EXPLANATORY MEMORANDUM

Association agreements form the legal base for the European Union's relations with southern Mediterranean countries.

The Euro-Mediterranean Agreement between the European Community and the People's Democratic Republic of Algeria, which was signed in 2002 and entered in force in 2005, provides in Articles 9 and 11 for mutual obligations in the field of tariff dismantling for industrial products, as listed in Annexes 2 and 3 to the Association Agreement.

Pursuant to Article 9, the tariff dismantling schedule may be revised by common agreement in the event of serious difficulties for a given product. Article 11 stipulates that Algeria may take exceptional measures of limited duration in the form of an increase in or reintroduction of customs duties. The total value of imported products subject to such measures may not exceed 15% of total imports of industrial products from the Community over the last year.

At the 5th meeting of the Association Council on 15 June 2010, Algeria informed the European Union of its intention to revise the tariff dismantling which took effect on 1 September 2005 and submitted a formal request on 13 September 2010. Algeria's decision, stemming from the evaluation of the Agreement's effects five years after its entry into force, was underpinned by the wish to rebalance the structure of non-hydrocarbon trade, given the economic situation in a number of industrial sectors in Algeria. The parties agreed to start consultations on the implementing conditions for such exceptional measures, and on the sectors concerned, with a view to negotiating a solution.

This draft is based on the result of the consultations between the parties in mid-June 2012, the aim of which was to decide on acceptable amendments to the basic duties and to the tariff dismantling schedule initially provided for in the Agreement.

2012/0330 (NLE)

Proposal for a

COUNCIL DECISION

concerning the position of the European Union within the EU-Algeria Association Committee on the implementation of the provisions concerning the industrial products set out in Articles 9 and 11 of the Euro-Mediterranean Agreement establishing an Association between the European Community and its Member States, of the one part, and the People’s Democratic Republic of Algeria, of the other part

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty on the Functioning of the European Union, and in particular the first subparagraph of Article 207(4) in conjunction with Article 218(9) thereof,

Having regard to the proposal from the European Commission,

Whereas:

(1)       The Euro-Mediterranean Agreement between the European Community and its Member States, of the one part, and the People’s Democratic Republic of Algeria, of the other part, was signed on 22 April 2002 and entered into force on 1 September 2005.

(2)       Article 9(4) of the Agreement provides that the tariff dismantling schedule may be revised by common agreement by the Association Committee in the event of serious difficulties for a given product.

(3)       Article 11 stipulates that Algeria may take exceptional measures of limited duration in the form of an increase in or reintroduction of customs duties. The total value of imports of the products subjected to such measures may not exceed 15% of total imports of industrial products from the Community over the last year. The Association Committee may decide on the schedule for the elimination of duties.

(4)       Following the difficulties experienced by Algeria when applying the tariff dismantling schedule for industrial products, set out in Article 9(2) and (3) of the Agreement, an expert group of the European Commission and the Algerian Republic met eight times between September 2010 and June 2012.

(5)       These consultations made it possible to define acceptable amendments to the basic duties and the tariff dismantling schedule initially established, in accordance with the conditions laid down in Articles 9(4) and 11 of the Association Agreement.

(6)       Article 97 of the Association Agreement provides that the Association Committee has the power to make decisions for the management of the Agreement; The Association Committee should give its opinion on the planned amendments.

(7)       The European Union's position within the EU-Algeria Association Committee must be therefore be set out,

HAS ADOPTED THIS DECISION:

Article 1

The position to be taken by the European Union within the EU-Algeria Association Committee established by the Euro-Mediterranean Association Agreement between the European Community and the People's Democratic Republic of Algeria concerning the implementation of Articles 9 and 11 thereof, is to approve the adoption of the draft Decision attached.

Article 2

The decision of the Association Committee amending the implementing conditions of tariff dismantling for industrial products shall be published in the Official Journal of the European Union once it has been adopted.

Article 3

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

Done at Brussels,

                                                                       For the Council

                                                                       The President

ANNEX

Draft

DECISION OF THE EU-ALGERIA ASSOCIATION COMMITTEE

No […]

of […]

amending the conditions of tariff dismantling for industrial products provided for in Article 9 of the Euro-Mediterranean Agreement establishing an association between the European Community and its Member States, of the one part, and the People's Democratic Republic of Algeria of the other part

THE ASSOCIATION COMMITTEE,

Having regard to the Euro-Mediterranean Agreement establishing an Association between the European Community and its Member States, of the one part, and the People’s Democratic Republic of Algeria, of the other part, hereinafter "the Agreement"[1], and in particular Articles 9 to 11 thereof,

Whereas:

(1)          Following the difficulties experienced by Algeria in applying the tariff dismantling schedule for industrial products, set out in Article 9(2) and (3) of the Agreement, an expert group of the European Commission and the Algerian Republic met eight times between September 2010 and June 2012.

(2)          These consultations made it possible to reach a compromise concerning acceptable amendments to the basic duties and to the tariff dismantling schedule initially established, in accordance with the conditions laid down in Articles 9(4) and 11 of the Association Agreement.

(3)          Article 97 of the Association Agreement provides that the Association Committee has the power to make decisions for the management of the agreement; the planned amendments should be subject to a decision by the Association Committee,

HAS DECIDED AS FOLLOWS:

Article 1

1.           The rates and terms approved during the bilateral consultations and set out in Annex I to this Decision shall replace the tariff dismantling conditions initially laid down for industrial products.

2.           The industrial products covered by these amendments are listed in Annex II.

Article 2

This Decision shall enter into force the day after its adoption by the Association Committee.

Done at Brussels, […]

|| For the Association Committee             The President             […]

ANNEX I

1.           Following a formal request to revise the tariff dismantling schedule for industrial products, filed by Algeria at the 5th meeting of the Association Council on 15 June 2010, and following the eight consultation meetings, the two parties agreed on 20 July 2012 on new provisions amending the tariff dismantling schedule for industrial products set out in Article 9 of the EU-Algeria Association Agreement, based on a list of 1 058 tariff sub-headings (final application by Algeria).

2.           Of the products identified in Article 9(2) of the Association Agreement, an initial list of 82 tariff sub-headings set out in Annex II-A (list 2 level 1) of this Decision shall benefit from the partial re-establishment of customs duties of 23% for products subject to a basic duty of 30%, and of 12% for products subject to a basic duty of 15%.

              The dismantling scheme for this measure, established in accordance with the provisions of Article 11 of the Association Agreement, shall last from 1 September 2012 to 1 September 2016, as detailed in Annex II to this Decision.

3.           A second list of products covered by Article 9(2) of the EU-Algeria Association Agreement, covering 185 tariff sub-headings and included in Annex II-B (list 2 level 2) of this Decision, shall be subject to the preferential maintenance of customs duties, granted to the European Union in 2010, i.e. 3% in 2012 and 2013, with a linear reduction in the following years, reaching 0% on 1 September 2016.

              The dismantling schedule for this measure is set out in accordance with the provisions of Article 9(4) of the Association Agreement.

              The other products covered by Article 9(2) shall be subject to the initial tariff dismantling schedule set out in the Association Agreement.

4.           As regards the products referred to in Article 9(3), a third list of the products covering 174 tariff sub-headings, included in Annex II-C (list 3 level 1) of this Decision, shall benefit from the partial re-establishment of customs duties:

– 23% for products subject to a basic duty of 30%;

– 12% for products subject to a basic duty of 15%.

              The dismantling schedule for this measure, established in accordance with the provisions of Article 11(2) of the Association Agreement, is detailed in Annex II-C of this Decision.

5.           A fourth list of the products referred to in Article 9(3) covering 617 tariff sub-headings included in Annex II-D (list 3 level 2) of this Decision shall be subject to the preferential maintenance of customs duties granted to the European Union in 2010 for the period from 1 September 2012 to 31 August 2016, with a linear reduction from 1 September 2016 to reach a rate of 0% by 1 September 2020.

              The dismantling schedule for this measure, established in accordance with the provisions of Article 11 of the Association Agreement, is detailed in Annex II-D to this Decision.

6.           The other products covered by Article 9(3) shall be subject to the initial tariff dismantling schedule set out in the Association Agreement.

7.           The provisions of this Decision shall apply from 1 September 2012.

ANNEX II

Lists of the industrial products subject to the new tariff dismantling schedule

Annex II-A (List 2 Level 1): 82 sub-headings subject to the basic duties of 30% and 15%

Tariff heading

29362400

34021100

34021200

34021300

34021900

60063300

60069000

63051000

63053300

63053900

70171000

70172000

70179000

73043110

73051100

73051200

73051900

73052000

73053190

73061100

73061900

73062100

73062900

73063000

73071110

73072100

73072200

73072310

73079300

73079900

73101000

73102100

73102900

73110090

73201000

73202000

73209000

84191110

84813000

84834000

85011000

85013100

85013200

85013300

85013400

85014000

85015100

85015200

85015300

85016110

85016120

85016200

85016300

85016400

85030000

85041010

85041090

85045000

85079000

85171890

85176219

85299090

85441110

85441190

85441910

85441990

85442000

85443000

85444200

85444900

85446000

85447000

87029010

87032230

87032330

87032430

87033130

87033230

87033330

87087000

87089100

87089200

Annex II-B (List 2 Level 2): 185 sub-headings subject to a basic duty of 5%

Tariff heading

30044000

30045010

30049000

30051000

30059000

30061000

73110010

73110020

82071300

82071910

84021100

84021200

84021900

84081010

84082010

84082090

84089010

84089090

84131110

84131190

84134000

84137011

84137012

84137013

84137014

84137015

84137016

84137017

84137021

84137022

84137023

84137031

84137040

84137051

84137052

84137061

84137062

84137063

84137070

84137090

84138100

84138200

84144000

84151020

84158110

84158210

84158310

84171000

84172000

84178000

84179000

84198112

84221120

84221900

84223000

84229090

84232000

84233000

84238200

84238900

84242000

84248100

84254200

84261100

84262000

84269100

84271010

84271030

84272010

84272020

84272040

84272050

84283200

84289010

84291100

84292000

84294000

84295100

84295200

84314200

84321000

84322100

84322900

84323000

84324000

84328000

84329000

84332000

84333000

84334000

84335100

84335900

84378000

84381000

84388000

84425000

84501120

84501220

84501912

84501992

84502000

84532000

84538000

84543000

84581900

84596900

84601900

84624900

84651000

84659100

84713010

84713090

84714110

84714190

84714900

84715000

84716000

84717000

84718000

84719000

84743100

84775900

84791000

85021100

85021200

85021300

85022010

85022090

85023900

85024000

85042100

85042210

85042220

85042300

85043100

85043200

85043300

85043400

85044000

85049000

85143000

85149000

85153900

85176211

85176212

85176290

85176900

85309000

85439000

86069900

86079900

86090000

87011010

87012090

87013010

87013020

87013090

87019010

87019020

87019030

87019090

87041010

87041090

87042220

87042290

87042390

87043110

87043210

87051000

87053000

87054000

87059010

87059090

87060090

87079010

87091900

87162000

87163100

87163900

90011000

90281000

90282010

90282020

90283000

90289000

Annex II-C (List 3 Level 1): 174 sub-headings subject to the basic duties of 30% and 15%

Tariff heading

27101111

27101112

27101113

27101114

27101115

27101119

27101931

27101932

27101933

27101934

27101935

27101936

27101937

27101939

27109100

27109900

27111210

27111310

27150010

27150030

27150050

32081010

32081020

32082010

32082020

32089010

32089020

32089030

32091010

32091021

32091029

32099010

32099020

32100010

32100020

33030030

33043000

33049900

33051000

33059000

33061000

33071000

33072000

33073000

33074900

33079000

34011100

34012019

34022000

34029000

34052000

34053000

34054000

35069100

35069900

38089110

38089210

39229000

39231000

39232900

39233000

39235090

39239000

39249000

39251000

39253000

39259000

44181000

44182000

48025600

48030000

48171000

48184020

48191000

48192011

48192019

48193000

48194000

48211090

56074910

56074990

63022100

63025100

68021000

68022100

68022900

68029100

68029200

68029300

68029900

69079000

69089000

69101000

69109000

71031090

71081310

72104900

73083000

73090090

73211190

73221100

73221900

73229000

73239300

73239900

73259900

73269090

76101000

76151900

76169930

76169990

82055900

82060000

82119200

83100000

84185090

84186900

84189900

84191190

84501190

84811010

84818010

84818020

85012000

85071000

85072000

85073000

85078000

85166000

85168000

85287290

85351000

85352100

85352900

85353000

85354000

85359000

85362010

85362020

85363000

85364900

85365010

85365090

85366910

85366990

85369010

85371000

85372000

87032190

87032290

87032340

87032350

87032360

87032390

87033120

87033190

87033220

87033240

87033290

87033320

87033390

94018000

94033000

94034000

94035000

94036000

94038900

94039000

94042900

94051000

94054000

94056000

94060010

94060090

Annex II-D (List 3 Level 2): 617 sub-headings subject to the basic duties of 30%, 15% and 5%

Tariff heading

28289030

32081030

32082030

32100030

32131000

32139000

33030010

33030020

33030040

33041000

33042000

33049100

33052000

33053000

34011990

34051000

34059000

34060000

34070010

35061000

35079000

36050000

39211300

39221000

39222000

39232100

39241000

39252000

39261000

39262000

39264000

42021100

42031090

42033010

42033090

42034010

42034090

42050090

44140000

44151000

44152000

44184000

44189000

44190000

45031000

45039000

45041000

45049000

48026200

48101400

48142000

48173000

48181000

48183000

48192029

48201000

48202000

48203000

48237000

51113000

51129000

52042000

52079000

52081100

52081200

52081300

52081900

52082100

52082200

52082300

52082900

52083100

52083200

52083300

52083900

52084100

52084200

52084300

52084900

52085100

52085200

52085900

52093100

52093900

52102900

52121200

54011090

54012090

54071000

54072000

54075300

54075400

54076100

54076900

54077100

54077200

54077300

54077400

54078100

54078200

54078300

54078400

54079100

54079200

54079300

54079400

55081020

55082020

55121100

55121900

55122100

55122900

55129100

55129900

55151300

56011000

56012100

56012200

56012900

56013000

56021010

56021090

56022110

56022190

56022900

56029000

56072100

56072910

56072990

56074100

56075010

56075020

56075090

56079010

56079020

56079090

57011000

57019000

57021000

57022000

57023100

57023200

57023900

57024100

57024200

57024900

57029100

57029200

57029900

57031000

57032000

57033000

57039000

57041000

57049000

57050000

58021100

58021900

58022000

58023000

58061000

58062000

58063100

58063200

58063900

58064000

58110000

59031000

59032000

59039000

59041000

59050010

59050090

61012000

61031000

61032200

61033100

61033200

61033300

61033900

61034200

61034300

61034900

61051000

61052000

61059000

61071100

61071900

61072100

61079100

61079900

61081900

61082100

61082900

61089100

61089900

61091000

61099000

61101100

61101900

61102000

61103000

61109000

61142000

61143000

61149000

61151000

61152100

61152200

61159900

62011200

62011300

62011900

62019100

62019200

62019300

62019900

62029300

62031900

62032200

62032300

62032900

62033100

62033200

62033300

62033900

62034100

62034200

62034300

62034900

62052000

62059000

62113210

62113290

62113300

62113900

62121000

63014000

63019000

63022200

63022900

63023100

63023200

63023900

63024000

63025300

63025900

63026000

63029100

63029300

63029900

63031900

63039900

63041100

63041900

63049100

63049200

63049300

63049900

63061200

63061900

63069900

63071000

63072000

63079000

63090000

64011000

64019200

64019900

64029900

64031900

64032000

64034000

64035100

64035900

64039100

64039900

64041100

64041900

64042000

64051000

64052000

64059000

68010000

68022300

68030090

68052000

68071000

69071000

69081000

69111000

69119000

69120000

69141090

70091000

70099100

70099200

70131000

70139100

70139910

70139990

70140010

70161000

70169010

70169020

70169030

70169090

72103000

72104100

73090010

73141400

73141900

73142000

73143100

73143900

73144100

73144200

73144900

73145000

73158200

73158900

73159000

73192000

73193000

73199000

73211110

73211120

73211200

73211900

73218110

73218120

73218190

73218200

73218900

73239100

73239200

73239400

73241000

73242100

73242900

73249000

73259100

73261100

73261910

73261990

73269010

76151100

76152000

76161000

76169100

76169910

76169920

82011000

82012000

82013000

82014000

82015000

82016000

82019000

82021000

82022000

82023100

82023900

82024000

82029100

82029900

82031000

82032000

82033000

82034000

82041100

82041200

82042000

82051000

82052000

82053000

82054000

82055100

82056000

82057000

82058000

82059000

82111000

82119100

82119300

82119400

82119500

82121000

82122000

82129000

82130000

82141000

82151000

82152000

82159100

82159900

83011000

83012000

83013000

83014000

83015000

83016000

83017010

83017090

83021000

83023000

83024100

83024200

83030000

83040000

83052000

83079000

83081000

83091010

83091090

83099000

84082020

84082030

84145110

84145190

84145910

84145990

84146000

84148000

84149000

84151010

84151090

84152000

84158120

84158131

84158190

84158220

84158290

84158320

84158390

84159010

84159090

84181010

84181012

84181019

84182110

84182112

84182119

84182910

84182912

84182919

84183010

84183020

84183090

84184011

84184012

84184019

84184090

84185010

84185020

84186100

84189100

84191900

84198111

84198119

84198190

84198900

84199010

84199030

84199090

84221110

84221190

84229010

84231000

84238100

84239000

84241000

84331100

84331900

84501110

84501210

84501290

84501910

84501919

84501990

84501999

84509010

84512100

84513010

84513090

84523000

84615000

84703000

84705000

84818090

84819000

85061000

85065000

85066000

85068000

85069090

85094000

85098000

85099000

85102000

85103000

85129000

85161000

85162100

85162900

85163100

85163200

85163300

85164000

85165000

85167100

85167200

85167900

85169000

85171100

85171210

85171290

85171810

85185000

85198100

85198900

85232100

85238000

85255000

85256000

85271200

85271300

85271900

85272100

85272900

85279110

85279120

85279190

85279200

85279900

85284910

85284990

85285910

85285990

85286900

85287110

85287190

85287210

85287310

85287390

85291010

85291050

85291060

85291070

85299010

85301000

85311000

85312000

85318000

85319000

85361000

85364110

85364120

85366190

85369020

85369030

85369090

85381000

85389010

85389090

85391000

85392100

85392200

85392900

85393100

85393200

85393900

85394100

85394900

85399000

87019040

87021090

87032220

87032370

87032380

87032420

87032490

87039000

87120090

87149100

87168010

90031100

90160010

90160090

90183100

94013000

94014000

94016100

94016900

94017100

94017900

94019000

94021000

94029010

94029020

94029030

94029090

94031000

94032000

94037000

94041000

94042100

94049000

94052000

94055000

94059100

94059200

94059900

94060020

96081000

96089900

96091000

LEGISLATIVE FINANCIAL STATEMENT FOR PROPOSALS HAVING A BUDGETARY IMPACT EXCLUSIVELY LIMITED TO THE REVENUE SIDE

1.           TITLE OF THE PROPOSAL

Implementing conditions of tariff dismantling for industrial products provided for in Article 9 of the Euro-Mediterranean Agreement establishing an association between the European Community and its Member States, of the one part, and the People's Democratic Republic of Algeria of the other part

2.           BUDGET LINES

Chapter and Article: not applicable

Amount budgeted for the year concerned: not applicable

3.           FINANCIAL IMPACT

x        Proposal has no financial impact

􀂅 Proposal has no financial impact on expenditure, but does have financial implications for         revenue – the effect is as follows:

(€ million to one decimal place)

Budget line || Revenue || 12 month period, starting dd/mm/yyyy || [Year n]

Article … || Impact on own resources || ||

4.           ANTI-FRAUD MEASURES

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5.           OTHER REMARKS

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[1]               OJ L 265, 10.10.2005.