COUNCIL DECISION

of 26 March 2012

on the conclusion of the Regional Convention on pan-Euro-Mediterranean preferential rules of origin

(2013/94/EU)

THE COUNCIL OF THE EUROPEAN UNION,

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

Having regard to the proposal from the European Commission,

Having regard to the consent of the European Parliament,

Whereas:

(1) On 26 November 2009 the Council authorised the Commission to open negotiations with the EFTA States, the participants in the Barcelona Process, the participants in the Stabilisation and Association Process and the Faroe Islands on the Regional Convention on pan-Euro-Mediterranean preferential rules of origin, hereinafter referred to as ‘the Convention’.

(2) On 9 December 2009 the text of the Convention was endorsed by the Euromed Trade Ministers at their Conference held in Brussels.

(3) In accordance with Council Decision 2013/93/EU (1), and subject to its conclusion at a later date, the Convention was signed on behalf of the European Union on 14 April 2011.

(4) The Convention should be concluded,

HAS ADOPTED THIS DECISION:

Article 1

The Regional Convention on pan-Euro-Mediterranean preferential rules of origin is hereby approved on behalf of the European Union.

The text of the Convention is attached to this Decision.

Article 2

The President of the Council shall designate the person empowered, on behalf of the European Union, to deposit the instrument of acceptance provided for in Article 10 of the Convention.

Article 3

The Commission shall represent the European Union in the Joint Committee established by Article 3 of the Convention. Representatives of Member States may attend the Joint Committee meetings.

Article 4

This Decision shall enter into force on the day of its adoption.

Done at Brussels, 26 March 2012.

For the Council

The President

N. WAMMEN

(1) See page 1 of this Official Journal.

REGIONAL CONVENTION

on pan-Euro-Mediterranean preferential rules of origin

THE EUROPEAN UNION,

ICELAND,

THE PRINCIPALITY OF LIECHTENSTEIN,

THE KINGDOM OF NORWAY,

THE SWISS CONFEDERATION,

hereinafter referred to as ‘the EFTA States’,

THE PEOPLE’S DEMOCRATIC REPUBLIC OF ALGERIA,

THE ARAB REPUBLIC OF EGYPT,

THE STATE OF ISRAEL,

THE HASHEMITE KINGDOM OF JORDAN,

THE REPUBLIC OF LEBANON,

THE KINGDOM OF MOROCCO,

THE PALESTINE LIBERATION ORGANISATION FOR THE BENEFIT OF THE PALESTINIAN AUTHORITY OF THE WEST BANK AND THE GAZA STRIP,

THE SYRIAN ARAB REPUBLIC,

THE REPUBLIC OF TUNISIA,

THE REPUBLIC OF TURKEY,

hereinafter referred to as ‘the participants in the Barcelona Process’,

THE REPUBLIC OF ALBANIA,

BOSNIA AND HERZEGOVINA,

THE REPUBLIC OF CROATIA,

THE FORMER YUGOSLAV REPUBLIC OF MACEDONIA,

MONTENEGRO,

THE REPUBLIC OF SERBIA

AS WELL AS KOSOVO (UNDER RESOLUTION 1244(1999) OF THE UNITED NATIONS SECURITY COUNCIL),

hereinafter referred to as ‘the participants in the European Union’s Stabilisation and Association Process’,

THE KINGDOM OF DENMARK IN RESPECT OF THE FAROE ISLANDS,

hereinafter referred to as ‘the Faroe Islands’,

hereinafter referred to together as the ‘Contracting Parties’,

CONSIDERING the pan-Euro-Mediterranean system of cumulation of origin, which is made up of a network of Free Trade Agreements and provides for identical rules of origin allowing for diagonal cumulation,

CONSIDERING the possible future extension of the geographical scope of diagonal cumulation to neighbouring countries and territories,

CONSIDERING the difficulties in the management of the current network of bilateral protocols on rules of origin among the countries or territories of the pan-Euro-Mediterranean zone, it is desirable to transpose the existing bilateral systems on rules of origin into a multilateral framework, without prejudice to the principles laid down in the relevant agreements or any other related bilateral agreements,

CONSIDERING that any amendment to a protocol on rules of origin applicable between two partner countries of the pan-Euro-Mediterranean zone implies identical amendments to each and every protocol applicable within the zone,

CONSIDERING that the rules of origin will need to be amended in order to better respond to the economic reality,

CONSIDERING the idea to base cumulation of origin on a single legal instrument in the form of a regional convention on preferential rules of origin, to which the individual free trade agreements applicable between the countries of the zone would refer,

CONSIDERING that the following regional Convention does not lead overall to a less favourable situation than in the previous relation between the free trade partners which apply the pan-euro or pan-euro-med cumulation,

CONSIDERING that the idea of a regional convention on preferential rules of origin for the pan-Euro-Mediterranean zone received the support of the Euro-Med Trade Ministers during their meeting in Lisbon on 21 October 2007,

CONSIDERING that a main objective of a single regional convention is to move towards the application of identical rules of origin for the purpose of cumulation of origin for goods traded between all Contracting Parties,

HAVE DECIDED to conclude the following Convention:

PART I

GENERAL PROVISIONS

Article 1

1. This Convention lays down provisions on the origin of goods traded under the relevant Agreements concluded between the Contracting Parties.

2. The concept of ‘originating products’ and the methods of administrative cooperation relating thereto are set out in the Appendixes to this Convention.

Appendix I sets out general rules for the definition of the concept of originating products and the methods of administrative cooperation.

Appendix II sets out special provisions applicable between certain Contracting Parties and derogating from the provisions laid down in Appendix I.

3. The following are Contracting Parties to this Convention:

— the European Union,

— the EFTA States as listed in the Preamble,

— the Kingdom of Denmark in respect of the Faroe Islands,

— the participants in the Barcelona Process as listed in the Preamble,

— the participants in the European Union’s Stabilisation and Association Process as listed in the Preamble.

With respect to the European Union, this Convention shall apply to the territory in which the Treaty on European Union is applicable, as defined in Article 52 of that Treaty and Article 355 of the Treaty of the Functioning of the European Union.

Article 2

For the purposes of this Convention:

(1) ‘Contracting Party’ means those listed in Article 1(3);

(2) ‘third party’ means any neighbouring country or territory which is not a Contracting Party,

(3) ‘relevant Agreement’ means a free trade agreement between two or more Contracting Parties, which refers to this Convention.

PART II

THE JOINT COMMITTEE

Article 3

1. A Joint Committee is hereby established in which each Contracting Party shall be represented.

2. The Joint Committee shall act by unanimity, without prejudice to Article 5(4).

3. The Joint Committee shall meet whenever necessary, but at least once a year. Any Contracting Party may request that a meeting be held.

4. The Joint Committee shall adopt its own rules of procedure, which shall,

inter alia

, contain provisions for convening meetings and for the designation of the chairperson and his term of office.

5. The Joint Committee may decide to set up any sub-committee or working group that can assist it in carrying out its duties.

Article 4

1. It shall be the responsibility of the Joint Committee to administer this Convention and ensure its proper implementation. For this purpose, it shall be regularly informed by the Contracting Parties about the experiences they have in the application of this Convention. The Joint Committee shall make recommendations, and in the cases provided for in paragraph 3, shall take decisions.

2. In particular the Joint Committee shall recommend to the Contracting Parties:

(a) explanatory notes and guidelines for the uniform application of this Convention;

(b) any other measures required for its application.

3. The Joint Committee shall adopt by decision:

(a) amendments to this Convention including amendments to the Appendixes;

(b) invitations to third parties to accede to this Convention in accordance with Article 5;

Decisions referred to in this paragraph shall be put into effect by the Contracting Parties in accordance with their own legislation.

4. If a representative of a Contracting Party in the Joint Committee has accepted a decision subject to the fulfilment of fundamental legal requirements, the decision shall enter into force, if no date is contained therein, on the first day of the second month after the lifting of the reservation is notified.

PART III

ACCESSION OF THIRD PARTIES

Article 5

1. A third party may become a Contracting Party to this Convention, provided that the candidate country or territory has a free trade agreement in force, providing for preferential rules of origin, with at least one of the Contracting Parties.

2. A third party shall submit a written request for accession to the depositary.

3. The depositary shall submit the request to the Joint Committee for its consideration.

4. The decision of the Joint Committee inviting a third party to accede to this Convention shall be sent to the depositary, which shall, within two months, forward it, together with a text of the Convention in force on that date, to the requesting third party. One single Contracting Party may not oppose that decision.

5. A third party invited to become a Contracting Party to this Convention shall do so by depositing an instrument of accession with the depositary. The said instruments shall be accompanied by a translation of the Convention into the official language(s) of the acceding third party.

6. The accession shall become effective on the first day of the second month following the depositing of the instrument of accession.

7. The depositary shall notify all Contracting Parties of the date on which the instrument of accession was deposited and the date on which the accession will become effective.

8. Recommendations and decisions of the Joint Committee referred to in Article 4(2) and (3) adopted between the date of submission of the request referred to in paragraph 2 of this Article and the date on which accession becomes effective shall also be communicated to the acceding third party via the depositary.

A declaration accepting such acts shall be inserted either in the instrument of accession or in a separate instrument deposited with the depositary within six months of the communication. If the declaration is not deposited within that period, the accession shall be considered void.

9. From the date referred to in paragraph 4, the third party concerned may be represented with observer status in the Joint Committee and any sub-committee and working groups.

PART IV

MISCELLANEOUS AND FINAL PROVISIONS

Article 6

Each Contracting Party shall take appropriate measures to ensure that this Convention is effectively applied, taking account of the need to achieve mutually satisfactory solutions of any difficulties arising from its application.

Article 7

The Contracting Parties shall keep each other informed via the depositary of the measures which they adopt for the implementation of this Convention.

Article 8

The Appendixes to this Convention shall form an integral part thereof.

Article 9

Any Contracting Party may withdraw from this Convention provided it gives 12 months’ notice in writing to the depositary, which shall notify all other Contracting Parties.

Article 10

1. This Convention shall enter into force on 1 January 2011, in relation to those Contracting Parties which, by then, have deposited their instrument of acceptance with the depositary, provided that at least two Contracting Parties have deposited their instruments of acceptance with the depositary by 31.12.2010.

2. If this Convention does not enter into force on 1 January 2011, it shall enter into force on the first day of the second month following the deposit of the last instrument of acceptance by at least two Contracting Parties.

3. In relation to any other Contracting Party than those referred to in paragraphs 1 and 2, this Convention shall enter into force on the first day of the second month following the deposit of its instrument of acceptance.

4. The depositary shall notify to the Contracting Parties the date of the deposit of the instrument of acceptance of each Contracting Party and the date of the entry into force of this Convention by publishing this information in the Official Journal of the European Union (C series).

Article 11

The General Secretariat of the Council of the European Union shall act as depositary of this Convention.

Appendix I

The definition of the concept of ‘originating products’ and methods of administrative cooperation

TABLE OF CONTENTS

TITLE I

GENERAL PROVISIONS

Article 1

Definitions

TITLE II

DEFINITION OF THE CONCEPT OF ‘ORIGINATING PRODUCTS’

Article 2

General requirements

Article 3

Cumulation of origin

Article 4

Wholly obtained products

Article 5

Sufficiently worked or processed products

Article 6

Insufficient working or processing

Article 7

Unit of qualification

Article 8

Accessories, spare parts and tools

Article 9

Sets

Article 10

Neutral elements

TITLE III

TERRITORIAL REQUIREMENTS

Article 11

Principle of territoriality

Article 12

Direct transport

Article 13

Exhibitions

TITLE IV

DRAWBACK OR EXEMPTION

Article 14

Prohibition of drawback of, or exemption from, customs duties

TITLE V

PROOF OF ORIGIN

Article 15

General requirements

Article 16

Procedure for the issue of a movement certificate EUR.1 or EUR-MED

Article 17

Movement certificates EUR.1 or EUR-MED issued retrospectively

Article 18

Issue of a duplicate movement certificate EUR.1 or EUR-MED

Article 19

Issue of movement certificates EUR.1 or EUR-MED on the basis of a proof of origin issued or made out previously

Article 20

Accounting segregation

Article 21

Conditions for making out an origin declaration or an origin declaration EUR-MED

Article 22

Approved exporter

Article 23

Validity of proof of origin

Article 24

Submission of proof of origin

Article 25

Importation by instalments

Article 26

Exemptions from proof of origin

Article 27

Supporting documents

Article 28

Preservation of proof of origin, supplier’s declaration and supporting documents

Article 29

Discrepancies and formal errors

Article 30

Amounts expressed in euro

TITLE VI

ARRANGEMENTS FOR ADMINISTRATIVE COOPERATION

Article 31

Administrative cooperation

Article 32

Verification of proofs of origin

Article 33

Dispute settlement

Article 34

Penalties

Article 35

Free zones

List of Annexes

ANNEX I:

Introductory notes to the list in Annex II

ANNEX II:

List of working or processing required to be carried out on non-originating materials in order for the product manufactured to obtain originating status

ANNEX III a:

Specimens of movement certificate EUR.1 and application for a movement certificate EUR.1

ANNEX III b:

Specimens of movement certificate EUR-MED and application for a movement certificate EUR-MED

ANNEX IV a:

Text of the origin declaration

ANNEX IV b:

Text of the origin declaration EUR-MED

ANNEX V:

List of Contracting Parties which do not apply provisions on partial drawback as provided for in Article 14(7) of this Appendix

TITLE I

GENERAL PROVISIONS

Article 1

Definitions

For the purposes of this Convention:

(a) ‘manufacture’ means any kind of working or processing including assembly or specific operations;

(b) ‘material’ means any ingredient, raw material, component or part,

etc.

, used in the manufacture of a product;

(c) ‘product’ means a product being manufactured, even if it is intended for later use in another manufacturing operation;

(d) ‘goods’ means both materials and products;

(e) ‘customs value’ means the value as determined in accordance with the Agreement on implementation of Article VII of the General Agreement on Tariffs and Trade 1994;

(f) ‘ex-works price’ means the price paid for the product ex works to the manufacturer in the Contracting Party in whose undertaking the last working or processing is carried out, provided the price includes the value of all the materials used, minus any internal taxes which are, or may be, repaid when the product obtained is exported;

(g) ‘value of materials’ means the customs value at the time of importation of the non-originating materials used, or, if this is not known and cannot be ascertained, the first ascertainable price paid for the materials in the exporting Contracting Party;

(h) ‘value of originating materials’ means the value of such materials as defined in (g) applied

mutatis mutandis

;

(i) ‘value added’ means the ex-works price minus the customs value of each of the materials incorporated which originate in the other Contracting Parties with which cumulation is applicable or, where the customs value is not known or cannot be ascertained, the first ascertainable price paid for the materials in the exporting Contracting Party;

(j) ‘chapters’ and ‘headings’ mean the chapters and the headings (four-digit codes) used in the nomenclature which makes up the Harmonised Commodity Description and Coding System, referred to in this Convention as ‘the Harmonised System’ or ‘HS’;

(k) ‘classified’ refers to the classification of a product or material under a particular heading;

(l) ‘consignment’ means products which are either sent simultaneously from one exporter to one consignee or covered by a single transport document covering their shipment from the exporter to the consignee or, in the absence of such a document, by a single invoice;

(m) ‘territories’ includes territorial waters;

(n) ‘customs authorities of the Contracting Party’ for the European Union means any of the customs authorities of the Member States of the European Union.

TITLE II

DEFINITION OF THE CONCEPT OF ‘ORIGINATING PRODUCTS’

Article 2

General requirements

1. For the purpose of implementing the relevant Agreement, the following products shall be considered as originating in a Contracting Party when exported to another Contracting Party:

(a) products wholly obtained in the Contracting Party, within the meaning of Article 4;

(b) products obtained in the Contracting Party incorporating materials which have not been wholly obtained there, provided that such materials have undergone sufficient working or processing in that Contracting Party within the meaning of Article 5;

(c) goods originating in the European Economic Area (EEA) within the meaning of Protocol 4 to the Agreement on the European Economic Area. Such goods shall be considered as originating in the European Union, Iceland, Liechtenstein (1) or Norway (‘EEA Parties’) when exported respectively from the European Union, Iceland, Liechtenstein or Norway to a Contracting Party other than the EEA Parties.

2. The provisions of paragraph 1(c) shall apply only provided that free trade agreements are applicable between the importing Contracting Party and the EEA Parties.

Article 3

Cumulation of origin

1. Without prejudice to the provisions of Article 2(1), products shall be considered as originating in the exporting Contracting Party when exported to another Contracting Party if they are obtained there, incorporating materials originating in Switzerland (including Liechtenstein) (2), Iceland, Norway, Turkey or in the European Union, provided that the working or processing carried out in the exporting Contracting Party goes beyond the operations referred to in Article 6. It shall not be necessary for such materials to have undergone sufficient working or processing.

2. Without prejudice to the provisions of Article 2(1), products shall be considered as originating in the exporting Contracting Party when exported to another Contracting Party if they are obtained there, incorporating materials originating in the Faroe Islands, any participant in the Barcelona Process other than Turkey, or any Contracting Party other than those referred to in paragraph 1 of this Article, provided that the working or processing carried out in the exporting Contracting Party goes beyond the operations referred to in Article 6. It shall not be necessary for such materials to have undergone sufficient working or processing.

3. Where the working or processing carried out in the exporting Contracting Party does not go beyond the operations referred to in Article 6, the product obtained shall be considered as originating in the exporting Contracting Party only where the value added there is greater than the value of the materials used originating in any one of the other Contracting Parties referred to in paragraphs 1 and 2. If this is not so, the product obtained shall be considered as originating in the Contracting Party which accounts for the highest value of originating materials used in the manufacture in the exporting Contracting Party.

4. Products originating in the Contracting Parties referred to in paragraphs 1 and 2 which do not undergo any working or processing in the exporting Contracting Party shall retain their origin if exported into one of the other Contracting Parties.

5. The cumulation provided for in this Article may be applied only provided that:

(a) a preferential trade agreement in accordance with Article XXIV of the General Agreement on Tariffs and Trade is applicable between the Contracting Parties involved in the acquisition of the originating status and the Contracting Party of destination;

(b) materials and products have acquired originating status by the application of rules of origin identical to those given in this Convention; and

(c) notices indicating the fulfilment of the necessary requirements to apply cumulation have been published in the Official Journal of the European Union (C series) and in the Contracting Parties which are party to the relevant Agreements, according to their own procedures.

The cumulation provided for in this Article shall apply from the date indicated in the notice published in the Official Journal of the European Union (C series).

The Contracting Parties shall provide the other Contracting Parties which are party to the relevant Agreements, through the European Commission, with details of the Agreements, including their dates of entry into force, which are applied with the other Contracting Parties referred to in paragraphs 1 and 2.

Article 4

Wholly obtained products

1. The following shall be considered as wholly obtained in a Contracting Party when exported to another Contracting Party:

(a) mineral products extracted from its soil or from its seabed;

(b) vegetable products harvested there;

(d) products from live animals raised there;

(e) products obtained by hunting or fishing conducted there;

(f) products of sea fishing and other products taken from the sea outside the territorial waters of the exporting Contracting Party by its vessels;

(g) products made aboard its factory ships exclusively from products referred to in (f);

(h) used articles collected there fit only for the recovery of raw materials, including used tyres fit only for retreading or for use as waste;

(i) waste and scrap resulting from manufacturing operations conducted there;

(j) products extracted from marine soil or subsoil outside its territorial waters provided that it has sole rights to work that soil or subsoil;

(k) goods produced there exclusively from the products specified in (a) to (j).

2. The terms ‘its vessels’ and ‘its factory ships’ in paragraph 1(f) and (g) shall apply only to vessels and factory ships:

(a) which are registered or recorded in the exporting Contracting Party;

(b) which sail under the flag of the exporting Contracting Party;

(c) which are owned to an extent of at least 50 % by nationals of the exporting Contracting Party, or by a company with its head office in the exporting Contracting Party, of which the manager or managers, Chairman of the Board of Directors or the Supervisory Board, and the majority of the members of such boards are nationals of the exporting Contracting Party and of which, in addition, in the case of partnerships or limited companies, at least half the capital belongs to the exporting Contracting Party or to public bodies or nationals of the said Contracting Party;

(d) of which the master and officers are nationals of the exporting Contracting Party; and

(e) of which at least 75 % of the crew are nationals of the exporting Contracting Party.

3. For the purpose of paragraph 2 (a) and (b), when the exporting Contracting Party is the European Union, it means a Member State of the European Union.

Article 5

Sufficiently worked or processed products

1. For the purposes of Article 2, products which are not wholly obtained shall be considered to be sufficiently worked or processed when the conditions set out in the list in Annex II are fulfilled.

The conditions referred to above indicate the working or processing which must be carried out on non-originating materials used in manufacturing and apply only in relation to such materials. It follows that if a product which has acquired originating status by fulfilling the conditions set out in the list is used in the manufacture of another product, the conditions applicable to the product in which it is incorporated do not apply to it, and no account shall be taken of the non-originating materials which may have been used in its manufacture.

2. Notwithstanding paragraph 1, non-originating materials which, according to the conditions set out in the list in Annex II, should not be used in the manufacture of a product may nevertheless be used, provided that:

(a) their total value does not exceed 10 % of the ex-works price of the product;

(b) any of the percentages given in the list for the maximum value of non-originating materials are not exceeded by virtue of this paragraph.

This paragraph shall not apply to products falling within Chapters 50 to 63 of the Harmonised System.

3. Paragraphs 1 and 2 shall apply subject to the provisions of Article 6.

Article 6

Insufficient working or processing

1. Without prejudice to paragraph 2, the following operations shall be considered as insufficient working or processing to confer the status of originating products, whether or not the requirements of Article 5 are satisfied:

(a) preserving operations to ensure that the products remain in good condition during transport and storage;

(b) breaking-up and assembly of packages;

(d) ironing or pressing of textiles;

(e) simple painting and polishing operations;

(f) husking, partial or total bleaching, polishing, and glazing of cereals and rice;

(g) operations to colour sugar or form sugar lumps;

(h) peeling, stoning and shelling, of fruits, nuts and vegetables;

(i) sharpening, simple grinding or simple cutting;

(j) sifting, screening, sorting, classifying, grading, matching; (including the making-up of sets of articles);

(k) simple placing in bottles, cans, flasks, bags, cases, boxes, fixing on cards or boards and all other simple packaging operations;

(l) affixing or printing marks, labels, logos and other like distinguishing signs on products or their packaging;

(m) simple mixing of products, whether or not of different kinds;

(n) mixing of sugar with any material;

(o) simple assembly of parts of articles to constitute a complete article or disassembly of products into parts;

(p) a combination of two or more operations specified in (a) to (n);

(q) slaughter of animals.

2. All operations carried out in the exporting Contracting Party on a given product shall be considered together when determining whether the working or processing undergone by that product is to be regarded as insufficient within the meaning of paragraph 1.

Article 7

Unit of qualification

1. The unit of qualification for the application of the provisions of this Convention shall be the particular product which is considered as the basic unit when determining classification using the nomenclature of the Harmonised System.

It follows that:

(a) when a product composed of a group or assembly of articles is classified under the terms of the Harmonised System in a single heading, the whole constitutes the unit of qualification;

(b) when a consignment consists of a number of identical products classified under the same heading of the Harmonised System, each product must be taken individually when applying the provisions of this Convention.

2. Where, under General Rule 5 of the Harmonised System, packaging is included with the product for classification purposes, it shall be included for the purposes of determining origin.

Article 8

Accessories, spare parts and tools

Accessories, spare parts and tools dispatched with a piece of equipment, machine, apparatus or vehicle, which are part of the normal equipment and included in the price thereof or which are not separately invoiced, shall be regarded as one with the piece of equipment, machine, apparatus or vehicle in question.

Article 9

Sets

Sets, as defined in General Rule 3 of the Harmonised System, shall be regarded as originating when all component products are originating. Nevertheless, when a set is composed of originating and non-originating products, the set as a whole shall be regarded as originating, provided that the value of the non-originating products does not exceed 15% of the ex-works price of the set.

Article 10

Neutral elements

In order to determine whether a product is an originating product, it shall not be necessary to determine the origin of the following which might be used in its manufacture:

(a) energy and fuel;

(b) plant and equipment;

(d) goods which neither enter into the final composition of the product nor are intended to do so.

TITLE III

TERRITORIAL REQUIREMENTS

Article 11

Principle of territoriality

1. Except as provided for in Article 2(1)(c), Article 3 and paragraph 3 of this Article, the conditions for acquiring originating status set out in Title II shall be fulfilled without interruption in the exporting Contracting Party.

2. Except as provided for in Article 3, where originating goods exported from a Contracting Party to another country return, they shall be considered as non-originating, unless it can be demonstrated to the satisfaction of the customs authorities that:

(a) the returning goods are the same as those exported; and

(b) they have not undergone any operation beyond that necessary to preserve them in good condition while in that country or while being exported.

3. The acquisition of originating status in accordance with the conditions set out in Title II shall not be affected by working or processing done outside the exporting Contracting Party on materials exported from the latter Contracting Party and subsequently re-imported there, provided:

(a) the said materials are wholly obtained in the exporting Contracting Party or have undergone working or processing beyond the operations referred to in Article 6 prior to being exported; and

(b) it can be demonstrated to the satisfaction of the customs authorities that:

(i) the re-imported goods have been obtained by working or processing the exported materials; and

(ii) the total added value acquired outside the exporting Contracting Party by applying the provisions of this Article does not exceed 10 % of the ex-works price of the end product for which originating status is claimed.

4. For the purposes of paragraph 3, the conditions for acquiring originating status set out in Title II shall not apply to working or processing done outside the exporting Contracting Party. However, where, in the list in Annex II, a rule setting a maximum value for all the non-originating materials incorporated is applied in determining the originating status of the end product, the total value of the non-originating materials incorporated in the territory of the exporting Contracting Party, taken together with the total added value acquired outside this Contracting Party by applying the provisions of this Article, shall not exceed the stated percentage.

5. For the purposes of applying the provisions of paragraphs 3 and 4, ‘total added value’ means all costs arising outside the exporting Contracting Party, including the value of the materials incorporated there.

6. The provisions of paragraphs 3 and 4 shall not apply to products which do not fulfil the conditions set out in the list in Annex II or which can be considered sufficiently worked or processed only if the general tolerance fixed in Article 5(2) is applied.

7. The provisions of paragraphs 3 and 4 shall not apply to products of Chapters 50 to 63 of the Harmonised System.

8. Any working or processing of the kind covered by the provisions of this Article and done outside the exporting Contracting Party shall be done under the outward processing arrangements, or similar arrangements.

Article 12

Direct transport

1. The preferential treatment provided for under the relevant Agreement shall apply only to products satisfying the requirements of this Convention which are transported directly between or through the territories of the Contracting Parties with which cumulation is applicable in accordance with Article 3. However, products constituting one single consignment may be transported through other territories with, should the occasion arise, trans-shipment or temporary warehousing in such territories, provided that they remain under the surveillance of the customs authorities in the country of transit or warehousing and do not undergo operations other than unloading, reloading or any operation designed to preserve them in good condition.

Originating products may be transported by pipeline across territory other than that of the Contracting Parties acting as exporting and importing parties.

2. Evidence that the conditions set out in paragraph 1 have been fulfilled shall be supplied to the customs authorities of the importing Contracting Party by the production of:

(a) a single transport document covering the passage from the exporting Contracting Party through the country of transit; or

(b) a certificate issued by the customs authorities of the country of transit:

(i) giving an exact description of the products;

(ii) stating the dates of unloading and reloading of the products and, where applicable, the names of the ships, or the other means of transport used; and

(iii) certifying the conditions under which the products remained in the transit country; or

Article 13

Exhibitions

1. Originating products, sent for exhibition in a country other than those referred to in Article 3 with which cumulation is applicable and sold after the exhibition for importation in a Contracting Party, shall benefit on importation from the provisions of the relevant Agreement provided it is shown to the satisfaction of the customs authorities that:

(a) an exporter has consigned these products from a Contracting Party to the country in which the exhibition is held and has exhibited them there;

(b) the products have been sold or otherwise disposed of by that exporter to a person in another Contracting Party;

(c) the products have been consigned during the exhibition or immediately thereafter in the state in which they were sent for exhibition; and

(d) the products have not, since they were consigned for exhibition, been used for any purpose other than demonstration at the exhibition.

2. A proof of origin shall be issued or made out in accordance with the provisions of Title V and submitted to the customs authorities of the importing Contracting Party in the normal manner. The name and address of the exhibition shall be indicated thereon. Where necessary, additional documentary evidence of the conditions under which they have been exhibited may be required.

3. Paragraph 1 shall apply to any trade, industrial, agricultural or crafts exhibition, fair or similar public show or display which is not organised for private purposes in shops or business premises with a view to the sale of foreign products, and during which the products remain under customs control.

TITLE IV

DRAWBACK OR EXEMPTION

Article 14

Prohibition of drawback of, or exemption from, customs duties

1. Non-originating materials used in the manufacture of products originating in a Contracting Party for which a proof of origin is issued or made out in accordance with the provisions of Title V shall not be subject in the exporting Contracting Party to drawback of, or exemption from, customs duties of whatever kind.

2. The prohibition in paragraph 1 shall apply to any arrangement for refund, remission or non-payment, partial or complete, of customs duties or charges having an equivalent effect, applicable in the exporting Contracting Party to materials used in the manufacture, where such refund, remission or non-payment applies, expressly or in effect, when products obtained from the said materials are exported and not when they are retained for home use there.

3. The exporter of products covered by a proof of origin shall be prepared to submit at any time, upon request from the customs authorities, all appropriate documents proving that no drawback has been obtained in respect of the non-originating materials used in the manufacture of the products concerned and that all customs duties or charges having equivalent effect applicable to such materials have actually been paid.

4. The provisions of paragraphs 1, 2 and 3 of this Article shall also apply in respect of packaging within the meaning of Article 7(2), accessories, spare parts and tools within the meaning of Article 8 and products in a set within the meaning of Article 9 when such items are non-originating.

5. The provisions of paragraphs 1 to 4 shall apply only in respect of materials which are of the kind to which the relevant Agreement applies.

(a) The prohibition in paragraph 1 of this Article shall not apply in bilateral trade between one of the Contracting Parties referred to in Article 3(1) with one of the Contracting Parties referred to in Article 3(2), excluding Israel, the Faroe Islands and the participants in the European Union’s Stabilisation and Association Process, if the products are considered as originating in the exporting or importing Contracting Party without application of cumulation with materials originating in one of the other Contracting Parties referred to in Article 3.

(b) The prohibition in paragraph 1 of this Article shall not apply in bilateral trade between Egypt, Jordan, Morocco and Tunisia, if the products are considered as originating in one of these countries without application of cumulation with materials originating in one of the other Contracting Parties referred to in Article 3.

7. Notwithstanding paragraph 1, the exporting Contracting Party may, except for products falling within Chapters 1 to 24 of the Harmonised System, apply arrangements for drawback of, or exemption from, customs duties or charges having an equivalent effect, applicable to non-originating materials used in the manufacture of originating products, subject to the following provisions:

(a) a 4 % rate of customs charge shall be retained in respect of products falling within Chapters 25 to 49 and 64 to 97 of the Harmonised System, or such lower rate as is in force in the exporting Contracting Party;

(b) a 8 % rate of customs charge shall be retained in respect of products falling within Chapters 50 to 63 of the Harmonised System, or such lower rate as is in force in the exporting Contracting Party.

The provisions of this paragraph shall not be applied by the Contracting Parties listed in Annex V.

8. The provisions of paragraph 7 shall apply until 31 December 2012 and may be reviewed by common accord.

TITLE V

PROOF OF ORIGIN

Article 15

General requirements

1. Products originating in one of the Contracting Parties shall, on importation into other Contracting Parties, benefit from the provisions of the relevant Agreements upon submission of one of the following proofs of origin:

(a) a movement certificate EUR.1, a specimen of which appears in Annex III a;

(b) a movement certificate EUR-MED, a specimen of which appears in Annex III b;

(c) in the cases specified in Article 21(1), a declaration (hereinafter referred to as the ‘origin declaration’ or ‘the origin declaration EUR-MED’) given by the exporter on an invoice, a delivery note or any other commercial document which describes the products concerned in sufficient detail to enable them to be identified. The texts of the origin declarations appear in Annexes IV a and b.

2. Notwithstanding paragraph 1, originating products within the meaning of this Convention shall, in the cases specified in Article 26, benefit from the provisions of the relevant Agreements without it being necessary to submit any of the proofs of origin referred to in paragraph 1 of this Article.

Article 16

Procedure for the issue of a movement certificate EUR.1 or EUR-MED

1. A movement certificate EUR.1 or EUR-MED shall be issued by the customs authorities of the exporting Contracting Party on application having been made in writing by the exporter or, under the exporter’s responsibility, by his authorised representative.

2. For this purpose, the exporter or his authorised representative shall fill in both the movement certificate EUR.1 or EUR-MED and the application form, specimens of which appear in the Annexes III a and b. These forms shall be completed in one of the languages in which the relevant Agreement is drawn up and in accordance with the provisions of the national law of the exporting country. If the completion of the forms is done in handwriting, they shall be completed in ink in printed characters. The description of the products shall be given in the box reserved for this purpose without leaving any blank lines. Where the box is not completely filled, a horizontal line shall be drawn below the last line of the description, the empty space being crossed through.

3. The exporter applying for the issue of a movement certificate EUR.1 or EUR-MED shall be prepared to submit at any time, at the request of the customs authorities of the exporting Contracting Party where the movement certificate EUR.1 or EUR-MED is issued, all appropriate documents proving the originating status of the products concerned as well as the fulfilment of the other requirements of this Convention.

4. Without prejudice to paragraph 5, a movement certificate EUR.1 shall be issued by the customs authorities of the exporting Contracting Party in the following cases:

(a) if the products are exported from one of the Contracting Parties referred to in Article 3(1) to one of the other Contracting Parties referred to in Article 3(1) and

(i) the products concerned can be considered as products originating in the exporting Contracting Party, in the importing Contracting Party or in one of the other Contracting Parties referred to in Article 3(1) with which cumulation is applicable, without application of cumulation with materials originating in one of the Contracting Parties referred to in Article 3(2), and fulfil the other requirements of this Convention, or

(ii) the products concerned can be considered as products originating in one of the Contracting Parties referred to in Article 3(2) with which cumulation is applicable, without application of cumulation with materials originating in one of the Contracting Parties referred to in Article 3, and fulfil the other requirements of this Convention, provided a certificate EUR-MED or an origin declaration EUR-MED has been issued in the country of origin;

(b) if the products are exported from one of the Contracting Parties referred to in Article 3(1) to one of the Contracting Parties referred to in Article 3(2) or from one of the Contracting Parties referred to in Article 3(2) to one of the Contracting Parties referred to in Article 3(1) and

(i) the products concerned can be considered as products originating in the exporting Contracting Party or in the importing Contracting Party, without application of cumulation with materials originating in one of the other Contracting Parties, and fulfil the other requirements of this Convention, or

(ii) the products concerned can be considered as products originating in one of the other Contracting Parties referred to in Article 3, with which cumulation is applicable, without application of cumulation with materials originating in one of the Contracting Parties referred to in Article 3, and fulfil the other requirements of this Convention, provided a certificate EUR-MED or an origin declaration EUR-MED has been issued in the country of origin;

(c) if the products are exported from one of the Contracting Parties referred to in Article 3(2) to one of the Contracting Parties referred to in Article 3(2) and

5. A movement certificate EUR-MED shall be issued by the customs authorities of the exporting Contracting Party, if the products concerned can be considered as products originating in the exporting Contracting Party, in the importing Contracting Party or in one of the other Contracting Parties referred to in Article 3 with which cumulation is applicable and fulfil the requirements of this Convention, in the following cases:

(a) if the products are exported from one of the Contracting Parties referred to in Article 3(1) to one of the other Contracting Parties referred to in Article 3(1) and

(i) cumulation was applied with materials originating in one or more of the Contracting Parties referred to in Article 3(2), provided a certificate EUR-MED or an origin declaration EUR-MED has been issued in the country of origin, or

(ii) the products may be used in the importing Contracting Party as materials in the context of cumulation for the manufacture of products for export from the importing Contracting Party to one of the Contracting Parties referred to in Article 3(2), or

(iii) the products may be re-exported from the importing Contracting Party to one of the Contracting Parties referred to in Article 3(2);

(i) cumulation was applied with materials originating in one or more of the other Contracting Parties referred to in Article 3, provided a certificate EUR-MED or an origin declaration EUR-MED has been issued in the country of origin, or

(ii) the products may be used in the importing Contracting Party as materials in the context of cumulation for the manufacture of products for export from the importing Contracting Party to one of the other Contracting Parties referred to in Article 3, or

(iii) the products may be re-exported from the importing Contracting Party to one of the Contracting Parties referred to in Article 3;

(c) if the products are exported from one of the Contracting Parties referred to in Article 3(2) to one of the Contracting Parties referred to in Article 3(2) and

(ii) the products may be used in the importing Contracting Party as materials in the context of cumulation for the manufacture of products for export from the importing Contracting Party to one of the other Contracting Parties referred to in Article 3, or

(iii) the products may be re-exported from the importing Contracting Party to one of the Contracting Parties referred to in Article 3.

6. A movement certificate EUR-MED shall contain one of the following statements in English in box 7:

(a) if origin has been obtained by application of cumulation with materials originating in one or more of the Contracting Parties:

‘CUMULATION APPLIED WITH … (name of the country/countries)’

(b) if origin has been obtained without the application of cumulation with materials originating in one or more of the Contracting Parties:

‘NO CUMULATION APPLIED’

7. The customs authorities issuing movement certificates EUR.1 or EUR-MED shall take any steps necessary to verify the originating status of the products and the fulfilment of the other requirements of this Convention. For this purpose, they shall have the right to call for any evidence and to carry out any inspection of the exporter’s accounts or any other check considered appropriate. They shall also ensure that the forms referred to in paragraph 2 are duly completed. In particular, they shall check whether the space reserved for the description of the products has been completed in such a manner as to exclude all possibility of fraudulent additions.

8. The date of issue of the movement certificate EUR.1 or EUR-MED shall be indicated in Box 11 of the certificate.

9. A movement certificate EUR.1 or EUR-MED shall be issued by the customs authorities and made available to the exporter as soon as actual exportation has been effected or ensured.

Article 17

Movement certificates EUR.1 or EUR-MED issued retrospectively

1. Notwithstanding Article 16(9), a movement certificate EUR.1 or EUR-MED may exceptionally be issued after exportation of the products to which it relates if:

(a) it was not issued at the time of exportation because of errors or involuntary omissions or special circumstances; or

(b) it is demonstrated to the satisfaction of the customs authorities that a movement certificate EUR.1 or EUR-MED was issued but was not accepted at importation for technical reasons.

2. Notwithstanding Article 16(9), a movement certificate EUR-MED may be issued after exportation of the products to which it relates and for which a movement certificate EUR.1 was issued at the time of exportation, provided that it is demonstrated to the satisfaction of the customs authorities that the conditions referred to in Article 16(5) are satisfied.

3. For the implementation of paragraphs 1 and 2, the exporter shall indicate in his application the place and date of exportation of the products to which the movement certificate EUR.1 or EUR-MED relates, and state the reasons for his request.

4. The customs authorities may issue a movement certificate EUR.1 or EUR-MED retrospectively only after verifying that the information supplied in the exporter’s application complies with that in the corresponding file.

5. Movement certificates EUR.1 or EUR-MED issued retrospectively shall be endorsed with the following phrase in English:

‘ISSUED RETROSPECTIVELY’

Movement certificates EUR-MED issued retrospectively by application of paragraph 2 shall be endorsed with the following phrase in English:

‘ISSUED RETROSPECTIVELY (Original EUR.1 No … [date and place of issue])’

6. The endorsement referred to in paragraph 5 shall be inserted in Box 7 of the movement certificate EUR.1 or EUR-MED.

Article 18

Issue of a duplicate movement certificate EUR.1 or EUR-MED

1. In the event of theft, loss or destruction of a movement certificate EUR.1 or EUR-MED, the exporter may apply to the customs authorities which issued it for a duplicate made out on the basis of the export documents in their possession.

2. The duplicate issued in this way shall be endorsed with the following word in English:

‘DUPLICATE’

3. The endorsement referred to in paragraph 2 shall be inserted in Box 7 of the duplicate movement certificate EUR.1 or EUR-MED.

4. The duplicate, which shall bear the date of issue of the original movement certificate EUR.1 or EUR-MED, shall take effect as from that date.

Article 19

Issue of movement certificates EUR.1 or EUR-MED on the basis of a proof of origin issued or made out previously

When originating products are placed under the control of a customs office in a Contracting Party, it shall be possible to replace the original proof of origin by one or more movement certificates EUR.1 or EUR-MED for the purpose of sending all or some of these products elsewhere within that Contracting Party. The replacement movement certificate(s) EUR.1 or EUR-MED shall be issued by the customs office under whose control the products are placed.

Article 20

Accounting segregation

1. Where considerable cost or material difficulties arise in keeping separate stocks of originating and non-originating materials which are identical and interchangeable, the customs authorities may, at the written request of those concerned, authorise the so-called ‘accounting segregation’ method (hereinafter referred to as the ‘method’) to be used for managing such stocks.

2. The method shall ensure that, for a specific reference period, the number of products obtained which could be considered as ‘originating’ is the same as that which would have been obtained had there been physical segregation of the stocks.

3. The customs authorities may make the grant of authorisation referred to in paragraph 1 subject to any conditions deemed appropriate.

4. The method shall be applied and the application thereof shall be recorded on the basis of the general accounting principles applicable in the country where the product was manufactured.

5. The beneficiary of the method may make out or apply for proofs of origin, as the case may be, for the quantity of products which may be considered as originating. At the request of the customs authorities, the beneficiary shall provide a statement of how the quantities have been managed.

6. The customs authorities shall monitor the use made of the authorisation and may withdraw it whenever the beneficiary makes improper use of the authorisation in any manner whatsoever or fails to fulfil any of the other conditions laid down in this Convention.

Article 21

Conditions for making out an origin declaration or an origin declaration EUR-MED

1. An origin declaration or an origin declaration EUR-MED as referred to in Article 15(1)(c) may be made out:

(a) by an approved exporter within the meaning of Article 22, or

(b) by any exporter for any consignment consisting of one or more packages containing originating products the total value of which does not exceed EUR 6 000.

2. Without prejudice to paragraph 3, an origin declaration may be made out in the following cases:

(a) if the products are exported from one of the Contracting Parties referred to in Article 3(1) to one of the other Contracting Parties referred to in Article 3(1) and

(i) the products concerned can be considered as products originating in the exporting Contracting Party, in the importing Contracting Party or in one of the other Contracting Parties referred to in Article 3(1) with which cumulation is applicable, without application of cumulation with materials originating in one of the Contracting Parties referred to in Articles 3(2), and fulfil the other requirements of this Convention, or

(c) if the products are exported from one of the Contracting Parties referred to in Article 3(2) to one of the Contracting Parties referred to in Article 3(2) and

3. An origin declaration EUR-MED may be made out if the products concerned can be considered as products originating in the exporting Contracting Party, in the importing Contracting Party or in one of the other Contracting Parties referred to in Article 3 with which cumulation is applicable and fulfil the requirements of this Convention, in the following cases:

(a) if the products are exported from one of the Contracting Parties referred to in Article 3(1) to one of the other Contracting Parties referred to in Article 3(1) and

(iii) the products may be re-exported from the importing Contracting Party to one of the Contracting Parties referred to in Article 3(2);

(ii) the products may be used in the importing Contracting Party as materials in the context of cumulation for the manufacture of products for export from the importing Contracting Party to one of the other Contracting Parties referred to in Article 3, or

(iii) the products may be re-exported from the importing Contracting Party to one of the Contracting Parties referred to in Article 3;

(c) if the products are exported from one of the Contracting Parties referred to in Article 3(2) to one of the Contracting Parties referred to in Article 3(2) and

(ii) the products may be used in the importing Contracting Party as materials in the context of cumulation for the manufacture of products for export from the importing Contracting Party to one of the other Contracting Parties referred to in Article 3, or

(iii) the products may be re-exported from the importing Contracting Party to one of the Contracting Parties referred to in Article 3.

4. An origin declaration EUR-MED shall contain one of the following statements in English:

(a) if origin has been obtained by application of cumulation with materials originating in one or more of the Contracting Parties:

‘CUMULATION APPLIED WITH … (name of the country/countries)’

(b) if origin has been obtained without the application of cumulation with materials originating in one or more of the Contracting Parties:

‘NO CUMULATION APPLIED’

5. The exporter making out an origin declaration or an origin declaration EUR-MED shall be prepared to submit at any time, at the request of the customs authorities of the exporting Contracting Party, all appropriate documents proving the originating status of the products concerned as well as the fulfilment of the other requirements of this Convention.

6. An origin declaration or an origin declaration EUR-MED shall be made out by the exporter by typing, stamping or printing on the invoice, the delivery note or another commercial document, the declaration, the texts of which appear in Annexes IV a and b, using one of the linguistic versions set out in those Annexes and in accordance with the provisions of the national law of the exporting country. If the declaration is handwritten, it shall be written in ink in printed characters.

7. Origin declarations and origin declarations EUR-MED shall bear the original signature of the exporter in manuscript. However, an approved exporter within the meaning of Article 22 shall not be required to sign such declarations provided that he gives the customs authorities of the exporting Contracting Party a written undertaking that he accepts full responsibility for any origin declaration which identifies him as if it had been signed in manuscript by him.

8. An origin declaration or an origin declaration EUR-MED may be made out by the exporter when the products to which it relates are exported, or after exportation on condition that it is presented in the importing country at the latest two years after the importation of the products to which it relates.

Article 22

Approved exporter

1. The customs authorities of the exporting Contracting Party may authorise any exporter (hereinafter referred to as ‘approved exporter’), who makes frequent shipments of products in accordance to the provisions of this Convention to make out origin declarations or origin declarations EUR-MED irrespective of the value of the products concerned. An exporter seeking such authorisation shall offer to the satisfaction of the customs authorities all guarantees necessary to verify the originating status of the products as well as the fulfilment of the other requirements of this Convention.

2. The customs authorities may grant the status of approved exporter subject to any conditions which they consider appropriate.

3. The customs authorities shall grant to the approved exporter a customs authorisation number which shall appear on the origin declaration or on the origin declaration EUR-MED.

4. The customs authorities shall monitor the use of the authorisation by the approved exporter.

5. The customs authorities may withdraw the authorisation at any time. They shall do so where the approved exporter no longer offers the guarantees referred to in paragraph 1, no longer fulfils the conditions referred to in paragraph 2 or otherwise makes an incorrect use of the authorisation.

Article 23

Validity of proof of origin

1. A proof of origin shall be valid for four months from the date of issue in the exporting Contracting Party, and shall be submitted within that period to the customs authorities of the importing Contracting Party.

2. Proofs of origin which are submitted to the customs authorities of the importing Contracting Party after the final date for presentation specified in paragraph 1 may be accepted for the purpose of applying preferential treatment, where the failure to submit these documents by the final date set is due to exceptional circumstances.

3. In other cases of belated presentation, the customs authorities of the importing Contracting Party may accept the proofs of origin where the products have been submitted before the said final date.

Article 24

Submission of proof of origin

Proofs of origin shall be submitted to the customs authorities of the importing Contracting Party in accordance with the procedures applicable in that country. The said authorities may require a translation of a proof of origin and may also require the import declaration to be accompanied by a statement from the importer to the effect that the products meet the conditions required for the implementation of the relevant Agreement.

Article 25

Importation by instalments

Where, at the request of the importer and subject to the conditions laid down by the customs authorities of the importing Contracting Party, dismantled or non-assembled products within the meaning of General Rule 2(a) of the Harmonised System falling within Sections XVI and XVII or headings 7308 and 9406 of the Harmonised System are imported by instalments, a single proof of origin for such products shall be submitted to the customs authorities upon importation of the first instalment.

Article 26

Exemptions from proof of origin

1. Products sent as small packages from private persons to private persons or forming part of travellers’ personal luggage shall be admitted as originating products without requiring the submission of a proof of origin, provided that such products are not imported by way of trade and have been declared as meeting the requirements of this Convention and where there is no doubt as to the veracity of such a declaration. In the case of products sent by post, that declaration may be made on the customs declaration CN22/CN23 or on a sheet of paper annexed to that document.

2. Imports which are occasional and consist solely of products for the personal use of the recipients or travellers or their families shall not be considered as imports by way of trade if it is evident from the nature and quantity of the products that no commercial purpose is in view.

3. Furthermore, the total value of these products shall not exceed EUR 500 in the case of small packages or EUR 1 200 in the case of products forming part of travellers’ personal luggage.

Article 27

Supporting documents

The documents referred to in Articles 16(3) and 21(5) used for the purpose of proving that products covered by a movement certificate EUR.1 or EUR-MED or an origin declaration or origin declaration EUR-MED may be considered as products originating in a Contracting Party and fulfil the other requirements of this Convention may consist

inter alia

of the following:

(1) direct evidence of the processes carried out by the exporter or supplier to obtain the goods concerned, contained for example in his accounts or internal bookkeeping;

(2) documents proving the originating status of materials used, issued or made out in the relevant Contracting Party where these documents are used in accordance with national law;

(3) documents proving the working or processing of materials in the relevant Contracting Party, issued or made out in the relevant Contracting Party, where these documents are used in accordance with national law;

(4) movement certificates EUR.1 or EUR-MED or origin declarations or origin declarations EUR-MED proving the originating status of materials used, issued or made out in the Contracting Parties in accordance with this Convention;

(5) appropriate evidence concerning working or processing undergone outside the relevant Contracting Party by application of Article 11, proving that the requirements of that Article have been satisfied.

Article 28

Preservation of proof of origin and supporting documents

1. The exporter applying for the issue of a movement certificate EUR.1 or EUR-MED shall keep for at least three years the documents referred to in Article 16(3).

2. The exporter making out an origin declaration or origin declaration EUR-MED shall keep for at least three years a copy of this origin declaration as well as the documents referred to in Article 21(5).

3. The customs authorities of the exporting Contracting Party issuing a movement certificate EUR.1 or EUR-MED shall keep for at least three years the application form referred to in Article 16(2).

4. The customs authorities of the importing Contracting Party shall keep for at least three years the movement certificates EUR.1 and EUR-MED and the origin declarations and origin declarations EUR-MED submitted to them.

Article 29

Discrepancies and formal errors

1. The discovery of slight discrepancies between the statements made in the proof of origin and those made in the documents submitted to the customs office for the purpose of carrying out the formalities for importing the products shall not

ipso facto

render the proof of origin null and void if it is duly established that this document does correspond to the products submitted.

2. Obvious formal errors such as typing errors on a proof of origin shall not cause this document to be rejected if these errors are not such as to create doubts concerning the correctness of the statements made in this document.

Article 30

Amounts expressed in euro

1. For the application of the provisions of Article 21(1)(b) and Article 26(3) in cases where products are invoiced in a currency other than euro, amounts in the national currencies of the Contracting Parties equivalent to the amounts expressed in euro shall be fixed annually by each of the countries concerned.

2. A consignment shall benefit from the provisions of Article 21(1)(b) or Article 26(3) by reference to the currency in which the invoice is drawn up, according to the amount fixed by the country concerned.

3. The amounts to be used in any given national currency shall be the equivalent in that currency of the amounts expressed in euro as at the first working day of October. The amounts shall be communicated to the European Commission by 15 October and shall apply from 1 January the following year. The European Commission shall notify all countries concerned of the relevant amounts.

4. A country may round up or down the amount resulting from the conversion into its national currency of an amount expressed in euro. The rounded-off amount may not differ from the amount resulting from the conversion by more than 5 %. A country may retain unchanged its national currency equivalent of an amount expressed in euro if, at the time of the annual adjustment provided for in paragraph 3, the conversion of that amount, prior to any rounding-off, results in an increase of less than 15 % in the national currency equivalent. The national currency equivalent may be retained unchanged if the conversion were to result in a decrease in that equivalent value.

5. The amounts expressed in euro shall be reviewed by the Joint Committee at the request of any Contracting Party. When carrying out this review, the Joint Committee shall consider the desirability of preserving the effects of the limits concerned in real terms. For this purpose, it may decide to modify the amounts expressed in euro.

TITLE VI

ARRANGEMENTS FOR ADMINISTRATIVE COOPERATION

Article 31

Administrative cooperation

1. The customs authorities of the Contracting Parties shall provide each other, through the European Commission, with specimen impressions of stamps used in their customs offices for the issue of movement certificates EUR.1 and EUR-MED, and with the addresses of the customs authorities responsible for verifying those certificates, origin declarations and origin declarations EUR-MED.

2. In order to ensure the proper application of this Convention, the Contracting Parties shall assist each other, through the competent customs administrations, in checking the authenticity of the movement certificates EUR.1 and EUR-MED, the origin declarations and the origin declarations EUR-MED and the correctness of the information given in these documents.

Article 32

Verification of proofs of origin

1. Subsequent verifications of proofs of origin shall be carried out at random or whenever the customs authorities of the importing Contracting Party have reasonable doubts as to the authenticity of such documents, the originating status of the products concerned or the fulfilment of the other requirements of this Convention.

2. For the purposes of implementing the provisions of paragraph 1, the customs authorities of the importing Contracting Party shall return the movement certificate EUR.1 or EUR-MED and the invoice, if it has been submitted, the origin declaration or the origin declaration EUR-MED, or a copy of these documents, to the customs authorities of the exporting Contracting Party giving, where appropriate, the reasons for the request for verification. Any documents and information obtained suggesting that the information given on the proof of origin is incorrect shall be forwarded in support of the request for verification.

3. The verification shall be carried out by the customs authorities of the exporting Contracting Party. For this purpose, they shall have the right to call for any evidence and to carry out any inspection of the exporter’s accounts or any other check considered appropriate.

4. If the customs authorities of the importing Contracting Party decide to suspend the granting of preferential treatment to the products concerned while awaiting the results of the verification, release of the products shall be offered to the importer subject to any precautionary measures judged necessary.

5. The customs authorities requesting the verification shall be informed of the results thereof as soon as possible. These results shall indicate clearly whether the documents are authentic and whether the products concerned may be considered as products originating in one of the Contracting Parties and fulfil the other requirements of this Convention.

6. If in cases of reasonable doubt there is no reply within ten months of the date of the verification request or if the reply does not contain sufficient information to determine the authenticity of the document in question or the real origin of the products, the requesting customs authorities shall, except in exceptional circumstances, refuse entitlement to the preferences.

Article 33

Dispute settlement

Where disputes arise in relation to the verification procedures of Article 32 which cannot be settled between the customs authorities requesting a verification and the customs authorities responsible for carrying out this verification, they shall be submitted to the bilateral body established by the relevant Agreement. Where disputes other than those related to the verification procedures of Article 32 arise in relation to the interpretation of this Convention, they shall be submitted to the Joint Committee.

In all cases the settlement of disputes between the importer and the customs authorities of the importing Contracting Party shall take place under the legislation of that country.

Article 34

Penalties

Penalties shall be imposed on any person who draws up, or causes to be drawn up, a document which contains incorrect information for the purpose of obtaining a preferential treatment for products.

Article 35

Free zones

1. The Contracting Parties shall take all necessary steps to ensure that products traded under cover of a proof of origin, which in the course of transport use a free zone situated in their territory, are not substituted by other goods and do not undergo handling other than normal operations designed to prevent their deterioration.

2. By way of derogation from paragraph 1, when products originating in a Contracting Party are imported into a free zone under cover of a proof of origin and undergo treatment or processing, the authorities concerned shall issue a new movement certificate EUR.1 or EUR-MED at the exporter’s request, if the treatment or processing undergone complies with this Convention.

(1) Due to the Customs Union between Liechtenstein and Switzerland, products originating in Liechtenstein are cosidered as originating in Switzerland.

(2) The Principality of Liechtenstein has a customs union with Switzerland and is a Contracting Party to the Agreement on the European Economic Area..

ANNEX I

Introductory notes to the list in Annex II

Note 1:

The list sets out the conditions required for all products to be considered as sufficiently worked or processed within the meaning of Article 5 of this Appendix.

Note 2:

2.1.

The first two columns in the list describe the product obtained. The first column gives the heading number or chapter number used in the Harmonised System and the second column gives the description of goods used in that system for that heading or chapter. For each entry in the first two columns, a rule is specified in column 3 or 4. Where, in some cases, the entry in the first column is preceded by an ’ex’, this signifies that the rules in column 3 or 4 apply only to the part of that heading as described in column 2.

2.2.

Where several heading numbers are grouped together in column 1 or a chapter number is given and the description of products in column 2 is therefore given in general terms, the adjacent rules in column 3 or 4 apply to all products which, under the Harmonised System, are classified in headings of the chapter or in any of the headings grouped together in column 1.

2.3.

Where there are different rules in the list applying to different products within a heading, each indent contains the description of that part of the heading covered by the adjacent rules in column 3 or 4.

2.4.

Where, for an entry in the first two columns, a rule is specified in both columns 3 and 4, the exporter may opt to apply either the rule set out in column 3 or that set out in column 4. If no origin rule is given in column 4, the rule set out in column 3 is to be applied.

Note 3:

3.1.

The provisions of Article 5 of this Appendix, concerning products having acquired originating status which are used in the manufacture of other products, shall apply regardless of whether this status has been acquired inside the factory where these products are used or in another factory in a Contracting Party.

Example:

An engine of heading 8407, for which the rule states that the value of the non-originating materials which may be incorporated may not exceed 40 % of the ex-works price, is made from ‘other alloy steel roughly shaped by forging’ of heading ex 7224.

If this forging has been forged in the European Union from a non-originating ingot, it has already acquired originating status by virtue of the rule for heading ex 7224 in the list. The forging can then count as originating in the value-calculation for the engine, regardless of whether it was produced in the same factory or in another factory in the European Union. The value of the non-originating ingot is thus not taken into account when adding up the value of the non-originating materials used.

3.2.

The rule in the list represents the minimum amount of working or processing required, and the carrying-out of more working or processing also confers originating status; conversely, the carrying-out of less working or processing cannot confer originating status. Thus, if a rule provides that non-originating material, at a certain level of manufacture, may be used, the use of such material at an earlier stage of manufacture is allowed, and the use of such material at a later stage is not.

3.3.

Without prejudice to Note 3.2, where a rule uses the expression ‘Manufacture from materials of any heading’, then materials of any heading(s) (even materials of the same description and heading as the product) may be used, subject, however, to any specific limitations which may also be contained in the rule.

However, the expression ‘Manufacture from materials of any heading, including other materials of heading …’ or ‘Manufacture from materials of any heading, including other materials of the same heading as the product’ means that materials of any heading(s) may be used, except those of the same description as the product as given in column 2 of the list.

3.4.

When a rule in the list specifies that a product may be manufactured from more than one material, this means that one or more materials may be used. It does not require that all be used.

Example:

The rule for fabrics of headings 5208 to 5212 provides that natural fibres may be used and that chemical materials, among other materials, may also be used. This does not mean that both have to be used; it is possible to use one or the other, or both.

3.5.

Where a rule in the list specifies that a product must be manufactured from a particular material, the condition does not prevent the use of other materials which, because of their inherent nature, cannot satisfy the rule. (See also Note 6.2 below in relation to textiles).

Example:

The rule for prepared foods of heading 1904, which specifically excludes the use of cereals and their derivatives, does not prevent the use of mineral salts, chemicals and other additives which are not products from cereals.

However, this does not apply to products which, although they cannot be manufactured from the particular materials specified in the list, can be produced from a material of the same nature at an earlier stage of manufacture.

Example:

In the case of an article of apparel of ex Chapter 62 made from non-woven materials, if the use of only non-originating yarn is allowed for this class of article, it is not possible to start from non-woven cloth – even if non-woven cloths cannot normally be made from yarn. In such cases, the starting material would normally be at the stage before yarn – that is, the fibre stage.

3.6.

Where, in a rule in the list, two percentages are given for the maximum value of non-originating materials that can be used, then these percentages may not be added together. In other words, the maximum value of all the non-originating materials used may never exceed the higher of the percentages given. Furthermore, the individual percentages must not be exceeded, in relation to the particular materials to which they apply.

Note 4:

4.1.

The term ‘natural fibres’ is used in the list to refer to fibres other than artificial or synthetic fibres. It is restricted to the stages before spinning takes place, including waste, and, unless otherwise specified, includes fibres which have been carded, combed or otherwise processed, but not spun.

4.2.

The term ‘natural fibres’ includes horsehair of heading 0511, silk of headings 5002 and 5003, as well as wool fibres and fine or coarse animal hair of headings 5101 to 5105, cotton fibres of headings 5201 to 5203, and other vegetable fibres of headings 5301 to 5305.

4.3.

The terms ‘textile pulp’, ‘chemical materials’ and ‘paper-making materials’ are used in the list to describe the materials, not classified in Chapters 50 to 63, which can be used to manufacture artificial, synthetic or paper fibres or yarns.

4.4.

The term ‘man-made staple fibres’ is used in the list to refer to synthetic or artificial filament tow, staple fibres or waste, of headings 5501 to 5507.

Note 5:

5.1.

Where, for a given product in the list, reference is made to this Note, the conditions set out in column 3 shall not be applied to any basic textile materials used in the manufacture of this product and which, taken together, represent 10 % or less of the total weight of all the basic textile materials used. (See also Notes 5.3 and 5.4).

5.2.

However, the tolerance mentioned in Note 5.1 may be applied only to mixed products which have been made from two or more basic textile materials.

The following are the basic textile materials:

— silk,

— wool,

— coarse animal hair,

— fine animal hair,

— horsehair,

— cotton,

— paper-making materials and paper,

— flax,

— true hemp,

— jute and other textile bast fibres,

— sisal and other textile fibres of the genus Agave,

— coconut, abaca, ramie and other vegetable textile fibres,

— synthetic man-made filaments,

— artificial man-made filaments,

— current-conducting filaments,

— synthetic man-made staple fibres of polypropylene,

— synthetic man-made staple fibres of polyester,

— synthetic man-made staple fibres of polyamide,

— synthetic man-made staple fibres of polyacrylonitrile,

— synthetic man-made staple fibres of polyimide,

— synthetic man-made staple fibres of polytetrafluoroethylene,

— synthetic man-made staple fibres of poly(phenylene sulphide),

— synthetic man-made staple fibres of poly(vinyl chloride),

— other synthetic man-made staple fibres,

— artificial man-made staple fibres of viscose,

— other artificial man-made staple fibres,

— yarn made of polyurethane segmented with flexible segments of polyether, whether or not gimped,

— yarn made of polyurethane segmented with flexible segments of polyester, whether or not gimped,

— products of heading 5605 (metallised yarn) incorporating strip consisting of a core of aluminium foil or of a core of plastic film whether or not coated with aluminium powder, of a width not exceeding 5 mm, sandwiched by means of a transparent or coloured adhesive between two layers of plastic film,

— other products of heading 5605.

Example:

A yarn, of heading 5205, made from cotton fibres of heading 5203 and synthetic staple fibres of heading 5506, is a mixed yarn. Therefore, non-originating synthetic staple fibres which do not satisfy the origin-rules (which require manufacture from chemical materials or textile pulp) may be used, provided that their total weight does not exceed 10 % of the weight of the yarn.

Example:

A woollen fabric, of heading 5112, made from woollen yarn of heading 5107 and synthetic yarn of staple fibres of heading 5509, is a mixed fabric. Therefore, synthetic yarn which does not satisfy the origin-rules (which require manufacture from chemical materials or textile pulp), or woollen yarn which does not satisfy the origin-rules (which require manufacture from natural fibres, not carded or combed or otherwise prepared for spinning), or a combination of the two, may be used, provided that their total weight does not exceed 10 % of the weight of the fabric.

Example:

Tufted textile fabric, of heading 5802, made from cotton yarn of heading 5205 and cotton fabric of heading 5210, is a only mixed product if the cotton fabric is itself a mixed fabric made from yarns classified in two separate headings, or if the cotton yarns used are themselves mixtures.

Example:

If the tufted textile fabric concerned had been made from cotton yarn of heading 5205 and synthetic fabric of heading 5407, then, obviously, the yarns used are two separate basic textile materials and the tufted textile fabric is, accordingly, a mixed product.

5.3.

In the case of products incorporating ‘yarn made of polyurethane segmented with flexible segments of polyether, whether or not gimped’, this tolerance is 20 % in respect of this yarn.

5.4.

In the case of products incorporating ‘strip consisting of a core of aluminium foil or of a core of plastic film whether or not coated with aluminium powder, of a width not exceeding 5 mm, sandwiched by means of a transparent or coloured adhesive between two layers of plastic film’, this tolerance is 30 % in respect of this strip.

Note 6:

6.1.

Where, in the list, reference is made to this Note, textile materials (with the exception of linings and interlinings), which do not satisfy the rule set out in the list in column 3 for the made-up product concerned, may be used, provided that they are classified in a heading other than that of the product and that their value does not exceed 8 % of the ex-works price of the product.

6.2.

Without prejudice to Note 6.3, materials, which are not classified within Chapters 50 to 63, may be used freely in the manufacture of textile products, whether or not they contain textiles.

Example:

If a rule in the list provides that, for a particular textile item (such as trousers), yarn must be used, this does not prevent the use of metal items, such as buttons, because buttons are not classified within Chapters 50 to 63. For the same reason, it does not prevent the use of slide-fasteners, even though slide-fasteners normally contain textiles.

6.3.

Where a percentage rule applies, the value of materials which are not classified within Chapters 50 to 63 must be taken into account when calculating the value of the non-originating materials incorporated.

Note 7:

7.1.

For the purposes of headings ex 2707, 2713 to 2715, ex 2901, ex 2902 and ex 3403, the ‘specific processes’ are the following:

(a) vacuum-distillation;

(b) redistillation by a very thorough fractionation process;

(d) reforming;

(e) extraction by means of selective solvents;

(f) the process comprising all of the following operations: processing with concentrated sulphuric acid, oleum or sulphuric anhydride; neutralisation with alkaline agents; decolourisation and purification with naturally active earth, activated earth, activated charcoal or bauxite;

(g) polymerisation;

(h) alkylation;

(i) isomerisation.

7.2.

For the purposes of headings 2710, 2711 and 2712, the ‘specific processes’ are the following:

(a) vacuum-distillation;

(b) redistillation by a very thorough fractionation process;

(d) reforming;

(e) extraction by means of selective solvents;

(g) polymerisation;

(h) alkylation;

(i) isomerisation;

(j) in respect of heavy oils of heading ex 2710 only, desulphurisation with hydrogen, resulting in a reduction of at least 85 % of the sulphur content of the products processed (ASTM D 1266-59 T method);

(k) in respect of products of heading 2710 only, deparaffining by a process other than filtering;

(l) in respect of heavy oils of heading ex 2710 only, treatment with hydrogen, at a pressure of more than 20 bar and a temperature of more than 250 °C, with the use of a catalyst, other than to effect desulphurisation, when the hydrogen constitutes an active element in a chemical reaction. The further treatment, with hydrogen, of lubricating oils of heading ex 2710 (e.g. hydrofinishing or decolourisation), in order, more especially, to improve colour or stability shall not, however, be deemed to be a specific process;

(m) in respect of fuel oils of heading ex 2710 only, atmospheric distillation, on condition that less than 30 % of these products distils, by volume, including losses, at 300 °C, by the ASTM D 86 method;

(n) in respect of heavy oils other than gas oils and fuel oils of heading ex 2710 only, treatment by means of a high-frequency electrical brush discharge;

(o) in respect of crude products (other than petroleum jelly, ozokerite, lignite wax or peat wax, paraffin wax containing by weight less than 0.75 % of oil) of heading ex 2712 only, de-oiling by fractional crystallisation.

7.3.

For the purposes of headings ex 2707, 2713 to 2715, ex 2901, ex 2902 and ex 3403, simple operations, such as cleaning, decanting, desalting, water separation, filtering, colouring, marking, obtaining a sulphur content as a result of mixing products with different sulphur contents, or any combination of these operations or like operations, do not confer origin.

ANNEX II

List of working or processing required to be carried out on non-originating materials in order for the product manufactured to obtain originating status