PROTOCOL 1 on the products referred to in Article 15

Article 1

1. Imports of the products specified in Annexes I, II, III and IV shall be subject to annual ceilings above which the customs duties actually applied in respect of third countries may be reintroduced in accordance with the provisions of the following paragraphs, the ceilings fixed for the year of entry into force of the Agreement being indicated against each product.

2. Once the ceiling set for imports of a product is reached, the customs duties referred to in paragraph 1 may be reintroduced in respect of imports of the product in question until the end of the calendar year.

When imports into the Community of a product subject to a ceiling reach 75 % of the amount laid down, the Community shall inform the Cooperation Council.

3. If, during two consecutive years, imports of a product subject to a ceiling have been less than 80 % of the amount laid down, the Community may suspend the ceiling in question.

4. As from the second year following the entry into force of the Agreement, the amounts of the ceilings given in Annexes I to IV shall be increased annually by 5 %, except for those specified in Annex II A, for which the rate of increase in the amounts of the ceilings shall be the same as for the voluntary restraint levels set for the same product under the Agreement on trade in textiles between Yugoslavia and the Community concluded in the framework of the Arrangement regarding international trade in textiles.

In the event of short-term difficulties, however, the Community reserves the right to extend for a period of one year the ceiling or ceilings set for the preceding year.

Article 2

1. The Community reserves the right to modify the arrangements applicable to the products specified in Annex III:

- upon adoption of a common definition of origin for petroleum products from third States or associated countries,

- upon adoption of decisions under a common commercial policy, or

- upon establishment of a common energy policy.

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

Consultations on the measures taken in implementation of this paragraph may be held within the Cooperation Council at the request of the other Party.

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

ANNEX I concerning certain industrial products

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ANNEX II A concerning certain textile products

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ANNEX II B

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ANNEX III concerning certain petroleum products

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ANNEX IV concerning certain primary products

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