Council Regulation (EC) No 3036/94 of 8 December 1994 establishing economic outward processing arrangements applicable to certain textiles and clothing products reimported into the Community after working or processing in certain third countries

1994R3036 — EN — 05.06.2003 — 001.001

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COUNCIL REGULATION (EC) No 3036/94

of 8 December 1994

establishing economic outward processing arrangements applicable to certain textiles and clothing products reimported into the Community after working or processing in certain 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 proposal from the Commission,

Whereas the import arrangements in the Community for the textile and clothing sectors as regards certain third countries contain specific measures applicable to products resulting from outward processing operations;

Whereas Regulation (EEC) No 636/82 (1) created economic outward processing arrangements applicable to certain textile and clothing products reimported into the Community after working or processing in certain third countries;

Whereas the policy followed by the Community is intended in particular to enable the textile and clothing industry to adapt to the conditions of international competition; whereas these new outward processing arrangements must fit in with efforts to increase the competitiveness of Community industry and must therefore not only be reserved for that industry but also be granted only to undertakings which make, in the Community, products at the same stage of manufacture as those which are intended to be reimported after outward processing, without prejudice, however, to the rights of persons who do not fulfil the conditions of this Regulation to whom derogations may be granted up to the total quantities imported under specific arrangements during one of the two years preceding the entry into force of this Regulation, for products which are not different in character and use;

Whereas the creation of the Internal Market in 1993 entails an area without frontiers in which, in particular, the free movement of goods will be ensured; whereas this entails, inter alia, the abolition of controls at internal frontiers and the elimination of disparities as regards import arrangements, as well as the option of reimporting compensating products into a Member State other than that in which the prior authorization was granted;

Whereas trade in textile and clothing products should be in line with the functioning of the said Internal Market, in particular as regards the application of the economic outward processing arrangements for textiles;

Whereas the earlier regional outward processing quotas have been replaced as from 1 January 1993 by a system of Community quotas not allocated between Member States;

Whereas the competent authorities of Member States should continue to issue prior authorizations to applicants wanting to make use of outward processing, but, in doing so, should communicate to the Commission the quantities requested, in order to verify whether those quantities are available within the total limits established at Community level;

Whereas quantities should be allocated by maximum tranches and the applications for a new tranche should be possible only when the previously allocated tranche has been utilized by at least 50 %;

Whereas the criteria and conditions which Member State operators must observe in order to qualify under these arrangements are not at present applied uniformly throughout the Community;

Whereas, therefore, the rules for implementation of these criteria and conditions have to be harmonized in order to allow access to outward processing under conditions common to the whole Community, especially in respect of the definition of ‘beneficiary’, of the term ‘similar products’, the priority for manufacturers maintaining an important production within the Community and the derogation from the rules concerning the origin of the product exported for outward processing;

Whereas the allocation of product quantities to each applicant should take account not only of the quantities available under the import arrangements established with regard to the particular product and third country concerned, but also of the bona fide status of the beneficiary as manufacturer and the efforts of the manufacturer to maintain production and employment within the Community of articles at the same stage of manufacture, while at the same time not reducing the quantities made available to, and used by, past beneficiaries;

Whereas, in keeping with the objectives of this Regulation, it is appropriate that the product quantities allocated should be reviewed at the end of each year in which available quantities for newcomers do not prove sufficient;

Whereas for the purpose of ensuring an efficient and impartial management of the system, the distribution of outward processing quantities which have not been set aside to meet the applications of persons with past performance allocation should be effected on a first-come, first-served basis;

Whereas, in view of Protocol No 1 on Textiles and Clothing Products to the Europe Agreements and the Interim Agreements concluded between the Community and the Czech Republic, the Skovak Republic, Poland, Hungary, Bulgaria and Romania, it is appropriate that the scope of the application of the Regulation be extended to certain liberalized categories of products originating in those countries;

Whereas it is necessary that the list of products to which this Regulation applies should be in conformity with the present classification of textile products (categories) based on the combined Nomenclature;

Whereas this Regulation should not affect reimportations into the Community of products after their working or processing in third countries pursuant to prior authorizations issued before the date of its application;

Whereas an efficient Community administration of the outward processing arrangements requires close cooperation between the Member States and the Commission,

HAS ADOPTED THIS REGULATION:

Article 1

(a)‘compensating products’ shall mean products resulting from the use of goods which have undergone the processing operations referred to in Article 2 (2) (d);

(b)‘goods’ shall mean goods exported from the customs territory of the Community to a third country to undergo these processing operations;

(c)‘total value of the goods’ shall mean: —in the case of the goods imported beforehand, their value for customs purposes as defined by  Council Regulation (EC) No 2913/92 of 12 October 1992 establishing the Community Customs Code  (2) and by its implementing Regulations, —in all other cases, the ex-factory price;

(d)‘competent authority’ shall mean the authority in a Member State which is competent to apply the provisions laid down in this Regulation, in particular the granting of prior authorizations;

(e)‘similar products’ are defined as products falling within the same category or within the same group of categories as is listed in Annex I, which may be modified in accordance with the procedure laid down in Article 12.

Article 2

(a)that person must: —manufacture, in the Community, products which are similar to and at the same stage of manufacturing as the compensating products in respect of which the application for the arrangement is made, and —perform in his own factory, within the Community, the main production processes on those products, at least sewing and assembly, or knitting in the case of fully fashioned garments obtained from yarn. —In determining the eligibility of an application under this provision, the competent authorities shall not take into account the design or manufacture of models or samples;

(b)that person may have compensating products manufactured, in a third country, by means of processing within the quantities allocated by the competent authorities of the Member State where the application is made, and subject to the conditions laid down in Article 3;

(c)the goods which that person exports temporarily for processing operations must be in free circulation within the meaning of Article 9 (2) of the Treaty and of Community origin within the meaning of Council Regulation (EEC) No 2913/92 of 12 October 1992 establishing the Community Customs Code (3) and its implementing regulations. Derogations from the provisions of this subparagraph may be granted by Member States' authorities only in respect of goods of which Community production is insufficient. Such derogations may not be granted in respect of more than 14 % of the total value of the goods for which a prior authorization is requested or in respect of which the benefit of the arrangement was granted to the beneficiary during the previous year. In exceptional and economically justified cases the competent authorities, on the basis of a decision taken in accordance with the procedure laid down in Article 12, may agree to a higher percentage of derogation. Past beneficiaries who benefited in 1994 from a percentage higher than 14 % may continue to do so for the same quantities for a period of three years on the basis of a list to be established by the Commission. Thereafter, such exceptions may be renewed on the basis of a decision taken in accordance with the procedure laid down in Article 12. The Member State shall communicate quarterly to the Commission the main aspects of the derogations thus granted, namely, the nature, origin and quantities of the goods in question originating outside the Community. The Commission shall communicate this information to the other Member States with a view to an examination by the Committee referred to in Article 12.

(d)the processing operations to be carried out in third countries must not be more extensive than those stipulated for each product in Annex II. The processing operations to be carried out may, however, be less extensive than those stipulated for each product in Annex II.

Such derogations shall apply only to the amount of the total quantities imported under specific arrangements of the type defined in Article 1 (3) during one of the two years preceding the entry into force of Regulation (EEC) No 636/82, and to products not different in kind or purpose.

Where, following the entry into force of this Regulation, a specific arrangement of a type defined in Article 1 (3) is established for the first time with regard to a country, and replaces for certain quantities the non-specific import limitation arrangement previously applicable to such quantities without, however, giving rise to an overall increase in the import possibilities as a result of the cumulative application of the two arrangements, similar derogations may be applied up to the limit of the quantities of products resulting from processing operations which were previously imported under the non-specific import limitation arrangement.

The derogations referred to in the preceding subparagraphs shall apply with priority to those persons who have previously benefited from the specific arrangements referred to above.

Cases of the application of this paragraph shall be communicated to the Commission, which shall forward them to Member States with a view to annual examination by the Committee referred to in Article 12.

Article 3

Beneficiaries shall become eligible for additional allocations for the same category and for the same country in accordance with paragraph 5 only when they have used the quantities mentioned in the previous subparagraph as laid down in the fourth subparagraph of paragraph 5.

In addition, a past beneficiary who chooses not to use the quantities reserved to him under the first subparagraph in respect of a specific category and third country shall become eligible to apply for an equivalent quantity in another category and third country, in accordance with the first come, first served rule referred to in the first subparagraph of paragraph 5. The quantities for which a renunciation has been made shall immediately be added to the quantities to be allocated  under paragraph 5.

On the accession of a country to the Community, these provisions shall apply to the economic operators of that country who have carried out outward processing operations in one of the two years preceding the accession up to the level of the quantities so carried out.

Allocations shall only be granted to those manufacturers who can prove that in the preceding year they maintained production in the Community. Each of these manufacturers may apply for a total quantity of compensating products with a value of the processing carried out in third countries no higher than 50 % of the value of his Community production.

The value of the Community production of the applicants concerned shall be determined on the basis of all products listed in Annex II that have been manufactured within the Community.

The allocation will be made by maximum amounts per application for each category and for each third country concerned. If a new application is submitted, additional amounts for the same category and for the same third country may only be allocated by the competent authorities to a particular applicant when the amount previously authorized for that applicant has been actually utilized by at least 50 % or at least quantities of goods corresponding to 80 % of the previously authorized amount have been exported.

Each of the manufacturers who has been authorized to carry out outward processing operations under this paragraph over the preceding year shall have quantities of compensating products allocated to him under paragraph 4. Where a manufacturer's Community production has declined due to outward processing operations carried out in the preceding year, these past performance quantities shall be reduced proportionately.

The quantities for each category and each third country which have been allocated shall correspond to the amount of compensating products reimported by the manufacturer during the period referred to in the previous subparagraph.

The applicant shall return, within 15 days of the expiry period, all prior authorizations, unused or partly used, to the competent authorities who delivered that authorization.

For the application of this paragraph, ‘unused quantities’ shall be considered to be those quantities for which prior authorizations have been issued but not used within a time limit of six months or nine months in case of extension of the original time limit by the competent authorities (i.e. the temporary export formalities for the entire quantity of raw material indicated in the prior authorization have not been completed). The competent authorities shall indicate to the Commission as quickly as possible the amounts of any unused quantities to be re-credited to the Community quota.