Regulation (EU) No 1150/2014 of the European Parliament and of the Council of 29 October 2014 amending Regulation (EU) No 374/2014 on the reduction or elimination of customs duties on goods originating in Ukraine

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty on the Functioning of the European Union, and in particular Article 207(2) thereof,

Having regard to the proposal from the European Commission,

After transmission of the draft legislative act to the national parliaments,

Acting in accordance with the ordinary legislative procedure (1),

Whereas:

(1) Ukraine is a priority partner country within the European Neighbourhood Policy and the Eastern Partnership. The European Union has been seeking an increasingly closer relationship with Ukraine in view of the latter's political association and economic integration with the Union. In that respect, between 2007 and 2011 the Union and Ukraine negotiated the Association Agreement between the European Union and its Member States, of the one part, and Ukraine, of the other part (2) (the Association Agreement), including a Deep and Comprehensive Free Trade Area (DCFTA), which was signed by both parties on 27 June 2014. Under the provisions of the DCFTA, the Union and Ukraine are to establish a free trade area over a transitional period of a maximum of 10 years, starting from the entry into force of the Association Agreement, in accordance with Article XXIV of the General Agreement on Tariffs and Trade 1994.

(2) In light of the unprecedented security, political and economic challenges faced by Ukraine, and in order to support its economy, it was decided to anticipate the implementation of the Schedule of concessions set out in Annex I-A to the Association Agreement by means of the autonomous trade preferences provided for under Regulation (EU) No 374/2014 of the European Parliament and the Council (3). In view of the challenges Ukraine still faces, the application of Regulation (EU) No 374/2014 should be extended until 31 December 2015. For the purpose of predictability, the customs duties and access to tariff quotas for the extended period should remain the same as for 2014.

(3) Article 2 of the Association Agreement provides that respect for democratic principles, human rights and fundamental freedoms, and respect for the principle of the rule of law constitute essential elements of that Agreement. Furthermore, it provides that the promotion of respect for the principles of sovereignty and territorial integrity, inviolability of borders and independence, as well as countering the proliferation of weapons of mass destruction, related materials and their means of delivery also constitute essential elements of that Agreement. The autonomous preferences provided for under Regulation (EU) No 374/2014 should also be subject to the respect for those same principles by Ukraine. In order to align Regulation (EU) No 374/2014 with Union practice and other EU trade policy instruments, it is appropriate to introduce the possibility to temporarily suspend the preferences in case of failure to respect the fundamental principles of human rights, democracy and the rule of law by Ukraine.

(4) In view of the urgency of the matter, it is important to apply an exception to the eight-week period referred to in Article 4 of Protocol No 1 on the role of national parliaments in the European Union, annexed to the Treaty on European Union and to the Treaty on the Functioning of the European Union,

HAVE ADOPTED THIS REGULATION:

Article 1

Regulation (EU) No 374/2014 is amended as follows:

(1) Article 1 is replaced by the following: ‘Article 1 Preferential arrangements Customs duties on goods originating in Ukraine shall be reduced or eliminated in accordance with Annex I. Where reference is made in Annex I to staging categories, the basic rate of duties for 2014 and 2015 shall be eliminated in the case of staging category 0 and shall be reduced by 25 % in the case of staging category 3, by 16,7 % in the case of staging category 5 and by 12,5 % in the case of staging category 7.’

(3) in Article 7, the second paragraph is replaced by the following: ‘It shall apply until 31 December 2015.’

(4) Annexes II and III are replaced by the text set out respectively in Annexes I and II to this Regulation.

Article 2

This Regulation shall enter into force on the day following that of its publication in the Official Journal of the European Union.

It shall apply from 2 November 2014.

This Regulation shall be binding in its entirety and directly applicable in all Member States.

Done at Brussels, 29 October 2014.

For the European Parliament The President M. SCHULZ

For the Council The President S. GOZI

(1) Position of the European Parliament of 23 October 2014 (not yet published in the Official Journal) and decision of the Council of 24 October 2014.

(2) OJ L 161, 29.5.2014, p. 3.

(3) Regulation (EU) No 374/2014 of the European Parliament and of the Council of 16 April 2014 on the reduction or elimination of customs duties on goods originating in Ukraine (OJ L 118, 22.4.2014, p. 1).