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Article 44 Derogations

United Kingdom

Original text. Later amendments are not shown.

1.

Derogations from this Protocol may be adopted by the Customs Cooperation Committee, hereafter in this article referred to as ‘the Committee’, where the development of existing industries or the creation of new industries in the ESA States justifies them. The ESA State or States concerned shall, either before or when it submits the matter to the Committee, notify the Community of its request for a derogation together with the reasons for the request in accordance with paragraph 2. The Community shall respond positively to all the ESA States’ requests which are duly justified in conformity with this Article and which cannot cause serious injury to an established Community industry.

2.

In order to facilitate the examination by the Committee of requests for derogation, the ESA State or States making the request shall, by means of the form given in Annex VII to this Protocol, furnish in support of its request the fullest possible information covering in particular the points listed below:

  • description of the finished product,

  • nature and quantity of materials originating in a third country,

  • nature and quantity of materials originating in the ESA States or the countries or territories, referred to in Articles 3 and 4 or the materials which have been processed there,

  • manufacturing processes,

  • value added,

  • number of employees in the enterprise concerned,

  • anticipated volume of exports to the Community,

  • other possible sources of supply for raw materials,

  • reasons for the duration requested in the light of efforts made to find new sources of supply,

  • other observations.

The same rules shall apply to any requests for extension. The Committee may modify the form.

3.

The examination of requests shall in particular take into account:

  1. (a)

    the level of development or the geographical situation of the ESA State or States concerned;

  2. (b)

    cases where the application of the existing rules of origin would significantly affect the ability of an existing industry in an ESA State to continue its exports to the Community, with particular reference to cases where this could lead to cessation of its activities;

  3. (c)

    specific cases where it can be clearly demonstrated that significant investment in an industry could be deterred by the rules of origin and where a derogation favouring the realisation of the investment program would enable these rules to be satisfied by stages.

4.

In every case an examination shall be made to ascertain whether the rules relating to cumulation of origin do not provide a solution to the problem.

5.

In addition, when a request for derogation concerns a least-developed or an island ESA State, its examination shall be carried out with a favourable bias having particular regard to:

  1. (a)

    the economic and social impact of the decision to be taken especially in respect of employment;

  2. (b)

    the need to apply the derogation for a period taking into account the particular situation of the ESA State concerned and its difficulties.

6.

In the examination of requests, special account shall be taken, case by case, of the possibility of conferring originating status on products which include in their composition materials originating in neighbouring developing countries, least developed countries or developing countries with which one or more ESA States have special relations, provided that satisfactory administrative cooperation can be established.

7.

Without prejudice to paragraphs 1 to 6, the derogation shall be granted where the value added to the non-originating products used in the ESA State concerned is at least 45 % of the value of the finished product, provided that the derogation is not such as to cause serious injury to an economic sector of the Community or of one or more Member States.

8.

Without prejudice and in addition to paragraphs 1 to 7, derogations concerning canned tuna and tuna loins shall be granted within an annual quota of 8 000 tonnes for canned tuna and within an annual quota of 2 000 tonnes for tuna loins. Applications for such derogations shall be submitted by the ESA States in accordance with the abovementioned quota to the Committee, which shall grant them automatically and put them into force by means of a decision.

9.

The Committee shall take steps necessary to ensure that a decision is reached as soon as possible and in any case not later than seventy-five working days after the request is received by the EC Co-chairman of the Committee. If the Community does not inform an ESA State of its position on the request within this period, the request shall be deemed to have been accepted.

10.
  1. (a)

    The derogation shall be valid for a period, generally of five years, to be determined by the Committee.

  2. (b)

    The derogation decision may provide for renewals without a new decision of the Committee being necessary, provided that the ESA State or States concerned submit, three months before the end of each period, a proof that they are still unable to meet the conditions of this Protocol which have been derogated from. If any objection is made to the extension, the Committee shall examine it as soon as possible and decide whether to prolong the derogation. The Committee shall proceed as provided for in paragraph 9. All necessary measures shall be taken to avoid interruptions in the application of the derogation.

  3. (c)

    In the periods referred to in subparagraphs (a) and (b), the Committee may review the terms for implementing the derogation should a significant change be found to have taken place in the substantive factors governing the decision to grant the derogation. On conclusion of its review the Committee may decide to amend the terms of its decision as regards the scope of derogation or any other condition previously laid down.