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Document 52022PC0215

Proposal for a COUNCIL DECISION on the position to be taken on behalf of the European Union in the Trade Specialised Committee on customs cooperation and rules of origin regarding the consultation laid down in Article 63(3) of the Trade and Cooperation Agreement between the European Union and the European Atomic Energy Community, of the one part, and the United Kingdom of Great Britain and Northern Ireland, of the other part

COM/2022/215 final

Date of document:
16/05/2022
Date of dispatch:
16/05/2022; Forwarded to the Council
Date of dispatch:
16/05/2022; Forwarded to the Parliament
Date of end of validity:
26/07/2022; Adopted by 32023D2505
Author:
European Commission, Directorate-General for Taxation and Customs Union
Responsible body:
TAXUD
Form:
Proposal for a decision
Treaty:
Treaty on the Functioning of the European Union
Legal basis:
Adopted act:
Link
Link
Link
Select all documents mentioning this document
Instruments cited:

Brussels, 16.5.2022

COM(2022) 215 final

2022/0153(NLE)

Proposal for a

COUNCIL DECISION

on the position to be taken on behalf of the European Union in the Trade Specialised Committee on customs cooperation and rules of origin regarding the consultation laid down in Article 63(3) of the Trade and Cooperation Agreement between the European Union and the European Atomic Energy Community, of the one part, and the United Kingdom of Great Britain and Northern Ireland, of the other part


EXPLANATORY MEMORANDUM

1.Subject matter of the proposal

The Trade Specialised Committee (TSC) on customs cooperation and rules of origin plans to adopt a decision on consultations under Article 63(3) of the Trade and Cooperation Agreement between the European Union and the European Atomic Energy Community, of the one part, and the United Kingdom of Great Britain and Northern Ireland, of the other part. This proposal concerns the decision establishing the position to be taken on this matter on the EU’s behalf in the TSC on customs cooperation and rules of origin.

2.Context of the proposal

2.1.The EU-UK Trade and Cooperation Agreement

The Trade and Cooperation Agreement between the European Union and the European Atomic Energy Community, of the one part, and the United Kingdom of Great Britain and Northern Ireland, of the other part (‘the Agreement’), grants duty‑and quota‑free access to imports in a party to the Agreement originating in the other party if they fulfil the rules of origin requirements. Article 63 of the Agreement sets out a procedure to verify the origin of the products. It also states that the parties must hold consultations if a party denies preferential treatment to a product of the other party even though the exporting party has provided a positive opinion confirming the origin of the product.

2.2.The TSC on customs cooperation and rules of origin

According to Article 8(1)(c) of the Agreement, the TSC’s remit covers matters of:

- Chapters 2 and 5 of Title I of Heading One of Part Two of the Agreement;

- the Protocol on mutual administrative assistance in customs matters; and

- the provisions on customs enforcement of intellectual property rights, fees and charges, customs valuation and repaired goods.

According to Article 121(2)(d) of the Agreement, the TSC on customs cooperation and rules of origin may adopt decisions or recommendations on the procedures for consultations under Article 63. It may also adopt decisions or recommendations on any technical or administrative matters relating to the implementation of Chapter 2 of Title I. This includes interpretative notes aimed at ensuring the uniform application of the rules of origin.

2.3.The envisaged act of the TSC on customs cooperation and rules of origin

The envisaged act aims to set out the rules for consultations between the parties if a party denies preferential treatment to a product of the other party even though the exporting party has provided a positive opinion on the origin of the product.

The envisaged act will become binding on the parties under Article 10 and Article 121(2)(d) of the Agreement. It will implement Article 63(3) of the Agreement. Under this article, the TSC on customs cooperation and rules of origin must set out a consultation procedure, for consultations the parties must hold if they disagree on the application of the rules of origin. Specifically, this is the case when a party denies preferential treatment to a product of the other party even though the exporting party has provided a positive opinion confirming the origin of the product after a verification procedure. Under the proposed rules, the parties must hold consultations in a flexible manner, aiding communication between the two parties and justifying the denial of preferential treatment.

Rule 1 sets out how a party may request to hold consultations with the other party. It also appoints the TSC secretariat as the contact point.

Rule 2 sets the deadlines for convening and concluding consultation sessions. It also proposes several possibilities for how they may be held.

Rule 3 requires the parties to announce the intended composition of their respective delegations before each session.

Rule 4 lays down the language arrangements for the consultations and the relevant documents to be distributed beforehand.

Rule 5 sets out the drafting arrangements and deadlines for the minutes of the sessions.

Rule 6 requires the parties to attempt to reach a mutually satisfactory solution. It also clarifies when the consultation period will be considered to have expired, stating that it will not be considered to have expired if the consultation did not take place due to causes attributable to one of the parties.

3.Position to be taken on the EU’s behalf

The Council should establish the position that the EU must take in the TSC on customs cooperation and rules of origin on adopting the rules of procedure for consultations under Article 63(3) of the Agreement. This will result in better regulation and greater transparency.

The proposed procedure does not affect the substance of the rules of origin under the Agreement.

4.Legal basis

4.1.Procedural legal basis

4.1.1.Principles

Article 218(9) of the Treaty on the Functioning of the European Union (TFEU) enables decisions establishing ‘the positions to be adopted on the Union’s behalf in a body set up by an agreement, when that body is called upon to adopt acts having legal effects, with the exception of acts supplementing or amending the institutional framework of the agreement.’

The concept of ‘acts having legal effects’ includes acts that have legal effects because of the rules of international law governing the body in question.

4.1.2.Application to the present case

The Agreement has established the TSC on customs cooperation and rules of origin. Therefore, it is a body set up by an agreement.

The act the TSC on customs cooperation and rules of origin is called upon to adopt is an act that has legal effects. It will be binding on the parties pursuant Article 10 and Article 121(2)(d) of the Agreement.

The envisaged act does not supplement or amend the institutional framework of the Agreement.

Therefore, the procedural legal basis for the proposed decision is Article 218(9) TFEU.

4.2.Substantive legal basis

4.2.1.Principles

The substantive legal basis for a decision under Article 218(9) TFEU depends primarily on the objective and content of the envisaged act on which a position is taken on the EU’s behalf. The envisaged act can have two aims or two components, one of which can be identified as the main one and the other as merely incidental. In this case, the decision under Article 218(9) TFEU must be founded on a single substantive legal basis, namely the one for the main or predominant aim or component.

4.2.2.Application to the present case

The main objective and content of the envisaged act is the establishment of a procedure for consultations if a party denies preferential treatment to a product of the other party under Article 63(3) of the Agreement.

4.3.Conclusion

The legal basis of the proposed decision should be the first subparagraph of Article 207(4) TFEU, read in conjunction with Article 218(9) TFEU.

2022/0153 (NLE)

Proposal for a

COUNCIL DECISION

on the position to be taken on behalf of the European Union in the Trade Specialised Committee on customs cooperation and rules of origin regarding the consultation laid down in Article 63(3) of the Trade and Cooperation Agreement between the European Union and the European Atomic Energy Community, of the one part, and the United Kingdom of Great Britain and Northern Ireland, 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 Trade and Cooperation Agreement establishing the relationship between the European Union and the European Atomic Energy Community, of the one part, and the United Kingdom of Great Britain and Northern Ireland, of the other part ('the Agreement'), was concluded by Council Decision 2020/2252 of 29 December 2020 and entered into force on 1 May 2021.

(2)The Agreement includes a consultation procedure in case of denial of preferences in Article 63(3). Pursuant to 121(2)(d) of the TCA, the Trade Specialised Committee on customs cooperation and rules of origin (“the Committee”) established by Article 8(1)(c) of the Agreement may adopt decisions or recommendations on the procedures for the consultation established in Article 63 (3) of the TCA. Pursuant to Article 10 TCA, decisions of the Committee are binding on the parties.

(3)It is appropriate to establish by a council decision the position to be taken on the EU's behalf within the Committee as the decision of the Committee on the rules of consultations established in Article 63 (3) of the TCA will have legal effects.

(4)Establishing rules for the consultation procedure provided for in Article 63(3) TCA will bring clarity and ensure transparency in case a party decides to deny the preferential tariff treatment to a product of the other party against the positive opinion of the latter confirming its originating status.

(5)The position of the Union within the Committee should therefore be based on the draft decision of the Committee in Annex to this Decision,

HAS ADOPTED THIS DECISION:

Article 1

The position to be taken on the Union's behalf within the Trade Specialised Committee on customs cooperation and rules of origin established by the Agreement shall be based on the draft decision of this Committee attached to this Decision.

Article 2

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

Article 3

This Decision is addressed to the Commission.

Done at Brussels,

   For the Council

   The President

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Brussels, 16.5.2022

COM(2022) 215 final

ANNEX

to the

Proposal for a Council Decision

on the position to be taken on behalf of the European Union in the Trade Specialised Committee on customs cooperation and rules of origin regarding the consultation laid down in Article 63(3) of the Trade and Cooperation Agreement between the European Union and the European Atomic Energy Community, of the one part, and the United Kingdom of Great Britain and Northern Ireland, of the other part


ANNEX

Draft

DECISION No … OF THE EU-UK TRADE SPECIALISED COMMITTEE

on customs cooperation and rules of origin

of

the Trade and Cooperation Agreement between the European Union and the European Atomic Energy Community, of the one part, and the United Kingdom of Great Britain and Northern Ireland, of the other part, concerning the consultation procedure in case of denial of preferences

THE TRADE SPECIALISED COMMITTEE on customs cooperation and rules of origin,

Having regard to the Trade and Cooperation Agreement establishing the relationship between the European Union and the European Atomic Energy Community, of the one part, and the United Kingdom of Great Britain and Northern Ireland, of the other part, (the 'Agreement'), and in particular Article 63(3) thereto concerning the establishment of a consultation procedure in case of denial of preferences,

Whereas:

(1)    The Trade and Cooperation Agreement establishing the relationship between the European Union and the European Atomic Energy Community, of the one part, and the United Kingdom of Great Britain and Northern Ireland, of the other part ('the Agreement'), was concluded by Council Decision 2020/2252 of 29 December 2020 and entered into force on 1 May 2021.

(2)    Article 121(2)(d) of the Agreement provides that the Trade Specialised Committee on customs cooperation and rules of origin (‘the Committee’) may adopt decisions or recommendations on the procedure for the consultation established in Article 63(3) of the Agreement.

(3)    Article 63(3) of the Agreement provides that when the customs authority of the importing party notifies the customs authority of the exporting party of its intention to deny the preferential tariff treatment after the receipt of the opinion of the exporting party confirming the origin of the product, consultations shall be held at the request of either party within three months after the date of that notification, and may take place in accordance with the procedure set by the Committee.

(4)    In accordance with Article 63(3) of the Agreement, procedural rules are to be established to facilitate an agreement between the parties in the case of denial of preferences against the opinion of the other party confirming the origin of the product.

HAS ADOPTED THIS DECISION:

Article 1

The Consultation referred to in Article 63(3) of the Agreement shall take place in accordance with the rules of procedure specified in the Annex to this decision.

Article 2

This decision shall enter into force on the date of its adoption.

It shall apply from the same day.

Done at…

   For the Trade Specialised Committee

The EU Co-chair and the UK Co-chair



ANNEX

PROCEDURE FOR CONSULTATIONS

IN ACCORDANCE WITH THE SECOND SUBPARAGRAPH OF ARTICLE 63(3) OF THE EU-UK TRADE AND COOPERATION AGREEMENT

Rule 1

1.After the customs authority of the importing party has notified the customs authority of the exporting party of its intention to deny the preferential tariff treatment, a party may submit a request for consultations to the other party pursuant to the second subparagraph of Article 63(3) of the EU-UK Trade and Cooperation Agreement (‘the Agreement’).

2.The request shall be made by the member of the Secretariat of the Trade Specialised Committee on customs cooperation and rules of origin (‘the Committee’) of the requesting party to the member of the secretariat of the other party by e-mail or, where appropriate, by any other means of [tele]communication that provides a record of the sending thereof. Unless proven otherwise, such request shall be deemed to be received on the date of its sending.

Rule 2

1.Consultations shall be convened and concluded within three months after the date of the notification of the intention referred to in Rule 1, unless the parties have agreed to extend the period for consultations. During that period, the parties may meet one or several times.

2.Consultations shall be held in person or by any other means of communication agreed by the parties. If held in person, consultations shall take place in the territory of the party to which the consultations requested are addressed, unless the parties agree otherwise.

Rule 3

15 calendar days in advance of each session of consultation, the Union and the United Kingdom respectively shall inform the other party via the Secretariat of the intended composition of their respective delegations and shall specify the name and function of each member of the delegation.

Rule 4

1.The consultation shall be held in English.

2.Written documents relevant for the consultation shall be circulated via the Secretariat to the other party. They may be in any of the official languages of the Union.

Rule 5

1.Draft minutes of each consultation session shall be drawn up by the official acting as member of the Secretariat of the respondent party hosting the meeting within 8 calendar days. The draft minutes shall be transmitted for comments to the member of the Secretariat of the other party. The latter may submit comments within 8 calendar days.

2.The minutes shall summarise the consultation sessions, specifying where applicable:

(a)the documents submitted; 

(b)any statement that one of the parties requested to be entered in the minutes; and

(c)the conclusions reached which may include the extension of the duration of the consultation.

3.The minutes shall include as an annex a list of participants setting out for each of the delegations the names and functions of all individuals who attended the meeting.

4.The Secretariat shall adjust the draft minutes on the basis of the comments received. The draft minutes, as revised, shall be approved by the parties within 28 days of the date of the session, or by any other date agreed by the parties. Upon approval of the minutes, the agreement reached shall take effect between the parties at the session of consultations when that conclusion was adopted.

5.In the case that the consultations are held in writing, the result of the consultations shall be recorded in the minutes of the next meeting of the Committee. The agreement reached during the consultations shall take effect between the parties at the session of consultations when that conclusion was adopted.  

Rule 6

1.The parties shall make every attempt to arrive at a mutually satisfactory resolution of the matter within the period of consultation referred to in Rule 2. If the parties reach an agreement, this latter is binding on the parties.

2.For the purpose of the third subparagraph of Article 63(3) of the Agreement, the period of consultation referred to in Rule 2 shall be considered expired when it arrives at its term and the Parties do not agree to extend it, except when the consultation was not held for causes attributable to the importing party.

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