Explanatory Memorandum to COM(2006)731-2 - Granting of the special incentive arrangement for sustainable development and good governance beyond 1 January 2007 to El Salvador

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1. On 21 December 2005, after examination of the request submitted by the Republic of El Salvador on 24 October 2005, the Commission decided i to include El Salvador in the definitive list of countries benefiting from the Special Incentive Arrangement for Sustainable Development and Good Governance, (hereinafter 'special incentive') on the basis of Articles 9, 10 and 11 of Council Regulation (EC) No 980/2005 of 27 June applying a scheme of generalised tariff preferences i (hereinafter 'the GSP Regulation').

2. El Salvador was the only country to invoke - as set out in Article 9(2)(b) of the GSP Regulation - incompatibility with its Constitution of provisions included in ILO conventions No 87 (concerning freedom of association and protection of the right to organise) and No 98 (concerning the application of the principles of the right to organise and to bargain collectively). Both conventions are listed in part A of Annex III to the GSP Regulation, which requires the ratification and effective implementation of several core human and labour rights ILO/UN conventions in order for a country to benefit from the additional tariff preferences.

3. Having regard to all relevant provisions of the GSP Regulation, notably Article 9(2)(b) thereof, under which the special incentive may be granted to a country which has not ratified and effectively implemented a maximum of two of the sixteen conventions listed in Part A of Annex III provided that in case of an incompatibility with its Constitution, the country concerned has formally committed itself to sign and ratify any missing Convention no later than 31 December 2006 , the Commission comes to the conclusion that the Republic of El Salvador has complied with the commitments set out in the GSP Regulation.

4. Therefore the Commission invites the Council to decide positively on the continued granting of the special incentive to El Salvador beyond 1 January 2007, as set out in Article 9 i of the GSP Regulation, by adopting the enclosed draft decision.