Explanatory Memorandum to COM(2002)388 - Community position within the EU - Hungary Association Council on the amendment of Protocol 4, concerning the definition of the concept of 'originating products' and methods of administrative co-operation, set out in the Europe association agreement with Hungary

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dossier COM(2002)388 - Community position within the EU - Hungary Association Council on the amendment of Protocol 4, concerning the definition of ...
source COM(2002)388 EN
date 12-07-2002
1. Rules of origin are essential to the correct functioning of the agreements between the Community and its trading partners. The Community and its Member States, of the one part, and the Republic of Hungary, of the other part, have signed on 16 December 1991 an Europe Agreement establishing an association between them. Protocol 4 of the Agreement, concerns the definition of the concept of originating products and methods of administrative co-operation  i.

2. This Protocol has been amended several times and it becomes necessary to consolidate all the amendments in a new text, which shall replace the current one. Such consolidation offers the opportunity to correct linguistic mistakes and differences between the different language versions and to introduce the necessary changes due to amendments to the Harmonized Commodity Description and Coding System ("Harmonized System"). Moreover, the derogation granted until 31 december 2002 for products processed from Zea Indurata maize and its derivatives (ex HS 1904) shall become permanent since such materials are not produced in the countries concerned. Finally, a special processing rule has been set up for monolithic integrated circuits (ex HS 8542) ; they will be considered as originating if they are obtained from a high technology 'front-end' operation of diffusion on semi-conductors substrates, even if a limited 'back-end' process (assembly ad/or testing) takes place in third countries ; such rule aims to support the semi-conductor industry, and indirectly the users of the concerned products in electronic sector, to maintain their competitivity.

3. In order to maintain identical rules of origin within the pan-European system of cumulation, a similar process of consolidation and amendment will take place for the other Protocols included in the preferential Agreements concluded by the Community.

4. In order to enable the contracting parties to achieve in time the process of adoption of the Decision, with a view to entering into force on 1 September 2002, an adoption of a Community position by the Council at its earliest convenience is recommended.

5. The Council is therefore asked to adopt the annexed proposal for a decision concerning the Community position within the EU - Hungary Association Council on the replacement of Protocol 4 to the Agreement by a consolidated one.