ADDITIONAL PROTOCOL

FINANCIAL PROTOCOL

signed at Brussels, 23 November 1970

ADDITIONAL PROTOCOL

PREAMBLE

HIS MAJESTY THE KING OF THE BELGIANS,

THE PRESIDENT OF THE FEDERAL REPUBLIC OF GERMANY,

THE PRESIDENT OF THE FRENCH REPUBLIC,

THE PRESIDENT OF THE ITALIAN REPUBLIC,

HIS ROYAL HIGHNESS THE GRAND DUKE OF LUXEMBOURG,

HER MAJESTY THE QUEEN OF THE NETHERLANDS,

and

THE COUNCIL OF THE EUROPEAN COMMUNITIES,

of the one part, and

THE PRESIDENT OF THE REPUBLIC OF TURKEY,

of the other part,

WHEREAS the Agreement establishing an Association between the European Economic Community and Turkey provides that the preparatory stage of the Association is to be followed by a transitional stage;

ACKNOWLEDGING that the preparatory stage has done much, in accordance with the objectives of the Association Agreement, to strengthen economic relations in general, and to expand trade in particular, between the European Economic Community and Turkey;

BELIEVING that the conditions have been established for passing from the preparatory stage to the transitional stage;

RESOLVED to adopt, in the form of an Additional Protocol the provisions relating to the conditions, arrangements and timetables for the implementation of the transitional stage;

WHEREAS during the transitional stage the Contracting Parties are to ensure, on the basis of mutual and balanced obligations, the progressive establishment of a customs union between Turkey and the Community and the closer alignment of the economic policies of Turkey and the Community in order to ensure the proper functioning of the Association and the progress of the joint measures which this requires;

HIS MAJESTY THE KING OF THE BELGIANS:

Mr Pierre HARMEL,

Minister for Foreign Affairs;

THE PRESIDENT OF THE FEDERAL REPUBLIC OF GERMANY:

Mr Walter SCHEEL,

Minister for Foreign Affairs;

THE PRESIDENT OF THE FRENCH REPUBLIC:

Mr Maurice SCHUMANN,

Minister for Foreign Affairs;

THE PRESIDENT OF THE ITALIAN REPUBLIC:

Mr Mario PEDINI,

Under-Secretary of State for Foreign Affairs;

HIS ROYAL HIGHNESS THE GRAND DUKE OF LUXEMBOURG:

Mr Gaston THORN,

Minister for Foreign Affairs;

HER MAJESTY THE QUEEN OF THE NETHERLANDS:

Mr J. M. A. H. LUNS,

Minister for Foreign Affairs;

THE COUNCIL OF THE EUROPEAN COMMUNITIES:

Mr Walter SCHEEL,

President in Office of the Council of the European Communities;

Mr Franco Maria MALFATTI,

President of the Commission of the European Communities;

THE PRESIDENT OF THE REPUBLIC OF TURKEY:

Mr Ihsan Sabri ÇAGLAYANGÍL,

Minister for Foreign Affairs;

HAVE AGREED upon the following provisions, which shall be annexed to the Agreement of Association:

Article 1

This Protocol lays down the conditions, arrangements and timetables for implementing the transitional stage referred to in Article 4 of the Agreement establishing an Association between the European Economic Community and Turkey.

TITLE I

FREE MOVEMENT OF GOODS

Article 2

1. Chapter I, Section I, and Chapter II of this Title shall apply:

(a) to goods produced in the Community or in Turkey, including those wholly or partially obtained or produced from products coming from third countries which are in free circulation in the Community or in Turkey;

(b) to goods coming from third countries and in free circulation in the Community or in Turkey.

2. Products coming from third countries shall be considered to be in free circulation in the Community or in Turkey if the import formalities have been complied with and any customs duties or charges having equivalent effect which are payable have been levied in the Community or in Turkey, and if they have not benefited from a total or partial drawback of such duties or charges.

3. Goods imported from third countries into the Community or into Turkey and accorded special customs treatment by reason of their country of origin or of exportation, shall not be considered to be in free circulation in the territory of one Contracting Party if they are re-exported to the other Contracting Party. The Council of Association may, however, make exceptions to this rule under conditions which it shall lay down.

4. Paragraphs 1 and 2 shall apply only to goods exported from the Community on or after the date of signature of this Protocol.

Article 3

1. Chapter I, Section I, and Chapter II of this Title shall likewise apply to goods obtained or produced in the Community or in Turkey, in the manufacture of which were used products coming from third countries and not in free circulation either in the Community or in Turkey. These provisions shall, however, apply to those goods only if the exporting State charges a countervailing levy, the rate of which is a percentage of the duties laid down in the Common Customs Tariff for third country products used in their manufacture. This percentage, fixed by the Council of Association for each of such periods as it may determine, shall be based on the tariff reduction granted on those goods in the importing State. The Council of Association shall also lay down the rules for the countervailing levy, taking into account the relevant rules in force before 1 July 1968 in trade between Member States.

2. The countervailing levy shall not, however, be charged on exports from the Community or from Turkey of goods obtained or produced under the conditions mentioned in this Article while the reduction of customs duties on the majority of goods imported into the territory of the other Contracting Party does not exceed 20 %, taking into account the various timetables for tariff reductions fixed by this Protocol.

Article 4

The Council of Association shall determine the methods of administrative cooperation to be used in implementing Articles 2 and 3, taking into account the methods laid down by the Community with regard to trade between Member States.

Article 5

1. If either Contracting Party considers that differences arising from the application to imports of customs duties, quantitative restrictions or any measures having equivalent effect, or from any other measure of commercial policy, threaten to deflect trade or to cause economic difficulties in its territory, it may bring the matter before the Council of Association, which shall, if necessary, recommend appropriate methods for avoiding any harm liable to result therefrom.

2. Where deflections occur or economic difficulties arise and the Party concerned considers that they call for immediate action, that Party may itself take the necessary protective measures, and shall notify the Council of Association thereof without delay; the Council of Association may decide whether the Party concerned shall amend or abolish those measures.

3. In the choice of such measures preference shall be given to those which least disturb the operation of the Association and, in particular, the normal development of trade.

Article 6

During the transitional stage the Contracting Parties shall, in so far as may be- necessary for the proper functioning of the Association, take steps to approximate their law, regulation or administrative action in respect of customs matters, taking into account the approximations already effected by the Member States of the Community.

CHAPTER I

THE CUSTOMS UNION

Section I

Elimination of customs duties between the Community and Turkey

Article 7

1. The Contracting Parties shall refrain from introducing between themselves any new customs duties on imports or exports or charges having equivalent effect, and from increasing those already applied, in their trade with each other at the date of entry into force of this Protocol.

2. The Council of Association may, however, authorize the Contracting Parties to introduce new customs duties on exports or charges having equivalent effect if they are necessary for the attainment of the objectives of the Agreement.

Article 8

Customs duties on imports and charges having equivalent effect, in force between the Community and Turkey, shall be progressively abolished in accordance with Articles 9 to 11.

Article 9

On the entry into force of this Protocol, the Community shall abolish customs duties and charges having equivalent effect on imports from Turkey.

Article 10

1. For each product, the basic duty on which Turkey is to apply the successive reductions shall be the duty actually applied in respect of the Community at the date of signature of this Protocol.

2. The timetable for the reductions to be effected by Turkey shall be as follows: the first reduction shall be made on the entry into force of this Protocol. The second and third shall be applied three years and five years later. The fourth and subsequent reductions shall be made each year in such a way that the final reduction is made at the end of the transitional stage.

3. Each reduction shall be made by lowering the basic duty on each product by 10 %.

Article 11

Notwithstanding Article 10 (2) and (3), Turkey shall progressively abolish, over a period of twenty-two years, in accordance with the following timetable, the basic duties in respect of the Community on the products listed in Annex 3: a reduction of 5 % on each duty shall be made on the entry into force of this Protocol. Three further reductions, each of 5 %, shall be made three, six and ten years later.

Eight further reductions, each of 10 %, shall be made twelve, thirteen, fifteen, seventeen, eighteen, twenty, twenty-one and twenty-two years respectively after the entry into force of this Protocol.

Article 12

1. Turkey may, during the first eight years of the transitional stage, make the amendments to Annex 3 which are needed to protect the development of a processing industry which did not exist in Turkey at the time of entry into force of this Protocol, or to ensure the expansion in accordance with the Turkish development plan in force at the time, of an existing processing industry. Such amendments may, however, only be made on condition that:

— in aggregate they relate to not more than 10 % by value of imports from the Community in 1967, calculated at 1967 prices;

— the value of imports from the Community of all products listed in Annex 3, calculated at 1967 prices, is not increased.

Products added to Annex 3 may immediately be made liable to duties calculated in accordance with Article 11; those products which are removed from that list shall immediately be made liable to duties calculated in accordance with the provisions of Article 10.

2. Turkey shall notify the Council of Association of the measures which it proposes to take pursuant to the above provisions.

3. To the same end as that mentioned in paragraph 1 above, and within the limit of 10 % of imports from the Community in 1967, the Council of Association may authorize Turkey, during the transitional stage, to reintroduce, increase or impose customs duties on imports of products subject to the arrangements set out in Article 10.

These tariff measures shall not, for any of the tariff headings which they affect, raise the duty on imports from the Community to more than 25 %

ad valorem

4. The Council of Association may derogate from paragraphs 1 and 3.

Article 13

1. Irrespective of the provisions of Articles 9 to 11, each Contracting Party may suspend in whole or in part the collection of duties applied by it to products imported from the other Party, in particular, as regards Turkey, for the purpose of stimulating imports of certain products necessary for its economic development; the other Contracting Party shall be informed of such measures.

2. The Contracting Parties declare their readiness to reduce their duties in trade with the other Party more rapidly than is provided for in Articles 9 to 11 if its general economic situation and the situation of the economic sector concerned so permit. The Council of Association shall make recommendations to this end.

Article 14

Where, in respect of a country outside the Association, Turkey applies a shorter timetable than is provided for in Articles 10 and 11 to the elimination of a charge having effect equivalent to a customs duty, the same timetable shall be applied to the elimination of that charge in respect of the Community.

Article 15

Without prejudice to Article 7 (2), the Contracting Parties shall, at the latest four years after the entry into force of this Protocol, abolish between themselves, customs duties on exports and charges having equivalent effect.

Article 16

1. Article 7 (1) and Articles 8 to 15 shall also apply to customs duties of a fiscal nature.

2. On the entry into force of this Protocol the Community and Turkey shall inform the Council of Association of their customs duties of a fiscal nature.

3. Turkey shall retain the right to substitute for these customs duties of a fiscal nature an internal tax which complies with the provisions of Article 44.

4. If the Council of Association finds that substitution for any customs duty of a fiscal nature meets with serious difficulties in Turkey, it shall authorize that country to retain the duty on condition that it shall abolish it not later than the end of the transitional stage. Such authorization must be requested within twelve months of the entry into force of this Protocol.

Turkey may provisionally continue to apply such a duty until a decision has been taken by the Council of Association.

Section II

Adoption by Turkey of the Common Customs Tariff

Article 17

The Turkish Customs Tariff shall be aligned on the Common Customs Tariff during the transitional stage on the basis of the duties actually applied by Turkey in respect of third countries at the date of signature of this Protocol, and in accordance with the following rules:

In the case of products on which the duties actually applied by Turkey at the date indicated above do not differ by more than 15 % either way from the duties in the Common Customs Tariff, the latter duties shall be applied one year after the second reduction of duties provided for in Article 10.

In any other case Turkey shall, one year after the second reduction of duties provided for in Article 10, apply duties reducing by 20 % the difference between the duty actually applied at the date of signature of this Protocol and the duty in the Common Customs Tariff.

When the fifth and seventh reductions of customs duties provided for in Article 10 are applied, this difference shall be further reduced by 20 %.

The Common Customs Tariff shall be applied in its entirety when the tenth reduction of customs duties provided for in Article 10 is applied.

Article 18

Notwithstanding Article 17 Turkey shall, for the products listed in Annex 3, align its customs tariff over a period of twenty-two years in accordance with the following rules:

In the case of products for which the duties actually applied by Turkey on the date of signature of this Protocol do not differ from the Common Customs Tariff duties by more than 15 % either way, the latter duties shall be applied from the date of the fourth reduction of duties provided for in Article 11.

In any-other case Turkey shall, from the date of the fourth reduction of duties provided for in Article 11, apply duties reducing by 20 % the difference between the duty actually applied at the date of signature of this Protocol and the duty in the Common Customs Tariff.

When the seventh and ninth reductions provided for in Article 11 are applied, this difference shall be further reduced by 30 % and 20 %, respectively.

The Common Customs Tariff shall be applied in its entirety at the end of the twenty-second year.

Article 19

1. In the case of particular products making up not more than 10 % of the total value of its imports in 1967, Turkey may, after consultation in the Council of Association, defer until the end of the twenty-second year after the entry into force of this Protocol the reductions of duties in respect of third countries which it should otherwise make under Articles 17 and 18.

2. In the case of particular products making up not more than 5 % of the total value of its imports in 1967, Turkey may, after consultation in the Council of Association, retain after a period of twenty-two years customs duties in respect of third countries which are higher than those in the Common Customs Tariff.

3. However, the application of the preceding paragraphs must not prejudice the free movement of goods within the Association and shall not entitle Turkey to invoke the provisions of Article 5.

4. Where alignment of the Turkish Customs Tariff with the Common Customs Tariff has been accelerated, Turkey shall maintain in favour of the Community a preference equivalent to that resulting from the arrangements provided for in this Chapter.

As regards the products listed in Annex 3, no such acceleration may take place before the end of the transitional stage, unless prior authorization has been given by the Council of Association.

5. As regards customs duties which have been authorized pursuant to the first subparagraph of Article 16 (4) or which Turkey may provisionally maintain in accordance with the second -subparagraph of Article 16 (4), Articles 17 and 18 need not be applied. On expiry of the authorization, Turkey shall apply the duties provided for in Articles 17 and 18.

Article 20

1. To facilitate the importation of particular goods from countries with which Turkey has concluded bilateral trade agreements, Turkey may, with the prior authorization of the Council of Association, grant tariff quotas at reduced or zero rates of duty, if the functioning of those agreements is appreciably affected by the application of this Protocol or by measures taken in pursuance thereof.

2. Such authorization shall be deemed to have been given when the tariff quotas mentioned in the preceding paragraph comply with the following conditions:

(a) the total annual value of such quotas does not exceed 10 % of the average value of Turkish imports from third countries during the past three years for which statistics are available, excluding from such imports those which were made with the help of the means referred to in Annex 4. Imports from third countries admitted free of duty within the framework of Annex 4 shall be deducted from this 10 %;

(b) in the case of each product, the value of imports provided for within the framework of the tariff quotas shall not exceed one third of the average value of Turkish imports of that product from third countries in the past three years for which statistics are available.

3. Turkey shall notify the Council of Association of measures which it envisages taking in pursuance of paragraph 2.

At the end of the transitional stage the Council of Association may decide whether the provisions of paragraph 2 should be repealed or amended.

4. In no case may the duty under a tariff quota be lower than that actually applied by Turkey to imports from the Community.

CHAPTER II

ELIMINATION OF QUANTITATIVE RESTRICTIONS BETWEEN THE CONTRACTING PARTIES

Article 21

Quantitative restrictions on imports and all measures having equivalent effect shall, without prejudice to the following provisions, be prohibited between the Contracting Parties.

Article 22

1. The Contracting Parties shall refrain from introducing any new quantitative restrictions on imports or measures having equivalent effect.

2. However, as regards Turkey, this obligation shall, at the date of the entry into force of this Protocol, apply only to 35 % of Turkish imports on private account from the Community in 1967. This percentage shall be increased to 40 %, 45 %, 60 % and 80 %, three, eight, thirteen and eighteen years after the entry into force of this Protocol.

3. Six months before each of the dates of the last three increases the Council of Association shall review the consequences for the economic development of Turkey of increasing the degree of liberalization and shall, if this is necessary for achievement of an accelerated development of the Turkish economy, decide to postpone the increase for a period which it shall determine.

In the absence of a decision, the increase shall be postponed for one year. The review procedure shall be repeated six months before expiry of that period. A further postponement of a year shall take place if the Council of Association again takes no decision.

At the end of this second period, Turkey shall implement the increase in the degree of liberalization unless a decision to the contrary has been taken by the Council of Association.

4. A list of products whose importation from the Community has been liberalized shall be supplied to the Community at the time of signature of this Protocol. The list shall be consolidated in respect of the Community. The lists of products liberalized at the deadlines mentioned in paragraph 2 shall also be supplied to the Community and consolidated in its respect.

5. Turkey may reintroduce quantitative restrictions on imports of products which have been liberalized but not consolidated pursuant to this Article, on condition that it opens quotas in favour of the Community equal to at least 75 % of the average imports from the Community during the three years preceding that reintroduction. These quotas shall be subject to the provisions of Article 25 (4).

6. In no case may Turkey apply to the Community a treatment less favourable than that accorded to third countries.

Article 23

Without prejudice to Article 22 (5) the Contracting Parties shall, in their trade with one another, refrain from making more restrictive the quantitative restrictions on imports and measures having equivalent effect existing at the date of entry into force of this Protocol.

Article 24

The Community shall, on the entry into force of this Protocol, abolish all quantitative restrictions on imports from Turkey. This liberalization shall be consolidated in respect of Turkey.

Article 25

1. Turkey shall progressively abolish quantitative restrictions on imports from the Community in accordance with the provisions of the following paragraphs.

2. One year after the entry into force of this Protocol quotas in favour of the Community shall be opened for imports of each product which has not been liberalized in Turkey. These quotas shall be fixed so as to correspond to the average imports from the Community in the last three years for which statistics are available, excluding imports financed:

(a) by special aid resources connected with specific investment projects;

(b) without allocation of foreign currency;

3. Where, in respect of a product which has not been liberalized, imports from the Community in the first year after the entry into force of this Protocol amount to less than 7 % of total imports of that product, a quota equal to 7 % of those imports shall be opened one year after the entry into force of this Protocol.

4. Three years after the entry into force of this Protocol Turkey shall increase the aggregate of the quotas so opened by not less than 10 % over the amount thereof for the preceding year and by not less than 5 % by value of the quota for each product. These amounts shall be increased every two years in the same proportion in relation to the preceding period.

5. From the thirteenth year after the entry into force of this Protocol each quota shall be increased every two years by at least 20 % in relation to the preceding period.

6. Where, in respect of a product which has not been liberalized, there have been no imports into Turkey in the first year after the entry into force of this Protocol, the rules for opening and increasing quotas shall be laid down by the Council of Association.

7. If the Council of Association finds that during two successive years the imports of any product which has not been liberalized have been appreciably below the level of the quota opened, that quota shall not be taken into account in calculating the total value of the quotas. In such case Turkey shall abolish quota restrictions on that product in respect of the Community.

8. All quantitative restrictions on imports into Turkey shall be abolished not later than twenty-two years after the entry into force of this Protocol.

Article 26

1. The Contracting Parties shall, within twenty-two years, abolish all measures having an effect equivalent to quantitative restrictions on imports from each other. The Council of Association shall recommend the progressive adjustments to be made during this period, taking into account provisions adopted within the Community.

2. In particular, Turkey shall, in accordance with the timetables laid down in Articles 10 and 11, progressively abolish the deposits required from importers for imports of goods from the Community.

Moreover, deposits amounting to more than 140 % of the dutiable value for customs purposes of goods imported from the Community, in the case of motor vehicle spare parts and accessories falling within heading No 87.06 of the Turkish Customs Tariff, and to more than 120 % of that value in the case of other products, shall be reduced to these levels on the entry into force of this Protocol.

Article 27

1. Quantitative restrictions on exports, and all measures having equivalent effect, shall be prohibited between the Contracting Parties.

The Community and Turkey shall, by the end of the transitional stage at the latest, abolish between themselves all quantitative restrictions on exports and any measures having equivalent effect.

2. Notwithstanding the preceding paragraph, the Community and Turkey may, after consultation in the Council of Association, retain or introduce restrictions on exports of basic products to the extent necessary to promote the development of specific sectors of their economies or to meet any shortage of those products.

In that event, the Party concerned shall open in favour of the other Party a quota which takes into account the average exports for the last three years for which statistics are available and the normal development of trade resulting from the progressive achievement of the customs union.

Article 28

Turkey declares its readiness to abolish quantitative restrictions on imports from and exports to the Community more rapidly than is provided for in the preceding Articles, if its general economic situation and the situation of the economic sector concerned so permit. To this end the Council of Association shall make recommendations to Turkey.

Article 29

The provisions of Articles 21 to 27 shall not preclude prohibitions or restrictions on imports, exports or goods in transit justified on grounds of public morality, public policy or public security; the protection of health and life of humans, animals or plants; the protection of national treasures possessing artistic, historic or archaeological value; or the protection of industrial and commercial property. Such prohibitions or restrictions shall not, however, constitute a means of arbitrary discrimination or a disguised restriction on trade between the Contracting Parties.

Article 30

1. The Contracting Parties shall progressively adjust any State monopolies of a commercial character so as to ensure that when the period of twenty-two years has ended no discrimination regarding the conditions under which goods are procured and marketed exists between nationals of Member States of the Community and nationals of Turkey.

The provisions of this Article shall apply to any body through which a Member State or Turkey, in law or in fact, either directly or indirectly supervises, determines or appreciably influences imports or exports between the Community and Turkey. These provisions shall also apply to monopolies delegated by the State to others.

2. The Contracting Parties shall refrain from introducing any new measure which is contrary to the principles laid down in paragraph 1 or which restricts the scope of the Articles dealing with the abolition of customs duties and quantitative restrictions between the Contracting Parties.

3. The procedure and the timetable in accordance with which the Turkish monopolies mentioned in this Article are to be adjusted and the barriers to trade between the Community and Turkey are to be lowered, shall be laid down by the Council of Association not later than six years after the entry into force of this Protocol.

Until the Council of Association takes the decision provided for in the preceding subparagraph, each Contracting Party shall apply to products subject to a monopoly in the territory of the other Contracting Party treatment at least as favourable as that applied to like products of the most-favoured third country.

4. The obligations on the Contracting Parties shall be binding only in so far as they are compatible with existing international agreements.

CHAPTER III

PRODUCTS SUBJECT TO SPECIFIC RULES ON IMPORTATION INTO THE COMMUNITY AS A RESULT OF THE IMPLEMENTATION OF THE COMMON AGRICULTURAL POLICY

Article 31

The arrangements for agricultural products set out in Chapter IV shall apply to products which are subject, on importation into the Community, to specific rules as a result of the implementation of the common agricultural policy.

CHAPTER IV

AGRICULTURE

Article 32

This Protocol shall extend to agricultural products, save as otherwise provided in Articles 33 to 35.

Article 33

1. Over a period of twenty-two years Turkey shall adjust its agricultural policy with a view to adopting, at the end of that period, those measures of the common agricultural policy which must be applied in Turkey if free movement of agricultural products between it and the Community is to be achieved.

2. During the period mentioned in paragraph 1, the Community shall, in establishing and subsequently developing its agricultural policy, take into account the interests of Turkish agriculture. Turkey shall furnish the Community with all information which is relevant in this connection.

3. The Community shall inform Turkey of proposals from the Commission regarding the establishment and development of the common agricultural policy, and of the opinions issued and decisions taken with regard to such proposals.

4. The Council of Association shall decide what information on agriculture shall be supplied by Turkey to the Community.

5. The proposals from the Commission mentioned in paragraph 3, and the measures in respect of agriculture which Turkey envisages taking in accordance with paragraph 1, may be the subject of consultation in the Council of Association.

Article 34

1. At the end of the period of twenty-two years the Council of Association, having established that Turkey has adopted the measures of the common agricultural policy which are referred to in Article 33 (1), shall adopt the provisions necessary for achieving the free movement of agricultural products between the Community and Turkey.

2. The provisions referred to in paragraph 1 may include any necessary derogations from the rules laid down in this Protocol.

3. The Council of Association may alter the date referred to in paragraph 1.

Article 35

1. Pending the adoption of provisions under Article 34 and by way of derogation from Articles 7 to 11, 15 to 18, 19 (1) and (5), 21 to 27, and 30, the Community and Turkey shall grant each other preferential treatment in their trade in agricultural products. The scope of such preferential treatment and the arrangements therefor shall be decided by the Council of Association.

2. The treatment to be accorded from the beginning of the transitional stage is, however, laid down in Annex 6.

3. One year after the entry into force of this Protocol and every two years thereafter, the Council of Association shall, at the request of either Contracting Party, review the results of the preferential treatment for agricultural products. It may decide upon improvements which prove to be necessary for progressive attainment of the objectives of the Agreement of Association.

4. Article 34 (2) shall apply.

TITLE II

MOVEMENT OF PERSONS AND SERVICES

CHAPTER 1

WORKERS

Article 36

Freedom of movement for workers between Member States of the Community and Turkey shall be secured by progressive stages in accordance with the principles set out in Article 12 of the Agreement of Association between the end of the twelfth and the twenty-second year after the entry into force of that Agreement.

The Council of Association shall decide on the rules necessary to that end.

Article 37

As regards conditions of work and remuneration, the rules which each Member State applies to workers of Turkish nationality employed in the Community shall not discriminate on grounds of nationality between such workers and workers who are nationals of other Member States of the Community.

Article 38

While freedom of movement for workers between Member States of the Community and Turkey is being brought about by progressive stages, the Council of Association may review all questions arising in connection with the geographical and occupational mobility of workers of Turkish nationality, in particular the extension of work and residence permits, in order to facilitate the employment of those workers in each Member State.

To that end, the Council of Association may make recommendations to Member States.

Article 39

1. Before the end of the first year after the entry, into force of this Protocol the Council of Association shall adopt social security measures for workers of Turkish nationality moving within the Community and for their families residing in the Community.

2. These provisions must enable workers of Turkish nationality, in accordance with arrangements to be laid down, to aggregate periods of insurance or employment completed in individual Member States in respect of old-age pensions, death benefits and invalidity pensions, and also as regards the provision of health services for workers and their families residing in the Community. These measures shall create no obligation on Member States to take into account periods completed in Turkey.

3. The abovementioned measures must ensure that family allowances are paid if a worker's family resides in the Community.

4. It must be possible to transfer to Turkey old-age pensions, death benefits and invalidity pensions obtained under the measures adopted pursuant to paragraph 2.

5. The measures provided for in this Article shall not affect the rights and obligations arising from bilateral agreements between Turkey and Member States of the Community, in so far as these agreements provide more favourable arrangements for Turkish nationals.

Article 40

The Council of Association may make recommendations to Member States and Turkey for encouraging the exchange of young workers; the Council of Association shall be guided in the matter by the measures adopted by Member States in implementation of Article 50 of the Treaty establishing the Community.

CHAPTER II

RIGHT OF ESTABLISHMENT, SERVICES AND TRANSPORT

Article 41

1. The Contracting Parties shall refrain from introducing between themselves any new restrictions on the freedom of establishment and the freedom to provide services.

2. The Council of Association shall, in accordance with the principles set out in Articles 13 and 14.of the Agreement of Association, determine the timetable and rules for the progressive abolition by the Contracting Parties, between themselves, of restrictions on freedom of establishment and on freedom to provide-services.

The Council of Association shall, when determining such timetable and rules for the various classes of activity, take into account corresponding measures already adopted by the Community in these fields and also the special economic and social circumstances of Turkey. Priority shall be given to activities making a particular contribution to the development of production and trade.

Article 42

1. The Council of Association shall extend to Turkey, in accordance with the rules which it shall determine, the transport provisions of- the Treaty establishing the Community with due regard to the geographical situation of Turkey. In the same way it may extend to Turkey measures taken by the Community in applying those provisions in respect of transport by rail, road and inland waterway.

2. If provisions for sea and air transport are laid down by the Community, pursuant to Article 84 (2) of the Treaty establishing the Community, the Council of Association shall decide whether, to what extent and by what procedure provisions may be laid down for Turkish sea and air transport.

TITLE III

CLOSER ALIGNMENT OF ECONOMIC POLICIES

CHAPTER I

COMPETITION, TAXATION AND APPROXIMATION OF LAWS

Article 43

1. The Council of Association shall, within six years of the entry into force of this Protocol, adopt the conditions and rules for the application of the principles laid down in Articles 85, 86, 90 and 92 of the Treaty establishing the Community.

2. During the transitional stage Turkey may be considered as being in the situation specified in Article 92 (3) (a) of the Treaty establishing the Community. Accordingly, aid to promote Turkish economic development shall be considered to be compatible with the proper functioning of the Association if such aid does not alter the conditions of trade to an extent inconsistent with the mutual interests of the Contracting Parties.

At the end of the transitional stage, the Council of Association shall, taking into account the economic situation of Turkey at that time, decide whether it is necessary to extend the period during which the preceding subparagraph shall apply.

Article 44

1. Neither Contracting Party shall impose, directly or indirectly, on the products of the other Party any internal taxation of any kind in excess of that imposed directly or indirectly on similar domestic products.

Neither Contracting Party shall impose on the products of the other Party any internal taxation of such a nature as to afford indirect protection to other products.

The Contracting Parties shall, not later than the beginning of the third year after the entry into force of this Protocol, repeal any provisions existing at the date of its signature which conflict with the above rules.

2. In trade between the Community and Turkey, repayment of internal taxation in respect of exported products shall not exceed the internal taxation imposed on those products, whether directly or indirectly.

3. Where a turnover tax calculated on a cumulative multi-stage tax system is levied, average rates for products or. groups of products may be established, in the case of internal taxation imposed on imported products or of repayments allowed on exported products, provided that there is no infringement of the principles laid down in the preceding paragraphs.

4. The Council of Association shall ensure that the above provisions are applied, taking into account the experience of the Community in the field covered by this Article.

Article 45

As regards trade between the Community and Turkey, and in the case of charges other than turnover taxes, excise duties and other forms of indirect taxation, remissions and repayments in respect of exports may not be granted, and countervailing charges in respect of imports may not be imposed, unless the measures contemplated have been approved in advance by the Council of Association and for a limited period.

Article 46

The Contracting Parties may adopt any protective measures which they consider to be needed to overcome difficulties due to the absence of a decision by the Council of Association on the rules and. conditions of application provided for in Article 43 (1), or to the non-application of those decisions or of Articles 44 or 45.

Article 47

1. If, during the period of twenty-two years, the Council of Association, on application by a Contracting Party, finds that dumping is being practised in trade between the Community and Turkey, it shall address recommendations to the person or persons with whom such practices originate for the purpose of putting an end to them.

2. The injured Party may, after notifying the Council of Association, take suitable protective measures where:

(a) the Council of Association has taken no decision pursuant to paragraph 1 within three months from the making of the application;

(b) despite the issue of recommendations under paragraph 1, the dumping practices continue.

Moreover, where the interests of the injured Party call for immediate action, that Party may, after informing the Council of Association, introduce interim protective measures which may include anti-dumping duties. Such measures shall not remain in force more than three months from the date of the application, or from the date on which the injured Party takes protective measures under (b) of the preceding subparagraph.

3. Where protective measures have been taken under (a) of the first subparagraph of paragraph 2, or under the second subparagraph of that paragraph, the Council of Association may, at any time, decide that such protective measures shall be suspended pending the issue of recommendations under paragraph 1.

The Council of Association may recommend the abolition or amendment of protective measures taken under (b) of the first subparagraph of paragraph 2.

4. Products which originated in or were in free circulation in one of the Contracting Parties and which have been exported to the other Contracting Party shall, on reimportation, be admitted into the territory of the former Contracting Party free of all customs duties, quantitative restrictions or measures having equivalent effect.

The Council of Association may make any appropriate recommendations for the application of this paragraph; it shall be guided by Community experience in this field.

Article 48

The Council of Association may recommend the Contracting Parties to take measures to approximate the laws, regulations or administrative provisions in respect of fields which are not covered by this Protocol but have a direct bearing on the functioning of the Association, and of fields covered by this Protocol but for which no specific procedure is laid down therein.

CHAPTER II

ECONOMIC POLICY

Article 49

In order to facilitate attainment of the objectives set out in Article 17 of the Agreement of Association, the Contracting Parties shall regularly consult each other in the Council of Association to coordinate their economic policies.

The Council of Association shall, where necessary, recommend appropriate measures.

Article 50

1. The Contracting Parties declare their readiness to undertake the liberalization of payments beyond the extent provided for in Article 19 of the Agreement of Association, in so far as their economic situation in general and the state of their balance of payments in particular so permit.

2. In so far as movements of goods, services and capital are limited only by restrictions on payments connected therewith, these restrictions shall be progressively abolished by applying,

mutatis mutandis,

the provisions relating to the abolition of quantitative restrictions, the provision of services and to capital movements.

3. The Contracting Parties undertake not to make more restrictive the arrangements which they apply to transfers connected with the invisible transactions listed in Annex III to the Treaty establishing the Community, without the prior agreement of the Council of Association.

4. If need be, the Contracting Parties shall consult each other on measures to be taken to enable the payments and transfers mentioned in Article 19 of the Agreement of Association and in this Article to be effected.

Article 51

In order to further the objectives set out in Article 20 of the Agreement of Association, Turkey shall, on the entry into force of this Protocol, endeavour to improve the treatment accorded to private capital from the Community which can contribute to the development of the Turkish economy.

Article 52

The Contracting Parties shall endeavour to avoid introducing any new foreign exchange restrictions on the movement of capital and current payments connected therewith between themselves, and shall endeavour not to make the existing arrangements more restrictive.

The Contracting Parties shall simplify to the maximum extent possible authorization and control formalities applicable to the conclusion and carrying out of capital transactions and transfers, and shall, in so far as is necessary, consult each other for the purpose of achieving such simplification.

CHAPTER III

COMMERCIAL POLICY

Article 53

1. The Contracting Parties shall consult each other in the Council of Association in order to achieve, during the transitional stage, the coordination of their commercial policies in relation to third countries, in particular in the fields mentioned in Article 113 (1) of the Treaty establishing the Community.

For this purpose, each Contracting Party shall, at the request of the other Party, furnish all relevant information on agreements which it concludes and which contain tariff or commercial provisions, as well as on changes which it makes in its external trade arrangements.

Where such agreements or changes might have a direct and particular effect on the functioning of the Association, there shall be appropriate consultation in the Council of Association in order to take into account the interests of the Contracting Parties.

2. At the end of the transitional stage, the Contracting Parties, meeting in the Council of Association, shall coordinate their commercial policies more closely with the aim of achieving a commercial policy based on uniform principles.

Article 54

1. If the Community concludes an agreement of association or a preferential agreement having a direct and particular effect on the functioning of the Association, appropriate consultation shall take place in the Council of Association in order to enable the Community to take into account the mutual interests stated in the Agreement of Association between the Community and Turkey.

2. Turkey shall, where necessary to prevent barriers to the movement of goods within the Community, endeavour to take all appropriate measures for the solution of any practical problem which may arise in connection with trade between Turkey and countries linked to the Community by an association agreement or a preferential agreement.

Where such measures have not been taken, the Council of Association may adopt the necessary provisions for ensuring the proper functioning of the Association.

Article 55

Consultations shall take place in the Council of Association on the implementation of ‘Regional Cooperation for Development’ (RCD).

The Council of Association may adopt any necessary provisions. These must not impede the proper functioning of the Association.

Article 56

In the event of a third State acceding to the Community, appropriate consultations shall take place in the Council of Association so as to ensure that account can be taken of the mutual interests of the Community and Turkey stated -in the Agreement of Association.

TITLE IV

GENERAL AND FINAL PROVISIONS

Article 57

The Contracting Parties shall progressively adjust the conditions for participation in contracts awarded by public authorities and public undertakings, and by private undertakings which have been granted special or exclusive rights, so that by the end of the period of twenty-two years there is no discrimination between nationals of Member States and nationals of Turkey established in the territory of the Contracting Parties.

The Council of Association shall determine the timetable and rules for this adjustment; when doing so it shall be guided by the solutions adopted by the Community in this field.

Article 58

In the fields covered by this Protocol:

— the arrangements applied by Turkey in respect of the Community shall not give rise to any discrimination between Member States, their nationals or their companies or firms;

— the arrangements applied by the Community in respect of Turkey shall not give rise to any discrimination between Turkish nationals or Turkish companies or firms.

Article 59

In the fields covered by this Protocol Turkey shall not receive more favourable treatment than that which Member States grant to one another pursuant to the Treaty establishing the Community.

Article 60

1. If serious disturbances occur in a sector of the Turkish economy or prejudice its external financial stability, or if difficulties arise which adversely affect the economic situation in a region of Turkey, Turkey may rake the necessary protective measures.

The Council of Association shall be notified immediately of those measures and of the rules for their application.

2. If serious disturbances occur in a sector of the economy of the Community or of one of more Member States, or prejudice the external financial stability of one or more Member States, or if difficulties arise which adversely affect the economic situation in a region of the Community, the Community may take, or authorize the Member State or States concerned to take, the necessary protective measures.

The Council of Association shall be notified immediately of such measures and of the rules for their application.

3. In the choice of measures to be taken in pursuance of paragraphs 1 and 2, preference shall be given to those which will least disturb the functioning of the Association. These measures shall not exceed what is strictly necessary to remedy the difficulties that have arisen.

4. Consultations may take place in the Council of Association on the measures taken in pursuance of paragraphs 1 and 2.

Article 61

Without prejudice to the special provisions of this Protocol, the transitional stage shall be twelve years.

Article 62

This Protocol and the Annexes thereto shall form an integral part of the Agreement establishing an Association between the European Economic Community and Turkey.

Article 63

1. This Protocol shall be ratified by the Signatory States in accordance with their respective constitutional requirements and shall be validly concluded on behalf of the Community by a decision of the Council, taken in accordance with the provisions of the Treaty establishing the Community; the decision shall be notified to the Contracting Parties to the Agreement establishing an Association between the European Economic Community and Turkey.

The instruments of ratification and the notification of conclusion shall be exchanged at Brussels.

2. This Protocol shall enter into force on the first day of the month following the date of the exchange of the instruments of ratification and of the notification mentioned in paragraph 1.

3. If this Protocol does not enter into force at the beginning of a calendar year, the Council of Association may shorten or lengthen the periods laid down in this Protocol, in particular those in which free movement of goods is to be achieved, so that they may terminate at the end of a calendar year.

Article 64

This Protocol is drawn up in two copies in the Dutch, French, German, Italian and Turkish languages, each of these texts being equally authentic.

In witness whereof, the undersigned Plenipotentiaries have signed this Additional Protocol.

Done at Brussels on the twenty-third day of November in the year one thousand nine hundred and seventy.

For His Majesty the King of the Belgians,

Pierre HARMEL

For the President of the Federal Republic of Germany,

Walter SCHEEL

For the President of the French Republic,

Maurice SCHUMANN

For the President of the Italian Republic,

Mario PEDINI

For His Royal Highness the Grand Duke of Luxembourg,

Gaston THORN

For Her Majesty the Queen of the Netherlands,

J. M. A. H. LUNS

For the Council of the European Communities,

Walter SCHEEL

Franco Maria MALFATTI

For the President of the Republic of Turkey,

Ihsan Sabri ÇAGLAYANGÍL

ANNEXES

ANNEX No 1

on the treatment to be accorded to imports of petroleum products from Turkey into the Community

Sole Article

1. Notwithstanding Articles 9 and 21 to 30 of the Additional Protocol, the products listed below and refined in Turkey shall be imported into the Community free of customs duties within the limit of an overall annual Community tariff quota of 200 000 metric tons:

CCT heading No

Description

27.10

Petroleum oils and oils:obtained from bituminous minerals, other than crude; preparations not elsewhere specified or included, containing not less than 70 % by weight of petroleum oils or of oils obtained from bituminous minerals, these oils being the basic constituents of the preparations:

Light oils:

III.	For other purposes

Medium oils:

III.	For other purposes

Heavy oils:

Gas oil:

(c)	For other purposes

II.

Fuel oil:

(c)	For other purposes

III.

Lubricating oils; other oils:

(c)	To be mixed in accordance with the terms of Additional Note 7 to this Chapter(1)

(d)	For other purposes

27.11

Petroleum gases and other gaseous hydrocarbons:

Commercial propane and commercial butane:

III.	For other purposes

27.12

Petroleum jelly:

Crude:

III.	For other purposes

Other

27.13

Paraffin wax, micro-crystalline wax, slack wax, ozokerite, lignite wax, peat wax and other mineral waxes, whether or not coloured:

Other:

Crude:

(c)	For other purposes

II.

Other

27.14

Petroleum bitumen, petroleum coke and other residues of petroleum oils or of oils obtained from bituminous minerals:

Other

2. The Community shall be entitled to modify the arrangements set out in paragraph 1:

— when a common definition of origin is adopted for petroleum products from third States and associated countries;

— when decisions are taken within the context of a common commercial policy;

— when a common energy policy is established.

In such a case, the Community shall ensure that the imports referred to in paragraph 1 are accorded advantages equivalent to those provided for in that paragraph.

3. Consultations may take place in the Council of Association on the measures taken in pursuance of paragraph 2.

4. Where the Community does not adopt measures under paragraph 2 within three years, the Council of Association may review the size of the quota laid down in paragraph 1.

5. Apart from paragraphs 1 and 2 above, the Additional Protocol shall not affect rules applied to the importation of petroleum products.

(1) Entry under this subheading is subject to conditions to be determined by the competent authorities.

ANNEX No 2

on the treatment to be accorded to imports of particular textile products from Turkey into the Community

Article 1

1. Notwithstanding Article 9 of the Additional Protocol, the Community shall progressively abolish the duties in the Common Customs Tariff in respect of products imported from Turkey which are listed below, by four successive reductions, each of 25 %, over a twelve-year period. These reductions shall be made at the date of entry into force of the Additional Protocol, and four, eight and twelve years thereafter:

CCT heading No

Description

55.05

Cotton yarn, not put up for retail sale

55.09

Other woven fabrics of cotton

58.01

Carpets, carpeting and rugs, knotted (made up or not):

ex A.

Of wool of fine animal hair, excluding hand made carpets, carpeting and rugs

2. Nevertheless, for products imported from Turkey which fall within heading Nos 55.05 and 55.09, the Community shall, on the entry into force of the Additional Protocol make a reduction of 75 % of the Common Customs Tariff duties within the limit of annual Community Tariff quotas of 300 metric tons for heading No 55.05 and 1 000 metric tons for heading No 55.09.

Article 2

Notwithstanding Articles 21, 22, 23 and:24 of the Additional Protocol, the Community shall have the right to introduce new quantitative restrictions on imports from Turkey of the following products.

CCT heading No	Description
50.01	Silk-worm cocoons suitable for reeling
50.02	Raw silk (not thrown)

ANNEX No 3

List of products subject to the timetable of tariff reductions laid down in Article 11

Turkish Customs Tariff heading No

Description

15.05

Wool grease and fatty substances derived therefrom (including lanolin):

— 90

Other

15.09

Degras

15.10

Fatty acids; acid oils from refining; fatty alcohols:

— 10

Fatty acids

15.11

Glycerol and glycerol lyes:

— 10

Glycerol

17.04

Sugar confectionery not containing cocoa:

— 90

Other

17.05

Flavoured or coloured sugars, syrups and molasses, but not including fruit juices containing added sugar in any proportion

18.06

Chocolate and other food preparations containing cocoa

19.02

Preparations of flour, starch or malt extract, of a kind used as infant food or for dietetic or culinary purposes, containing less than 50 % by weight of cocoa

21.07

Food preparations not elsewhere specified or included

22.08

Ethyl alcohol or neutral spirits, undenatured, of a strength of 80 % or higher; denatured spirits (including ethyl alcohol and neutral spirits) of any strength

24.02

Manufactured tobacco; tobacco extracts and essences

25.32

Strontianite (whether or not calcined), other than strontium oxide; mineral substances not elsewhere specified or included; broken pottery:

ex 90

Strontianite (whether or not calcined)

27.04

Coke and semi-coke of coal, of lignite or of peat:

— 21

Coke and semi-coke of coal

28.06

Hydrochloric acid and chlorosulphonic acid:

— 10

Hydrochloric acid

28.08

Sulphuric acid; oleum:

— 30

Oleum

28.15

Sulphides of non-metals; phosphorus trisulphide:

— 20

Carbon disulphide

28.17

Sodium hydroxide (caustic Soda); potassium hydroxide (caustic potash); peroxides of sodium or potassium:

— 11

Sodium hydroxide, chemically pure

— 12

Sodium hydroxide

28.20

Aluminium oxide and hydroxide; artificial corundum:

— 10

Aluminium oxide

— 20

Aluminium hydroxide

28.21

Chromium oxides and hydroxides

28.22

Manganese oxides:

— 10

Manganese dioxide

28.23

Iron oxides and hydroxides; earth colours containing 70 % or more by_ weight of combined iron evaluated as Fe2O3

28.27

Lead oxides; red lead and orange lead

28.30

Chlorides and oxychlorides:

— 30

Ammonium chloride

28.32

Chlorates and perchlorates

28.35

Sulphides; polysulphides:

— 20

Of sodium

28.37

Sulphites and thiosulphates

28.38

Sulphates (including alums) and persulphates:

— 31

Sodium sulphates

— 40

Aluminium sulphates

— 71

Iron sulphates

28.40

Phosphites, hypophosphites and phosphates:

— 11

Sodium phosphates

28.42

Carbonates and percarbonates; commercial ammonium carbonate containing ammonium carbamate:

— 11

Sodium bicarbonate

— 12

Sodium percarbonate

— 13

Sodium carbonate (calcined)

— 14

Sodium carbonate (crystalline)

— 42

Precipitated calcium carbonate

28.45

Silicates; commercial sodium and potassium silicates:

— 10

Sodium

— 20

Potassium

28.47

Salts of metallic acids (for example, chromates, permanganates, stannates):

— 32

Sodium chromate

— 33

Potassium chromate

— 34

Lead chromate

— 35

Sodium dichromate

— 36

Potassium dichromate

28.54

Hydrogen peroxide (including solid hydrogen peroxide)

28.56

Carbides (for example, silicon carbide, boron carbide, metallic carbides)

29.02

Halogenated derivatives of hydrocarbons:

— 30

Trichloroethylene

— 40

Carbon tetrachloride

— 60

Perchlorethylene

— 80

Chorofluoromethanes

— 90

Other

29.03

Sulphonated, nitrated or nitrosated derivatives of hydrocarbons (excluding xylene musk of heading 29.03.10)

29.04

Acyclic alcohols and their halogenated, sulphonated, nitrated or nitrosated derivatives:

— 10

Pentaerythritol

— 21

Pure methanol

— 22

Butyl alcohol

— 23

Propyl alcohol and isopropyl alcohol

— 24

Stearyl and cetyl alcohol

— 25

Sorbitol, mannitol

— 26

Propylene glycol

— 39

Other

29.09

Epoxides, epoxyalcohols, expoxyphenols and poxyethers, with a three or four member ring and their halogenated, sulphonated, nitrated or nitrosated derivatives:

— 90

Other

29.14

Monoacids and their anhydrides, acid halides, acid peroxides and peracids, and their halogenated, sulphonated, nitrated or nitrosated derivatives:

— 21

Acetic anhydride

— 22

Acetic acid other than acetic anhydride

— 30

Oleic acid

— 41

Formic acid

— 42

Sodium acetate

— 43

Aluminium acetate

— 46

Magnesium acetate

— 47

Butyl acetate

— 48

Ethyl stearate

— 49

Other

29.15

Polyacids and their anhydrides, acid halides, acid peroxides and peracids, and their halogenated, sulphonated, nitrated or nitrosated derivatives:

— 51

Dioctyl phthalate

— 52

Dibutyl phthalate

— 53

Diethyl phthalate

— 54

Dimethylphthalate

29.16

Alcohol-acids, aldehyde-acids, ketone-acids, phenol-acids and other single or complex oxygen-function acids, and their anhydrides, acid halides, acid peroxides and peracids and their halogenated, sulphonated, nitrated or nitrosated derivatives:

— 41

Citric acid

— 53

Calcium gluconate

— 54

Calcium lactate

29.28

Diazo-, azo- and azoxy-compounds

29.33

Organo-mercury compounds

29.35

Heterocyclic compounds; nucleic acids:

— 30

Furfural dehyde (furfurol)

— 59

Other

29.43

Sugars, chemically pure, other than sucrose:

— 10

Glucose

— 20

Lactose

— 90

Other

30.03

Medicaments (including veterinary medicaments):

(b)

Other:

— 41

First category

— 42

Second category

— 43

Third category

32.03

Synthetic tanning substances, whether or not mixed with natural tanning materials; artifical bates for pre-tanning (for example, of enzymatic, pancreatic or bacterial origin)

32.05

Synthetic organic dyestuffs (including pigment dyestuffs); synthetic organic products of a kind used as luminophores; products of the kind known as optical -bleaching agents, substantive to the fibre; natural indigo (excluding natural indigo falling within subheading 32.05.10, synthetic organic products of a kind used as luminophores falling within subheading 32.05.30 and products of the kind known as optical bleaching agents, substantive to the fibre, falling within subheading 32.05.40)

32.06

Colour lakes

32.07

Other colouring matter; inorganic products of a kind used as luminophores:

— 22

Lithopone

32.09

Varnishes and lacquers; distempers; prepared water - pigments of the kind used for finishing leather; paints and enamels; pigments in linseed oil, white spirit, spirits of turpentine, - varnish or other paint or enamel media; stamping foils; dyes or other colouring matter in forms of packings of a kind sold by retail (excluding prepared water pigments of the kind used for finishing leather falling within subheading 32.09.22 and stamping foils falling within subheading 32.09.32)

32.13

Writing ink, printing ink and other inks:

— 19

Other printing inks

— 22

Concentrated writing inks

— 23

Copying and hectographic inks

— 24

Inks for ballpoint pens

— 25

Inks for duplicating machines and for impregnating ink pads or typewriter ribbons

33.06

Perfumery, cosmetics and toilet preparations

34.01

Soap, including medicated soap

34.02

Organic surface-active agents; surface-active preparations and washing preparations, whether or not containing soap

34.05

Polishes and creams, for footwear, furniture or floors, metal polishes, scouring powders and similar preparations, but excluding prepared waxes falling within heading No 34.04

35.06

Prepared glues not elsewhere specified or included; products suitable for use as glues put up for sale by retail as glues in packages not exceeding a net weight of 1 kg:

— 20

Other

36.05

Pyrotechnic articles (for example, fireworks, railway fog signals, amorces, rain rockets)

36.06

Matches, excluding Bengal matches

38.03

Activated carbon (decolourizing, depolarizing or adsorbent); activated diatomite, activated clay, activated bauxite and other activated natural mineral products (excluding other products falling within subheading 38.03.90)

38.05

Tall oil (liquid rosin)

38.12

Prepared glazings, prepared dressings and prepared mordants, of a kind used in the textile, paper, leather or like industries

39.01

Condensation, polycondensation and polyaddition products, whether or not modified or polymerised, and whether or not linear (for example, phenoplasts, aminoplasts, alkyds, polyallyl esters and other unsaturated polyesters, silicones), excluding other products falling within subheading 39.01.19, polyamides and superpolyamides falling within subheading 39.01.23 and other products falling within subheading 39.01.29

39.02

Polymerization and copolymerization products (for example, polyethylene, polytetrahaloethylenes, polyisobutylene, polystyrene, polyvinyl chloride, polyvinyl acetate, polyvinyl chloroacetate and other polyvinyl derivatives, polyacrylic and polymethacrylic derivatives, coumaroneindene resins):

—	Liquid or pasty products, including emulsions, dispersions and solutions;

— 12

Polyvinyl acetate

— 16

Polyacrylic and polymethacrylic derivatives

— 17

Coumarone-indene resins:

— 19

Other:

—	Blocks, lumps, powders (including moulding powders), granules, flakes and similar bulk forms, waste and scrap:

— 22

Polyvinyl acetate

— 26

Polyacrylic and polymethacrylic derivatives

— 27

Coumarone-indene resins

— 29

Other

—

Other:

— 32

Polyvinyl acetate

— 39

Other

39.03

Regenerated cellulose; cellulose nitrate, cellulose acetate and other cellulose esters, cellulose ethers and other chemical derivatives of cellulose, plasticized or not (for example, collodions, celluloid); vulcanized fibre:

—	Liquid or pasty products including emulsions, dispersions and solutions:

— 11

Collodions

—	Blocks, lumps, powders (including moulding powders), granules, flakes and similar bulk forms, waste and scrap:

— 22

Cellulose nitrate

— 23

Cellulose acetate

—

Other:

— 31

Regenerated cellulose

— 32

Vulcanized fibre

— 34

Cellulose acetate

39.07

Articles of materials of the kinds described in heading Nos 39.01 to 39.06

40.02

Synthetic rubber latex; prevulcanized synthetic rubber latex; synthetic rubber; factice derived from oils:

(a)	Synthetic rubber and latex intended for the manufacture and reconditioning (retreading) of tyres and inner tubes for transport vehicles of all types:

— 12

Synthetic latex

(b)

Other:

— 22

Synthetic latex

— 23

Factice derived from oils

40.09

Piping and tubing, of unhardened vulcanized rubber

40.13

Articles of apparel and clothing accessories (including gloves), for all purposes, of unhardened vulcanized rubber

40.14

Other articles of unhardened vulcanized rubber:

— 21

Erasers

41.10

Composition leather with a basis of leather or leather fibre, in slabs, in sheets or in rolls

42.01

Saddlery and harness, of any material (for example saddles, harness, collars, traces, knee-pads and boots), for any kind of animal

42.02

Travel goods (for example, trunks, suit-cases, hat-boxes, travelling-bags, rucksacks), shopping-bags, handbags, satchels, brief-cases, wallets, purses, toilet-cases, tool-cases, tobacco-pouches, sheaths, cases, boxes, (for example, for arms, musical instruments, binoculars, jewellery, bottles, collars, footwear, brushes) and similar containers of leather or of composition leather, of vulcanized fibre, of artificial plastic sheeting, of paperboard or of textile fabric

42.06

Articles made from gut (other than silk-worm gut), from goldbeater's skin, from bladders or from tendons

43.01

Raw furskins:

— 40

Caracul, Astrakhan

— 90

Other

43.02

Furskins, tanned or dressed, including furskins assembled in plates, crosses and similar forms; pieces or cuttings of furskin, tanned or dressed including heads, paws, tails and the like (not being fabricated)

43.03

Articles of furskin

43.04

Artificial fur and articles made thereof

44.11

Drawn wood; match splints; wooden pegs or pins for footwear

44.15

Plywood, blockboard, laminboard, battenboard and similar laminated wood products (including veneered panels and sheets); inlaid wood and wood marquetry:

— 20

Plywood or inlaid wood or wood marquetry

44.16

Cellular wood panels, whether or not faced with base metal

44.17

‘Improved’ wood, in sheets, blocks or the like

44.18

Reconstituted wood, being wood shavings, wood chips, sawdust, wood flour or other ligneous waste agglomerated with natural or artificial resins or other organic binding substances, in sheets, blocks or the like

44.23

Builders' carpentry and joinery (including prefabricated and sectional buildings and assembled parquet flooring panels)

44.25

Wooden tools, tool bodies, tool handles, broom and brush bodies and handles; boot and shoe lasts and trees, of wood:

— 10

Boot and shoe lasts and trees

44.28

ANNEX No 4

on the use by Turkey of special aid resources

THE CONTRACTING PARTIES,

desiring not to impede the use by Turkey of special aid resources,

HAVE AGREED AS FOLLOWS:

If the provisions of the Agreement of Association or of the Additional Protocol impede the use by Turkey of special aid resources made available to its economy, Turkey shall, after notification to the Council of Association, be entitled:

(a) to open tariff quotas in accordance with Article 20 (4) of the Additional Protocol for the importation of goods which are purchased with the resources in question;

(b) to import free of duty goods which constitute gifts under Title III of Public Law 480 of the United States or under a food aid programme;

(c) to restrict invitations to tender to suppliers of products originating in countries which grant special aid where the use of such resources entails the importation of products originating in those countries, and where a tendering procedure is prescribed by the legislation of Turkey or of the countries in question.

Products imported into Turkey under this Annex may not be re-exported to the Community either unaltered or after working or processing.

The provisions of this Annex must not hamper the proper functioning of the Association.

At the end of the transitional stage the Council of Association may decide whether this Annex is to remain in force.

In the meantime, if any change is made to the nature of the resources referred to in paragraph 1 of this Annex or to the procedure to be followed for their use, or if any difficulties arise affecting their use, the Council of Association shall review the situation with a view to taking the appropriate measures.

ANNEX No 5

on German internal trade and connected problems

THE CONTRACTING PARTIES,

taking into consideration the conditions at present existing by reasons of the division of Germany,

HAVE AGREED AS FOLLOWS:

Since trade between German territories subject to the Basic Law for the Federal Republic of Germany and German territories in which the Basic Law does not apply is a part of German internal trade, the application of the Agreement of Association or of the Additional Protocol in Germany requires no change in the treatment currently accorded to this trade.

Each Contracting Party shall inform the other Contracting Party of any agreements relating to trade with the German territories in which the Basic Law for the Federal Republic of Germany does not apply, and of any implementing provisions. Each Contracting Party shall ensure that implementation of such agreements does not conflict with the principles of the Association and shall in particular take appropriate measures to avoid harming the economy of the other Contracting Party.

Each Contracting Party may take appropriate measures to prevent any difficulties arising for it from trade between the other Contracting Party and the German territories in which the Basic Law for the Federal Republic of Germany does not apply.

ANNEX No 6

on the treatment to be accorded to agricultural products

Article 1

The treatment provided for in Article 35 (2) of the Additional Protocol is set out in the following Articles.

CHAPTER I

PREFERENTIAL TREATMENT OF IMPORTS INTO THE COMMUNITY

Article 2

Customs duties equal to 50 % of the duties in the Common Customs Tariff shall be applicable to imports into the Community of products listed below and originating in Turkey.

CCT heading No

Description

07.01

Vegetables, fresh or chilled:

E.	Chard (or white beet) and cardoons

Leguminous vegetables, shelled or unshelled:

ex III.

Other

—

Broad beans:

—	From 1 July to 30 April

Olives:

I.	For uses other than the production of oil(1)

Capers

S.	Sweet peppers

ex T.

Other:

—

Parsley

07.03

Vegetables provisionally preserved in brine, sulphur water or in other preservative solutions, but not specially prepared for immediate consumption:

Olives:

I.	For uses other than the production of oil(1)

Capers

08.03

Figs, fresh or dried:

Fresh

08.04

Grapes, fresh or dried:

Fresh:

Table grapes:

ex (a)

From 1 November to 14 July:

—	From 1 December to 31 December

—	From 18 June to 14 July

ex (b)

From 15 July to 31 October:

—	From 15 July to 17 July

08.05

Nuts other than those falling within heading No 08.01, fresh or dried, shelled or not:

D.	Pistachios

Pecans

ex F.

Other:

—	Pignolia nuts

08.06

Apples, pears and quinces, fresh:

Quinces

08.12

Fruit, dried, other than that falling within heading No 08.01, 08.02, 08.03, 08.04 or 08.05:

Apricots

B.	Peaches, including nectarines

D.	Apples and pears

Papaws

Fruit salads:

I.	Not containing prunes

Other

20.01

Vegetables and fruit, prepared or preserved by vinegar or acetic acid, with or without sugar, whether or not containing salt, spices or mustard:

ex B.

Other:

—	Prepared or preserved by vinegar or acetic acid, whether or not containing salt, spices or mustard, but not containing sugar, excluding gherkins

20.02

Vegetables prepared or preserved otherwise than by vinegar or acetic acid:

F.	Capers and olives

ex H.

Other, excluding carrots and mixtures(2)

20.05

Jams, fruit jellies, marmalades, fruit purees and fruit pastes, being cooked preparations, whether or not containing added sugar

Other:

ex III.

Not specified:

—	Fig purées

20.06

Fruit otherwise prepared or preserved, whether or not containing added sugar or spirit:

A.	Nuts (including ground-nuts), roasted

Article 3

The products listed below and originating in Turkey shall be imported into the Community free of customs duties and charges having equivalent effect:

CCT heading No

Description

08.04

Grapes, fresh or dried

Dried:

I.	In immediate containers of a net capacity of 15 kg or less

Article 4

1. Customs duties equal to 60 % of the duties in the Common Customs Tariff shall be applicable to imports into the Community of products listed below and originating in Turkey:

CCT heading No	Description
ex 08.02 A	Fresh oranges

2. Customs duties equal to 50 % of the duties in the Common Customs Tariff shall be applicable to imports into the Community of products listed below and originating in Turkey:

CCT heading No	Description
ex 08.02 B	Fresh mandarins and satsumas; clementines, tangerines and other similar citrus hybrids, fresh
ex 08.02 C	Fresh lemons

3. During the period of application of reference prices, paragraphs 1 and 2 shall apply on condition that on the internal Community market the prices of citrus fruit imported from Turkey are, after customs clearance and allowance for the conversion factors operative for the various classes of citrus fruit and after deduction of transport costs and import charges other than customs duties, not less than the reference prices for the period in question plus the incidence of the Common Customs Tariff on those reference prices and a fixed amount of 1·20 units of account per 100 kilogrammes.

4. The transport costs and import charges other than customs duties referred to in paragraph 3 shall be those laid down for calculating the entry prices referred to in Regulation No 23 on the progressive establishment of a common organization of the market in fruit and vegetables.

However, the Community shall be entitled to calculate the amount to be deducted in respect of import charges, other than customs duties, referred to in paragraph 3, in such a way as to avoid difficulties which may arise from the incidence of those charges on entry prices, depending on origin.

5. The provisions of Article 11 of Regulation No 23 shall continue to apply.

6. Where the advantages accruing from the provisions of paragraphs 1 and 2 above would or could be jeopardized by reasons of abnormal conditions of competition, consultations may be held in the Council of Association on the problems arising from such a situation.

Article 5

ad valorem

duty of 3 % shall be applicable to imports into the Community of products listed below and originating in Turkey. This duty shall be reduced to 2 % one year after the date of entry into force of the Additonal Protocol and to 1 % two years after that date. It shall be abolished at the end of the third year.

CCT heading No

Description

08.03

Figs, fresh or dried

ex B.

Dried:

—	In immediate containers of a net capacity of 15 kg or less

Article 6

ad valorem

duty of 2·5 % within an annual Community tariff quota of 18 700 metric tons, shall be applicable to imports into the Community of products listed below and originating in Turkey:

CCT heading No

Description

08.05

Nuts other than those falling within heading No 08.01, fresh or dried, shelled or not:

ex F.

Other:

—	Hazel nuts

Article 7

1. The Community shall take all measures necessary to ensure- that the levy on imports into the Community of olive oil other than refined olive oil, falling within subheading No 15.07 A II of the Common Customs Tariff, wholly produced in Turkey and transported direct from that country to the Community, is the import levy calculated in accordance with the provisions of Article 13 of Regulation No 136/66/EEC on the establishment of a common organisation of the market in oils and fats, and applicable on the day of importation, less 0.5 unit of account per 100 kilogrammes.

2. Additionally and on condition that Turkey applies a special export charge reflected in the import price, the Community shall reduce the amount of the levy calculated in accordance with paragraph 1 by an amount equal to that of the charge paid but not exceeding 4.5 units of account per 100 kilogrammes.

Each Contracting Party shall take the necessary measures for the implementation of this paragraph.

3. Consultations on the operation of the arrangements provided for in this Article may be held in the Council of Association.

Article 8

The products listed below and originating in Turkey shall be imported into the Community free of Customs duty:

CCT heading No	Description
24.01	Unmanufactured tobacco, tobacco refuse

Article 9

Customs duties equal to 25 % of the duties in the Common Customs Tariff shall be applicable to imports into the Community of products listed below and originating in Turkey. These duties shall be reduced to 10 % of the duties in the Common Customs Tariff at the end of the second year after the entry into force of the Additional Protocol. They shall be abolished at the end of the third year.

CCT heading No

Description

01.01

Live horses, asses, mules and hinnies:

Horses:

I.	Pure-bred breeding animals(3)

III.

Other

Asses

C.	Mules and hinnies

01.02

Live animals of the bovine species:

Domestic species:

I.	Pure-bred breeding animals(3)

Other

01.03

Live swine:

Domestic species:

I.	Pure-bred breeding animals(3)

Other

02.01

Meat and edible offals of the animals falling within heading No 01.01, 01.02, 01.03 or 01.04, fresh, chilled or frozen:

Meat:

ex I.

Of asses, mules and hinnies falling under heading 01.01

II.

Of bovine animals:

(b)

Other

III.

Of swine:

(b)

Other

ex IV.

Other, excluding meat of domestic sheep and lambs

Offals:

I.	For the manufacture of pharmaceutical products(3)

II.

Other:

(a)	Of horses, asses, mules and hinnies

ex (d)

Not specified, excluding offals of domestic sheep and lambs

02.04

Other meat and edible meat offals, fresh, chilled or frozen

02.06

Meat and edible meat offals (except poultry liver), salted, in brine, dried or smoked:

Other:

ex II.

Not specified, excluding meat and offals of domestic sheep and lambs

04.05

Birds' eggs and egg yolks, fresh, dried or otherwise preserved, sweetened or not:

Eggs in shell, fresh or preserved:

II.	Other eggs

Eggs not in shell; egg yolks:

II.

Other(3)

05.04

Guts, bladders and stomachs of animals (other than fish) whole and pieces thereof

05.15

Animal products not elsewhere specified or included; dead animals of Chapter 1 or Chapter 3, unfit for human consumption:

ex B.

Other

—	Animal products not elsewhere specified or included: dead animals of Chapter 1, unfit for human consumption

ex 07.05

Dried leguminous vegetables, shelled, whether or not skinned or split (excluding those for sowing)

08.01

Dates, bananas, pineapples, mangoes, mangosteens, avocados, guavas, coconuts, Brazil nuts and cashew nuts, fresh or dried, shelled or not:

Dates

Avocados

Coconuts and cashew nuts:

I.	Dehydrated coconuts pulp

II.

Other

F.	Brazil nuts

Other

ex Chapter 9

Tea and spices, excluding mate (heading 09.03)

11.03

Flours of the leguminous vegetables falling within heading No 07.05

11.04

Flours of the fruits falling within any heading in Chapter 8

11.08

Starches; inulin:

Inulin

12.07

Plants and parts (including seeds and fruit) of trees, bushes, shrubs or other plants, being goods of a kind used primarily in perfumery, in pharmacy, or for insecticidal, fungicidal or similar purposes, fresh or dried, whole, cut, crushed, ground or powdered

12.08

Locust beans, fresh or dried, whether or not kibbled or ground, but not further prepared; fruit kernels and other vegetable products of a kind used primarily for human food, not falling within any other heading

12.09

Cereal straw and husks, unprepared, or chopped but not otherwise prepared

ex 12.10

Mangolds, swedes, fodder roots; hay, lucerne, clover, sainfoin, forage kale, lupines, vetches and similar forage products, excluding dehydrated flours of green fodder

ex 15.02

Unrendered fats of goats; tallow (including ‘premier jus’) produced from those fats

15.03

Lard stearin, oleostearin and tallow stearin; lard oil, oleo-oil and tallow oil, not emulsified or mixed or prepared in any way

ex 16.01

Sausages and the like, of meat, meat offal or animal blood, excluding those containing meat or offal of pigs, sheep, lambs or animals of bovine species

16.03

Meat extracts and meat juices

18.01

Cocoa beans, whole or broken, raw or roasted

18.02

Cocoa shells, husks; skins and waste

22.07

Other fermented beverages (for example, cider, perry and mead)

23.01

Flours and meals, of meat, offals, fish, crustaceans or molluscs, unfit for human consumption; greaves:

A.	Flours and meals of meat and offal; greaves

23.02

Bran, sharps and other residues derived from the sifting, milling or working of cereals or of leguminous vegetables:

B.	Of leguminous vegetables

ex 23.03

Brewing and distilling dregs and waste; residues of starch manufacture and similar residues

23.06

Vegetable products of a kind used for animal food, not elsewhere specified or included:

ex A.

Acorns, horse chestnuts and pomace or marc of fruit, excluding residue from the pressing of grapes

Other

23.07

Sweetened forage; other preparations of a kind used in animal feeding:

A.	Fish or marine mammal solubles

C.	Not specified

Article 10

On implementation of the common fisheries policy the Community shall take any measures which may be necessary to ensure that Turkey retains export opportunities which are at least equivalent to those provided for under Article 6 of the Provisional Protocol.

The Council of Association shall examine measures which might serve to improve such opportunities.

Article 11

The Council of Association shall determine the preferential treatment applicable to wine originating in Turkey.

Article 12

The Community shall take all measures necessary to ensure that the levy on the following goods, produced in Turkey and imported direct from that country into the Community, is the levy calculated in accordance with the provisions of Article 13 of Regulation No 120/67/EEC on the common organization of the market in cereals, less 0.5 unit of account per metric ton:

CCT heading No

Description

10.01

Wheat and meslin (mixed wheat and rye):

B.	Durum wheat

10.07

Buckwheat, millet, canary seed and grain sorghum; other cereals:

ex D.

Other:

—	Canary seed

Article 13

1. On condition that Turkey applies a special export charge, reflected in the import price on rye of heading No 10.02 of the Common Customs Tariff, which is produced in Turkey and imported direct from that country into the Community, the Community shall reduce the amount of the levy on imports of this product, calculated in accordance with Article 13 of Regulation No 120/67/EEC on the common organisation of the market in cereals, by an amount equal to that of the charge paid, up to a limit of 8 units of account per metric ton.

Each Contracting Party shall take the measures necessary for the implementation of this paragraph.

2. Consultations on the operation of the arrangements provided for in this Article may be held in the Council of Association.

Article 14

Without prejudice to the levying of a variable component determined in accordance with Article 5 of Regulation (EEC) No 1059/69 laying down the trade arrangement applicable to certain goods resulting from the processing of agricultural products, the Community shall take all necessary measures for the progressive reduction, in accordance with the timetable specified in Article 9 of this Annex, of the fixed component levied on imports into the Community of the following goods originating in Turkey:

CCT heading No

Description

ex 17.04

Sugar confectionery, not containing cocoa, excluding liquorice extracts more than 10 % by weight of sucrose, but not containing other added substances

19.01

Malt extract

19.02

Preparations of flour, meal, starch or malt extract, of a kind used as infant food or for dietetic or culinary purposes, containing less than 50 % by weight of cocoa

19.05

Prepared foods obtained by the swelling or roasting of cereals or cereal products (puffed rice, cornflakes and similar products)

19.06

Communion, wafers, empty cachets of a kind suitable for pharmaceutical use, sealing wafers, rice paper and similar products

19.07

Bread, ships' biscuits and other ordinary bakers' wares, not containing added sugar, honey, eggs, fats, cheese or fruit

19.08

Pastry, biscuits, cakes and other fine bakers' wares, whether or not containing cocoa in any proportion

21.01.

Roasted chicory and other roasted coffee substitutes; extracts, essences and concentrates thereof:

Roasted chicory and other roasted coffee substitutes:

II.

Other

Extracts, essences and concentrates:

II.

Other

21.06

Natural yeasts (active or inactive); prepared baking powders:

Active natural yeasts:

II.	Bakers' yeast

29.04:

Acyclic alcohols and their halogenated, sulphonated, nitrated or nitrosated derivatives:

Polyhydric alcohols:

II.

Mannitol

III.

Sorbitol

ex 35.01

Casein, caseinates and other casein derivatives

35.05

Dextrins and dextrin glues; soluble or roasted starches; starch glues

38.12

Prepared glazings, prepared dressings and prepared mordants, of a kind used in the textile, paper, leather or like industries:

Prepared glazings and prepared dressings:

I.	With a basis of amylaceous substances

Article 15

Should Community regulations be amended in respect of products covered by this Annex, the Community shall be entitled to modify the arrangements therefor laid down in this Annex.

When modifying such arrangements the Community shall grant in respect of imports originating in Turkey an advantage comparable to that provided for in this Annex.

Article 16

The Council of Association shall lay down the definition of the concept ‘originating products’ for the purposes of the application of this Chapter.

CHAPTER II

TREATMENT OF IMPORTS INTO TURKEY

Article 17

With respect to its commercial imports, Turkey shall grant to the Community preferential treatment such as to ensure a satisfactory increase in imports of agricultural products originating in the Community.

(1) Entry under this subheading is subject to conditions to be laid down by the competent authorities.

(2) This heading includes,

inter alia

, roasted chick peas (leblebis).

(3) Entry under this subheading is subject to conditions to be laid down by the competent authorities.

FINANCIAL PROTOCOL

HIS MAJESTY THE KING OF THE BELGIANS,

THE PRESIDENT OF THE FEDERAL REPUBLIC OF GERMANY,

THE PRESIDENT OF THE FRENCH REPUBLIC,

THE PRESIDENT OF THE ITALIAN REPUBLIC,

HIS ROYAL HIGHNESS THE GRAND DUKE OF LUXEMBOURG,

HER MAJESTY THE QUEEN OF THE NETHERLANDS,

and

THE COUNCIL OF THE EUROPEAN COMMUNITIES,

of the one part,

THE PRESIDENT OF THE TURKISH REPUBLIC,

of the other part,

ANXIOUS to promote an accelerated development of the Turkish economy in order to facilitate the pursuit of the objectives of the Agreement establishing an Association between the European Economic Community and Turkey,

HIS MAJESTY THE KING OF THE BELGIANS:

Mr Pierre HARMEL,

Minister for Foreign Affairs;

THE PRESIDENT OF THE FEDERAL REPUBLIC OF GERMANY:

Mr Walter SCHEEL,

Minister for Foreign Affairs;

THE PRESIDENT OF THE FRENCH REPUBLIC:

Mr Maurice SCHUMANN,

Minister for Foreign Affairs;

THE PRESIDENT OF THE ITALIAN REPUBLIC:

Mr Mario PEDINI,

Under-Secretary of State for Foreign Affairs;

HIS ROYAL HIGHNESS THE GRAND DUKE OF LUXEMBOURG:

Mr Gaston THORN,

Minister for Foreign Affairs;

HER MAJESTY THE QUEEN OF THE NETHERLANDS:

Mr J. M. A. H. LUNS,

Minister for Foreign Affairs;

THE COUNCIL OF THE EUROPEAN COMMUNITIES:

Mr Walter SCHEEL,

President in Office of the Council of the European Communities;

Mr Franco Maria MALFATTI,

President of the Commission of the European Communities;

THE PRESIDENT OF THE TURKISH REPUBLIC:

Mr Ihsan Sabri ÇAĞLAYANGÍL,

Minister for Foreign Affairs;

HAVE AGREED AS FOLLOWS:

Article 1

Within the framework of the Association between the European Economic Community and Turkey, the Community shall supplement Turkey's own endeavours by participating, in the manner laid down in this Protocol, in measures to promote the development of that country.

Article 2

1. Requests for financing may be submitted to the European Investment Bank by the Turkish State, by an authority and by public or private undertakings which have their seat or a place of business in Turkey; the Bank shall notify them of the action taken on their application.

2. Investment projects shall be eligible for financing where they:

(a) help to increase the productivity of the Turkish economy and, in particular, aim to provide Turkey with a better economic infrastructure, higher agricultural output, and modern, efficiently-run public or private undertakings in the industrial and service sectors;

(b) further the aims of the Agreement of Association;

3. With respect to the choice of investment projects within the framework of the above provisions:

(a) only individual projects may be financed;

(b) as a general rule, investment projects which are to be carried out on Turkish territory may be financed irrespective of the sectors of the economy to which they relate.

4. Special consideration shall be given to projects which could serve to improve the Turkish balance of payments.

Article 3

1. Requests which have been approved shall be financed by loans from the European Investment Bank acting on authority from the Member States of the Community.

2. These loans may be granted up to an aggregate amount of 195 million units of account, which may be committed in a period expiring on 23 May 1976. Any balance outstanding at the end of that period shall be used in accordance with the provisions of this Protocol until it is exhausted.

3. The funds committed each year as a result of the granting of loans shall be distributed as evenly as possible over the whole period in which this Protocol is in force. However, relatively large amounts may, within reasonable limits, be committed in the first part of this period.

4. To the amount specified in paragraph 2 there shall be added the undisbursed portion of loans committed pursuant to the first Financial Protocol but cancelled before the whole or a part of the relevant payments had been made.

Article 4

1. Requests for financing which are not submitted by the Turkish Government cannot be approved without the agreement of that Government.

2. Where a loan is granted to an undertaking or to an authority other than the Turkish State, that loan shall be subject to a guarantee from the Turkish State.

3. Undertakings whose risk capital comes wholly or partly from countries of the Community shall have access to the finance provided for in this Protocol on the same conditions as undertakings with Turkish capital.

Article 5

1. Loans shall be granted on the basis of the economic features of the projects which they are to finance.

2. Loans, especially those for capital investment projects, the return on which is indirect or long-term, may be granted for a maximum of thirty years, and may be redemption-free for up to eight years. The rate of interest on such loans must be not less than 2.5 % per annum.

3. Loans for the financing of projects showing a normal return, which must account for not less than 30 % of the amount of the loans granted to Turkey annually, may be made on the following terms:

(a) a loan period and a redemption-free period determined by the Bank, subject to the limits laid down in paragraph 2, with a view to facilitating the servicing of loans by Turkey;

(b) a rate of interest of not less than 4.5 % per annum.

4. The loans referred to in the preceding paragraph may be granted through the intermediary of appropriate Turkish agencies.

The choice of projects to be financed through these agencies and the terms on which loans by the Bank may be granted by the agency or agencies concerned to recipient undertakings, shall be subject to prior approval by the Bank.

5. Repayments by recipient undertakings which are not immediately needed by the intermediary agencies for the redemption of loans from the Bank, shall be paid into a special account; the use of such amounts shall be subject to approval by the Bank.

Article 6

1. All natural and legal persons who are nationals of Turkey or of Member States of the Community may participate on equal terms in tendering procedures, invitations to tender, transactions and contracts relating to projects for which loans have been granted.

2. The loans may by used to cover expenditure on imports or domestic expenditure, where such expenditure is necessary for carrying out approved capital investment projects, including expenditure on planning, on the services of consulting engineers and on technical assistance.

3. The Bank shall ensure that funds are used as judiciously as possible and in accordance with the objectives of the Agreement of Association.

Article 7

Turkey shall, for the whole period of a loan, make available to the recipients of the loan the currency necessary for the payment of interest and commission, and for the repayment of capital.

Article 8

Contributions under this Protocol for the execution of certain projects may take the form of participation in financing operations in which, in particular, third countries, international finance organisations or credit and development authorities and institutions in Turkey or of Member States of the Community may be concerned.

Article 9

1. While this Protocol is in force the Community shall examine the possibility of supplementing the amount of the loans specified in Article 3 by loans granted by the European Investment Bank from its own resources and on market terms and whose aggregate amount may total 25 million units of account.

2. These loans would be used to finance projects showing a normal return which are to be carried out in Turkey by private undertakings.

3. The Statute of the European Investment Bank and Articles 4, 7 and 8 of this Protocol shall apply to these loans.

Article 10

The Contracting Parties shall, one year before expiry of this Protocol, consider which of its provisions relating to financial assistance might be adopted for a further period.

Article 11

This Protocol shall be annexed to the Agreement establishing an Association between the European Economic Community and Turkey.

Article 12

1. This Protocol shall be ratified by the Signatory States in accordance with their respective constitutional requirements and, as regards the Community, shall become binding by a Council Decision taken in accordance with the Treaty establishing the Community and notified to the Contracting Parties to the Agreement establishing an Association between the European Economic Community and Turkey.

The above instruments of ratification and the act of notification of conclusion shall be exchanged at Brussels.

2. This Protocol shall enter into force on the first day of the month following the date of exchange of the instruments of ratification and act of notification of conclusion, referred to in paragraph 1.

Article 13

This Protocol is drawn up in two copies in the Dutch, French, German, Italian and Turkish languages, each of these texts being equally authentic.

In witness whereof, the undersigned Plenipotentiaries have signed this Financial Protocol.

Done at Brussels this twenty-third day of November in the year one thousand nine hundred and seventy.

For His Majesty the King of the Belgians,

Pierre HARMEL

For the President of the Federal Republic of Germany,

Walter SCHEEL

For the President of the French Republic,

Maurice SCHUMANN

For the President of the Italian Republic,

Mario PEDINI

For His Royal Highness the Grand Duke of Luxembourg,

Gaston THORN

For Her Majesty the Queen of the Netherlands,

J. M. A. H. LUNS

For the Council of the European Communities,

Walter SCHEEL

Franco Maria MALFATTI

For the President of the Republic of Turkey,

Ihsan Sabri ÇAĞLAYANGÍL