21997A0222(01)

21997A0222(01) 21997A0222(01) Agreement between the European Community, of the one part, and the Government of Denmark and the Home Government of the Faroe Islands, of the other part Official Journal L 053 , 22/02/1997 P. 0002 - 0135  Dates: of document:   06/12/1996 of effect:   01/01/1997; Entry into force See Art 40.3; See OJ L 53 P. 136 of signature:   06/12/1996; Brussels end of validity:   99/99/9999 Authentic language: The official languages ; German ; English ; Danish ; Spanish ; Finnish ; French ; Greek ; Italian ; Dutch ; Portuguese ; Swedish ; Other than Community language ; Faroese Author: European Community ; Denmark ; Faroe Islands Subject matter: Commercial policy ; External relations ; Fisheries policy Directory code: 04202000 ; 11401040 EUROVOC descriptor: customs duties ; economic activity ; Denmark ; EC trade agreement ; Faeroes Legal basis: 192E113................... Adoption 192E228-P2F1.............. Adoption Amendment to: 291A1231(01)...... Repeal........ DP1/1/97 295A0310(01)...... Repeal........ DP1/1/97 Amended by: Adopted by.... 397D0126.......... Amended by.... 298D0325(01)...... Completion PROT.1 from 01/05/1998 Amended by.... 298D0926(01)...... Amendment PROT 4 ART.1 from 01/10/1998 Completed by.. 299A1130(01)...... DPDATEFF Amended by.... 299D0714(01)...... Replacement PROT.1 from 01/08/1999 Amended by.... 201D0814(01)...... Amendment PROT 1 ANN from 01/09/2001 Amended by.... 202D0306.......... Addition PROT 3 ART 20 BI from 01/01/2002 Subsequent related instruments: Amendment proposed by 501SC0905......... Amendment proposed by 504SC1444......... AGREEMENT between the European Community, of the one part, and the Government of Denmark and the Home Government of the Faroe Islands, of the other part THE EUROPEAN COMMUNITY, of the one part, and THE GOVERNMENT OF DENMARK AND THE HOME GOVERNMENT OF THE FAROE ISLANDS, of the other part, RECALLING the status of the Faeroes as a self-governing integral part of one of the Member States of the Community; RECALLING the resolution of the Council of 4 February 1974 on the problems of the Faeroes; CONSIDERING the vital importance for the Faeroes of fisheries, which constitute their essential economic activity, fish and fishery products being their main export articles; CONSIDERING the importance of the fisheries relationship laid down in the Agreement on fisheries between the Contracting Parties, who confirm that the trade aspects of this Agreement should not affect the functioning of the Fisheries Agreement and that, consequently, the volume of the mutual fisheries possibilities under that Agreement should continue to be maintained at a satisfactory level; DESIRING to consolidate and to extend the economic relations existing between the Community and the Faeroes and to ensure, with due regard for fair conditions of competition, the harmonious development of their commerce for the purpose of contributing to the work of constructing Europe; RESOLVED progressively to eliminate the obstacles to substantially all their trade, in accordance with the provisions of the General Agreement on Tariffs and Trade (GATT) 1994 concerning the establishment of free trade areas; DECLARING their readiness to examine, in the light of any relevant factor, and in particular of developments in the Community, the possibility of developing and deepening their relations where it would appear to be useful in the interests of their economies to extend them to fields not covered by this Agreement; CONSIDERING that, to this end, an Agreement between the European Economic Community, of the one part, and the Government of Denmark and the Home Government of the Faroe Islands, of the other part (hereafter referred to as the 'initial Agreement`) was signed on 2 December 1991; CONSIDERING that an Agreement in the form of an Exchange of Letters between the European Community, of the one part, and the Government of Denmark and the Home Government of the Faroe Islands, of the other part, amending Tables I and II of the Annex to Protocol 1 of the initial Agreement (hereafter referred to as the 'Agreement in the form of an Exchange of Letters`) was signed on 8 March 1995; CONSIDERING that, pursuant to the accession of the Republic of Austria, the Republic of Finland and the Kingdom of Sweden to the European Union on 1 January 1995, the arrangements applicable to trade in fish and fishery products between the Faeroes and the Community should be adjusted in order to maintain trade flows between the Faeroes, on the one hand, and the new Member States, on the other; CONSIDERING that, as a result of the adoption by the Community of a common definition of origin for petroleum products, it is necessary to make adjustments to the provisions affecting these products; CONSIDERING that, in order to take account of certain developments in trade between the Community and the Member States of EFTA, it is necessary to make adjustments to the provisions concerning the definition of the concept of 'originating products` and methods of administrative cooperation; CONSIDERING that, in order to take account of the specific production of fish feed on the Faeroes, it is necessary to make adjustments to the provisions applicable to imports of certain agricultural products; CONSIDERING that, in order to help ensure its correct functioning, a Protocol on mutual administrative assistance in customs matters should be incorporated into this Agreement; CONSIDERING that, in order to conform with certain modifications to the nomenclature of the customs tariffs of the Contracting Parties affecting products referred to in the initial Agreement, it is necessary to update the tariff nomenclature of these products; CONSIDERING that, in order to provide for more flexibility, it is appropriate to empower the Joint Committee to decide on amendments to the provisions of the Protocols to this Agreement; CONSIDERING that, for the sake of clarity, the initial Agreement and the Agreement in the form of an Exchange of Letters should be replaced by a composite new text in the form of this Agreement; TAKING INTO ACCOUNT that the bilateral trade Agreements between Finland and Sweden and the Faeroes cease to be in force on the entry into force of this Agreement; HAVE DECIDED, in pursuit of these objectives and considering that no provisions of this Agreement may be interpreted as exempting the Contracting Parties from the obligations which are incumbent on them under other international agreements, TO CONCLUDE THIS AGREEMENT: Article 1 The aim of this Agreement is: (a) to promote through the expansion of reciprocal trade the harmonious development of economic relations between the Community and the Faeroes and thus to foster in the Community and in the Faeroes the advance of economic activity, the improvement of living and employment conditions, and increased productivity and financial stability, (b) to provide fair conditions of competition for trade between the Contracting Parties, (c) to contribute in this way, by the removal of barriers to trade, to the harmonious development and expansion of world trade. Article 2 This Agreement shall apply to products originating in the Community or the Faeroes: (i) which fall within Chapters 25 to 97 of the Harmonized System, other than those listed in Annex II to the Treaty establishing the European Community, and other than those listed in Annex I to this Agreement; (ii) which are specified in Protocols 1, 2 and 4 to this Agreement, with due regard to the arrangements provided for in those Protocols. Article 3 No new customs duty on imports shall be introduced in trade between the Community and the Faeroes. Article 4 1. The Community shall abolish customs duties on imports from the Faeroes. 2. The Faeroes shall abolish customs duties on imports from the Community: to this end Annex II sets out the provisions contained in the customs and fiscal legislation of the Faeroes. Article 5 The provisions concerning the abolition of customs duties on imports shall apply also to import duties of a fiscal nature. The Faeroes may replace an import duty of a fiscal nature or the fiscal element of an import duty by an internal tax. Article 6 No new charge having an effect equivalent to a customs duty shall be introduced in trade between the Community and the Faeroes. Charges having an effect equivalent to customs duties on imports in trade between the Community and the Faeroes shall be abolished. Article 7 No customs duty on exports or charge having equivalent effect shall be introduced in trade between the Community and the Faeroes. Customs duties on exports and charges having equivalent effect shall be abolished. Article 8 Protocol 1 lays down the tariff treatment and arrangements applicable to certain fish and fishery products released for free circulation in the Community or imported into the Faeroes. Article 9 Protocol 2 lays down the tariff treatment and arrangements applicable to certain products obtained by processing agricultural products. Article 10 1. In the event of specific rules being established as a result of the implementation of its agricultural policy or of any alteration of the current rules, the Contracting Party in question may adapt the arrangements resulting from this Agreement in respect of the products which are the subject of those rules or alterations. 2. In such cases the Contracting Party in question shall take due account of the interests of the other Contracting Party. To this end the Contracting Parties may consult each other within the Joint Committee established by Article 31. Article 11 Protocol 3 lays down the definition of the concept of 'originating products` and methods of administrative cooperation. Article 12 A Contracting Party which is considering the reduction of the effective level of its duties or charges having equivalent effect applicable to third countries benefiting from most-favoured-nation treatment, or which is considering the suspension of their application, shall, as far as may be practicable, notify the Joint Committee not less than 30 days before such reduction or suspension comes into effect. It shall take note of any representations by the other Contracting Party regarding any distortions which might result therefrom. Article 13 1. No new quantitative restriction on imports or measures having equivalent effect shall be introduced in trade between the Community and the Faeroes. 2. The Contracting Parties shall abolish quantitative restrictions on imports and any measures having an effect equivalent to quantitative restrictions on imports. Article 14 1. The Community reserves the right to modify the arrangements applicable to the petroleum products falling within headings Nos 2710, 2711, ex 2712 (excluding ozokerite, lignite wax and peat wax) and 2713 of the combined nomenclature on adoption of decisions under the common commercial policy for petroleum products or on establishment of a common energy policy. In this event, the Community shall take due account of the interests of the Faeroes; to this end it shall inform the Joint Committee, which shall meet under the conditions set out in Article 33 (2). 2. The Faeroes reserves the right to take similar action should it be faced with like situations. 3. Subject to paragraphs 1 and 2, this Agreement shall not prejudice the non-tariff rules applied to imports of petroleum products. Article 15 1. The Contracting Parties declare their readiness to foster, so far as their agricultural policies allow, the harmonious development of trade in agricultural products to which this Agreement does not apply. 2. The Contracting Parties shall apply their rules in veterinary, health and plant health matters in a non-discriminatory fashion and shall not introduce any new measures that have the effect of unduly obstructing trade. 3. The Contracting Parties shall examine, under the conditions set out in Article 35, any difficulties that might arise in their trade in agricultural products and shall endeavour to seek appropriate solutions. Article 16 The Home Government of the Faroe Islands shall take the necessary control measures to ensure the correct application of the reference price fixed or to be fixed by the Community, referred to in Article 2 of Protocol 1. The Contracting Parties shall ensure the correct application of the definition of the concept of 'originating products` and methods of administrative cooperation, laid down in Protocol 3. Article 17 Protocol 4 lays down the special provisions applicable to imports of certain agricultural products other than those listed in Protocol 1. Article 18 Protocol 5 lays down the provisions on mutual assistance between administrative authorities in customs matters. Article 19 The Contracting Parties reaffirm their commitment to grant each other the most-favoured-nation treatment in accordance with the GATT 1994. This Agreement shall not preclude the maintenance or establishment of customs unions, free trade areas or arrangements for frontier trade, except in so far as they alter the trade arrangements provided for in this Agreement, in particular the provisions concerning rules of origin. Article 20 The Contracting Parties shall refrain from any measure or practice of an internal fiscal nature which, whether directly of indirectly, discriminates between the products of one Contracting Party and like products originating in the territory of the other Contracting Party. Products exported to the territory of one of the Contracting Parties may not benefit from repayment of internal taxation in excess of the amount of direct or indirect taxation imposed on them. Article 21 Payments relating to trade in goods and the transfer of such payments to the Member State of the Community in which the creditor is resident or to the Faeroes shall be free from any restrictions. Article 22 This Agreement shall not preclude prohibitions or restrictions on imports, exports or goods in transit justified on grounds of public morality, law and order or public security, the protection of life and health of humans, animals or plants, the protection of national treasures of artistic, historic or archaeological value, the protection of industrial and commercial property, or rules relating to gold or silver. Such prohibitions or restrictions must not, however, constitute a means of arbitrary discrimination or a disguised restriction on trade between the Contracting Parties. Article 23 Nothing in this Agreement shall prevent a Contracting Party from taking any measures: (a) which it considers necessary to prevent the disclosure of information contrary to its essential security interests; (b) which relate to trade in arms, munitions or war materials or to research, development or production indispensable for defence purposes, provided that such measures do not impair the conditions of competition in respect of products not intended for specifically military purposes; (c) which it considers essential to its own security in time of war or serious international tension. Article 24 1. The Contracting Parties shall refrain from any measure likely to jeopardize the fulfilment of the objectives of this Agreement. 2. They shall take any general or specific measures required to fulfil their obligations under this Agreement. If either Contracting Party considers that the other Contracting Party has failed to fulfil an obligation under this Agreement, it may take appropriate measures under the conditions and in accordance with the procedures laid down in Article 29. Article 25 1. The following are incompatible with the proper functioning of this Agreement in so far as they may affect trade between the Community and the Faeroes: (i) all agreements between undertakings, decisions by associations of undertakings and concerted practices between undertakings which have as their object or effect the prevention, restriction or distortion of competition as regards the production of or trade in goods; (ii) abuse by one or more undertakings of a dominant position in the territories of the Contracting Parties as a whole or in a substantial part thereof; (iii) any public aid which distorts or threatens to distort competition by favouring certain undertakings or the production of certain goods. 2. Should a Contracting Party consider that a given practice is incompatible with this Article, it may take appropriate measures under the conditions and in accordance with the procedures laid down in Article 29. Article 26 Where an increase in imports of a given product is or is likely to be seriously detrimental to any production activity carried on in the territory of one of the Contracting Parties and where this increase is due to: (i) the partial or total reduction in the importing Contracting Party, as provided for in this Agreement, of customs duties and charges having equivalent effect levied on the product in question; and (ii) the fact that the duties or charges having equivalent effect levied by the exporting Contracting Party on imports of raw materials or intermediate products used in the manufacture of the product in question are significantly lower than the corresponding duties or charges levied by the importing Contracting Party: the Contracting Party concerned may take appropriate measures under the conditions and in accordance with the procedures laid down in Article 29. Article 27 If one of the Contracting Parties finds that dumping is taking place in trade with the other Contracting Party, it may take appropriate measures against this practice in accordance with the Agreement on Implementation of Article VI of the GATT 1994, under the conditions and in accordance with the procedures laid down in Article 29. Article 28 If serious disturbances arise in any sector of the economy or if difficulties arise which could bring about serious deterioration in the economic situation of a region, the Contracting Party concerned may take appropriate measures under the conditions and in accordance with the procedures laid down in Article 29. Article 29 1. In the event of a Contracting Party subjecting imports of products liable to give rise to the difficulties referred to in Articles 26 and 28 to an administrative procedure, the purpose of which is to provide rapid information on the trend of trade flows, it shall inform the other Contracting Party. 2. In the cases specified in Articles 24 to 28, before taking the measures provided for therein or, in cases to which paragraph 3 (d) of this Article applies, as soon as possible, the Contracting Party in question shall supply the Joint Committee with all relevant information required for a thorough examination of the situation with a view to seeking a solution acceptable to the Contracting Parties. In the selection of measures, priority must be given to those which least disturb the functioning of this Agreement. The safeguard measures shall be notified immediately to the Joint Committee and shall be the subject of periodical consultations within the Committee, particularly with a view to their abolition as soon as circumstances permit. 3. For the implementation of paragraph 2, the following provisions shall apply: (a) as regards Article 25, either Contracting Party may refer the matter to the Joint Committee if it considers that a given practice is incompatible with the proper functioning of this Agreement within the meaning of Article 25 (1). The Contracting Parties shall provide the Joint Committee with all relevant information and shall give it the assistance it requires in order to examine the case and, where appropriate, to eliminate the practice objected to. If the Contracting Party in question fails to put an end to the practice objected to within the period fixed by the Joint Committee, or in the absence of agreement in the Joint Committee within three months of the matter being referred to it, the Contracting Party concerned may adopt any safeguard measures it considers necessary to deal with the serious difficulties resulting from the practices in question; in particular it may withdraw tariff concessions; (b) as regards Article 26, the difficulties arising from the situation referred to in that Article shall be referred for examination to the Joint Committee, which may take any decision needed to put an end to such difficulties. If the Joint Committee or the exporting Contracting Party has not taken a decision putting an end to the difficulties within 30 days of the matter being referred, the importing Contracting Party is authorized to levy a compensatory charge on the product imported. The compensatory charge shall be calculated according to the incidence on the value of the goods in question of the tariff disparities in respect of the raw materials or intermediate products incorporated therein; (c) as regards Article 27, consultation in the Joint Committee shall take place before the Contracting Party concerned takes the appropriate measures; (d) where exceptional circumstances requiring immediate action make prior examination impossible, the Contracting Party concerned may, in the situations specified in Articles 26, 27 and 28 and also in the case of export aids having a direct and immediate incidence on trade, apply forthwith the precautionary measures strictly necessary to remedy the situation. Article 30 Where one or more Member States of the Community or the Faeroes is in difficulties or is seriously threatened with difficulties as regards its balance of payments, the Contracting Party concerned may take the necessary safeguard measures. It shall inform the other Contracting Party forthwith. Article 31 1. A Joint Committee is hereby established which shall be responsible for the administration of this Agreement and shall ensure its proper implementation. For this purpose, it shall make recommendations and take decisions in the cases provided for in this Agreement. These decisions shall be put into effect by the Contracting Parties in accordance with their own rules. 2. For the purpose of the proper implementation of this Agreement the Contracting Parties shall exchange information and, at the request of either Party, shall hold consultations within the Joint Committee. 3. The Joint Committee shall adopt its own rules of procedure. Article 32 1. The Joint Committee shall consist of representatives of the Contracting Parties. 2. The Joint Committee shall act by mutual agreement. Article 33 1. Each Contracting Party shall preside in turn over the Joint Committee, in accordance with the arrangements to be laid down in its rules of procedure. 2. The Chairman shall convene meetings of the Joint Committee at least once a year in order to review the general functioning of this Agreement. The Joint Committee shall, in addition, meet whenever special circumstances so require, at the request of either Contracting Party, in accordance with the conditions to be laid down in its rules of procedure. 3. The Joint Committee may decide to set up any working party that can assist it in carrying out its duties. Article 34 1. The Joint Committee may amend the provisions of the Protocols to this Agreement. 2. In the event of modifications of the nomenclature of the customs tariffs of the Contracting Parties affecting products referred to in this Agreement, the Joint Committee may adapt the tariff nomenclature of these products to conform with such modifications. Article 35 1. Where a Contracting Party considers that it would be useful in the common interest of both Contracting Parties to develop the relations established by this Agreement by extending them to fields not covered thereby, it shall submit a reasoned request to the other Contracting Party. The Contracting Parties may instruct the Joint Committee to examine this request and, where appropriate, to make recommendations to them, particularly with a view to opening negotiations. 2. The agreements resulting from the negotiations referred to in paragraph 1 will be subject to ratification or approval by the Contracting Parties in accordance with their own procedures. Article 36 At the request of the Faeroes, the Community will consider - improving the access possibilities for specific products, - extending its tariff concessions for Faeroese fishery products to include new fish species caught by Faeroese fishing vessels based and operating in the North Atlantic, or to include fishery products pertaining thereto not currently produced by the Faeroese fishing industry. These new fish species or fishery products could be imported free of duty into the Community, subject to the necessary quantitative limitations should the new fish species or fishery products be of a sensitive nature in the Community. Article 37 The Annexes and Protocols to this Agreement shall form an integral part thereof. Article 38 Either Contracting Party may denounce this Agreement by notifying the other Contracting Party. This Agreement shall cease to be in force 12 months after the date of such notification. Article 39 This Agreement shall apply, on the one hand, to the territories to which the Treaty establishing the European Community is applied and under the conditions laid down in that Treaty and, on the other hand, to the territory of the Faeroes. Article 40 1. This Agreement is drawn up in duplicate in the Danish, Dutch, English, Finnish, French, German, Greek, Italian, Portuguese, Spanish, Swedish and Faeroese languages, each of these texts being equally authentic. 2. It will be approved by the Contracting Parties in accordance with their own procedures. 3. It shall enter into force on 1 January 1997, provided that the Contracting Parties have notified each other before that date that the procedures necessary to this end have been completed. After this date, this Agreement shall enter into force on the first day of the third month following such notification. 4. The provisions of the following Agreements shall cease to be in force on the entry into force of this Agreement: - the Agreement between the European Economic Community, of the one part, and the Government of Denmark and the Home Government of the Faroe Islands, of the other part, signed on 2 December 1991, - the Agreement in the form of an exchange of letters between the European Community, of the one part, and the Government of Denmark and the Home Government of the Faroe Islands, of the other part, amending Tables I and II of the Annex to Protocol 1 of the abovementioned Agreement, signed on 8 March 1995, - the bilateral trade agreements between Finland and Sweden and the Faeroes. Hecho en Bruselas, el seis de diciembre de mil novecientos noventa y seis. Udfördiget i Bruxelles den sjette december nitten hundrede og seks og halvfems. Geschehen zu BrŽssel am sechsten Dezember neunzehnhundertsechsundneunzig. øółżõ ėĮłĖ ĀęįžąūūõĖ, ėĮłĖ ąžł Äõśõüņęč˙į ščūłń õżżłńśŽėłń õżõżČżĮń ąžł. Done at Brussels on the sixth day of December in the year one thousand nine hundred and ninety-six. Fait š Bruxelles, le six dłcembre mil neuf cent quatre-vingt-seize. Fatto a Bruxelles, addü sei dicembre millenovecentonovantasei. Gedaan te Brussel, de zesde december negentienhonderd zesennegentig. Feito em Bruxelas, em seis de Dezembro de mil novecentos e noventa a seis. Tehty Brysselissō kuudentena pōivōnō joulukuuta vuonna tuhatyhdeksōnsataayhdeksōnkymmentōkuusi. Som skedde i Bryssel den sjōtte december nittonhundranittiosex. GjŲrdur ż BrŪssel, sötta desembur nżtjanhundra s og n´ytiseks. Por la Comunidad Europea For Det Europöiske Föllesskab FŽr die Europōische Gemeinschaft Ćłń Į÷ż ÅįęųĘńŪśČ Ź˙łżŽĮ÷Įń For the European Community Pour la Communautł europłenne Per la Comunitš europea Voor de Europese Gemeenschap Pela Comunidade Europeia Euroopan yhteisŠn puolesta Põ Europeiska gemenskapens vōgnar Fyri Europeiska Felagsskapin >REFERENCE TO A GRAPHIC> Por el Gobierno de Dinamarca y el Gobierno local de las Islas Feroe For Danmarks regering og FörŲernes landsstyre FŽr die Regierung von Dōnemark und die Landesregierung der FōrŠer Ćłń Į÷ż śįņąęż÷ė÷ Į÷Ė ÄńżčńĖ śńł Į÷ż Į˙ĘłśČ śįņąęż÷ė÷ Įųż ĶČėųż ÖõęŽõ For the Government of Denmark and the Home Government of the Faroe Islands Pour le gouvernement du Danemark et le gouvernement local des žles Fłroł Per il governo della Danimarca e per il governo locale delle isole FörŲer Voor de Regering van Denemarken en de Landsregering van de FaerŠer Pelo Governo da Dinamarca e pelo Governo Regional das Ilhas Faroł Tanskan hallituksen ja Fōrsaarten paikallishallituksen puolesta Põ Danmarks regerings och FōrŠarnas landsstyres vōgnar Fyri rżkisstjėrn Danmarkar og FŲroya landsst´yri >REFERENCE TO A GRAPHIC> ANNEX I >TABLE POSITION> ANNEX II For the purposes of Article 4 (2) to this Agreement, the customs and fiscal legislation of the Föroes contains the following provisions: (a) a customs tariff based on the Harmonized System and respecting the GATT obligations of Denmark; (b) a duty-free treatment for goods of Community origin, with the exceptions set out in Protocols 2 and 4; (c) a system of indirect taxation based on the following elements: - a value-added tax (VAT, based on the same principles as those which apply in the Community, including non-discrimination of imported goods; and - a system of excise duties, levied equally on domestic production and imported goods. PROTOCOL 1 concerning the tariff treatment and arrangements applicable to certain fish and fishery products released for free circulation in the Community or imported into the Faeroes Article 1 As regards the products listed in the Annex to this Protocol and originating in the Faeroes: 1. no new customs duties shall be introduced in trade between the Community and the Faeroes; 2. the customs duties and other conditions to be applied on import into the Community shall be as indicated in the Annex. Article 2 The preferential duty rates indicated in the Annex apply only if the free-at-frontier price, which is determined by the Member States in accordance with Article 22 of Regulation (EEC) No 3759/92 (OJ No L 388, 31. 12. 1992, p. 1), as last amended by Regulation (EC) No 3318/94 (OJ No L 350, 31. 12. 1994, p. 15), is at least equal to the reference price fixed, or to be fixed, by the Community for the products under consideration or the categories of the products concerned. Article 3 For the purpose of eliminating customs duties, reference ceilings are established in the Annex for certain products originating in the Faeroes. Should imports of these products exceed the reference ceiling, the Community may introduce the full customs duty. Article 4 The Faeroes shall abolish tariffs and duties on imports of fish and fishery products originating in the Community. ANNEX The customs duties and other conditions to be applied on import into the Community of products originating in and coming from the Faeroes shall be as indicated below. >TABLE POSITION> >TABLE POSITION> PROTOCOL 2 concerning the tariff treatment and arrangements applicable to certain products obtained by processing agricultural products Article 1 In order to take account of differences in the cost of the agricultural products incorporated in the goods specified in the table annexed to this Protocol, this Agreement does not preclude: (i) the levying, on import, of an agricultural component or fixed amount, or the application of internal price compensation measures; (ii) the application of measures adopted on export. Article 2 The Community shall apply the customs duties on imports originating in the Faeroes as indicated in the table annexed to this Protocol. Article 3 The Faeroes shall abolish tariffs and duties on imports of processed agricultural products originating in the Community, with the exceptions mentioned in Protocol 4, Article 2. Should the Faeroes introduce such measures for processed agricultural products as mentioned in Article 1 of this Protocol, the Community shall be duly notified. >TABLE POSITION> PROTOCOL 3 concerning the definition of the concept of 'originating products` and methods of administrative cooperation TITLE I GENERAL PROVISIONS Article 1 Definitions TITLE II DEFINITION OF THE CONCEPT OF 'ORIGINATING PRODUCTS` Article 2 General requirements Article 3 Bilateral cumulation of origin Article 4 Wholly obtained products Article 5 Sufficiently worked or processed products Article 6 Insufficient working or processing operations Article 7 Unit of qualification Article 8 Accessories, spare parts and tools Article 9 Sets Article 10 Neutral elements TITLE III TERRITORIAL REQUIREMENTS Article 11 Principle of territoriality Article 12 Direct transport Article 13 Exhibitions TITLE IV DRAWBACK OR EXEMPTION Article 14 Prohibition of drawback of, or exemption from, customs duties TITLE V PROOF OF ORIGIN Article 15 General requirements Article 16 Procedure for the issue of an EUR.1 movement certificate Article 17 EUR.1 movement certificates issued retrospectively Article 18 Issue of a duplicate EUR.1 movement certificate Article 19 Issue of EUR.1 movement certificates on the basis of a proof of origin issued or made out previously Article 20 Conditions for making out an invoice declaration Article 21 Approved exporter Article 22 Validity of proof of origin Article 23 Submission of proof of origin Article 24 Importation by instalments Article 25 Exemptions from proof or origin Article 26 Supporting documents Article 27 Preservation of proof of origin and supporting documents Article 28 Discrepancies and formal errors Article 29 Amounts expressed in ecu TITLE VI ARRANGEMENTS FOR ADMINISTRATIVE COOPERATION Article 30 Mutual assistance Article 31 Verification of proofs of origin Article 32 Dispute settlement Article 33 Penalties Article 34 Free zones TITLE VII CEUTA AND MELILLA Article 35 Application of the Protocol Article 36 Special conditions TITLE I GENERAL PROVISIONS Article 1 Definitions For the purposes of this Protocol: (a) 'manufacture` means any kind of working or processing including assembly or specific operations; (b) 'material` means any ingredient, raw material, component or part, etc., used in the manufacture of the product; (c) 'product` means the product being manufactured, even if it is intended for later use in another manufacturing operation; (d) 'goods` means both materials and products; (e) 'customs value` means the value as determined in accordance with the 1994 Agreement on implementation of Article VII of the General Agreement on Tariffs and Trade (WTO Agreement on customs valuation); (f) 'ex-works price` means the price paid for the product ex works to the manufacturer in the Community or the Faeroes in whose undertaking the last working or processing is carried out, provided the price includes the value of all the materials used, minus any internal taxes which are, or may be, repaid when the product obtained is exported; (g) 'value of materials` means the customs value at the time of importation of the non-originating materials used, or, if this is not known and cannot be ascertained, the first ascertainable price paid for the materials in the Community or the Faeroes; (h) 'value of originating materials` means the value of such materials as defined in subparagraph (g) applied mutatis mutandis; (i) 'added value` shall be taken to be the ex works price minus the customs value of each of the products incorporated which did not originate in the country in which those products were obtained; (j) 'chapters` and 'headings` mean the chapters and the headings (four-digit codes) used in the nomenclature which makes up the Harmonized Commodity Description and Coding System, referred to in this Protocol as 'the Harmonized System` or 'HS`; (k) 'classified` refers to the classification of a product or material under a particular heading; (l) 'consignment` means products which are either sent simultaneously from one exporter to one consignee or covered by a single transport document covering their shipment from the exporter to the consignee or, in the absence of such a document, by a single invoice; (m) 'territories` includes territorial waters. TITLE II DEFINITION OF THE CONCEPT OF 'ORIGINATING PRODUCTS` Article 2 General requirements 1. For the purpose of implementing this Agreement, the following products shall be considered as originating in the Community: (a) products wholly obtained in the Community within the meaning of Article 4 of this Protocol; (b) products obtained in the Community incorporating materials which have not been wholly obtained there, provided that such materials have undergone sufficient working or processing in the Community within the meaning of Article 5 of this Protocol. 2. For the purpose of implementing this Agreement, the following products shall be considered as originating in the Faeroes: (a) products wholly obtained in the Faeroes within the meaning of Article 4 of this Protocol; (b) products obtained in the Faeroes incorporating materials which have not been wholly obtained there, provided that such materials have undergone sufficient working or processing in the Faeroes within the meaning of Article 5 of this Protocol. Article 3 Bilateral cumulation of origin 1. Materials originating in the Community shall be considered as materials originating in the Faeroes when incorporated into a product obtained there. It shall not be necessary that such materials have undergone sufficient working or processing, provided they have undergone working or processing going beyond that referred to in Article 6 (1) of this Protocol. 2. Materials originating in the Faeroes shall be considered as materials originating in the Community when incorporated into a product obtained there. It shall not be necessary that such materials have undergone sufficient working or processing, provided they have undergone working or processing going beyond that referred to in Article 6 (1) of this Protocol. Article 4 Wholly obtained products 1. The following shall be considered as wholly obtained in the Community or the Faeroes: (a) mineral products extracted from their soil or from their seabed; (b) vegetable products harvested there; (c) live animals born and raised there; (d) products from live animals raised there; (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 of the Community or the Faeroes by their vessels; (g) products made aboard their factory ships exclusively from products referred to in subparagraph (f); (h) used articles collected there fit only for the recovery of raw materials, including used tyres fit only for retreading or for use as waste; (i) waste and scrap resulting from manufacturing operations conducted there; (j) products extracted from marine soil or subsoil outside their territorial waters provided that they have sole rights to work that soil or subsoil; (k) goods produced there exclusively from the products specified in subparagraphs (a) to (j). 2. The terms 'their vessels` and 'their factory ships` in subparagraphs 1 (f) and (g) shall apply only to vessels and factory ships: (a) which are registered or recorded in an EC Member State or in the Faeroes; (b) which sail under the flag of an EC Member State or of the Faeroes; (c) which are owned to an extent of at least 50 % by nationals of EC Member States or of the Faeroes, or by a company with its head office in one of these States, of which the manager or managers, Chairman of the Board of Directors or the Supervisory Board, and the majority of the members of such boards are nationals of EC Member States or of the Faeroes and of which, in addition, in the case of partnerships or limited companies, at least half the capital belongs to those States or to public bodies or nationals of the said States; (d) of which the master and officers are nationals of EC Member States or of the Faeroes; and (e) of which at least 75 % of the crew are nationals of EC Member States or of the Faeroes. Article 5 Sufficiently worked or processed products 1. For the purposes of Article 2, products which are not wholly obtained are considered to be sufficiently worked or processed when the conditions set out in the list in Annex II are fulfilled. The conditions referred to above indicate, for all products covered by this Agreement, the working or processing which must be carried out on non-originating materials used in manufacturing and apply only in relation to such materials. Accordingly, it follows that if a product, which has acquired originating status by fulfilling the conditions set out in the list is used in the manufacture of another product, the conditions applicable to the product in which it is incorporated do not apply to it, and no account shall be taken of the non-originating materials which may have been used in its manufacture. 2. Notwithstanding paragraph 1, non-originating materials which, according to the conditions set out in the list, should not be used in the manufacture of a product may nevertheless be used, provided that: (a) their total value does not exceed 10 % of the ex-works price of the product; (b) any of the percentages given in the list for the maximum value of non-originating materials are not exceeded through the application of this paragraph. This paragraph shall not apply to products falling within Chapters 50 to 63 of the Harmonized System. 3. Paragraphs 1 and 2 shall apply except as provided in Article 6. Article 6 Insufficient working or processing operations 1. Without prejudice to paragraph 2, the following operations shall be considered as insufficient working or processing to confer the status of originating products, whether or not the requirements of Article 5 are satisfied: (a) operations to ensure the preservation of products in good condition during transport and storage (ventilation, spreading out, drying, chilling, placing in salt, sulphur dioxide or other aqueous solutions, removal of damaged parts, and like operations); (b) simple operations consisting of removal of dust, sifting or screening, sorting, classifying, matching (including the making-up of sets of articles), washing, painting, cutting up; (c) (i) changes of packaging and breaking up and assembly of packages; (ii) simple placing in bottles, flasks, bags, cases, boxes, fixing on cards or boards etc., and all other simple packaging operations; (d) affixing marks, labels and other like distinguishing signs on products or their packaging; (e) simple mixing of products, whether or not of different kinds, where one or more components of the mixtures do not meet the conditions laid down in this Protocol to enable them to be considered as originating in the Community or the Faeroes; (f) simple assembly of parts to constitute a complete product; (g) a combination of two or more operations specified in subparagraphs (a) to (f); (h) slaughter of animals. 2. All the operations carried out in either the Community or the Faeroes on a given product shall be considered together when determining whether the working or processing undergone by that product is to be regarded as insufficient within the meaning of paragraph 1. Article 7 Unit of qualification 1. The unit of qualification for the application of the provisions of this Protocol shall be the particular product which is considered as the basic unit when determining classification using the nomenclature of the Harmonized System. Accordingly, it follows that: (a) when a product composed of a group or assembly of articles is classified under the terms of the Harmonized System in a single heading, the whole constitutes the unit of qualification; (b) when a consignment consists of a number of identical products classified under the same heading of the Harmonized System, each product must be taken individually when applying the provisions of this Protocol. 2. Where, under General Rule 5 of the Harmonized System, packaging is included with the product for classification purposes, it shall be included for the purposes of determining origin. Article 8 Accessories, spare parts and tools Accessories, spare parts and tools dispatched with a piece of equipment, machine, apparatus or vehicle, which are part of the normal equipment and included in the price thereof or which are not separately invoiced, shall be regarded as one with the piece of equipment, machine, apparatus or vehicle in question. Article 9 Sets Sets, as defined in General Rule 3 of the Harmonized System, shall be regarded as originating when all component products are originating. Nevertheless, when a set is composed of originating and non-originating products, the set as a whole shall be regarded as originating, provided that the value of the non-originating products does not exceed 15 % of the ex-works price of the set. Article 10 Neutral elements In order to determine whether a product originates, it shall not be necessary to determine the origin of the following which might be used in its manufacture: (a) energy and fuel; (b) plant and equipment; (c) machines and tools; (d) goods which do not enter and which are not intended to enter into the final composition of the product. TITLE III TERRITORIAL REQUIREMENTS Article 11 Principle of territoriality 1. The conditions set out in Title II relative to the acquisition of originating status must be fulfilled without interruption in the Community or the Faeroes. 2. If originating goods exported from the Community or the Faeroes to another country are returned, they must be considered as non-originating, unless it can be demonstrated to the satisfaction of the customs authorities that: (a) the goods returned are the same goods as those exported; and (b) they have not undergone any operation beyond that necessary to preserve them in good condition while in that country or while being exported. Article 12 Direct transport 1. The preferential treatment provided for under the Agreement applies only to products, satisfying the requirements of this Protocol, which are transported directly between the Community and the Faeroes. However, products constituting one single consignment may be transported through other territories with, should the occasion arise, trans-shipment or temporary warehousing in such territories, provided that they remain under the surveillance of the customs authorities in the country of transit or warehousing and do not undergo operations other than unloading, reloading or any operation designed to preserve them in good condition. Originating products may be transported by pipeline across territory other than that of the Community or the Faeroes. 2. Evidence that the conditions set out in paragraph 1 have been fulfilled shall be supplied to the customs authorities of the importing country by the production of: (a) a single transport document covering the passage from the exporting country through the country of transit; or (b) a certificate issued by the customs authorities of the country of transit: (i) giving an exact description of the products; (ii) stating the dates of unloading and reloading of the products and, where applicable, the names of the ships, or the other means of transport used; and (iii) certifying the conditions under which the products remained in the transit country; or (c) failing these, any substantiating documents. Article 13 Exhibitions 1. Originating products, sent for exhibition in another country and sold after the exhibition for importation in the Community or the Faeroes shall benefit on importation from the provisions of the Agreement provided it is shown to the satisfaction of the customs authorities that: (a) an exporter has consigned these products from the Community or the Faeroes to the country in which the exhibition is held and has exhibited them there; (b) the products have been sold or otherwise disposed of by that exporter to a person in the Community or the Faeroes; (c) the products have been consigned during the exhibition or immediately thereafter in the state in which they were sent for exhibition; and (d) the products have not, since they were consigned for exhibition, been used for any purpose other than demonstration at the exhibition. 2. A proof of origin must be issued or made out in accordance with the provisions of Title V and submitted to the customs authorities of the importing country in the normal manner. The name and address of the exhibition must be indicated thereon. Where necessary, additional documentary evidence of the conditions under which they have been exhibited may be required. 3. Paragraph 1 shall apply to any trade, industrial, agricultural or crafts exhibition, fair or similar public show or display which is not organized for private purposes in shops or business premises with a view to the sale of foreign products, and during which the products remain under customs control. TITLE IV DRAWBACK OR EXEMPTION Article 14 Prohibition of drawback of, or exemption from, customs duties 1. Non-originating materials used in the manufacture of products originating in the Community or in the Faeroes for which a proof of origin is issued or made out in accordance with the provisions of Title V shall not be subject in the Community or the Faeroes to drawback of, or exemption from, customs duties of whatever kind. 2. The prohibition in paragraph 1 shall apply to any arrangement for refund, remission or non-payment, partial or complete, of customs duties or charges having an equivalent effect, applicable in the Community or the Faeroes to materials used in the manufacture, where such refund, remission or non-payment applies, expressly or in effect, when products obtained from the said materials are exported and not when they are retained for home use there. 3. The exporter of products covered by a proof of origin shall be prepared to submit at any time, on request from the customs authorities, all appropriate documents proving that no drawback has been obtained in respect of the non-originating materials used in the manufacture of the products concerned and that all customs duties or charges having equivalent effect applicable to such materials have actually been paid. 4. The provisions of paragraphs 1 to 3 shall also apply in respect of packaging within the meaning of Article 7 (2), accessories, spare parts and tools within the meaning of Article 8 and products in a set within the meaning of Article 9 when such items are non-originating. 5. The provisions of paragraphs 1 to 4 shall apply only in respect of materials which are of the kind to which the Agreement applies. Furthermore, they shall not preclude the application of an export refund system for agricultural products, applicable upon export in accordance with the provisions of the Agreement. TITLE V PROOF OF ORIGIN Article 15 General requirements 1. Products originating in the Community shall, on importation into the Faeroes and products originating in the Faeroes shall, on importation into the Community, benefit from this Agreement upon submission of either: (a) an EUR.1 movement certificate, a specimen of which appears in Annex III; or (b) in the cases specified in Article 20 (1), a declaration, the text of which appears in Annex IV, given by the exporter on an invoice, a delivery note or any other commercial document which describes the products concerned in sufficient detail to enable them to be identified (hereinafter referred to as the 'invoice declaration`). 2. Notwithstanding paragraph 1, originating products within the meaning of this Protocol shall, in the cases specified in Article 25, benefit from this Agreement without it being necessary to submit any of the documents referred to above. Article 16 Procedure for the issue of an EUR.1 movement certificate 1. An EUR.1 movement certificate shall be issued by the customs authorities of the exporting country on application having been made in writing by the exporter or, under the exporter's responsibility, by his authorized representative. 2. For this purpose, the exporter or his authorized representative shall fill out both the EUR.1 movement certificate and the application form, specimens of which appear at Annex III. These forms shall be completed in one of the languages in which this Agreement is drawn up and in accordance with the provisions of the domestic law of the exporting country. If they are handwritten, they shall be completed in ink in printed characters. The description of the products must be given in the box reserved for this purpose without leaving any blank lines. Where the box is not completely filled, a horizontal line must be drawn below the last line of the description, the empty space being crossed through. 3. The exporter applying for the issue of an EUR.1 movement certificate shall be prepared to submit at any time, at the request of the customs authorities of the exporting country where the EUR.1 movement certificate is issued, all appropriate documents proving the originating status of the products concerned as well as the fulfilment of the other requirements of this Protocol. 4. An EUR.1 movement certificate shall be issued by the customs authorities of an EC Member State or the Faeroes if the products concerned can be considered as products originating in the Community or the Faeroes and fulfil the other requirements of this Protocol. 5. The issuing customs authorities shall take any steps necessary to verify the originating status of the products and the fulfilment of the other requirements of this Protocol. For this purpose, they shall have the right to call for any evidence and to carry out any inspection of the exporter's accounts or any other check considered appropriate. The issuing customs authorities shall also ensure that the forms referred to in paragraph 2 are duly completed. In particular, they shall check whether the space reserved for the description of the products has been completed in such a manner as to exclude all possibility of fraudulent additions. 6. The date of issue of the EUR.1 movement certificate shall be indicated in Box 11 of the certificate. 7. An EUR.1 movement certificate shall be issued by the customs authorities and made available to the exporter as soon as actual exportation has been effected or ensured. Article 17 EUR.1 movement certificates issued retrospectively 1. Notwithstanding Article 16 (7), an EUR.1 movement certificate may exceptionally be issued after exportation of the products to which it relates if: (a) it was not issued at the time of exportation because of errors or involuntary omissions or special circumstances; or (b) it is demonstrated to the satisfaction of the customs authorities that an EUR.1 movement certificate was issued but was not accepted at importation for technical reasons. 2. For the implementation of paragraph 1, the exporter must indicate in his application the place and date of exportation of the products to which the EUR.1 movement certificate relates, and state the reasons for his request. 3. The customs authorities may issue an EUR.1 movement certificate retrospectively only after verifying that the information supplied in the exporter's application agrees with that in the corresponding file. 4. EUR.1 movement certificates issued retrospectively must be endorsed with one of the following phrases: 'NACHTRÄGLICH AUSGESTELLT`, 'DELIVRE A POSTERIORI`, 'RILASCIATO A POSTERIORI`, 'AFGEGEVEN A POSTERIORI`, 'ISSUED RETROSPECTIVELY`, 'UDSTEDT EFTERFŲLGENDE`, 'ÅŹÄĻČÅĶ ÅŹ ŌŁĶ ÕÓŌÅŃŁĶ`, 'EXPEDIDO A POSTERIORI`, 'EMITIDO A POSTERIORI`, 'ANNETTU JÄLKIKÄTEEN`, 'UTFÄRDAT I EFTERHAND`, 'GIVIN EFTIRFYLGJANDI`. 5. The endorsement referred to in paragraph 4 shall be inserted in the 'Remarks` box of the EUR.1 movement certificate. Article 18 Issue of a duplicate EUR.1 movement certificate 1. In the event of theft, loss or destruction of an EUR.1 movement certificate, the exporter may apply to the customs authorities which issued it for a duplicate made out on the basis of the export documents in their possession. 2. The duplicate issued in this way must be endorsed with one of the following: 'DUPLIKAT`, 'DUPLICATA`, 'DUPLICATO`, 'DUPLICAAT`, 'DUPLICATE`, 'ĮĶŌÉĆŃĮÖĻ`, 'DUPLICADO`, 'SEGUNDA VIA`, 'IAKSOISKAPPALE`, 'TVITAK`. 3. The endorsement referred to in paragraph 2 shall be inserted in the 'Remarks` box of the duplicate EUR.1 movement certificate. 4. The duplicate, which must bear the date of issue of the original EUR.1 movement certificate, shall take effect as from that date. Article 19 Issue of EUR.1 movement certificates on the basis of a proof of origin issued or made out previously When originating products are placed under the control of a customs office in the Community or the Faeroes, it shall be possible to replace the original proof of origin by one or more EUR.1 movement certificates for the purpose of sending all or some of these products elsewhere within the Community or the Faeroes. The replacement EUR.1 movement certificate(s) shall be issued by the customs office under whose control the products are placed. Article 20 Conditions for making out an invoice declaration 1. An invoice declaration as referred to in Article 15 (1) (b) may be made out: (a) by an approved exporter within the meaning of Article 21; or (b) by any exporter for any consignment consisting of one or more packages containing originating products whose total value does not exceed ECU 6 000. 2. An invoice declaration may be made out if the products concerned can be considered as products originating in the Community or the Faeroes and fulfil the other requirements of this Protocol. 3. The exporter making out an invoice declaration shall be prepared to submit at any time, at the request of the customs authorities of the exporting country, all appropriate documents proving the originating status of the products concerned as well as the fulfilment of the other requirements of this Protocol. 4. An invoice declaration shall be made out by the exporter by typing, stamping or printing on the invoice, the delivery note or another commercial document, the declaration, the text of which appears in Annex …