Explanatory Memorandum to COM(2000)590 - Proposal for a Council Decicion concerning the approval of an agreement with each of the EFTA countries that grants tariff preferences under the GSP (Norway and Switzerland), providing that goods from Norway or Switzerland shall be treated on their arrival on the customs territory of the EC as goods with content of Community origin (reciprocal agreement) - Main contents
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This page contains a limited version of this dossier in the EU Monitor.
| dossier | COM(2000)590 - Proposal for a Council Decicion concerning the approval of an agreement with each of the EFTA countries that grants tariff ... |
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| source | COM(2000)590  |
| date | 22-09-2000 |
In 1980 the Community and the EFTA countries (six at the time) decided to facilitate movement between them of goods benefiting from one of the seven GSP schemes (the Community GSP and the GSPs of the six EFTA countries). They did so at the time using simple bilateral administrative agreements, which were not published.
The agreements allowed replacement certificates to be issued for goods accompanied by a certificate of origin form A entering one of the seven territories granting preferences where all or part of the goods were to be forwarded to another one or more of the seven territories (Article 89 of Regulation EEC No 2454/93 of 2 July 1993, as last amended by Regulation EC No 12/97 of 18 December 1996).
It was possible to introduce this arrangement because the Community GSP and those of the EFTA countries (now Switzerland and Norway) are based on similar principles, particularly as regards the origin criteria which are, de facto, those established by the Community and adopted by both Switzerland and Norway. This correspondence of principles was lost in 1995 when the Community decided to introduce the cumulation rule referred to above.
However, in 1998 the Swiss and Norwegian rules were amended to introduce the equivalent of the cumulation rules in their schemes. The logical implication of allowing this transit facility to continue to apply to all goods eligible for one or other of the GSPs is that each of the three parties should recognise components originating on the territories of each of the two others as originating in the beneficiary country within the meaning of its own cumulation of origin rules. In practice, the Community will grant preferences to goods originating in beneficiary countries where some of the components originate in Switzerland and/or Norway and, those two countries will treat goods containing Community components in the same way.
In other words, the Community and EFTA will accept components from the other two parties via export to developing countries. This situation will make it possible to maintain the correspondence of the GSPs, particularly as concerns rules of origin, so as not to disrupt the very frequent movement of goods within the economic area composed of these three customs territories, which is very extensively integrated (e.g.: a cargo of Brazilian products is cleared by customs in the Netherlands and broken up into consignments going to Germany and Switzerland, using a replacement certificate for the latter country, which is issued by the Netherlands customs). The volume of the Community economy compared to that of the Swiss and Norwegian economies means that more Community components are likely to enter EFTA countries via beneficiary countries than vice versa.
The Commission accordingly asked the Council for a negotiating mandate to establish two parallel agreements in the form of letters with Switzerland and Norway making these arrangements consistent under international law. The agreements are to cover the entire replacement certificate procedure, whether or not the goods meet the origin criteria because of cumulation; it has transpired that the 1980 agreements were not watertight in terms of international law.
After the Council gave the Commission the negotiating mandate on 29 March 1996, talks with the Swiss and Norwegian authorities produced the annexed draft exchanges of letters. The provisions were finalised at the technical level between the three parties, who have recently started applying this bilateral cumulation arrangement.
It should be noted that, contrary to what was envisaged at the beginning of the negotiations, fisheries and agriculture products have been excluded from the scope of the agreements (Chapters 1 to 24 of the CN).
The texts have been the subject of technical scrutiny by Member State experts meeting within the Customs Code Committee (Origin Section).