AGREEMENT

between the European Economic Community and the People's Republic of Bulgaria

on trade in textile products

Done at Brussels on 11 July 1987

THE COUNCIL OF THE EUROPEAN COMMUNITIES,

of the one part, and

THE GOVERNMENT OF THE PEOPLE'S REPUBLIC OF BULGARIA,

of the other part,

DESIRING to promote, with a view to permanent cooperation and in conditions providing the utmost security for trade, the mutual expansion and orderly and equitable development of trade in textile products between the European Economic Community (hereinafter referred to as 'the Community') and the People's Republic of Bulgaria (hereinafter referred to as 'Bulgaria'),

RESOLVED to take the fullest possible account of the economic and social problems at present affecting the textile industry in both importing and exporting countries, in particular in order to eliminate the real dangers of distortion of the Community market and of disturbance of trade in Bulgarian textile products,

HAVE DECIDED to conclude this Agreement and to this end have designated as their Plenipotentiaries:

THE COUNCIL OF THE EUROPEAN COMMUNITIES:

THE GOVERNMENT OF THE PEOPLE'S REPUBLIC OF BULGARIA:

WHO HAVE AGREED AS FOLLOWS:

SECTION I

Trade arrangements

Article 1

1. This Agreement shall apply to trade in textile products of cotton, wool, fine animal hair or man-made fibres originating in Bulgaria which are listed in Annex I.

2. The classification of the products covered by this Agreement is based on the nomenclature of the Common Customs Tariff and on the Nomenclature of Goods for the External Trade Statistics of the Community and the Statistics of Trade between its Member States (NIMEXE).

From the entry into force of the International Convention of the Harmonized Commodity Description and Coding System (HS), this classification will be based on the Harmonized System and on the Community Nomenclatures derived from that system.

3. The origin of the products covered by this Agreement shall be determined in accordance with the rules in force in the Community.

Any amendment to these rules of origin shall be communicated to Bulgaria and shall not have the effect of reducing any quantitative limit established in Annex II.

The procedures for control of the origin of the products referred to above are laid down in Protocol A.

Article 2

1. Bulgaria agrees to establish and maintain for each calendar year quantitative limits on its exports to the Community in accordance with the table in Annex II.

2. Subject to the provisions set out in Articles 5 and 7, and without prejudice to the quantitative arrangements applicable to products undergoing the operations referred to in Article 3 (4), the Community undertakes in respect of

products covered by this Agreement to suspend the application of quantitative restrictions on imports currently in force, and not to introduce new quantitative restrictions.

3. Measures having equivalent effect to quantitative restrictions on the importation into the Community of the products covered by this Agreement shall be prohibited.

Article 3

1. Exports of cottage industry fabrics woven on hand- or foot-operated looms, articles of clothing or other textile articles obtained or sewn manually from such fabrics and traditional folklore handicraft products shall not be subject to quantitative limits, provided that these products meet the conditions laid down in Protocol B.

2. Imports into the Community of textile products covered by this Agreement shall not be subject to the quantitative limits established in Annex II, provided that they are declared to be for re-export from the Community in the same state or after processing, under the administrative system of control which exists within the Community.

However, the release for home use of products imported under the conditions referred to above shall be subject to the production of an export licence issued by the Bulgarian authorities, and to proof of origin in accordance with the provisions of Protocol A.

3. Where the competent authorities in the Community have evidence that imports of textile products have been set off against a quantitative limit established under this Agreement, but that the products have subsequently been re-exported from the Community in the same state or after processing, the authorities concerned shall inform the Bulgarian authorities within four weeks of the quantities involved and shall authorize imports of identical quantities of the same products, which shall not be set off against the quantitative limit established for the current or the following year.

4. Re-imports into the Community of textile products listed in Annex I which have been temporarily exported by the Community and subsequently processed in Bulgaria shall not be subject to the quantitative limits established under this Agreement, provided they are effected in accordance with the regulations on economic outward processing traffic in force in the Community.

Article 4

1. Advance use of a portion of the quantitative limit established for the following year shall be authorized for each category of products up to 5 % of the quantitative limit for the current year.

Amounts delivered in advance shall be deducted from the quantitative limits established for the following year.

2. Carryover to the corresponding quantitative limit for the following year of amounts not used during any given year

shall be authorized up to 7 % of the quantitative limit for the current year.

3. In the case of Group I, transfers shall be allowed only in the following cases:

- amounts may be transferred between categories 2 and 3 up to 4 % of the quantitative limit for the category to which the transfer is made,

- amounts may be transferred between categories 4, 5, 6, 7 and 8 up to 4 % of the quantitative limit for the category to which the transfer is made.

Amounts may be transferred to any category in Group II or III from any category in Group I, II or III, up to 5 % of the quantitative limit for the category to which the transfer is made.

4. The table of equivalence applicable to the transfers referred to above is given in Annex I.

5. The increase in any given category of products resulting from the cumulative application of the provisions in paragraphs 1, 2 and 3 during a single year must not exceed the following limits:

- 13 % for categories of products in Group I,

- 13,5 % for categories of products in Groups II and III.

6. Prior notification must be given by the Bulgarian authorities to the Community of any recourse to the provisions of paragraphs 1, 2 and 3 above.

Article 5

1. Should the Community consider that a textile product covered by this Agreement is being imported into the Community from Bulgaria at a price abnormally lower than the normal competitive level and is for this reason causing or threatening to cause serious injury to Community producers of like or directly competing products, it may request consultations with Bulgaria, and in that event the following specific provisions shall be applicable.

2. Consultations shall be held at the request of the Community in order to ascertain whether the situation described in paragraph 1 exists. If agreement is reached as to the existence of such a situation, Bulgaria shall take the necessary steps to remedy it.

3. If the consultations referred to above fail to produce agreement within 30 days of the Community's request for

such consultations, and should consignments of the product in question continue to be sent at prices which are lower than the range of prices charged under normal conditions of competition, and for this reason cause or threaten to cause serious injury to the Community producers referred to

in paragraph 1, the Community, while continuing consultations with a view to reaching a mutually acceptable solution, may refuse to import the said consignments. Such action may be continued only for as long as is strictly necessary to prevent or remedy the situation.

4. In critical circumstances, where imports of specific textile products at prices below the range of prices charged under normal conditions of competition could cause injury which it would be difficult to repair, the Community may temporarily refuse to import the said products pending agreement on a solution in the course of consultations. Such consultations shall be opened without delay, and in any case within five days of the request by the Community, with a view to reaching a mutually acceptable solution. The two Parties shall do their utmost to reach a mutually acceptable solution within five days of the opening of such consultations.

5. For the purposes of applying the provisions of this Article, in order to determine whether the price of a textile product is 'below the range of prices charged under normal conditions of competition', it may be compared with:

- the prices of like products at a comparable marketing stage on the market of the importing country, and

- the prices generally charged for such products sold under normal market conditions by other exporting countries on the market of the importing country, and

- the lowest prices charged for such products sold under normal market conditions by any other exporting country in the three months preceding the request for consultations, and not having led to the adoption of any measure by the Community.

6. Bulgaria may request consultations at any time with a view to examining such difficulties as may arise from the application of the provisions of this Article.

SECTION II

Administration of the Agreement

Article 6

1. Exports of textile products covered by this Agreement which are subject to quantitative limits shall be subject to a double-checking system, the details of which are specified in Protocol A.

2. The competent authorities in the Member States are required to issue import authorizations or documents automatically within five working days of the submission of a request by an importer in accordance with Protocol A.

The said import authorizations or documents shall be valid for six months.

Article 7

1. Exports of textile products not subject to the quantitative limits established in Annex II may be made subject to quantitative limits on the conditions laid down in the following paragraphs.

2. Where the Community finds, under the system of administrative control set up, that the level of imports of

products in a given category not listed in Annex II originating in Bulgaria exceeds, in relation to the preceding year's total imports into the Community of products in that category, the following rates:

- for categories of products in Group I: 0,4 %,

- for categories of products in Group II: 2,4 %,

- for categories of products in Group III: 8 %,

it may request the opening of consultations in accordance with the procedure described in Article 14 of this Agreement, with a view to reaching agreement on an appropriate restraint level for the products in such category.

3. Pending a mutually satisfactory solution, Bulgaria undertakes, from the date of notification of the request for consultations, to suspend or limit at the level indicated by the Community exports of the category of products in question to the Community or to the region or regions of the Community market specified by the Community.

The Community shall authorize the importation of products of the said category shipped from Bulgaria before the date on which the request for consultations was submitted.

4. Should the Parties be unable in the course of consultations to reach a satisfactory solution within the period specified in Article 14, the Community shall have the right to introduce a definitive quantitative limit at an annual level not lower than the level resulting from the application of the formula set out in paragraph 2, or 106 % of the level of imports reached during the calendar year preceding that in which imports exceeded the level resulting from the application of the formula set out in paragraph 2 and gave rise to the request for consultations, whichever is the higher.

The annual level so fixed shall be revised upwards after consultations in accordance with the procedure referred to in Article 14 with a view to fulfilling the conditions set out in paragraph 2, should the trend of total imports into the Community of the product in question make this necessary.

5. The limits introduced pursuant to paragraphs 2 or paragraph 4 may in no case be lower than the level of Community imports of products in that category originating in Bulgaria in 1985.

6. In accordance with the procedures set out in paragraphs 2 and 4, a quantitative limit may be fixed on a regional basis where imports of a given product into any region of the Community exceed the following regional percentages of the amounts determined as laid down in paragraph 2:

Federal Republic of Germany25,5 %.

Benelux9,5 %.

France16,5 %.

Italy13,5 %.

Denmark2,7 %.

Ireland0,8 %.

United Kingdom21,0 %.

Greece1,5 %.

Spain7,5 %.

Portugal1,5 %.

7. The annual growth rate for the quantitative limits introduced under this Article shall be determined in accordance with the provisions of Protocol C.

8. The provisions of this Article shall not apply where the percentages specified in paragraph 2 have been reached as a result of a fall in total imports into the Community, and not as a result of an increase in exports of products originating in Bulgaria.

9. In the event of the provisions of paragraph 2 or paragraph 4 being applied, Bulgaria undertakes to issue export licences for products covered by contracts concluded before the introduction of the quantitative limit, up to the volume of the quantitative limit fixed for the current year.

10. Up to the date on which the statistics referred to in Article 9 (6) are provided, the provisions of paragraph 2 of this Article shall be applied on the basis of the annual statistics previously communicated by the Community.

11. The provisions of this Agreement which concern exports of products subject to the quantitative limits established in Annex II shall also apply to products for which quantitative limits are introduced under this Article.

Article 8

1. Bulgaria and the Community agree to cooperate fully in preventing the circumvention of the present Agreement by transhipment, rerouting or whatever other means.

2. Where information available to the Community as a result of the investigations carried out in accordance with the procedures set out in Protocol A constitutes evidence that products of Bulgarian origin subject to quantitative limits established under this Agreement have been transhipped, rerouted or otherwise imported into the Community in circumvention of this Agreement, the Community may request the opening of consultations in accordance with the procedures described in Article 14 of this Agreement, with a view to reaching agreement on an equivalent adjustment of the corresponding quantitative limits established under this Agreement.

3. Pending the result of the consultations referred to in paragraph 2, Bulgaria shall as a precautionary measure, if so requested by the Community, make the necessary arrangements to ensure that adjustments of quantitative limits liable to be agreed following the consultations referred to in paragraph 2, may be carried out for the quota year in which the request to open consultations in accordance with paragraph 2 was made, or for the following year if the quota for the current year is exhausted, where clear evidence of circumvention is provided.

4. Should the parties be unable in the course of consultations to reach a satisfactory solution within the period specified in Article 14 of this Agreement, the Community shall have the right, where clear evidence of circumvention has been provided, to deduct from the quantitative limits established under this Agreement amounts equivalent to the products of Bulgarian origin.

Article 9

1. Bulgaria shall supply the Community with precise statistical information on all export licences issued by the Bulgarian authorities for all categories of textile products subject to the quantitative limits established under this Agreement as well as on all certificates issued by the Bulgarian authorities for products referred to in Article 3 (1) and subject to the provisions of Protocol B.

The Community shall likewise transmit to the Bulgarian authorities precise statistical information on import authorizations or documents issued by the competent Community authorities, in connection with the export licenses and certificates issued by Bulgaria.

2. The information referred to in paragraph 1 shall, for all categories of products, be transmitted before the end of the second month following the quarter to which the statistics relate.

3. For the purpose of applying provisions of Article 8, the Community may ask Bulgaria to transmit available statistical information on textiles exports of products covered by this Agreement by country of destination.

The Community shall transmit to the Bulgarian authorities import statistics for all products covered by the system of administrative control referred to in Article 7 (2) and for products covered by Article 3 (2).

4. The information referred to in paragraph 3 above shall, for all categories of products, be transmitted before the end of the third month following the quarter to which the statistics relate.

5. Should it be found on analysis of the information exchanged that there are significant discrepancies between the returns for exports and those for imports, consultations may be initiated in accordance with the procedure specified in Article 14.

6. For the purpose of applying the provisions of Article 7, the Community undertakes to provide the Bulgarian authorities before 15 April of each year with the preceding year's statistics on imports of all textile products covered by this Agreement, broken down by supplying country and Community Member State.

Article 10

1. In case of divergent opinions between Bulgaria and the competent Community authorities at the point of entry into the Community on the classification of products covered by the present Agreement, classification shall provisionally be based on indications provided by the Community, pending consultations in accordance with Article 14 with a view to reaching agreement on definitive classification of the product concerned.

2. The authorities of Bulgaria shall be informed of any amendment to the tariff and statistical nomenclature in force

in the Community or any decision, made in accordance with the procedures in force in the Community, relating to the classification of products covered by this Agreement.

Any amendment to the tariff and statistical nomenclatures in force in the Community or any decision which results in a modification of the classification of products covered by this Agreement shall not have the effect of reducing any quantitative limit established in Annex II.

The procedures for the application of this paragraph are set out in Protocol A.

Article 11

Bulgaria shall endeavour to ensure that exports of textile products covered by this Agreement are spaced out as evenly as possible over the year, due account being taken nevertheless of seasonal factors.

Should there be an excessive concentration of imports due to other than seasonal factors on any products belonging to a category subject to quantitative limits under this Agreement, the Community may request consultations in accordance with the procedure specified in Article 14 with a view to remedying this situation.

Article 12

In the event of denunciation of this Agreement as provided for in Article 17 (4), the quantitative limits established in Annex II shall be reduced on a pro rata basis.

Article 13

1. For the purpose of the administration of this Agreement, the limits referred to in Article 2 are broken down by the Community into shares for each of its Member States.

2. Portions of the quantitative limits established in

Annex II not used in a Member State of the Community may be allocated to another Member State in accordance with the procedures in force in the Community. The Community undertakes to examine with care and to reply within four weeks to any request made by Bulgaria for such reallocation. In the event of any reallocation the flexibility provisions set out in Article 4 shall continue to be applicable to the levels of the original allocation.

3. After the first of June of each year of application of the Agreement, Bulgaria may transfer, subject to prior notification to the Community, unused quantities within the regional quota-shares of a Community quantitative limit, set out in Annex II, to the quota-shares of the same limit of other regions of the Community provided that the regional quota-share from which the transfer is made is utilized by less than 80 %, and up to the amount of the following percentages of the quota-share to which the transfer is made:

2 % in the first year of application of the Agreement,

4 % in the second year of application of the Agreement,

8 % in the third year of application of the Agreement,

12 % in the fourth year of application of the Agreement.

4. Should it appear in any given region of the Community that additional supplies are required, the Community may, where measures taken pursuant to paragraph 1 above are inadequate to cover those requirements, authorize the importation of amounts greater than those stipulated in Annex II.

Article 14

1. The special consultation procedures referred to in this Agreement other than those referred to in paragraph 2 of this Article, shall be governed by the following rules:

- any request for consultations shall be notified in writing to the other Party,

- where appropriate, the request for consultations shall be followed within a reasonable period (and in any case not later than 15 days following the notification) by a report setting out the circumstances which, in the opinion of the requesting Party, justify the submission of such a request,

- the Parties shall enter into consultations within one month of notification of the request at the latest, with a view to reaching agreement or a mutually acceptable conclusion within one further month at the latest,

- the period of one month referred to above for the purpose of reaching agreement or a mutually acceptable conclusion may be extended by common accord.

2. The Community may request consultations in accordance with paragraph 1 when it ascertains that during a particular year of application of the Agreement difficulties arise in the Community or one of its regions due to a sharp and substantial increase, by comparison to the preceding year, in imports of a given category of Group 1 subject to the quantitative limits set out in Annex II.

3. At the request of either of the Parties, consultations shall be held on any problems arising from the application of this Agreement. Any consultations held under this Article shall take place in a spirit of cooperation and with a desire to reconcile the differences between the two Parties.

Article 15

1. Bulgaria and the Community undertake to refrain from discrimination in the allocation of export licences and import authorizations or documents referred to in Protocol A

and B.

2. In implementing this Agreement, the Contracting Parties shall take care to maintain the traditional commercial practices and trade flows between the Community and Bulgaria.

3. Should either Party find that the application of this Agreement is disturbing existing commercial relations between importers in the Community and suppliers in Bulgaria consultations shall be started promptly, in accordance with the procedure specified in Article 14, with a view to remedying this situation.

Article 16

This Agreement shall apply, on the one hand, to the territories in which the Treaty establishing the European Economic Community is applied and under the conditions laid down in that Treaty and, on the other hand, to the territory of the People's Republic of Bulgaria.

Article 17

1. This Agreement enters into force on the first day of the month following its signature. It shall be applicable until

31 December 1990.

2. This Agreement shall apply with effect from 1 January 1987.

3. Either Party may at any time propose amendments to this Agreement.

4. Either Party may at any time denounce this Agreement, provided that at least 90 days' notice is given. In the latter event the Agreement shall come to an end on the expiry of the period of notice.

5. The Annexes and Protocols, as, well as Exchanges of Letters, Agreed Minute and Joint Declarations attached to this Agreement shall form an integral part thereof.

Article 18

This Agreement shall be drawn up in two copies in the Danish, Dutch, English, French, German, Italian, Greek, Spanish, Portuguese and Bulgarian languages, each of those texts being equally authentic.

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ANNEX I

LIST OF PRODUCTS

1. When the constitutive material of the products of categories 1 to 114 is not specifically mentioned these products are to be taken to be made exclusively of wool or of fine animal hair, of cotton or of man-made fibres.

2. Garments which are not recognizable as being garments for men or boys or as garments for women or girls are classified with the latter.

3. Where the expression 'babies' garments' is used, this is meant also to cover girls' garments up to and including commercial size 86.

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ANNEX II

For practical reasons the product descriptions used in Annex I are given in the present Annex in abbreviated form

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