Article 1 
1. The Community scheme of generalised tariff preferences (hereinafter referred to as ‘the scheme’) shall, from the date of entry into force of this Regulation until 31 December 2008, apply in accordance with this Regulation.
Article 2 
The beneficiary countries of the arrangements referred to in Article 1(2) are listed in Annex I.
Article 3 
1. A beneficiary country shall be removed from the scheme when it has been classified by the World Bank as a high-income country during three consecutive years, and when the value of imports for the five largest sections of its GSP-covered imports to the Community represent less than 75 % of the total GSP-covered imports of the beneficiary country to the Community. 2. When a beneficiary country benefits from a preferential commercial agreement with the Community which covers at least all the preferences provided by the present scheme for that country, it shall be removed from the list of beneficiary countries in Annex I. 3. The Commission shall notify a beneficiary country of its removal from the list of beneficiary countries in Annex I.
Article 4 
The products included in the arrangements referred to in points (a) and (b) of Article 1(2) are listed in Annex II.
Article 5 
1. The tariff preferences provided for by this Regulation shall apply to imports of products included in the arrangements enjoyed by the beneficiary country in which they originate. 2. For the purposes of the arrangements referred to in Article 1(2), the rules of origin, concerning the definition of the concept of originating products, the procedures and the methods of administrative cooperation related thereto, are laid down in Regulation (EEC) No 2454/93. 3. Regional cumulation within the meaning of Regulation (EEC) No 2454/93 shall also apply where a product used in further manufacture in a country belonging to a regional group originates in another country of the group, which does not benefit from the arrangements applying to the final product, provided that both countries benefit from regional cumulation for that group.
Article 6 
For the purposes of this Regulation: (a) ‘Common Customs Tariff duties’ means the duties specified in Part Two of Annex I to Council Regulation (EEC) No 2658/87 of 23 July 1987 on the tariff and statistical nomenclature and on the Common Customs Tariff ( 6 ), except those duties set up within the framework of tariff quotas; (c) ‘Committee’ means the Committee referred to in Article 28.
Article 7 
1. Common Customs Tariff duties on products listed in Annex II as non-sensitive products shall be entirely suspended, except for agricultural components. 2. Common Customs Tariff ad valorem duties on products listed in Annex II as sensitive products shall be reduced by 3,5 percentage points. For products of sections XI(a) and XI(b), this reduction shall be 20 %. 3. Where preferential duty rates, calculated in accordance with Article 7 of Regulation (EC) No 2501/2001 ( 7 ) on Common Customs Tariff ad valorem duties applicable on the day before the entry into force of this Regulation, provide a tariff reduction, for the products referred to in paragraph 2 of this Article, of more than 3,5 percentage points, those preferential duty rates shall apply. 4. Common Customs Tariff specific duties other than minimum or maximum duties on products listed in Annex II as sensitive products shall be reduced by 30 %. 5. Where Common Customs Tariff duties on products listed in Annex II as sensitive products include ad valorem duties and specific duties, the specific duties shall not be reduced. 6. Where duties reduced in accordance with paragraphs 2 and 4 specify a maximum duty, that maximum duty shall not be reduced. Where such duties specify a minimum duty, that minimum duty shall not apply. 7. The tariff preferences referred to in paragraphs 1 to 4 shall not apply to products of sections in respect of which those tariff preferences have been removed, for the country of origin concerned, according to Article 14, Article 21(8) and column C of Annex I.
Article 8 
1. Common Customs Tariff ad valorem duties on all products listed in Annex II which originate in a country included in the special incentive arrangement for sustainable development and good governance shall be suspended. 2. Common Customs Tariff specific duties on products referred to in paragraph 1 shall be entirely suspended, except for products for which Common Customs Tariff duties also include ad valorem duties. For products of CN codes 1704 10 91 and 1704 10 99 , the specific duty shall be limited to 16 % of the customs value. 3. For a beneficiary country the special incentive arrangement for sustainable development and good governance shall not include products of the sections for which these tariff preferences have been withdrawn according to column C of Annex I.
Article 9 
2. Before the end of 2006, the Commission shall report to the Council on the compliance by a country concerned with the above-mentioned commitments. The granting of the special incentive arrangement for sustainable development and good governance to this country beyond 1 January 2007 is subject to a Council decision. As appropriate, and on the basis of the abovementioned report, the Commission shall propose to the Council such a continuation. 3. A vulnerable country is one: (a) that is not classified by the World Bank as a high income country during three consecutive years, and whose five largest sections of its GSP-covered imports to the Community represent more than 75 % in value of its total GSP-covered imports, and (b) whose GSP-covered imports to the Community represent less than 1 % in value of total GSP-covered imports to the Community. The data to be used are those available on 1 September 2004, as an average over three consecutive years. 4. The Commission shall keep under review the status of ratification and effective implementation of the conventions listed in Annex III. Before the end of the period of application of this Regulation and in time for the discussion on the next Regulation, the Commission shall present to the Council a report concerning the status of ratification of such conventions, including recommendations by monitoring bodies.
Article 10 
2. The requesting country shall submit its request to the Commission in writing and shall provide comprehensive information concerning ratification of the conventions referred to in Annex III, the legislation and measures to effectively implement the provisions of the conventions and its commitment to accept and fully comply with the monitoring and review mechanism envisaged in the relevant conventions and related instruments. 3. Those countries that are granted provisionally the special incentive arrangement for sustainable development and good governance from the date of entry into force of this Regulation shall also submit a request according to paragraphs 1 and 2 by 31 October 2005. The Commission shall assess the request according to Article 11.
Article 11 
1. Where the Commission receives a request accompanied by the information referred to in Article 10, the Commission shall examine the request. The examination shall take into account the findings of the relevant international organisations and agencies. It may ask the requesting country any questions which it considers relevant and may verify the information received with the requesting country or any other relevant sources. 2. The Commission shall decide, in accordance with the examination referred to in paragraph 1 and the procedure referred to in Article 28(4), whether to grant a requesting country the special incentive arrangement for sustainable development and good governance as of 1 January 2006. 3. The Commission shall notify a requesting country of a decision taken in accordance with paragraph 2. Where a country is granted the special incentive arrangement, it shall be informed of the date on which that decision enters into force. The Commission shall by 15 December 2005 publish a notice in the Official Journal of the European Union , listing the countries benefiting from the special incentive arrangement for sustainable development and good governance. 4. Where a requesting country is not granted the special incentive arrangement, the Commission shall explain the reasons if that country so requests. 5. The Commission shall conduct all relations with a requesting country concerning the request in close coordination with the Committee acting in accordance with the procedure referred to in Article 28(4).
Article 12 
1. Without prejudice to paragraphs 2, 3 and 4, Common Customs Tariff duties on all products of Chapters 1 to 97 of the Harmonized System except those of Chapter 93 thereof, originating in a country that according to Annex I benefits from the special arrangement for least developed countries, shall be entirely suspended. 2. Common Customs Tariff duties on the products of tariff heading 1006 shall be reduced by 20 % on 1 September 2006, by 50 % on 1 September 2007 and by 80 % on 1 September 2008. They shall be entirely suspended as from 1 September 2009. 3. Common Customs Tariff duties on the products of CN code 0803 00 19 shall be reduced by 20 % annually as from 1 January 2002. They shall be entirely suspended as from 1 January 2006. 4. Common Customs Tariff duties on the products of tariff heading 1701 shall be reduced by 20 % on 1 July 2006, by 50 % on 1 July 2007 and by 80 % on 1 July 2008. They shall be entirely suspended as from 1 July 2009. 5. Until Common Customs Tariff duties are entirely suspended in accordance with paragraphs 2 and 4, a global tariff quota at zero duty shall be opened for every marketing year for products of tariff heading 1006 and subheading 1701 11 10 respectively, originating in the countries benefiting from this special arrangement. The initial tariff quotas for the marketing year 2001/2002 shall be equal to 2 517 tonnes, husked rice equivalent, for products of tariff heading 1006 , and 74 185 tonnes, white sugar equivalent, for products of subheading 1701 11 10 . For each of the following marketing years, the quotas shall be increased by 15 % over the quotas of the previous marketing year. 6. The Commission shall adopt detailed rules governing the opening and administration of the quotas referred to in paragraph 5, in accordance with the procedure referred to in Article 28(4). In opening and administrating these quotas, the Commission shall be assisted by the management committees for the relevant common market organisations. 7. When a country is excluded by the United Nations from the list of the least developed countries, it is withdrawn from the list of the beneficiaries of this arrangement. The removal of a country from the arrangement and the establishment of a transitional period of at least three years shall be decided by the Commission, in accordance with the procedure referred to in Article 28(4).
Article 13 
Article 12(4) and provisions of Article 12(5) referring to products of tariff subheading 1701 11 10 shall not apply to products originating in countries benefiting from the preferences referred to in this section and released for free circulation in the French overseas departments.
Article 14 
1. The tariff preferences referred to in Articles 7 and 8 shall be removed in respect of products originating in a beneficiary country of a section, when the average value of Community imports from that country of products included in the section concerned and covered by the arrangement enjoyed by that country exceeds 15 % of the value of Community imports of the same products from all countries and territories listed in Annex I over three consecutive years, on the basis of the most recent data available on 1 September 2004. For each of the sections XI(a) and XI(b) the threshold shall be 12,5 %. 2. The sections removed in accordance with paragraph 1 are listed in Annex I, column C. 3. The removal of sections from this scheme shall apply as from 1 January 2006 until 31 December 2008. 4. The Commission shall notify a beneficiary country of the removal of a section. 5. Paragraph 1 does not apply to a beneficiary country in respect of any section which represents more than 50 % in value of all GSP-covered imports to the Community originating from the country in question. 6. The statistical source used for the purpose of this Article shall be the COMEXT statistics.
Article 15 
1. Where the rate of an ad valorem duty for an individual import declaration reduced in accordance with the provisions of this Chapter is 1 % or less, that duty shall be entirely suspended. 2. Where the rate of a specific duty for an individual import declaration reduced in accordance with the provisions of this Chapter is EUR 2 or less per individual euro amount, that duty shall be entirely suspended. 3. Subject to paragraphs 1 and 2, the final rate of preferential duty calculated in accordance with this Regulation shall be rounded down to the first decimal place.
Article 16 
2. Without prejudice to paragraph 1, the special incentive arrangement referred to in Section 2 of Chapter II may be temporarily withdrawn, in respect of all or certain products included in this arrangement, originating in a beneficiary country, in particular if the national legislation no longer incorporates those conventions referred to in Annex III which have been ratified in fulfilment of the requirements of Article 9(1) and (2) or if that legislation is not effectively implemented. 3. The preferential arrangements provided for in this Regulation shall not be withdrawn pursuant to paragraph 1(d) in respect of products which are subject to anti-dumping or countervailing measures under Regulations (EC) No 384/96 ( 8 ) or (EC) No 2026/97 ( 9 ), for the reasons which justify those measures.
Article 17 
1. The preferential arrangements provided for in this Regulation may be temporarily withdrawn, in respect of all or of certain products, originating in a beneficiary country, in cases of fraud, irregularities or systematic failure to comply or to ensure compliance with the rules of origin of products and the procedures related thereto, and to provide the administrative cooperation as required for the implementation and the control of the respect of the arrangements referred to in Article 1(2). 3. The Commission may suspend the preferential arrangements provided for in this Regulation in respect of all or of certain products, originating in a beneficiary country, where it considers that there is sufficient evidence that temporary withdrawal would be justified for the reasons referred to in paragraphs 1 and 2, provided that it has first: — informed the Committee; — called on the Member States to take such precautionary measures as are necessary in order to safeguard the Community's financial interests and/or secure compliance by the beneficiary country with its obligations; — published a notice in the Official Journal of the European Union stating that there are grounds for reasonable doubts about the application of the preferential arrangements and/or compliance by the beneficiary country with its obligations, which may call into question its right to continue enjoying the benefits granted by this Regulation. The Commission shall inform the beneficiary country concerned of any decision taken in accordance with this paragraph, before it becomes effective. The Commission shall also notify the Committee thereof. 4. Any Member State may refer a decision taken in accordance with paragraph 3 to the Council within 1 month. The Council, acting by a qualified majority, may take a different decision within 1 month. 5. The period of suspension shall not exceed 6 months. On conclusion of the period, the Commission shall decide either to terminate the suspension after informing the Committee or to extend the period of suspension in accordance with the procedure referred to in paragraph 3. 6. Member States shall communicate to the Commission all relevant information that may justify suspension of preferences or its extension.
Article 18 
1. Where the Commission or a Member State receives information that may justify temporary withdrawal and where the Commission or a Member State considers that there are sufficient grounds for an investigation, it shall inform the Committee and request consultations, which should take place within one month. 2. Following the consultations, the Commission may decide, within 1 month and in accordance with the procedure referred to in Article 28(5), to initiate an investigation.
Article 19 
1. Where the Commission decides to initiate an investigation, it shall publish a notice in the Official Journal of the European Union announcing the investigation, and notify the beneficiary country concerned thereof. The notice shall provide a summary of the information received and state that any relevant information should be sent to the Commission. It shall specify the period, which may not exceed four months as from the date of publication of the notice, within which interested parties may make their views known in writing. 2. The Commission shall provide the beneficiary country concerned with every opportunity to cooperate in the investigation. 3. The Commission shall seek all information it considers necessary including the available assessments, comments, decisions, recommendations and conclusions of the relevant supervisory bodies of the UN, the ILO and other competent international organisations. These shall serve as the point of departure for the investigation as to whether temporary withdrawal is justified for the reason referred to in point (a) of Article 16(1). The Commission may verify the information received with economic operators and the beneficiary country concerned. 4. The Commission may be assisted by officials of the Member State on whose territory verification might be sought, if that Member State so requests. 5. Where information requested by the Commission is not provided within the period specified in the notice announcing the investigation, or the investigation is significantly impeded, findings may be made on the basis of the facts available. 6. The investigation should be completed within a year. The Commission may extend this period, in accordance with the procedure referred to in Article 28(5).
Article 20 
1. The Commission shall submit a report on its findings to the Committee. 2. Where the Commission considers that the findings do not justify temporary withdrawal, it shall decide, in accordance with the procedure referred to in Article 28(5), to terminate the investigation. In that case, the Commission shall publish a notice in the Official Journal of the European Union , announcing the termination of the investigation and setting out its main conclusions. 3. Where the Commission considers that the findings justify temporary withdrawal for the reason referred to in point (a) of Article 16(1), it shall decide, in accordance with the procedure referred to in Article 28(5), to monitor and evaluate the situation in the beneficiary country concerned for a period of six months. The Commission shall notify the beneficiary country concerned of this decision and shall publish a notice in the Official Journal of the European Union , announcing that it intends to submit a proposal to the Council for temporary withdrawal, unless, before the end of the period, the beneficiary country concerned makes a commitment to take the measures necessary to conform, in a reasonable period of time, with the conventions referred to in Part A of Annex III. 4. Where the Commission considers temporary withdrawal to be necessary, it shall submit an appropriate proposal to the Council, which shall decide within 1 month by a qualified majority. In cases referred to in paragraph 3, the Commission shall submit its proposal at the end of the period referred to in that paragraph. 5. Where the Council decides on temporary withdrawal, such decision shall enter into force 6 months after it was taken, unless it is decided before then that the reasons justifying it no longer prevail.
Article 21 
1. Where a product originating in a beneficiary country is imported on terms which cause, or threaten to cause, serious difficulties to a Community producer of like or directly competing products, normal Common Customs Tariff duties on that product may be reintroduced at any time at the request of a Member State or on the Commission's initiative. 2. The Commission shall take a formal decision to initiate an investigation within a reasonable period of time. Where the Commission decides to initiate an investigation, it shall publish a notice in the Official Journal of the European Union announcing the investigation. The notice shall provide a summary of the information received and state that any relevant information should be sent to the Commission. It shall specify the period, which shall not exceed 4 months from the date of publication of the notice, within which interested parties may make their views known in writing. 3. The Commission shall seek all information it deems necessary and may verify the information received with the beneficiary country concerned and any other relevant source. It may be assisted by officials of the Member State on whose territory verification might be sought, if that Member State so requests. 4. In examining whether there are serious difficulties, the Commission shall take account, inter alia , of the following factors concerning Community producers where the information is available: — market share, — production, — stocks, — production capacity, — bankruptcies, — profitability, — capacity utilisation, — employment, — imports, — prices. 5. The investigation shall be completed within 6 months after the publication of the notice referred to in paragraph 2. The Commission may, in case of exceptional circumstances and after consultation of the Committee, extend this period in accordance with the procedure referred to in Article 28(5). 6. The Commission shall take a decision within 1 month, in accordance with the procedure referred to in Article 28(5). Such decision shall enter into force within 1 month as from its publication. 7. Where exceptional circumstances requiring immediate action make an investigation impossible, the Commission may, after informing the Committee, take any preventive measure which is strictly necessary.
Article 22 
Where imports of products included in Annex I to the Treaty cause, or threaten to cause, serious disturbance to Community markets, in particular to one or more of the outermost regions, or these markets' regulatory mechanisms, the Commission, on request of a Member State or on its own initiative, may suspend the preferential arrangements in respect of the products concerned after consulting the management committee for the relevant common market organisation.
Article 23 
1. The Commission shall inform the beneficiary country concerned as soon as possible of any decision taken in accordance with Article 21 or 22 before it becomes effective. The Commission shall also notify the Council and the Member States thereof. 2. Any Member State may refer a decision taken in accordance with Article 21 or 22 to the Council within 1 month. The Council, acting by a qualified majority, may adopt a different decision within 1 month.
Article 24 
Products in Chapters 1 to 24 originating in beneficiary countries may be subject to a special surveillance mechanism in order to avoid disturbances in the Community market. The Commission, on its own initiative or on the request of a Member State, shall decide the products on which this surveillance list shall be applied. All periods mentioned in Article 21 which exceed 2 months shall be reduced to 2 months in the following cases: — when the beneficiary country does not comply with the rules of origin or does not provide the administrative cooperation required in Article 17, or — when imports of products in Chapters 1 to 24 under the preferential regimes granted under this Regulation massively exceed the usual levels of exports of the beneficiary country.
Article 25 
Nothing in this Chapter shall affect the application of safeguard clauses adopted as part of the Common Agricultural Policy under Article 37 of the Treaty, or as part of the Common Trade Policy under Article 133 of the Treaty, or any other safeguard clauses which may be applied.
Article 26 
The Commission shall in accordance with the procedure referred to in Article 28(5) adopt changes to the Annexes to this Regulation made necessary: (a) by amendments to the Combined Nomenclature; (b) by changes in the international status or classification of countries or territories; (c) by the application of Article 3(2); (d) if a country has reached the thresholds set out in Article 3(1); (e) for the establishment of the final list of beneficiary countries by 15 December 2005 at the latest in accordance with Article 11.
Article 27 
1. Within six weeks of the end of each quarter, Member States shall send the Statistical Office of the European Communities their statistical data on products placed under the customs procedure of free circulation during that quarter under the tariff preferences provided for in this Regulation. These data, supplied by reference to Combined Nomenclature codes and, where applicable, TARIC codes, shall show, by country of origin, values, quantities and any supplementary units required in accordance with the definitions in Council Regulation (EC) No 1172/95 ( 10 ) and Commission Regulation (EC) No 1917/2000 ( 11 ). 2. In accordance with Article 308d of Regulation (EEC) No 2454/93, Member States shall forward to the Commission, at its request, details of the quantities of products admitted for free circulation under the tariff preferences provided for in this Regulation, during the previous months. These data shall include the products referred to in paragraph 3. 3. The Commission shall, in close cooperation with Member States, monitor the imports of products of CN code 0803 00 19 , of tariff headings 0603 , 1006 , 1701 , 1704 and 6403 and of CN codes 1604 14 , 1604 19 31 , 1604 19 39 , 1604 20 70 , 2002 90 and 2103 20 in order to determine whether the conditions referred to in Articles 21 and 22 are fulfilled.
Article 28 
1. In implementing this Regulation, the Commission shall be assisted by a Generalised Preferences Committee (hereinafter referred to as ‘the Committee’). 2. The Committee may examine any matter relating to the application of this Regulation raised by the Commission or on the request of a Member State. 3. The Committee shall examine the effects of the scheme, on the basis of a report from the Commission covering the period from 1 January 2006. This report shall cover all preferential arrangements referred to in Article 1(2) and be presented in time for the discussion on the next Regulation. 4. Where reference is made to this paragraph, Articles 5 and 7 of Decision 1999/468/EC shall apply. The period laid down in Article 5(6) of Decision 1999/468/EC shall be set at 3 months. 5. Where reference is made to this paragraph, Articles 3 and 7 of Decision 1999/468/EC shall apply. 6. The Committee shall adopt its Rules of Procedure.
Article 29 
Council Regulation (EC) No 552/97 ( 12 ), which refers to Council Regulations (EC) No 3281/94 ( 13 ) and (EC) No 1256/96 ( 14 ), shall be considered to refer to the corresponding provisions of this Regulation. Commission Regulations (EC) No 1381/2002 ( 15 ) and (EC) No 1401/2002 ( 16 ), which refer to Regulation (EC) No 2501/2001, shall be considered to refer to the corresponding provisions of this Regulation.
Article 30 
1. The special incentive arrangement for sustainable development and good governance of Section 2 of Chapter II of this Regulation as well as the provisions applied in conjunction with that arrangement shall enter into force on 1 July 2005. That arrangement repeals with effect from its entry into force the special arrangements to combat drug production and trafficking of Title IV of Regulation (EC) No 2501/2001 and the provisions of Regulation (EC) No 2501/2001 applied in conjunction with those arrangements. The other provisions of this Regulation shall enter into force on 1 January 2006 and repeal with effect from that date those provisions of Regulation (EC) No 2501/2001 then still in force. 2. This Regulation shall apply until 31 December 2008. However, this date shall not apply to the special arrangements for least developed countries, nor, to the extent that they are applied in conjunction with those arrangements, to any other provisions of this Regulation.