Implementation of the regional convention of pan euro med rules of origin
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Implementation of the regional Convention of Pan-Euro-Med rules of origin. TAXUD – Unit B3 Rules of origin. 30-31 October 2012. Content. 1) PEM Convention – state of play of the ratification process 2) how to apply the Convention? - entry into force - entry into application

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Implementation of the regional Convention of Pan-Euro-Med rules of origin

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Implementation of the regional convention of pan euro med rules of origin

Implementation of the regional Convention of Pan-Euro-Med rules of origin

TAXUD – Unit B3 Rules of origin

30-31 October 2012


Content

Content

  • 1) PEM Convention – state of play of the ratification process

  • 2) how to apply the Convention?

  • - entry into force

    - entry into application

    • practicalities

      3) Action plan


Ratification process

Ratification process

9 Contracting Parties for which the Convention has entered into force

Date of: Signature Ratification Entry info force

Norway 15/06/2011 09/11/2011 01/01/2012

Switzerland 15/06/2011 28/11/2011 01/01/2012

Liechtenstein 15/06/2011 28/11/2011 01/01/2012

Croatia 15/06/2011 20/01/2012 01/03/2012

Iceland 30/06/2011 12/03/2012 01/05/2012

Albania 27/06/2011 05/03/2012 01/05/2012

European Union 15/06/2011 26/03/2012 01/05/2012

Montenegro 15/06/2011 02/07/2012 01/09/2012

Former Yugoslav15/06/2011 14/06/2012 01/08/2012

Republic of Macedonia


Ratification process1

Ratification process

5 Contracting Parties for which the Convention has not yet entered into force (which signed but not ratified):

Date of Signature

FaroeIslands15/06/2011

Jordan07/07/2011

Turkey04/11/2011

Morocco18/04/2012

Algeria05/10/2012

NB: 9 other Contracting Parties (Bosnia and Herzegovina, Egypt, Israel, Kosovo*, Lebanon, Palestinian Authority, Serbia, Syria, Tunisia) neither signed nor ratified the Convention yet.

Source: website of the Council of the EU, http://www.consilium.europa.eu/policies/agreements/search-the-agreements-database?lang=en&command=details&id=297&lang=en&aid=2010035&doclang=en


Pem convention entry into force

PEM Convention - entry into force

  • - The Convention has entered into force after the exchange of the instrument of the ratification was done by first three Contracting Parties (Article 10 of the Convention).

  • - Norway, Switzerland, Lichtenstein, 1 January 2012

  • - EU joined the Convention on 1 May 2012, publication in the EU Official Journal still pending

  • - entry into force allows to participate in the institutional set-up (Joint Committee). No impact on applicable rules of origin and cumulation yet.


Pem convention how to apply diagonal cumulation

PEM Convention – how to apply diagonal cumulation?

  • - Entry into application= cumulation on the basis of application of the Convention's RoO in a "relevant agreement“ (see Article 1, 2 of the Convention, Article 3 of Appendix 1)

  • - Phasing in of the Convention = Amendment to Origin Protocols, which should be replaced by a reference to the Convention (including the appendices).

  • - applicability depends on the entry into force of the reference to the Convention in FTAs, and not the entry into force of the PEM Convention


Pem convention how to apply diagonal cumulation1

PEM Convention – how to apply diagonal cumulation?

  • Ultimate target:

  • - all Contracting Parties sign, ratify, and create references to the Convention in their FTAs

  • - a new matrix, covering all Contracting Parties, with the dates of entry into application of the Convention in respective FTAs in will be published

  • - new possibilities for diagonal cumulation (incorporation of Western Balkans)

  • - this will enable to introduce the revision of RoO


Pem convention how to apply diagonal cumulation2

PEM Convention – how to apply diagonal cumulation?

  • Transitional period

  • - aim: expand cumulation possibilities, prevent any disruption to trade

  • - two systems working in parallel:

    • PEM and SAA cumulation

    • Cumulation based on the Convention

  • - introduction of references to the Convention in FTAs

  • - a new matrix (with WB) is published with the dates of entry into application the references to the Convention in respective FTAs

  • - timeframe: till a set date (end of 2014) or till the revised rules of origin are adopted by the Joint Committee


  • Diagonal cumulation under the convention in the transitional period

    Diagonal cumulation under the Convention in the transitional period

    • - cumulation is possible between the Contracting Parties independently of the question whether the Convention has ever entered into force for them …

    • - … PROVIDED that the three traditional conditions of Article 3 on cumulation apply:

      1) FTA in force

      2) Identical RoO, and

      3) Matrix published

      [contextual interpretation and extensive meaning of the term "Contracting Parties"]

    Examples will be provided soon!


    Article 3 of appendix i to the convention

    Article 3 of appendix I to the Convention

    • 5.The cumulation provided for in this Article may be applied only provided that:

    • (a)a preferential trade agreement in accordance with Article XXIV of the General Agreement on Tariffs and Trade (GATT) is applicable between the Contracting Parties involved in the acquisition of the originating status and the Contracting Party of destination;

    • (b)materials and products have acquired originating status by the application of rules of origin identical to those given in this Convention;

    • and

    • (c)notices indicating the fulfilment of the necessary requirements to apply cumulation have been published in the Official Journal of the European Union (C series) and in the Contracting Parties which are party to the relevant Agreements, according to their own procedures.


    Implementation of the regional convention of pan euro med rules of origin

    New matrix - example


    Implementation of the regional convention of pan euro med rules of origin

    New matrix (extract) - example

    NB: for the Western Balkans  only the dates of entry into application of the references to the PEM Convention


    Implementation of the regional convention of pan euro med rules of origin

    Diagonal cumulation under the Convention in the transitional period

    Cumulation EU – Turkey – Meds – EFTA

    • no trade disruptions (old PEM system)

    • RoO are identical

      Cumulation EU – Turkey – Western Balkans

    • no trade disruptions (old SAA system)

    • RoO are identical (on condition that differences in certification between SAP and Convention are solved)


    Implementation of the regional convention of pan euro med rules of origin

    • Cumulation EU (Turkey) – Western Balkans – EFTA

      • New cumulation possibility (SAP+)

      • Conditions:

        • FTAs  FTAs: EFTA- Albania, -Croatia, -Macedonia, -Montenegro, -Serbia already in force

        • Identical RoO Not (cumulation provisions in current Protocols and the Convention differ), until

        • 1) references to the Convention are created in all FTAs:

          • EU -EFTA add WB

          • EU-Turkey-WB (SAP) add EFTA

          • Turkey-EFTA add WB

          • Turkey-WB  add EFTA

          • WB (CEFTA) add EFTA

            2) Problem of certification solved (SAP vs. Convention)


    Implementation of the regional convention of pan euro med rules of origin

    • Cumulation EU (Turkey) – Western Balkans – Meds

    • Cumulation Western Balkans – Meds – EFTA

      • New cumulation possibility

      • Conditions:

        • FTAs  no WB-Meds FTAs yet in force

        • Identical RoO  If any new WB-Meds FTA is force it will be easy to introduce RoO of the Convention automatically (attention : certification, and exclusions). Fulfilled only if there are references to the Convention.


    Implementation of the regional convention of pan euro med rules of origin

    CONTRACTING PARTIES OF THE PEM CONVENTION

    WESTERN BALKANS

    Albania

    Bosnia and Herzegovina

    Croatia

    Kosovo*

    the former Yugoslav Republic of

    Macedonia

    Montenegro

    Serbia

    PEM system of cumulation

    EU

    SAA

    cumulation

    Turkey

    EFTA

    Norway

    Switzerland Lichtenstein

    Iceland

    MEDS

    Algeria

    Egypt

    Israel

    Jordan

    Lebanon

    Morocco

    Syria

    Tunisia

    West Bank and Gaza Strip

    Faroe Islands


    Action plan 1

    Action plan (1)

    1) signature and ratification by the Contracting Parties – ongoing

    •  The Contracting Parties that have not yet done so are highly encouraged to sign and complete the ratification process.

      2) Organisation of the Joint Committee with settlement of the Rules of procedure if critical mass is reached (2013)

    •  draft rules of procedure will be tabled soon, written comments to be submitted, tbd during the next PEM WG


    Action plan 2

    Action plan (2)

    3) Implementation of the PEM Convention

    Examples how diagonal cumulation under the Convention will work in the transitional period will be tabled soon.

     Creation of the references to the Convention in FTAs (corresponding to the entry of the application) for all the Contracting Parties (between 2012 and 2014). Template will be tabled soon.

     A new matrix (comprising all Contracting Parties, including WB) will be published with the dates of entry into application the references to the Convention in FTAs


    Action plan 3

    Action plan (3)

    • 4) Revision of the Appendix I (Protocol with the list rules) is on-going. Possible revision of Appendix II (e.g. possible exclusions from scope of diagonal cumulation, etc.)

    • 5) requesting the agreement of the Contracting Parties for inviting the Eastern Partnership countries with whom the EU is currently negotiating FTAs to accede to the Convention.

    • 6) The Joint Committee will decide on the entry into force of the revised rules of origin (1 January2015 at the latest). The end of transitional period  only PEM Convention applies.


    Implementation of the regional convention of pan euro med rules of origin

    Contact:

    TAXUD, unit B3 (Rules of Origin)

    Email: [email protected]


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