Division 2 As a result of those negotiations it was agreed to amend the Agreement as follows:

The text of Article 3 is replaced by the following:

‘Article 3

1.

Vietnam agrees to limit its exports to the Community of products listed in Annex II to the amounts set out therein for each Agreement year.

In the allocation of quantities for export to the Community, Vietnam shall not discriminate against companies fully or partially owned by Community investors.

2.

Exports of textile products set out in Annex II shall be subject to a double-checking system as specified in Protocol A.

3.

In administering the quantitative limits referred to in paragraph 1, Vietnam shall ensure that the Community textile industry benefits from utilisation of such limits.

In particular, Vietnam undertakes to reserve, as a priority, 30 % of the quantitative limits for firms in that industry for a period of three months beginning on 1 January of each year. For this purpose, contracts made with such firms during the period in question and submitted to the Vietnamese authorities during the same period shall be taken into consideration.

4.

To facilitate the implementation of these provisions, the Community shall provide the competent Vietnamese authorities, before 31 October of each year, with a list of interested manufacturers and processors and of the indicative quantity of products requested for each firm. To this end, the firms concerned must make direct contact with the relevant Vietnamese bodies during the period specified in paragraph 3, in order to verify what quantities are available under the reserve referred to in paragraph 3.

5.

Subject to the provisions of this Agreement, and without prejudice to the quantitative system applicable to products subject to the operations referred to in Article 4, the Community undertakes to suspend the application of quantitative restrictions currently in force in respect of products covered by this Agreement.

6.

Exports of products referred to in Annex IV to the Agreement which are not subject to quantitative limits shall be subject to the double-checking system referred to in paragraph 2.’

The text of Article 7 is replaced by the following:

‘Article 7

Vietnam shall ensure that the supply of raw silk and silk waste to Community industry shall be made at conditions not less favourable than to Vietnamese domestic users.’

The text of Article 9 is replaced by the following:

‘Article 9

1.

In any Agreement year, advance use of a portion of the quantitative limit established in Annex II for the following year shall be authorised for each category of products up to 5 % of the quantitative limit for the current year.

Amounts delivered in advance shall be deducted from the corresponding quantitative limit established for the following year.

2.

Carryover to the corresponding quantitative limit for the following year of amounts not used during any given Agreement year shall be authorised for each product category up to 7 % of the specific quantitative limit for the current year.

3.

Transfers between categories 4, 5, 6, 7 and 8 shall be limited to 7 % of the quantitative limit laid down for the category to which the transfer is made. Amounts may be transferred into any category in Groups II, III, IV and V from any category in Groups I, II, III, IV and V up to 7 % of the specific quantitative limit laid down for the category to which the transfer is made.

4.

The table of equivalence applicable to the transfers referred to above is given in Annex I to this Agreement.

5.

The increase in any category of products resulting from the cumulative application of the provisions in paragraphs 1, 2 and 3 during an Agreement year must not exceed 17 %.

6.

The Vietnamese authorities shall give the Community prior notification of any recourse to the provisions of paragraphs 1, 2 and 3.’

The text of Article 10(2) is replaced by the following:

‘2.

Where the Community finds that, under existing arrangements for administrative control, the level of imports of products in a given category covered by paragraph 1 originating in Vietnam exceeds the preceding year's total volume of imports into the Community from all sources of products in that category by the following percentage:

• 1 % for product categories in Group I,

• 5 % for product categories in Group IIA,

• 2,5 % for product categories in Group IIB,

• 10 % for product categories in Group III,

• 10 % for product categories in Group IV,

• 10 % for product categories in Group V,

it may request the opening of consultations in accordance with the procedure described in Article 17, with a view to reaching agreement on an appropriate restraint level for the products in that category.’

The text of Article 19(1) is replaced by the following:

‘1.

This agreement shall enter into force on the first day of the month following the date on which the Contracting Parties notify each other of the completion of the procedures necessary for this purpose. It shall be applicable until 31 December 2000. Thereafter, its application shall be automatically extended for a period of one year, unless either Party notifies the other by 30 June 2000 at the latest that it does not agree with the extension.

In the event of extension of the Agreement up to 31 December 2001, the quantitative limits for the categories of products set out in Annex II and in the Annex to Protocol B for the year 2001 shall be the amounts set out in those annexes for the year 2000 increased by the percentage of growth applied for each category of products between the years 1999 and 2000.’

Annex I to the Agreement is replaced by Annex A to this letter.

Annex II to the Agreement is replaced by Annex B to this letter.

Annex III to the Agreement is deleted.

Annex IV to the Agreement is replaced by Annex C to this letter.

The Annex to Protocol B of the Agreement is replaced by Annex D to this letter.

Protocol C of the Agreement is replaced by Annex E to this letter.

Annex I to the Protocol of Understanding concerning access to the Vietnamese market for products of the textile and clothing sector originating in the European Community attached to the Agreement initialled on 1 August 1995 is replaced by Annex F to this letter.

An Agreed Minute on non-discrimination in the implementation of Article 3(1) is attached in Annex G to this letter.

An Agreed Minute on transitional measures in the implementation of Article 3(3) and (4) during 1998 is attached in Annex H to this letter.

An Agreed Minute on the conditions applicable to goods produced for the domestic market by companies operating in Vietnam fully or partially owned by Community investors is attached in Annex J to this letter.

An Agreed Minute on the establishment of an electronic link between the central Vietnamese licensing office and the European Commission's central licence management system (SIGL) is attached in Annex K to this letter.

An Agreed Minute on the implementation of the irrevocable duty reduction referred to in paragraph 4 of the Protocol of Understanding concerning access to the Vietnamese market for products of the textile and clothing sector originating in the European Community, attached to the Agreement initialled on 1 August 1995 is attached in Annex L to this letter.

An Agreed Minute on consultations regarding categories 1, 2 and 3 is attached in Annex M to this letter.