EUROPEAN COMMISSION

Brussels, 8.2.2017

COM(2017) 65 final

2017/0021(NLE)

Proposal for a

COUNCIL DECISION

on the position to be adopted on behalf of the European Union within the EU-Mexico Joint Committee relating to amendments to Annex III to Decision No 2/2000 of the EC-Mexico Joint Council of 23 March 2000, concerning the definition of the concept of originating products and methods of administrative cooperation

EXPLANATORY MEMORANDUM

1.CONTEXT OF THE PROPOSAL

•Reasons for and objectives of the proposal

The Economic Partnership, Political Coordination and Cooperation Agreement between the European Community and its Member States, of the one part, and the United Mexican States, of the other part, was signed in Brussels on 8 December 1997. The trade liberalisation provisions were laid down in Decision No 2/2000 of the EC-Mexico Joint Council established by the Agreement (hereinafter "Decision No 2/2000").

Annex III to Decision No 2/2000 of the EC-Mexico Joint Council, concerning the definition of the concept of 'originating products' and methods of administrative cooperation, sets out the rules of origin for the products originating in the territory of the Parties to the Agreement. The list of working or processing required to be carried out on non-originating materials in order that the product manufactured can obtain originating status, the “product specific rules”, is contained in Appendix II of Annex III to Decision No 2/2000.

A derogation to the product specific rules was contained in Notes 2 and 3 of Appendix IIa of Annex III to Decision No 2/2000 for certain chemical products in the Harmonised System (HS) under headings 2914 and 2915. This derogation applied initially until 30 June 2003 and was then renewed three times; until 30 June 2006 by Decision No 1/2004 of the EU-Mexico Joint Committee, until 30 June 2009 by Decision No 1/2007 of the EU-Mexico Joint Committee and until 30 June 2014 by Decision No 1/2010 of the EU-Mexico Joint Committee. Thereafter the derogation lapsed.

Mexico and the European Union have agreed to reintroduce the product specific rules contained in the derogation in Notes 2 and 3 of Appendix IIa of Annex III to Decision No 2/2000 retroactively as from 1 July 2014 and limited in time until 31 December 2019 Moreover, Mexico and the European Union have agreed upon some modernised alternative product specific rules.

The application of the amendments to the product specific rules will be retrospective as from 1 July 2014 when the previous EU-Mexico Joint Committee Decision expired. To allow for that retroactive application, the delay for the presentation of the proof or origin by a movement certificate EUR.1 or an invoice declaration has been extended from 2 years to 3 years for the relevant chemical products entering the European Union between 1 July 2014 and 30 June 2015.

•Consistency with existing policy provisions in the policy area

•Consistency with other Union policies

2.LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY

•Legal basis

•Subsidiarity (for non-exclusive competence)

•Proportionality

3.RESULTS OF EX-POST EVALUATIONS, STAKEHOLDER CONSULTATIONS AND IMPACT ASSESSMENTS

•Stakeholder consultations

•Collection and use of expertise

•Impact assessment

4.BUDGETARY IMPLICATIONS

5.OTHER ELEMENTS

2017/0021 (NLE)

Proposal for a

COUNCIL DECISION

on the position to be adopted on behalf of the European Union within the EU-Mexico Joint Committee relating to amendments to Annex III to Decision No 2/2000 of the EC-Mexico Joint Council of 23 March 2000, concerning the definition of the concept of originating products and methods of administrative cooperation

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty on the Functioning of the European Union, and in particular Article 207 in conjunction with Article 218(9) 1 thereof,

Having regard to the proposal from the European Commission,

Whereas:

(1)Joint Declaration V 2 to Decision No 2/2000 of the EC-Mexico Joint Council 3 established by the Economic Partnership, Political Coordination and Cooperation Agreement between the European Community and its Member States, of the one part, and the United Mexican States, of the other part, signed in Brussels on 8 December 1997 4 provides that the EC–Mexico Joint Committee established by that agreement is to review the necessity to extend beyond 30 June 2003 the application of the rules of origin set out in Notes 2 and 3 of Appendix II(a) to Annex III to Decision No 2/2000. That review concerns the product specific rules in Appendix II to Annex III to Decision No 2/2000 for certain chemical products under the Harmonised System headings 2914 and 2915.

(2)On 17 September 2010 the Joint Committee adopted Decision No 1/2010 5 which extended the application of the rules of origin established in those Notes for the third time. Decision No 1/2010 applies until 30 June 2014.

(3)It is considered appropriate to extend on a temporary basis the application of the rules of origin established in Notes 2 and 3 of Appendix II(a) to Annex III to Decision No 2/2000 with effect from 1 July 2014 until 31 December 2019 in line with the principles of the modernisation of the agreement between Mexico and the European Union to ensure continuity with future product specific rules.

(4)Since the extension of the application of the rules of origin established in Notes 2 and 3 of Appendix II(a) to Annex III to Decision No 2/2000 granted by Decision No 1/2010 expired on 30 June 2014, it is considered appropriate to apply the new extension retroactively, from 1 July 2014 in order avoid disruption in existing economic conditions.

(5)For the purposes of the retroactive application, the time-limit for presentation of the proof of origin by way of a EUR.1 movement certificate or an invoice declaration should be extended from 2 years to 3 years for the relevant chemical products imported into the Union in the period from 1 July 2014 to 30 June 2015,

HAS ADOPTED THIS DECISION:

Article 1

1. The position to be adopted on behalf of the Union within the European Union-Mexico Joint Committee regarding Annex III to Decision No 2/2000 of the EC-Mexico Joint Council of 23 March 2000 shall be based on the draft Decision of the European Union-Mexico Joint Committee attached to this Decision.

2. The representatives of the Union in the European Union-Mexico Joint Committee may agree to minor changes to the draft Decision of the European Union-Mexico Joint Committee referred to in paragraph 1 without further decision of the Council.

Article 2

After its adoption, the Decision of the European Union-Mexico Joint Committee regarding amendments to Annex III to Decision No 2/2000 of the EC-Mexico Joint Council shall be published in the Official Journal of the European Union.

Done at Brussels,

LEGISLATIVE FINANCIAL STATEMENT

1.FRAMEWORK OF THE PROPOSAL

1.1.Title of the proposal

1.2.Policy area(s) concerned in the ABM/ABB structure

1.3.Nature of the proposal

1.4.Objective(s)

1.5.Grounds for the proposal

1.6.Duration and financial impact

1.7.Management mode(s) planned

2.MANAGEMENT MEASURES

2.1.Monitoring and reporting rules

2.2.Management and control system

2.3.Measures to prevent fraud and irregularities

3.ESTIMATED FINANCIAL IMPACT OF THE PROPOSAL/INITIATIVE

3.1.Heading(s) of the multiannual financial framework and expenditure budget line(s) affected

3.2.Estimated impact on expenditure

3.2.1.Summary of estimated impact on expenditure

3.2.2.Estimated impact on operational appropriations

3.2.3.Estimated impact on appropriations of an administrative nature

3.2.4.Compatibility with the current multiannual financial framework

3.2.5.Third-party contributions

3.3.Estimated impact on revenue

LEGISLATIVE FINANCIAL STATEMENT

1.FRAMEWORK OF THE PROPOSAL/INITIATIVE

1.1.Title of the proposal/initiative

1.2.Policy area(s) concerned in the ABM/ABB structure 6  

1.3.Nature of the proposal/initiative

☒ The proposal/initiative relates to a new action 

◻ The proposal/initiative relates to a new action following a pilot project/preparatory action 7  

◻ The proposal/initiative relates to the extension of an existing action 

◻ The proposal/initiative relates to an action redirected towards a new action 

1.4.Objective(s)

1.4.1.The Commission's multiannual strategic objective(s) targeted by the proposal/initiative

1.4.2.Specific objective(s) and ABM/ABB activity(ies) concerned

1.4.3.Expected result(s) and impact

Specify the effects which the proposal/initiative should have on the beneficiaries/groups targeted.

1.4.4.Indicators of results and impact

Specify the indicators for monitoring implementation of the proposal/initiative.

1.5.Grounds for the proposal/initiative

1.5.1.Requirement(s) to be met in the short or long term

1.5.2.Added value of EU involvement

1.5.3.Lessons learned from similar experiences in the past

1.5.4.Compatibility and possible synergy with other appropriate instruments

1.6.Duration and financial impact

☒ Proposal/initiative of limited duration

–☒    Proposal/initiative in effect from 01/07/2014 to 31/12/2019

–◻    Financial impact from YYYY to YYYY

◻ Proposal/initiative of unlimited duration

–Implementation with a start-up period from YYYY to YYYY,

–followed by full-scale operation.

1.7.Management mode(s) planned 8  

◻ Direct management by the Commission

–◻ by its departments, including by its staff in the Union delegations;

–◻    by the executive agencies

☒Shared management with the Member States

◻ Indirect management by entrusting budget implementation tasks to:

–◻ third countries or the bodies they have designated;

–◻ international organisations and their agencies (to be specified);

–◻the EIB and the European Investment Fund;

–◻ bodies referred to in Articles 208 and 209 of the Financial Regulation;

–◻ public law bodies;

–◻ bodies governed by private law with a public service mission to the extent that they provide adequate financial guarantees;

–◻ bodies governed by the private law of a Member State that are entrusted with the implementation of a public-private partnership and that provide adequate financial guarantees;

–◻ persons entrusted with the implementation of specific actions in the CFSP pursuant to Title V of the TEU, and identified in the relevant basic act.

–If more than one management mode is indicated, please provide details in the ‘Comments’ section.

Comments

2.MANAGEMENT MEASURES

2.1.Monitoring and reporting rules

Specify frequency and conditions.

2.2.Management and control system

2.2.1.Risk(s) identified

2.2.2.Information concerning the internal control system set up

2.2.3.Estimate of the costs and benefits of the controls and assessment of the expected level of risk of error

2.3.Measures to prevent fraud and irregularities

Specify existing or envisaged prevention and protection measures.

3.ESTIMATED FINANCIAL IMPACT OF THE PROPOSAL/INITIATIVE

3.1.Heading(s) of the multiannual financial framework and expenditure budget line(s) affected

Not applicable

3.2.Estimated impact on expenditure

3.2.1.Summary of estimated impact on expenditure

Not applicable

3.2.2.Estimated impact on operational appropriations

–☒The proposal/initiative does not require the use of operational appropriations

–◻    The proposal/initiative requires the use of operational appropriations, as explained below:

3.2.3.Estimated impact on appropriations of an administrative nature

3.2.3.1.Summary

–☒    The proposal/initiative does not require the use of appropriations of an administrative nature

–◻    The proposal/initiative requires the use of appropriations of an administrative nature, as explained below:

3.2.3.2.Estimated requirements of human resources

–☒    The proposal/initiative does not require the use of human resources.

–◻    The proposal/initiative requires the use of human resources, as explained below:

3.2.4.Compatibility with the current multiannual financial framework

–☒    The proposal/initiative is compatible the current multiannual financial framework.

–◻    The proposal/initiative will entail reprogramming of the relevant heading in the multiannual financial framework.

–◻    The proposal/initiative requires application of the flexibility instrument or revision of the multiannual financial framework.

3.2.5.Third-party contributions

–The proposal/initiative does not provide for co-financing by third parties.

3.3.Estimated impact on revenue

–◻    The proposal/initiative has no financial impact on revenue.

–☒    The proposal/initiative has the following financial impact:

on own resources

on miscellaneous revenue

EUR million (to three decimal places)

For miscellaneous ‘assigned’ revenue, specify the budget expenditure line(s) affected.

Specify the method for calculating the impact on revenue.

(1) OJ C 326, 26.10.2012, p. 146

(2) OJ L 245, 29.9.2000, p.1167.

(3) OJ L 245, 29.9.2000, p.1, cf. OJ L 157, 30.6.2000, p.10

(4) OJ L 276, 28.10.2000, p. 45.

(5) OJ L 277, 21.10.2010, p. 30.

(6) ABM: activity-based management; ABB: activity-based budgeting.

(7) As referred to in Article 54(2)(a) or (b) of the Financial Regulation.

(8) Details of management modes and references to the Financial Regulation may be found on the BudgWeb site: http://www.cc.cec/budg/man/budgmanag/budgmanag_en.html

(9) As regards traditional own resources (customs duties, sugar levies), the amounts indicated must be net amounts, i.e. gross amounts after deduction of 25 % for collection costs.

EUROPEAN COMMISSION

Brussels, 8.2.2017

COM(2017) 65 final

ANNEX

to the

Proposal for a Council Decision

on the position to be adopted on behalf of the European Union within the EU-Mexico Joint Committee relating to amendments to Annex III to Decision No 2/2000 of the EC-Mexico Joint Council of 23 March 2000, concerning the definition of the concept of originating products and methods of administrative cooperation

DECISION No X/XXXX OF THE EUROPEAN UNION-MEXICO JOINT COMMITTEE

of XX XXXXXX XXXX

relating to amendments to Annex III to Decision No 2/2000 of the EC-Mexico Joint Council of 23 March 2000, concerning the definition of the concept of originating products and methods of administrative cooperation

THE JOINT COMMITTEE,

Having regard to Decision No 2/2000 of the EC-Mexico Joint Council of 23 March 2000 (hereinafter ‘Decision No 2/2000’), and its Annex III, and in particular Article 38 thereof,

Whereas:

(1)    Annex III to Decision No 2/2000 sets out the rules of origin for the products originating in the territory of the Parties to the Agreement.

(2)    The product specific rules of origin set out in Appendix II to Annex III to Decision No 2/2000 for products classified in Harmonized System headings 2914 and 2915 should be amended to allow the temporary application from 1 July 2014 to 31 December 2019 of the product specific rules of origin set out in notes 2 and 3 in Appendix II(a) to Annex III to Decision No 2/2000 and be updated to allow a modernised product specific rule of origin in line with recent trade agreements. It is considered appropriate to apply the new extension retroactively from 1 July 2014 in order avoid disruption in existing economic conditions.

(3)    Appendix V to Annex III to Decision No 2/2000 sets out the time-limit for each Party to accept an EUR.1 movement certificate issued retrospectively as referred to in Article 17(3) of that Annex, or for the exporter to present an invoice declaration to the customs authority of the importing Party after exportation of the products as provided for in Article 20(6) of Annex III to Decision No 2/2000. 

(4)    For products falling under Harmonized System headings 2914 and 2915 imported into the EU in the period from 1 July 2014 to 30 June 2015, the period of presentation should be extended to three years to take into account the retroactive amendments to the product specific rules of origin for those products.

(5)    The title of Appendix V to Annex III to Decision No 2/2000 should be amended to align it with the changed time-limit and with Article 17(3) and Article 20(6) of Annex III to Decision No 2/2000.

(6)    Annex III to Decision No 2/2000 of the EC-Mexico Joint Council should therefore be amended accordingly,

HAS DECIDED AS FOLLOWS:

Article 1

1. Appendix II to Annex III to Decision No 2/2000 is amended as set out in Annex I to this Decision.

2. Appendix V to Annex III to Decision No 2/2000 is replaced as set out in Annex II to this Decision.

Article 2

This Decision shall enter into force 45 days after the day of its adoption.

It shall apply from 1 July 2014.

Done at XXXX, XX XXXX 2017

For the Joint Committee

ANNEX I

Appendix II to Annex III to Decision No 2/2000 is amended as follows:

(1)     the following entry is inserted:

* Applicable from 1 July 2014 to 31 December 2019.

** A “chemical reaction” is a process (including a biochemical process) which results in a molecule with a new structure by breaking intramolecular bonds and by forming new intramolecular bonds, or by altering the spatial arrangement of atoms in a molecule.

The following processes should not be considered for purposes of origin:

(a)dissolving in water or other solvents;

(b)the elimination of solvents including solvent water; or

(c)the addition or elimination of water of crystallization."

(2)    the entry for HS heading 2915 is replaced by the following:

*    Applicable from 1 July 2014 to 31 December 2019.

** A “chemical reaction” is a process (including a biochemical process) which results in a molecule with a new structure by breaking intramolecular bonds and by forming new intramolecular bonds, or by altering the spatial arrangement of atoms in a molecule.

The following processes should not be considered for purposes of origin:

(a)    dissolving in water or other solvents;

(b)    the elimination of solvents including solvent water; or

(c)    the addition or elimination of water of crystallization."

ANNEX II

Appendix V to Annex III to Decision No 2/2000 is replaced by the following:

"Appendix V

PERIOD OF TIME FOR ACCEPTANCE BY THE CUSTOMS AUTHORITY OF AN EUR.1 MOVEMENT CERTIFICATE ISSUED RETROSPECTIVELY IN ACCORDANCE WITH ARTICLE 17(3) OF ANNEX III AND FOR THE PRESENTATION OF AN INVOICE DECLARATION IN ACCORDANCE WITH ARTICLE 20 (6) OF THAT ANNEX

1. For imports to the European Union: The period of time is two years from the time when the products to which the EUR.1 movement certificate relates are imported. For products falling under HS heading ex 2914 and 2915 as set out in Appendix II, having entered the European Union between 1 July 2014 and 30 June 2015, the period of time is three years from the time when the products to which the EUR.1 movement certificate relates are imported.

2. For imports to Mexico: The period of time is one year from the time when the products to which the EUR.1 movement certificate relates are imported."