Explanatory Memorandum to COM(2007)252 - Accession of the EC to the World Customs Organisation and the exercise of rights and obligations akin to membership ad interim

Please note

This page contains a limited version of this dossier in the EU Monitor.

CONTEXT OF THE PROPOSAL

Grounds for and objectives of the proposal The Council of the European Union decided on 19 March 2001 that the European Community should seek membership of the World Customs Organisation i. It authorized the Commission to negotiate the membership of the European Community with the World Customs Organisation. Based on this Council decision, the European Community submitted a request to the World Customs Organisation to become a full member in April 2001.

General context The issue of membership was discussed during the 2001 June sessions of the Council i of the World Customs Organisation as well as the subsequent World Customs Organisation meetings of December 2001 and June 2002. At that time several countries opposed it. The Council of the World Customs Organisation in 2002 left the issue open waiting for a political solution to emerge. Following contacts at political level, the request was presented again at the meeting of the Council of the World Customs Organisation in June 2006. This time the proposal that the World Customs Organisation opens discussion with the European Community regarding its membership request was endorsed. The Council of the World Customs Organisation and subsequently the Policy Commission of the World Customs Organisation in December 2006 examined the legal, voting and budgetary issues pertinent to the membership of the European Community in the World Customs Organisation. Throughout the process, the Commission kept Member States informed in the Customs Policy Group regarding the developments and the practical consequences of the potential membership in the World Customs Organisation. Currently the European Community participates in those World Customs Organisation bodies which are created by other international conventions or agreements to which it is already a party (e.g. Valuation Agreement, Harmonised System, Revised Kyoto Convention, etc.). In the case of other bodies and meetings it can only participate as observer and in some cases a special invitation is required (e.g. Policy Commission meeting). As member of the World Customs Organisation, the European Community will be entitled to participate fully in all World Customs Organisation bodies which are open to general membership and to be elected in bodies with elected membership. Customs matters are exclusive Community competence by virtue of the Treaty establishing the European Community and secondary legislation, most importantly the Community Customs Code. There is also some acquis in the area of customs cooperation related to customs offences and other matters related to EU Member States competences, as regulated by title VI of the Treaty establishing the European Union. A declaration of Community competence to the World Customs Organisation in the field of customs matters is necessary, and is attached herewith i. In all World Customs Organisation bodies, a Community position will be established for matters falling under Community competence. For matters falling under national competence, EU Member States should strive to adopt a common position in order to ensure the unity of external representation of the Community and its Member States, as required by the case law of the European Court of Justice i. Coordinated Community positions will be established in the Council's Customs Union (Legislation and Policy) Working Party or in the Customs Code Committee. On issues subject to Community competence, the European Community casts a number of votes equal to the number of its EU Member States in line with established practice in the World Customs Organisation administered Conventions (e.g. the Revised Kyoto Convention, the Istanbul Convention) and the World Trade Organisation i. An exception is the Harmonised System Convention, where the European Community, together with its Member States, as contracting party has only one vote. EU Member States will continue to pay their membership fees to the World Customs Organisation. This was recognised by the Council in its decision of 19 March 2001. The European Community will pay an annual contribution to the World Customs Organisation to strengthen the work of the Organisation and to cover additional administrative expenses. The European Community contribution will be such that the combined EU Member States and European Community contributions to the World Customs Organisation reflect the weight and importance of the European Community in international trade and customs matters. The overall share of contribution of the European Community and EU Member States to the World Customs Organisation will also be comparable in relative terms to the combined contributions to the World Trade Organisation i. The World Customs Organisation will have to modify the Convention establishing a Customs Co-operation Council to enable accession of customs and economic unions inter alia the European Community. The Council of the World Customs Organisation at its 109th/110th session of June 2007 is expected to adopt a decision i to amend the Convention. The amendment will enter into force after all World Customs Organisation members have given written notification of their acceptance of the amendment. Once the Convention has been modified, the European Community will be able to deposit a legal instrument of accession. Furthermore the Council of the World Customs Organisation, at its 109th/110th session of June 2007, is also expected to adopt a decision, in order to allow the European Community to temporarily exercise the rights and obligations which are akin to a member's with immediate effect i . Member States are called upon to support these two decisions of the Council of the World Customs Organisation in the interest of the European Community. The European Community will be in a position to accept the interim status.

Existing provisions in the area of the proposal There are no existing provisions in the area of the proposal.

Consistency with the other policies and objectives of the Union Not applicable.

3.

CONSULTATION OF INTERESTED PARTIES AND IMPACT ASSESSMENT


Consultation of interested parties

not relevant

Collection and use of expertise

There was no need for external expertise.

Impact assessment o Improved international recognition of the EC competence in the field of the Customs policy. EC membership will enable the Community to fully exert its authority within the WCO and in bilateral relations. o Contribution to and direct influence on WCO decision-making progress. In addition to the traditional activities of the WCO in customs areas, where the EC is already a Contracting Party to a number of WCO conventions, new priorities and activities are developed, in particular in the areas of supply chain security and combating counterfeiting and pirated goods. It is important for the Commission to fully influence the direction of these discussions. o More effective co-ordination of Member States in the WCO. o Raising the international image of the EC and that of the Commission.

Contents

1.

LEGAL ELEMENTS OF THE PROPOSAL



Summary of the proposed action The objective of the proposal for a Council decision is to enable the Community membership in the World Customs Organisation.

Legal basis The legal basis is Article 133 in conjunction with Article 300 i first sentence thereof and second subparagraph thereof of the Treaty establishing the European Community

Subsidiarity principle The proposal falls under the exclusive competence of the Community. The subsidiarity principle therefore does not apply.

4.

Proportionality principle


The proposal complies with the proportionality principle for the following reason. The measure proposed is necessary for creating the legal basis for obtaining the EC membership at the WCO.

The share of the combined Community and EU Member States financial contributions to the WCO will be comparable to that for the World Trade Organisation.

5.

Choice of instruments


Proposed instruments: other.

Other means would not be adequate for the following reason(s). According to Article 300 of the EC Treaty, the signing, and the conclusion of the agreements shall be decided on by the Council, acting by a qualified majority on a proposal from the Commission. The Council Decision is the appropriate instrument.

2.

BUDGETARY IMPLICATION



6.

The budgetary implications include the annual financial contribution of the European Community to the World Customs Organisation as set out in the attached legislative financial statement


7.

1. 2007/0087 (ACC)


Proposal for a

COUNCIL DECISION

on the accession of the European Communities to the World Customs Organisation and the exercise of rights and obligations akin to membership ad interim

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community, and in particular Article 133 thereof, in conjunction with Article 300 i, first subparagraph first sentence and second subparagraph thereof;

Whereas:

2. the Council decided on 19 March 2001 to authorize the Commission to negotiate on behalf of the European Community, the accession of the European Community to the World Customs Organisation i,

3. the Convention establishing a Customs Co-operation Council is expected to be amended by the Council of the World Customs Organisation at its 109th/110th session in June 2007 to allow customs or economic unions, including the European Community to acquire membership of the World Customs Organisation,

4. following exploratory talks with the World Customs Organisation, the European Community and the World Customs Organisation examined the possibility for the European Community to exercise the rights and obligations akin to those of Members of the World Customs Organisation pending the ratification of the amended Convention establishing a Customs Co-operation Council by all Members of the World Customs Organisation,

5. the European Community is expected to be in a position to assume these rights and obligations in the framework of the Convention establishing a Customs Co-operation Council in matters of Community competence,

6. the EU Members States shall maintain their status in the World Customs Organisation,

7. both the European Community and its Member States have competence in the areas covered by the Convention establishing a Customs Co-operation Council, it is therefore desirable for the European Community to become a Contracting Party to the Convention in order to carry out together the obligations laid down in the Convention and exercise together the rights it confers in cases of shared competence in order to guarantee the uniform application of the Convention,

8. for matters falling under European Community competence a European Community position must be established. For matters falling under national competence EU Member States should strive to adopt a common position to ensure the unity of external representation of the European Community and its Member States,

9. in view of the above the Council should adopt the necessary decision to enable European Community membership to the World Customs Organisation and to provide for the exercise of rights and obligations akin to membership ad interim.

HAS DECIDED AS FOLLOWS:

8.

Article 1


1. Upon entry into force of the amendment to the Convention establishing a Customs Co-operation Council allowing the European Community to become a member of that organization, the European Community shall express its consent to be bound by the amended Convention and thereby accede to the World Customs Organization.

2. The Commission is hereby authorised to designate the person empowered to deposit the instrument of the formal notification to the depositor of the Convention in order to bind the Community, subject to the fulfilment of the procedural requirements of the EC Treaty.

9.

Article 2


1. EU Member States shall vote in favour of the Council of the World Customs Organisation decisions according to which the European Community shall, as an interim measure, be granted rights akin to those enjoyed by World Customs Organisation Members, subject to the conditions contained therein.

2. The European Commission shall submit a letter to the World Customs Organisation according to which the European Community accepts the rights and obligations akin to those of World Customs Organisation members as laid down in the World Customs Organisation Council decision pending the entry into force of the amendment of the Convention establishing a Customs Co-operation Council.

3. The letter shall contain a declaration of competence as specified in Annex 1.

4. The European Community shall pay an annual contribution to the World Customs Organisation to strengthen the work of the World Customs Organisation and to cover additional administrative expenses as of 1 July 2007.

Done at Brussels, […]

10.

For the Council


The President

[…]

11.

ANNEX Declaration of competence by the European Communities in matters covered by the Convention establishing a Customs Co-operation Council


In accordance with the Treaty establishing the European Community, as amended, this declaration sets out the competence that the EU Member States have transferred to the Communities in matters governed by the Convention establishing a Customs Co-operation Council.

The exercise of competence which EU Member States has transferred to the European Communities pursuant to the Treaties is, by its nature, liable to continuous change. The European Communities therefore reserve the right to adjust the declaration.

12.

Policy area EC legislation


Customs union, Common commercial policy, Customs cooperation Articles 23 to 27 of the Treaty establishing the European Community, Articles 131 to 134 of the Treaty establishing the European Community, Article 135 of the Treaty establishing the European Community

Facilitation of customs procedures Council Regulation (EEC) No 2913/92 of 12 October 1992 establishing the Community Customs Code Council decision of 17 March 2003 concerning the accession of the European Community to the Protocol of Amendment to the International Convention on the simplification and harmonisation of customs procedures (Kyoto Convention) (2003/231/EC) Directive 2002/6/EC of the European Parliament and of the Council on reporting formalities for ships arriving and/or departing from ports of the Member States of the Community

Customs valuation Council Regulation (EEC) No 2913/92 of 12 October 1992 establishing the Community Customs Code Commission Regulation (EEC) No 2454/93 of 2 July 1993 laying down provisions for the implementation of Council Regulation (EEC) No 2913/92 establishing the Community Customs Code Council Decision 80/271/EEC of 10 December 1979 concerning the conclusion of the Multilateral Agreements resulting from the 1973 to 1979 trade negotiations (OJ L 71, 17.3.1980, p.

1)

Origin Council Regulation (EEC) No 2913/92 of 12 October 1992 establishing the Community Customs Code Council Decision 80/271/EEC of 10 December 1979 concerning the conclusion of the Multilateral Agreements resulting from the 1973 to 1979 trade negotiations (OJ L 71, 17.3.1980, p.

1) Several joint committee decisions with third countries, e.g. 2006/343/EC: Decision No 2/2005 of the EC-Iceland Joint Committee of 22 December 2005 amending Protocol 3 to the Agreement, concerning the definition of the concept of originating products and methods of administrative cooperation

Harmonised System, tariff classification 87/369/EEC: Council Decision of 7 April 1987 concerning the conclusion of the International Convention on the Harmonized Commodity Description and Coding System and of the Protocol of Amendment thereto Council Regulation (EEC) No 2658/87 of 23 July 1987 on the tariff and statistical nomenclature and on the Common Customs Tariff Commission regulation (EC) No 1719/2005 of 27 October 2005 amending Annex I to Council Regulation (EEC) No 2658/87 on the tariff and statistical nomenclature and on the Common Customs Tariff

Tariff and quota matters Articles 26 and 133 of the Treaty establishing the European Community Council Regulation (EC) No 2505/96 of 20 December 1996 opening and providing for the administration of Community tariff quotas for certain agricultural and industrial products and amending Regulation (EC) No 3059/95 opening and providing for the administration of Community tariff quotas for certain agricultural and industrial products (first series 1996) Commission Regulation (EEC) No 2454/93 of 2 July 1993 laying down provisions for the implementation of Council Regulation (EEC) No 2913/92 establishing the Community Customs Code Council Regulation (EC) No 384/96 of 22 December 1995 on protection against dumped imports from countries not members of the European Community as amended Council Regulation (EC) No 2026/97 of 6 October 1997 on protection against subsidized imports from countries not members of the European Community as amended Council Regulation (EC) No 3285/94 of 22 December 1994 on the common rules for imports and repealing Regulation (EC) No 518/94 as amended

Compliance and enforcement: drug precursors, fight against counterfeiting, cash control Council Regulation (EEC) No 2913/92 of 12 October 1992 establishing the Community Customs Code Council Regulation (EEC) No 3677/90 of 13 December 1990 laying down measures to be taken to discourage the diversion of certain substances to the illicit manufacture of narcotic drugs and psychotropic substances Commission Regulation (EEC) No 3769/92 of 21 December 1992 implementing and amending Council Regulation (EEC) No 3677/90 laying down measures to be taken to discourage the diversion of certain substances to the illicit manufacture of narcotic drugs and psychotropic substances Council Regulation (EC) No 111/2005 of 22 December 2004 laying down rules for the monitoring of trade between the Community and third countries in drug precursors Council Regulation (EC) No 1383/2003 of 22 July 2003 concerning customs action against goods suspected of infringing certain intellectual property rights and the measures to be taken against goods found to have infringed such rights Regulation (EC) No 1889/2005 of the European Parliament and of the Council of 26 October 2005 on controls of cash entering or leaving the Community

Supply chain security Regulation (EC) No 648/2005 of the European Parliament and of the Council of 13 April 2005 amending Council Regulation (EEC) No 2913/92 establishing the Community Customs Code

Transit, temporary admission Council Regulation (EEC) No 2913/92 of 12 October 1992 establishing the Community Customs Code Commission Regulation (EEC) No 2454/93 of 2 July 1993 laying down provisions for the implementation of Council Regulation (EEC) No 2913/92 establishing the Community Customs Code Convention between the European Economic Community, the Republic of Austria, the Republic of Finland, the Republic of Iceland, the Kingdom of Norway, the Kingdom of Sweden and the Swiss Confederation, on a common transit procedure Council Decision (EEC) No 93/329 of 15 March 1993 concerning the conclusion of the Convention on Temporary Admission and accepting its annexes Council Regulation (EEC) No 719/91 of 21 March 1991 on the use in the Community of TIR carnets and ATA carnets as transit documents

Capacity building, technical assistance, training Treaty establishing the European Community Part Three: Community policies, Title XX: Development Cooperation Title XXI: Economic, Financial and Technical Cooperation with Third Countries

LEGISLATIVE FINANCIAL STATEMENT

13.

1. NAME OF THE PROPOSAL: COUNCIL DECISION on the accession of the European Communities to the World Customs Organisation and the exercise of rights and obligations akin to membership ad interim


14.

2. ABM / ABB FRAMEWORK


Policy Area(s) concerned and associated Activity/Activities:

15.

1403 International aspects of taxation and customs


16.

3. BUDGET LINES


3.1. Budget lines (operational lines and related technical and administrative assistance lines (ex- B..A lines)) including headings:

- 140303 Membership of international organisations in the field of customs and tax

The creation of this budget line to be submitted to the Budget Authority in 2007.

3.2. Duration of the action and of the financial impact:

- The period of validity of the legal base runs from adoption estimated July 2007 on.

- The payments will continue after 31/12/2013

3.3. Budgetary characteristics:

17.

Budget line Type of expenditure New EFTA contribution Contributions from applicant countries Heading in financial perspective


Non-comp Diff i YES NO NO No

18.

4. SUMMARY OF RESOURCES


19.

4.1. Financial Resources


20.

4.1.1. Summary of commitment appropriations (CA) and payment appropriations (PA)


EUR million (to 3 decimal places)

Expenditure type Section no. Year 2012 and later Total

Operational expenditure i

Commitment Appropriations (CA) 8.1. a 0. 6.

Payment Appropriations (PA) b 0. 6.

Administrative expenditure within reference amount i

Technical & administrative assistance (NDA) 8.2.4. c - - - - - - -

21.

TOTAL REFERENCE AMOUNT


Commitment Appropriations a+c 0. 6.

Payment Appropriations b+c 0. 6.

Administrative expenditure not included in reference amount i

Human resources and associated expenditure (NDA) 8.2.5. d - 0. 0. 0. 0. 0. 1.

Administrative costs, other than human resources and associated costs, not included in reference amount (NDA) 8.2.6. e - 0. 0. 0. 0. 0. 0.

22.

Total indicative financial cost of intervention


TOTAL CA including cost of Human Resources a+c+d+e 0. 1. 1. 1. 1. 2. 7.

TOTAL PA including cost of Human Resources b+c+d+e 0. 1. 1. 1. 1. 2. 7.

23.

The amount mentioned in this financial statement refer only to the period covered by the Financial Framework 2007-2013


Co-financing details

If the proposal involves co-financing by Member States, or other bodies (please specify which), an estimate of the level of this co-financing should be indicated in the table below (additional lines may be added if different bodies are foreseen for the provision of the co-financing):

24.

EUR million (to 3 decimal places)


Co-financing body Year n n + n + n + n + n + 5 and later Total

…………………… f

TOTAL CA including co-financing a+c+d+e+f

25.

4.1.2. Compatibility with Financial Programming


x Proposal is compatible with existing financial programming.

Proposal will entail reprogramming of the relevant heading in the financial perspective.

Proposal may require application of the provisions of the Interinstitutional Agreement i (i.e. flexibility instrument or revision of the financial perspective).

A provision has been foreseen in the APS 2008 decision for the accession of the European Communities to the World Customs Organisation.

26.

4.1.3. Financial impact on Revenue


x Proposal has no financial implications on revenue

Proposal has financial impact – the effect on revenue is as follows:

4.2. Human Resources FTE (including officials, temporary and external staff) – see detail under point 8.2.1.

27.

Annual requirements Year 2012 and later


Total number of human resources

28.

5. CHARACTERISTICS AND OBJECTIVES


29.

5.1. Need to be met in the short or long term


With the membership to the World Customs Organisation, EC will assume a role which is commensurate with its responsibilities in Customs policy areas.

30.

5.2. Value-added of Community involvement and coherence of the proposal with other financial instruments and possible synergy


Currently the EC participates in those WCO bodies which are created by other international conventions or agreements to which it is already a party (e.g. Valuation Agreement, Harmonised System, Revised Kyoto Convention, etc.).

As member to the WCO, the EC would be entitled to participate fully in all WCO bodies which are open to the general membership, notably Council of the WCO, Permanent Technical Committee, Enforcement Committee, etc., and to be elected to WCO bodies with elected membership, notably Policy Commission, Finance Committee, Audit Committee.

31.

5.3. Objectives, expected results and related indicators of the proposal in the context of the ABM framework


32.

5.4. Method of Implementation (indicative)


x Centralised Management

x directly by the Commission

indirectly by delegation to:

executive Agencies

bodies set up by the Communities as referred to in art. 185 of the Financial Regulation

national public-sector bodies/bodies with public-service mission

Shared or decentralised management

with Member states

with Third countries

Joint management with international organisations (please specify)

33.

Relevant comments: None


34.

6. MONITORING AND EVALUATION


35.

6.1. Monitoring system


Reporting in the Annual Activity Report (AAR) of Taxation and Customs Union Directorate General

36.

6.2. Evaluation


37.

6.2.1. Ex-ante evaluation


Council decision of 19 March 2001 to start negotiations to obtain membership to WCO

38.

6.2.2. Measures taken following an intermediate/ex-post evaluation (lessons learned from similar experiences in the past)


Lessons learned from Community membership to FAO and other international organisations.

39.

6.2.3. Terms and frequency of future evaluation


Non applicable

40.

7. Anti-fraud measures


Participation to WCO Finance and Audit Committees

41.

8. DETAILS OF RESOURCES


42.

8.1. Objectives of the proposal in terms of their financial cost


Commitment appropriations in EUR million (to 3 decimal places)

Year Year Year Year Year Year

Officials or temporary staff i (XX 01 01) A*/AD -

B*, C*/AST - - -. - - -

Staff financed i by art. XX 01 - - -. - - -

Other staff i financed by art. XX 01 04/ - - -. - - -

43.

TOTAL -


44.

8.2.2. Description of tasks deriving from the action


Preparation, coordination and representation of Community position in the WCO

45.

8.2.3. Sources of human resources (statutory)


Posts currently allocated to the management of the programme to be replaced or extended

x Posts pre-allocated within the APS/PDB exercise for year 2008 : 1 AD post

Posts to be requested in the next APS/PDB procedure

X Posts to be redeployed using existing resources within the managing service (internal redeployment) : 1 AD post

Posts required for year n although not foreseen in the APS/PDB exercise of the year in question

8.2.4. Other Administrative expenditure included in reference amount (XX 01 04/05 – Expenditure on administrative management)

46.

EUR million (to 3 decimal places)


Budget line (number and heading) Year Year Year Year Year Year 2012 and later TOTAL

Other technical and administrative assistance - - - - - - -

- intra muros - - - - - - -

- extra muros - - - - - - -

Total Technical and administrative assistance - - - - - - -

47.

8.2.5. Financial cost of human resources and associated costs not included in the reference amount


EUR million (to 3 decimal places)

Type of human resources Year Year Year Year Year Year 2012 and later

Officials and temporary staff (XX 01 01) - 0. 0. 0. 0. 0.

Staff financed by Art XX 01 02 (auxiliary, END, contract staff, etc.) (specify budget line) p.m. p.m. p.m. p.m. p.m. p.m.

Total cost of Human Resources and associated costs (NOT in reference amount) - 0. 0. 0. 0. 0.

Calculation– Officials and Temporary agents

48.

108,000 EUR per year per official /temporary staff


Calculation– Staff financed under art. XX 01 02

49.

Non applicable


50.

8.2.6. Other administrative expenditure not included in reference amount EUR million (to 3 decimal places)


Year Year Year Year Year Year 2012 and later TOTAL

XX 01 02 11 01 – Missions - 0. 0. 0. 0. 0. 0.

XX 01 02 11 02 – Meetings & Conferences 0. 0. 0. 0. 0. 0.

XX 01 02 11 03 – Committees i - - - - - - -

XX 01 02 11 04 – Studies & consultations - - - - - - -

51.

XX 01 02 11 05 - Information systems - - - - - - -


2 Total Other Management Expenditure (XX 01 02 11) - 0. 0. 0. 0. 0. 0.

52.

3 Other expenditure of an administrative nature (specify including reference to budget line) - - - - - - -


Total Administrative expenditure, other than human resources and associated costs (NOT included in reference amount) - 0. 0. 0. 0. 0. 0.

53.

Calculation - Other administrative expenditure not included in reference amount


54.

1,000 EUR per mission


The membership will entail two meetings of the Expert group International Affairs for coordination of EC position.Meetings : travel expenses for 27 experts.
“World Customs Organization”, to more clearly reflect its scope. Presently the WCO has 171 members.
"(…) the European Community is competent for all matters governed by the body of the Convention and its General Annex, except for those matters not falling within its exclusive explicit or implicit competence as laid down in the Treaty establishing the European Community as amended and within secondary Community legislation.".
§108.
§1, third sentence, of the Marrakesh Agreement establishing the World Trade Organisation reads: "Where the European Communities exercise their right to vote they shall have a number of votes equal to the number of their EU Member States which are members of the World Trade Organisation.
“World Customs Organization”, to more clearly reflect its scope. Presently the World Customs Organisation has 171 members.