Community industry" if it is supported by those Community producers whose collective output
constitutes more than 50 per cent of the total production of the like product produced by that portion of
the Community industry expressing either support for or opposition to the complaint. However, no
investigation shall be initiated when Community producers expressly supporting the complaint account
for less than 25 per cent of total production of the like product produced by the Community industry.
5.5       The authorities shall avoid, unless a decision has been made to initiate an investigation, any
publicising of the complaint for the initiation of an investigation. However, after receipt of a properly
documented complaint and before proceeding to initiate an investigation, the government of the exporting
country concerned shall be notified.
5.6       If in special circumstances, it is decided to initiate an investigation without having received a
written complaint by or on behalf of the Community industry for the initiation of such investigation, this
shall be done on the basis of sufficient evidence of dumping, injury and a causal link, as described in
paragraph 2, to justify the initiation of an investigation.
 5.7      The evidence of both dumping and injury shall be considered simultaneously in the decision
whether or not to initiate an investigation. A complaint shall be rejected where there is insufficient
evidence of either dumping or of injury to justify proceeding with the case. In this respect, the imports
 concerned shall normally be regarded as negligible if the volume of dumped imports from a particular
 country accounts for less than 3 per cent of imports of the like product in the Community unless
 countries which individually account for less than 3 per cent of the imports of the like product in the
 Community collectively account for more than 7 per cent of imports of the like product in the
 Community.
 5.8       The complaint may be withdrawn prior to initiation, in which case it shall be considered not to
 have been lodged.
 5.9       Where, after consultation, it is apparent that there is sufficient evidence to justify initiating
 proceedings the Commission shall initiate proceedings within one month of the lodging of the
 complaint and publish a notice in the Official Joumal of the European Communities. Where insufficient
 evidence has been presented, the complainant shall, after consultation, be so informed within one month
 of the date on which the complaint is lodged with the Commission.
 5.10 The notice of initiation of the proceedings shall announce the initiation of an investigation.
 indicate the product and countries concerned, give a summary of the information received, and provide
 that all relevant information is to be communicated to the Commission; it shall state the periods within
 which interested parties may make themselves known, present their views in writing and submit
 information, if such views and information are to be taken into account during the investigation; it
 shall also state the period within which interested parties may apply to be heard by the Commission in
 accordance with Article 6.5.
                                                        18
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5.11     The Commission shall advise the exporters and importers known to it to be concemed, as well as
representatives of the exporting country and the complainants, of the initiation of the proceedings and,
with due regard to the protection of confidential information, provide the full text of the written
complaint received under Article 5.1 to the known exporters, and to the authorities of the exporting
country and make it available, upon request, to other interested parties involved. Where the number of
exporters involved is particularly high, the full text of the written complaint should instead be provided
only to the authorities of the exporting country or to the relevant trade association.
5.12     An anti-dumping investigation shall not hinder the procedures of customs clearance.
                                                        19
 ---pagebreak---                                                                                                              Aï
Article 6
The investigation
A.        Information and procedure
6.1       Following the initiation of the proceedings, the Commission, acting in co-operation with the
Member States, shall commence an investigation at Community level. Such investigation shall cover
both dumping and injury and these shall be investigated simultaneously. For the purpose of a
representative finding, an investigation period shall be selected which, in the case of dumping shall,
normally, cover a period of not less than six months immediately prior to the initiation of the
proceedings. Information relating to a period subsequent to the investigation period shall, normally, not
be taken into account.
6.2       Parties receiving questionnaires used in an anti-dumping investigation shall be given at least
thirty days for reply. The time-limit for exporters shall be counted from the date of receipt of the
questionnaire, which for this purpose shall be deemed to have been received one week from the day on
which it was sent to the exporter or transmitted to the appropriate diplomatic representative of the
exporting country. An extension to the thirty day period may be granted, taking due account of the time
limits of the investigation and provided the party gives a good reason, in terms of its particular
circumstances, for such extension.
6.3       The Commission may request Member States to supply information and Member States shall
take whatever steps are necessary in order to give effect to such requests. They shall send to the
Commission the information requested together with the results of all inspections, checks or
investigations carried out. Where this information is of general interest or where its transmission has
been requested by a Member State, the Commission shall forward it to the Member States, provided it is
not confidential, in which case a non-confidential summary shall be forwarded.
 6.4      The Commission may request Member States to carry out all necessary checks and inspections,
particularly amongst importers, traders and Community producers, and to carry out investigations in
third countries, provided the firms concerned give their consent and the government of the country in
 question has been officially notified and raises no objection. Member States shall take whatever steps are
necessary in order to give effect to such requests from the Commission; Officials of the Commission
 shall be authorised, if the Commission or a Member State so requests, to assist the officials of Member
 States in carrying out their duties.
 6.5      The interested parties, which have made themselves known in accordance with Article 5.10. may
 be heard if they have, within the period prescribed in the notice published in the Official Journal of the
 European Communities, made a written request for a hearing showing that they are an interested party
 likely to be affected by the result of the proceedings and that there are particular reasons why they
 should be heard.
 6.6       Opportunities shall, on request, be provided for the importers, exporters, representatives of the
 government of the exporting country and the complainants, which have made themselves known in
 accordance with Article 5.10. to meet those parties with adverse interests, so that opposing views may be
 presented and rebuttal arguments offered. Provision of such opportunities must take account of the need
 to preserve confidentiality and of the convenience to the parties. There shall be no obligation on any
 party to attend a meeting, and failure to do so shall not be prejudicial to that party's case. Oral
 information provided under this paragraph shall be taken into account in so far as it is subsequently
 reproduced in writing.
                                                        20
 ---pagebreak--- 6.7      The complainants, importers, exporters, users and consumer organisations,
                                                                                                        $Mù
made themselves known in accordance with Article 5.10, as well as the representatives 01
country may, upon written request, inspect all information made available by any party to
investigation, as distinct from internal documents prepared by the authorities of the C
Member States, which is relevant to the presentation of their cases and not confidential w^hltô
meaning of Article 19, and that it is used in the investigation. Such parties may respond to
information and their comments should be taken into consideration, to the extent that they are^*
sufficiently substantiated in the response.
6.8      Except in the circumstances provided for in Article 18, the information supplied by ;
parties and upon which findings are based, shall be examined for accuracy to the degree j
6.9      Investigations shall, except in special circumstances, be concluded within one year; \
case more than 18 months, after their initiation.
                                                                                                      m
                                                                                              AM
                                                                                                »Xi
                                                                                                 <» M i
                                                                                                        l
                                                       21
                                                                                                    !Ai
 ---pagebreak--- Artîffef
               measures
7.1 ^Provisional measures may be applied if proceedings have been initiated in accordance with the
provisions of Article 5, a public notice has been given to that effect and interested parties have been
given fHJpcfoate opportunities to submit information and make comments in accordance with Article 5.10.
a proviiional affirmative determination has been made of dumping and consequent injury to the
CofOfl|ijpgÇY industry, and the Community interest calls for intervention to prevent such injury. The
              measures shall be imposed no sooner than 60 days from the initiation of the proceedings
              * {JKfff nine months from the initiation of the proceedings.
               amount of the provisional anti-dumping duty shall not exceed the margin of dumping as
                established but it should be less than the margin, if such lesser duty would be adequate to
             Itijury to the Community industry.
                  ional measures shall take the form of a security and the release of the products concemed
                  tion in the Community shall be conditional upon the provision of such security.
                  ommission shall take provisional action after consultation or, in cases of extreme urgency,
                   the Member States. In this latter case, consultations shall take place 10 days, at the
              notification to the Member States of the action taken by the Commission.
                   a Member State requests immediate intervention by the Commission and the conditions of
                        the Commission shall within a maximum of five working days of receipt of the
   Wry        'fi whether a provisional anti-dumping duty should be imposed.
              rÈomrrussion shall forthwith inform the Council and the Member States of any decision
              pjts Article. The Council, acting by a qualified majority, may decide differently.
                      al duties may be imposed for six months and extended for a further three months or
                          for nine months. However, they may only be extended, or imposed for a ninfr
                     erq exporters representing a significant percentage of the trade involved so request or
                 upon notification bvthe Commission.
     CWk:
                                                         22
 ---pagebreak---                                                                                                             A%
Article 8
 Undertakings
8.1       Investigations may be terminated without the imposition of provisional or definitive duties upon
receipt of satisfactory voluntary undertakings from any exporter to revise its prices or to cease exports to
the area in question at dumped prices so that the Commission, after consultation, is satisfied that the
injurious effect of the dumping is eliminated. Price increases under such undertakings shall not be higher
than necessary to eliminate the margin of dumping and they should be less than the margin of dumping if
such increases would be adequate to remove the injury to the Community industry.
8.2       Undertakings may be suggested by the Commission, but no exporter shall be obliged to enter
into such an undertaking. The fact that exporters do not offer such undertakings, or do not accept an
invitation to do so, shall in no way prejudice the consideration of the case. However, it may be
determined that a threat of injury is more likely to be realised if the dumped imports continue.
Undertakings shall not be sought or accepted from exporters unless a provisional affirmative
determination of dumping and injury caused by such dumping has been made. Save in exceptional
circumstances, undertakings may not be offered later than the end of the period during which
representations may be made under Article 20.5.
8.3       Undertakings offered need not be accepted if their acceptance is considered impractical, for
example, if the number of actual or potential exporters is too great, or for other reasons, including
reasons of general policy. The exporter concerned may be provided with the basis on which it is intended
to propose the rejection of the offer of an undertaking and may be given an opportunity to make
comments thereon. The reasons for rejection shall be set out in the definitive decision.
8.4       Parties which offer an undertaking shall be required to provide a non-confidential version of
such undertaking, so that it may be made available to interested parties to the investigation.
8.5        Where undertakings are, after consultation, accepted and there is no objection raised within the
Advisory Committee, the investigation shall be terminated. In all other cases, the Commission shall
submit to the Council forthwith a report on the results of the consultation, together with a proposal that
the investigation be terminated. The investigation shall stand terminated if, within one month, the
Council, acting by a qualified majority, has not decided otherwise.
8.6       If the undertakings are accepted, the investigation of dumping and injury shall normally be
completed. In such a case, if a negative determination of dumping or injury is made, the undertaking
shall automatically lapse, except in cases where such a determination is due in large part to the existence
of an undertaking. In such cases the authorities may require that an undertaking be maintained for a
reasonable period. In the event that an affirmative determination of dumping and injury is made, the
undertaking, shall continue consistent with its terms and the provisions of this Regulation.
8.7      The Commission shall require any exporter from which an undertaking has been accepted to
provide, periodically, information relevant to the fulfilment of such undertaking, and to permit
verification of pertinent data. Non-compliance with such requirements shall be construed as a violation
of the undertaking.
                                                       23
 ---pagebreak---                                                                                                            Acy
8.8     Where undertakings are accepted from certain exporters during the course of an investigation,
they shall, for the purpose of Article 11. be deemed to take effect from the date on which the
investigation is concluded for the exporting country.
8.9      In case of violation or withdrawal of undertakings bv any party, a definitive duty shall be
imposed in accordance with Article 9. on the basis of the facts established within the context of the
investigation which led to the undertaking, provided that such investigation was concluded with a final
determination on dumping and injury and the exporter concerned, except in the case of withdrawal of
undertakings bv the exporter, has been given an opportunity to comment.
8.10     A provisional duty may, after consultation, be imposed in accordance with Article 7 on the basis
of the best information available, where there is reason to believe that an undertaking is being violated,
or in case of violation or withdrawal of undertaking where the investigation which led to the undertaking
was not concluded.
                                                      24
 ---pagebreak---                                                                                               '" <         . Ac)x
Article 9
Termination without measures; imposition of definitive duties
9.1      Where the complaint is withdrawn, proceedings may be terminated unless such termination
would not be in the Community interest.                                             *
9.2      WTiere, after consultation, protective measures are unnecessary and there is no objection raised
within the Advisory Committee, the investigation or proceedings shall be terminated. In all other cases,
the Commission shall submit to the Council forthwith a report on the results of the consultation, together
with a proposal that the proceedings be terminated. The proceedings shall stand terminated if, within one
month, the Council, acting by a qualified majority, has not decided otherwise.
9.3      For proceedings initiated under Article 5.9. injury shall normally be regarded as negligible where
the imports concerned represent less than the volumes set out in Article 5 7. For the same proceedings,
there shall be immediate termination where it is determined that the margin of dumping is less than 2 per
cent, expressed as a percentage of the export price, provided that it is only the investigation that shall be
terminated where the margin is below 2% for individual exporters and they shall remain subject to the
proceedings and may be re-investigated in any subsequent review carried out for the country concerned
under Article 11.
9.4      Where the facts as finally established show that there is dumping and injury caused thereby, and
the Community interest calls for intervention in accordance with Article 21. a definitive anti-dumping
duty shall be imposed by the Council, acting by simple majority on a proposal submitted by the
Commission after consultation of the Advisory Committee. Where provisional duties are in force, a
proposal for definitive action shall be submitted to the Council not later than one month before the expiry
of such duties. The amount of the anti-dumping duty shall not exceed the margin of dumping established
but it should be less than the margin if such lesser duty would be adequate to remove the injury to the
Community industry.
9.5      An anti-dumping duty shall be imposed in the appropriate amounts in each case, on a non-
discriminatory basis on imports of a product from all sources found to be dumped and causing injury,
except as to imports from those sources from which undertakings under the terms of this Regulation
have been accepted. The Regulation shall specify the duty for each supplier or, if that is impracticable
and in the cases referred to in Article 2.7. the supplying country concerned.
9.6      When the Commission has limited its examination in accordance with Article 17, any anti-
dumping duty applied to imports from exporters or producers which have made themselves known in
accordance with Article 17 but were not included in the examination shall not exceed the weighted
average margin of dumping established for die parties in the sample. For the purpose of this paragraph,
the Commission shall disregard any zero and de minimis margins, and margins established under the
circumstances referred to in Article 18. The authorities shall apply individual duties or normal values to
imports from any exporter or producer which is granted individual treatment as provided for in Article
 17.
                                                       25
 ---pagebreak---                                                                                                            A^
Article 10
Retroactivity
10.1      Provisional measures and definitive anti-dumping duties shall only be applied to products which
enter free circulation after the time when the decision taken under Article 7.1 and Article 9.5,
respectively enters into force, subject to the exceptions set out in this Regulation.
10.2 Where a provisional duty has been applied and the facts as finally established show that there is
dumping and injury, the Council shall decide, irrespective of whether a definitive anti-dumping duty is to
be imposed, what proportion of the provisional duty is to be definitively collected. For this purpose,
'injury' shall not include material retardation of the estabhshment of a Community industry, nor threat of
material injury, except where it is found that this would, in the absence of provisional measures, have
developed into material injury. In all other cases involving such threat or retardation, any provisional
amounts shall be released and definitive duties can only be imposed from the date that a final
detennination of threat or material retardation is made.
 10.3 If the definitive anti-dumping duty is higher than the provisional duty, the difference shall not be
collected. If the definitive duty is lower than the provisional duty, the duty shall be recalculated. Where a
final determination is negative, the provisional duty shall not be confirmed.
 10.4 A definitive anti-dumping duty may be levied on products which were entered for consumption .
not more than 90 days prior to the date of application of provisional measures but not prior to the
initiation of the investigation, provided that imports have been registered in accordance with Article
 14.5, the Commission has provided the importers concemed with an opportunity to comment, and that:
    (i) there is, for the product in question, a history of dumping over an extended period, or the
    importer was aware of the dumping or the importer should have been aware of the dumpmg. in terms
    of the extent of the dumping and injury alleged or found; and
    (ii) in addition to the level of imports which caused injury during the investigation period, there is a
    further substantial rise in imports which, in the light of its timing and volume and other
    circumstances, is likely to seriously undermine the remedial effect of the definitive anti-dumping duty
    to be applied.
 10.5     In cases of violation or withdrawal of undertakings, definitive duties may be levied in
accordance with this Regulation on goods entered for free circulation not more than ninety days before
the application of provisional measures, provided that imports have been registered in accordance with
 Article 14.5, and that any such retroactive assessment shall not apply to imports entered before the
 violation or withdrawal of the undertaking.
                                                        26
 ---pagebreak---                                                                                                              V)
Article 11
                                                                                                                h
Duration, reviews and refunds
 11.1     An anti-dumping measure shall remain in force only as long as and to the extent necessary to
counteract dumping which is causing injury.
11.2      A definitive anti-dumping measure shall expire five years from its imposition or five years from
the date of the conclusion of the most recent review which has covered both dumping and injury unless it
is determined in a review that the expiry would be likely to lead to a continuation or recurrence of
dumping and injury. Such an expiry review shall be initiated on the initiative of the Commission, or upon
request made by or on behalf of Community producers and the measure shall remain in force pending the
outcome of such review.
     11.2.1        An expiry review shall be initiated where the request contains sufficient evidence that
    the removal of the measures would be likely to result in a continuation or recurrence of dumping and
    injury. Such a likelihood may, for example, be indicated bv evidence of continued dumping and injury
    or evidence that the removal of injury is partly or solely due to the existence of measures or evidence
    that the circumstances of the exporters, or market conditions, are such that thev would indicate the
    likelihood of further injurious dumping.
     11.2.2        In carrying out investigations under this paragraph, the exporters, importers, the
    representatives of the exporting country and the Community producers shall be provided with the
    opportunity to amplify, rebut or comment on the matters set out in the review request and conclusions
    shall be reached with due account taken of all relevant and duly supported evidence presented in
    relation to the question of whether the removal of measures would be likely, or unlikely, to lead to the
    continuation or recurrence of dumping and injury.
     11.2.3        Under this paragraph, a notice of impending expiry shall be published in the Official
    Journal of the European Communities at an appropriate time in the final year of the period of
    application of the measures as defined in this paragraph. Thereafter, the Community producers shall,
    no later than three months before the end of the five year period, be entitled to lodge a review request
    in accordance with paragraph 2.1. A notice announcing the actual expiry of measures under this
    paragraph shall also be published.
 11.3 The need for the continued imposition of measures may also be reviewed, where warranted on
the initiative of the Commission or at the request of a Member State or, provided that a reasonable
period of time of at least 1 year has elapsed since the imposition of the definitive measure, upon a
request, by any exporter or importer or bv the Community producers, which contains sufficient evidence
substantiating the need for such an interim review.
     11.3.1        An interim review shall be initiated where the request contains sufficient evidence that
    the continued imposition of the measure is no longer necessary to offset dumping and/or the injury
    would be unlikely to continue or recur if the measure were removed or varied, or that the existing
    measure is not, or is no longer, sufficient to counteract dumping which is causing injury.
     11.3.2        In carrying out investigations under this paragraph, the Commission may, inter alia,
    consider whether the circumstances with regard to dumping and injury have changed significantly, or
    whether existing measures are achieving the intended results in removing the injury previously
    established in accordance with Article 3 of this Regulation. In these respects, account shall be taken
    of all relevant and duly supported evidence in the final determination.
                                                       27
 ---pagebreak---                                                                                                             A%
11.4      A review shall also be carried out for the purpose of determining individual margins of dumping
for new exporters in the exporting country in question which have not exported the product during the
period of investigation on which the measures were based.
     11.4.1       The review shall be initiated where a new exporter or producer can show that it is not
    related to any of the exporters or producers in the exporting country which are subject to the anti-
    dumping measures on the product, and where they have actually exported to the Community
    following the above-mentioned investigation period, or where they can demonstrate that they have
    entered into a an irrevocable contractual obligation to export a significant quantity to the Community.
     11.4.2       A review for a new exporter shall be initiated, and carried out on an accelerated basis,
    after consultation of the Advisory Committee and Community producers have been given an
    opportunity to comment. The Commission Regulation initiating a review shall repeal the duty in force
    with regard to the new exporter concerned, bv amending the Regulation which imposed the duty, and
    making imports subject to registration in accordance with Article 14.5 in order to ensure that, should
    the review result in a determination of dumping in respect of such an exporter, anti-dumping duties
     can be levied retroactively to the date of the initiation of the review.
     11.4.3        The provisions of this paragraph shall not apply where duties have been imposed under
    the provisions of Article 9.6.
 11.5     The relevant provisions of this Regulation with regard to procedures and the conduct of
investigations, excluding those relating to time limits, shall apply to any review carried out under
paragraphs 2. 3 and 4. Any such review shall be carried out expeditiously and shall normally be
concluded within twelve months of the date of initiation of the review.
 11.6     Reviews under this Article shall be initiated by the Commission after consultation of the
Advisory Committee. Where warranted byreviews,measures shall be repealed or maintained under
paragraph 2. or repealed, maintained or amended under paragraphs 3 and 4. by the Community
institution responsible for their introduction. Where measures are repealed for mdividual exporters, but
not for the country as a whole, such exporters shall remain subject to the proceedings and may,
automatically, be re-investigated in any subsequent review carried out for that country under this Article.
 11.7 Where a review of measures under paragraph 3 is in progress at the end of the period of
application of measures as defined in paragraph 2. such review shall also cover the circumstances set out
 in paragraph 2.
                                                          28
 ---pagebreak---  11.8 Notwithstanding paragraph 2. an importer may request reimbursement of duties collected where            A%
it is shown that the dumping margin, on the basis of which duties were paid, has been eliminated, or
reduced to a level which is below the level of the duty in force.
     11.8.1         In order to request a refund of anti-dumping duties, the importer shall submit an
     application to the Commission. The application shall be submitted via the Member State in the
    territory of which the products were released for free circulation and within six months of the date on
    which the amount of the definitive duties to be levied was duly determined by the competent
     authorities or of the date on which a decision was made definitively to collect the amounts secured by
    way of provisional duty. Member States shall forward the request to the Commission forthwith.
     11.8.2         An application for refund shall only be considered to be duly supported by evidence
    where it contains precise information on the amount of refund of anti-dumping duties claimed and all
     customs documentation relating to the calculation and payment of such amount. It shall also include
     evidence, for a representative period, on normal values and export prices to the Community for the
     exporter or producer to which the duty applies. In cases where the importer is not associated to the
    exporter or producer concerned and such information is not immediately available, or the exporter or
    producer is unwilling to release it to the importer, the application shall contain a statement from the
     exporter or producer that the dumping margin has been reduced or eliminated, as specified in this
     Article, and that the relevant supporting evidence shall be provided to the Commission. Where such
     evidence is not forthcoming from the exporter or producer, within a reasonable period of time, the
     application shall be rejected.
     11.8.3         The Commission shall, after consultation of the Advisory Committee, decide whether
     and to what extent the application should be granted or it may decide at any time to initiate an interim
     review and the information and findings from such review, carried out in accordance with the
    provisions applicable for such reviews, shall be used to determine whether and to what extent a
     refund is justified. Refunds of duties shall normally take place within 12 months, and in no case more
    than 18 months after the date on which a request for a refund, duly supported by evidence, has been
     made by an importer of the product subject to the anti-dumping duty. The payment of any refund
     authorised should normally be made by Member States within 90 days of the above-mentioned
     decision.
 11.9 In all review or refund investigations carried out under this Article, the Commission shall apply,
in so far as circumstances have not changed, the same methodology as in the investigation which led to
the duty, with due account taken of the provisions set out in Articled, and in particular Section D
thereof, and the provisions of Article 17 of this Regulation.
 11.10 In any investigation carried out under this Article, the Commission shall examine the reliability
of export prices in accordance with Article 2. However, where it is decided to construct the export price
in accordance with Article 2.9, it shall calculate the export price with no deduction for the amount of
anti-dumping duties paid when conclusive evidence is provided that the duty is duly reflected in resale
prices and the subsequent selling prices in the Community.
                                                         29
 ---pagebreak---                                                                                                            A3)f
Article 12
12.1     Where the Community industry submits sufficient information showing that measures have led
to no movement, or insufficient movement, in resale prices or subsequent selling prices in the
Community, the investigation may, after consultation, be re-opened to examine whether the measure has
had effects on the above-mentioned prices.
 12.2    During an investigation under this Article, exporters, importers and Community producers shall
be provided with an opportunityto clarify the situation with regard to resale prices and subsequent
selling prices and if it is concluded that the measure should have led to movements in such prices, in
order to remove the injury previously established in accordance with Article 3. export prices shall be re-
assessed in accordance with Article 2. and dumping margins shall be re-calculated to take account of the
re-assessed export prices. Where it is considered that a lack of movement in the prices in the Community
is due to a fall in export prices, which occurred prior to orfollowingthe imposition of measures,
dumping margins may be re-calculated to take account of such lower export prices.
 12.3 WTiere a re-investigation under this Article shows increased dumping, the measures in force shall
be amended bv the Council, by simple majority on a proposal from the Commission, in accordance with
the new findings on export prices.
 12.4    The relevant provisions of Article 5 and Article 6 shall apply to any review carried out under
this Article, except that such review shall be carried out expeditiously and shall normally be concluded
within six months of the date of initiation of the re-investigation.
 12.5     Alleged changes in normal value shall only be taken into account under this Article where
 complete information on revised normal values, duly substantiated bv evidence, is made available to the
 Commission within the time limits set out in the notice of initiation of an investigation. Where an
 investigation involves a re-examination of normal values, imports may be made subject to registration in
 accordance with Article 14.5 pending the outcome of the investigation.
                                                       30
 ---pagebreak--- Articled                                                                                                      ^
Circumvention
 13.1     Anti-dumping duties imposed under this Regulation may be extended to apply to imports from
third countries of like products, or parts thereof, when circumvention of the measures in force is taking
place. Circumvention shall be defined as a change in the pattern of trade between third countries and the
Community which stems from a practice, process or work for which there is insufficient due cause or
economic justification, other than the imposition of the duty, and there is evidence that the remedial
effects of the duty are being undennined. in terms of the prices and/or quantities of the assembled like
product.
 13.2     An assembly operation in the Community or a third country shall be considered to circumvent
the measures in force where:
    (i) the operation started or substantially increased since, or just prior to. the initiation of the anti-
    dumping investigation and the parts concerned are from the country subject to measures: and
    (ii) the parts constitute 60% or more of the total value of the parts of the assembled product except
    that in no case shall circumvention be considered to be taking place where the value added to the
    parts brought in. during the assembly or completion operation, is greater than 25% of the
    manufacturing cost: and
    (iii) the remedial effects of the duty are being undermined, in terms of the prices and/or quantities of
    the assembled like product.
 13.3     Investigations shall be initiated under this Article where the request contains sufficient evidence
on the factors set out in paragraph 1. Initiations shall be made, after consultation of the Advisory
Committee, bv Commission Regulation which shall also instruct the customs authorities to make imports
subject to registration in accordance with Article 14.5 or to request guarantees. Investigations shall be
carried out bv the Commission, which may be assisted bv customs authorities, and shall be concluded
within nine months. When the facts, as finally ascertained, justify the extension of measures, this shall
be done bv the Council, acting bv simple majority and on a proposal from the Commission, from the date
that registration was imposed under Article 14.5 or guarantees were requested. The relevant procedural
provisions of this Regulation with regard to initiations and the conduct of investigations shall apply
under this Article.
 13.4     Products shall not be subject to registration under Article 14.5 or measures where they are
accompanied bv a customs certificate declaring that the importation of the goods does not constitute
circumvention. Tliese certificates may be issued to importers, upon written application, bv the authorities
following authorisation bv a decision of die Commission after consultation of the Advisory Committee
or the decision of the Council imposing measures and they shall remain valid for the period, and under
the conditions, set down therein.
 13.5     Nothing in this Article shall preclude the normal application of the provisions in force
concerning customs duties.
                                                        31
 ---pagebreak--- Article 14
General provisions
14.1      Provisional or definitive anti-dumping duties shall be imposed by Regulation, and collected by
Member States in the form, at the rate specified and according to the other criteria laid down in the
Regulation imposing such duties. Such duties shall also be collected independently of the customs duties,
taxes and other charges normally imposed on imports. No product shall be subject to both anti-dumping
and countervailing duties for the purpose of dealing with one and the same situation arising from
dumping or from export subsidisation.
 14.2     Regulations imposing provisional or definitive anti-dumping duties, or Regulations or Decisions
accepting undertakings or terminating investigations or proceedings, shall be published in the Official
Journal of the European Communities. Such Regulations or Decisions shall contain, in particular, and
with due regard to the protection of confidential information, the names of the exporters, if practical, or
countries involved, a description of the product and a summary of the material facts and considerations
relevant to the dumping and injury detenrtinations. In each case, a copy of the Regulation or Decision
shall be sent to known interested parties. The provisions of this paragraph shall apply mutatis mutandis
to reviews.
 14.3     Special provisions, in particular with regard to the common definition of the concept of origin, as
contained in Council Regulation (EEC) No 2913/92 of 12 October 1992. may be adopted in. or under. .
this Regulation.
 14.4     In the Community interest, measures imposed under this Regulation may, after consultation of
the Advisory Cornmittee. be suspended bv a decision of the Commission for a period of up to one year
 because of a change in market conditions in the Community which makes the application of such
 measures temporarily inappropriate, provided that the Community industry has been given an
 opportunity to comment. The suspension may be extended for a further period if the Council so decides,
 by simple majority, on a proposal from the Commission. Measures may, at any time and after
 consultation, be re-instated if the reason for suspension is no longer applicable.
  14.5 The Commission may, after consultation of the Advisory Committee, direct the customs
 authorities to take the appropriate steps to register imports, so that measures may subsequently be
 applied against these imports from the date of such registration. Imports may be made subject to
 registration following a request from the Community industry which contains sufficient evidence to
 justify such action. Registration shall be introduced bv Regulation which shall specify the purpose of the
 action and, if appropriate, the estimated amount of possible future liability. Imports may not be made
 subject to registration for a period longer than nine months.
  14.6 Member states shall report to the Commission, on a monthly basis, the import trade of products
 subject to investigation and subject to measures, and the amount of duties collected under this
 Regulation.
                                                        32
 ---pagebreak--- Article 15
Consultations
 15.1     Any consultations provided for in this Regulation shall take place within an Advisory
Cornmittee, which shall consist of representatives of each Member State, with a representative of the
Commission as chairman. Consultations shall be held immediately on request by a Member State or on
the initiative of the Commission and in any event within a timeframe which allows the time limits set
by this Regulation to be respected.
 15.2 The Committee shall meet when convened by its chairman. He shall provide the Member States,
as promptly as possible, with all relevant information.
 15.3 Where necessary, consultation may be in writing only; in such case the Commission shall notify
the Member States and shall specify a period within which they shall be entitled to express their opinions
or to request an oral consultation which the chairman shall arrange, provided that such oral
consultation can be held within a timeframe which allows the time limits set by this Regulation to
be respected.
 15.4     Consultation shall in particular cover:
    (i)   the existence of dumping and the methods of establishing the dumping margin;
    (ii) the existence and extent of injury;
    (iii) the causal link between the dumped imports and injury;
    (iv) the measures which, in the circumstances, are appropriate to prevent or remedy the injury
    caused by dumping and the ways and means for putting such measures into effect.
                                                     33
 ---pagebreak--- Article 16
Verification visits
16.1     The Commission shall, where it considers it appropriate, carry out visits to examine the records
of importers, exporters, traders, agents, producers, trade associations and organisations, to verify
information provided on dumping and injury. In the absence of a proper and timely reply, a verification
visit may not be carried out.
 16.2    The Commission may carry out investigations in third countries as required, provided it obtains
the agreement of the firms concemed, it notifies the representatives of the government of the country in
question and the latter does not object to the investigation. As soon as the agreement of the firms
concemed has been obtained the Commission should notify the authorities of the exporting country of the
names and addresses of the firms to be visited and the dates agreed.
 16.3     The firms concemed shall be advised of the nature of the information to be verified during
verification visits and of any further information which needs to be provided during such visits, though
this should not preclude requests to be made during the verification for further details to be provided in
the light of information obtained.
 16.4     In investigations carried out under this paragraph, the Commission shall be assisted by officials
of those Member States who so request.
                                                       34
 ---pagebreak--- Articled                                                                                                 olo£s
Sampling
 17.1    In cases where the number of complainants, exporters or importers, types of product or
transactions is large, the investigation may be limited to a reasonable number of parties, products or
transactions bv using samples which are statistically valid on the basis of information available at the
time of the selection, or to the largest representative volume of production, sales or exports which can
reasonably be investigated within the time available.
 17.2    Thefinalselection of parties, types of products or transactions made under these sampling
provisions shall rest with the Commission, though preference shall be given to choosing a sample in
consultation with, and with the consent of, die parties concemed, provided such parties make themselves
known and make sufficient information available, within three weeks of initiation, to enable a
representative sample to be chosen.
 17.3    In cases where the examination has been limited in accordance with this Article, an individual
margin of dumping shall, nevertheless, be calculatedforany exporter or producer not initially selected
who submits the necessary information within the time limits provided for in this Regulation, except
where the number of exporters or producers is so large that mdividual examinations would be unduly
burdensome and prevent the timely completion of the investigation.
 17.4 Where it is decided to sample and there is a degree of non-co-operation bv some or all of the
parties selected which is likely to materially affect the outcome of the mvestigation. a new sample may
be selected. However, if a material degree of non-co-operation persists or there is insufficient time to
select a new sample, therelevantprovisions of Article 18 shall apply.
                                                       35
 ---pagebreak---                                                                                                              oie r>
Article 18
Non-co-operation
18.1      In cases in which any interested party refuses access to, or otherwise does not provide, necessary
information within the time limits as providedfor in this Regulation, or significantly impedes the
investigation, provisional or final findings, affirmative or negative, may be made on the basis of the facts
available. Where it is found that any interested party has supplied false or misleading information, the
information shall be disregarded and use may be made of facts available. Interested parties should be
made aware of the consequences of non-co-operation.
 18.2     A lack of a computerised response shall not be deemed to constitute non-co-operation, provided
that the interested party shows that presenting the response as requested would result in an unreasonable
extra burden or unreasonable additional cost.
 18.3 Where the information presented by an interested party may not be ideal in all respects it should
not be disregarded, provided that any deficiencies are not such as to cause undue difficulty in arriving at
a reasonably accurate finding and provided the information is appropriately submitted in timely fashion,
it is verifiable and the party has acted to the best of its ability.
 18.4      If evidence or information is not accepted, the supplying party should be informed forthwith of
the reasons therefor and should be granted an opportunity to provide further explanations within the time.
 limit specified. If the explanations are considered unsatisfactory, the reasons for rejection of such
evidence or information should be disclosed and given in any published findings.
 18.5 If determinations, including those with respect to normal value, are based on the provisions of
paragraph 1 of this Article, including the information supplied in the complaint, it should, where
practicable and with due regard to the time limits of the mvestigation. be checked by reference to
 information from other independent sources which may be available, such as published price lists,
 official import statistics and customs returns, or information obtained from other interested parties
 during the investigation.
  18.6     If an interested party does not cooperate, or only cooperates partially, and thus relevant
 information is being withheld, the result could be less favourable to thé party than if it had cooperated.
                                                        36
 ---pagebreak--- Article 19
                                                                                                             2 » ^'
Confidentiality
19.1     Any information which is by nature confidential, (for example, because its disclosure would be
of significant competitive advantage to a competitor or because its disclosure would have a significantly
adverse effect upon a person supplying the information or upon a person from whom he acquired the
information) or which is provided on a confidential basis by parties to an investigation shall, upon good
cause shown, be treated as such by the authorities.
 19.2    Interested parties providing confidential information shall be required to furnish non-confidential
summaries thereof. These summaries shall be in sufficient detail to permit a reasonable understanding of
the substance of the information submitted in confidence. In exceptional circumstances, such parties may
indicate that such information is not susceptible of summary. In such exceptional circumstances, a
statement of the reasons why summarisation is not possible must be provided.
 19.3    If it is considered that a request for œrifidentiality is not warranted and if the supplier of the
information is either unwilling to make the information available or to authorise its disclosure in
generalised or summary form, such information may be disregarded unless,it can be satisfactorily -
demonstrated from appropriate sources that the information is correct. Requests for confidentiality
should not be arbitrarily rejected,
 19.4 This Article shall not preclude the disclosure of general information by the Community
authorities and in particular of the reasons on which decisions taken pursuant to this Regulation are
based, or disclosure of the evidence relied on by the Community authorities in so far as necessary to
explain those reasons in court proceedings. Such disclosure must take into account the legitimate interest
of the parties concerned that their business secrets should not be divulged.
 19.5 The Council, the Commission and Member States, or the officials of any of these, shall not
reveal any information received pursuant to this Regulation for which confidential treatment has been
requested by its supplier, without specific permission from the supplier. Exchanges of information
between the Commission and Member States or any information relating to consultations made pursuant
to Article 15 or any internal documents prepared by the authorities of the Community or its Member
States shall not be divulged except as specifically provided for in this Regulation.
 19.6    Information received pursuant to this Regulation shall be used only for the purpose for which it
was requested.
                                                        37
 ---pagebreak--- Article20                                                                                                      "^^
Disclosure
20.1      The complainants, importers, exporters and representatives of the exporting country may request
disclosure of the details underlying the essential facts and considerations, on the basis of which
provisional measures have been imposed. Requests for such disclosure shall be made in writing
immediately following the imposition of provisional measures and the disclosure shall be made in writing
as soon as possible thereafter.
20.2      The parties mentioned in paragraph 1, may request final disclosure of the essential facts and
considerations, on the basis of which it is intended to recommend the imposition of definitive measures,
or the termination of an investigation or proceedings without the imposition of measures, with particular
attention being paid to the disclosure of any facts or considerations which are different from those used
for any provisional measures.
20.3      Requests for final disclosure, as defined in paragraph 2, shall be addressed to the Commission in
writing and be received, in cases where a provisional duty has been applied, not later than one month
after publication of the imposition of that duty. Where a provisional duty has not been applied, parties
 shall be provided with an opportunity to request final disclosure within time limits set by the
 Commission.
20.4      Final disclosure shall be given in writing. It shall be made, with due regard paid to the protection
of confidential information, as soon as possible and, normally, not later than one month prior to a
 definitive decision or the submission by the Commission of any proposal for final action pursuant to
 Article 9. Where the Commission is not in a position to disclose certain facts or considerations at that
time, these shall be disclosed as soon as possible thereafter. Disclosure shall not prejudice any
 subsequent decision which may be taken bv the Commission or the Council but where such decision is
 based on any different facts and considerations, these shall be disclosed as soon as possible.
 20.5     Representations made after final disclosure is given shall be taken into consideration only if
 received within a period to be set by the Commission in each case, which shall be at least 10 days, due
 consideration being given to the urgency of the matter.
                                                         38
 ---pagebreak---                                                                                                                3 c
Article 21                                                                                                     <*^ j .
Community interest
21.1     Under this Regulation, a determination as to whether the Community interest calls for
intervention shall be based on an appreciation of all the various interests taken as a whole, including the
interests of the domestic industry and users and consumers, and a determination under this Article shall
only be made where all parties have been given the opportunity to make their views known under
paragraph 2. In such an examination, the need to eliminate the trade distorting effects of injurious
dumping and to restore effective competition shall be given special consideration. Measures, as
determined on the basis of the dumping and injury found, may not be applied, where the authorities, on
the basis of all the information submitted, can clearly conclude that it is not in the Community interest to
apply such measures.
21.2     In order to provide a sound basis on which the authorities can take account of all views and
information in the decision on whether, or not, the imposition of measures is in the Communitv interest,
the complainants, importers, representative users and representative consumer organisations may, within
the time limits specified in the notice of initiation of the anti-dumping investigation, make themselves
known and provide information to the Commission. Such information, or appropriate summaries thereof,
shall be made available to the other parties specified in this Article, and they shall be entitled to respond
to such information.
21.3     The parties which have acted in conformity with paragraph 2 may request a hearing. Such
requests may be granted when they are submitted within the time limits set in paragraph 2. and when
they set out the particular reasons, in terms of the Communitv interest why the parties should be heard.
21.4     The parties which have acted in conformity with paragraph 2. may provide comments on the
application of any provisional duties imposed. Such comments shall be received within one month of the
application of such measures if they are to be taken into account and they, or appropriate summaries
thereof, shall be made available to other parties who shall be entitled to respond to such comments.
21.5     The Commission shall examine the information which is properly submitted, and the extent to
which it is representative, and the results of such analysis, together with an opinion on its merits, shall be
transmitted to the Advisory Committee. The balance of views expressed in the Committee shall be taken
into account bv the Commission in any proposal made under Article 9.
21.6     The parties which have acted in conformity with paragraph 2. may request the facts and
considerations on which final decisions are likely to be taken to be made available to them. Such
information shall be made available to the extent possible and without prejudice to any subsequent
decision taken bv the Commission or the Council.
21.7     Under this Article, information shall only be taken into account where it is supported bv actual
evidence which substantiates its validity.
                                                        39
 ---pagebreak--- Article 22
Final provisions
This Regulation shall not preclude the application of:
(i)      any special rules laid down in agreements concluded between the Community and third
countries;
(ii)     the Community Regulations in the agricultural sector and of Regulation (EEC) No 1059/69 (^J.
(EEC) No 2730/75 ( 6 ); and (EEC) No 2783/75 ( 7 ); this Regulation shall operate by way of complement
to those Regulations and in derogation from any provisions thereof which preclude the application of
anti-dumping duties;
(iii)    special measures, provided that such action does not run counter to obligations under the GATT.
Article 23
Repeal of existing legislation
Regulation (EC) No 2423/88, as amended by Regulation (EC) No 521 and Regulation (EC) No 522, is
hereby repealed. References to the repealed Regulation shall be construed as references to this
Regulation.
Article 24
Entry into force
This Regulation shall enter into force on the date determined by the decision on the entry into force of the
acts implementing the results of the Uruguay Round. It shall apply to proceedings already initiated.
However, the references to time limits for the initiation of proceedings and the imposition of provisional
duties, shall only apply after a date which the Council shall specify in a Decision to be adopted by a
qualified majority no later than 1 April 1995 on the basis of a Commission proposal to be submitted to
the Council once the necessary budgetary resources have been made available.
This Regulation shall be binding in its entirety and directly applicable in all Member States.
Done at Brussels,
 5
          O J N o L 141,12.06.1969, p. 1.
 6
          OJ No L 281,01.11.1975, p. 20.
 7
          OJNoL282,01.11.1975,p. 104.
                                                       40
 ---pagebreak---                    •2o?
Commercial defence
    Subsidies
 ---pagebreak---                                                                                       %s
                          Explanatory memorandum
A. INTRODUCTION
   The Uruguay Round trade negotiations, concluded in 1994, have led to the new
   Agreement on Subsidies and Countervailing Measures ("The Subsidies
   Agreement") which, as regards countervailing measures, is required to be
   implemented into Community legislation in order that, as agreed at Marrakech, it
   can come into effect on 1 January 1995.
   The Subsidies Agreement contains new and detailed rules on subsidies and
   countervailing duty investigations, and in view of the extent of the changes and
   to ensure an adequate and transparent implementation of the new rules, it is
   considered necessary to transpose the language of the Subsidies Agreement into
   Community legislation to the extent possible and for this purpose the Agreement,
   rather than the existing Community legislation, Regulation (EC) No 2423/88], has
   been taken as the basis for the proposed legislation.
   Additions to the Subsidies Agreement have been, for the most part, been restricted
   to : clarifications where the Agreement is unclear; incorporation of existing
   provisions on the EU's rather unique procedures and decision-making, amended to
   take account of Court judgements; and the amendment or incorporation of EU
   specific rules on issues such as negligible import volumes, sampling, non-
   corporation, circumvention and Community interest, on which the Agreement is
   silent, imprecise or where it merely gives an indication of minima. On several
   issues, more detailed provisions from the new anti-dumping regulation are used in
   this regulation, where there is no conflict with the provisions of the Subsidies
   Agreement.
    OJ No L 209, 2.9.1988, p. 1.
 ---pagebreak---                                                                                      2i<
The Subsidies Agreement sets new standards for the imposition of countervailing
measures with its new and detailed rules on the definition of a subsidy,
countervailability and calculation, its increased procedural requirements for
initiation and subsequent investigation and its restrictions on the imposition of
provisional duties. Its implementation into Community legislation will, of course,
produce the same result. Moreover, the adoption of these new rules would,at the
same time, improve legal certainty through greater precision, extend transparency
and increase the rights of parties.
In the same vein, some of the new rules, such as on negligible import volumes
and Community interest, should further reinforce this effect of transparency and
legal certainty. Community industries would have a clear idea of the minimum
level of import volumes required both for complaints and final action. Moreover,
all interested parties would be made aware of their rights and obligations with
regard to the Community interest aspects of these cases, in that a structured
framework would be provided for the provision and treatment of information by
the authorities.
Furthermore, it is important that measures, once taken, should be effective, and in
this regard a new provision on circumvention has been added.
Finally, it will be noted that this draft countervailing duty regulation is, for the
first time, entirely separate from the proposed legislation on anti-dumping. This
development is justified by the far more detailed nature of the new Subsidies
Agreement, the increasingly distinct procedures with regard to CVD and anti-
dumping investigations, and the consequent need to give the CVD instrument
greater autonomy.
 ---pagebreak---                                                                                        Sli
B. MAIN FEATURES OF DRAFT COUNTERVAILING DUTY
   REGULATION
1. Definition of a subsidy (Article 2)
   The definition of a subsidy reproduces literally that contained in the Subsidies
   Agreement, that is, a financial contribution by public authorities and a benefit to
   enterprises which is derived from such financial contribution.
2. Notion of a countervailable subsidy (Article 3)
   The conditions for countervailability (or non-countervailability, as the case may
   be) also reproduce those of the Subsidies Agreement concerning specificity of
   subsidies and the green list, as well as the so-called "green box" contained in the
   Agreement on Agriculture.
3. Calculation of the amount of a countervailable subsidy (Article 4)
   The provision on calculation of the amount of a countervailable subsidy espouses
   the principle of "benefit to the recipient". This approach is now permitted by
   Article 14 of the Subsidies Agreement, and will enhance the possibility of the
   Community using countervailing duty actions compared to the "cost to the
   government" approach. The "benefit to the recipient" approach is more in line
   with the methodology employed in state aid cases in the Community.
 ---pagebreak---                                                                                        1*VL-
4.  Injury and Community industry (Articles 5 and 6)
    These provisions closely follow those of the Subsidies Agreement.
5.  Initiation of proceedings (Article 7)
    In addition to the basic criteria for initiating countervailing duty proceedings,
    Paragraphs 5-7 also set out the conditions under which investigations can be
    opened with regard to non-countervailable types of subsidy in order to determine
    whether the criteria for non-countervailability have been met.
6.  Conclusion of investigations (Article 8)
    The Subsidies Agreement provides that investigations should normally be
    concluded within 12 months, which conflicts with the 13 months envisaged for
    EU investigations from 1995 onwards.
    It is proposed to incorporate the provisions of the Agreement into this regulation
    (Article 8.9), although provisional duties would still have to be applied with 9
    months (Article 9.1).
7.  Undertakings (Article 10)
(a) In countervailing duty investigations, undertakings may be. accepted from
    Governments or exporters.
 ---pagebreak---                                                                                         m
(b)  Over the years, there have been continual problems on what to do in cases where
     exporters have violated or withdrawn undertakings. In such circumstances, it is
     considered that the Community should be entitled to impose definitive duties based
     on the findings of the previous investigation, otherwise an exporter which is
     violating its undertaking could end up in a more advantageous position than its
     rivals which may be faithfully applying the undertakings. Moreover, carrying out a
     completely new investigation based on new facts is a time-consuming affair which
     should only be undertaken where the circumstances justify it. Violation does not
     appear to be one of these circumstances.
     The new provisions set out in Articles 10.9 and 10.10 of the draft text would
     permit the imposition of definitive duties in cases of proven violation or
     withdrawal though, of course, the exporter's rights would be safeguarded in that
     he would be entitled to ask for a review if the circumstances with regard to
     subsidization or injury have changed. Moreover, the change in measures would
     not generate a new 5 year "sunset" period. Where violation is only suspected, the
      remedy is a provisional duty while the matter is under investigation.
 8.   Negligible import volumes and de minimis subsidy (Article 11).
 (a)  This Regulation takes over the negligible import volumes for developing countries
      set out in the Subsidies Agreement. It also takes over the provision of the
      Agreement that a subsidy amount of less than 1% ad-valorem is de minimis.
 ---pagebreak---                                                                                          ,^M
(b) It is proposed not to define developing countries for the purpose of this
    Regulation..
9.  Reviews and refunds (Article 13)
(a) The provisions on reviews and refunds are broadly in line with those of the anti-
    dumping regulation, with one exception.
(b) As regards accelerated reviews for new exporters (Section C), the Subsidies
    Agreement is far less explicit than the Anti-Dumping Agreement on the question
    of new exporters. Article 19.3 states only that :
    "Any exporter whose exports are subject to a definitive countervailing duty but
    who was not actually investigatedfor reasons other than a refusal to co-operate,
    shall be entitled to an expedited review in order that the investigating authorities
    promptly establish an individual countervailing duty rate for that exporter. "
 ---pagebreak---                                                                                         IK
    There is no equivalent to the anti-dumping provisions which stipulate that the
    exporter must not have exported to the Community during the investigation
    period and must not be related to other exporters; neither is it stated that duties
    must not be collected during the review period.
    In these circumstances, it is proposed to maintain a text based on the Subsidies
    Agreement.
10. Circumvention (Article 14)
    Anti-circumvention measures are not mentioned in the Subsidies Agreement, and
    the appropriateness of measures against the circumvention of countervailing
    duties has to be evaluated on the basis of certain specified conditions. It should
    also be considered that the circumvention of countervailing duties, which result
    from a subsidy granted by a Government, by exporters, is a particular situation,
    which needs to be analysed in its proper context.
    Therefore, the anti-circumvention provision of this regulation emphasises the
    possibility of taking measures to prevent circumvention of countervailing duties
    through practices, either assembly in third countries or the Community, for which
    there is insufficient due cause or economic justification other than the imposition
    of the duty. If the remedial effects of duties are undermined, measures may be
    taken, provided that the imported like product and/or parts still benefit from a
    countervailable subsidy.
    This provision provides a solid safeguard against circumvention of countervailing
    duties, and enables the Community to ensure that measures remain effective.
    The procedural part of the Article is in line with the anti-dumping regulation.
 ---pagebreak---                                                                                          2^
11. Sampling (Article 18)
    There are no specific provisions on sampling in the Subsidies Agreement.
    However, it is desirable to establish rules for sampling in countervailing duty
    cases, since the same problems of large numbers of exporters and importers which
    arise in anti-dumping investigations may also arise in countervailing duty
    proceedings. Therefore it is proposed to transpose the anti-dumping regulation's
    provisions on sampling into the countervailing duty regulation.
12. Non-co-operation (Article 19)
    Article 12.7 of the Subsidies Agreement only contains the following brief
    reference to this issue :
    "In cases in which any interested Member or interested party refuses access to, or
    otherwise does not provide, necessary information within a reasonable period or
    significantly impedes the investigation, preliminary andfinal determinations,
    affirmative or negative, may be made on the basis of the facts available. "
    The same provision exists in the Anti-Dumping Agreement, but is supplemented
    by Annex II to that Agreement, which does not appear in the Subsidies
    Agreement.
    As regards the countervailing duty regulation, it is proposed to take over the anti-
    dumping regulation's provisions on non-co-operation, given that these do not
    conflict with Subsidy Agreement's provision, but simply expand on it, and are
    aimed at greater transparency and predictability of the Community's actions on
    this issue.
 ---pagebreak---                                                                                         m
13. Confidentiality (Article 20)
    Provisions on confidentiality are based on the provisions of the Subsidies
    Agreement, which are slightly different from those of the Anti-Dumping
    Agreement because of the direct involvement of Governments in countervailing
    duty proceedings, and therefore of the presence, in the record of an investigation,
    of government confidential, as well as business confidential, information. In
    particular, it will be specified that details of all bilateral consultations with
    Governments under the Subsidies Agreement are confidential.
14. Simultaneous imposition of anti-dumping and countervailing duties (Article
    15.1)
    The basic provision of GATT Article VI:5 is included in the CVD regulation.
15. Relationship between countervailing duty measures and multilateral
    remedies (Article 23)
    A provision has been inserted to permit withdrawal of countervailing duties in
    cases in which a multilateral subsidy action has been carried out (Panel) and
    measures other than countervailing duties have been taken as a consequence of
    such action (since countervailing duty investigations and GATT panels can be
    carried out in parallel, but only one type of remedy is allowed under the Subsidies
    Agreement).
 ---pagebreak---                                                                                          «MS
16. Other
    It should be noted that the provisions on suspension of measures and registration
    of imports (Article 15) and Community interest (Article 22), are in line with the
    anti-dumping provisions, as are most of the procedural rules in this regulation
    which are not specifically referred to in this section.
C.   CONCLUSION
    In order to implement the 1994 Agreement on Subsidies and Countervailing
    Measures as concluded as a result of the Uruguay Round of multilateral trade
    negotiations, and to take account of the issues set out above, the Commission
    submits to the Council
    a proposal to replace the Community's basic countervailing duty legislation.
                                                                                      10
 ---pagebreak---                                                                                             l'\c)
                                         PROPOSAL FOR :
                                                                              94/
                              COUNCIL REGULATION (EC) N°             /94            0231 (ACC)
                               on protection against subsidised imports
                  from countries not members of the European Community.
The Council of the European Union
Having regard to the Treaty establishing the European Community, and in particular
Article 113 thereof,
Having regard to the Regulations establishing the common organisation of agricultural
markets and the Regulations adopted under Article 235 of the Treaty applicable to
goods manufactured from agricultural products, and in particular the provisions of those
Regulations which allow for derogation from the general principle that protective
measures at frontiers may be replaced solely by the measures provided for in those
Regulations,
Having regard to the proposal from the Commission,
Having regard to the opinion of the European Parliament,
Whereas, by Regulation (EEC) N° 2423/880) , as amended by Regulation (EC) N°
521/94(2) and Regulation (EC) N° 522/94(3) the Council adopted common rules for
protection against dumped or subsidised imports from countries which are not members
of the European Economic Community;
0 ) O.J. L209, 2.8.1988, c J .
( 2 )O.J.L66, 16.3.1994, p. 7
( 3 )O.J. L66, 16.3.1994, p. 10
 ---pagebreak---                                                                                          CA-xÀ-^s
Whereas, these rules were adopted in accordance with existing international obligations,
in particular those arising from Article VI of the General Agreement on Tariffs and
Trade ("the GATT"), from the Agreement on Implementation of Article VI of the
GATT ("the 1979 Anti-Dumping Code") and from the Agreement on Interpretation and
Application of Articles VI, XVI and XXIII of the GATT ("the 1979 Subsidies Code");
Whereas, the conclusion of the Uruguay Round of multilateral trade negotiations has led
to the establishment of the World Trade Organisation ("the WTO");
Whereas, Annex 1A to the Agreement establishing the WTO ("the WTO Agreement")
contains, inter alia, the General Agreement on Tariffs and Trade 1994 ("the GATT
1994"), an Agreement on Agriculture ("the Agreement on Agriculture"), a new
Agreement on implementation of Article VI of the GATT 1,994 ("the Anti-Dumping
Agreement"), and a new Agreement on Subsidies and Countervailing Measures ("the
Subsidies Agreement");
Whereas, in order to reach greater transparency and effectiveness in the application by
the Community of the rules laid down in respectively the Anti-Dumping Agreement and
the Subsidies Agreement, it is considered necessary to adopt two separate Regulations
which will lay down in sufficient detail the requirements for the application of each of
these commercial defence instruments;
Whereas, it is therefore appropriate to amend Community rules governing the
application of countervailing measures in the light of the new multilateral rules, inter
alia with regard to the procedures for initiation of proceedings and the conduct of
subsequent investigations, including the establishment and treatment of the facts, the
application of provisional measures, the imposition and collection of countervailing
duties, the duration and review of countervailing measures, and the public disclosure of
information relating to countervailing investigations;
 ---pagebreak---                                                                                               1 1
Whereas, in view of the extent of the changes brought about by the new Agreements
and to ensure an adequate and transparent implementation of the new rules, it is
appropriate to transpose the' language of the new Agreements into Community
legislation to the extent possible;
Whereas, furthermore it seems advisable to explain, in adequate detail, when a subsidy
shall be deemed to exist, according to which principles it shall be countervailable (in
particular whether the subsidy has been granted specifically), and according to which
criteria the amount of the countervailable subsidy shall be calculated;
Whereas, it is clear that in determining the existence of a subsidy it is necessary to
demonstrate that there has been a financial contribution by a government or any public
authority within the territory of a country, or that there has been any form of income or
price support in the sense of Article XVI of the GATT 1994, and that a benefit has
thereby been conferred to the recipient enterprise;
Whereas, it is necessary to explain in sufficient detail which kind of subsidies are not
countervailable and which procedure shall be followed if during an investigation it is
determined that an investigated enterprise has received non-countervailable subsidies;
 Whereas, the Subsidies Agreement states that the provisions concerning non-
 countervailable subsidies shall cease to apply five years after the date of entry into force
 of the WTO Agreement, unless they are extended by mutual agreement of the Members
 of the WTO, and that it may therefore be necessary to amend this Regulation
 accordingly, if the validity of those provisions is not so extended;
 Whereas, the measures listed in Annex 2 to the Agreement on Agriculture are non-
 countervailable, to the extent provided for in that Agreement;
 ---pagebreak---                                                                                             HZ
Whereas, it is desirable to lay down clear and detailed guidance on the factors which
may be relevant for the determination of whether the subsidised imports have caused
material injury or are threatening to cause injury; and whereas, in demonstrating that the
volume and price levels of the imports concerned are responsible for injury sustained by
a Community industry, attention should be given to the effect of other factors and in
particular existing market conditions in the Community;
Whereas, it is advisable to define the term "Community industry" and provide that
parties related to exporters may be excluded from such industry and to define the term
"related"; and whereas it is also necessary to provide for countervailing duty action to be
taken with regard to producers in a region of the Community and to lay down guidelines
on the definition of such a region;
Whereas, it is necessary to set down who may lodge a countervailing duty complaint,
including the extent to which it sholilfi $fc supported by the Community industry, and
the information on countervailable subsidies, injury and causality which such complaint
should contain; and whereas it is also expedient to specify the procedures with regard to
the rejection of complaints or the initiation of proceedings;
Whereas, it is necessary to lay down how interested parties shall be given notice of the
information which the authorities require, ample opportunity to present all relevant
evidence and a full opportunity for the defence of their interests; whereas, it is also
desirable to set out clearly the rules and procedures to be followed during the
investigation, in particular that interested parties have to make themselves known,
present their views and submit information within specified time limits, if such views
and information are to be taken into account; and whereas it is also appropriate to set
out the conditions under which an interested party may have access to, and comment on,
information presented by other interested parties; whereas there should also be
cooperation between the Member States and the Commission with regard to the
collection of information;
 ---pagebreak---                                                                                             22
Whereas, it is necessary to lay down the conditions under which provisional duties may
be imposed, including that they may not be imposed sooner than 60 days from initiation
and no later than 9 months from initiation; whereas, such duties may in all cases be
imposed by the Commission only for a four month period;
Whereas, it is necessary to specify procedures for the acceptance of undertakings which
eliminate or offset the countervailable subsidies and injury instead of the imposition of
provisional or definitive duties; whereas it is also appropriate to lay down the
consequences of violation or withdrawal of undertakings and that provisional duties
may be imposed in cases of suspected violation or where further investigation is
necessary to complete the findings; whereas, in accepting undertakings, care should be
taken that the proposed undertakings, and their enforcement, do not lead to anti-
competitive behaviour;
Whereas, in order to reflect the provisions of tlie Subsidies Agreement, it is necessary to
provide for the termination of cases, without or without measures, normally within
twelve months, and in no case later than eighteen months from the initiation of the
investigation; whereas, an investigation should be terminated in case the amount of the
 subsidy is found to be de minimis or if, particularly in case of imports originating in
developing countries, the volume of subsidised imports or the injury is negligible, and it
 is appropriate to define these criteria; whereas, where measures are to be imposed, it is
necessary to provide for the termination of investigations and to lay down that measures
 should be less than the amount of countervailable subsidies if such lesser amount would
 remove the injury, as well as to specify the method of calculating the level of measures
 in cases of sampling;
 ---pagebreak---                                                                                             20
Whereas, it is necessary to provide for the retroactive collection of provisional duties as
deemed appropriate and to define the circumstances which may trigger the retroactive
application of duties to avoid the undermining of the definitive measures to be applied;
whereas it is also necessary to provide that duties may be applied retroactively in cases
of violation or withdrawal of undertakings;
Whereas, it is necessary to provide that measures shall lapse after five years unless a
review investigation indicates that they should be maintained; whereas, it is also
necessary to provide, in cases where sufficient evidence is submitted of changed
circumstances, for interim reviews or for investigations to determine whether refunds of
countervailing duties are warranted;
Whereas, even though the Subsidies Agreement does not contain provisions concerning
circumvention of countervailing measures, the possibility of such circumvention exists,
in terms similar, albeit not identical, to the circumvention of anti-dumping measures;
whereas it appears therefore appropriate to enact an anti-circumvention provision in this
Regulation;
Whereas, it is expedient to permit the suspension of countervailing measures where
there is a temporary change in market conditions which make the continued imposition
of such measures temporarily inappropriate;
Whereas, it is necessary to provide that imports under investigation may be made
subject to registration upon importation to enable measures to be subsequently applied
against such imports;
Whereas, to ensure a proper enforcement of measures, it is necessary that Member
States monitor and report to the Commission the import trade of products subject to
investigation and subject to measures and the amount of duties collected under this
regulation;
 ---pagebreak---                                                                                            tzç
Whereas, it is necessary to provide for consultations of an Advisory Committee at
regular and specified stages of the investigation; whereas the committee shall consist of
representatives of Member States with a representative of the Commission as chairman;
Whereas, it is expedient to provide for verification visits to check information submitted
on countervailable subsidies and injury, though such visits should be dependent on
proper replies to questionnaires being received;
Whereas, it is essential to provide for sampling in cases where the number of parties or
transactions are large in order to permit a timely completion of investigations;
Whereas, it is necessary to provide that for parties who do not cooperate satisfactorily
other information may be used to establish findings and such information may be less
favourable to the party than if it had cooperated;
Whereas, provision should be made for the treatment of confidential information so that
business or governmental secrets are not divulged;
Whereas, it is essential that provision is made for the proper disclosure of the essential
facts and considerations to parties which qualify for such treatment and that such
disclosure is made, with due regard to the decision-making process in the Community,
within a time period which permits parties to defend their interests;
Whereas, it is prudent to provide for an administrative system under which arguments
can be presented in relation to whether measures are in the Community interest,
including the interests of consumers, and to lay down the time periods within which
such information has to be presented as well as the disclosure rights of the parties
concerned;
 ---pagebreak---                                                                                           4%
Whereas, it is imperative to link the implementation of time limits for the lodging of
complaints, the initiation of proceedings and the imposition of provisional duties to the
establishment of the necessary administrative structure within the Commission's
services; whereas the Council, therefore, should specify, in a decision to be adopted by
qualified majority no later than 1 April 1995, when these time limits shall apply;
Whereas, in applying the rules of the Subsidies Agreement it is essential, in order to
maintain the balance ofrightsand obligations which this Agreement sought to establish,
that the Community take account of their interpretation by the Community's major
trading partners, as reflected in legislation or established practice,
HAS ADOPTED THIS REGULATION :
 ---pagebreak---                                                                                             21*3-
                                         Article 1
                                         Principles
1.    This Regulation lays down provisions for protection against subsidised imports
from countries not members of the European Community. A countervailing duty may be
imposed for the purpose of offsetting any subsidy granted, directly or indirectly, for the
manufacture, production, export or transport of any product whose release for free
circulation in the Community causes injury.
2.    For the purpose of this Regulation, a product is considered as being subsidised if
it benefits from a countervailable subsidy as defined in Articles 2 and 3 of this
Regulation.
3.    Such subsidy may be granted by the Government of the country of origin of the
imported product, or by the Government of an intermediate country from which the
product is exported to the Community, known for the purpose of this Regulation as "the
country of export".
4.    Notwithstanding the above, where products are not directly imported from the
country of origin but are exported to the Community from an intermediate country, the
provisions of this Regulation shall be fully applicable and the transaction or transactions
shall, where appropriate, be regarded as having taken place between the country of
origin and the Community.
5.     For the purpose of this Regulation the term "like product" shall be interpreted to
mean a product which is identical, i.e. alike in all respects to the product under
consideration, or in the absence of such a product, another product which although not
alike in all respects, has characteristics closely resembling those of the product under
consideration.
 ---pagebreak---                                                                                            1 1 \
                                         Article 2
                                 Definition of a subsidy
A subsidy shall be deemed to exist if:
1.   (a) there is a financial contribution by a government or any public body within
     the territory of the country of origin or export (hereinafter referred to as
     "government"), i.e. where:
     (i)   a government practice involves a direct transfer of funds (e.g., grants, loans,
           and equity infusion), potential direct transfers of funds or liabilities (e.g.,
           loan guarantees);
     (ii)  government revenue that is otherwise due, is foregone or not collected (e.g.,
           fiscal incentives such as tax credits); in this regard, the exemption of an
           exported product from duties or taxes borne by the like product when
           destined for domestic consumption, or the remission of such duties or taxes
           in amount not in excess of those which have been accrued, shall not be
           deemed to be a subsidy, provided that such an exemption is granted in
           accordance with the provisions of Annexes I-III to this Regulation;
     (iii) a government provides goods or services other than general infrastructure,
           or purchases goods;
     (iv) a government                                    '   '    -
                  makes payments to a funding mechanism, or
                  entrusts or directs a private body to carry out one or more of the type
                  of functions illustrated in (i) to (iii) above which would normally be
                  vested in the government, and
                                                                                        10
 ---pagebreak---                                                                                      2-1S.
        the practice, in no real sense, differs from practices normally followed by
         governments;
                                        or
   (b) there is any form of income or price support in the sense of Article XVI of
   the GATT 1994,
                                       and
2. a benefit is thereby conferred.
                                                                                  11
 ---pagebreak---                                                                                                2^
                                          Article 3
                               Countervailability of subsidies
                                      A. PRINCIPLE
1. Subsidies as defined by Article-2 shall be subject to countervailing measures only
if they are specific, as defined in Paragraphs 2 to 4 below.
                                     B. SPECIFICITY
2. In order to determine whether a subsidy, as defined in Article 2 above is specific
to an enterprise or industry or group of enterprises or industries (hereinafter referred to
as "certain enterprises") within the jurisdiction of the granting authority, the following
principles shall apply:
       (a)   Where the granting authority, or the legislation pursuant to which the
             granting authority operates, explicitly limits access to a subsidy to certain
             enterprises, such subsidy shall be specific.
       (b)   Where the granting authority, or the legislation pursuant to which the
             granting authority operates, establishes objective criteria or conditions
             governing the eligibility for, and the amount of, a subsidy, specificity shall
             not exist, provided that the eligibility is automatic and that such criteria and
             conditions are strictly adhered to.
             For the purpose of this Article, objective criteria or conditions mean criteria
             or conditions which are neutral, which do not favour certain enterprises over
             others, and which are economic in nature and horizontal in application, such
             as number of employees or size of enterprise.
                                                                                            12
 ---pagebreak---                                                                                              lyi
             The criteria or conditions must be clearly spelled out in law, regulation, or
             other official document, so as to be capable of verification.
       (c)   If, notwithstanding any appearance of non-specificity resulting from the
             application of the principles laid down in subparagraphs (a) and (b) above,
             there are reasons to believe that the subsidy may in fact be specific, other
             factors may be considered. Such factors are: use of a subsidy programme by
             a limited number of certain enterprises, predominant use by certain
             enterprises, the granting of disproportionately large amounts of subsidy to
             certain enterprises, and the manner in which discretion has been exercised
             by the granting authority in the decision to grant a subsidy. In this regard,
             information on the frequency with which applications for a subsidy are
             refused or approved and the reasons for such decisions shall, in particular,
             be considered.
             In applying this provision, account shall be taken of the extent of
             diversification of economic activities within the jurisdiction of the granting
             authority, as well as of the length of time during which the subsidy
             programme has been in operation.
3.     A subsidy which is limited to certain enterprises located within a designated
geographical region within the jurisdiction of the granting authority shall be specific.
The setting or change of generally applicable tax rates by all levels of government
entitled to do so shall not be deemed to be a specific subsidy for the purposes of this
Regulation.
4.     Irrespective of the provisions of paragraphs 2 and 3 above, the following subsidies
shall be deemed to be specific:
       (a)    Subsidies contingent, in law or in fact, whether solely or as one of several
              other conditions, upon export performance, including those illustrated in
              Annex I to this Regulation.
                                                                                          13
 ---pagebreak---                                                                                            l^
            Subsidies shall be considered to be contingent in fact upon export
            performance when the facts demonstrate that the granting of a subsidy,
            without having been made legally contingent upon export performance, is in
            fact tied to actual or anticipated exportation or export earnings. The mere
            fact that a subsidy is accorded to enterprises which export shall not for that
            reason alone be considered to be an export subsidy within the meaning of
            this provision.
      (b)   Subsidies contingent, whether solely or as one of several other conditions,
            upon the use of domestic over imported goods.
5.    Any determination of specificity under the provisions of this Article shall be
clearly substantiated on the basis of positive evidence.
                     C. NON-COUNTERVAILABLE SUBSIDIES
6.    The following subsidies shall not be subjected to countervailing measures:
      (a)   Subsidies which are not specific within the meaning of paragraphs 2 and 3
            of this Article;
      (b)   Subsidies which are specific, within the meaning of paragraphs 2 and 3 of
            this Article, but which meet the conditions provided for in paragraphs 7, 8
            or 9 below.
      (c)   The element of subsidy which may exist in any of the measures listed in
            Annex IV to this Regulation.
                                                                                        14
 ---pagebreak---                                                                                           B^
7.    Subsidies for research activities conducted by firms or by higher education or
research establishments on a contract basis with firms shall not be subject to
countervailing measures, if the subsidies cover not more than 75 per cent of the costs of
industrial research or 50 per cent of the costs of pre-competitive development activity,
and provided that such subsidies are limited exclusively to:
(i)   personnel costs (researchers, technicians and other supporting staff employed
      exclusively in the research activity);
(ii)  costs of instruments, equipment, land and buildings used exclusively and
      permanently (except when disposed of on a commercial basis) for the research
      activity;
(iii) costs of consultancy and equivalent services used exclusively for the research
      activity, including bought-in research, technical knowledge, patents, etc.;
(iv) additional overhead costs incurred directly as a result of the research activity;
(v)   other running costs (such as those of materials, supplies and the like), incurred
      directly as a result of the research activity.
For the purpose of this paragraph:
(a)   The allowable levels of non-countervailable subsidy referred to in this paragraph
      shall be established by reference to the total eligible costs incurred over the
      duration of an individual project.
      In case of programmes which span both "industrial research" and "pre-competitive
      development activity", the allowable level of non-countervailable subsidy shall
      not exceed the simple average of the allowable levels of non-countervailable
      subsidy applicable to the above two categories, calculated on the basis of all
      eligible costs as set forth in items (i)-(v) of this paragraph.
                                                                                       15
 ---pagebreak---                                                                                           XVLl
(b)   The term "industrial research" means planned search or critical investigation
      aimed at discovery of new knowledge, with the objective that such knowledge
      may be useful in developing new products, processes or services, or in bringing
      about a significant improvement to existing products, processes or services.
(c)   The term "pre-competitive development activity" means the translation of
      industrial research findings into a plan, blueprint or design for new, modified or
      improved products, procteEsesH or services whether intended for sale or use,
      including the creation ofm; first prototype which would not be capable of
      commercial use. It may further include the conceptual formulation and design of
      products, processes or services alternatives and initial demonstration or pilot
      projects, provided that these same projects cannot be converted or.used for
      industrial application or commercial exploitation. It does not include routine or
      periodic alterations to existing products, production lines, manufacturing process,
      services, and other on-going operations even though those alterations may
      represent improvements. The provisions of this paragraph shall not apply to civil
      aircraft (as defined in the 1979 Agreement on Trade in Civil Aircraft, as amended,
      or in any later Agreement amending or replacing such Agreement).
8.    Subsidies to disadvantaged regions within the territory of the country of origin
and/or export, given pursuant to a general framework of regional development, and
which would be non-specific if the criteria laid down in paragraphs 2 and 3 of this
Article were applied to each eligible region concerned, shall not be subject to
countervailing measures provided that:
(i)   each disadvantaged region is a clearly designated contiguous geographical area
      with a definable economic and administrative identity;
                                                                                       16
 ---pagebreak---                                                                                             & \
(ii)  the region is considered as disadvantaged on the basis of neutral and objective
      criteria, indicating that the region's difficulties arise out of more than temporary
      circumstances; such criteria must be clearly spelled out in law, regulation, or other
      official document, so as to be capable of verification;
(iii) the criteria include a measurement of economic development which shall be based
      on at least one of the following factors:
             one of either income per capita or hou^iold income per capita, or GDP per
             capita, which must not be above 85 per cent of the average for the territory
             of the country of origin or export concerned;
             unemployment rate, which must be at least 110 per cent of the average for
             the territory of the country of origin or export concerned;
      as measured over a three-year period: such measurement, however, may be a
      composite one and may include other factors.
For the purpose of this paragraph :
(a)   A "general framework of regional development" means that regional subsidy
      programmes are part of an internally consistent and generally applicable regional
      development policy and that regional development subsidies are not granted in
      isolated geographical points having no, or virtually no influence on the
      development of a region.
(b)   "Neutral and objective criteria" means criteria which do not favour certain regions
      beyond what is appropriate for the elimination or reduction of regional disparities
      within the framework of the regional development policy. In this regard, regional
      subsidy programmes shall include ceilings on the amount of subsidy which can be
      granted                                                                            to
                                                                                         17
 ---pagebreak---                                                                                           ïtto
      each subsidised project. Such ceilings must be differentiated according to the
      different levels of development of eligible regions and must be expressed in terms
      of investment costs or the cost of job creation. Within such ceilings, the
      distribution of subsidy shall be sufficiently broad and even to avoid the
      predominant use of a subsidy by, or the granting of disproportionately large
      amounts of subsidy to, certain enterprises. This sub-paragraph shall be applied in
      the light of the criteria set out in paragraphs 2 and 3 of this Article.
9.    Subsidies to promote adaptation of existing facilities to new environmental
requirements imposed by law ancj/or regulations which result in greater constraints and
financial burden on firms, shall not be subject to countervailing measures, provided that
the subsidy:
(i)   is a one-time non-recurring measure; and
(ii)  is limited to 20 per cent of the cost of adaptation; and
(iii) does not cover the cost of replacing and operating the subsidised investment,
      which must be fully borne by firms; and
(iv) is directly linked to and proportionate to a firm's planned reduction of nuisances
      and pollution, and does not cover any manufacturing cost savings which may be
      achieved; and
(v)   is available to all firms which can adopt the new equipment and/or production
      processes.
For the purpose of this paragraph the term "existing facilities" means facilities having
been in operation for at least two years at the time when new environmental
requirements are imposed.
                                                                                       18
 ---pagebreak---                                                                                             13}
                                          Article 4
               Calculation of the amount of the countervailable subsidy
                                     A. PRINCIPLE
1.    The amount of countervailable subsidies, for the purpose of this Regulation, shall
be calculated in terms of the benefit conferred to the recipient which is found to exist
during the investigation period for subsidisation. Normally this period shall be the most
recent accounting year of the beneficiary, but may be any other period of at least six
months prior to the initiation of the investigation for which reliable financial and other
relevant data are available.
              B. CALCULATION OF BENEFIT TO THE RECIPIENT
2.    As regards the calculation of benefit to the recipient, the following rules shall
apply:
       (a)  Government provision of equity capital shall not be considered as conferring
            a benefit, unless the investment can be regarded as inconsistent with the
            usual investment practice (including for the provision of risk capital) of
            private investors in the territory of the country of origin and/or export.
      .(b)  A loan by a government shall not be considered as conferring a benefit,
            unless there is a difference between the amount that the firm receiving the
            loan pays on the government loan and the amount that the firm would pay
            for a comparable commercial loan which the firm could actually obtain on
            the market. In this case the benefit shall be the difference between the two
            amounts.
                                                                                         19
 ---pagebreak---                                                                                          2M
      (c)  A loan guarantee by a government shall not be considered as conferring a
           benefit, unless there is a difference between the amount that the firm
           receiving the guarantee pays on a loan guaranteed by the government and
           the amount that the firm would pay for a comparable commercial loan
           absent the government guarantee. In this case the benefit shall be the
           difference between these two amounts adjusted for any differences in fees.
      (d)  The provision of goods or services or purchases of goods by a government
           shall not be considered as-conferring a benefit unless the provision is made
           for less than adequate remuneration, or the purchase is made for more than
           adequate remuneration. The adequacy of remuneration shall be determined
           in relation to prevailing market conditions for the good or service in
           question in the country of provision or purchase (including price, quality,
           availability, marketability, transportation and other conditions of purchase
           or sale).
                C. GENERAL PROVISIONS ON CALCULATION
3.    The amount of countervailable subsidies shall be determined according to the
following provisions
      (a)  The amount of the countervailable subsidies shall be determined per unit of
           the subsidised product exported to the Community.
      (b)  In establishing this amount the following elements may be deducted from
           the total subsidy:
           (i)    any application fee, or other costs necessarily incurred in order to
                  qualify for, or to obtain, the subsidy;
                                                                                      20
 ---pagebreak---                                                                                      Xà5
    (ii)   export taxes, duties or other charges levied on the export of the
           product to the Community specifically intended to offset the subsidy.
    Where an interested party claims a deduction, it must prove that the claim is
    justified.
(c) Where the subsidy is not granted by reference to the quantities
    manufactured, produced, exported ?or transported, the amount of
     countervailable subsidy shall be determined by allocating the value of the
    total subsidy, as appropriate, over the level of production, sales or exports of
    the products concerned during the investigation period for subsidisation.
(d)  Where the subsidy can be linked to the acquisition or future acquisition of
     fixed assets, the amount of the countervailable subsidy shall be calculated
     by spreading the subsidy across a period which reflects the normal
     depreciation of such assets in the industry concerned. The amount so
     calculated which is attributable to the investigation period, inoiuding that
     which derives from fixed assets acquired before this period, shall be
     allocated as described in sub-paragraph 3(c).
     Where the assets are non-depreciating, the subsidy shall be valued as an
     interest-free loan, and be treated in accordance with paragraph 2(b) of this
     Article.
(e)  Where a subsidy cannot be linked to the acquisition of fixed assets, the
     amount of the benefit received during the investigation period shall in
     principle be attributed to this period, and allocated as described in sub-
     paragraph 3(c), unless special circumstances arise justifying attribution over
     a different period.
                                                                                  21
 ---pagebreak---                                                                                           llfC
                                          Article 5
                                 Determination of Injury
 1.   Under this Regulation, the term "injury" shall, unless otherwise specified, be
taken to mean material injury to the Community industry, threat of material injury to the
Community industry or material retardation of the establishment of such an industry,
and shall be interpreted in accordance with the provisions of this Article.
2.    A determination of injury shall be based on positive evidence and involve an
objective examination of both (a) the volume of the subsidised imports and the effect of
the subsidised imports on prices in the Community market for like products, and (b) the
consequent impact of these imports on the Community industry.
3.    With regard to the volume of the subsidised imports, consideration shall be given
as to whether there has been a significant increase in subsidised imports, either in
absolute-terms or relative to production or consumption in the Community. With regard
to the effect of the subsidised imports on prices, consideration shall be given as to
whether there has been a significant price undercutting by the subsidised imports as
compared with the price of a like product of the Community, or whether the effect of
such imports is otherwise to depress prices to a significant degree or prevent price
increases, which otherwise would have occurred, to a significant degree. No one or
several of these factors can necessarily give decisive guidance.
4.    Where imports of a product from more than one country are simultaneously
subject to countervailing duty investigations, the effects of such imports shall be
cumulatively assessed only if it is determined that (1) the amount of countervailable
subsidies                     established                    in                  relation
                                                                                       22
 ---pagebreak---                                                                                               M
to the imports from each country is more than de minimis as defined in paragraph 3 of
Article 11 and that the volume of imports from each country is not negligible and (2) a
cumulative assessment of the effects of the imports is appropriate in light of the
conditions of competition between imported products and the conditions of competition
between the imported products and the like Community product.
5.      The examination of the impact of the subsidised imports on the Community
industry concerned shall include an evaluation of all relevant economic factors and
indices having a bearing on the state of the industry, including: the fact that an industry
is still in the process of recovering from the effects of past subsidisation or dumping, the
magnitude of the amount of countervailable subsidies, actual and potential decline in
sales, profits, output, market share, productivity, return on investments, utilisation of
capacity; factors affecting Community prices; actual and potential negative effects on
cash flow, inventories, employment, wages, growth, ability to raise capital or
investments and, in the case of agriculture, whether there has been an increased burden
on Government support programmes. This list is not exhaustive, nor can one or several
of these factors necessarily give decisive guidance.
6.      It must be demonstrated, from all the relevant evidence presented in relation to
paragraph 2, that the subsidised imports are causing injury within the meaning of this
Regulation. Specifically, this shall entail a demonstration that the volume and/or price
 levels identified under paragraph 3 are responsible for an impact on the Community
 industry as provided for in paragraph 5, and that this impact exists to a degree which
enables it to be classified as material.
 7.     Known factors other than the subsidised imports which at the same time are
 injuring the Community industry shall also be examined to ensure that injury caused by
 these other factors is not attributed to the subsidised imports under paragraph 6. Factors
 which may be considered in this respect include, inter alia, the volume and prices of
 non-subsidised imports, contraction in demand or changes in the patterns of
 consumption, trade restrictive practices of and competition between the foreign and
 Community producers, developments in technology and the export performance and
 productivity of the Community industry.
                                                                                           23
 ---pagebreak---                                                                                              lip.
8.    The effect of the subsidised imports shall be assessed in relation to the production
of the Community industry of the like product when available data permit the separate
identification of that production on the basis of such criteria as the production process,
producers' sales and profits. If such separate identification of that production is not
possible, the effects of the subsidised imports shall be assessed by the examination of
the production of the narrowest group or range of products, which includes the like
product, for which the necessary information can be provided.
9.    A determination of a threat of material injury shall be based on facts and not
merely on allegation, conjecture or remote possibility. The change in circumstances
which would create a situation in which the subsidy would cause injury must be clearly
foreseen and imminent.
10. In making a determination regarding the existence of a threat of material injury,
consideration should be given to, inter alia, such factors as:
      (i)    the nature of the subsidy or subsidies in question and the trade effects likely
             to arise therefrom;
      (ii)   a significant rate of increase of subsidised imports into the Community
             market indicating the likelihood of substantially increased imports;
      (iii) sufficient freely disposable or an imminent, substantial increase in capacity
             of the exporter indicating the likelihood of substantially increased
             subsidised exports to the Community market, taking into account the
             availability of other export markets to absorb any additional exports;
      (iv) whether imports are entering at prices that would, to a significant degree,
             depress prices or prevent price increases which otherwise would have
             occurred, and would likely increase demand for further imports; and
                                                                                          24
 ---pagebreak---                                                                                          ilfi
      (v)  inventories of the product being investigated.
11. No one of the factors listed above by itself can necessarily give decisive guidance
but the totality of the factors considered must lead to the conclusion that further
subsidised exports are imminent and that, unless protective action is taken, material
injury would occur.
                                                                                      25
 ---pagebreak---                                                                                              2-1,3
                                          Article 6
                            Definition of Community Industry
1.    For the purposes of this Regulation, the term "Community industry" shall be
interpreted as referring to the Community producers as a whole of the like product or to
those of them whose collective output of the products constitutes a major proportion, as
defined in paragraph 8 of Article 7, of the total Community production of those
products, except that
      (i)   when producers are related to the exporters or importers or are themselves
            importers of the allegedly subsidised product, the term "the Community
            industry" may be interpreted as referring to the rest of the producers;
      (ii)  in exceptional circumstances the territory of the Community may, for the
            production in question, be divided into two or more competitive markets
            and the producers within each market may be regarded as a separate
            industry if (a) the producers within such market sell all or almost all of their
            production of the product in question in that market, and (b) the demand in
            that market is not to any substantial degree supplied by producers of the
            product in question located elsewhere in the Community. In such
            circumstances, injury may be found to exist even where a major proportion
            of the total Community industry is not injured, provided there is a
            concentration of subsidised imports into such an isolated market and
            provided further that the subsidised imports are causing injury to the
            producers of all or almost all of the production within such market.
2.    For the purpose of paragraph 1, producers shall be considered to be related to
exporters or importers only if (a) one of them directly or indirectly controls the other; or
(b) both of them are directly or indirectly controlled by a third person; or (c) together
they directly or indirectly control a third person, provided that there are grounds for
believing                                   or                                   suspecting
                                                                                          26
 ---pagebreak---                                                                                             2^
that the effect of the relationship is such as to cause the producer concerned to behave
differently from non-related producers. For the purpose of this paragraph, one shall be
deemed to control another when the former is legally or operationally in a position to
exercise restraint or direction over the latter.
3.     Where the Community industry has been interpreted as referring to the producers
in a certain region, the exporters or the Government granting countervailable subsidies
shall be given an opportunity to offer undertakings pursuant to Article 10 in respect of
the region concerned. If an adequate undertaking is not offered promptly or the
situations set out in paragraphs 9 and 10 of Article 10 apply, a provisional or definitive
countervailing duty may be imposed in respect of the Community as a whole. In such
cases the duties may, if practicable, be limited to specific products or exporters.
4.     The provisions of paragraph 8 of Article 5 shall apply to this Article.
                                                                                         27
 ---pagebreak---                                                                                             2-l/A-
                                         Article 7
                                Initiation of proceedings
1.    Except as provided for in paragraph 10 of this Article, an investigation to
determine the existence, degree and effect of any alleged subsidy shall be initiated upon
a written complaint by any natural or legal person, or any association not having legal
personality, acting on behalf of the Community industry.
      (i)   The complaint may be submitted to the Commission, or a Member State,
            which shall forward it to the Commission. The Commission shall send
            Member States a copy of any complaint it receives. The complaint shall be
            deemed to have been lodged on the first working day following its delivery
            to the Commission by registered mail or the issuing of an acknowledgement
            of receipt by the Commission.
      (ii)  Where, in the absence of any complaint, a Member State is in possession of
            sufficient evidence of subsidisation and of injury resulting therefrom for the
            Community industry, it shall immediately communicate such evidence to
            the Commission.
2.    A complaint under paragraph 1 shall include sufficient evidence of the existence
of countervailable subsidies (including, if possible, of their amount), injury and a causal
link between the allegedly subsidised imports and the alleged injury. The complaint
shall contain such information as is reasonably available to the complainant on the
following:
      (i)   identity of the complainant and a description of the volume and value of the
            Community production of the like product by the complainant. Where a
            written complaint is made on behalf of the Community industry, the
            complaint shall identify the industry on behalf of which the complaint is
            made              by             a             list            of           all
                                                                                         28
 ---pagebreak---                                                                                             m,
            known Community producers of the like product (or associations of
            Community producers of the like product) and, to the extent possible, a
            description of the volume and value of Community production of the like
            product accounted for by such producers;
     (ii)   a complete description of the allegedly subsidised product, the names of the
            country or countries of origin and/or export in question, the identity of each
            known exporter or foreign producer and a list of known persons importing
            the product in question;
      (iii) evidence with regard to the existence, amount, nature and countervailability
            of the subsidies in question;
      (iv) information on the evolution of the volume of the allegedly subsidised
            imports, the effect of these imports on prices of the like product in the
            Community market and the consequent impact of the imports on the
            Community industry, as demonstrated by relevant factors and indices
            having a bearing on the state of the Community industry, such as those
            listed in paragraphs 3 and 5 of Article 5.
3.    The Commission shall, to the degree possible, examine the accuracy and adequacy
of the evidence provided in the complaint to determine whether there is sufficient
evidence to justify the initiation of an investigation.
4.    An investigation may be initiated in order to determine whether or not the alleged
subsidies are specific within the meaning of paragraphs 2 and 3 of Article 3 of this
Regulation.
5.    An investigation may also be initiated in respect of subsidies non-countervailable
according to paragraphs 7, 8 or 9 of Article 3 in order to determine whether or not the
conditions laid down in those paragraphs have been met.
                                                                                         29
 ---pagebreak---                                                                                            Ll<>
6.    If a subsidy is granted pursuant to a subsidy programme which has been notified
in advance of its implementation to the WTO Committee on Subsidies and
Countervailing Measures in accordance with the provisions of Article 8 of the Subsidies
Agreement, and in respect of which the Committee has failed to determine that the
relevant conditions laid down in Article 8 of the Subsidies Agreement have not been
met, an investigation shall not be initiated in respect of a subsidy granted pursuant to
such a programme, unless a violation of Article 8 of the Subsidies Agreement has been
ascertained by the competent WTO Dispute Settlement Body or through arbitration as
provided in paragraph 5 of Article 8 of the Subsidies Agreement.
7.    An investigation may also be initiated in respect of measures of the type listed in
Annex IV to this Regulation, to the extent that they contain an element of subsidy as
defined by Article 2, in order to determine whether the measures in question fully
conform to the provisions of Annex IV.
8.    An investigation shall not be initiated pursuant to paragraph 1 unless it has been
determined, on the basis of an examination of the degree of support for, or opposition
to, the complaint expressed by Community producers of the like product, that the
complaint has been made by or on behalf of the Community industry. The complaint
shall be considered to have been made "by or on behalf of the Community industry" if it
is supported by those Community producers whose collective output constitutes more
than 50 per cent of the total production of the like product produced by that portion of
the Community industry expressing either support for or opposition to the complaint.
However, no investigation shall be initiated when Community producers expressly
supporting the complaint account for less than 25 per cent of total production of the like
product produced by the Community industry.
                                                                                        30
 ---pagebreak---                                                                                             ^u
9.     The Commission shall avoid, unless a decision has been made to initiate an
investigation, any publicising of the complaint for the initiation of an investigation.
However, as soon as possible after the receipt of a properly documented complaint
under this Article, and in any event before the initiation of an investigation, the
Commission shall notify the Government of the country of origin and/or export
concerned, and this Government shall be invited for consultations with the aim of
clarifying the situation as to matters referred to in Paragraph 2 above and arriving at a
mutually agreed solution.
 10. If in special circumstances, the Commission decides to initiate an investigation
without having received a written complaint by or on behalf of the Community industry
for the initiation of such investigation, this shall be done on the basis of sufficient
evidence of the existence of countervailable subsidies, injury and causal link, as
described in paragraph 2, to justify the initiation of an investigation.
 11. The evidence of both subsidies and injury shall be considered simultaneously in
the decision whether or not to initiate an investigation. A complaint shall be rejected
where there is insufficient evidence of either countervailable subsidies or of injury to
justify proceeding with the case.
 12. The complaint may be withdrawn prior to initiation, in which case it shall be
considered not have been lodged.
 13. Where, after consultation, it is apparent that there is sufficient evidence to justify
initiating proceedings the Commission shall initiate proceedings within one month of
the lodging of the complaint and publish a notice in the Official Journal of the
European Communities. Where insufficient evidence has been presented, the
complainant shall, after consultation, be so informed within one month of the date on
which the complaint is lodged with the Commission.
                                                                                         31
 ---pagebreak---                                                                                            2l<5
14. The notice of initiation of the proceeding shall announce the initiation of an
investigation, indicate the product and countries concerned, give a summary of the
information received and provide that all relevant information is to be communicated to
the Commission; it shall state the periods within which interested parties may make
themselves known, present their views in writing and submit information, if such views
and information are to be taken into account during the investigation; it shall also state
the period within which interested parties may apply to be heard by the Commission in
accordance with paragraph 5 of Article 8.
15. The Commission shall advise the exporters and importers known to it to be
concerned, as well as the Government of the country of origin and/or export and the
complainants, of the initiation of the proceedings and, with due regard to the protection
of confidential information, provide the full text of the written complaint received under
paragraph 1 to the known exporters, and to the authorities of the country of origin
and/or export, and make it available, upon request, to other interested parties involved.
Where the number of exporters involved is particularly high, the full text of the written
complaint should instead be prov»8©# $nly to the authorities of the country of origin
and/or export or to the relevant tradeassociation.
16. A countervailing duty investigation shall not hinder the procedures of customs
clearance.
                                                                                        32
 ---pagebreak---                                                                                             ^yi
                                          Article 8
                     The investigation: information and procedure
1.     Following the initiation of the proceedings, the Commission, acting in co-
operation with the Member States, shall commence an investigation at Community
level. Such investigation shall cover both subsidisation and injury and these shall be
investigated simultaneously. For the purpose of a representative finding, an
investigation period shall be selected which, in the case of subsidisation, shall normally
cover the investigation period provided for in paragraph 1 of Article 4. Information
relating to a period subsequent to the investigation period shall, normally, not be taken
into account.
2.     Parties receiving questionnaires used in a countervailing duty investigation shall
be given at least thirty days for reply. The time4imit for exporters shall be counted from
the date of receipt of the questionnaire, which for this purpose shall be deemed to have
been received one week from the day on^whâfflai it was sent to the respondent or
transmitted to the appropriate diplomatic representative of the country of origin and/or
export. An extension to the thirty day period may be granted, taking due account of the
time limits of the investigation and provided the party gives a good reason, in terms of
its particular circumstances, for such extension.
3.     The Commission may request Member States to supply information, and Member
States shall take whatever steps are necessary in order to give effect to such requests.
They shall send to the Commission the information requested together with the results
of all inspections, checks or investigations carried out. Where this information is of
general interest or where its transmission has been requested by a Member State, the
Commission shall forward it to the Member States, provided it is not confidential, in
which case a non-confidential summary shall be forwarded.
                                                                                         33
 ---pagebreak---                                                                                            3S1
4.     The Commission may request Member States to carry out all necessary checks
and inspections, particularly amongst importers, traders and Community producers, and
to carry out investigations in third countries, provided the firms concerned give their
consent and the government of the country in question has been officially notified and
raises no objection. Member States shall take whatever steps are necessary in order to
give effect to such requests from the Commission. Officials of the Commission shall be
authorised, if the Commission or a Member State so requests, to assist the officials of
Member States in carrying out their duties.
5.     The interested parties, which have made themselves known in accordance with
paragraph 14 of Article 7, may be heard if they have, within the period prescribed in the
notice published in the Official Journal of the European Communities, made a written
request for a hearing showing that they are an interested party likely to be affected by
the result of the proceedings and that there are particular reasons why they should be
heard.
6.     Opportunities shall, on request, be provided for the importers, exporters and the
complainants, which have made themselves known in accordance with paragraph 14 of
Article 7, and the Government of the country of origin and/or export, to meet those
parties with adverse interests, so that opposing views may be presented and rebuttal
arguments offered. Provision of such opportunities must take account of the need to
preserve confidentiality and of the convenience to the parties. There shall be no
obligation on any party to attend a meeting, and failure to do so shall not be prejudicial
to that party's case. Oral information provided under this Paragraph shall be taken into
account by the Commission in so far as it is subsequently reproduced in writing.
7.     The complainants, the Government of the country of origin and/or export,
importers, exporters, users and consumer organisations, which have made themselves
known in accordance with paragraph 14 of Article 7, may, upon written request, inspect
all information made available to the Commission by any party to an investigation, as
distinct                                  from                                    internal
                                                                                        34
 ---pagebreak---                                                                                             ^>ï
documents prepared by the authorities of the Community or its Member States,
provided that it is relevant to the defence of their interests and not confidential within
the meaning of Article 20, and that it is used in the investigation. Such parties may
respond to such information and their comments may be taken into consideration, to the
extent that they are sufficiently substantiated in the response.
8.    Except in circumstances provided for in Article 19, the information supplied by
interested parties and upon which findings are based, shall be examined for accuracy to
the degree possible.
9.    Investigations shall, except in special circumstances, be concluded within one
year, and in no case more than 18 months, after their initiation.
 10. Throughout the investigation, the Commission shall afford the Government of the
country of origin and/or export a reasonable opportunity to continue consultations, with
a view to clarifying the factual situation and arriving at a mutually agreed solution.
                                                                                         35
 ---pagebreak---                                                                                             2i"i
                                         Article 9
                                   Provisional measures
 1.    Provisional measures may be applied if proceedings have been initiated in
 accordance with the provisions of Article 7, a public notice has been given to that effect
and interested parties have been given adequate opportunities to submit information and
make comments in accordance with paragraph 14 of Article 7, a provisional affirmative
determination has been made that the imported product benefits from countervailable
subsidies and of consequent injury to the Community industry, and the Community
interest calls for intervention to prevent such injury. The provisional measures shall be
imposed no sooner than 60 days from the initiation of the proceedings but no later than
nine months from the initiation of the proceedings.
2.    The amount of the provisional countervailing duty shall not exceed the total
amount of countervailable subsidies as provisionally established but it should be less
than this amount, if such lesser duty would be adequate to remove the injury to the
Community industry.
3.    Provisional measures shall take the form of a security and the release of the
products concerned for free circulation in the Community shall be conditional upon the
provision of such security.
4.    The Commission shall take provisional action after consultation or, in cases of
extreme urgency, after informing the Member States. In this latter case, consultations
shall take place 10 days, at the latest, after notification to the Member States of the
action taken by the Commission.
5.    Where à Member State requests immediate intervention by the Commission and
the conditions of paragraph 1 of Article 9 are met, the Commission shall, within a
maximum of five working days of receipt of the request, decide whether a provisional
countervailing duty should be imposed.
                                                                                         36
 ---pagebreak---                                                                                           ^
6.    The Commission shall forthwith inform the Council and the Member States of any
decision taken under this Article. The Council, acting by qualified majority, may decide
differently.
7.     Provisional countervailing duties shall have a maximum period of validity of four
months.
                                               ,iJOW y'JiJ
                                                                                       37
 ---pagebreak---                                                                                             2sr
                                        Article 10
                                      Undertakings
 1.   Investigations may be terminated! without the imposition of provisional or
definitive duties upon acceptance of satisfactory voluntary undertakings under which
      (i)   the Government of the country of origin and/or export agrees to eliminate or
            limit the subsidy or take other measures concerning its effects; or
      (ii)  any exporter undertakes to revise its prices or to cease exports to the area in
            question as long as such exports benefit from countervailable subsidies, so
            that the Commission, after consultation, is satisfied that the injurious effect
            of the subsidies is eliminated. Price increases under such undertakings shall
            not be higher than necessary to offset the amount of countervailable
            subsidies, and should be less than the amount of countervailable subsidies if
            such increases would be adequate to remove the injury to the Community
            industry.
2.    Undertakings may be suggested by the Commission, but no Government or
exporter shall be obliged to enter into such an undertaking. The fact that Governments
or exporters do not offer such undertakings, or do not accept an invitation to do so, shall
in no way prejudice the consideration of the case. However, it may be determined that a
threat of injury is more likely to be realised if the subsidised imports continue.
Undertakings shall not be sought or accepted from Governments or exporters unless a
provisional affirmative determination of subsidisation and injury caused by such
subsidisation has been made. Save in exceptional circumstances, undertakings may not
be offered later than the end of the period during which representations may be made
under Paragraph 5 of Article 21.
                                                                                         38
 ---pagebreak---                                                                                              ls(j
3.    Undertakings offered need not be accepted if their acceptance is considered
impractical, for example, if the number of actual or potential exporters is too great, or
for other reasons, including reasons of general policy. The exporter and/or the
Government of the country of origin and/or export concerned may be provided with the
basis on which it is intended to propose the rejection of the offer of an undertaking and
may be given an opportunity to make comments thereon. The reasons for rejection shall
be set out in the definitive decision.
4.     Parties which offer an undertaking shall be required to provide a non-confidential
version of such undertaking, so that it may be made available to interested parties to the
investigation.
5.     Where undertakings are, after consultation, accepted, and there is no objection
raised within the Advisory Committee, the investigation shall be terminated. In all other
cases, the Commission shall submit to the Council forthwith a report on the results of
the consultation, together with a proposal that the proceedings be terminated. The
proceedings shall stand terminated if, within one month, the Council, acting by qualified
majority, has not decided otherwise.
6.     If the undertakings are accepted, the investigation of subsidisation and injury shall
normally be completed. In such a case, if a negative determination of subsidisation or
injury is made, the undertaking shall automatically lapse except in cases where such a
determination is due in large part to the existence of an undertaking. In such cases, the
authorities may require that an undertaking be maintained for a reasonable period. In
the event that an affirmative determination of subsidisation and injury is made, the
undertaking shall continue consistent with its terms and the provisions of this
Regulation.
7.     The Commission shall require any Government or exporter from whom
undertakings have been accepted to provide, periodically, information relevant to the
fulfilment of such undertaking, and to permit verification of pertinent data. Non-
compliance with such requirements shall be construed as a violation of the undertaking.
                                                                                          39
 ---pagebreak---                                                                                             <ZÏ\
8.    Where undertakings are accepted from certain exporters during the course of an
investigation, they shall, for the purpose of Article 13, deemed to take effect from the
date on which the investigation is concluded for the country of origin and/or export.
9.    In case of violation or withdrawal of undertakings by any party , a definitive duty
shall be imposed in accordance with Article 11, on the basis of the facts established
within the context of the investigation which led to the undertaking, provided that such
investigation was concluded with a final determination on subsidisation and injury, and
the exporter concerned, or the Government of the country of origin and/or export,
except in the case of withdrawal of undertakings by the exporter or such Government,
has been given an opportunity to comment.
10. A provisional duty may, after consultation, be imposed in accordance with Article
9 on the basis of the best information available, where there is reason to believe that an
undertaking is being violated, or in case of violation or withdrawal of undertakings
where the investigation which led to the undertaking was not concluded.
                                                                                         40
 ---pagebreak---                                                                                               a il
                                          Article 11
          Termination without measures and imposition of definitive duties
1. Where the complaint is be withdrawn, proceedings may be terminated unless such
termination would not be in the Community interest.
2.     Where, after consultation, protective measures are unnecessary and there is no
objection raised within the Advisory Committee, the investigation or proceedings shall be
terminated. In all other cases, the Commission shall submit to the Council forthwith a
report on the results of the consultation, together with a proposal that the proceedings be
terminated. The proceedings shall stand terminated if, within one month, the Council,
acting by a qualified majority, has not decided otherwise.
 3.    Subject to and in accordance with the provisions of paragraphs 4 and 5 below,
there shall be immediate termination of the proceedings where it is determined that the
 amount of countervailable subsidies is de minimis, or where the volume of subsidised
 imports, actual or potential, or the injury, is negligible.
 4.    With regard to investigations concerning imports from developing countries, the
 volume of subsidised imports shall be considered negligible if it represents less than 4 per
 cent of the total imports of the like product in the Community, unless imports from
 developing countries whose individual shares of total imports represent less than 4 per
 cent collectively account for more than 9 per cent of the total imports of the like product
 in the Community.
                                                                                           41
 ---pagebreak---                                                                                            &3
5.    For the same investigations, the amount of the countervailable subsidies shall be
considered to be de minimis if such amount is less than 1 per cent ad valorem, except
that
      (a)   as regards investigations concerning imports from developing countries the
            de minimis threshold shall be 2% ad valorem; and
      (b)   for those developing countries Members of the WTO referred to in Annex
            VII of the Subsidies Agreement as well as for developing countries
            Members of the WTO which have completely eliminated export subsidies as
            defined in paragraph 4(a) of Article 3 of this Regulation, the de minimis
            subsidy threshold shall be 3 per cent ad valorem; where the application of
            this provision depends on the elimination of export subsidies, it shall apply
            from the date that the elimination of export subsidies is notified to the WTO
            Committee on Subsidies and Countervailing Measures, and for so long as
            export subsidies are not granted by the developing country concerned; this
            provision shall expire eight years from the date of entry into force of the
            WTO Agreement;
provided that it is only the investigation that shall be terminated where the amount of
the countervailable subsidies is below the relevant de minimis level for individual
exporters and they shall remain subject to the proceedings and may be re-investigated in
any subsequent review carried out for the country concerned under Article 13.
6.    Where the facts as finally established show the existence of countervailable
subsidies and injury caused thereby, and the Community interest calls for intervention
in accordance with Article 22, a definitive countervailing duty shall be imposed by the
Council, acting by simple majority on a proposal submitted by the Commission after
consultation of the Advisory Committee, unless the subsidy or subsidies are withdrawn
or it has been demonstrated that the subsidies no longer confer any benefit to the
exporters involved. Where provisional duties are in force, a proposal for definitive
action shall be submitted to the Council not later than one month before the expiry of
such duties. The amount of the countervailing duty shall not exceed the amount of
countervailable subsidies from which the exporters have been found to benefit,
established under this Regulation, but should be less than the total amount of
countervailable subsidies, if such lesser duty would be adequate to remove the injury to
the Community industry.
                                                                                        42
 ---pagebreak---                                                                                             •2&L
7.    A countervailing duty shall be imposed in the appropriate amounts in each case,
on a non-discriminatory basis, on imports of a product from all sources found to benefit
from countervailable subsidies and causing injury, except as to imports from those
sources from which undertakings under the terms of this Regulation have been accepted.
The Regulation shall specify the duty for each supplier, or, if that is impracticable, the
supplying country concerned.
8.    When the Commission has limited its examination in accordance with Article 18,
any countervailing duty applied to imports from exporters or producers which have
made themselves known in accordance with Article 18 but were not included in the
examination shall not exceed the weighted average amount of countervailable subsidies
established for the parties in the sample. For the purpose of this paragraph, the
Commission shall disregard any zero and de minimis amounts of countervailable
subsidies, and amounts of countervailable subsidies established under the circumstances
referred to in Article 19. The authorities shall apply individual duties to imports from
any exporter or producer which is granted individual treatment, as provided for in
Article 18.
                                                                                         43
 ---pagebreak---                                                                                               %à-
                                          Article 12
                                        Retroactivity
 1.    Provisional measures and definitive countervailing duties shall only be applied to
products which enter for consumption after the time when the decision taken under
Paragraph 1 of Article 9 and Paragraph 7 of Article 11, respectively, enters into force,
subject to the exceptions set out in this Regulation.
2.     Where a provisional duty has been applied and the facts as finally established
show the existence of countervailable subsidies and injury, the Council shall decide,
irrespective of whether a definitive countervailing duty is to be imposed, what
proportion of the provisional duty is to be definitively collected. For this purpose,
'injury' shall not include material retardation of the establishment of a Community
industry, nor threat of material injury, except where it is found that this would, in the
absence of provisional measures, have developed into material injury. In all other cases
involving such threat or retardation, any provisional amounts shall be released and
definitive duties can only be imposed from the date that a final determination of threat
or material retardation is made.
3.     If the definitive countervailing duty is higher than the provisional duty, the
difference shall not be collected. If the definitive duty is lower than the provisional duty,
the duty shall be recalculated. Where a final deterrnination is negative, the provisional
duty shall not be confirmed.
                                                                                          44
 ---pagebreak---                                                                                            JJe'cà/
4.    A definitive countervailing duty may be levied on products which were entered
for consumption not more than 90 days prior to the date of application of provisional
measures but not prior to the initiation of the investigation, provided that the imports
have been registered in accordance with paragraph 5 of Article 15, the importers
concerned have been given an opportunity to comment by the Commission, and that it is
found that:
      (i)   there exist critical circumstances where for the subsidised product in
            question injury which is difficult to repair is caused by massive imports in a
            relatively short period of a product benefiting from countervailable
            subsidies under the terms of this Regulation; and,
      (ii)   where it is deemed necessary, in order to preclude the recurrence of such
            .injury, to assess countervailing duties retroactively on those imports.
5.    In cases of violation or withdrawal of undertakings, definitive duties may be
levied in accordance with this Regulation on goods entered for consumption not more
than ninety days before the application of provisional measures, provided than the
imports have been registered in accordance with paragraph 5 of Article 15, and that any
such retroactive assessment shall not apply to imports entered before the violation or
withdrawal of the undertaking.
                                                                                        45
 ---pagebreak---                                                                                            %-b
                                         Article 13
                               Duration, reviews and refunds
1. A countervailing measure shall remain in force only as long as and to the extent
necessary to counteract the countervailable subsidies which are causing injury.
A.     Expiry reviews
2.     A definitive countervailing measure shall expire five years from its imposition or
five years from the date of the most recent review which has covered both subsidisation
and injury, unless it is determined in a review that the expiry would be likely to lead to
continuation or recurrence of subsidisation and injury. Such an expiry review shall be
initiated on the initiative of the Commission, or upon a request made by or on behalf of
the Community producers and the measure shall remain in force pending the outcome of
such review.
3.     An expiry review shall by initiated where the request contains sufficient evidence
that the removal of measures would be likely to result in a continuation or recurrence of
subsidisation and injury. Such a likelihood may, for example, be indicated by evidence
of continued subsidisation and injury or evidence that the removal of injury is partly or
solely due to the existence of measures or evidence that the circumstances of the
exporters, or market conditions, are such that they would indicate the likelihood of
further injurious subsidisation.
4.     In carrying out investigations under this section, the exporters, importers, the
Government of the country of origin and/or export and the complainants shall be
provided with* the opportunity to amplify, rebut or comment on the matters set out in the
review request and conclusions shall be reached with due account taken of all relevant
and duly supported evidence presented in relation to the question of whether the
removal of measures would be likely, or unlikely, to lead to the continuation or
recurrence of subsidisation and injury.
                                                                                        46
 ---pagebreak---                                                                                            >u
5.    Under this section, a notice of impending expiry shall be published in the Official
Journal of the European Communities at an appropriate time as defined in this
paragraph in the final year of the period of application of the measures. Thereafter, the
Community producers shall, no later than three months before the end of the five year
period, be entitled to lodge a review request in accordance with paragraph 3. A notice
announcing the actual expiry of measures under this section shall also be published.
B.     Interim reviews
6.     The need for the continued imposition of measures may also be reviewed, where
warranted on the initiative of the Commission or at the request of a Member State or,
provided that a reasonable period of time of at least 1 year has elapsed since the
imposition of the definitive measure, upon a request by any exporter, importer or the
Community producers or the Government of the country of origin and/or export which
contains sufficient evidence substantiating the need for such an interim review.
7.     An interim review shall be initiated where the request contains sufficient evidence
that the continued imposition of the measure is no longer necessary to offset the
countervailable subsidy and/or the injury would be unlikely to continue or recur if the
measure were removed or varied, or that the existing measure is not, or is no longer,
sufficient to counteract the countervailable subsidy which is causing injury.
8.     Where countervailing duties have been imposed in accordance with paragraph 7 of
Article 11, an interim review shall be initiated if the Community producers provide
sufficient evidence that the duties have led to no movement or insufficient movement of
resale prices of the imported product in the Community. If the investigation proves the
allegations to be correct, countervailing duties may be increased to achieve the price
increase required to remove injury, although the increased duty level shall not exceed
the amount of the countervailable subsidies.
                                                                                        47
 ---pagebreak---                                                                                             2Jtf
9.    In carrying out investigations under this section, the Commission may, inter alia,
consider whether the circumstances with regard to subsidisation and injury have
changed significantly, or whether existing measures are achieving the intended results in
removing the injury previously established in accordance with Article 5 of this
Regulation. In these respects, account shall be taken of all relevant and duly supported
evidence in the final determination.
C.    Accelerated reviews
10. Any exporter whose exports are subject to a definitive countervailing duty but
who was not individually investigated during the original investigation for reasons other
than a refusal to co-operate with the Commission, shall be entitled, upon request, to an
accelerated review in order that the Commission promptly establish an individual
countervailing duty rate for that exporter.       Such a review shall be initiated after
consultation of the Advisory Committee and Community producers have been given an
opportunity to comment.
D.    General provisions on reviews
11. The relevant provisions of Article 7 and Article 8, excluding those relating to time
limits, shall apply to any review carried out under sections A, B and C of this Article.
Any such review shall be carried out expeditiously and shall normally be concluded
within twelve months of the date of initiation of the review.
12. Reviews under this Article shall be initiated by the Commission after consultation
of the Advisory Committee. Where warranted by reviews, measures shall be repealed or
maintained under section A, or repealed, maintained or amended under sections B and
C, by the Community institution responsible for their introduction. Where measures are
repealed for individual exporters, but not for the country as a whole, such exporters
shall remain subject to the proceedings and may be re-investigated in any subsequent
review carried out for that country under this Article.
                                                                                         48
 ---pagebreak---                                                                                           <3k>G
13. Where a review of measures under section B is in progress at the end of the period
of application of measures as defined in section A, the measures shall also be
investigated under the provisions of section A.
E.     Refunds
14. Notwithstanding section A, an importer may request reimbursement of duties
collected where it is shown that the amount of countervailable subsidies, on the basis of
which duties were paid, has been eliminated, or reduced to a level which is below the
level of the duty in force.
15. In order to request a refund of countervailing duties, the importer shall submit an
application to the Commission. The application shall be submitted via the Member State
in the territory of which the products were released for free circulation and within six
months of the date on which the amount of the definitive duties to be levied was duly
determined by the competent authorities or of the date on which a decision was made
definitively to collect the amounts secured by way of provisional duty. Member States
shall forward the request to the Commission forthwith.
16. An application for refund shall only be considered to be duly supported by
evidence where it contains precise information on the amount of refund of
countervailing duties claimed and all customs documentation relating to the calculation
and payment of such amount. It shall also include evidence, for a representative period,
on the amount of countervailable subsidies for the exporter or producer to which the
duty applies. In cases where the importer is not associated to the exporter or producer
concerned                                     and                                   such
                                                                                       49
 ---pagebreak---                                                                                            XG^
information is not immediately available or the exporter or producer is unwilling to
release it to the importer, the application shall contain a statement from the exporter or
producer that the amount of countervailable subsidies has been reduced or eliminated, as
specified in this Article, and that the relevant supporting evidence shall be provided to
the Commission. It shall be understood that where such evidence is not forthcoming
from the exporter or producer, within a reasonable period of time, the application shall
be rejected.
 17. The Commission shall, after consultation of the Advisory Committee, decide
whether and to what extent the application should be granted or it may decide at any
time to initiate an interim review and the information and findings from such review,
carried out in accordance with the provisions applicable for such reviews, shall be used
to determine whether and to what extent a refund is justified. Refunds of duties shall
normally take place within 12 months, and in no case more than 18 months after the
date on which a request for a refund, duly supported by evidence, has been made by an
importer of the product subject to the countervailing duty. The payment of any refund
authorised should normally be made by Member States within 90 days of the above-
noted decision.
F.    Final provision
 18. In all review or refund investigations carried out under this Article, the
Commission shall apply, in so far as circumstances have not changed, the same
methodology as in the investigation which led to the duty, with due account taken of the
provisions set out in Article 4 and Article 18 of this Regulation.
                                                                                        50
 ---pagebreak---                                                                                                OfoS
                                           Article 14
                                        Circumvention
 1.    Countervailing duties imposed under this Regulation may be extended to apply to
imports from third countries of like products, or parts thereof, when circumvention of
the measures in force is taking place. Circumvention shall be defined as a change in the
pattern of trade between third countries and the Community which stems from a
practice, process or work for which there is insufficient due cause or economic
justification, other than the imposition of the duty, and there is evidence that the
remedial effects of the duty are being undermined, in terms of the prices and/or
quantities of the assembled like product, and the imported like product and/or parts
thereof still benefit from the subsidy.
2.      Investigations shall be initiated under this Article where the request contains
 sufficient evidence on the factors set out in paragraph 1. Initiations shall be made, after
 consultation of the Advisory Committee, by Commission Regulation which shall also
 instruct the customs authorities to make imports subject to registration in accordance
 with Paragraph 5 of Article 15 or request guarantees.. Investigations shall be carried out
 by the Commission, which may be assisted by customs authorities, and shall be
 concluded within nine months. When the facts, as finally ascertained, justify the
 extension of measures, this shall be done by the Council, acting by simple majority and
 on a proposal from the Commission, from the date that registration was imposed under
 Paragraph 5 of Article 15 or guarantees were requested. The relevant procedural
 provisions of this Regulation with regard to initiations and the conduct of investigations
 shall apply under this Article.
 3.     Products shall not be subject to registration under Paragraph 5 of Article 15 or
 measures where they are accompanied by a customs certificate declaring that the
 importation of the goods does not constitute circumvention. These certificates may be
 issued to importers, upon written application, by the authorities following authorisation
 by a decision of the Commission after consultation of the Advisory Committee or the
 decision of the Council imposing measures and they shall remain valid for the period,
  and under the conditions, set down therein.
                                                                                            51
 ---pagebreak---                                                                                           Ate
4.    Nothing in this Article shall preclude the normal application of the provisions in
force concerning customs duties.
                                                                                       52
 ---pagebreak---                                                                                           •A
                                        Article 15
                                   General provisions
1.    Provisional or definitive countervailing duties shall be imposed by Regulation,
and collected by Member States in the form, at the rate specified and according to the
other criteria laid down in the Regulation imposing such duties. Such duties shall also
be collected independently of the customs duties, taxes and other charges normally
imposed on imports. No product shall be subject to both anti-dumping and
countervailing duties to compensate for the same situation arising from dumping or
export subsidisation.
2.    Regulations imposing provisional or definitive countervailing duties, or
Regulations or Decisions accepting undertakings or terminating investigations or
proceedings, shall be published in the Official Journal of the European Communities.
Such Regulations or Decisions shall contain, in particular, and with due regard to the
protection of confidential information the names of the exporters, if practical, or
countries involved, a description of the product and a summary the facts and
considerations relevant to the countervailable subsidies and injury determinations. In
each case, a copy of the Regulation or Decision shall be sent to known interested
parties. The provisions of this paragraph shall apply mutatis mutandis to reviews.
3.     Special provisions, in particular with regard to the common definition of the
concept of origin, as contained in Council Regulation (EEC) No 2913/92 of 12 October
 1992, may be adopted in, or under, this Regulation.
 4.    In the Community interest, measures imposed under this Regulation may, after
 consultation of the Advisory Committee, be suspended by a decision of the Commission
 for a period of up to one year because of a change in market conditions in the
 Community                                                                         which
                                                                                       53
 ---pagebreak---                                                                                             •*u
makes the application of such measures temporarily inappropriate, provided that the
Community industry has been given an opportunity to comment. The suspension may
be extended for a further period if the Council so decides, by simple majority, on a
proposal from the Commission. Measures may, at any time and after consultation, be re-
instated if the reason for suspension is no longer applicable.
5.     The Commission may, after consultation of the Advisory Committee, direct the
customs authorities to take the appropriate steps to register imports, so that measures
may subsequently be applied against these imports from the date of such registration.
Imports may be made subject to registration following a request from the Community
industry which contains sufficient evidence to justify such action. Registration shall be
introduced by Regulation which shall specify the purpose of the action and, if
appropriate, the estimated amount of possible future liability. Imports may not be made
subject to registration for a period longer than nine months.
6.     Member States shall report to the Commission, on a monthly basis, the import
trade of products subject to investigation and subject to measures, and the amount of
duties collected under this Regulation.
                                                                                         54
 ---pagebreak---                                                                                           k\b
                                         Article 16
                                      Consultations
1.    Any consultations provided for in this Regulation shall take place within an
Advisory Committee, which shall consist of representatives of each Member State, with
a representative of the Commission as chairman. Consultations shall be held
immediately on request by a Member State or on the initiative of the Commission, and
in any event within a time frame which allows the time limits set by this Regulation to
be respected.
2.    The Committee shall meet when convened by its chairman. He shall provide the
Member States, as promptly as possible, with all relevant information.
3.    Where necessary, consultation may be in writing only; in such case the
Commission shall notify the Member States and shall specify a period within which
they shall be entitled to express their opinions or to request an oral consultation, which
the chairman shall arrange, provided that such oral consultation can be held within a
time frame which allows the time limits set by this Regulation to be respected.
4.    Consultation shall in particular cover:
      (i)   the existence of countervailable subsidies and the methods of establishing
            their amount;
      (ii)  the existence and extent of injury;
                                                                                         55
 ---pagebreak---                                                                                 J.}*
(iii) the causal link between the subsidised or dumped imports and injury;
(iv) the measures which, in the circumstances, are appropriate to prevent or
      remedy the injury caused by the countervailable subsidies or the dumping
      and the ways and means for putting such measures into effect.
                                                                             56
 ---pagebreak---                                                                                              ^
                                          Article 17
                                      Verification visits
1.     The Commission shall, where it considers it appropriate, carry out visits to
examine the records of importers, exporters, traders, agents, producers, trade
associations and organisations, to verify information provided on subsidisation and
injury. In the absence of a proper and timely reply, a verification visit may not be
carried out.
2.     The Commission may carry out investigations in third countries as required,
provided it obtains the agreement of the firms concerned, it notifies the representatives
of the government of the country in question and the latter does not object to the
investigation. As soon as the agreement of the firms concerned has been obtained the
Commission should notify the authorities of the country of origin and/or export of the
names and addresses of the firms to be visited and the dates agreed.
3.     The firms concerned shall be advised on the nature of the information to be
verified during verification visits and of any further information which needs to be
provided during such visits, though this should not preclude requests to be made during
the verification for further details to be provided in the light of information obtained.
4.     In investigations carried out under this paragraph, the Commission shall be
assisted by officials of those Member States who so request.
                                                                                          57
 ---pagebreak---                                                                                             2qS
                                         Article 18
                                         Sampling
1.    In cases where the number of complainants, exporters or importers, types of
product or transactions is large, the investigation may be limited to a reasonable number
of parties, products or transactions by using samples which are statistically valid on the
basis of information available to it at the time of the selection, or to the largest
representative volume of the production, sales or exports which can reasonably be
investigated within the time limit available.
2.    The final selection of parties, types of products or transactions made under these
sampling provisions shall rest with the Commission, though preference shall be given to
choosing a sample in consultation with, and with the consent of, the parties concerned,
provided such parties make themselves known and make sufficient information
available, within three weeks of initiation, to enable a representative sample to be
chosen.
3.    In cases where the examination has been limited in accordance with this Article,
an individual amount of countervailable subsidisation shall, nevertheless, be calculated
for any exporter or producer not initially selected who submits the necessary
information within the time limits provided for in this Regulation, except where the
number of exporters or producers is so large that individual examinations would be
unduly burdensome and prevent the timely completion of the investigation.
4.    Where it is decided to sample and there is a degree of non-co-operation by some
or all of the parties selected which is likely to materially affect the outcome of the
investigation, a new sample may be selected. However, if a material degree of non-co-
operation persists or there is insufficient time to select a new sample, the relevant
provisions of Article 19 shall apply.
                                                                                         58
 ---pagebreak---                                                                                            1*
                                         Article 19
                                      Non-co-operation
1.    In cases in which any interested party refuses access to, or otherwise does not
provide, necessary information within the time limits as provided for in this Regulation,
or significantly impedes the investigation, preliminary or final findings, affirmative or
negative, may be made on the basis of the facts available. Where the it is found that any
interested party has supplied false or misleading information, the information shall be
disregarded and use may be made of the facts available. Interested parties should be
made aware of the consequences of non-co-operation.
2.    A lack of a computerised response shall not be deemed to constitute non-co-
operation provided that the interested party shows that presenting the response as
requested would result in an unreasonable extra burden or unreasonable additional cost.
3.    Where the information presented by an interested party may not be ideal in all
respects it should not be disregarded, provided that any deficiencies are not such as to
cause undue difficulty in arriving at a reasonably accurate finding and provided the
information is appropriately submitted in timely fashion, it is verifiable and the party
has acted to the best of its ability.
4.    If evidence or information is not accepted, the supplying party should be informed
forthwith of the reasons thereof and have an opportunity to provide further explanations
within the time limit specified. If the explanations are considered unsatisfactory, the
reasons for rejection of such evidence or information should be disclosed and given in
any published findings.
                                                                                        59
 ---pagebreak---                                                                                           2
                                                                                            ^Ar
5.    If determinations, including those with respect to the amount of countervailable
subsidies , are based on the provisions of paragraph 1 of this Article, including the
information supplied in the complaint, it should, where practicable and with due regard
to the time limits of the investigation, be checked by reference to information from
other independent sources which may be available, such as published price lists, official
import statistics and customs returns, or information obtained from other interested
parties during the investigation.
6.    If an interested party does not co-operate, or only co-operates partially, and thus
relevant information is being withheld, the result could be less favourable to the party
than if it had co-operated.
                                                                                       60
 ---pagebreak---                                                                                              l-)l
                                        Article 20
                                     Confidentiality
1.    Any information which is by nature confidential, (for example, because its
disclosure would be of significant competitive advantage to a competitor or because its
disclosure would have a significantly adverse effect upon a person supplying the
information or upon a person from whom he acquired the information) or which is
provided on a confidential basis by parties to an investigation shall, upon good cause
shown, be treated as such by the authorities.
2.    Interested parties providing confidential information shall be required to furnish
non-confidential summaries thereof. These summaries shall be in sufficient detail to
permit a reasonable understanding of the substance of the information submitted in
confidence. In exceptional circumstances, such parties may indicate that such
information is not susceptible of summary. In such exceptional circumstances, a
statement of the reasons why summarisation is not possible must be provided.
3.    If it is considered that a request for confidentiality is not warranted and if the
supplier of the information is either unwilling to make the information available or to
authorise its disclosure in generalised or summary form, such information may be
disregarded unless it can be satisfactorily demonstrated from appropriate sources that
the information is correct. Requests for confidentiality should not be arbitrarily rejected.
4.    This Article shall not preclude the disclosure of general information by the
Community authorities and in particular of the reasons on which decisions taken
pursuant to this Regulation are based, or disclosure of the evidence relied on by the
Community authorities is so far as necessary to explain those reasons in court
proceedings. Such disclosure must take into account the legitimate interest of the parties
 concerned that their business or Governmental secrets should not be divulged.
                                                                                          61
 ---pagebreak---                                                                                            =2:p
5.    The Council, the Commission and the Member States, or the officials of any of
these, shall not reveal any information received pursuant to this Regulation for which
confidential treatment has been requested by its supplier, without specific permission
from the supplier. Exchanges of information between the Commission and Member
States, any information relating to consultations made pursuant to Article 16 or
consultations described in Paragraph 9 of Article 7 and Paragraph 10 of Article 8, or any
internal documents prepared by the authorities of the Community or its Member States,
shall be not be divulged except as specifically provided for in this Regulation.
6.    Information received pursuant to this Regulation shall be used only for the
purpose for which it was requested.
                                                                                        62
 ---pagebreak---                                                                                             n
                                        Article 21
                                        Disclosure
1.    The complainants, importers, exporters and representatives of the country or
origin and/or export may request disclosure of the details underlying the essential facts
and considerations, on the basis of which provisional measures have been imposed.
Requests for such disclosure shall be made in writing immediately following the
imposition of provisional measures and the disclosure shall be made in writing as soon
as possible thereafter.
2.    The parties mentioned in paragraph 1, may request final disclosure of the essential
facts and considerations, on the basis of which it is intended to recommend the
imposition of definitive measures, or the termination of an investigation or proceedings
without the imposition of measures, with particular attention being paid to the
disclosure of any facts or considerations which are different from those used for any
provisional measures.
3.    Requests for final disclosure, as defined in paragraph 2, shall be addressed to the
Commission in writing and be received, in cases where a provisional duty has been
applied, not later than one month after publication of the imposition of that duty. Where
a provisional duty has not been applied, parties shall be provided with an opportunity to
request final disclosure within time limits set by the Commission.
4.    Final disclosure shall be given in writing. It shall be made, with due regard paid to
the protection of business or Governmental secrets, as soon as possible, and normally,
not later than one month prior to a definitive decision or the submission by the
Commission of any proposal for final action pursuant to Article 11. Where the
Commission is not in a position to disclose certain facts or considerations at that time,
these shall be disclosed as soon as possible thereafter. Disclosure shall not prejudice any
subsequent decision which may be taken by the Commission or the Council, but where
such decision is based on any different facts and considerations, these shall be disclosed
as soon as possible.
                                                                                         63
 ---pagebreak---                                                                                          l ï \
5.    Representations made after final disclosure is given shall be taken into
consideration only if received within a period to be set by the Commission in each case,
which shall be at least 10 days, due consideration being given to the urgency of the
matter.
                                                                                      64
 ---pagebreak---                                                                                              £$X
                                         Article 22
                                   Community interest
1.     Under this Regulation, a determination as to whether the Community interest calls
for intervention shall be based on an appreciation of all the various interests taken as a
whole, including the interests of the domestic industry and users and consumers, and a
determination under this Article shall only be made where all parties have been given
the opportunity to make their views known under paragraph 2. In such an examination,
the need to eliminate the trade distorting effects of injurious subsidisation and to restore
effective competition shall be given special consideration. Measures, as determined on
the basis of subsidization and injury found, may not be applied where the authorities, on
the basis of all the information submitted, can safely conclude that it is not in the
Community interest to apply such measures.
2.     In order to provide a sound basis on which the authorities can take account of all
views and information in the decision on whether, or not, the imposition of measures is
in the Community interest, the complainants, importers, representative users and
representative consumer organisations may, within the time limits specified in the notice
of initiation of the countervailing duty investigation, make themselves known and
provide information to the Commission. Such information, or appropriate summaries
thereof, shall be made available to the other parties specified in this Article, and they
shall be entitled to respond to such information.
3.     The parties which have acted in conformity with paragraph 2 may request a
hearing. Such requests shall be made in writing, within the time limits set in paragraph
2, and shall set out the particular reasons, in terms of the Community interest, why they
should be heard.
                                                                                          65
 ---pagebreak---                                                                                               Xîb
4.    The parties which have acted in conformity with paragraph 2 may provide
comments on the application of any provisional duties imposed. Such comments shall
be received within one month of the application of such measures if they are to be taken
into account and they, or appropriate summaries thereof, shall be made available to
other parties who shall be entitled to respond to such comments.
5.    The Commission shall examine the information which is properly submitted, and
the extent to which it is representative, and the results of such analysis, together with an
opinion on its merits, shall be transmitted to the Advisory Committee. The balance of
views expressed in the Committee shall be taken into account by the Commission in any
proposal made under Article 11.
6.    The parties which have acted in conformity with paragraph 2, may request the
facts and considerations on which final decisions are likely to be taken to be made
available to them. Such information shall be made available to the extent possible and
without prejudice to any subsequent decision taken by the Commission or the Council.
7.    Under this Article, information shall only be taken into account where it is
supported by actual evidence which substantiates its validity.
                                                                                           66
 ---pagebreak---                                                                                          Mlf
                                         Article 23
    Relationships between countervailing duty measures and multilateral remedies
If an imported product is made subject to any countermeasures imposed following
recourse to the dispute settlement procedures of the Subsidies Agreement, and such
measures are appropriate to remove the injury caused by the countervailable subsidies,
any countervailing duty imposed with regard to that product shall immediately be
suspended, or repealed, as appropriate.
                                         Article 24
                                      Final provisions
This Regulation shall not preclude the application of:
(i)     any special rules laid down in agreements concluded between the Community and
        third countries;
(ii)    the Community Regulations in the agricultural sector and of Regulation (EEC) No
         1059/69W , (EEC) No 2730/750) ; and (EEC) No 2783/75(6) ; this Regulation shall
        operate by way of complement to those Regulations and in derogation from any
        provisions thereof which preclude the application of anti-dumping or
        countervailing duties;
 (iii) special measures, provided that such action does not run counter to obligations
        under the GATT.
 < 4 )OJNoL 141, 12.06.1969, p. 1.
 <5) OJNo L 281, 01.11.1975, p. 20.
 <6)OJ No L 282, 01.11.1975, p. 104.
                                                                                      67
 ---pagebreak---                                                                                             ^ Si"
                                         Article 25
                              Repeal of existing legislation
Regulation (EEC) No 2423/88, as amended by Regulation (EC) No 521/94 and
Regulation (EC) No 522/94, is hereby repealed. References to the repealed Regulation
shall be construed as references to this Regulation.
                                         Article 26
                                     Entry into force
This Regulation shall enter into force on the date determined by a decision governing
the entry into force of the acts implementing the results of the Uruguay Round. It shall
apply to proceedings already initiated. However, the references to time limits for the
initiation of proceedings and the imposition of provisional duties shall only apply after a
date which the Council shall specify in a Decision to be adopted by a qualified majority
no later than 1 April 1995 on the basis of a Commission proposal to be submitted to the
Council once the necessary budgetary resources have been made available.
This Regulation shall be binding in its entirety and directly applicable in all Member
States.
Done at Brussels,
                                                                                         68
 ---pagebreak---                                              ANNEX I
                      ILLUSTRATIVE LIST OF EXPORT SUBSIDIES
(a) The provision by governments of direct subsidies to a firm or an industry
contingent upon export performance.
(b) Currency retention schemes or any similar practices which involve a bonus on
exports.
(c) Internal transport and freight charges on export shipments, provided or mandated
by governments, on terms more favourable than for domestic shipments.
(d) The provision by governments or their agencies either directly or indirectly
through government-mandated schemes, of imported or domestic products or services
for use in the production of exported goods, on terms or conditions more favourable
than for provision of like or directly competitive products or services for use in the
production of goods for domestic consumption, if (in the case of products) such terms or
conditions are more favourably than those commercially availableO) on world markets
to their exporters.
 0) The term "commercially available" means that the choice between domestic and imported products is
 unrestricted and depends only on commercial considerations.
 ---pagebreak---                                                                                                                 >
 (e) The full or partial exemption, remission, or deferral specifically related to exports,
 of direct taxes(^) or social welfare charges paid or payable by industrial or commercial
enterprises^3).
 (f) The allowance of special deductions directly related to exports or export
performance, over and above those granted in respect of production for domestic
consumption, in the calculation of the base on which direct taxes are charged.
(g) The exemption or remission, in respect of the production and distribution of
exported products, of indirect taxes(2) in excess of those levied in respect of the
production and distribution of like products when sold for domestic consumption.
(h) The exemption, remission or deferral of prior-stage cumulative indirect taxes (2)
on goods or services used in the production of exported products in excess of the
exemption, remission or deferral of like prior-stage cumulative indirect taxes on goods
or services used in the production of like products when sold for domestic consumption;
provided, however, that prior-stage cumulative indirect taxes may be exempted,
remitted or deferred on exported products even when not exempted, remitted or deferred
on like products when sold for domestic consumption, if the prior-stage cumulative
indirect taxes are levied on inputs that are consumed in the production of the exported
product (making normal allowance for waste)(4) . This item shall be interpreted in
(2) For the purpose of this Regulation and its annexes:
        The term "direct taxes" shall mean tax on wages, profits, interests, rents, royalties, and all other
forms of income, and taxes on the ownership of real property;
        The term "import charges" shall mean tariffs, duties, and other fiscal charges not elsewhere
enumerated that are levied on imports;
        The term "indirect taxes" shall mean sales, excise, turnover, value added, franchise, stamp,
transfer, inventory and equipment taxes, border taxes and all taxes other than direct taxes and import
charges;
        "Prior-stage" indirect taxes are those levied on goods or services used directly or indirectly in
making the product;
        "Cumulative" indirect taxes are multi-staged taxes levied where there is no mechanism for
subsequent crediting of the tax if the goods or services subject to tax at one stage of production are used
in a succeeding state of production;
        "Remission" of taxes includes the refund or rebate of taxes;
        "Remission of drawback" includes the full or partial exemption or deferral of import charges.
<3) Deferral may not amount to an export subsidy where, for example, appropriate interest charges are
collected.
(4) Paragraph (h) does not apply to value-added tax systems and border-tax adjustment in lieu thereof; the
problem of the excessive remission of value-added taxes is exclusively covered by paragraph (g).
                                                                                                             70
 ---pagebreak---                                                                                            11 g.
accordance with the guidelines on consumption of inputs in the production process
contained in Annex II.
(i) The remission or drawback of import charges(2) in excess of those levied on
imported inputs that are consumed in the production of the exported product (making
normal allowance for waste); provided , however, that in particular cases a firm may use
a quantity of home market inputs equal to, and having the same quality and
characteristics as, the imported inputs as a substitute for them in order to benefit from
this provision if the import and the corresponding export operations both occur within a
reasonable time period, not to exceed two years. This item shall be interpreted in
accordance with the guidelines on consumption of inputs in the production process
contained in Annex II and the guidelines in the determination of substitution drawback
systems as export subsidies contained in Annex III.
(j) The provision by governments (or special institutions controlled by governments)
of export credit guarantee or insurance programmes, of insurance or guarantee
programmes against increases in the cost of exported products or of exchange risk
programmes, at premium rates which are inadequate to cover the long-term operating
costs and losses of the programmes.
 (2)   See previous reference.
                                                                                        71
 ---pagebreak---                                                                                              Ztb
(k) The grant by governments (or special institutions controlled by and/or acting
under the authority of governments) of export credits at rates below those which they
actually have to pay for the funds so employed (or would have to pay if they borrowed
on international capital markets in order to obtain funds of the same maturity and other
credit terms and denominated in the same currency at the export credit), or the payment
by them of all or part of the costs incurred by exporters or financial institutions in
obtaining credits, in so far as they are used to secure a material advantage in the field of
export credit terms.
Provided, however, that if a Member of the WTO is a party to an international
undertaking on official export credits to which at least twelve original such Members
are parties as of 1 January 1979 (or a successor undertaking which has been adopted by
those original Members), or if in practice a Member of the WTO applied the interest
rates provisions of the relevant undertaking, an export credit practice which is in
conformity with those provisions shall not be considered an export subsidy.
(1) Any other charge on the public account constituting an export subsidy in the sense
of Article XVI of GATT 1994.
                                                                                          72
 ---pagebreak---                                                                                                           15 o
                                              ANNEX II
       GUIDELINES ON CONSUMPTION OF INPUTS IN THE PRODUCTION
                                             PROCESS*5)
                                                    I
1. Indirect tax rebate schemes can allow for exemption, remission or deferral of
prior-stage cumulative indirect taxes levied on inputs that are consumed in the
production of the exported product (making normal allowance for waste). Similarly,
drawback schemes can allow for the remission or drawback of import charges levied on
inputs that are consumed in the production of the exported product (making normal
allowance for waste).
2.     The Illustrative List of Export Subsidies in Annex I makes reference to the term
"inputs that are consumed in the production of the exported product" in paragraphs (h)
and (i). Pursuant to paragraph (h), indirect tax rebate schemes can constitute an export
subsidy to the extent that they result in exemption , remission or deferral of prior-stage
cumulative indirect taxes in excess of the amount of such taxes actually levied on inputs
that are consumed in the production of the exported product. Pursuant to paragraph (i),
drawback schemes can constitute an export subsidy to the extent that they result in a
remission or drawback of import charges in excess of those actually levied on inputs
that are consumed in the production of the exported product. Both paragraphs stipulate
that normal allowance for waste must be made in findings regarding consumption of
inputs in the production of the exported product. Paragraph (i) also provides for
substitution, where appropriate.
(5) Inputs consumed in the production processes are inputs physically incorporated, energy, fuels and oil
used in the production process and catalysts which are consumed in the course of their use to obtain the
exported product.
 ---pagebreak---                                                                                            ^
                                              II
3.     In examining whether inputs are consumed in the production of the exported
product, as part of a countervailing duty investigation, the Commission shall normally
proceed on the following basis:
4.     Where it is alleged that an indirect tax rebate scheme, or a drawback scheme,
conveys a subsidy by reason of over-rebate or excess drawback of indirect taxes or
import charges on inputs consumed in the production of the exported product, the
Commission shall normally first determine whether the government of the exporting
country has in place and applies a system or procedure to confirm which inputs are
consumed in the production of the exported product and in what amounts. Where such a
system or procedure is determined to be applied, the Commission shall normally then
examine the system or procedure to see whether it is reasonable, effective for the
purpose intended, and based on generally accepted commercial practices in the country
of export. The Commission may deem it necessary to carry out, in accordance with
paragraph 2 of Article 17, certain practical tests in order to verify information or to
satisfy itself that the system or procedure is being effectively applied.
5.     Where there is no such system or procedure, where it is not reasonable, or where it
is instituted and considered reasonable but is found not to be applied or not be applied
effectively, a further examination by the exporting country based on the actual inputs
involved will normally need to be carried out in the context of determining whether an
excess payment occurred. If the Commission deems it necessary, a further examination
may be carried out in accordance with paragraph 4.
6.     The Commission shall normally treat inputs as physically incorporated if such
inputs are used in the production process and are physically present in the product
exported. An input need not be present in thefinalproduct in the same form in which it
entered the production process.
                                                                                        74
 ---pagebreak--- 7.    In determining the amount of a particular input that is consumed in the production
of the exported product, a "normal allowance for waste" shall normally be taken into
account, and such waste shall normally be treated as consumed in the production of the
exported product. The term "waste" refers to that portion of a given input which does
not serve an independent function in the production process, is not consumed in the
production of the exported product (for reasons such as inefficiencies) and is not
recovered, used or sold by the same manufacturer.
8.    The Commission's determination of whether the claimed allowance for waste is
"normal" shall normally take into account the production process, the average
experience of the industry in the country of export, and other technical factors, as
appropriate. The Commission shall bear in mind that an important question is whether
the authorities in the exporting country have reasonably calculated the amount of waste,
when such an amount is intended to be included in the tax or duty rebate or remission.
                                                                                       75
 ---pagebreak---                                                                                           153
                                        ANNEX III
            GUIDELINES IN THE DETERMINATION OF SUBSTITUTION
                   DRAWBACK SYSTEMS AS EXPORT SUBSIDIES
                                              I
 1.    Drawback systems can allow for the refund or drawback of import charges on
inputs which are consumed in the production process of another product and where the
export of this latter product contains domestic inputs having the same quality and
characteristics as those submitted for the imported inputs. Pursuant to paragraph (i) of
the Illustrative List of Export Subsidies in Annex I, substitution drawback systems can
constitute an export subsidy to the extent that they result in an excess drawback of the
import charges levied initially on the imported inputs for which drawback is being
claimed.
                                             II
2.     In examining any substitution drawback system as part of a countervailing duty
investigation pursuant to this Regulation, the Commission shall normally proceed on the
following basis:
3.     Paragraph (i) of the Illustrative List stipulates that home market inputs may be
substituted for imported inputs in the production of a product for export provided such
inputs are equal in quantity to, and have the same quality and characteristics as, the
imported inputs being substituted. The existence of a verification system or procedure is
important because it enables the government of the exporting country to ensure and
demonstrate that the quantity on inputs for which drawback is claimed does not exceed
the quantity of similar products exported, in whatever form, and that there is not
drawback of import charges in excess of those originally levied on the imported inputs
in question.
 ---pagebreak---                                                                                            23 H
4.     Where it is alleged that a substitution drawback system conveys a subsidy, the
Commission shall normally first proceed to determine whether the government of the
exporting country has in place and applies a verification system or procedure. Where
such a system or procedure is determined to be applied, the Commission shall normally
then examine the verification procedures to see whether they are reasonable, effective
for the purpose intended, and based on generally accepted commercial practices in the
country of export. To the extent that the procedures are determined to meet this test and
are effectively applied, no subsidy will be presumed to exist. It may be deemed
necessary by the Commission to carry out, in accordance with paragraph 2 of Article 17,
certain practical tests in order to verify information or to satisfy itself that the
verification procedures are being effectively applied.
5.      Where there are no verification procedures, where they are not reasonable, or
where such procedures are instituted and considered reasonable but are found not to be
actually applied or not be applied effectively, there may be a subsidy. In such cases,
further examination by the exporting country based on the actual transactions involved
would need to be carried out to determinate whether an excess payment occurred. If the
Commission deems it necessary, a further examination would be carried out in
accordance with paragraph 4.
6.      The existence of a substitution drawback provision under which exporters are
 allowed to select particular import shipments on which drawback is claimed should not
 of itself be considered to convey a subsidy.
 7.     An excess drawback of import charges in the sense of paragraph (i) would be
 deemed to exist where governments paid interest on any monies refunded under their
 drawback schemes, to the extent of the interest actually paid or payable.
                                                                                        77
 ---pagebreak---                                                                                             2A
                                        ANNEX IV
    (This Annex reproduces Annex 2 to the Agreement on Agriculture. Any terms or
  expression which are not explained herein or which are not self-explanatory are to be
                      interpreted in the context of that Agreement)
                DOMESTIC SUPPORT : THE BASIS OF EXEMPTION
                     FROM THE REDUCTION COMMITMENTS
1.    Domestic support measures for which exemption from the reduction commitments
is claimed shall meet the fundamental requirement that they have no, or at most
minimal, trade-distorting effects of effects on production. Accordingly, all measures for
which exemption is claimed shall conform to the following basic criteria:
      (a)   the support in question shall be provided through a publicly-funded
            government programme (including government revenue foregone) not
            involving transfers from consumers; and,
      (b)   the support in question shall not have the effect of providing price support to
            producers;
      plus policy-specific criteria and conditions as set out below.
 ---pagebreak---                                                                                           2AL
Government Service Programmes
2.  General Services
    Policies in this category involve expenditures (or revenue foregone) in relation to
    programmes which provide services or benefits to agriculture or the rural
    community. They shall not involve direct payments to producers or processors.
     Such programmes, which include but are not restricted to the following list, shall
    meet the general criteria in paragraph 1 above and policy-specific conditions
    where set out below:
     (a)  research, including general research, research in connection with
          environmental programmes, and research programmes relating to particular
          products;
     (b)  pest and disease control, including general and product-specific pest and
          disease control measures, such as early-warning systems, quarantine and
          eradication;
     (c)  training services, including both general and specific training facilities;
     (d)  extension and advisory services, including the provision of means to
          facilitate the transfer of information and the results of research to producers
          and consumers;
     (e)  inspection services, including general inspection services and the inspection
          of particular products for health, safety, grading or standardization purposes;
     (f)  marketing and promotion services, including market information, advice and
          promotion relating to particular products but excluding expenditure for
          unspecified purposes that could be used by sellers to reduce their selling
          price or confer a direct economic benefit to purchasers; and
                                                                                       79
 ---pagebreak---         (g)    infrastructural services, including: electricity reticulation, roads and other
               means of transport, market and port facilities, water supply facilities, dams
               and drainage schemes, and infrastructural works associated with
               environmental programmes. In all cases the expenditure shall be directed to
               the provision or construction of capital works only, and shall exclude the
               subsidized provision of on-farm facilities other than for the reticulation of
               generally available public utilities. It shall not include subsidies to inputs or
               operating costs, or preferential user charges.
3.      Public stockholding for food security purposes*6)
        Expenditures (or revenue foregone) in relation to the accumulation and holding of
        stocks of products which form an integral part of a food security programme
        identified in national legislation. This may include government aid to private
        storage of products as part of such a programme.
                                           F.q rri (A>
        The volume and accumulation of such stocks shall correspond to predetermined
        targets related solely to food security. The process of stock accumulation and
        disposal shall be financially transparent. Food purchases by the government shall
        be made at current market prices and sales from food security stocks shall be
        made at no less than the current domestic market price for the product and quality
        in question.
4.      Domestic food aid*7)
        Expenditures (or revenue foregone) in relation to the provision of domestic food
        aid to sections of the population in need.
(6) For the purpose of paragraph 3 of this Annex, governmental stockholding programmes for food
security purposes in developing countries whose operation is transparent and conducted in accordance
with officially published objective criteria or guidelines shall be considered to be in conformity with the
provisions of this paragraph, including programmes under which stocks of foodstuffs for food security
purposes are acquired and released at administered prices, provided that the difference between the
acquisition price and the external reference price is accounted for in the AMS.
(7) For the purposes of paragraphs 3 and 4 of this Annex, the provision of foodstuffs at subsidized prices
with the objective of meeting food requirements of urban and rural poor in developing countries on a
regular basis at reasonable prices shall be considered to be in conformity with the provisions of this
paragraph.
                                                                                                           80
 ---pagebreak---                                                                                         •is 2
Eligibility to receive the food aid shall be subject to clearly-defined criteria related
to nutritional objectives. Such aid shall be in the form of direct provision of food
to those concerned or the provision of means to allow eligible recipients to buy
food either at market or a subsidized prices. Food purchases by the government
shall be made at current market prices and the financing and administration of the
aid shall be transparent.
Direct payments to producers
Support provided through direct payments (or revenue foregone, including
payments in kind) to producers for which exemption from reduction commitments
is claimed shall meet the basic criteria set out in paragraph 1 above, plus specific
criteria applying to individual types of direct payment as set out in paragraphs 6
through 13 below. Where exemption from reduction is claimed for any existing or
new type of direct payment other than those specified in paragraphs 6 through 13,
it shall conform to criteria (b) through (e) in paragraph 6, in addition to the general
criteria set out in paragraph 1.
Decoupled income support
(a)    Eligibility for such payments shall be determined by clearly-defined criteria
       such as income, status as a producer or landowner, factor use or production
       level in a defined and fixed base period.
(b)    The amount of such payments in any given year shall not be related to, or
       based on, the type or volume of production (including livestock units)
       undertaken by the producer in any year after the base period.
(c)    The amount of such payments in any given year shall not be related to, or
       based on, the prices, domestic or international, applying to any production
       undertaken in any year after the base period.
                                                                                       81
 ---pagebreak---                                                                                         253
      (d)  The amount of such payments in any given years shall not be related to, or
           based on, the factors of production employed in any year after the base
           period.
     (e)   No production shall be required in order to receive such payments.
7.    Government financial participation in income insurance and income safety-net
programmes
      (a)  Eligibility for such payments shall be determined by an income loss, taking
           into account only income derived from agriculture, which exceeds 30 per
           cent of average gross income or the equivalent in net income terms
           (excluding any payments from the same or similar schemes) in the
           preceding three-year period or a three-year average based on the preceding
           five-year period, excluding the highest and the lowest entry. Any producer
           meeting this condition shall be eligible to receive the payments.
      (b)  The amount of such payments shall compensate for less than 70 per cent of
           the producer's income loss in the year the producer becomes eligible to
           receive this assistance.
      (c)  The amount of any such payments shall relate solely to income; it shall not
           relate to the type or volume of production (including livestock units)
           undertaken by the producer; or to the prices, domestic or international,
           applying to such production; or to the factors of production employed.
      (d)  Where a producer receives in the same year payments under this paragraph
           arid under paragraph 8 (relief from natural disasters), the total of such
           payments shall be less than 100 per cent of the producer's total loss.
                                                                                     82
 ---pagebreak--- 8.    Payments (made either directly or by way of a government financial participation
in crop insurance schemes) for relief from natural disasters
      (a)   Eligibility for such payments shall arise only following a formal recognition
            by government authorities that a natural or like disaster (including disease
            outbreaks, pest infestations, nuclear accidents, and war on the territory of
            the Member concerned) has occurred or is occurring; and shall be
            determined by a production loss which exceeds 30 per cent of the average of
            production in the preceding three-year period or a three-year average based
            on the preceding five year period, excluding the highest and the lowest
            entry.
      (b)   Payments made following a disaster shall be applied only in respect of
            losses of income, livestock (including payments in connection with the
            veterinary treatment of animals), land or other production factors due to the
                   . ..       .       .        •<•!•* u n -
            natural disaster m question.
      (c)    Payments shall compensate for not more than the total cost of replacing such
             losses and shall not require or specify the type or quantity of future
             production.
      (d)    Payments made during a disaster shall not exceed the level required to
             prevent or alleviate further loss as defined in criterion (b) above.
       (e)   Where a producer receives in the same year payments under this paragraph
             and under paragraph 7(income insurance and income safety-net
             programmes), the total of such payments shall be less than 100 per cent of
             the producer's total loss.
                                                                                        83
 ---pagebreak---                                                                                         âo-1
9.   Structural   adjustment     assistance   provided through producer retirement
programmes
     (a)   Eligibility for such payments shall be determined by reference to clearly
           defined criteria in programmes designed to facilitate the retirement of
           persons engaged in marketable agricultural production, or their movement to
           non-agricultural activities.
     (b)   Payments shall be conditional upon the total and permanent retirement of
           the recipientsfrommarketable agricultural production.
10. Structural    adjustment     assistance   provided through resource     retirement
programmes.
     (a)   Eligibility for such payments shall be determined by reference to clearly
           defined criteria in programmes designed to remove land or other resources,
           including livestock,frommarketable agricultural production.
     (b)   Payments shall be conditional upon the retirement of land from marketable
           agricultural production for a minimum of three years, and in the case of
           livestock on its slaughter or definitive permanent disposal.
     (c)   Payments shall not require or specify any alternative use for such land or
  '        other resources which involves the production of marketable agricultural
           products.
     (d)   Payments shall not be related to either type or quantity of production or to
           the prices, domestic or international, applying to production undertaken
           using the land or other resources remaining in production.
                                                                                     84
 ---pagebreak---                                                                                        So>
11. Structural adjustment assistance provided through investment aids
    (a)   Eligibility for such payments shall be determined by reference to clearly-
          defined criteria in government programmes designed to assist the financial
          or physical restructuring of a producer's operations in response to
          objectively demonstrated structural disadvantages. Eligibility for such
          programmes may also be based on a clearly-defined government programme
          for the reprivatization of agricultural land.
    (b)   The amount of such payments in any given year shall not be related to, or
          based on, the type or volume of production (including livestock units)
          undertaken by the producer in any year after the base period other than as
          provided for under criterion (e) below.
    (c)   The amount of such payments in any given year shall not be related to, or
          based on, the prices, domestic or international, applying to any production
          undertaken in any year after the base period.
    (d)   The payments shall be given only for the period of time necessary for the
          realisation of the investment in respect of which they are provided.
    (e)   The payments shall not mandate or in any way designate the agricultural
          products to be produced by the recipients except to require them not to
          produce a particular product.
     (f)  The payments shall be limited to the amount required to compensate for the
          structural disadvantage.
                                                                                    85
 ---pagebreak---                                                                                        •3^3
12. Payments under environmental programmes
    (a) Eligibility for such payments shall be determined as part of a clearly-defined
        government environmental or conservation programme and be dependent on
        the fulfilment of specific conditions under the government programme,
        including conditions related to production methods or inputs.
    (b) The amount of payment shall be limited to the extra costs or loss of income
        involved in complying with the government programme.
13. Payments under regional assistance programmes
    (a) Eligibility for such payments shall be limited to producers in disadvantaged
        regions. Each such region must be a clearly designated contiguous
        geographical area with a definable economic and administrative identity,
        considered as disadvantaged on the basis of neutral and objective criteria
        clearly spelt out in a law or regulation and indicating that the region's
        difficulties arise out of more than temporary circumstances.
    (b) The amount of such payments in any given year shall not be related to, or
        based on, the type or volume of production (including livestock units)
        undertaken by the producer in any year after the base period other than to
        reduce that production.
    (c) The amount of such payments in any given year shall not be related to, or
        based on, the prices, domestic or international, applying to any production
        undertaken in any year after the base period.
    (d) Payments shall be available only to producers in eligible regions, but
        generally available to all producers within such regions.
                                                                                    86
 ---pagebreak---                                                                                  i*>L|
(e) Where related to production factors, payments shall be made at a degressive
    rate above a threshold level of the factor concerned.
(f) The payments shall be limited to the extra costs of loss of income involved
    in undertaking agricultural production in the prescribed area.
                                                                              87
 ---pagebreak---                     '^cl
Commercial defence:
   Safeguards
 ---pagebreak---                                                                                                  % (o
                                 Explanatory memorandum
The Uruguay Round Safeguards Agreement clarifies and strengthens the disciplines of
GATT 1994, specifically those regarding the implementation of Article XIX.
The Agreement restores multilateral control over safeguards and requires the elimination of
any measures which escape such control.
Safeguard measures may be applied only in the circumstances and in the manner specified in
the Agreement. As a result, all grey area measures, i.e. arrangements for limiting imports
or exports, orderly-marketing arrangements or other similar arrangements, will be
prohibited and must be eliminated.
The only exception made is for the EC-Japan arrangement relating to certain types of motor
vehicle, which expires on 31 December 1999.
In the Community's case, adherence to the obligations stemming from the Safeguards
Agreement entails denouncing all grey-area measures by the deadline given in the
Agreement (180 days following the entry into force of the Agreement Establishing the
MTO) and reviewing or amending (where necessary) the common rules for imports
established by Council Regulation (EC) No 518/94, particularly in connection with
safeguards.
The attached draft Regulation is the product of such a review.
It should be pointed out, however, that Community legislation already contains precise rules
that often go beyond the more general provisions of the Safeguards Agreement. This is the
case, for example, with the strict investigation deadlines and the more detailed list of factors
to be considered in determining serious injury and the causal link between such injury and
imports.
The main amendments to Council Regulation (EC) No 518/94 are therefore as follows:
(a)     Incorporation of definitions
        Definitions of the terms "threat of serious injury", "serious injury" and "Community
        producers".
                Article 5(3); Agreement on Safeguards Article 4(1)
(b)     Causal link: other factors
        The Article dealing with the factors to be considered in an investigation will have
        added to it an extra paragraph on determining the presence of a causal link.
                Article 10(1) (d); Agreement on Safeguards Article 4(2)
 ---pagebreak---                                                                                           %
                                                                                            \
(c) Rights of the interested parties
    Explicitly expressed right of reply to other parties' arguments for the interested
    parties.
            End of Article 6(2); Agreement on Safeguards Article 3(1)
(d) Taking of provisional safeguard measures in critical circumstances
    Adoption of the Safeguards Agreement's clauses on provisional measures
    (conditions, duration and nature).
            Article 8; Agreement on Safeguards Article 6
(e) Quota levels
    Explicit provision on the setting of a quota at a level, in principle, no lower than
    average imports over the last three representative years.
            Article 16(2) (b); Agreement on Safeguards Article 5(1)
(f) Allocation of quotas among supplier countries
    Arrangements for allocating quotas among supplier countries are now included
    (agreement, share of previous imports, modulation).
            Article 16(3); Agreement on Safeguards Article 5(2)
(g) Duration of safeguard measures
    No safeguard measure may now remain in force for longer than four years unless
    extended after a further investigation. The extension may not be for longer than four
    years.
            Article 20; Agreement on Safeguards Article 7(1) to 7(3)
(h) Progressive liberalization and mid-term review
    Any measure applying for longer than one year will have to be liberalized at regular
    intervals and any measure applying for longer than three years will be subject to a
    mid-term review.
            Articles 20(4) and 21 (1); Agreement on Safeguards Article 7(4)
(i) Reimposition of safeguard measures
    There can now be no reimposition of safeguard measures on a particular product for
    at least two years from the expiry of the previous such measure.
            Article 22; Agreement on Safeguards Article 7(5) and 7(6)
(j) Developing countries
    Adoption of the Safeguards Agreement's provisions prohibiting the imposition of
    safeguard measures on products from developing country WTO Members if imports
    of those products are below a certain level.
             Article 19; Agreement on Safeguards Article 9(1)
 ---pagebreak---                        COUNCIL REGULATION (EC) No .../94
                                                                                   94/  0232(ACC)
                                      of      1994
          on common rules for imports and repealing Regulation (EC) No 518/94
THE COUNCIL OF THE EUROPEAN UNION,
Having regard to the Treaty establishing the European Community, and in particular
Article 113 thereof,
Having regard to the instruments establishing common organization of agricultural markets
and the instruments concerning processed agricultural products, in particular insofar as
they provide for derogation from the general principle that quantitative restrictions or
measures having equivalent effect may be replaced solely by the measures provided for in
the said instruments,
Having regard to the proposal from the Commission,
Having regard to the opinion of the European Parliament,
Whereas the common commercial policy should be based on uniform principles; whereas
Council Regulation (EC) No 518/941 of 7 March 1994 on common rules for imports and
repealing Regulation (EEC) No 288/822 is an important part of the policy;
Whereas due account was taken when Regulation (EC) No 518/94 was adopted of the
Community's international obligations, particularly those deriving from Article XIX of the
General Agreement on Tariffs and Trade (GATT);
Whereas the completion of the Uruguay Round has led to the foundation of the World
Trade Organization (WTO); whereas Annex 1A to the Agreement establishing the WTO
contains inter alia the General Agreement on Tariffs and Trade 1994 (GATT 1994) and an
Agreement on Safeguards;
Whereas the Agreement on Safeguards meets the need to clarify and reinforce the
 disciplines of GATT 1994, and specifically those of Article XIX; whereas that Agreement
 requires the elimination of safeguard measures which escape those rules, such as voluntary
 export restraints, orderly marketing arrangements and any other similar import or export
 arrangements;
 '       OJL67, 10.3.1994, p.77.
 2
         OJL 35, 9.2.1982, p.l.
 REG518/518fin-e (version définitive)
 ---pagebreak---                                                                                              5o9
                                                                                           2
Whereas in the light of these new multilateral rules the common rules for imports should
be made clearer and if necessary amended, particularly where the application of safeguard
measures is concerned;
Whereas the starting point for the common rules for imports is liberalization of imports,
namely the absence of any quantitative restrictions;
Whereas the Commission should be informed by the Member States of any danger created
by trends in imports which might call for Community surveillance or the application of
safeguard measures;
Whereas in such instances the Commission should examine the terms and conditions under
which imports occur, the trend in imports, the various aspects of the economic and trade
situations and, where appropriate, the measures to be applied;
Whereas if Community surveillance is applied, release for free circulation of the products
concerned should be made subject to presentation of an import document meeting uniform
criteria; whereas that document should, on simple application by the importer, be
endorsed by the authorities of the Member States within a certain period but without the
importer thereby acquiring any right to import; whereas the document should therefore be
valid only during such period as the import rules remain unchanged;
Whereas the Member States and the Commission should exchange the information resulting
from Community surveillance as fully as possible;
Whereas it falls to the Commission and the Council to adopt the safeguard measures
required by the interests of the Community; whereas those interests should be considered
as a whole and should in particular encompass the interest of Community producers, users
and consumers;
Whereas safeguard measures against a Member of the WTO may be considered only if the
product in question is imported into the Community in such greatly increased quantities
and on such terms or conditions as to cause, or threaten to cause, serious injury to
Community producers of like or directly competing products, unless international
obligations permit derogation from this rule;
 ---pagebreak---                                                                                              3
Whereas the terms "serious injury", "threat of serious injury" and "Community producers"
should be defined and more precise criteria for determining injury be established;
Whereas an investigation must precede the application of any safeguard measure, subject to
the reservation that the Commission be allowed in urgent cases to apply provisional
measures;
Whereas there should be more detailed provisions on the opening of investigations, the
checks and inspections required, access by exporter countries and interested parties to the
information gathered, hearings for the parties involved and the opportunities for those
parties to submit their views;
Whereas the provisions on investigations introduced by this Regulation are without
prejudice to Community or national rules concerning professional secrecy;
Whereas it is also necessary to set time limits for the initiation of investigations and for
determinations as to whether or not measures are appropriate, with a view to ensuring that
such determinations are made quickly, in order to increase legal certainty for the economic
operators concerned;
Whereas in cases in which safeguard measures take the form of a quota the level of the
latter should be set in principle no lower than the average level of imports over a
representative period of at least three years;
Whereas in cases in which a quota is allocated among supplier countries each country's
quota may be determined by agreement with the countries themselves or by taking as a
reference the level of imports over a representative period; whereas derogations from these
rules should nevertheless be possible where there is a disproportionate increase in imports,
provided that due consultation under the auspices of the WTO Committee on Safeguards
takes place; "
Whereas the maximum duration of safeguard measures should be determined and specific
provisions regarding extension, progressive liberalization and reviews of such measures be
laid down;
Whereas the circumstances in which products originating in a developing country Member
 of the WTO should be exempt from safeguard measures should be established;
 ---pagebreak---                                                                                                AA
                                                                                             4
Whereas surveillance or safeguard measures confined to one or more regions of the
Community may prove more suitable than measures applying to the whole Community;
whereas, however, such measures should be authorized only exceptionally and where no
alternative exists; whereas it is necessary to ensure that such measures are temporary and
cause the minimum of disruption to the operation of the internal market;
Whereas in the interests of uniformity in rules for imports, the formalities to be carried out
by importers should be simplified and made identical regardless of the place where the
goods clear customs; whereas it is therefore desirable to provide that any formalities
should be carried out using forms corresponding to the specimen annexed to the
Regulation;
Whereas import documents issued in connection with Community surveillance measures
should be valid throughout the Community irrespective of the Member State of issue;
Whereas the textile products covered by Regulation (EC) No 517/94 of 7 March 1994 on
common rules for imports of textile products from certain third countries not covered by
bilateral agreements, protocols or other arrangements or by other specific Community
import rules are subject to special treatment at Community and international level; whereas
they should therefore be completely excluded from the scope of this Regulation;
Whereas the provisions of this Regulation are applicable without prejudice to Articles 77,
81, 244, 249 and 280 of the Act of Accession of Spain and Portugal;
Whereas Regulation (EC) No 518/94 should consequently be repealed,
 ---pagebreak---                                                                                               5
                                                                                                M.X
HAS ADOPTED THIS REGULATION:
                                         TITLE I
                                     General principles
                                         Article 1
1.      This Regulation applies to imports of products covered by the Treaty originating in
        third countries, except for:
                textile products covered by Regulation (EC) No 517/94,
                the products originating in certain third countries listed in Regulation (EC)
                No 519/94 on common rules for imports from certain third countries,
2.       The products referred to in paragraph 1 shall be freely imported into the
         Community and accordingly, without prejudice to the safeguard measures which
        may be taken under Title V, shall not be subject to any quantitative restrictions.
                                         TITLE II
                  Community information and consultation procedure
                                          Article 2
The Commission shall be informed by the Member States should trends in imports appear
to call for surveillance or safeguard measures. This information shall contain the evidence
available, as determined on the basis of the criteria laid down in Article 10. The
Commission shall immediately pass this information on to all the Member States.
                                          Article 3
Consultations may be held either at the request of a Member State or on the initiative of the
Commission. They shall take place within eight working days of the Commission receiving
the information provided for in Article 2 and, in any event, before the introduction of any
Community surveillance or safeguard measure.
 ---pagebreak---                                                                                            H3
                                                                                         6
                                      Article 4
1. Consultation shall take place within an advisory committee, hereinafter called 'the
   Committee', made up of representatives of each Member State with a representative
   of the Commission as chairman.
2. The Committee shall meet when convened by its chairman. He shall provide the
   Member States with all relevant information as promptly as possible, .
3. Consultations shall cover in particular:
           terms and conditions of import, import trends and the various aspects of the
           economic and trade situation with regard to the product in question;
           the measures, if any, to be taken.
4. Consultations may be conducted in writing if necessary. The Commission shall in
   this event inform the Member States, which may express their opinion or request
   oral consultations within a period offiveto eight working days, to be decided by
   the Commission.
                                    TITLE m
                      Community investigation procedure
                                    Article 5
1. Without prejudice to Article 8, the Community investigation procedure shall be
   implemented before any safeguard measure is applied.
2. Using as a basis the factors described in Article 10, the investigation shall seek to
   determine whether imports of the product in question are causing or threatening to
   cause serious injury to the Community producers concerned.
3. The following definitions shall apply:
   (a)      "serious injury" means a significant overall impairment in the position of
           Community producers,
 ---pagebreak---                                                                                            M-V
   (b)      "threat of serious injury" means serious injury that is clearly imminent;
   (c)      "Community producers" means the producers as a whole of the like or
            directly competing products operating within the territory of the
            Community, or those whose collective output of the like or directly
            competing products constitutes a major proportion of the total Community
            production of those products.
                                        Article 6
1. Where after consultations referred to in Article 3, it is apparent to the Commission
   that there is sufficient evidence to justify the initiation of an investigation, the
   Commission shall:
   (a)    initiate an investigation within one month of receipt of information from a
         Member State and publish a notice in the Official Journal of the European
          Communities', such notice shall give a summary of the information received,
         and stipulate that all relevant information is to be communicated to the
         Commission; it shall state the period within which interested parties may
         make known their views in writing and submit information, if such views and
          information are to be taken into account during the investigation; it shall also
          state the period within which interested parties may apply to be heard orally
         by the Commission in accordance with paragraph 4;
   (b)   commence the investigation, acting in cooperation with the Member States.
2. The Commission shall seek all information it deems to be necessary and, where it
   considers it appropriate, after consulting the Committee, endeavour to check this
   information with importers, traders, agents, producers, trade associations and
   organizations.
   The Commission shall be assisted in this task by staff of the Member State on
   whose territory these checks are being carried out, provided that Member State so
   wishes.
   Interested parties which have come forward under paragraph (l)(a) and
   representatives of the exporting country may, upon written request, inspect all
   information made available to the Commission in connection with the investigation
   other than internal documents prepared by the authorities of the Community or its
   Member States, provided that that information is relevant to the presentation of
   their case and not confidential within the meaning of Article 9, and that it is used by
   the Commission in the investigation.
 ---pagebreak---                                                                                          MS
   Interested parties which have come forward may communicate their views on the -
   information in question to the Commission; those views may be taken into
   consideration where they are backed by sufficient evidence.
3. The Member States shall supply the Commission, at its request and following
   procedures laid down by it, with the information at their disposal on developments
   in the market of the product being investigated.
4. The Commission may hear the interested parties. Such parties must be heard where
   they have made a written application within the period laid down in the notice
   published in the Official Journal of the European Communities, showing that they
   are actually likely to be affected by the outcome of the investigation and that there
   are special reasons for them to be heard orally.
5. When information is not supplied within the time limits set by this Regulation or by
   the Commission under this Regulation, or the investigation is significantly impeded,
   findings may be made on the basis of the facts available. Where the Commission
   finds that any interested party or third party has supplied it which false or
   misleading information, it shall disregard the information and may make use of
   facts available.
6. Where it appears to the Commission, after the consultation referred to in Article 3,
   that there is insufficient evidence to justify an investigation, it shall inform the
   Member States of its decision within one month of receipt of the information from
   the Member States.
                                     Article 7
1. At the end of the investigation, the Commission shall submit a report on the results
   to the Committee.
2. Where the Commission considers, within nine months of the initiation of the
   investigation, that no Community surveillance or safeguard measures are necessary,
   the investigation shall be terminated within a month, the Committee having first
   been consulted. The decision to terminate the investigation, stating the main
   conclusions of the investigation and a summary of the reasons therefor, shall be
   published in the Official Journal of the European Communities.
 ---pagebreak---                                                                                            9
3. If the Commission considers that Community surveillance or safeguard measures
   are necessary, it shall take the necessary decisions in accordance with Titles IV and
   V, no later than nine months from the initiation of the investigation. In exceptional
   circumstances, this time limit may be extended by a further maximum period of two
   months; the Commission shall then publish a notice in the Official Journal of the
   European Communities setting forth the duration of the extension and a summary of
   the reasons therefor.
                                      Article 8
1. The provisions of this Title shall not preclude the use, at any time, of surveillance
   measures in accordance with Articles 11 to 15 or provisional safeguard measures in
   accordance with Articles 16, 17 and 18.
   Provisional safeguard measures shall be applied:
            in critical circumstances where delay would cause damage which it would be
            difficult to repair, making immediate action necessary;
            where a preliminary determination provides clear evidence that increased
            imports have caused or are threatening to cause serious injury.
2. The duration of such measures shall not exceed 200 days.
3.  Provisional safeguard measures should take the form of an increase in the existing
    level of customs duty (whether the latter is zero or higher) if such action is likely to
   prevent or repair the serious injury.
4.  The Commission shall immediately conduct whatever investigation measures are
    still necessary.
5.  Should the provisional safeguard measures be repealed because no serious injury or
    threat of serious injury exists, the customs duties collected as a result of the
    provisional measures shall be automatically refunded as soon as possible. The
    procedure laid down in Article 235 et seq of Council Regulation (EEC) No 2913/92
    of 12 October 1992 shall apply.
 ---pagebreak---                                                                                              A\
                                                                                          10
                                      Article 9
1.  Information received pursuant to this Regulation shall be used only for the purpose
   for which it was requested.
2.  (a)    Neither the Council, nor the Commission, nor the Member States, nor the
           officials of any of these shall reveal any information of a confidential nature
           received pursuant to this Regulation, or any information provided on a
           confidential basis without specific permission from the supplier of such
           information.
   (b)     Each request for confidentiality shall state the reasons why the information
           is confidential.
           However, if it appears that a request for confidentiality is unjustified and if
           the supplier of the information wishes neither to make it public nor to
           authorize its disclosure in general terms or in the form of a summary, the
           information concerned may be disregarded.
3. Information shall in any case be considered to be confidential if its disclosure is
   likely to have a significantly adverse effect upon the supplier or the source of such
   information.
4. The preceding paragraphs shall not preclude reference by the Community
   authorities to general information and in particular to reasons on which decisions
   taken under this Regulation are based. The said authorities shall, however, take into
   account the legitimate interest of the legal and natural persons concerned that their
   business secrets should not be divulged.
                                     Article 10
1. Examination of the trend of imports, of the conditions in which they take place and
   of serious injury or threat of serious injury to Community producers resulting from
   such imports shall cover in particular the following factors:
   (a)     the volume of imports, in particular where there has been a significant
           increase, either in absolute terms or relative to production or consumption in
           the Community;
 ---pagebreak---                                                                                             Mi
                                                                                          H
   (b)     the price of the imports, in particular where there has been a significant
           price undercutting as compared with the price of a like product in the
           Community;
   (c)     the consequent impact on the Community producers as indicated by trends in
           certain economic factors such as:
                   production,
                   capacity utilization,
                   stocks,
                   sales,
                   market share,
                   prices (i.e. depression of prices or prevention of price increases
                   which would normally have occurred),
                   profits,
                   return on capital employed,
                   cash flow,
                   employment.
   (d)     factors other than trends in imports which are causing or may have caused
           injury to the Community producers concerned.
2. Where a threat of serious injury is alleged, the Commission shall also examine
   whether it is clearly foreseeable that a particular situation is likely to develop into
   actual injury. In this regard account may be taken of factors such as:
   (a)     the rate of increase of the exports to the Community;
   (b)     export capacity in the country of origin or export, as it stands or is likely to
           be in the foreseeable future, and the likelihood that that capacity will be used
        * to export to the Community.
 ---pagebreak---                                                                                      12
                                   TITLE IV
                                  Surveillance
                                   Article 11
1. Where the trend in imports of a product originating in a third country covered by
   this Regulation threatens to cause injury to Community producers, and where the
   interests of the Community so require, import of that product may be subject, as
   appropriate, to:
   (a)     retrospective Community surveillance carried out in accordance with the
           provisions laid down in the decision referred to in paragraph 2,
           or
   (b)     prior Community surveillance carried out in accordance with Article 12.
2. The decision to impose surveillance shall be taken by the Commission according to
   the procedure laid down in Article 16 (5) and (6).
3. The surveillance measures shall have a limited period of validity. Unless otherwise
   provided, they shall cease to be valid at the end of the second six-month period
   following the six months in which the measures were introduced.
                                   Article 12
1. Products under prior Community surveillance may be put into free circulation only
   on production of an import document. Such document shall be endorsed by the
   competent authority designated by Member States, free of charge, for any quantity
   requested and within a maximum of five working days of receipt by the national
   competent authority of a declaration by any Community importer, regardless of his
   place of business in the Community. This declaration shall be deemed to have been
   received by the national competent authority no later than three working days after
   submission, unless it is proven otherwise.
2. The import document and the declaration by the importer shall be made out on a
   form corresponding to the model in the Annex.
 ---pagebreak---                                                                                              ^ 0
                                                                                          13
       Additional information to that provided for in the aforementioned form may be
       required. Such information shall be specified in the decision to impose surveillance.
3.     The import document shall be valid throughout the Community, regardless of the
       Member State of issue.
4.     A finding that the unit price at which the transaction is effected exceeds that
       indicated in the import document by less than 5 % or that the total value or quantity
       of the products presented for import exceeds the value or quantity given in the
       import document by less than 5 % shall not preclude the release for free circulation
       of the product in question. The Commission, having heard the opinions expressed
       in the Committee and taking account of the nature of the products and other special
       features of the transactions concerned, may fix a different percentage, which,
       however, should not normally exceed 10 %.
5.     Import documents may be used only for such time as arrangements for liberalization
       of imports remain in force in respect of the transactions concerned. Such import
       documents may not in any event be used beyond the expiry of a period which shall
       be laid down at the same time and by means of the same procedure as the
       imposition of surveillance, and shall take account of the nature of the products and
       other special features of the transactions.
6.     Where the decision taken under Article 11 so requires, the origin of products under
       Community surveillance must be proved by a certificate of origin. This paragraph
       shall not affect other provisions concerning the production of any such certificate.
7.     Where the product under prior Community surveillance is subject to regional
       safeguard measures in a Member State, the import authorization granted by that
       Member State may replace the import document.
                                         Article 11
Where import of a product has not been made subject to prior Community surveillance
within eight working days of the end of consultations, the Commission, in accordance with
Article 18, may introduce surveillance confined to imports into one or more regions of the
Community.                       ,
 ---pagebreak---                                                                                            b*l
                                                                                        14
                                     Article 14
1.  Products under regional surveillance may be put into free circulation in the region
   concerned only on production of an import document. Such document shall be
   endorsed by the competent authority designated by the Member State(s) concerned,
   free of charge, for any quantity requested and within a maximum of five working
   days of receipt by the national competent authority of a declaration by any
   Community importer, regardless of his place of business in the Community. This
   declaration shall be deemed to have been received by the national competent
   authority no later than three working days after submission, unless it is proven
   otherwise. Import documents may be used only for such time as arrangements for
   imports remain liberalized in respect of the transactions concerned.
2. The import document and the declaration by the importer shall be made out on a
   form corresponding to the model in the Annex.
   Additional information to that provided in the aforementioned form may be
   required. Such particulars shall be specified in the decision to impose surveillance.
                                     Article 15
1. Member States shall communicate to the Commission within the first ten days of
   each month in the case of Commumty or regional surveillance :
   (a)      in the case of prior surveillance, details of the sums of money (calculated
           on the basis of cif prices) and quantities of goods in respect of which import
           documents were issued or endorsed during the preceding period;
   (b)     in every case, details of imports during the period preceding the period
           referred to in subparagraph (a).
   The information supplied by Member States shall be broken down by product and
   by country.
   Different provisions may be laid down at the same time and by the same procedure
   as the surveillance arrangements.
2. Where the nature of the products or special circumstances so require, the
   Commission may, at the request of a Member State or on its own initiative, amend
   the timetables for submitting this information.
3. The Commission shall inform the Member States accordingly.
 ---pagebreak---                                                                                           3ix
                                                                                       15
                                  TITLE V
                            Safeguard measures
                                  Article 16
 Where a product is imported into the Community in such greatly increased
quantities and/or on such terms or conditions as to cause, or threaten to cause,
serious injury to Community producers, the Commission, in order to safeguard the
interests of the Community, may, acting at the request of a Member State or on its
own initiative:
(a)     limit the period of validity of import documents within the meaning of
        Article 12 to be endorsed after the entry into force of this measure;
(b)     alter the import rules for the product in question by making its release for
        free circulation conditional on production of an import authorization, the
        granting of which shall be governed by such provisions and subject to such
        limits as the Commission shall lay down.
The measures referred to in (a) and (b) shall take effect immediately.
(a)     When establishing a quota, account shall be taken in particular of:
                the desirability of maintaining, as far as possible, traditional trade
                flows,
                the volume of goods exported under contracts concluded on normal
                terms and conditions before the entry into force of a safeguard
                measure within the meaning of this Title, where such contracts have
                been notified to the Commission by the Member State concerned,
                the need to avoid jeopardizing achievement of the aim pursued in
                establishing the quota.
(b)     The quota shall not be set lower than the average level of imports over the
        last three representative years for which statistics are available unless a
        different level is necessary to prevent or remedy serious injury.
(a)     In cases in which a quota is allocated among supplier countries, allocation
        may be agreed with those of them having a substantial interest in supplying
        the product concerned for import into the Community.
 ---pagebreak---                                                                                             lib
                                                                                         16
           Failing this, the quota shall be allocated among the supplier countries in
           proportion to their share of imports into the Community of the product
           concerned during a previous representative period, due account being taken
           of any specific factors which may have affected or may be affecting the trade
           in the product.
   (b)     Provided that its obligation to see that consultations are conducted under the
           auspices of the WTO Committee on Safeguards is not disregarded, the
           Community may nevertheless depart from this method of allocation if
           imports originating in one or more supplier countries have increased in
           disproportionate percentage in relation to the total increase of imports of the
           product concerned over a previous representative period.
4. (a)     The measures referred to in this Article shall apply to every product which
           is put into free circulation after their entry into force. In accordance with
           Article 18 they may be confined to one or more regions of the Community.
   (b)     However, such measures shall not prevent the release for free circulation of
           products already on their way to the Community provided that the
           destination of such products cannot be changed and that those products
           which, under Articles 11 and 12, may be put into free circulation only on
           production of an import document are in fact accompanied by such a
           document.
5. Where intervention by the Commission has been requested by a Member State, the
   Commission shall take a decision within a maximum of five working days of receipt
   of such a request.
6. Any decision taken by the Commission under this Article shall be commumcated to
   the Council and to the Member States. Any Member State may, within one month
   following the day of such communication, refer the decision to the Council.
7. If a Member State refers the Commission's decision to the Council, the Council,
   acting by a qualified majority, may confirm, amend or revoke that decision.
   If, within three months of the referral of the matter to the Council, the Council has
   not taken a decision, the decision taken by the Commission shall be deemed
   revoked.
 ---pagebreak---                                                                                            17
                                         Article 17
Where the interests of the Community so require, the Council, acting by a qualified
majority on a proposal from the Commission drawn up in accordance with the terms of
Title III, may adopt appropriate measures to prevent a product being imported into the
Community in such greatly increased quantities and/or on such terms or conditions as to
cause, or threaten to cause, serious injury to Community producers of like or directly
competing products.
Article 16 (2), (3) and (4) shall apply.
                                         Article 18
Where it emerges, primarily on the basis of the factors referred to in Article 10, that the
conditions laid down for the adoption of measures under Articles 11 and 16 are met in one
or more regions of the Community, the Commission, after having examined alternative
solutions, may exceptionally authorize the application of surveillance or safeguard
measures limited to the region(s) concerned if it considers that such measures applied at
that level are more appropriate than measures applied throughout the Community.
These measures must be temporary and must disrupt the operation of the internal market as
little as possible.
The measures shall be adopted in accordance with the provisions laid down in Articles 11
and 16 respectively.
                                         Article 19
No safeguard measure may be applied to a product originating in a developing country
Member of the WTO as long as that country's share of Community imports of the product
concerned does not exceed 3%, provided that developing country Members with less than a
3% import share collectively account for not more than 9% of total Community imports of
the product concerned.
 ---pagebreak---                                                                                             l>a.r
                                                                                         18
                                     Article 20
1. The duration of safeguard measures must be limited to the period of time necessary
   to prevent or remedy serious injury and to facilitate adjustment on the part of
   Community producers. The period should not exceed four years, including the
   duration of any provisional measure.
2. Such initial period may be extended, except in the case of the measures referred to
   in Article 16(3)(b), provided it is determined that:
           the safeguard measure continues to be necessary to prevent or remedy
           serious injury,
           and there is evidence that Community producers are adjusting.
3. Extensions shall be adopted in accordance with the terms of Title III and using the
   same procedures as the initial measures. A measures so extended shall not be no
   more restrictive than it was at the end of the initial period.
4. If the duration of the measure exceeds one year, the measure must be progressively
   liberalized at regular intervals during the period of application, including the period
   of extension.
5. The total period of application of a safeguard measure shall not exceed eight years.
                                     Article 21
1. While any surveillance or safeguard measure applied in accordance with Titles IV
   and V is in operation, consultations shall be held within the Committee, either at
   the request of a Member State or on the initiative of the Commission. If the
   duration of a safeguard measure exceeds three years, the Commission shall seek
   such consultations no later than the mid-point of the period of application of that
   measure.
   The purpose of such consultations shall be:
   (a)     to examine the effects of the measure;
   (b)     to determine whether and in what manner it is appropriate to accelerate the
           pace of liberalization;
   (c)     to ascertain whether its application is still necessary.
 ---pagebreak---                                                                                           î>2£
                                                                                       19
2. Where, as a result of the consultations referred to in paragraph 1, the Commission
   considers that any surveillance or safeguard measure referred to in Articles 11, 13,
   16, 17 and 18 should be revoked or amended, it shall proceed as follows:
   (a)     where the measure was enacted by the Council, the Commission shall
          propose to the Council that it be revoked or amended. The Council shall act
          by a qualified majority.
   (b)     in all other cases, the Commission shall amend or revoke Community
           safeguard and surveillance measures.
   Where the decision relates to regional surveillance measures, it shall apply from the
   sixth day following that of its publication in the Official Journal of the European
   Communities.
                                    Article 22
1. Where imports of a product have already been subject to a safeguard measure no
   further such measure shall be applied to that product until a period equal to the
   duration of the previous measure has elapsed. Such period shall not be less than
   two years.
2. Notwithstanding paragraph 1, a safeguard measure of 180 days or less may be
   reimposed for a product if:
   (a)     at least one year has elapsed since the date of introduction of a safeguard
           measure on the import of that product, and
   (b)     such a safeguard measure has not been applied to the same product more
           than twice in thefive-yearperiod immediately preceding the date of
           introduction of the measure.
 ---pagebreak---                                                                                              20
                                           TITLE VI
                                       Final provisions
                                           Article 23
Where the interests of the Community so require, the Council, acting by a qualified
majority on a proposal from the Commission, may adopt appropriate measures to allow the
rights and obligations of the Community or of all its Member States, in particular those
relating to trade in commodities, to be exercised and fulfilled at international level.
                                           Article 24
1       This Regulation shall not preclude the fulfilment of obligations arising from special
        rules contained in agreements concluded between the Community and third
        countries.
2.       (a) Without prejudice to other Community provisions, this Regulation shall not
              preclude the adoption or application by Member States:
              (i)     of prohibitions, quantitative restrictions or surveillance measures on
                      grounds of public morality, public policy or public security; the
                     protection of health and life of humans, animals or plants, the
                     protection of national treasures possessing artistic, historic or
                      archaeological value, or the protection of industrial and commercial
                     property;
              (ii)    of special formalities concerning foreign exchange;
              (iii)    of formalities introduced pursuant to international agreements in
                           accordance with the Treaty.
        (b)      The Member States shall inform the Commission of the measures or
                 formalities they intend to introduce or amend in accordance with this
                 paragraph. In the event of extreme urgency, the national measures or
                 formalities in question shall be communicated to the Commission
                 immediately upon their adoption.
 ---pagebreak---                                                                                              21
                                         Article 25
1.      This Regulation shall be without prejudice to the operation of the instruments
        establishing the common organization of agricultural markets or of Community or
        national administrative provisions derived therefrom or of the specific instruments
        applicable to goods resulting from the processing of agricultural products; it shall
        operate by way of complement to those instruments.
2.      However, in the case of products covered by the instruments referred to in
        paragraph 1, Articles 11 to 15 and 22 shall not apply to those in respect of which
        the Community rules on trade with third countries require the production of a
        licence or other import document.
        Articles 16, 18 and 21 to 24 shall not apply to those products in respect of which
        such rules provide for the application of quantitative import restrictions.
                                         Article 26
Until 31 December 1995, Spain and Portugal may maintain the quantitative restrictions on
agricultural products referred to in Articles 77, 81, 244, 249 and 280 of the Act of
Accession.
                                         Article 27
Regulation (EC) No 518/94 is hereby repealed. References to the repealed Regulation shall
be understood as referring to this Regulation.
                                         Article 28
This Regulation shall enter into force on a date determined by a decision on the entry into
force of the acts implementing the results of the Uruguay Round.
This Regulation shall be binding in its entirety and directly applicable in all Member
States.
 ---pagebreak---                                                                                                             ^2.3
                                                  ANNEX
            List of particulars to be given in the boxes of the surveillance document
SURVEILLANCE DOCUMENT
 1. Applicant
    (name, full address, country)
 2. Registration No
 3. Consignor (name, address, country)
 4. Competent authorities of issue
    (name and address)
 5. Declarant (name and address)
 6. Last day of validity
 7. Country of origin
 8. Country of consignment
 9. Proposed place and date of importation
10. Reference to Regulation (EC) which imposed surveillance
11. Description of goods, marks and numbers, number and kind of packages
12. Goods code (CN)
13. Gross mass (kg)
14. N e t mass (kg)
15. Additional units
16. cif value EC frontier in ecu
17. Further particulars
18. Certification by the applicant:
    I, the undersigned, certify that the information provided in this application is true and given in good
    faith.
    Date and place
    (signature)         (stamp)
19. Stamp of the competent authorities
    Date
    (signature)         (stamp)
Original for the applicant
Copy for the competent authorities
 ---pagebreak---                                                                                                                                                   13>O
    EUROPEAN COMMUNITIES                                                      SURVEILLANCE DOCUMENT
    1. Applicant (name, full address, country)                                2. Registration No
    3. Consignor (name, address, country)                                     4. Competent authorities of issue (name and address)
    S. Declarant (name and address)                                           6. Last day of validity
x
o                                                                             7. Country of origin                8. Country of consignment
  • 9. Proposed place and date of importation                                 10. Reference to Regulation (EC) which imposed surveillance
    11. Description of goods, marks and numbers, number and kind of packages                 12. Goods code (CN)
                                                                                                                  13. Gross mass (kg)
                                                                                                                  14. Net mass (kg)
                                                                                                                  15. Additional units
                                                                                                                  16. cif value EC frontier in ecu
    17. Further particulars
   18. Certification by the applicant :
        I. undersigned, certify that the information provided in this application is true and given in good faith
   19. Stamp of the competent authorities                                                    Place and date
                                                Date:
        (signature)                             (stamp)
                                                                                             (signature)                                     (stamp)
 ---pagebreak---                                                                                                                                               3>%
EUROPEAN COMMUNITIES                                                      SURVEILLANCE DOCUMENT
1. Applicant (name, full address, country]                               2. Registration No
3. Consignor (name, address, country)                                    4. Competent authorities of issue (name and address)
5. Declarant (name and address)                                          6. Last day of validity
                                                                         7. Country of origin                 8. Country of consignment
9. Proposed place and date of importation                                 10. Reference to Regulation (EC) which imposed surveillance
11. Description of goods, marks and numbers, number and kind of packages                12. Goods code (CN)
                                                                                                              13. Gross mass (kg)
                                                                                                              14. Net mass (kg)
                                                                                                              15. Additional units
                                                                                                              16. cif value EC frontier in ecu
17. Further particulars
18. Certification by the applicant:
    I. undersigned, certify that the information provided in this application is true and given in good faith
19. Stamp of the competent authorities                                                   Place and date
                                            Date:
    (signature)                              (stamp)
                                                                                         (signature)                                     (stamp)
 ---pagebreak---                     S i 2/
Commercial defence:
  New Instrument
 ---pagebreak---                                                                                                     %^3
                              EXPLANATORY MEMORANDUM
This proposal amends Regulation 2641/84 on the strengthening of the common
commercial policy with regard in particular to protection against illicit commercial
practices. The Council has already amended this Regulation (with Regulation 522/94)
in order to strengthen the link between this instrument of commercial defence and the
improved dispute settlement mechanism of the WTO. This purpose has been achieved
at the procedural level: resort to Regulation 2641/84 (as already amended) will enable
Community industries and Member States to activate the Community institutions
(Commission and Council) for the purpose of WTO dispute settlement with all the
necessary guarantees of transparency and due process, and subject to the control of the
Court of Justice.
This new proposal is aimed at pursuing this process further, by making the instrument
better adapted to the changed nature of WTO dispute settlement (including, but not
limited to, its applicability to the GATS1 and TRIPs Agreements). In particular, the
proposed amendments are aimed at dealing with problems created by third country
illicit commercial practices for Community exporters on foreign markets. A brief
explanation of the rationale for the proposed changes follows below, together with a
table summarising the possibilities of action which would exist under this proposed
Regulation if it were adopted.
No change is being proposed to the decision-making procedures resulting from the
amendments already adopted in 1994, except for re-grouping the relevant provisions in
a more logical order. Thus, this proposal would not result in any modification of the
respective roles of the Community institutions involved (Commission and Council) and
of the majority required for the Council to decide on these matters.
1.     Reg. 2641/84 is currently based on two "tracks" : the first gives a Community
       industry the right to complain against foreign "illicit practices" if it suffers
       material injury; the second gives Member States the right to prompt the
       Commumty to act in all cases (including, but not limited to, illicit practices) in
       which the Community has rights under international rules.
2.     The second "track" (i.e. referral of a matter by one or more Member States
       invoking the defense of the Community's international rights) appears now
       satisfactory, after the 1994 amendments. Any further changes should only be
1
     In particular, the notion of "providers of services" has been introduced within the concept of
     "Community industry", to take into account the new rules of the GATS
 ---pagebreak---                                                                                          ^
   envisaged after its effectiveness has been tested in practice (which will only
   happen after the WTO has entered into force). The first "track" (complaint by a
   Community industry against an "illicit practice"), instead, continues to suffer
   from serious shortcomings, and the renewed interest that many sectors of
   European industry are showing for the WTO and the new rules has highlighted
   these shortcomings.
3. The first problem lies with the concepts of "Community industry" and of
   "material injury". These were borrowed from existing commercial defence
   instruments, and it continues to make sense to use them in the context of any
   instrument of protection of the Community's domestic market, even though they
   are stricter than what WTO/GATT requires from us. However, most GATT rules
   are based on a test of "adverse effects on trade" which often does not coincide
   with "injury": in general, GATT employs the concept of "nullification or
   impairment" of benefits, which is even presumed (and the presumption is
   practically irrefutable) in cases of violation of GATT rules. Some agreements go
   even further: the new Subsidies Agreement, for instance, expressly provides that
    "material injury" is only one of three possible types of "adverse effects on trade",
   the other ones being "nullification or impairment" in the general GATT sense,
   and "serious prejudice" to a country's interests (cf. Article 5 new Subsidies
   Agreement).
4. Furthermore, if we consider the effect of foreign trade practices on Community
   exports to third countries (whether to the country applying or maintaining the
   practices in question or to another country), as opposed to imports into the
   Community, very rarely the whole of a Community industry (or a major
   proportion thereof) is concerned. Yet, this does not make the practices in
   question any less objectionable or even illicit. Moreover, the effect of trade
   barriers is often first and foremost to prevent trade from taking place (by
   discouraging potential exporters), even before a trade distortion takes place.
5.  In these circumstances, it makes sense to add a "third track", under which
    Community exporters could prompt the Community to react against objectionable
    or illicit foreign trade practice that affect them in third country markets, while
    leaving untouched the existing "tracks" (the first one, notwithstanding its strict
    limitations, could still be useful for Commumty industries, as regards the
    Community's domestic market; the second "track" contains", of course, the
    general "right of action" for Member States).
6.  The objective of this exercice is not to create an easier way way of applying the
    instrument, but a different one, better suited to a market opening strategy in
    favour of our exporters. Thus, the question is not to relax the conditions for
    standing of the complainant and for the trade effects suffered, but to adapt them
    to an instrument for the opemng of third country market (as opposed to yet
    another instrument for the defence of the Community market, which does not
    appear appropriate in this context).
 ---pagebreak---                                                                                    1.3S-
Thus, while "Community enterprises", even individually, should have the right to
lodge a complaint under this new third "track", they would have to show that the
reasons for the Community to act go beyond the narrow advantage that the
complaining firm(s) could draw from the Community's international action.
Moreover, the concept of "material injury" can only be replaced (in respect of
Community exports) with another concept which also has in-built limitations, so
that not just any kind of effects would justify the Community's intervention. The
solution proposed here is to introduce the notion of "adverse trade effects",
which is strictly linked to how these effects are (or will) be defined through the
WTO (including through dispute settlement cases), in order to offer a sufficient
guarantee against "open-ended" actions. A requirement of "material impact" has
also been added, to enable the Community institutions to weed out frivolous
actions, and to concentrate on actions which benefit the Community and/or
Member States beyond the advantages they would bring to the complainant.
The considerations set out in points 6 through 8 above, together with the
Community's traditional and well-founded position that market opening and trade
liberalisation must be pursued within the context of the multilateral trading
system (as well as with the need to differentiate this instrument, in terms of
international legality, from section 301) strongly militate in favour of
strengthening even further the link between this commercial policy instrument
and international (essentially WTO) trade rules and dispute settlement.
 ---pagebreak---                                                                                                                                           22 September 1994
                                                                             TABLE
                                            Actions possible under the proposed commercial practices Regulation
                                    Complainant                  Practice complained of                    Effects to be shown              Market where the effects
                                                                                                                                                    take place
       1st track                Community industry                        illicit practices                   material injury            Community market or a third
  (complaint Art. 3)        (or major proportion thereof)             (includes violations of                                                    country market
                      it now includes providers of services,            GATT/WTO rules)
                           as well as producers of goods
      2nd track                    Member States                  exercise of the Community's     only those necessary for the action    Community market or a third
   (referral Art. 4)                                                   international rights                  being requested                     country market
                                                                    (includes any commercial      (e.g. "nullification or impairment" or
                                                                   practice by a third country)   other adverse trade effects in GATT
                                                                                                          "non-violation" cases)
      3rd track               Community enterprises                 any commercial practice               adverse trade effects             market of a third country
(complaint Art. 3bis)                                                   by a third country      (defined by the international rules
                      (it includes a fortiori the Community                                     being invoked: in GATT/WTO terms it       (including that of the country
                                 industry as a whole)                                           includes both "violation" and "non-        applying or maintaining the
                            whether producers of goods                                          violation" cases)                            practice complained of)
                               or providers of services                                         includes a requirement of "material
                                                                                                impact" on the Community
                                                                                                                                                                         0^
 ---pagebreak---                                                                                           ~X\
                                         ANNEX
                      Description of the changes Article by Article
Article 1: Aims
The notion of "adverse trade effects" resulting from any commercial practice has been
introduced, alongside those of "injury" resulting from an illicit commercial practice
and of "exercise of Community's rights". The notion of "adverse trade effects" is
defined later on, in Article 2.
Article 2: Definitions
1.     The notion of "providers of services" has been introduced within the concept of
        "Community industry", to take into account the new rules of the GATS.
2.     The concept of "regional injury" (paragraph 4 (b)) has been reduced to the case
       of imports into a region of the Community because, apart from the fact that the
       case of injury caused to a "regional exporting industry" is at best marginal, it
       would in any event be taken care of by the new "track".
3.     The notion of adverse trade effects" is defined (in paragraph 5), and strictly
       linked to a "right of action" under international trade law (essentially WTO,
       therefore) in respect of trade in goods and/or services. The fact that the effects
       complained of must be "typified" under international rules offers a sufficient
       guarantee against "open-ended" actions, and can therefore permit this right to
       complain to encompass both "violation" cases ("illicit practices") and "non-
       violation" cases (trade practices which are not "illicit" but which can
       nevertheless be attacked through GATT/WTO dispute settlement on the basis of
       their trade effects: a typical example are domestic subsidies).
       The notion also includes a requirement of "material impact", which would
       enable the Community institutions to weed out, frivolous actions, and to
       concentrate on actions which benefit the Community and/or Member States
       beyond the advantages they would bring to the complainant.
4.     The notion of "Community enterprises", as those who have a right to lodge a
       complaint under this "third track" when they have suffered from "adverse trade
       effects", has been introduced (in paragraph 6). The actual language of this
       provision may need to be reviewed in consultation with the Legal Service, to
       make sure that it is consistent with the same concept as used in other areas of
       Community law.
 ---pagebreak--- Article 3: Complaint
This Article has been split, in fact, into three separate provisions :
       Article 3 confirms the right of a Community industry to complain against illicit
       practices which have caused it to suffer material injury ("first track").
       Article 3bis introduces the right of Community enterprises to complain when
       they have suffered from adverse trade effects in the two cases mentioned above
       ("third track").
       Article 3ter lays down the procedures to be followed in respect of either of such
       complaints when they are lodged with the Commission. The provision on the
       deadline for a decision on whether to open an examination procedure or not has
       been moved here (from the end of Article 6), and amended to shorten the
       deadline to 45 days in all cases, except where the complainant itself prefers to
       integrate the complaint with more information rather than risk a negative
       decision.
Article 4: Referral by a Member State
1.     This Article maintains the general right of complaint for Member States in all
       circumstances ("second track") and clarifies that it includes the case of "adverse
       trade effects".
2.     It further clarifies that Member States must only supply "sufficient" evidence
        (since this is a pre-initiation stage of the procedure), and that such evidence
       must refer to all the elements of the referral: the commercial practice
       complained of (whether or not it is an illicit one) and any resulting effects
       which may be necessary to allege in an international action, e.g. under WTO
       dispute settlement procedures.
3.      Finally, a provision introducing a firm 45 days deadline (modelled on that
       provided for complaints by the Community industry or Commumty enterprises)
       has been added, to guarantee Member States prompt examination of their
       requests.
Article 5: Consultation procedure (unchanged^
Article 6Î Community examination procedure
Paragraph 8 has been deleted, and corresponding provisions have been inserted in
Articles 3 ter and 4.        ,
 ---pagebreak---                                                                                            -llî
Article 7: Confidentiality (unchanged)
Article 8: Evidence
1.     The existing provisions of the Article have been amended to conform to the
       changes described above.
2.     The meaning of "adverse trade effects", in terms of the economic impact of a
       foreign trade practice, is further clarified (in paragraph 4).
3.   , The link between adverse trade effects and a GATT/WTO right of action is also
       further clarified, in terms of evidence which has to be provided by the parties
       and examined by the Commission (in paragraph 5). In particular, this
       provisions is meant to ensure that when no evidence of adverse trade effects is
       necessary for an international action (eTg. in a GATT/WTO "violation" case,
       where such effects are presumed according to consolidated GATT
        "jurisprudence"), the Commission can take this into account when evaluating
       the evidence, either at the stage of a complaint/referral, or of the investigation.
4.     The non-exhaustive nature of any evidentiary requirements listed in this Article
       has been further clarified (in paragraph 6). The formula employed comes from
       the provisions on injury in AD and CVD (under both the existing Codes and the
       New Agreements).
5.     The title has been changed to reflect the above;
Article 9: Termination of the procedure
1.     Paragraph 2(a) has been amended to make it clear that this type of termination
       of the procedure does not require any Community action. The reference to
       Article 11 was confusing because, in fact, Article 11 provided for the
       application of Article 12 to decisions under Article 9, paragraph 2(a).
2.     The amendment to paragraph 2(c) is purely stylistical.
Article 10: Adoption of commercial policy measures
1.     A reference to the "third track" has been included (paragraph 1).
2.     A link between the measures that the Commission would eventually propose to
       the Council (if necessary) and those which can be authorised by the WTO
       dispute settlement body ("DSB") in case of non-implementation of a panel's
       report has been made more explicit (in paragraph 2).
 ---pagebreak---                                                                                         \ ^o
Article 11: Decision-making procedures
The text of this Article is that which results from Regulation 522/94, and the changes
proposed here are meant to clarify the language, but not to modify the substance of the
1994 amendment. The title of the Article has also been modified for the same reason.
Article 12: Committee procedure
A title has been introduced for case of reference to this Article. (The same has been
done for Articles 13 and 14).
Article 13: General provisions
Beside the introduction of a title, a provision has been added repealing the original
Regulation 2641/84 and its 1994 amendment (Reg. 522/94) and replacing them entirely
with this new Regulation.
Article 14: Entry into force
The formula employed here has been suggested by the Legal Service for all the
elements of the U.R. Implementing package.
 ---pagebreak---                                                                                                             un
                                              Proposal for a
                                                                                      9 4 / 0233(ACC)
                                     Council Regulation (EC) No. ( )
on the strengthening of the common commercial policy, in particular with regard to protection
against illicit commercial practices and adverse trade effects suffered by Community enterprises,
and to the exercise of the Community's rights under international trade rules;
THE COUNCIL OF THE EUROPEAN UNION,
Having regard to the Treaty establishing the European Community, and in particular Article 113 thereof,
Having regard to the rules establishing the common organisation of agricultural markets and the rules
adopted under Article 235 of the Treaty, applicable to goods processed from agricultural products, and in
particular those provisions thereof, which allow for derogation from the general principle that any
quantitative restriction or measure having equivalent effect may be replaced solely by the measures
provided for in those instruments,
Having regard to the proposalfromthe Commission,
Having regard to the opinion of the European Parliament,
Whereas the common commercial policy must be based on uniform principles, notably with regard to
commercial defence;
Whereas Council Regulation (EC) No ( ) on protection against dumped imports from countries not
members of the European Community, Council Regulation (EC) No ( ) on protection against subsidised
importsfromcountries not members of the European Community, Council Regulation (EC) No 518/94 on
common rules for imports, and Council Regulation (EC) No 519/94 on common rules for imports from
certain third countries constitute important components of the Community's system of commercial
defence;
Whereas such instruments are based on common concepts, notably the injury caused to a Community
industry, and this concept appears appropriate in the context of any instrument of legitimate protection of
the Community's domestic market;
 ---pagebreak--- Whereas the Council Regulation (EEC) No 2641/84 had provided the Community with procedures
enabling it :
                  to respond to any illicit commercial practice with a view to removing the injury resulting
                  therefrom, and
                  to ensure full exercise of the Community's rights with regard to the commercial practices
                  of third countries;
Whereas, following conclusion of the Uruguay Round Multilateral Trade Negotiations and the perspective
creation of a World Trade Organisation ("WTO") which lays down new and improved procedures for the
settlement of trade disputes among countries Members of the WTO, Council Regulation (EC) No 522/94
had made it clear that the procedures laid down in Regulation 2641/94 were the most appropriate for the
Community industry and for Member States to prompt Community action under the WTO dispute
settlement mechanism in order to respond to illicit commercial practices and/or to ensure full exercise of
the Community's rights (as appropriate);
Whereas the experience in the application of Regulation 2641/84 has shown that the concepts of
Community industry and of injury appear inadequate to enable the Community, its Member States and its
enterprises to react to commercial practices (whether or not illicit) of third countries when the effects of
such practices are felt on the market of any third country not member of the European Community (which
may be the market of the country applying or maintaining the practice in question pr the market of another
country);
Whereas the Uruguay Round Agreement establishing the WTO ("WTO Agreement") not only improves
and develops international rules concerning trade in goods, but establishes a General Agreement on Trade
m Services ("GATS") and an Agreement on Trade-Related Intellectual property matters ("TRIPs
Agreement"), and that such Agreements also fall within the scope of the WTO dispute settlement
mechanism;
 Whereas for those reasons it appears appropriate to maintain and improve the procedures laid down in
 Regulation 2641/84, as amended by Regulation 522/94;
 Whereas in this context protection in relation to the Community's domestic market should continue to be
 granted to a Community industry suffering from material injury caused by illicit commercial practices;
 ---pagebreak---                                                                                                                  '^.ï
Whereas it is nevertheless appropriate to clarify that a Community industry can also be comprised of
providers of services, as well as producers of goods;
Whereas Member States should continue to have access to these procedures in respect of all matters
concerning commercial policy and the trade practices (whether or not illicit) of third countries, in order to
ensure full exercise of the Community's rights;
Whereas it is desirable to provide the Community with the means to operate effectively in the direction of
further trade liberalisation through the application of international trade rules, in particular those laid down
in the Annexes to the WTO Agreement;
Whereas, to this end, it is advisable to provide Community enterprises with the means to react to trade
practices which prevent them (wholly or partially) from trading with countries outside the Community,
provided that such practices give rise to the Community's right to action under applicable international
trade rules;
Whereas it appears therefore appropriate to further amend Regulation 2641/84 accordingly;
Whereas it is also appropriate to confirm that the Community must act in compliance with its international
obligations and, where such obligations result from agreements, maintain the balance of rights and
obligations which it is the purpose of those agreements to establish;
Whereas it is also appropriate to confirm that any measures taken under the procedures in question should
also be in conformity with the Community's international obligations, as well as being without prejudice to
other measures in cases not covered by this Regulation which might be adopted directly pursuant to Article
113 of the Treaty;
Whereas it should be confirmed that, for the purposes of implementing this Regulation, there should be
close co-operation between the Member States and the Commission, in particular through consultations
within the advisory committee, as well as through the information of the Committee established by Article
113 of the Treaty;
Whereas the rules of procedures to be followed during the examination procedure provided for in this
Regulation should also be confirmed, in particular as regards the rights and obligations of the Community
authorities and the parties involved, and the conditions under which interested parties may have access to
information and may ask to be informed of the essential facts and considerations resulting from the
examination procedure;
 ---pagebreak---                                                                                                                 "M
Whereas in acting under this Regulation the Community has to bear in mind the need for rapid and
effective action, through the application of the decision-making procedures provided for in the Regulation;
HAS ADOPTED THIS REGULATION :
                                                   Article 1
                                                     Aims
This Regulation establishes procedures in the matter of commercial policy which, subject to compliance
with existing international obligations and procedures, are aimed at:
(a) responding to any illicit commercial practice with a view to removing the injury resulting therefrom;
(b) responding to any commercial practice (whether or not illicit) with a view to removing the adverse
      trade effects resulting therefrom;
(c) ensuring full exercise of the Community's rights with regard to the commercial practices of third
      countries.
7/ shall be applied in particular to the initiation and subsequent conduct and termination of international
dispute settlement procedures in the area of common commercial policy.
                                                   Article 2
                                                  Definitions
 1.    For the purposes of this Regulation, illicit commercial practices shall be any international trade
practice attributable to third countries which are incompatible with international law or with the generally
accepted rules.
2.     For the purposes of this Regulation, the Community's rights shall be those international trade rights of
which it may avail itself either under international law or under generally accepted rules.
 ---pagebreak---                                                                                                               ^
3.   For the purposes of this Regulation, injury shall be any material injury caused or threatened to
Community industry.
4.   The term 'Community industry' shall be taken to mean all Community producers or providers,
respectively:
     of products or services identical or similar to the product or service which is the subject of illicit
     practices or
     of products or services competing directly with that product or service, or
     who are consumers or processors of the product or consumers or users of the service which is the
     subject of illicit practices,
or all those producers or providers whose combined output constitutes a major proportion of total
Community production of the products or services in question; however:
(a) when producers or providers are related to the exporters or importers or are themselves importers of
     the product or service alleged to be the subject of illicit practices, the term 'Community industry' may
     be interpreted as referring to the rest of the producers or providers;
(b) in particular circumstances, the producers or providers within a region of the Community may be
     regarded as the Community industry if their collective output constitutes the major proportion of the
     output of the product or service in question in the Member State or Member State within which the
     region is located provided that where the illicit practice concerns imports into the Community, their
     effect is concentrated in that Member State or those Member States.
5.   For the purposes of this Regulation, adverse trade effects shall be those
     which are felt, in respect of a product or service, on the market of any country non Member of the
     European Community, and
     which could give rise to actions under relevant international rules, whether as a result of an illicit
     commercial practice or otherwise,
     and which have a material impact, actual or potential, on the economy of the Community or of a
     region of the Community, or on a sector of economic activity therein.
Adverse trade effects shall also include cases where trade flows, concerning a product or service, are
prevented, impeded or diverted as a result of any commercial practice, as well as cases where any
commercial practice has materially affected the supply or inputs (e.g. parts and components or raw
materials) to Community enterprises. Adverse trade effects shall also include threat of such effects.
 ---pagebreak---                                                                                                                 2 V6
6.    The term "Community enterprise" shall be taken to mean any natural or legal person having an
established presence within the Community for the purpose of carrying out an economic activity
concerning the production of goods or the provision of services.
                                                     Article 3
                              Complaint on behalf of the. Community industry
1.    Any natural or legal person, or any association not having legal personality, acting on behalf of a
Community industry which considers that it has suffered injury as a result of illicit commercial practices
may lodge a written complaint.
2.    The complaint must contain sufficient evidence of the existence of illicit commercial practices and the
injury resulting therefrom. Evidence of injury must be given on the basis of the factors indicated in Article
8.
                                                   Article 3 bis
                                 Complaint on behalf of Community enterprises
1.    Any Community enterprise, or any association, having or not legal personality, acting on behalf of
one or more Community enterprises, which considers that such Community enterprises have been
materially affected by adverse trade effects within the meaning of paragraph 5 of Article 2 of this
Regulation, may lodge a written complaint.
2.    The complaint must contain sufficient evidence of the existence of commercial practices (whether or
not illicit) and of adverse trade effects, resulting therefrom. Evidence of adverse trade effects must be given
on the basis of the factors indicated in Article 8.
                                                             -o i\uio
 ---pagebreak---                                                                                                              ^ >
                                                   Article 3 ter
                                              Complaint procedures
1.    The complaint shall be submitted to the Commission, which shall send a copy thereof to the Member
States.
2     The complaint may be withdrawn, in which case the procedure may be terminated unless such
termination would not be in the interests of the Community.
3.    Where it becomes apparent after consultation that the complaint does not provide sufficient evidence
to justify initiating an investigation, then the complainant shall be so informed.
4.    The Commission shall take a decision as soon as possible on the opening of a Community
examination procedure following any complaint made in accordance with Articles 3 or 3 bis; the decision
shall normally be taken within 45 days of the lodging of the complaint; this period may be suspended at the
request, or with the agreement, of the complainant, in order to allow the provision of complementary
information which may be needed to fully assess the validity of the complainant's case.
                                                    Article 4
                                          Referral by a Member State
 1.   Any Member State may ask the Commission to initiate the procedures referred to in Article 1.
2.    It shall supply the Commission with sufficient evidence to support its request, as regards commercial
practices of third countries and, where appropriate, of any effects resulting therefrom. Where evidence of
injury or of adverse trade effects is appropriate, it must be given on the basis of the factors indicated in
Article 8.
3.    The Commission shall notify the other Member States of the requests without delay.
4.     Where it becomes apparent after consultation that the request does not provide sufficient evidence to
justify initiating an investigation, then the Member State shall be so informed.
 ---pagebreak---                                                                                                                   A't
5.     The Commission shall take a decision as soon as possible on the opening of a Community
examination procedure following any referral by a Member State made in accordance with Article 4; the
decision shall normally be taken within 45 days of the referral; this period may be suspended at the request,
or with the agreement, of the referring Member State, in order to allow the provision of complementary
information which may be needed to fully assess the validity of the case presented by the referring Member
State.
                                                     Article 5
                                             Consultation procedure
 1.     For the purpose of consultations pursuant to this Regulation, an advisory committee, hereinafter
referred to as 'the Committee', is hereby set up and shall consist of representatives of each Member State,
with a representative of the Commission as chairman.
2.      Consultations shall be initiated at the request of a Member State or on the initiative of the
Commission. The chairman of the Committee shall provide the Member States, as promptly as possible,
with all relevant information in his possession. He shall also inform the Article 113 Special Committee
 thereof.
 3.     The Committee shall meet when convened by its chairman.
 4.     Where necessary, consultations may be in writing. In such case the Commission shall notify in writing
 the Member States who, within a period of eight working days from such notification, shall be entitled to
 express their opinions in writing or to request oral consultations.
                                                      Article 6
                                       Community examination procedure
  1.     Where, after consultation, it is apparent to the Commission that there is sufficient evidence to justify
  initiating an examination procedure and that it is necessary in the interest of the Community, the
  Commission shall act as follows:
 ---pagebreak---                                                                                                           \if,5
(a) it shall announce the initiation of an examination procedure in the Official Journal of the European
    Communities; such announcement shall indicate the product and countries concerned, give a summary
    of the information received, and provide that all relevant information is to be communicated to the
    Commission; it shall state the period within which interested parties may apply to be heard orally by
    the Commission in accordance with paragraph 5;
 ---pagebreak---                                                                                                                 l£®
                                                                                                            10
(b) it shall so officially notify the representatives of the country or countries which are the subject of the
     procedure, with whom, where appropriate, consultations may be held;
(c)   it shall conduct the examination at Community level, acting in co-operation with the Member States.
2.    (a) If necessary, and notably in cases of allegations of illicit commercial practices, the Commission
            shall seek all the information it deems necessary and attempt to check this information with the
            importers, traders, agents, producers, trade associations and organisations, provided that the
            undertakings or organisations concerned give their consent.
      (b) . Where necessary, the Commission shall carry out investigations in the territory of third countries,
            provided that the governments of the countries concerned have been officially notified and raise
            no objection within a reasonable period.
      (c) The Commission shall be assisted in its investigation by officials of the Member State in whose
            territory the checks are carried out, provided that the Member State in question so requests.
3.    Member States shall supply the Commission, upon request, with all information necessary for the
examination, in accordance with the detailed arrangements laid down by the Commission.
4.     (a) The complainants and the exporters and importers concerned, as well as the representatives of
            the principal exporting or importing country or countries concerned, may inspect all information
             made available to the Commission except for internal documents for the use of the Commission
             and the administrations, provided that such information is relevant to the protection of their
             interests and not confidential within the meaning of Article 7 and that it is used by the
             Commission in its examination procedure. The persons concerned shall address a reasoned
             request in writing to the Commission, indicating the information required.
       (b) The complainants and the exporters and importers concerned and the representatives of the
             principal exporting of importing country or countries concerned may ask to be informed of the
             principal facts and considerations resulting from the examination procedure.
 5.    The Commission may hear the parties concerned. It shall hear them if they have, within the period
 prescribed in the notice published in the Official Journal of the European Communities, made a written
 request for a hearing showing that they are a party primarily concerned by the result of the procedure.
 ---pagebreak---                                                                                                             11
6.    Furthermore, the Commission shall, on request, give the parties primarily concerned an opportunity to
meet, so that opposing views may be presented and any rebuttal argument put forward. In providing this
opportunity the Commission shall take account of the wishes of the parties and of the need to preserve
confidentiality. There shall be no obligation on any party to attend a meeting and failure to do so shall not
be prejudicial to that party's case.
7.    When the information requested by the Commission is not supplied within a reasonable time or where
the investigation is significantly impeded, findings may be made on the basis of the facts available.
8.    When it has concluded its examination the Commission shall report to the Committee. The report
should normally be presented within five months of the announcement of initiation of the procedure, unless
the complexity of the examination is such that the Commission extends the period to seven months.
                                                    Article 7
                                                Confidentiality
 1.    Information received pursuant to this Regulation shall be used only for the purpose for which it was
requested.
2.     (a) Neither the Council, nor the Commission, nor Member States, nor the officials of any of these,
            shall reveal any information of a confidential nature received pursuant to this Regulation, or any
             information provided on a confidential basis by a party to an examination procedure, without
            specific permission from the party submitting such information.
       (b) Each request for confidential treatment shall indicate why the information is confidential and
             shall be accompanied by a non-confidential summary of the information or a statement of the
            reasons why the inforrnation in not susceptible of such summary.
 3.    Information will normally be considered to be confidential if its disclosure is likely to have a
 significantly adverse effect upon the supplier or the source of such information.
 4.    However, if it appears that a request for confidentiality is not warranted and if the supplier is either
 unwilling to make the information public or to authorise its disclosure in generalised or summary form, the
 information in question may be disregarded.
 ---pagebreak---                                                                                                             12
                                                                                                               kx
5.   This Article shall not preclude the disclosure of general information by the Community authorities and
in particular of the reasons on which decisions taken pursuant to this Regulation are based. Such disclosure
must take into account the legitimate interest of the parties concerned that their business secrets should not
be divulged.
                                                    Article 8
                                                    Evidence
 1.   An examination of injury shall involve in particular the following factors:
(a) the volume of Community imports or exports concerned, notably where there has been a significant
      increase or decrease, either in absolute terms or relative to production or consumption on the, market
      in question;
(b) the prices of the Community industry's competitors, in particular in order to determine whether there
      has been, either in the Community or on third country markets, significant undercutting of the prices
      of the Community industry;
(c) the consequent impact on the Community industry and as indicated by trends in certain economic
      factors such as:
            production,
            utilisation of capacity,
            stocks,
            sales,
            market share,
            prices (that is, depression of prices or prevention of price increases which would normally have
            occurred),
            profits,
       -    return on capital,                                                                  /
            investment,
            employment.
 ---pagebreak---                                                                                                                   ^
                                                                                                               13
2.    Where a threat of injury is alleged, the Commission shall also examine whether it is clearly
foreseeable that a particular situation is likely to develop into actual injury. In this regard, account may also
be taken of factors such as:
(a) the rate of increase of exports to the market where the competition with Community products is taking
      place;
(b) export capacity in the country of origin or export, which is already in existence or will be operational
      in the foreseeable future, and the likelihood that the exports resulting from that capacity will be to the
      market referred to in point (a).
3.    Injury caused by other factors which, either individually or in combination, are also adversely
affecting Community industry must not be attributed to the practices under consideration.
4.    Where adverse trade effects within the meaning of paragraph 5 of Article 2 of this Regulation are
alleged, the Commission shall examine the impact of such adverse effects, actual or potential, on the
economy of the Community or of a region of the Community, or on a sector of economic activity therein.
To this effect, the Commission may take into account, where relevant, factors of the type listed in
paragraphs 1 and 2 above, as well as the impact on the current and future competitiveness of the
Community and of its Member States, including in terms of technological advance.
5.    The Commission shall also, in examining evidence of adverse trade effects, have regard to the
provisions, principles or practice which govern the right of action under relevant international rules
referred to in paragraph 5 of Article 2 of this Regulation.
6.    The Commission shall further examine any other relevant evidence contained in the complaint or in
the referral. In this respect, the list of factors and the indications given jn paragraphs 1 to 5 above are not
exhaustive, nor can one or several of such factors and indications necessarily give decisive guidance as to
the existence of injury or of adverse trade effects.
                                                      Article 9
                                          Termination of the procedure
 1.   When it is found as a result of the examination procedure that the interests of the Community do not
require any action to be taken, the procedure shall be terminated in accordance with Article 12.
 ---pagebreak---                                                                                                              3-</
                                                                                                          14
2.   (a)   When, after an examination procedure, the third country or countries concerned take(s) measures
           which are considered satisfactory, and therefore no action by the Community is required, the
           procedure may also be terminated in accordance with the provisions of Article 12.
     (b) The Commission shall supervise the application of these measures, where appropriate on the
           basis of information supplied at intervals, which it may request from the third countries
           concerned and check as necessary.
     (c) Where the measures taken by the third country or countries concerned have been rescinded,
           suspended or improperly implemented or where the Commission has grounds for believing this
           to be the case or, finally, where a request for information made by the Commission as provided
           for by point (b) has not been granted, the Commission shall inform the Member States, and
           where necessary and justified by the results of the investigation and the new facts available any
           measures shall be taken in accordance with paragraph 3 of Article 11.
                                                  Article 10
                                  Adoption of commercial policy measures
1.   Unless the factual and legal situation is such that an examination procedure may not be required,
where it is found as a result of the examination procedure, that action is necessary in the interests of the
Community in order to:
(a) respond to any illicit commercial practice with the aim of removing the injury resulting therefrom; or
(b) ensure the removal of adverse trade effects suffered by Community enterprises; or
(c) ensure full exercise of the Community's rights with regard to the commercial practices of third
     countries.
the appropriate measures shall be determined in accordance with the procedure set out in Article 11.
 ---pagebreak---                                                                                                             3£T
                                                                                                         15
2.    Where the Community's international obligations require the prior discharge of an international
procedure for consultation or for the settlement of disputes, the measures referred to in paragraph 3 shall
only be decided on after that procedure has been terminated, and taking account of the results of the
procedure. In particular, where the Community has requested an international dispute settlement body to
indicate and authorize the measures which are appropriate for the implementation of the results of an
international dispute settlement procedure, the Community commercial policy measures which may be
needed in consequence of such authorization shall be compatible with those recommended by such
international dispute settlement body.                                                                 \t
3.    Any commercial policy measures may be taken which are compatible with existing international
obligations and procedures, notably:
(a) suspension or withdrawal of any concession resulting from commercial policy negotiations;
(b) the raising of existing customs duties or the introduction of any other charge on imports;
(c) the introduction of quantitative restrictions or any other measures modifying import or export
      conditions or otherwise affecting trade with the third country concerned.
4.    The corresponding decisions shall state the reasons on which they are based and shall be published in
the Official Journal of the European Communities. Publication shall also be deemed to constitute
       i         '          '           •                . .  . . - • -                                •
notification to the countries and parties primarily concerned.
                                                   Article 11             ,
                                          Decision-makingprocedures
 1.   The decisions referred to in paragraphs 1 and 2(a) of Article 9 shall be adopted in accordance with
 the provisions of Article 12.
 2.    Where the Community follows formal international consultation or dispute settlement procedures,
 decisions relating to the initiation, conductor termination ofsuch procedures shall be taken in accordance
 with Article! 2.
 ---pagebreak---                                                                                                          16
3.    Where the Community, having acted in accordance with paragraph 2 of Article 10 of this Regulation,
has to take a decision on the measures of commercial policy to be adopted under paragraph 2(c) of Article
9 or under Article 10, thé Council shall act, in accordance with Article 113 of the Treaty, by a qualified
majority, not later than 30 working days after receiving the proposal.                              ^
                                                   Article 12
                                            Committee procedure
Should reference be made to the procedure provided for in this Article, the matter shall be brought before
the Committee by its chairman.
The Commission representative shall submit to the Committee a draft of the decision to be taken. The
Committee shall discuss the matter within a period to be fixed by the chairman, depending on the urgency
of the matter.
The Commission shall adopt a decision which it shall communicate to the Member States and which shall
apply after a period of 10 days if during this period no Member State has referred the matter to the Council.
The Council may, at the request of a Member State and acting by a qualified majority revise the
Commission's decision.
The Commission's decision shall apply after a period of 30 days if the Council has not given a ruling within
this period, calculated from the day on which the matter was referred to the Council.
                                                   Article 13
                                               General previsions
 1.   This Regulation shall not apply in cases covered by other existing rules in the common commercial
 policy field. It shall operate by way of complement to the:
      rules establishing the common organisation of agricultural markets and their implementing provisions;
 ---pagebreak---                                                                                                               * >
                                                                                                           17
      specific rules adopted under Article 235 of the Treaty, applicable to goods processed from agricultural
      products.
It shall be without prejudice to other measures which may be taken pursuant to Article 113 of the Treaty.
2.    Regulation (EEC) No. 2641/84, as amended by Regulation (EC) No. 522/94 is hereby repealed.
References to the repealed Regulation shall be construed as references to this Regulation.
                                                   Article 14
                                                Entry into force
1.    This Regulation shall enter into force on the date determined by a decision governing the entry into
force of the acts implementing the results of the Uruguay Round.
2.    This Regulation shall be binding in its entirety and directly applicable in all Member States.
 ---pagebreak---                       1st
        Part 7
Intellectual property
 ---pagebreak---                                      iiA
TRIPs MODIFICATIONS IN COMMUNITY LAW
 ---pagebreak---                                                                                              **>(>:
                          EXPLANATORY MEMORANDUM
               FOR TRIPs MODIFICATIONS IN COMMUNITY LAW
I.      INTRODUCTION
The Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs)
concluded within the framework of the Uruguay Round negotiations contains provisions
on the protection of intellectual property rights, in particular with the purpose of
establishing international disciplines in this area in order to promote international trade
and to prevent trade distortions due to the lack of adequate and effective intellectual
property protection.
The TRIPs Agreement, in addition to establishing general provisions and basic principles
on the protection of intellectual property rights, provides for standards concerning the
availability, scope and use of intellectual property rights, notably:
        copyright and related rights;
        trademarks;
        geographical indications;
        industrial designs;
        patents;
        layout-designs (topographies) of integrated circuits;
        protection of undisclosed information; and
        contains also provisions on the control of anti-competitive practices in contractual
        licences.
These standards are to be enforced domestically on the basis of detailed provisions,
including special requirements related to border measures; the acquisition and
maintenance of intellectual property rights and related civel and criminal law procedures.
This proposal for a Council Regulation contains proposals to amend those Community
acts which have to be modified in order to implement in Community law the provisions
of the TRIPs Agreement. Reference is also made in this Explanatory Memorandum to
current proposals of Community acts submitted by the Commission to the
Council/Parliament which would also have to be amended in order to bring them into line
with the requirements of the TRIPs Agreement.
 The present proposal does not concern those areas of current Member State legislation
 which would have to be amended to implement the TRIPs Agreement. In this respect,
 consultations between Member States and the Commission seem necessary in order to
 ensure that such modifications of Member State legislation be undertaken against the
 background of a common analysis of the implication and interpretation of the TRIPs
 Agreement.
 ---pagebreak---                                                                                              T>H
II.      TRADEMARKS
Legislation:     Council Regulation (EC) 40/94 of 20 December 1993 on the Community
                 Trademark1.
Article 5 of Council Regulation 40/94 defines the "Persons who can be proprietors of
Community Trademarks". This Article, which notably refers to the Paris Convention for
the Protection of Industrial Property, implements in paragraph 1, subparagraphs (a) and
(b), the principle of national treatment as regards nationals and domiciliaries of a State
party to this Convention.
Nevertheless, Article 5, paragraph 1, subparagraph (d), of this Regulation basically
subjects the granting of national treatment to nationals of States not parties to the Paris
Convention to the requirement of reciprocal national treatment in their country of origin
for nationals of the Member States. Art. 29, paragraph 5, of this Regulation, concerning
the right of priority, contains a similar requirement in relation to filings made in a State
which is not a party to the Paris Convention..
In order to comply with the national treatment obligation in Article 3 of the TRIPs
Agreement, these provisions should be modified to ensure that nationals of all WTO
Members, even if the Member in question is not a party to the Paris Convention, receive a
treatment no less favourable than that accorded to nationals of Community Member
 States.
 III.    GEOGRAPHICAL INDICATIONS
Insofar as the protection of geographical indications for wines and spirits as foreseen in
 Article 23 TRIPs is concerned, the relevant amendments to Council Regulation 822/87 of
 16 March 1987, Council Regulation 1601/91 of 10 June 1991, both of them concerning
 wines, and Council Regulation 1576/89 of 29 May 1989 concerning spirit drinks, are
 dealt with in the part on agriculture.
 IV.     LAYOUT-DESIGNS OF INTEGRATED CIRCUITS
 Legislation:    Council Directive 87/54/EEC of 16 December 1986 on the Legal
                 Protection of Topographies of Semiconductor Products2.
 Articles 35 to 38 of the TRIPs Agreement set out the obligations of WTO Members in
 relation to the protection of layout-designs (topographies) of integrated circuits. In
 accordance with these Articles, the Community should ensure that nationals of all other
 WTO Members benefit from such protection. The Commission proposes to extend the
 protection of topographies of integrated circuits, as required by the TRIPs Agreement, to
 nationals of all WTO Members.
  1
    OJL 1L 14.1.1994
 2
   OJ L24. 27.1.1987
 ---pagebreak---                                                                                               ZGL
V.      PROPOSED COMMUNITY LEGISLATION
In addition to amending existing Community legislation in order to bring it in line with the
TRIPs Agreement, the Commission will need to ensure that current Community proposals
in the diferent fields of intellectual property rights protection are in conformity with the
TRIPs Agreement.
                                                                                             V
 ---pagebreak---                                                                                                  •}É>3
           PROPOSAL FOR A COUNCIL REGULATION (EC) No                            /94
                                        of              1994
                                                                                     9 4 / 0234(CNS)
              amending Council Regulation (EC) No 40/94 of 20 December 1993
 on the Community trademark for the implementation of the agreements concluded
                              in the framework of the Uruguay Round
THE COUNCIL OF THE EUROPEAN UNION
Having regard to the Treaty establishing the European Community and in particular
Article 235 thereof,
Having regard to the proposal by the Commission,
Having regard to the opinion of the European Parliament,
Whereas the Agreement establishing the World Trade Organization (hereinafter, the
WTO Agreement) was signed on behalf of the Community; whereas the Agreement on
Trade-Related Aspects of Intellectual Property Rights (hereinafter, the TRIPs
Agreement), annexed to the WTO Agreement, contains detailed provisions on the
protection of intellectual property rights whose purpose is the establishment of
international disciplines in this area in order to promote international trade and prevent
trade distortions and friction due to the lack of adequate and effective intellectual
property protection;
Whereas in order to ensure that all relevant Community legislation is in full compliance
with the TRIPs Agreement, the Community must take certain measures in relation to
current Community acts on the protection of intellectual property rights; whereas these
measures entail in some respects the amendment or modification of Community acts;
whereas these measures also entail complementing current community acts;
Whereas Council Regulation (EC) 40/94 of 20 December 1993 creates the Community
Trademark 1 ; whereas Article 5 of Council Regulation 40/94 defines the "Persons who can
be proprietors of Community Trademarks" by referring notably to the Paris Convention
for the Protection of Industrial Property and requires reciprocal national treatment fron*
countries which are not parties to the Paris Convention; whereas Article 29 of Regulation
40/94, concerning the right of priority, also needs to be amended in this respect; whereas
 in order to comply with the national treatment obligation in Article 3 of the TRIPs
 Agreement, these provisions should be modified to ensure that nationals of all WTO
 Members, even if the Member in question is not a party to the Paris Convention, receive
 1
   OJL 11, 14.1.1994, p. 1
 g:\raithra\public\ip\940726b
 ---pagebreak---                                                                                                     TJtL/
a treatment no less favourable than that accorded to nationals of Community Member
States.
HAS ADOPTED THIS REGULATION
                                                Article 1
Article 5 of Council Regulation (EC) No 40/94 of 20 December 1993 on the Community
trade mark, paragraph 1, subparagraph (b), is replaced by the following text:
            "(b) nationals of other States which are parties to the Paris Convention for the
            protection of industrial property, hereinafter referred to as "the Paris Convention'/,
            or to the Agreement establishing the World Trade Organisation;".
                                                 Article 2
Article 5 of Council Regulation (EC) No 40/94 of 20 December 1993 on the Community
trade mark, paragraph 1, subparagraph (d), is replaced by the following text:
            "(d) nationals, other than those referred to under subparagraph (c), of any State
            which is not party to the Paris convention or to the Agreement establishing the
            World Trade Organisation and which, according to published findings, accords to
            nationals of all the Member States the same protection for trade marks as it
            accords to its own nationals and, if nationals of the Member States are required to
            prove registration in the country of origin, recognises the registration of
            Community trade marks as such proof.".
                                                 Article 3
                                                 ~-     • urnrnr •                       •"
 Article 29 of Council Regulation (EC) No 40/94 of 20 December 1993 on the
 Community trade mark, paragraph 1, is replaced by the following text:
             " 1. A person who has duly filed an application for a trademark in or for any State
             party to the Paris Convention or to the Agreement establishing the World Trade
             Organisation, or his successors in title, shall enjoy, for the purpose of filing a
             Community trade mark application for the same trade mark in respect of goods or
             services which are identical with or contained within those for which the
             application has been filed, a right of priority during a period of six months from
             the date of filing of the first application".
                                                  Article 4
  Article 29^ of Council Regulation (EC) No 40/94 of 20 December 1993 on die
 Community trade mark, paragraph 5, is replaced by the following text:
              "5. If the first filing has been made in a State which is not a party to the Pari *
              Convention or to the Agreement establishing the World Trade Organisât iou,
              paragraphs 1 to 4 shall apply only in so far as that State, according to pu!> ; !v .i
  g:\raithra\public\ip\940726b
 ---pagebreak---                                                                                                    }«•
           findings, grants, on the basis of the first filing made at the Office and subject to
           conditions equivalent to those laid down in this Regulation, a right of priority
           having equivalent effect".
                                               Article 5
1.         This regulation shall enter into force on the date determined by the decision on the
entry into force of the acts implementing the results of the Uruguay Round.
2.         It shall be applicable as of 1 January 1996.
This Regulation shall be binding in its entirety and directly applicable in all Member
States.
Done in Brussels, _ _                1994
                                                            For the Council
                                                            The President
                                         i.nmu,m<'
g:\raithra\public\ip\940726b                                                                    ~f~
 ---pagebreak---                                                                                                ~l<4>
                                 PROPOSAL FOR A COUNCIL DECISION
 on the extension of the legal protection of topographies of semiconductor products
                         to persons from a Member of the World Trade Organisation
THE COUNCIL OF THE EUROPEAN UNION
Having regard to the Treaty establishing the European Community,
Having regard to Council Directive 87/54/EEC of 16 December 1986 on the legal
protection of topographies of semiconductor products, and in particular Article 3(7)
thereof,
Having regard to the proposal from the Commission,
Whereas the Agreement establishing the World Trade Organization (hereinafter, WTO)
was signed on behalf of the Community; whereas the Agreement on Trade-Related
Aspects of Intellectual Property Rights (hereinafter, the TRIPs Agreement), annexed to
the Agreement establishing the WTO, contains detailed provisions on the protection of
intellectual property rights whose purpose is the establishment of international disciplines
in this area in order to promote international trade and prevent trade distortions and
friction due to the lack of adequate and effective intellectual property protection;
Whereas in order to ensure that all relevant Community legislation is in full compliance
 with the TRIPs Agreement; the Community must take certain measures in relation to
 current Community acts on the protection of intellectual property rights; whereas these
 measures entail in some respects the amendment or modification of Community acts;
 whereas these measures also entail complementing current community acts;
 Whereas Council Directive 87/54/EEC of 16 December 1986 concerns the legal
 protection of topographies of semiconductor products1; whereas Articles 35 to 38 of the
 TRIPs Agreement set out the obligations of WTO Members in relation to the protection
 of layout-designs (topographies) of integrated circuits; whereas iri accordance with
 Article 1, paragraph 3, and Article 3 of the TRIPs Agreement, the Community must
 ensure that nationals of all other WTO Members benefit from such protection and from
 the application of national treatment; whereas it is therefore necessary to extend the
 protection under Directive 87/54/EEC to nationals of WTO Members, without any
 reciprocity requirement; whereas it is adequate to use the procedure of Article 3,
 paragraph 7, of the Directive to this end;
 g:Vaithni\public\ip\94<)726d
  1
    OJN°L24, 27.1.1987, p. 36
                                                                                             ?
 ---pagebreak---                                                                                                3<4
HAS ADOPTED THIS DECISION
                                             Article 1
Member States shall extend the legal protection for topographies of semiconductor
products provided for under Directive 87/54/EEC as follows:
(a)        natural persons who are nationals of, or are domiciled in the territory of, a
          Member of the Agreement establishing the WTO, shall be treated as nationals of a
           Member State;
(b)        legal entities which or natural persons who have a real and effective establishment
           for the creation of topographies or the production of integrated circuits in the
           territory of a Member of the Agreement establishing the WTO shall be treated as
           legal entities or natural persons having a real and effective industrial or
           commercial establishment in the territory of a Member State.
                                             Article 2
 1.        This Decision shall enter into force on the date determined by the decision on the
entry into force of the acts implementing the results of the Uruguay Round.
2.         It shall be applicable as of 1 January 1996.
3.         Decisions 90/510/EEC2 and 93/17/EEC3 are. abrogated, as of the date of
application of the present I Decision, in so far as they concern the extension of the
protection under Directive 87/54/EEC to countries or territories Members of the
Agreement establishing the WTO.
                                              Article 3
This Decision is addressed to the Member States.
Done in Brussels,                  :-19.94
                                                         For the Council
                                                         The President
 2
   OJ L N° 285, 17.10.1990, p. 29
 3
   O J N ° L II, 19.1.1993, p. 22
 ---pagebreak---                                                                      ISSN 0254-1475
                                                              COM(94) 414 final
                                                      DOCUMENTS
EN                                                                     06 11 02
                                 Catalogue number : CB-CO-94-451-EN-C
                                                             ISBN 92-77-80974-4
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