AGREEMENT between the European Economic Community and the State of Israel

THE EUROPEAN ECONOMIC COMMUNITY,

of the one part, and

THE STATE OF ISRAEL,

of the other part,

DESIRING to consolidate and extend the economic relations established by the Agreements of

4 June 1964 and 29 June 1970 between the European Economic Community and the State of

Israel and to ensure, with due regard for fair conditions of competition, the harmonious development

of their commerce,

CONSIDERING that the Community is anxious to develop economic and trade relations with

countries of the Mediterranean basin, and taking account of the desire of Israel to strengthen its

economic links with the Community,

RESOLVED to this end to continue the progressive elimination of the obstacles to substantially

all their trade, in accordance with the provisions of the General Agreement on Tariffs and Trade

concerning the establishment of free trade areas, and to establish cooperation between the Contracting

Parties on a basis of mutual advantage,

DECLARING their readiness to examine the possibility of developing and deepening their

relations where it would appear to be useful in the interests of their economies to extend them

to fields not covered by this Agreement,

HAVE DECIDED, in pursuit of these objectives and considering that no provision of this Agreement

may be interpreted as exempting the Contracting Parties from the obligations which are

incumbent upon them under other international agreements,

TO CONCLUDE THIS AGREEMENT:

Article 1

The aim of this Agreement is:

- to promote through the expansion of reciprocal trade the harmonious development of economic relations between the European Economic Community and the State of Israel and thus to foster in the Community and in Israel the advance of economic activity, the improvement of living and employment conditions, and increased productivity and financial stability;

- to promote cooperation in areas which are of

reciprocal interest to the Contracting Parties;

- to provide fair conditions of competition for trade

between the Contracting Parties;

- to contribute in this way, by the removal of

barriers to trade, to the harmonious development

and expansion of world trade.

TITLE I

Trade

Article 2

1. Products originating in Israel shall, on importation into the Community, be governed by the provisions of Protocol 1.

2. Products originating in the Community shall, onimportation into Israel, be governed by the provisions

of Protocol 2.

3. Protocol 3 lays down the rules of origin.

Article 3

1. No new customs duty on imports or charge having equivalent effect and no new quantitative restriction on imports or measure having equivalent effect shall be introduced in trade between the Community and Israel.

2. Charges having an effect equivalent to customs duties on imports introduced on or after 1 January 1974 in trade between the Community and Israel shall be abolished upon the entry into force of the Agreement. Any charge having an effect equivalent to a customs duty on imports, the rate of which on 31 December 1974 was higher than that actually applied on 1 January 1974, shall be reduced to the latter rate upon the entry into force of the Agreement.

Article 4

1. No new customs duty on exports or charge having equivalent effect shall be introduced in trade between the Community and Israel.

2. Customs duties and charges having equivalent effect on products exported from one Contracting Party to the other shall be abolished on 1 July 1977.

Article 5

Articles 3 and 4 shall apply to products other than those listed in Annex II to the Treaty establishing the European Economic Community.

Article 6

1. A Contracting Party which is considering the reduction of the effective level of its duties or charges having equivalent effect applicable to third countries benefiting from most-favoured-nation treatment, or which is considering the suspension of their application, shall, as far as may be practicable, notify the Joint Committee not less than 30 days before such reduction or suspension comes into effect. It shall take note of any representations by the other Contracting Party regarding any distortions which might result therefrom.

2. In the event of amendments to the nomenclature of the customs tariffs of the Contracting Parties affecting products referred to in the Agreement, the Joint Committee may adapt the tariff nomenclature of these products in the Agreement.

Article 7

1. In the event of specific rules being established as a result of the implementation of its agricultural policy or of any alteration of the current rules or in the event of any alteration or extension of the provisions relating to the implementation of the agricultural policy, the Contracting Party in question may amend the arrangements resulting from the Agreement in respect of the products which are the subject of those rules or alterations.

2. In such cases the Contracting Party in question shall take due account of the interests of the other Contracting Party. To this end the Contracting Parties may consult each other within the Joint Committee.

Article 8

The Agreement shall not preclude the maintenance or establishment of customs unions, free trade areas or arrangements for frontier trade, except in so far as they alter the trade arrangements provided for in the Agreement, in particular the provisions concerning the rules of origin.

Article 9

The Contracting Parties shall refrain from any measure or practice of an internal fiscal nature establishing, whether directly or indirectly, discrimination between the products of one Contracting Party and like products originating in the territory of the other Contracting Party.

Products exported to the territory of one of the Contracting Parties may not benefit from repayment of internal taxation in excess of the amount of direct or indirect taxation imposed on them.

Article 10

Payments relating to trade in goods and the transfer of such payments to the Member State of the Community in which the creditor is resident or to Israel shall be free from any restrictions where such trade is covered by the provisions of the Agreement.

Article 11

The Agreement 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 human, animal or plant life and health, the protection of national treasures of artistic, historic or archaeological value, the protection of industrial and commercial property, or rules relating to gold or silver. Such prohibitions or restrictions must not, however, constitute a means of arbitrary discrimination or a disguised restriction on trade between the Contracting Parties.

Article 12

1. The following are incompatible with the proper functioning of the Agreement in so far as they may affect trade between the Community and Israel:

(i) all agreements between undertakings, decisions by associations of undertakings and concerted practices between undertakings which have as their object or effect the prevention, restriction or distortion of competition as regards the production of or trade in goods;

(ii) abuse by one or more undertakings of a dominant position in the territories of the Contracting Parties as a whole or in a substantial part thereof;

(iii) any public aid which distorts or threatens to distort competition by favouring certain undertakings or the production of certain goods.

2. Should a Contracting Party consider that a given practice is incompatible with this Article, it may take appropriate measures under the conditions and in accordance with the procedures laid down in Article 16.

Article 13

Where an increase in imports of a given product is or is likely to be seriously detrimental to any production activity carried on in the territory of one of the Contracting Parties and where this increase is due to:

- the partial or total reduction in the importing Contracting Party, as provided for in the Agreement, of customs duties and charges having equivalent effect levied on the product in question ; and,

- the fact that the duties or charges having equivalent effect levied by the exporting Contracting Party on imports of raw materials or intermediate products used in the manufacture of the product in question are significantly lower than the corresponding duties or charges levied by the importing Contracting Party;

the Contracting Party concerned may take appropriate measures under the conditions and in accordance with the procedures laid down in Article 16.

Article 14

If one of the Contracting Parties finds that dumping is taking place in trade with the other Contracting Party, it may take appropriate measures against this practice in accordance with the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade, under the conditions and in accordance with the procedures laid down in Article 16.

Article 15

If serious disturbances arise in any sector of the economy or if difficulties arise which could bring about serious deterioration in the economic situation of a region, the Contracting Party concerned may take appropriate measures under the conditions and in accordance with the procedures laid down in Article 16.

Article 16

1. In the event of a Contracting Party subjecting imports of products liable to give rise to the difficulties referred to in Articles 13 and 15 to an administrative procedure, the purpose of which is to provide rapid information on the trend of trade flows, it shall inform the other Contracting Party.

2. In the cases specified in Articles 12, 13, 14, 15 and 25, before taking the measures provided for therein, or, as soon as possible in cases to which paragraph 3 (d) applies, the Contracting Party in question shall supply the Joint Committee with all relevant information required for a thorough examination of the situation with a view to seeking a solution acceptable to the Contracting Parties. In the selection of measures, priority must be given to those which least disturb the functioning of the Agreement. The safeguard measures shall be notified immediately to the Joint Committee and shall be the subject of periodical consultations within the Committee, particularly with a view to their abolition as soon as circumstances permit.

3. For the implementation of paragraph 2, the following provisions shall apply:

(a) As regards Article 12, either Contracting Party may refer the matter to the Joint Committee if it considers that a given practice is incompatible with the proper functioning of the Agreement within the meaning of Article 12 (1).The Contracting Parties shall provide the Joint Committee with all relevant information and shall give it the assistance it requires in order to the case and, where appropriate, to eliminate the practice objected to.

If the Contracting Party in question fails to put an end to the practice objected to within the period fixed by the Joint Committee or, in the absence of agreement in the Joint Committee,within three months of the matter being referred to it, the Contracting Party concerned may adopt any safeguard measures it considers necessary to deal with the serious difficulties resulting from the practice in question ; in particular it may withdraw tariff concessions.

(b) As regards Article 13, the difficulties arising from the situation referred to in that Article shall be referred for examination to the Joint Committee, which may take any decision needed to put an end to such difficulties.

If the Joint Committee or the exporting Contracting Party has not taken a decision putting an end to the difficulties within 30 days of notification of the matter, the importing Contracting Party shall be authorized to levy a countervailing charge on the product imported.

The countervailing charge shall be calculated according to the incidence on the value of the goods in question of the tariff disparities in respect of the raw materials or intermediate products incorporated therein.

(c) As regards Article 14, consultation in the Joint Committee shall take place before the Contracting Party concerned takes the appropriate measures.

(d) Where exceptional circumstances requiring immediate action make prior examination impossible, the Contracting Party concerned may, in the situations specified in Articles 13, 14 and 15 and also in the case of export aids having a direct and immediate incidence on trade, apply forthwith such precautionary measures as are strictly necessary to remedy the situation.

Article 17

Where one or more Member States of the Community or Israel is in difficulties or is seriously threatened with difficulties as regards its balance of payments, the Contracting Party concerned may take the necessary safeguard measures. It shall inform the other Contracting Party forthwith.

TITLE II

Cooperation

Article 18

1. The Community and Israel shall, as a factor complementary to trade, institute cooperation in spheres which are in the mutual interest of the Contracting Parties.

2. To this end, the Joint Committee shall seek ways and means of promoting the development and diversification of trade, facilitating the transfer of technological knowhow, and encouraging private investment and contacts and cooperation between the industries of the Community and Israel.

3. The Joint Committee is empowered to make recommendations with a view to implementing one or more of the measures referred to in paragraph 2.

The examination of such measures must be undertaken case by case and be subject to the existence of some mutual interest for the Contracting Parties.

4. The Contracting Parties may, as a factor complementary to trade, develop economic cooperation in spheres which are of mutual interest to them, taking into account developments in the Community's economic policies.

TITLE III

General and final provisions

Article 19

1. A Joint Committee is hereby established which shall be responsible for the administration of the Agreement and shall ensure its proper implementation. For this purpose, it shall make recommendations and take decisions in the cases provided for in the Agreement. These decisions shall be implemented by the Contracting Parties in accordance with their own rules.

2. For the purpose of the proper implementation of the Agreement, the Contracting Parties shall exchange information and, at the request of either Party, shall hold consultations within the Joint Committee.

3. The Joint Committee shall formally adopt its own rules of procedure.

Article 20

1. The Joint Committee shall consist of representatives of the Community on the one hand, and of representatives of Israel on the other.

2. The Joint Committee shall act by mutual agreement.

Article 21

1. Each Contracting Party shall preside in turn over the Joint Committee, in accordance with the arrangements to be laid down in its rules of procedure.

2. The Chairman shall convene meetings of the Joint Committee at least once a year in order to review the general functioning of the Agreement.

The Joint Committee shall, in addition, meet whenever special circumstances so require, at the request of either Contracting Party, in accordance with the conditions to be laid down in its rules of procedure.

3. The Joint Committee may decide to set up any working party that can assist it in carrying out its duties.

Article 22

1. In accordance with the procedure adopted for negotiating the Agreement, the Contracting Parties shall review the results of the Agreement on the basis of the experience gained during its functioning and of the objectives defined therein and consider any improvements which could be made. This review shall take place first from the beginning of 1978 and again from the beginning of 1983 and any improvements adopted shall operate from 1 January 1979 and 1 January 1984 respectively.

2. Should Israel need to slow down its tariff dismantling programme, the Contracting Parties may decide, when reviewing the industrial sector, to extend, on mutually agreed conditions, the time limits set out in Article 1 (2) of Protocol 2. These limits relate to the rates of reduction of 30 % and 80 % respectively. Neither time limit may be extended by more than two years.

The tariff dismantling programme referred to in Article 1 (2) of Protocol 2 shall be completed by 1 January 1989 at the latest.

Article 23

Nothing in the Agreement shall prevent a Contracting Party from taking any measures:

(a) which it considers necessary to prevent the disclosure of information contrary to its essential security interests;

(b) which relate to trade in arms, munitions or war materials or to research, development or production indispensable for defence purposes, provided that such measures do not impair the conditions of competition in respect of products not intended for specifically military purposes;

(c) which it considers essential to its security in time of war or serious international tension.

Article 24

In the fields covered by the Agreement:

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

- the arrangements applied by the Community in respect of Israel shall not give rise to discrimination between Israeli nationals, companies or firms.

Article 25

1. The Contracting Parties shall refrain from any measure likely to jeopardize the attainment of the objectives of the Agreement.

2. They shall take any general or specific measures required to fulfil their obligations under the Agreement.

If either Contracting Party considers that the other Contracting Party has failed to fulfil an obligation under the Agreement, it may take appropriate measures under the conditions and in accordance with the procedures laid down in Article 16.

Article 26

1. Where a Contracting Party considers that it would be useful in the common interest of the Contacting Parties to develop the relations established by the Agreement by extending them to fields not covered thereby, it shall submit a reasoned request to the other Contracting Party.

The Contracting Parties may instruct the Joint Committee to examine this request and, where appropriate, to make recommendations to them, particularly with a view to opening negotiations.

2. The agreements resulting from the negotiations referred to in paragraph 1 will be subject to ratification or approval by the Contracting Parties in accordance with their own procedures.

Article 27

The Protocols annexed to the Agreement shall form an integral part thereof.

Article 28

Either Contracting Party may denounce the Agreement by notifying the other Contracting Party.

The Agreement shall cease to apply 12 months after the date of such notification.

Article 29

The Agreement shall apply, on the one hand, to the territories to which the Treaty establishing the European Economic Community applies under the conditions laid down in that Treaty and, on the other, to the State of Israel.

Article 30

This Agreement is drawn up in duplicate in the Danish, Dutch, English, French, German, Italian and Hebrew languages, each of these texts being equally authentic.

This Agreement will be approved by the Contracting Parties in accordance with their own procedures.

It shall enter into force on the first day of the second month following the date on which the Contracting Parties notify each other that the procedures necessary to this end have been completed.

The Agreement of 29 June 1970 between the European Economic Community and the State of Israel shall cease to be applicable on the same date.

Udfærdiget i Bruxelles, den første Sivan femtusind syvhundrede og femogtredive i den hebraiske kalender, svarende til den ellevte maj nitten hundrede og femoghalvfjerds.

Geschehen zu Brüssel am ersten Siwan fünftausendsiebenhundertfünfunddreißig des

hebräischen Kalenders ; dieser Tag entspricht dem elften Mai neunzehnhundertfünfundsiebzig.

Done at Brussels, the first day of Sivan in the year five thousand seven hundred and

thirty-five of the Hebrew calendar, corresponding to the eleventh day of May in the year

one thousand nine hundred and seventy-five.

Fait à Bruxelles, le premier Sivan cinq mil sept cent trente-cinq du calendrier hébraïque,

correspondant au onze mai mil neuf cent soixante-quinze.

Fatto a Bruxelles, il primo Sivan cinquemilasettecentotrentacinque del calendario ebraico,

corrispondente all'undici maggio millenovecentosettantacinque.

Gedaan te Brussel, één Siwan vijfduizend zevenhonderd vijfendertig van de Hebreeuwse

kalender, welke datum overeenkomt met de elfde mei negentienhonderd vijfenzeventig.

For Rådet for De europæiske Fællesskaber

Im Namen des Rates der Europäischen Gemeinschaften

For the Council of the European Communities

Pour le Conseil des Communautés européennes

Per il Consiglio delle Comunità europee

Voor de Raad van de Europese Gemeenschappen

På Israels regerings vegne

Im Namen der Regierung des Staates Israel

For the Government of the State of Israel

Pour le gouvernement de l'État d'Israël

Per il governo dello Stato d'Israele

Voor de Regering van de Staat Israël

PROTOCOL 1on the application of Article 2(1) of the Agreement

Article 1

Subject to Articles 5 and 7 of the Agreement, customs duties and charges having equivalent effect on imports into the Community of products other than those listed in Annex II to the Treaty establishing the European Economic Community, and other than those listed in Annex A, shall be abolished in accordance with the following timetables:

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Article 2

1. For each product, the basic duties to which the reductions provided for in Article 1 are to be applied shall be:

- for the Communtiy as originally constituted: those duties actually applied in respect of Israel on 1 January 1974 pursuant to Annex I to the Agreement of 29 June 1970 between the European Economic Community and the State of Israel;

- for Denmark, Ireland and the United Kingdom: those duties actually applied in respect of Israel on 1 January 1972.

2. The reduced duties calculated in accordance with Article 1 shall be rounded to the first decimal place.

Subject to the application by the Community of Article 39 (5) of the Act concerning the conditions of accession and the adjustments to the Treaties, as regards the specific duties or the specific duties or the specific part of the mixed duties in the Irish and United Kingdom Customs Tariffs, Article 1 shall be applied, with rounding to the fourth decimal place.

Article 3

1. In the case of customs duties comprising a protective component and a fiscal component, Article 1 shall apply to the protective component.

2. Ireland and the United Kingdom shall replace customs duties of a fiscal nature or the fiscal component of such duties by an internal tax, in accordance with Article 38 of the Act concerning the conditions of accession and the adjustments to the Treaties.

Article 4

1. Quantitative restrictions on imports into the Community of the products referred to in Articles 1, 5 and 7 shall be abolished on the date of the entry into force of the Agreement, and measures having an effect equivalent to quantitative restrictions on imports shall be abolished not later than 1 January 1976.

2. The measures provided for in paragraphs 1 and 2 of Protocol 6 and in Article 1 of Protocol 7 to the Act concerning the conditions of accession and the adjustments to the Treaties on certain quantitative restrictions relating to Ireland and on imports of motor vehicles and the motor vehicle assembly industry in Ireland shall apply to Israel.

Article 5

1. Imports of the following products shall be subject to annual ceilings above which the customs duties applicable in respect of third countries may be re-introduced in accordance with paragraphs 2 to 9.

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2. Taking into account the Community's right to suspend application of ceilings for certain products, the ceilings fixed for the year of entry into force of the Agreement shall be those shown in Annex B.

From the following year the ceilings shall be raised annually by 5%.

For products covered by paragraph 1 but not included in Annex B, the Community reserves the right to introduce ceilings of which the level will be equal to the average amount of imports into the Community over the last three years for which statistics are available, increased by 5%: for the following years, the levels of the ceilings shall be raised annually by 5%.

3. Should, for two successive years, imports of a product subject to a ceiling be less than 90% of the level fixed, the Community shall suspend the application of this ceiling.

4. In the event of short-term economic difficulties, the Community reserves the right, after consultation within the Joint Committee, to maintain for a year the level fixed for the preceding year.

5. On 1 December each year the Community shall notify the Joint Committee of the list of products subject to ceilings in the following year and of the levels of the ceilings.

6. When a ceiling fixed for imports of a product covered by this Article is reached, the customs duties actually applied in respect of third countries on imports of the product in question may be reimposed until the end of the calendar year.

However, for the products falling within Common Customs Tariff headings 27.10, 27.11 A and B 1, 27.12, 27.13 B, 27.14, 28.40 ex B II (calcium hydrogen phosphate containing less than 0.2% of fluorine and more than 0.01% of iron), 42.02 ex B, 42.03, 51.04, 56.05, 56.07 and 76.03, the customs duties applicable by virtue of this paragraph are those of the Common Customs Tariff reduced by 50%. In no circumstances, however, may these duties be lower than those resulting from the application of Article 1.

7. When imports into the Community of a product subject to ceilings reach 75% of the level fixed, the Community shall inform the Joint Committee.

8. After 1 July 1977 the Contracting Parties shall examine in the Joint Committee the possibility of revising the percentage by which the levels of ceilings are raised, having regard to the trend of consumption and imports in the Community and to experience gained in applying this Article.

9. The ceilings for the products listed in paragraph 1 shall be abolished by not later than 31 December 1979.

Article 6

1. The Community reserves the right to modify the arrangements applicable to the petroleum products falling within headings 27.10, 27.11 A and B 1, 27.12, 27.13 B and 27.14 of the Common Customs Tariff upon adoption of a common definition of origin for petroleum products or of decisions under the common commercial policy for the products in question or upon establishment of a common energy policy.

In this event the Community shall ensure that imports of those products will enjoy advantages equivalent to those provided for in this Protocol.

2. Consultations on the measures taken in application of paragraph 1 may be held within the Joint Committee.

3. Subject to paragraph 1, the Agreement shall not prejudice the non-tariff rules applied to imports of petroleum products.

Article 7

For goods resulting from the processing of agricultural products and:

- listed in Annex C, the reductions specified in Article 1, shall apply to the fixed component of the import charges levied on these products in the Community;

- listed in Annex D, the reductions specified in Article 1 shall apply to the difference between the basic duties referred to in Article 2 and the final duties indicated in respect of each.

Article 8

1. Customs duties on imports into the Community of the products originating in Israel which are listed as follows shall be reduced by the rates indicated for each of them.

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2. By way of derogation from paragraph 1, Denmark, Ireland and the United Kingdom shall be authorized to apply, until 1 January 1978, to imports of fresh oranges of subheading 08.02 ex A of the Common Customs Tariff and of fresh mandarins (including tangerines and satsumas), clementines, wilkings and other similar citrus hybrids of subheading 08.02 ex B of the Common Customs Tariff, duties which may not be lower than those set out in Annex E.

3. Paragraph 1 shall apply to fresh lemons of subheading 08.02 ex C of the Common Customs Tariff on condition that on the internal Community market the prices of lemons imported from Israel are, after customs clearance and deduction of import charges other than customs duties, not less than the reference price plus the incidence on that reference price of the customs duties actually applied in respect of third countries and a fixed amount of 1-20 units of account per 100 kilogrammes.

4. The 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 (EEC) No 1035/72 on the 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 the import charges other than customs duties referred to in paragraph 3 according to origin in such a way as to avoid difficulties which may arise from the incidence of those charges on entry prices.

Articles 23 to 28 of Regulation (EEC) No 1035/72 shall continue to apply.

Article 9

Duties on imports into the Community of the products originating in Israel which are listed below shall be reduced by the following rates, subject to compliance with the conditions agreed upon by exchange of letters.

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Article 10

1. Customs duties on imports into the Community of the following product originating in Israel shall be reduced by 30% within the limits of the annual Community tariff quota indicated below:

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2. If paragraph 1 does not apply to a fall calendar year, the quota shall be opened pro rata.

Article 11

1. The rates of reduction specified in Articles 8, 9 and 10 shall apply to customs duties actually applied in respect of third countries.

2. However, the duties applied by Denmark, Ireland and the United Kingdom as a result of the reductions referred to in paragraph 1 may in no case be lower than those applied by the said countries to the Community as originally constituted.

3. By way of derogation from paragraph 1, should the application thereof temporarily result in tariff movements away from alignment on the final duty, Denmark, Ireland and the United Kingdom may maintain their duties until the level of these duties has been reached on the occasion of a subsequent alignment, or they may apply the duty which would result from a subsequent alignment as soon as a tariff movement reaches or passes the said level.

4. The reduced duties calculated in accordance with paragraph 1 shall be rounded to the first decimal place, and the specific duties or the specific part of the mixed duties rounded to the fourth decimal place.

Article 12

If, pursuant to Article 7 of the Agreement, the Community amends the arrangements laid down in this Protocol for products covered by Annex II to the Treaty establishing the European Economic Community, it shall accord imports originating in Israel an advantage comparable to that provided for this Protocol.

Article 13

1. The products originating in Israel referred to in this Protocol may not enjoy more favourable treatment when imported into the Community than that applied by the Member States between themselves.

2. For the application of the preceding paragraph, account shall not be taken of the customs duties and charges having equivalent effect resulting from the application of Articles 32, 36 and 59 of the Act concerning the conditions of accession and the adjustments to the Treaties.

ANNEX A

relating to the products referred to in Article 1

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ANNEX B

List of ceilings for 1975

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ANNEX C

relating to the products referred to in Article 7

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ANNEX D

relating to the products referred to in Article 7, second incident

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ANNEX E

minimum residual duties which may be applied under the terms of Article 8(2)

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PROTOCOL 2

on the application of Article 2(2) of the Agreement

Article 1

1. Subjects to Articles 2, 3 and 6, the customs duties and charges having equivalent effect on imports into Israel of products other than those listed in Annex II to the Treaty establishing the European Economic Community shall be abolished in accordance with the following timetable:

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2. However, the customs duties and charges having equivalent effect on imports into Israel of products listed in Annex A shall be abolished in accordance with the following timetable:

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Article 2

1. The basic duties to which the successive reductions provided for in Article 1 are to be applied shall, for each product, be the duties actually applied on 1 January 1975 in respect of the Community, pursuant to the provisions of Annex II to the Agreement of 29 June 1970 between the European Economic Community and the State of Israel.

2. However, in respect of products listed in Annex B, the basic duties shall be those of the Israel Customs Tariff as shown in that Annex opposite each heading. Within the limit of the rates indicated, the basic duty to be taken into consideration in calculating the reductions referred to in Article 1 shall be that actually applied at any given moment in respect of third countries.

3. The reduced duties calculated in accordance with Article 1 shall be rounded to the first decimal place.

Article 3

1. In so far as its industrialization and development make protective measures necessary, Israel may up to 31 December 1979 introduce, increase or re-introduce ad valorem customs duties not exceeding 20% after consultation within the Joint Committee, and up to 31 December 1983 after agreement within the Joint Committee. The total value of the products for which these measures can be applied may not exceed 10% of the total value of Israel's imports from the Community in 1973.

2. These measures may be taken only if they are necessary to protect and favour the development of a new processing industry not already existing in Israel on the date of the entry into force of the Agreement: they may be applied only with respect to the production of specific goods.

3. Twenty-four months after introducing, increasing or re-introducing customs duties, Israel shall reduce the tariffs by at least 5% per year in respect of imports of the products in question originating in the Community. The abolition of such duties must be completed by not later than 1 January 1989.

Article 4

1. In the case of customs duties comprising a protective component and a fiscal component, Article 1 shall apply to the protective component.

2. Israel shall replace customs duties of a fiscal nature or the fiscal component of such duties by an internal tax.

Article 5

Quantitative restrictions on imports into Israel and measures having an effect equivalent to quantitative restrictions on imports shall be abolished on the date of entry into force of the Agreement. However, quantitative restrictions on products listed in Annex C shall be abolished not later than 1 January 1985.

The timetable for the abolition of such restrictions is set out in Annex D.

Article 6

For the goods resulting from the processing of agricultural products listed in Annex E, the reductions specified in Article 1 shall apply to the difference between the basic duties referred to in Article 2 and the final duties indicated in each case.

Article 7

1. Duties on imports into Israel of products listed in Annex F shall be reduced by the rates indicated for each of them.

2. The rates if duty to be taken into consideration in calculating the reduced duties referred to in paragraph 1 shall be those actually applied at any given moment in respect of third countries.

ANNEX A

relating to products subject on importation into Israel to the basic duties reduced by the rates and in accordance with the timetable set out in Article 1 (2) of Protocol 2

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ANNEX B

relating to products subject on importation into Israel to Article 2 (2) of Protocol 2

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ANNEX C

relating to products referred to in Article 5 of Protocol 2

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ANNEX D

relating to the quantitative restrictions referred to in Article 5 of Protocol 2

Timetable for the abolition of quantitative restrictions

Not later than 1 January 1980 20% [1]

Not later than 1 January 1982 40% [1]

Not later than 1 January 1983 60% [1]

Not later than 1 January 1984 80% [1]

Not later than 1 January 1985 100% [1]

[1] Of the total value of imports from the Community in 1973 of products in Line C

ANNEX E

relating to the products referred to in Article 6 of Protocol 2

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ANNEX F

relating to the agricultural products referred to in Article 7 (1) of Protocol 2

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PROTOCOL 3

concerning the application of Article 2 (3) of the Agreement

TITLE 1

Definition of the concept of 'originating products'

Article 1

For the purpose of implementing the Agreement, the following products, on condition that they were transported directly within the meaning of Article 5, shall be considered as:

1. products originating in the Community:

(a) products wholly obtained in the Community,

(b) products obtained in the Community in the manufacture of which products other than those referred to in (a) are used, provided that the said products have undergone sufficient working or processing within the meaning of Article 3. This condition shall not apply, however, to products which, within the meaning of this Protocol, originate in Israel.

The products in List C shall be temporarily excluded from the scope of this Protocol.

Article 2

The following shall be considered as 'wholly obtained' either in the Community or in Israel within the meaning of Article 1 (1) (a) and (2) (a).

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

(b) vegetable products harvested there;

(c) live animals born and raised 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 by their vessels;

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

(h) used articles collected there fit only for the recovery of raw materials;

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

(j) goods produced there exclusively from products specified in subparagraphs (a) to (i).

Article 3

1. For the purpose of implementing Article 1 (1) (b) and (2) (b), the following shall be considered as sufficient working or processing:

(a) working or processing as a result of which the goods obtained receive a classification under a tariff heading other than that covering each of the products worked or processed, except, however, working or processing specified in List A, where the special provisions of that list apply;

(b) working or processing specified in List B.

'Sections', 'Chapters' and 'tariff headings' shall mean the Sections, Chapters and headings in the Brussels Nomenclature for the Classification of Goods in Customs Tariffs.

2. When, for a given product obtained, a percentage rule limits in List A and in List B the value of the materials and parts which can be used, the total value of these materials and parts, whether or not they have changed tariff heading in the course of the working, processing or assembly within the limits and under the conditions laid down in each of those two lists, may not exceed, in relation to the value of the product obtained, the value corresponding either to the common rate, if the rates are identical in both lists, or to the higher of the two if they are different.

3. For the purpose of implementing Article 1 (1) (b) and (2) (b), the following shall always be considered as insufficient working or processing to confer the status of originating products, whether or not there is a change of tariff heading;

(a) operations to ensure the preservation of merchandise in good condition during transport and storage (ventilation, spreading out, drying, chilling, placing in salt, sulphur dioxide or other aqueous solutions, removal of damaged parts, and like operations);

(b) simple operations consisting of removal of dust, sifting or screening, sorting, classifying, matching (including the making up of sets of articles), washing, painting, cutting up;

(c) (i) changes of packing and breaking up and assembly of consignments;

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

(d) affixing marks, labels or other like distinguishing signs on products or their packaging;

(e) simple mixing of products, whether or not of different kinds, where one or more components of the mixtures do not meet the conditions laid down in this Protocol to enable them to be considered as originating either in the Community or in Israel;

(f) simple assembly of parts of articles to constitute a complete article;

(g) a combination of two or more operations specified in subparagraphs (a) to (f);

(h) slaughter of animals.

Article 4

Where the Lists A and B referred to in Article 3 provide that goods obtained in the Community or in Israel shall be considered as originating therein only if the value of the products worked or processed does not exceed a given percentage of the value of the goods obtained, the values to be taken into consideration for determining such percentage shall be:

- on the one hand,

as regards products whose importation can be proved, their customs value at the time of importation;

as regards products of undetermined origin, the earliest ascertainable price paid for such products in the territory of the Contracting Party where manufacture takes place;

- and on the other hand,

the ex-works price of the goods obtained, less internal taxes refunded or refundable on exportation.

Article 5

Originating products whose transport is effected without entering into a territory other than that of the Contracting Parties are considered as transported directly from the Community to Israel or from Israel to the Community. However, goods originating in Israel or in the Community and constituting one single shipment which is not split up may be transported through territory other than that of the Contracting Parties with, should the occasion arise, transhipment or temporary warehousing in such territory, provided that the crossing of the latter territory is justified for geographical reasons, that the goods have remained under the surveillance of the customs authorities in the country of transit or of warehousing, that they have not entered into the commerce of such countries not been delivered for home use there and have not undergone operations other than unloading, reloading or any operation designed to preserve them in good condition.

TITLE II

Arrangements for administrative cooperation

Article 6

1. Originating products within the meaning of this Protocol shall, on import into the Community or into Israel, benefit from the Agreement upon submission of a movement certificate EUR. 1, a specimen of which is given in Annex V to this Protocol, issued by the customs authorities of Israel or of the Member States of the Community.

However, originating products within the meaning of this Protocol which are sent by post (including parcel post) shall, provided that the consignments contain only originating products and the value does not exceed 1 000 units of account per consignment, benefit from the Agreement on import into the Community or Israel on presentation of form EUR. 2 a specimen of which is given in Annex VI to this Protocol.

The unit of account (u.a.) has a value of 0.88867088 g of fine gold. Should the unit of account be changed, the Contracting Parties shall make contact with each other at Joint Committee level to redefine the value in terms of gold.

2. Without prejudice to Article 3 (3), where, at the request of the person declaring the goods at the customs, a dismantled or non-assembled article falling within Chapter 84 or 85 of the Brussels Nomenclature is imported by instalments on the conditions laid down by the competent authorities, it shall be considered to be a single article and a movement certificate may be submitted for the whole article upon importation of the first instalment.

3. 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 are not separately invoiced are regarded as one with the piece of equipment, machine, apparatus or vehicle in question.

Article 7

A movement certificate EUR. 1 shall be issued only on written application by the exporter. Such application shall be made on the form, of which a specimen is given in Annex V to this Protocol, which shall be completed in accordance with this Protocol.

Article 8

1. A movement certificate EUR. 1 shall be issued by the customs authorities of the exporting State when the goods to which it relates are exported. It shall be made available to the exporter as soon as actual exportation has been effected or ensured.

In exceptional circumstances a movement certificate EUR. 1 may also be issued after the goods to which it relates have been exported if it was not issued at exportation because of errors or involuntary omissions or special circumstances. In this case, the certificate shall bear a special reference to the conditions under which it was issued.

A movement certificate EUR. 1 may be issued only where it can serve as the documentary evidence required for the purpose of implementing the preferential treatment provided for in the Agreement.

2. Applications for a movement certificate EUR. 1 must be preserved for at least two years by the customs authorities of the exporting country.

Article 9

1. A movement certificate EUR. 1 must be submitted, within four months of the date of issue by the customs authorities of the exporting State, to the customs authorities of the importing State where the goods are entered.

2. A movement certificate EUR. 1 which is submitted to the customs authorities of the importing State 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 the certificate by the final date set is due to reasons of force majeure or exceptional circumstances.

In other cases of belated presentation, the customs authorities of the importing State may accept the certificates where the goods have been submitted to them before the said final date.

Article 10

Movement certificates EUR. 1 shall be made out on the form of which a specimen is given in Annex V to this Protocol. This form shall be printed in one or more of the languages in which the Agreement is drawn up. Certificates shall be made out in one of these languages and in accordance with the provisions of the domestic law of the exporting State. If they are handwritten, they shall be completed in ink and in capital letters.

Each certificate shall measure 210 X 297 mm. A tolerance of up to plus 8 mm or minus 5 mm in the length may be allowed. The paper used must be sized white writing paper not containing mechanical pulp and weighing not less than 25 g/m . It shall have a printed green guilloche pattern background making any falsification by mechanical or chemical means apparent to the eye.

The Member States of the Community and Israel may reserve the right to print the certificates themselves or may have them printed by approved printers. In the latter case, each certificate must include a reference to such approval. Each certificate must bear the name and address of the printer or a mark by which the printer can be identified. It shall also bear a serial number, either printed or not, by which it can be identified.

Article 11

Movement certificates EUR. 1 shall be submitted to customs authorities in the importing State, in accordance with the procedures laid down by that State. The said authorities may require a translation of a certificate. They may also require the import declaration to be accompanied by a statement from the importer to the effect that the goods meet the conditions required for the implementation of the Agreement.

Article 12

Form EUR. 2, a specimen of which is given in Annex VI, shall be completed by the exporter. It shall be made out in one of the languages in which the Agreement is drawn up and in accordance with the provisions of the domestic law of the exporting State. If it is handwritten, it must be completed in ink and in capital letters.

Form EUR. 2 shall be composed of two parts, each part being 210 X 148 mm. The paper used shall be sized white writing paper not containing mechanical pulp and weighing not less than 64 g/m . The two parts of form EUR. 2 may be detachable.

The Member States of the Community and Israel may reserve the right to print the forms themselves or may have them printed by approved printers. In the latter case each form must include a reference to such approval. In addition, each part must bear the distinctive sign attributed to the approved printer and a serial number, either printed or not, by which it can be identified.

Article 13

A form EUR. 2 shall be completed for each postal consignment. After completing and signing the two parts of the form, the exporter shall, in the case of consignments by parcel post, attach the two parts to the dispatch note. In the case of consignments by letter post, the exporter shall attach Part 1 firmly to the consignment and insert Part 2 inside it.

These provisions do not exempt the exporters from complying with any other formalities required by customs or postal regulations.

Article 14

1. The Community and Israel shall admit goods sent as small packages to private persons or forming part of travellers' personal luggage as originating products benefiting from the Agreement without requiring the production of a movement certificate EUR. 1, or the completion of a form EUR. 2, provided that such goods are not imported by way of trade and have been declared as meeting the conditions required for the application of these provisions and where there is no doubt as to the veracity of such declaration.

2. Importations which are occasional and consist solely of goods for the personal use of the recipients or travellers or their families shall not be considered as importations by way of trade if it is evident from the nature and quantity of the goods that no commercial purpose is in view. Furthermore, the total value of these goods must not exceed 60 units of account in the case of small packages or 200 units of account in the case of the contents of travellers' personal luggage.

Article 15

1. Goods sent from the Community or from Israel for exhibition in another country and sold after the exhibition for importation into Israel or into the Community shall benefit on importation from the provisions of the Agreement on condition that the goods meet the requirements of this Protocol entitling them to be recognized as originating in the Community or in Israel and provided that it is shown to the satisfaction of the customs authorities that:

(a) an exporter has consigned the goods from the Community or from Israel to the country in which the exhibition is held and has exhibited them there;

(b) the goods have been sold or otherwise disposed of by that exporter to someone in Israel or in the Community;

(c) the goods have been consigned during the exhibition or immediately thereafter to Israel or to the Community in the state in which they were sent for exhibition;

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

2. A movement certificate EUR. 1 mut be produced to the customs authorities in the normal manner. The name and address of the exhibition must be indicated thereon. Where necessary, additional documentary evidence of the nature of the goods and 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 ot organized for private purposes in shops or business premises with a view to the sale of foreign goods, and during which the goods remain under customs control.

Article 16

In order to ensure the proper application of the provisions of this Title, the Member States of the Community and Israel shall assist each other, through their respective customs administrations, in checking the authenticity and accuracy of movement certificates EUR. 1 and of the declarations by the exporters on forms EUR. 2.

The Joint Committee shall be authorized to take any decision necessary for the methods of administrative cooperation to be applied at the due time in the Community and in Israel.

Article 17

Penalties shall be imposed on any person who, in order to enable goods to be accepted as eligible for preferential treatment, draws up, or causes to be drawn up, either a document which contains incorrect particulars for the purpose of obtaining a movement certificate EUR. 1 or a form EUR. 2 containing incorrect particulars.

TITLE III

Final provisions

Article 18

1. The Community and Israel shall take any measures necessary to enable movement certificates EUR. 1 as well as forms EUR. 2 to be submitted, in accordance with Articles 11 and 12 of this Protocol, from the day on which the Agreement enters into force.

2. Certificates of type A. II. 1 and forms A. II. 2 may be used under the conditions laid down in this Protocol until stocks are exhausted.

Article 19

The Community and Israel shall each take the necessary steps to implement this Protocol.

Article 20

The Explanatory Notes, Lists A, B and C, the specimen movement certificate EUR. 1 and the specimen form EUR.2 shall form an integral part of this Protocol.

Article 21

Goods which comply with the provisions of Title 1 and which, on the date of entry into force of the Agreement, are either being transported or being held in the Community or in Israel in temporary storage, in bonded warehouses or in free zones, may be allowed to benefit from the provisions of the Agreement, subject to the submission - within four months of that date - to the customs authorities of the importing State of a movement certificate, drawn up retrospectively by the competent authorities of the exporting State, and of any documents that provide supporting evidence of the conditions of transport.

Article 22

1. Unless the Joint Committee decides otherwise, no drawback or remission of any kind may be granted from customs duties in the Community or in Israel in respect of products referred to in Article 1 of Protocols 1 and 2 and used in manufacture which do not originate in the Community or Israel as from 1 January 1984.

2. In this and the following Articles, the term 'customs duties' also means charges having an equivalent effect to customs duties.

Article 23

1. The provisions of the last sentence of Article 1(2) (b) shall not apply until 1 July 1977 to products originating in Denmark, Ireland and the United Kingdom which have been insufficiently worked or processed in Israel, within the meaning of Article 3 (3), when the products obtained are imported into the Community as originally constituted.

2. Products originating in the Community obtained in the Community as originally constituted from products originating in Denmark, Ireland and the United Kingdom as a result of insufficient working or processing, within the meaning of Article 3 (3), shall be subject, when imported into Israel, to the duties laid down in the Agreement for those three countries.

Article 24

The Joint Committee may decide to amend the provisions of this Protocol.

ANNEX I

EXPLANATORY NOTES

Note 1 - Article 1

The terms 'the Community' or 'Israel' shall also cover the territorial waters of the Member States of the Community or of Israel respectively.

Vessels operating on the high seas, including factory ships, on which fish caught is worked or processed shall be considered as part of the territory of the State to which they belong provided that they satisfy the conditions set out in Explanatory Note 4.

Note 2 - Article 1

In order to determine whether goods originate in the Community or in Israel, it shall not be necessary to establish whether the power and fuel, plant and equipment, and machines and tools used to obtain such goods originate in third countries or not.

Note 3 - Article 1

Packing shall be considered as forming a whole with the goods contained therein. The provision, however, shall not apply to packing which is not of the normal type for the article packed and which has intrinsic utilization value and is of a durable nature, apart from its function as packing.

Note 4 - Article 2 (f)

The term 'their vessels' shall apply only to vessels:

- which are registered or recorded in a Member State of the Community or in Israel;

- which sail under the flag of a Member State of the Community or of Israel;

- which are at least 50% owned by nationals of Member States of the Community or of Israel or by a company with is head office in one of those States, of which the manager or managers, chairman of the board of directors or of the supervisory board and the majority of the members of such boards are nationals of the Member States of the Community or of Israel and of which, in addition, in the case of partnerships or limited companies, at least half the capital belongs to those States or to public bodies or nationals of the said States:

- of which the captain and officers are all nationals of the Member States of the Community or of Israel;

- of which at least 75% of the crew are nationals of the Member States of the Community or of Israel.

Note 5 - Article 4

'Ex-works price' shall mean the price paid to the manufacturer in whose undertaking the last working or processing is carried out, provided the price includes the value of all the products used in manufacture.

'Customs value' shall be understood as meaning the customs value laid down in the Convention concerning the Valuation of Goods for Customs Purposes signed in Brussels on 15 December 1950.

Note 6 - Article 8

Where a movement certificate EUR. 1 relates to goods originally imported from a Member State of the Community or from Israel and re-exported in the same State, the new certificates issued by the re-exporting State must show in which State the original movement certificate was issued.

Note 7 - Article 22

'Drawback or remission of any kind granted from customs duties' shall mean any arrangement for refund or remission, partial or complete, of customs duties applicable to products used in manufacture, provided that the said provision concedes, expressly or in effect, the repayment or non-charging or the non-imposition when goods obtained from the said products are exported but not when they are retained for home use.

ANNEX II

LIST A

List of working or processing operations which result in a change of tariff heading without conferring the status of 'originating products' on the products undergoing such operations, or conferring this status only subject to certain conditions

>TABLE POSITION>

ANNEX III

LIST B

List of working or processing operations which do not result in a change of tariff heading, but which do confer the status of 'originating products' on the products undergoing such operations

>TABLE POSITION>

FINAL ACT

The representatives of

THE EUROPEAN ECONOMIC COMMUNITY,

of the one part, and

THE GOVERNMENT OF THE STATE OF ISRAEL,

of the other part,

meeting at Brussels on 11 May 1975 corresponding to first day of Sivan in the year five thousand seven hundred and thirty-five of the Hebrew calendar for the signature of the Agreement between the European Economic Community and the State of Israel,

have, on signing this Agreement,

- adopted the following Joint Declarations by the Contracting Parties:

1. Joint Declaration by the Contracting Parties on the application of Article 2 of Protocols 1 and 2

2. Joint Declaration by the Contracting Parties on Article 5 (2) of Protocol 1

3. Joint Declaration by the Contracting Parties on processed agricultural products

4. Joint Declaration by the Contracting Parties on Article 8 of Protocol 1

5. Joint Declaration by the Contracting Parties on agricultural products

6. Joint Declaration by the Contracting Parties on Article 2(1) of Protocol 2

7. Joint Declaration by the Contracting Parties on the Israel Customs Tariff;

- taken note of the Declarations listed below:

1. Declaration by the European Economic Community on Article 11 of the Agreement

2. Declaration by the European Economic Community on Article 12 (1) of the Agreement

3. Declaration by Israel on Article 12 (1) of the Agreement

4. Declaration by the European Economic Community on the regional application of certain provisions of the Agreement

5. Declaration by the European Economic Community on Article 22 of the Agreement and Article 8 of Protocol 1;

- and taken note of:

- the Exchange of Letters on scientific and technological cooperation between the Presidents of the two delegations.

The above Declarations and the Exchange of Letters are annexed to this Final Act.

The Representatives have agreed that these Declarations and this Exchange of Letters shall be subjected, in the same manner as the Agreement, to any procedures that may be necessary to ensure their validity.

Udfærdiget i Bruxelles, den første Sivan femtusind synhundrede og femogtredive i den hebraiske kalender, svarende til den ellevte maj nitten hundrede og femoghalvfjerds.

Geschehen zu Brüssel am ersten Siwan fünftausendsiebenhundertfünfunddreißig des hebräischen Kalenders; dieser Tag entspricht dem elften Mai neunzehnhundertfünfundsiebzig.

Done at Brussels, the first day of Sivan in the year five thousand seven hundred and thirty-five of the Hebrew calendar, corresponding to the eleventh day of May in the year one thousand nine hundred and seventy-five.

Fait à Bruxelles, le premier Sivan cinq mil sept cent trente-cinq du calendrier hébraïque, correspondant au onze mai mil neuf cent soixante-quinze.

Fatto a Bruxelles, il primo Sivan cinquemilasettecentotrentacinque del calendario ebraico, corrispondente all'undici maggio millenovecentosettantacinque.

Gedaan te Brussel, één Siwan vijfduizend zevenhonderd vijfendertig van de Hebreeuwse kalender, welke datum overeenkomst met de elfde mei negentienhonderd vijfenzeventig.

TTGRAPH

For Rådet for De europæiske Fællesskaber

Im Namen des Rates der Europäischen Gemeinschaften

For the Council of the European Communities

Pour le Conseil des Communautés européennes

Per il Consiglio delle Comunità europee

Voor de Raad van de Europese Gemeenschappen

TTGRAPH

På Israels regerings vegne

Im Namen der Regierung des Staates Israel

For the Government of the State of Israel

Pour le gouvernement de l'État d'Israël

Per i governo dello Stato d'Israele

Voor de Regering van de Staat Israël

TTGRAPH

Joint Declaration by the Contracting Parties on the application of Article 2 of Protocols 1 and 2

The Contracting Parties agree that if duty reductions result from the tariff agreements negotiated under the General Agreement on Tariffs and Trade, the duties thus reduced shall be taken into consideration for the purpose of calculating new basic duties to replace the basic duties referred to in Article 2 of Protocols 1 and 2.

Joint Declaration by the Contracting Parties on Article 5 (2) of Protocol 1

The Contracting Parties agree that if the entry into force of the Agreement does not coincide with the beginning of a calendar year ceilings referred to in Article 5(2) of Protocol 1 will be applied pro rata.

Joint Declaration by the Contracting Parties on processed agricultural products

The Contracting Parties agree that the Agreement does not preclude export measures to take account of differences in the cost of the basic agricultural products incorporated in goods referred to in Article 7 of Protocol 1 resulting from the processing of those products.

Joint Declaration by the Contracting Parties on Article 8 of Protocol 1

The Contracting Parties agree that, without prejudice to the application of the first subparagraph of Article 22 (2) of Regulation (EEC) No 1035/72, the products listed in Article 8 of Protocol 1 and included in Annex III to that Regulation shall be admitted into the Community without quantitative restrictions or measures having equivalent effect throughout the period during which duty reductions apply.

Further, the Contracting Parties agree that, where the provisions of Articles 23 to 28 of Regulation (EEC) No 1035/72 are referred to in Protocol 1, the Community is referring to the arrangements applicable to third countries at the time of importation of the products in question.

Joint Declaration by the Contracting Parties on agricultural products

1. The Contracting Parties declare their readiness to foster, so far as their agricultural policies allow, the harmonious development of trade in agricultural products to which the Agreement does not apply.

The Contracting Parties shall apply their rules on veterinary, health and plant health matters in a non-discriminatory fashion and shall not introduce any new measures that have the effect of unduly obstructing trade.

2. The Contracting Parties shall examine, under the conditions set out in Article 21 of the Agreement, any difficulties that might arise in their trade in agricultural products and shall endeavour to seek appropriate solutions.

Joint Declaration by the Contracting Parties on Article 2 (1) of Protocol 2

The Contracting Parties, while taking as basic duties the duties actually applied on 1 January 1975, agree that:

Should Israel have temporarily increased certain duties prior to 1 January 1975, it is understood that, in the event of the old rates being re-introduced after that date, they should replace the basic duties referred to in Article 2 (1) of Protocol 2.

Joint Declaration by the Contracting Parties on the Israel Customs Tariff

The Contracting Parties, considering that the structure of the Israel Customs Tariff is being revised by the Israel customs authorities, agree that until 31 December 1976 Israel may take appropriate measures to correct any distortions resulting from such revision in respect of the products referred to in Annex A to Protocol 2.

It is understood that any such correction must not have the effect of modifying the level of the concessions made in the Agreement. The Joint Committee could adopt the measures necessary to this end.

Declaration by the European Economic Community on Article 11 of the Agreement

The Community declares that Article 11 of the Agreement provides for exceptions to the prohibition of quantitative restrictions.

Prohibitions on religious or ritual grounds which are applied impartially to imported and indigenous products do not constitute quantitative restrictions and consequently do not come under Article 11 of the Agreement.

If, however, such prohibitions were so applied as to constitute quantitative restrictions, they might come under the exceptions provided for in Article 11 of the Agreement.

Declaration by the European Economic Community on Article 12 (1) of the Agreement

The Community declares that in the context of the autonomous implementation of Article 12 (1) of the Agreement which is incumbent on the Contracting Parties, it will assess any practices contrary to that Article on the basis of criteria arising from the application of the rules of Articles 85, 86, 90 and 92 of the Treaty establishing the European Economic Community.

Declaration by Israel on Article 12 (1) of the Agreement

The Government of Israel declares that it considers any public aid to promote the economic development of Israel to be compatible with the provisions of this Article, provided such aid does not affect the conditions of trade to such extent as to be contrary to the common interest.

Declaration by the European Economic Community on the regional application of certain provisions of the Agreement

The Community declares that the application of any measures it may take under Article 12, 13, 14, or 15 of the Agreement, under the conditions and in accordance with the procedures laid down in Article 16, or under Article 17, may be limited to one of its regions by virtue of Community rules.

Declaration by the European Economic Community on Article 22 of the Agreement and Article 8 of Protocol 1

The Community is ready to consider, in the light of the results of the Agreement and taking into account the trend of trade flows between the Community and the Mediterranean countries, an improvement of the concession accorded in Article 8 of Protocol 1 for oranges, mandarins (including tangerines and satsumas), clementines, wilkings and other similar citrus hybrids, to take effect from the beginning of the fourth marketing year.

EXCHANGE OF LETTERS

on scientific and technological cooperation on the occasion of the signing of the Agreement between the European Economic Community and the State of Israel

Excellency,

I have the honour to inform you that the Community is ready to consider case by case the possibility of Israel sharing in certain ventures of scientific and technological cooperation which the Community is planning to undertake with other third countries, or in the results of certain such ventures.

I should be grateful if you would acknowledge receipt of this letter.

Please accept, your Excellency, the assurance of my highest consideration.

Sir,

You were good enough to make the following communication to me in your letter of today's date:

'I have the honour to inform you that the Community is ready to consider case by case the possibility of Israel sharing in certain ventures of scientific and technological cooperation which the Community is planning to undertake with other third countries, or in the results of certain such ventures.

I should be grateful if you would acknowledge receipt of this letter'.

I have the honour to acknowledge receipt of that letter.

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