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Rules of origin in the fisheries sector – the ACP perspective Monday 7 th . March 2003, Brussels

Rules of origin in the fisheries sector – the ACP perspective Monday 7 th . March 2003, Brussels. Ross Denton Baker & McKenzie, London Ross.denton@bakernet.com. Overview. What is the purpose of the EU-ACP relationship? What are the functions of rules of origin?

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Rules of origin in the fisheries sector – the ACP perspective Monday 7 th . March 2003, Brussels

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  1. Rules of origin in the fisheries sector – the ACP perspectiveMonday 7th. March 2003, Brussels Ross Denton Baker & McKenzie, London Ross.denton@bakernet.com

  2. Overview • What is the purpose of the EU-ACP relationship? • What are the functions of rules of origin? • How do the EU-ACP rules of origin work in the fisheries sector? • What are the problems? • What might be the solutions?

  3. What is the objective of the EU-ACP relationship? • While there may be other, and other subsidiary objectives, development is the only important objective

  4. What are the functions of rules of origin? • To permit preferential trade by stopping or limiting trade deflection • The EU hints at building of trade blocs which protect EU industry from goods produced from cheap raw materials  trade deflection a function of tariffs  does the EU have more “lenient” rules of origin for raw, unprocessed goods, or goods that do not compete with EU products?

  5. ACP rules of origin - fish (e) products obtained by hunting or fishing conducted there (f) products of sea fishing and other products taken from the sea outside the territorial waters by their vessels (g) products made aboard their factory ships exclusively from products referred to in subparagraph (f)

  6. Basic test • Seems uncontroversial since: • Comprehensible • Easy to operate, i.e., not complex • But note . . . . . .

  7. “Their vessels” and “their factory ships” Only applies to vessels and factory ships (a) which are registered or recorded in an EC Member State, in an ACP State or in an OCT (b) which sail under the flag of an EC Member State, of an ACP State or of an OCT; (c) which are owned to an extent of at least 50 per cent by nationals of States party to the Agreement, or of an OCT, or by a company with its head office in one of these States or OCT, of which the Chairman of the Board of Directors or the Supervisory Board, and the majority of the members of such boards are nationals of States party to the Agreement, or of an OCT, and of which, in addition, in the case of partnerships or limited companies, at least half the capital belongs to those States party to the Agreement or to public bodies or nationals of the said States, or of an OCT; (d) of which at least 50 % of the crew, master and officers included, are nationals of States party to the Agreement, or of an OCT.

  8. “Their vessels” and “their factory ships” • Notwithstanding other rules, the Community shall recognise, upon request of an ACP State, that vessels chartered or leased by the ACP State be treated as "their vessels" to undertake fisheries activities in its exclusive economic zone under the following conditions: - that the ACP State offered the Community the opportunity to negotiate a fisheries agreement and the Community did not accept this offer; - that at least 50% of the crew, master and officers included are nationals of States party to the Agreement, or of an OCT; - that the charter or lease contract has been accepted by the ACP-EC Customs Cooperation Committee as providing adequate opportunities for developing the capacity of the ACP State to fish on its own account and in particular as conferring on the ACP State the responsibility for the nautical and commercial management of the vessel placed at its disposal for a significant period of time.

  9. ACP rules of origin – fish products Chapter 03 “Fish and crustaceans, molluscs and other aquatic invertebrates” • Manufacture in which all the materials of Chapter 3 used must be wholly obtained Chapter 16 “Preparations of meat, of fish or of crustaceans, molluscs or other aquatic invertebrates” • . . . All the materials of Chapter 3 used must be wholly obtained

  10. Rules of origin - fish products • One very strict test – wholly originating • “Local” fish can be caught by anyone and processed locally • Facilitates use of domestic product but does not allow partial use of imported products and so limits possibilities of economies of scale in factories • Use a different rule or add an alternative?

  11. Possible solutions • Use different rule or add second rule? • Is adding complexity helpful? In other sectors, complexity is not the answer – reduces incentive to export or fraud • Can ACP fisheries threaten the EU? Put another way, what is so special about tuna loins and canned tuna? • Article 38(8) gives limited access via a quota (2,000 and 8,000 T) • Why not have unlimited access subject to a quota and surge mechanism?

  12. Rules of origin in the fisheries sector – the ACP perspectiveMonday 7th. March 2003, Brussels Ross Denton Baker & McKenzie, London Ross.denton@bakernet.com

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