(1)

The quota system on footwear products set out in Council Regulation (EC) No 427/2003 of 3 March 2003 on a transitional product-specific safeguard mechanism for imports originating in the People’s Republic of China and amending Regulation (EC) No 519/94 on common rules for imports from certain third countries (2) expired on 1 January 2005.

(2)

On 7 December 2004, the Commission was informed by some Member States that it would be appropriate to impose surveillance measures on footwear products pursuant to Regulation (EC) No 3285/94.

(3)

The Community footwear industry is largely composed of small and medium-sized enterprises, most of which are located in regions with few other sources of employment. It is therefore vulnerable to competition from low-priced imports originating in particular in the People’s Republic of China.

(4)

In response to this import competition, the Community footwear industry has, in recent years, undergone an extensive restructuring by concentrating its output on more up-market products which are also the products that have been under quota. These products represent approximately 85 % of production in the Community footwear industry. This restructuring has entailed a marked reduction of capacity and workforce. Despite these efforts, the Community footwear industry continues to lose production and market share owing to cheap foreign imports.

(5)

Over the period 2000 to 2003, imports of footwear products originating in the People’s Republic of China not subject to quotas increased sharply both in absolute terms as well as in terms of share of the Community market, with prices that were substantially lower than the prices of equivalent products manufactured in the Community. The average increase in imports was 59 % between 2000 and 2003 and the average difference in prices was 21 %.

(6)

Given that prevailing market conditions for all footwear products are the same, it is expected that the recent liberalisation will lead to a similar substantial increase of imports. On the basis of recent trends in imports of footwear, the result of the 2005 removal of quotas could lead to a doubling in imports in the short term, with a likely consequent loss in market share for the Community industry of 6 % and a loss of 17 000 jobs. A threat of injury to Community producers for the purposes of Article 11 of Regulation (EC) No 3285/94 can therefore be deemed to exist.

(7)

This likely impact is so significant that the interests of the Community require that imports of certain footwear products of Chinese origin should be subject to prior Community surveillance in order to provide statistical information permitting rapid analysis of import trends. The footwear concerned, mainly medium to high quality footwear, is that for which significant production still remains in the Community and can be considered sensitive for that reason. Prior surveillance by means of an automatic import licensing regime applicable until 31 January 2006 would provide the fastest means of obtaining a clear picture of the early effects of the removal of these quotas as any retrospective system takes time to provide meaningful data.

(8)

It is also appropriate, in order to obtain an overall view of the trends in imports of footwear, to establish a retrospective customs-based surveillance system for imports of all footwear from all sources. This includes footwear requiring to be made subject to prior surveillance. When the retrospective system of surveillance is fully operational the prior surveillance can be terminated, at the latest by 31 January 2006.

(9)

The completion of the internal market requires that the formalities to be accomplished by Community importers be identical wherever the goods may be cleared.

(10)

In order to facilitate the collection of data, the release for free circulation of the products covered by prior surveillance should be made subject to presentation of a surveillance document meeting uniform criteria. That document should, on simple application by the importer, be endorsed by the authorities of the Member States within a certain period but without the importer thereby acquiring any right to import. The document should therefore be valid only as long as the import rules remain unchanged; it should be valid throughout the Community.

(11)

In order to ensure transparency the Member States and the Commission should exchange the information resulting from Community surveillance as fully as possible.

(12)

The issue of surveillance documents, while subject to standard conditions at Community level, should be the responsibility of the national authorities.

(13)

It is desirable for this Regulation to enter into force on the day of its publication in order to collect the data as soon as possible,