Paragraph 9 Circumvention

Hong Kong and the Community agree to cooperate fully in preventing the circumvention of these administrative arrangements by transhipment, re-routing of whatever other means.

The Community and Hong Kong note the well established and close cooperation which exists between the two parties in preventing and dealing with problems relating to the contravention through circumvention of the provisions of previous Agreements between the Community and Hong Kong, and, in particular, the mutually satisfactory solutions which have been reached on equivalent debiting of the corresponding quantitative limits.

The two parties reaffirm their willingness to strengthen this cooperation in all its aspects having regard to the administrative and technical procedures in force in the Community and Hong Kong for the implementation of these administrative arrangements.

Hong Kong confirms that its export control system permits the prompt debiting of circumvented amounts to the appropriate quantitative limits established under Article 2 of the ATC and previous Agreements.

Where information available to the Community as a result of the investigation carried out in accordance with the procedures set out in Protocol A constitutes evidence that products of Hong Kong origin subject to quantitative limits established under Article 2 of the ATC have been transhipped, re-routed or otherwise imported into the Community in circumvention of these administrative arrangements, the Community may request the opening of consultations in accordance with the procedures described in Article 12 (1) of these administrative arrangements, with a view to reaching agreement on an equivalent adjustment of the corresponding quantitative limits.

Should the parties be unable in the course of the consultations to reach a satisfactory solution within the period specified in Article 12 (1) of these administrative arrangements, the Community shall have the right, where clear evidence of circumvention has been provided, to deduct from the quantitative limits amounts equivalent to the products of Hong Kong origin.

Deduction of the relevant quantitative limits shall, as a general rule, be implemented in the following manner:

• where the evidence provided clearly establishes that the provisions of these administrative arrangements have been circumvented, Hong Kong shall, at the request of the Community, debit the circumvented amounts to the appropriate quantitative limits for the year in which the circumvention took place or for subsequent years, the timing and apportioning of such debiting being decided in consultation with the Community, to ensure that, where appropriate, such debiting may be satisfactorily implemented.

Should the consultation period provided for in Article 12 (1) of these administrative arrangements be sufficient to complete the examination of the evidence adduced the parties may agree to extend that period.