AGREEMENT between the European Coal and Steel Community and the Republic of Turkey on trade in products covered by the Treaty establishing the European Coal and Steel Community

THE EUROPEAN COAL AND STEEL COMMUNITY,

of the one part, and

THE REPUBLIC OF TURKEY,

of the other part,

WHEREAS the Community and the Republic of Turkey in furtherance of the Ankara Agreement are concluding a Customs Union in respect of products covered by the Treaty establishing the European Community,

PURSUING the objective of the elimination of barriers to trade and desiring to find solutions for the products covered by the Treaty establishing the European Coal and Steel Community,

HAVE DECIDED, in pursuance of these objectives,

TO CONCLUDE THIS AGREEMENT and to this end have designated as their Plenipotentiaries:

THE COMMISSION OF THE EUROPEAN COMMUNITIES

THE PRESIDENT OF THE REPUBLIC OF TURKEY

WHO, having exchanged their full powers, found in good and due form,

HAVE AGREED AS FOLLOWS:

Article 1

This Agreement shall apply to those coal and steel products covered by the Treaty establishing the European Coal and Steel Community and which originate in the Community or Turkey as listed in Annex I.

Article 2

The Community and Turkey shall establish, in accordance with the provisions of this Agreement and in conformity with their obligations under the World Trade Organization, a free trade area in respect of the products referred to in Article 1.

Elimination of customs duties and charges having equivalent effect

Article 3

1. Customs duties on imports or exports shall be abolished in trade between the Parties in the products referred to in Article 1 on the date of entry into force of this Agreement, save that customs duties in respect of imports into Turkey of those products set out in Annex II shall be abolished over three years beginning on the first day of the month following the date on which the Agreement enters into force pursuant to Article 20 in accordance with the schedule set out in Annex II, namely a reduction to 50 % of the consolidated duties specified in Annex II during the first year of this Agreement and by way of a further reduction to 25 % of those duties during the second and third years of this Agreement.

2. No new customs duties on imports or exports shall be introduced in trade between the Parties from the date of entry into force of this Agreement.

3. Taxes, duties and levies other than customs duties, including all measures having equivalent effect, shall be abolished on both sides on the date of entry into force of this Agreement and shall not be reintroduced.

Elimination of quantitative restrictions or measures having equivalent effect

Article 4

Quantitative restrictions or measures having equivalent effect shall be wholly abolished in respect of trade between the Community and Turkey on the date of entry into force of this Agreement. The Community and Turkey shall refrain from introducing any new quantitative restrictions or measures having equivalent effect in respect of trade between the Community and Turkey from that date.

Article 5

If the Community or Turkey considers that a particular practice is incompatible with the terms of Article 3 or 4 it may refer the matter to the ECSC/Turkey Joint Committee and may take appropriate measures following consultation of the Joint Committee or after 45 days of referral for such consultations. Priority will be given to measures which least disturb the functioning of this Agreement.

Customs provisions

Article 6

1. The combined nomenclature of goods shall be applied to the classification of goods for import into the Community.

2. Protocol 1 lays down rules of origin for the purposes of this Agreement.

Competition, concentrations and State aids

Article 7

1. The following shall be incompatible with the proper functioning of this Agreement, in so far as they may affect trade between the Community and Turkey:

(i) all agreements of cooperative or concentrative nature 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;

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

(iii) public aid in any form whatsoever except derogations allowed pursuant to the ECSC Treaty.

2. Any practices contrary to paragraph 1 (i), (ii) and (iii) shall be assessed on the basis of the relevant criteria arising from the application of the rules of Articles 65 and 66 of the Treaty establishing the European Coal and Steel Community (and, where relevant, Article 85 of the Treaty establishing the European Community) and the rules on State aid in the ECSC sector, together with its secondary legislation.

3. Turkey shall notify the Community in sufficient time of any public aid proposed to be granted in the ECSC steel sector. The Community shall have the right to raise objections against any such aid which would have been deemed unlawful under Community law had it been granted by a Member State. If Turkey does not agree with the Community's opinion, and if the case is not resolved within 30 days, the Community and Turkey shall each have the right to refer the case to arbitration.

4. Each Party shall ensure transparency in the area of public aid by a full and continuous exchange of information to the other Party, including amount, intensity and purpose of any proposed aid.

5. The ECSC/Turkey Joint Committee shall, within two years from the entry into force of this Agreement adopt the necessary rules for the implementation of paragraphs 1 to 4. These rules shall be based on those already existing in the Community and shall, inter alia, specify the role of the respective competition or State aid authorities.

6. If the Community or Turkey considers that a particular practice is incompatible with the terms of paragraph 1 to 4, and

- is not adequately dealt with under the rules adopted pursuant to paragraph 5,

or

- in the absence of such rules, and if such practice causes or threatens to cause serious prejudice to its domestic industry, or a substantial part thereof,

it may take appropriate action following consultation of the ECSC/Turkey Joint Committee or after 45 days of the referral for such consultations. Priority shall be given to measures which least disturb the functioning of this Agreement. In the case of practices incompatible with paragraph 1 (iii) such appropriate measures may, where the Agreement establishing the World Trade Organization applies thereto, only be adopted in conformity with the procedures and under the conditions laid down by the World Trade Organization and any other relevant instrument negotiated under its auspices which are applicable between the Parties.

7. Turkey shall have the right to raise objections and seize the ECSC/Turkey Joint Committee in respect of aid granted by a Member State which it deems to be unlawful under Community law. If the case is not resolved within three months the ECSC/Turkey Joint Committee may decide to refer it to the Court of Justice of the European Communities.

Article 8

1. The Parties recognize that during five years after the entry into force of this Agreement, and by way of derogation from Article 7, paragraph 1 (iii), Turkey may, exceptionally, as regards the products covered by this Agreement, grant public aid on a case-by-case basis for restructuring or conversion purposes, provided that:

- transparency is ensured by a full and continuous exchange of information concerning the implementation of the restructuring programme including amount, intensity and purpose of the aid and a detailed restructuring plan;

- the restructuring programme is linked to rationalizing not involving an overall increase in capacity for hot-rolled products;

- the aid leads to viability determined according to the usual viability criteria implying modernization with the sole aim to improve efficiency of the benefiting firms under normal market conditions at the end of the restructuring period;

- the amount of aid granted is not out of proportion to its objectives and is strictly limited, in amount and intensity, to what is absolutely necessary to restore viability;

- Turkey notifies the Community in sufficient time of any aid proposed to be granted under this Article. The Community shall have the right to raise reasoned objections in respect of any such aid which does not comply with the criteria set out above.

2. If, during a period equal to the derogation for subsidies pursuant to paragraph 1 above and given the particular sensitivity of steel market, imports of specific steel products originating in one Party cause or threaten to cause serious injury to domestic producers of like products or serious disturbances to the steel markets of the other Party, both Parties shall enter into consultation immediately to find an appropriate solution. Pending such a solution and notwithstanding other provisions of the Agreement and in particular when exceptional circumstances require immediate action, the importing Party may adopt forthwith quantitative or other solutions strictly necessary to deal with the situation, in accordance with its international and multilateral obligations. Such action may include quantitative restrictions limited to one or more regions that are affected by imports of the steel products in question.

Article 9

The Parties shall exchange information, taking into account the limitations imposed by the requirements of professional and business secrecy.

Trade defence instruments Anti-dumping procedures

Article 10

If one of the Parties finds that dumping is taking place in trade with the other Party within the meaning of Article VI of the General Agreement of Tariffs and Trade, it may take appropriate measures against this practice, in accordance with the Agreement relating to the application of Article VI of the General Agreement on Tariffs and Trade, with related internal legislation and with the conditions and procedures set out in Article 11.

Article 11

1. Where dumping is being practised in trade between the Community and Turkey the injured Party may notify the ECSC/Turkey Joint Committee, which shall address recommendations to the person or persons with whom such practices originate for the purpose of putting an end to them.

2. The injured Party may, after notifying the ECSC/Turkey Joint Committee, take suitable protective measures where:

(a) the ECSC/Turkey Joint Committee has taken no decision pursuant to paragraph 1 within three months from the making of the application;

(b) despite the issue of recommendations the dumping practices continue.

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

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

The ECSC/Turkey Joint Committee may recommend the abolition or amendment of protective measures taken under (b) of the first subparagraph of paragraph 2.

Safeguard measures

Article 12

1. Where any product is being imported in such increased quantities and under such conditions as to cause, or threaten to cause:

- serious injury to domestic producers of like or directly competitive products in the territory of one of the Parties, or

- serious disturbances in the steel sector or a related sector of the economy or difficulties which could bring about serious deterioration in the economic situation of a region,

the Community or Turkey, whichever is concerned, may take appropriate measures under the conditions and in accordance with the procedures laid down in Article 16.

2. In the choice of measures to be taken in pursuance of paragraph 1, preference shall be given to measures which least disturb the functioning of this Agreement.

Article 13

In the framework of the application of trade policy measures towards third countries, the Parties shall endeavour, through exchange of information and consultation, to seek possibilities for coordinating their action when the circumstances and international obligations of both Parties allow.

The ECSC/Turkey Joint Committee

Article 14

1. An ECSC/Turkey Joint Committee is hereby established. The Joint Committee shall carry out an exchange of views and information, formulate recommendations to the Parties and deliver opinions with a view to ensuring the proper functioning of this Agreement. In the cases provided for herein the Joint Committee shall have the power to take decisions. Such decisions shall be binding on the Parties which shall take the necessary measures to implement the decisions taken.

It shall draw up its decisions and recommendations by agreement between the Parties.

2. The Parties shall consult within the Joint Committee on any point relating to the implementation of this Agreement which gives rise to a difficulty for either of them.

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

Article 15

1. The Joint Committee shall consist of representatives of the Parties.

2. The office of chairman of the Joint Committee shall be held alternately, for a period of six months, by the representative of the Community, i.e., the Commission of the European Communities, and the representative of Turkey.

3. In order to carry out its duties, the Joint Committee shall decide on the frequency of its meetings and shall also meet on the initiative of its chairman or at the request of one of the Parties.

Consultation of the ECSC/Turkey Joint Committee

Article 16

1. In the cases referred to in Articles 5, 10 and 12 the Community or Turkey, as the case may be, shall supply the ECSC/Turkey Joint Committee with all relevant information with a view to seeking a solution acceptable to the Parties.

2. For the purposes of implementing paragraph 1, the following provisions shall apply:

(a) as regards Article 12 the difficulties arising from 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 Party has not taken a decision to put an end to the difficulties or no other satisfactory solution has been reached within 30 days of the matter being referred to the Joint Committee, the importing Party may adopt appropriate measures to remedy the difficulties which have arisen. Priority shall be given to such measures as least disturb the functioning of this Agreement;

(b) where exceptional circumstances requiring immediate action make prior information or examination, as the case may be, impossible, the Community or Turkey, whichever is concerned, may, in situations specified in Article 12 apply forthwith the precautionary and provisional measures strictly necessary to deal with the situation, and the Joint Committee will be informed immediately.

Settlement of disputes

Article 17

If examination by the Joint Committee fails to settle a dispute relating to safeguard measures taken in accordance with Article 12, within six months of the date on which the referral was made, either Party may refer the dispute to arbitration under the procedures laid down in Article 18. The arbitration award shall be binding on the Parties to the dispute.

Article 18

1. If a dispute has been referred to arbitration there shall be three arbitrators.

2. The two Parties to the dispute shall each appoint one arbitrator within 30 days.

3. The two arbitrators so designated shall nominate by common agreement one umpire who shall not be a national of either Contracting Party. If they cannot agree within two months of their appointment, the umpire shall be chosen by them from seven persons on a list established by the Joint Committee, which shall establish and review this list in accordance with its rules of procedure.

4. The arbitration tribunal shall sit in Brussels. Unless the Parties decide otherwise, it shall adopt its rules of procedure. It shall take its decisions by majority.

Contact Group

Article 19

The Parties shall establish a Contact Group which will discuss matters arising out of the functioning of this Agreement including in particular questions related to trade between the Parties, cooperation between them in respect of investment and the progress of restructuring. The Contact Group shall report to the Joint Committee.

General and final provisions Entry into force

Article 20

This Agreement shall be approved by the Parties in accordance with their own procedures. The Agreement shall enter into force on the first day of the month following the date on which the Parties notify each other that these procedures have been completed.

Article 21

This Agreement shall be drawn up in duplicate in the Danish, Dutch, English, Finnish, French, German, Italian, Spanish, Swedish, Greek, Portuguese and Turkish languages, each of the texts being equally authentic.

Interpretation

Article 22

The provisions of this Agreement, in so far as they are identical in substance to the corresponding provisions of the Treaty establishing the European Community shall be interpreted for the purposes of their implementation and application to products covered by this Agreement, in conformity with the relevant decisions of the Court of Justice of the European Communities.

Done at Brussels, on the twenty-fifth day of July in the year one thousand nine hundred and ninety-six.

For the European Coal and Steel Community

>REFERENCE TO A FILM>

For the Republic of Turkey

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ANNEX I

LIST OF ECSC COAL AND STEEL PRODUCTS 1996

2601 11 00

2601 12 00

2602 00 00

2619 00 10

2701 11 10

2701 11 90

2701 12 10

2701 12 90

2701 19 00

2701 20 00

2702 10 00

2702 20 00

2704 00 19

2704 00 30

7201 10 11

7201 10 19

7201 10 30

7201 10 90

7201 20 00

7201 50 10

7201 50 90

7202 11 20

7202 11 80

7202 99 11

7203 10 00

7203 90 00

7204 10 00

7204 21 10

7204 21 90

7204 29 00

7204 30 00

7204 41 10

7204 41 91

7204 41 99

7204 49 10

7204 49 30

7204 49 91

7204 49 99

7204 50 10

7204 50 90

7206 10 00

7206 90 00

7207 11 11

7207 11 14

7207 11 16

7207 12 10

7207 19 11

7207 19 14

7207 19 16

7207 19 31

7207 20 11

7207 20 15

7207 20 17

7207 20 32

7207 20 51

7207 20 55

7207 20 57

7207 20 71

7208 10 00

7208 25 00

7208 26 00

7208 27 00

7208 36 00

7208 37 10

7208 37 90

7208 38 10

7208 38 90

7208 39 10

7208 39 90

7208 40 10

7208 40 90

7208 51 10

7208 51 30

7208 51 50

7208 51 91

7208 51 99

7208 52 10

7208 52 91

7208 52 99

7208 53 10

7208 53 90

7208 54 10

7208 54 90

7208 90 10

7209 15 00

7209 16 10

7209 16 90

7209 17 10

7209 17 90

7209 18 10

7209 18 91

7209 18 99

7209 25 00

7209 26 10

7209 26 90

7209 27 10

7209 27 90

7209 28 10

7209 28 90

7209 90 10

7210 11 10

7210 12 11

7210 12 19

7210 20 10

7210 30 10

7210 41 10

7210 49 10

7210 50 10

7210 61 10

7210 69 10

7210 70 31

7210 70 39

7210 90 31

7210 90 33

7210 90 38

7211 13 00

7211 14 10

7211 14 90

7211 19 20

7211 19 90

7211 23 10

7211 23 51

7211 29 20

7211 90 11

7212 10 10

7212 10 91

7212 20 11

7212 30 11

7212 40 10

7212 40 91

7212 50 31

7212 50 51

7212 60 11

7212 60 91

7213 10 00

7213 20 00

7213 91 10

7213 91 20

7213 91 41

7213 91 49

7213 91 70

7213 91 90

7213 99 10

7213 99 90

7214 20 00

7214 30 00

7214 91 10

7214 91 90

7214 99 10

7214 99 31

7214 99 39

7214 99 50

7214 99 61

7214 99 69

7214 99 80

7214 99 90

7215 90 10

7216 10 10

7216 21 00

7216 22 00

7216 31 11

7216 31 19

7216 31 91

7216 31 99

7216 32 11

7216 32 19

7216 32 91

7216 32 99

7216 33 10

7216 33 90

7216 40 10

7216 40 90

7216 50 10

7216 50 91

7216 50 99

7216 99 10

7218 10 00

7218 91 11

7218 91 19

7218 99 11

7218 99 20

7219 11 00

7219 12 10

7219 12 90

7219 13 10

7219 13 90

7219 14 10

7219 14 90

7219 21 10

7219 21 90

7219 22 10

7219 22 90

7219 23 00

7219 24 00

7219 31 00

7219 32 10

7219 32 90

7219 33 10

7219 33 90

7219 34 10

7219 34 90

7219 35 10

7219 35 90

7219 90 10

7220 11 00

7220 12 00

7220 20 10

7220 90 11

7220 90 31

7221 00 10

7221 00 90

7222 10 11

7222 11 19

7222 11 21

7222 11 29

7222 11 91

7222 11 99

7222 19 10

7222 19 90

7222 30 10

7222 40 10

7222 40 30

7224 10 00

7224 90 01

7224 90 05

7224 90 08

7224 90 15

7224 90 31

7224 90 39

7225 11 00

7225 19 10

7225 19 90

7225 20 20

7225 30 00

7225 40 20

7225 40 50

7225 40 80

7225 50 00

7225 91 10

7225 92 10

7225 99 10

7226 11 10

7226 19 10

7226 19 30

7226 20 20

7226 91 10

7226 91 90

7226 92 10

7226 93 20

7226 94 20

7226 99 20

7227 10 00

7227 20 00

7227 90 10

7227 90 50

7227 90 95

7228 10 10

7228 10 30

7228 20 11

7228 20 19

7228 20 30

7228 30 20

7228 30 41

7228 30 49

7228 30 61

7228 30 69

7228 30 70

7228 30 89

7228 60 10

7228 70 10

7228 70 31

7228 80 10

7228 80 90

7301 10 00

7302 10 31

7302 10 39

7302 10 90

7302 20 00

7302 40 10

7302 90 10

ANNEX II

>TABLE>

Memorandum of Understanding

In the context of the Agreement setting up a free trade area in products covered by the Treaty establishing the European Coal and Steel Community, signed in Brussels on 25 July 1996, the Parties hereby record their mutual understanding that the criteria to be used to determine the viability of Turkish steel companies in connection with State aid falling under Article 8 of the Agreement are as follows:

Criteria of viability

- an expected annual gross operating result of 13,5 % of turnover for integrated steel mills and of 10 % for non-integrated steel undertakings,

- a price-cost squeeze of 2,5 %,

- a minimum depreciation level of 7 % for integrated steel mills and of 5 % for non-integrated steel undertakings in order to guarantee a replacement of the activities on which the company's viability is based at a pace equal to that of competitors,

- a level of financial charges not lower than 5 % of turnover for integrated steel mills and not lower than 3,5 % of turnover for non-integrated steel undertakings, which was set to keep State aid to the strict minimum,

- a minimum return of 1,5 % of turnover on own capital so that, whether the capital stems from public or private sources, it produces a fair yield,

- realistic sale forecasts.

Memorandum of Understanding

In the context of the Agreement setting up a free trade area in products covered by the Treaty establishing the European Coal and Steel Community, signed in Brussels on 25 July 1996, the Parties hereby record their mutual understanding that the amount of any State aid accorded pursuant to the provisions of Article 8 of the Agreement shall be expressed in a manner which takes into account the granting of aid in the context of fluctuations in the value of the Turkish lira, thus:

- aid in respect of costs already incurred and past losses should be expressed in Turkish lira (as already having been incurred and fixed in Turkish lira),

- future costs, such as the cost of investment, may be expressed in ecus, but the ECU/Turkish lira conversion rate to be used for the calculation of such aid shall be that which is valid at the moment, or for the year in which the costs are actually incurred (since from such a date they have been fixed in Turkish lira).

Declaration

In the context of the Agreement between the European Coal and Steel Community and the Republic of Turkey, signed in Brussels on 25 July 1996, establishing a free trade area in trade between them in products covered by the Treaty establishing the European Coal and Steel Community, and more particularly Article 19 thereof, the Parties agreed that they would conduct a regular follow-up of questions arising out of the functioning of the Agreement and more particularly those relating to trade and the circumstances in respect of competition.

In order to effect such a follow-up the two parties will apprise the Contact Group established by Article 19 of the Agreement which, following its examination, will report to the ECSC/Turkey Joint Committee.

Declaration

In the context of the Protocol fixing rules of origin in respect of the Agreement setting up a free trade area in products covered by the Treaty establishing the European Coal and Steel Community, signed in Brussels on 25 July 1996, the Parties hereby agree that:

- it is their intention that the provisions of Article 13 of the Protocol on rules of origin (concerning drawback or exemption) should apply in the same manner as the corresponding Article of the Protocol on rules of origin contained in the agreements between the Community and the countries of the European Free Trade Area and of central and eastern Europe following the finalization of the negotiations currently under way to provide a revised standard form Protocol on origin for the Community and those States,

- in the event of substantive differences between Protocol 1 of the present Agreement (including the Annexes to the Protocol) and the revised Protocol on rules of origin in respect of the Community and the countries of the European Free Trade Area and of central and eastern Europe, the Parties will submit the matter to the ECSC/Turkey Joint Committee with a view to revising the text of the Protocol to the present Agreement to ensure that the same rules apply.

PROTOCOL 1 on rules of origin

TABLE OF CONTENTS

TITLE I GENERAL PROVISIONS

Article 1 Definitions

TITLE II DEFINITION OF THE CONCEPT OF 'ORIGINATING PRODUCTS`

Article 2 General requirements

Article 3 Bilateral cumulation of origin

Article 4 Wholly obtained products

Article 5 Sufficiently worked or processed products

Article 6 Insufficient working or processing operations

Article 7 Unit of qualification

Article 8 Accessories, spare parts and tools

Article 9 Neutral elements

TITLE III TERRITORIAL REQUIREMENTS

Article 10 Principle of territoriality

Article 11 Direct transport

Article 12 Exhibitions

TITLE IV DRAWBACK OR EXEMPTION

Article 13 Prohibition of drawback of, or exemption from, customs duties

TITLE V PROOF OF ORIGIN

Article 14 General requirements

Article 15 Procedure for the issue of a movement certificate EUR.1

Article 16 Movement certificates EUR.1 issued retrospectively

Article 17 Issue of a duplicate movement certificate EUR.1

Article 18 Issue of movement certificates EUR.1 on the basis of a proof of origin issued or made out previously

Article 19 Conditions for making out an invoice declaration

Article 20 Approved exporter

Article 21 Validity of proof of origin

Article 22 Submission of proof of origin

Article 23 Supporting documents

Article 24 Preservation of proof of origin and supporting documents

Article 25 Discrepancies and formal errors

Article 26 Amounts expressed in ecus

TITLE VI ARRANGEMENTS FOR ADMINISTRATIVE COOPERATION

Article 27 Mutual assistance

Article 28 Verification of proofs of origin

Article 29 Dispute settlement

Article 30 Penalties

Article 31 Free zones

TITLE VII CEUTA AND MELILLA

Article 32 Application of the Protocol

Article 33 Special conditions

TITLE VIII FINAL PROVISIONS

Article 34 Amendments to the Protocol

TITLE I GENERAL PROVISIONS

Article 1

Definitions

For the purposes of this Protocol:

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

(b) 'material` means any ingredient, raw material, component or part, etc., used in the manufacture of the product;

(c) 'product` means the product being manufactured, even if it is intended for later use in another manufacturing operation;

(d) 'goods` means both materials and products;

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

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

(g) 'value of materials` means the customs value at the time of importation of the non-originating materials used, or, if this is not known and cannot be ascertained, the first ascertainable price paid for the materials in the Community or Turkey;

(h) 'value of originating materials` means the value of such materials as defined in point (g) applied mutatis mutandis;

(i) 'added value` shall be taken to be the ex works price minus the customs value of each of the products incorporated which did not originate in the country in which those products were obtained;

(j) 'chapters` and 'headings` mean the chapters and the headings (four-digit codes) used in the nomenclature which makes up the Harmonized Commodity Description and Coding System, referred to in this Protocol as 'the Harmonized System` or 'HS`;

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

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

(m) 'territories` includes territorial waters.

TITLE II DEFINITION OF THE CONCEPT OF 'ORIGINATING PRODUCTS`

Article 2

General requirements

1. For the purpose of implementing the Agreement, the following products shall be considered as originating in the Community:

(a) products wholly obtained in the Community within the meaning of Article 4 of this Protocol;

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

2. For the purpose of implementing this Agreement, the following products shall be considered as originating in Turkey:

(a) products wholly obtained in Turkey within the meaning of Article 4 of this Protocol;

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

Article 3

Bilateral cumulation of origin

1. Materials originating in the Community shall be considered as materials originating in Turkey when incorporated into a product obtained there. It shall not be necessary that such materials have undergone sufficient working or processing, provided they have undergone working or processing going beyond that referred to in Article 6 (1) of this Protocol.

2. Materials originating in Turkey shall be considered as materials originating in the Community when incorporated into a product obtained there. It shall not be necessary that such materials have undergone sufficient working or processing, provided they have undergone working or processing going beyond that referred to in Article 6 (1) of this Protocol.

Article 4

Wholly obtained products

The following shall be considered as wholly obtained in the Community or Turkey:

(a) mineral products extracted from their soil;

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

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

(d) goods produced there exclusively from the products specified in points (a), (b) and (c).

Article 5

Sufficiently worked or processed products

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

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

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

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

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

3. Paragraphs 1 and 2 shall apply except as provided in Article 6 of this Protocol.

Article 6

Insufficient working or processing operations

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

(a) operations to ensure the preservation of products 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 packaging and breaking up and assembly of packages;

(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 and 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 in the Community or Turkey;

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

(g) a combination of two or more operations specified in points (a) to (f).

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

Article 7

Unit of qualification

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

Accordingly, it follows that:

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

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

2. Where, under general rule 5 concerning the implementation of the Harmonized System, packaging is included with the product for classification purposes, it shall be included for the purposes of determining origin.

Article 8

Accessories, spare parts and tools

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

Article 9

Neutral elements

In order to determine where a product originates, it shall not be necessary to determine the origin of the following which might be used in its manufacture:

(a) energy and fuel;

(b) plant and equipment;

(c) machines and tools;

(d) goods which do not enter and which are not intended to enter into the final composition of the product.

TITLE III TERRITORIAL REQUIREMENTS

Article 10

Principle of territoriality

1. The conditions set out in Title II relative to the acquisition of originating status must be fulfilled without interruption in the Community or Turkey.

2. If originating goods exported from the Community or Turkey to another country are returned, they must be considered as non-originating, unless it can be demonstrated to the satisfaction of the customs authorities that:

(a) the goods returned are the same goods as those exported;

and

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

Article 11

Direct transport

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

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

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

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

(i) giving an exact description of the products;

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

and

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

(c) failing these, any substantiating documents.

Article 12

Exhibitions

1. Originating products, sent for exhibition in another country and sold after the exhibition for importation in the Community or Turkey shall benefit on importation from the provisions of the Agreement provided it is shown to the satisfaction of the customs authorities that:

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

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

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

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

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

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

TITLE IV DRAWBACK OR EXEMPTION

Article 13

Prohibition of drawback of, or exemption from, customs duties

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

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

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

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

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

TITLE V PROOF OF ORIGIN

Article 14

General requirements

Products originating in the Community shall, on importation into Turkey and products originating in Turkey shall, on importation into the Community, benefit from the Agreement upon submission of either:

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

(b) in the cases specified in Article 19 (1) of this Protocol, a declaration, the text of which appears in Annex IV, given by the exporter on an invoice, a delivery note or any other commercial document which describes the products concerned in sufficient detail to enable them to be identified (hereinafter referred to as the 'invoice declaration`).

Article 15

Procedure for the issue of a movement certificate EUR.1

1. A movement certificate EUR.1 shall be issued by the customs authorities of the exporting country on application having been made in writing by the exporter or, under the exporter's responsibility, by his authorized representative.

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

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

4. A movement certificate EUR.1 shall be issued by the customs authorities of a Member State of the Community or Turkey if the products concerned can be considered as products originating in the Community or Turkey and fulfil the other requirements of this Protocol.

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

6. The date of issue of the movement certificate EUR.1 shall be indicated in box 11 of the certificate.

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

Article 16

Movement certificates EUR.1 issued retrospectively

1.Notwithstanding Article 15 (7), a movement certificate EUR.1 may exceptionally be issued after exportation of the products to which it relates if:

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

or

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

2. For the implementation of paragraph 1, the exporter must indicate in his application the place and date of exportation of the products to which the movement certificate EUR.1 relates, and state the reasons for his request.

3. The customs authorities may issue a movement certificate EUR.1 retrospectively only after verifying that the information supplied in the exporter's application agrees with that in the corresponding file.

4. Movement certificates EUR.1 issued retrospectively must be endorsed with one of the following phrases:

'EXPEDIDO A POSTERIORI`, 'UDSTEDT EFTERFØLGENDE`, 'NACHTRÄGLICH AUSGESTELLT`, 'ÅÊÄÏÈÅÍ ÅÊ ÔÙÍ ÕÓÔÅÑÙÍ`, 'ISSUED RETROSPECTIVELY`, 'DELIVRE A POSTERIORI`, 'RILASCIATO A POSTERIORI`, 'AFGEGEVEN A POSTERIORI`, 'EMITIDO A POSTERIORI`, 'UTFÄRDAT I EFTERHAND`, 'ANNETTU JÄLKIKÄTEEN`, 'SONRADAN VERILMISTIR`.

5. The endorsement referred to in paragraph 4 shall be inserted in the 'remarks` box of the movement certificate EUR.1.

Article 17

Issue of a duplicate movement certificate EUR.1

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

2. The duplicate issued in this way must be endorsed with one of the following words:

'DUPLICADO`, 'DUPLIKAT`, 'DUPLIKAT`, 'ÁÍÔÉÃÑÁÖÏ`, 'DUPLICATE`, 'DUPLICATA`, 'DUPLICATO`, 'DUPLICAAT`, 'SEGUNDA VIA`, 'KAKSOISKAPPALE`, 'DUPLIKAT`, 'IKINCI NUSHADIR`.

3. The endorsement referred to in paragraph 2 shall be inserted in the 'remarks` box of the duplicate movement certificate EUR.1.

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

Article 18

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

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

Article 19

Conditions for making out an invoice declaration

1. An invoice declaration as referred to in point (b) of Article 14 of this Protocol may be made out:

(a) by an approved exporter within the meaning of Article 20 of this Protocol, or

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

2. An invoice declaration may be made out if the products concerned can be considered as products originating in the Community or Turkey and fulfil the other requirements of this Protocol.

3. The exporter making out an invoice declaration shall be prepared to submit at any time, at the request of the customs authorities of the exporting country, all appropriate documents proving the originating status of the products concerned as well as the fulfilment of the other requirements of this Protocol.

4. An invoice declaration shall be made out by the exporter by typing, stamping or printing on the invoice, the delivery note or another commercial document, the declaration, the text of which appears in Annex IV, using one of the linguistic versions set out in that Annex and in accordance with the provisions of the domestic law of the exporting country. If the declaration is handwritten, it shall be written in ink in printed characters.

5. Invoice declarations shall bear the original signature of the exporter in manuscript. However, an approved exporter within the meaning of Article 20 of this Protocol shall not be required to sign such declarations provided that he gives the customs authorities of the exporting country a written undertaking that he accepts full responsibility for any invoice declaration which identifies him as if it had been signed in manuscript by him.

6. An invoice declaration may be made out by the exporter when the products to which it relates are exported, or after exportation on condition that it is presented in the importing country no longer than two years after the importation of the products to which it relates.

Article 20

Approved exporter

1. The customs authorities of the exporting country may authorize any exporter who makes frequent shipments of products under this Agreement to make out invoice declarations irrespective of the value of the products concerned. An exporter seeking such authorization must offer to the satisfaction of the customs authorities all guarantees necessary to verify the originating status of the products as well as the fulfilment of the other requirements of this Protocol.

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

3. The customs authorities shall grant to the approved exporter a customs authorization number which shall appear on the invoice declaration.

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

5. The customs authorities may withdraw the authorization at any time. They shall do so where the approved exporter no longer offers the guarantees referred to in paragraph 1, does not fulfil the conditions referred to in paragraph 2 or otherwise makes an incorrect use of the authorization.

Article 21

Validity of proof of origin

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

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

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

Article 22

Submission of proof of origin

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

Article 23

Supporting documents

The documents referred to in Articles 15 (3) and 19 (3) of this Protocol used for the purpose of proving that products covered by a movement certificate EUR.1 or an invoice declaration can be considered as products originating in the Community or Turkey and fulfil the other requirements of this Protocol may consist inter alia of the following:

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

(b) documents proving the originating status of materials used, issued or made out in the Community or Turkey where these documents are used in accordance with domestic law;

(c) documents proving the working or processing of materials in the Community or Turkey, issued or made out in the Community or Turkey, where these documents are used in accordance with domestic law;

(d) movement certificates EUR.1 or invoice declarations proving the originating status of materials used, issued or made out in the Community or Turkey in accordance with this Protocol.

Article 24

Preservation of proof of origin and supporting documents

1. The exporter applying for the issue of a movement certificate EUR.1 shall keep for at least three years the documents referred to in Article 15 (3) of this Protocol.

2. The exporter making out an invoice declaration shall keep for at least three years a copy of this invoice declaration as well as the documents referred to in Article 19 (3) of this Protocol.

3. The customs authorities of the exporting country issuing a movement certificate EUR.1 shall keep for at least three years the application form referred to in Article 15 (2) of this Protocol.

4. The customs authorities of the importing country shall keep for at least three years the movement certificates EUR.1 and the invoice declarations submitted to them.

Article 25

Discrepancies and formal errors

1. The discovery of slight discrepancies between the statements made in the proof of origin and those made in the documents submitted to the customs office for the purpose of carrying out the formalities for importing the products shall not ipso facto render the proof of origin null and void if it is duly established that this document does correspond to the products submitted.

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

Article 26

Amounts expressed in ecus

1. Amounts in the national currency of the exporting country equivalent to the amounts expressed in ecus shall be fixed by the exporting country and communicated to the importing countries through the Commission of the European Communities.

2. When the amounts exceed the corresponding amounts fixed by the importing country, the latter shall accept them if the products are invoiced in the currency of the exporting country. When the products are invoiced in the currency of another Member State of the Community, the importing country shall recognize the amount notified by the country concerned.

3. The amounts to be used in any given national currency shall be the equivalent in that national currency of the amounts expressed in ecus as at the first working day in October 1995.

4. The amounts expressed in ecus and their equivalents in the national currencies of the Member States of the Community and Turkey shall be reviewed by the Joint Committee at the request of the Community or Turkey. When carrying out this review, the Joint Committee shall ensure that there will be no decrease in the amounts to be used in any national currency and shall furthermore consider the desirability of preserving the effects of the limits concerned in real terms. For this purpose, it may decide to modify the amounts expressed in ecus.

TITLE VI ARRANGEMENTS FOR ADMINISTRATIVE COOPERATION

Article 27

Mutual assistance

1. The customs authorities of the Member States of the Community and of Turkey shall provide each other, through the Commission of the European Communities, with specimen impressions of stamps used in their customs offices for the issue of movement certificates EUR.1 and with the addresses of the customs authorities responsible for verifying those certificates and invoice declarations.

2. In order to ensure the proper application of this Protocol, the Community and Turkey shall assist each other, through the competent customs administrations, in checking the authenticity of the movement certificates EUR.1 or the invoice declarations and the correctness of the information given in these documents.

Article 28

Verification of proofs of origin

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

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

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

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

5. The customs authorities requesting the verification shall be informed of the results of this verification as soon as possible. These results must indicate clearly whether the documents are authentic and whether the products concerned can be considered as products originating in the Community or Turkey and fulfil the other requirements of this Protocol.

6. If in cases of reasonable doubt there is no reply within 10 months of the date of the verification request or if the reply does not contain sufficient information to determine the authenticity of the document in question or the real origin of the products, the requesting customs authorities shall, except in exceptional circumstances, refuse entitlement to the preferences.

Article 29

Dispute settlement

Where disputes arise in relation to the verification procedures of Article 28 of this Protocol which cannot be settled between the customs authorities requesting a verification and the customs authorities responsible for carrying out this verification or where they raise a question as to the interpretation of this Protocol, they shall be submitted to the Joint Committee.

In all cases the settlement of disputes between the importer and the customs authorities of the importing country shall be under the legislation of the said country.

Article 30

Penalties

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

Article 31

Free zones

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

2. By means of an exemption to the provisions contained in paragraph 1, when products originating in the Community or Turkey are imported into a free zone under cover of a proof of origin and undergo treatment or processing, the authorities concerned shall issue a new EUR.1 certificate at the exporter's request, if the treatment or processing undergone is in conformity with the provisions of this Protocol.

TITLE VII CEUTA AND MELILLA

Article 32

Application of the Protocol

1. The term 'Community` used in Article 2 of this Protocol does not cover Ceuta and Melilla.

2. Products originating in Turkey, when imported into Ceuta or Melilla, shall enjoy in all respects the same customs regime as that which is applied to products originating in the customs territory of the Community under Protocol 2 of the Act of Accession of the Kingdom of Spain and the Portuguese Republic to the European Communities. Turkey shall grant to imports of products covered by the Agreement and originating in Ceuta and Melilla the same customs regime as that which is granted to products imported from and originating in the Community.

3. For the purpose of the application of paragraph 2 concerning products originating in Ceuta and Melilla, this Protocol shall apply mutatis mutandis subject to the special conditions set out in Article 33 of this Protocol.

Article 33

Special conditions

1. Providing they have been transported directly in accordance with the provisions of Article 12 of this Protocol, the following shall be considered as:

(1) products originating in Ceuta and Melilla:

(a) products wholly obtained in Ceuta and Melilla;

(b) products obtained in Ceuta and Melilla in the manufacture of which products other than those referred to in point (a) are used, provided that:

(i) the said products have undergone sufficient working or processing within the meaning of Article 5 of this Protocol;

or that

(ii) those products are originating in Turkey or the Community within the meaning of this Protocol, provided that they have been submitted to working or processing which goes beyond the insufficient working or processing referred to in Article 6 (1) of this Protocol.

(2) products originating in Turkey:

(a) products wholly obtained in Turkey;

(b) products obtained in Turkey, in the manufacture of which products other than those referred to in point (a) are used, provided that:

(i) the said products have undergone sufficient working or processing within the meaning of Article 5 of this Protocol;

or that

(ii) those products are originating in Ceuta and Melilla or the Community within the meaning of this Protocol, provided that they have been submitted to working or processing which goes beyond the insufficient working or processing referred to in Article 6 (1) of this Protocol.

2. Ceuta and Melilla shall be considered as a single territory.

3. The exporter or his authorized representative shall enter 'Turkey` and 'Ceuta and Melilla` in box 2 of movement certificates EUR.1 or on invoice declarations. In addition, in the case of products originating in Ceuta and Melilla, this shall be indicated in box 4 of movement certificates EUR.1 or on invoice declarations.

4. The Spanish customs authorities shall be responsible for the application of this Protocol in Ceuta and Melilla.

TITLE VIII FINAL PROVISIONS

Article 34

Amendments to the Protocol

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

ANNEX I

INTRODUCTORY NOTES TO THE LIST IN ANNEX II

Note 1:

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

Note 2:

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

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

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

Note 3:

3.1 The provisions of Article 5 of the Protocol concerning products having acquired originating status which are used in the manufacture of other products apply regardless of whether this status has been acquired inside the factory where these products are used or in another factory in the Community or in Turkey.

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

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

ANNEX II

LIST OF WORKING OR PROCESSING REQUIRED TO BE CARRIED OUT ONNON-ORIGINATING MATERIALS IN ORDER THAT THE PRODUCT MANUFACTURED CAN OBTAIN ORIGINATING STATUS

>TABLE>

ANNEX III

MOVEMENT CERTIFICATE EUR.1 AND APPLICATION FOR A MOVEMENT CERTIFICATE EUR.1

Printing instructions

1. Each form shall measure 210 × 297 mm; a tolerance of up to minus 5 mm or plus 8 mm in the length may be allowed. The paper used must be white, sized for writing, not containing mechanical pulp and weighing not less than 25 g/m². It shall have a printed green guilloche pattern background making any falsification by mechanical or chemical means apparent to the eye.

2. The competent authorities of the Member States of the Community and of Turkey 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. Each form 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.

>REFERENCE TO A FILM>

>REFERENCE TO A FILM>

ANNEX IV

INVOICE DECLARATION

>START OF GRAPHIC>

The invoice declaration, the text of which is given below, must be made out in accordance with the footnotes. However, the footnotes do not have to be reproduced.

English version

The exporter of the products covered by this document (customs authorization No . . . (1)) declares that, except where otherwise clearly indicated, these products are of . . . preferential origin (2).

Spanish version

El exportador de los productos incluidos en el presente documento [autorización aduanera no . . . (1)] declara que, salvo indicación en sentido contrario, estos productos gozan de un origen preferencial . . . (2).

Danish version

Eksportøren af varer, der er omfattet af nærværende dokument (toldmyndighedernes tilladelse nr. . . . (1)), erklærer, at varerne, medmindre andet tydeligt er angivet, har præferenceoprindelse i . . . (2).

German version

Der Ausführer (Ermächtigter Ausführer; Bewilligungs-Nr. . . . (1)) der Waren, auf die sich dieses Handelspapier bezieht, erklärt, daß diese Waren, soweit nicht anderes angegeben, präferenzbegünstigte . . . Ursprungswaren sind (2).

Greek version

Ï åîáãùãÝáò ôùí ðñïúüíôùí ðïõ êáëýðôïíôáé áðü ôï ðáñüí Ýããñáöï [Üäåéá ôåëùíåßïõ õð' áñéè. . . . (1)] äçëþíåé üôé, åêôüò åÜí äçëþíåôáé óáöþò Üëëùò, ôá ðñïúüíôá áõôÜ åßíáé ðñïôéìçóéáêÞò êáôáãùãÞò . . . (2).

French version

L'exportateur des produits couverts par le présent document [autorisation douanière no . . . (1)] déclare que, sauf indication claire du contraire, ces produits ont l'origine préférentielle . . . (2).

Italian version

L'esportatore delle merci contemplate nel presente documento [autorizzazione doganale n. . . . (1)] dichiara che, salvo indicazione contraria, le merci sono di origine preferenziale . . . (2).

Dutch version

De exporteur van de goederen waarop dit document van toepassing is (douanevergunning nr. . . . (1)), verklaart dat, behoudens uitdrukkelijke andersluidende vermelding, deze goederen van preferentiële . . . oorsprong zijn (2).

(1) When the invoice declaration is made out by an approved exporter within the meaning of Article 20 of the Protocol, the authorization number of the approved exporter must be entered in this space. When the invoice declaration is not made out by an approved exporter, the words in brackets shall be omitted or the space left blank.

(2) Origin of products to be indicated. When the invoice declaration relates in whole or in part, to products originating in Ceuta and Melilla within the meaning of Article 33 of the Protocol, the exporter must clearly indicate them in the document on which the declaration is made out by means of the symbol 'CM'.

Portuguese version

O abaixo assinado, exportador dos produtos cobertos pelo presente documento [autorização aduaneira no. . . . (1)], declara que, salvo expressamente indicado em contrário, estes produtos são de origem preferencial . . . (2).

Finnish version

Tässä asiakirjassa mainittujen tuotteiden viejä (tullin lupa n:o . . . (1)) ilmoittaa, että nämä tuotteet ovat, ellei toisin ole selvästi merkitty, etuuskohteluun oikeutettuja . . . alkuperätuotteita (2).

Swedish version

Exportören av de varor som omfattas av detta dokument (tullmyndighetens tillstånd nr. . . . (1)) försäkrar att dessa varor, om inte annat tydligt markerats, har förmånsberättigande ursprung . . . (2).

Turkish version

Isbu belge (gümrük onay No: . . . (1) kapsamindaki maddelerin ihracatçisi aksi açikça bekirtikmedikçe, bu maddelerin . . . menseli ve tercihli (2) maddeler oldugunu beyan eder.

. (3)

(Place and date)

. (4)

(Signature of the exporter; in addition the name of the person signing the declaration has to be indicated in clear script)

(1) When the invoice declaration is made out by an approved exporter within the meaning of Article 20 of the Protocol, the authorization number of the approved exporter must be entered in this space. When the invoice declaration is not made out by an approved exporter, the words in brackets shall be omitted or the space left blank.

(2) Origin of products to be indicated. When the invoice declaration relates in whole or in part, to products originating in Ceuta and Melilla within the meaning of Article 33 of the Protocol, the exporter must clearly indicate them in the document on which the declaration is made out by means of the symbol 'CM'.

(3) These indications may be omitted if the information is contained on the document itself.

(4) See Article 19 (5) of the Protocol. In case where the exporter is not required to sign, the exemption of signature also implies the exemption of the name of the signatory.

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