Explanatory Memorandum to COM(2001)360 - Providing detailed rules for the application of Article 12(2) of the Agreement with Andorra

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dossier COM(2001)360 - Providing detailed rules for the application of Article 12(2) of the Agreement with Andorra.
source COM(2001)360 EN
date 02-07-2001
1. Title I of the Agreement in the form of an Exchange of Letters between the European Economic Community and the Principality of Andorra of 28 June 1990 establishes a customs union for the products covered by Chapters 25 to 97 of the Harmonised System. Title II defines the arrangements applicable to products not covered by the customs union (Chapters 1 to 24 of the HS). Under these arrangements, which are preferential and non-reciprocal, products which originate in the Principality of Andorra are exempt from import duties when imported into the Community, following the preferential rules of origin laid down in an Appendix, while Community goods only enjoy most-favoured-nation status (Article 12(1)).

2. However, there is one category of Community goods eligible for a preferential tariff rate (60% of the rate applied to products from third countries) when imported into Andorra. Article 12 i sets a preferential rate for manufactured tobacco products covered by headings HS 24.02 and 24.03 made from raw tobacco which was in free circulation in the Community. The preference granted to Community manufactured tobaccos is thus based not on the Community preferential origin of these products, but on their Community status combined with the fact that they were manufactured within the Community from raw tobacco.

3. These products are not covered by the provisions concerning transit and status which have been adopted by the Joint Committee. No provisions have been laid down concerning the application of Article 12 i, and the result is a state of both legal and practical uncertainty as to the modalities which should govern the granting of the preference and the documentary evidence which has to be presented. There can be no doubt that exporters requesting certificates of origins and T2s/T2Ls with a view to obtaining preferential treatment by the Andorran authorities have been dealt with in a range of different ways. It is therefore urgent to find a solution to this problem.

4. The Commission proposes that the problem should be solved by a Council regulation that would make it possible for the Community customs authorities to issue a certificate for the purposes of applying Article 12 i to manufactured tobaccos being exported to Andorra. For its part, the Principality of Andorra has agreed to issue a decree laying down that the preferential rate should be granted to holders of the certificate which can be found in Annex I.

5. Given the above, the Commission proposes that the Council should adopt the attached proposal for a regulation as soon as possible.