Proposal for a COUNCIL DECISION concluding an Agreement in the form of an Exchange of Letters between the European Union and the Eastern Republic of Uruguay pursuant to Article XXIV:6 and Article XXVIII of the General Agreement on Tariffs and Trade (GATT) 1994 relating to the modification of concessions in the schedule of the Republic of Croatia in the course of its accession to the European Union

EXPLANATORY MEMORANDUM

With the accession of the Republic of Croatia, the European Union enlarged its customs union. Consequently, the European Union was required under World Trade Organisation (WTO) rules (Article XXIV:6 of the GATT 1994) to enter into negotiations with WTO Members having negotiating rights related to the tariff schedule of Croatia in order to eventually agree on a compensatory adjustment. Such adjustment is due if the adoption of the EU’s external tariff regime results in an increase in tariff beyond the level for which the acceding country has bound itself at the WTO.

On 15 July 2013, the Council authorised the Commission to open negotiations under Article XXIV:6 of the GATT 1994. The Commission has negotiated with the Members of the WTO holding negotiating rights with respect to the withdrawal of specific concessions in relation to the withdrawal of the schedule of the Republic of Croatia in the course of its accession to the European Union.

Negotiations with the Eastern Republic of Uruguay resulted in a draft Agreement in the form of an Exchange of Letters that was initialled on 18 December 2015 in Nairobi (the Agreement). Consequently, this proposal asks the Council to adopt a decision to conclude the Agreement in the form of an Exchange of Letters with the Eastern Republic of Uruguay. In parallel, a separate proposal on the signature of this Agreement is also submitted..

The proposal falls under exclusive competence of the Union, Article 3(1)(e) of the Treaty on the Functioning of the European Union. The subsidiarity principle therefore does not apply.

The Eastern Republic of Uruguay was affected by the withdrawal of Croatia's concessions. The compensatory adjustments do not exceed Uruguay's rights in this respect. The proposal complies with the proportionality treatment.

A Decision of the Council to conclude the Agreement is required under Article 218(6)(a) TFEU.

The Commission proposes to the Council that the Agreement in the form of an Exchange of Letters with the Eastern Republic of Uruguay be signed on behalf of the Union. In parallel, a separate proposal on the signature of this Agreement is also being submitted to the Council.

As a result of the Agreement the Commission will adopt an implementing Regulation to extend the following tariff rate quotas, pursuant to Article 187(a) of the Single Common Market Organisation (CMO) Regulation (Regulation (EU) No 1308/2013):

• Add 76 tonnes in the country allocated (Uruguay) EU tariff rate quota 'boneless meat of bovine animals, fresh or chilled; edible offal of bovine animals, thick skirt and thin skirt, fresh or chilled', tariff item numbers ex 0201 30 00 and ex 0206 10 95, maintaining the present in-quota rate of 20%. The new tariff rate quota shall be 4 076 tonnes;

• Add 1 875 tonnes into the EU tariff rate quota 'Meat of bovine animals, frozen – Edible offal of bovine animals, frozen', tariff item numbers 0202 and 0206.29.91, maintaining the present in-quota rate of 20%. The new tariff rate quota shall be 54 875 tonnes.

The relevant implementation measures are being prepared in parallel to this proposal.

COUNCIL DECISION

concluding an Agreement in the form of an Exchange of Letters between the European Union and the Eastern Republic of Uruguay pursuant to Article XXIV:6 and Article XXVIII of the General Agreement on Tariffs and Trade (GATT) 1994 relating to the modification of concessions in the schedule of the Republic of Croatia in the course of its accession to the European Union

Having regard to the Treaty on the Functioning of the European Union, and in particular Article 207(4), first subparagraph, in conjunction with Article 218(6)(a) thereof,

Having regard to the proposal from the European Commission,

Having regard to the consent of the European Parliament ¹ ,

Whereas:

1. On 15 July 2013 the Council authorised the Commission to open negotiations with certain other Members of the World Trade Organization under Article XXIV:6 of the General Agreement on Tariffs and Trade (GATT) 1994, in the course of the accession to the European Union of the Republic of Croatia.

2. Negotiations have been conducted by the Commission within the framework of the negotiating directives issued by the Council.

3. These negotiations have been concluded and an Agreement in the form of an Exchange of Letters between the European Union and the Eastern Republic of Uruguay pursuant to Article XXIV:6 and Article XXVIII of the GATT 1994 relating to the modification of concessions in the schedule of the Republic of Croatia in the course of its accession to the European Union was initialled on 18 December 2015.

4. The Agreement was signed on behalf of the European Union on […], subject to the conclusion of the Agreement at a later date, in accordance with Council Decision […].

5. The Agreement should be concluded,

HAS ADOPTED THIS DECISION:

Article 1

The Agreement in the form of an Exchange of Letters between the European Union and the Eastern Republic of Uruguay pursuant to Article XXIV:6 and Article XXVIII of the General Agreement on Tariffs and Trade (GATT) 1994 relating to the modification of concessions in the schedule of the Republic of Croatia in the course of its accession to the European Union, is hereby concluded.

The text of the Agreement is annexed to this Decision.

Article 2

The President of the Council shall designate the person empowered to proceed, on behalf of the European Union, to the notification provided for in the Agreement, in order to express the consent of the European Union to be bound by the Agreement.

Article 3

This Decision shall enter into force on the day of its adoption. It shall be published in the Official Journal of the European Union.

The date of entry into force of the Agreement shall be published in the Official Journal of the European Union.

Done at Brussels,

LEGISLATIVE FINANCIAL STATEMENT FOR PROPOSALS HAVING A BUDGETARY IMPACT EXCLUSIVELY LIMITED TO THE REVENUE SIDE

Proposal for a Council Decision concluding an Agreement in the form of an Exchange of Letters between the European Union and the Eastern Republic of Uruguay pursuant to Article XXIV:6 and Article XXVIII of the General Agreement on Tariffs and Trade (GATT) 1994 relating to the modification of concessions in the schedule of the Republic of Croatia in the course of its accession to the European Union

Revenue line:    Chapter 12 – Customs duties and other duties

◻    Proposal has no financial implications

X Proposal has no financial impact on expenditure but has a financial impact on revenue

◻    Proposal has a financial impact on assigned revenue – the effect is as follows:

(EUR million to one decimal place ² )

General anti-fraud measures associated with EU customs and quantitative quota administration will apply.

(method/formula used for calculation of revenues): Unit value of average similar trade imports for years 2012-2014 multiplied by the new tariff rate quotas volumes multiplied by the in-quota rate duty (20%) minus 25% deduction for collection costs. For subsequent years, the unit value has been considered as constant.

AGREEMENT IN THE FORM OF AN EXCHANGE OF LETTERS

Between the European Union and the Eastern Republic of Uruguay pursuant to Article XXIV:6 and Article XXVIII of the General Agreement on Tariffs and Trade (GATT) 1994 relating to the modification of concessions in the schedule of the Republic of Croatia in the course of its accession to the European Union

A. Letter from the European Union

Brussels, …………..

Sir/Madam,

Following negotiations under Article XXIV:6 and Article XXVIII of the General Agreement on Tariffs and Trade 1994 (GATT) relating to the modification of the Schedule of the Republic of Croatia in the course of its accession to the European Union, I have the honour to propose the following:

The European Union shall incorporate in its schedule, for the customs territory of the EU 28, the concessions contained in the schedule of the EU 27 with the following modifications:

Add 76 tonnes in the country allocated (Uruguay) EU tariff rate quota 'boneless meat of bovine animals, fresh or chilled; edible offal of bovine animals, thick skirt and thin skirt, fresh or chilled', tariff item numbers ex 0201 30 00 and ex 0206 10 95, maintaining the present in-quota rate of 20%. The new tariff rate quota shall be 4 076 tonnes;

Add 1 875 tonnes into the EU tariff rate quota 'Meat of bovine animals, frozen – Edible offal of bovine animals, frozen', tariff item numbers 0202 and 0206.29.91, maintaining the present in-quota rate of 20%. The new tariff rate quota shall be 54 875 tonnes.

The European Union and Uruguay shall notify each other of the completion of their internal procedures for the entry into force of the agreement. The agreement shall enter into force 14 days after the date of receipt of the latest notification.

I should be obliged if you would confirm that your Government is in agreement with the content of this letter. Should this be the case, this letter and your confirmation shall together constitute an Agreement in the form of an Exchange of Letters between the European Union and Uruguay.

Please accept, Sir/Madam, the assurance of my highest consideration.

For the European Union

B. Letter from the Eastern Republic of Uruguay

Brussels,…………..

Sir/Madam,

I have the honour to acknowledge the receipt of your letter of …………., which reads as follows:

"Following negotiations under Article XXIV:6 and Article XXVIII of the General Agreement on Tariffs and Trade 1994 (GATT) relating to the modification of the Schedule of the Republic of Croatia in the course of its accession to the European Union, I have the honour to propose the following:

The European Union shall incorporate in its schedule, for the customs territory of the EU 28, the concessions contained in the schedule of the EU 27 with the following modifications:

Add 76 tonnes in the country allocated (Uruguay) EU tariff rate quota 'boneless meat of bovine animals, fresh or chilled; edible offal of bovine animals, thick skirt and thin skirt, fresh or chilled', tariff item numbers ex 0201 30 00 and ex 0206 10 95, maintaining the present in-quota rate of 20%. The new tariff rate quota shall be 4 076 tonnes;

Add 1 875 tonnes into the EU tariff rate quota 'Meat of bovine animals, frozen – Edible offal of bovine animals, frozen', tariff item numbers 0202 and 0206.29.91, maintaining the present in-quota rate of 20%. The new tariff rate quota shall be 54 875 tonnes.

The European Union and Uruguay shall notify each other of the completion of their internal procedures for the entry into force of the agreement. The agreement shall enter into force 14 days after the date of receipt of the latest notification.

I should be obliged if you would confirm that your Government is in agreement with the content of this letter. Should this be the case, this letter and your confirmation shall together constitute an Agreement in the form of an Exchange of Letters between the European Union and Uruguay."

I hereby have the honour to express my Government's agreement with the above letter.

On behalf of the Eastern Republic of Uruguay