The Protocol on Amendments to the Protocol B on Rules of Origin to the Free Trade Agreement between the Republic of Slovenia and the Republic of Latvia

* The Principality if Liechtenstein has a Customs union with Switzerland, and is a Contracting Party to the Agreement on the European Economic Area.

** Cumulation as provided for this Article does not apply to materials originating in Turkey which are mentioned in the list at Annex V to this Protocol.

The Republic of Latvia (hereinafter called Latvia) and the Republic of Slovenia (hereinafter called Slovenia),

Having regard to the Free Trade Agreement between the Republic of Slovenia, of the one part, and the Republic of Latvia, of the other part (1), signed in Riga on 22 April 1996, and in particular Article 38 thereof,

Whereas within this Protocol B the definition of the term "originating products" needs to be amended to ensure the proper operation of the extended system of cumulation which permits the use of materials originating in the European Community, the Republic of Poland, the Republic of Hungary, the Czech Republic, the Slovak Republic, the Republic of Bulgaria, Romania, the Republic of Latvia, the Republic of Lithuania, the Republic of Estonia, the Republic of Slovenia, the European Economic Area, Iceland, Norway and Switzerland;

Whereas it would seem advisable to maintain in operation by 31 December 2000 the system of flat rate charges provided for in Article 15 of this Protocol B in connection with the prohibition of drawback and exemption from customs duty;

Whereas it would also be appropriate to extend the cumulation system to such products originating in the Republic of Turkey;

Whereas to facilitate and simplify administrative tasks it would be desirable to amend the wording of Articles 3, 4 and 12 of Protocol B;

Whereas taking into account of changes in processing techniques and shortages of certain raw materials, some corrections must be made to the list of working and processing requirements which non-originating materials have to fulfil to qualify for originating status,

HAVE DECIDED AS FOLLOWS:

Article 1

Protocol B concerning the definition of the concept of "originating products" and methods of administrative co-operation is hereby amended as follows:

1. Paragraph 1(i) of Article 1 shall be replaced by :

"(i) "added value" shall be taken to be the ex-works price minus the customs value of each of the materials incorporated which originate in the other countries referred to in Article3 and 4 or, where the customs value is not known or cannot be ascertained, the first price verifiably paid for the products in Latvia or Slovenia."

2. Articles 3 and 4 shall be replaced by the following:

" Article 3

Cumulation in Slovenia:

l. Without prejudice to the provisions of Article 2 , products shall be considered as originating in Slovenia if such products are obtained there, incorporating materials originating in the European Community, the Republic of Bulgaria, the Republic of Poland, the Republic of Hungary, the Czech Republic, the Slovak Republic, Romania, the Republic of Lithuania, the Republic of Latvia, the Republic of Estonia, the Republic of Slovenia, Iceland, Norway, Switzerland (including Liechtenstein)* or the Republic Turkey ** in accordance with the provisions of the Protocol on rules of origin annexed to the Agreements between Slovenia and each of these countries, provided that the working or processing carried out in Slovenia goes beyond that referred to in Article 7 of this Protocol. It shall not be necessary that such materials have undergone sufficient working or processing.

2. Where the working or processing carried out in Slovenia does not go beyond the operations referred to in Article 7, the product obtained shall be considered as originating in Slovenia only where the value added there is greater than the value of the materials used originating in any one of the other countries referred to in paragraph 1. If this is not so, the product obtained shall be considered as originating in the country which accounts for the highest value of originating materials used in the manufacture in Slovenia.

3. Products, originating in one of the countries referred to in paragraph 1, which do not undergo any working or processing in Slovenia, retain their origin if exported into one of these countries.

4. The cumulation provided for in this Article may only be applied to materials and products which have acquired originating status by an application of rules of origin identical to those given in this Protocol.

Article 4

Cumulation in Latvia

l. Without prejudice to the provisions of Article 2, products shall be considered as originating in Latvia, if such products are obtained there, incorporating materials originating in the European Community, the Republic of Bulgaria, the Republic of Poland, the Republic of Hungary, the Czech Republic, the Slovak Republic, Romania, the Republic of Lithuania, the the Republic of Estonia, the Republic of Slovenia, Iceland, Norway, Switzerland (including Liechtenstein)* or the Republic Turkey** in accordance with the provisions of the Protocol on rules of origin annexed to the Agreements between Latvia and each of these countries, provided that the working or processing carried out in Latvia goes beyond that referred to in Article 7 of this Protocol. It shall not be necessary that such materials have undergone sufficient working or processing.

2. Where the working or processing carried out in Latvia does not go beyond the operations referred to in Article 7, the product obtained shall be considered as originating in Latvia only where the value added there is greater than the value of the materials used originating in any one of the other countries referred to in paragraph 1. If this is not so, the product obtained shall be considered as originating in the country which accounts for the highest value of originating materials used in the manufacture in Latvia.

3. Products, originating in one of the countries referred to in paragraph 1, which do not undergo any working or processing in Latvia, retain their origin if exported into one of these countries.

4. The cumulation provided for in this Article may only be applied to materials and products which have acquired originating status by an application of rules of origin identical to those given in this Protocol.

3. Article 12 shall be replaced by the following:

" Article 12

Principle of territoriality:

l. Except as provided the Articles 3 and 4, and paragraph 3 of this Article, the conditions for acquiring originating status set out in Title II must continue to be fulfilled at all times in Latvia or Slovenia.

2. Except as provided for in Articles 3 and 4, where originating goods exported from one of Latvia or Slovenia to another country return, they must be considered as non-originating, unless it can be demonstrated to the satisfaction of the customs authorities that:

(a) the returning goods are the same as those that were 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.

3. The acquisition of originating status in accordance with the conditions set out in Title II shall not be affected by working or processing done outside Latvia or Slovenia on materials exported from one of Latvia or Slovenia and subsequently reimported there, provided:

(a) the said materials are wholly obtained in Latvia or Slovenia or have undergone working or processing beyond the insufficient operations listed in Article 7 prior to being exported; and

(b) it can be demonstrated to the satisfaction of the customs authorities that:

i) the reimported goods have been obtained by working or processing the exported materials; and

ii) the total added value acquired outside Latvia or Slovenia by applying the provisions of this Article does not exceed 10% of the ex-works price of the end product for which originating status is claimed.

4. For the purposes of paragraph 3, the conditions for acquiring originating status set out in Title II shall not apply to working or processing done outside Latvia or Slovenia. But where, in the list in Annex II, a rule setting a maximum value for all the non-originating materials incorporated is applied in determining the originating status of the end product, the total value of the non-originating materials incorporated in the territory Latvia or Slovenia concerned, taken together with the total added value acquired outside Latvia or Slovenia by applying the provisions of this Article, shall not exceed the stated percentage.

5. For the purposes of applying the provisions of paragraphs 3 and 4, "total added value" shall be taken to mean all costs arising outside Latvia or Slovenia, including the value of the materials incorporated there.

6. The provisions of paragraphs 3 and 4 shall not apply to products which do not fulfil the conditions set out in the list in Annex II or which can be considered sufficently worked or processed only if the general values fixed in Article 6(2) are applied.

7. The provisions of paragraphs 3 and 4 shall not apply to products coming under Chapters 50 to 63 of the Harmonised System.

8. Any working or processing of the kind covered by the provisions of this Article and done outside Latvia or Slovenia shall be done under the outward%‡rocessing arrangements, or similar arrangements."

4. In Articles 13,14,15,17,21,27,30,32, the phrase "referred to in Article 4" shall be replaced by "referred to in Articles 3 and 4" ;

5. In the last paragraph of Article 15 (6) the date" 31 December 1998" shall be replaced by the new date "31 December 2000".

6. In Article 26 (1) the reference C2/CP3" shall be replaced b the new reference CN22/CN23".

7. In Annex I Note 5.2 :

(a) between the indents

-" artificial man-made filaments" and

- synthetic man-made staple fibres of polypropylene",

the following shall be inserted:

" -current conducting filaments";

(b) the fifth Example ("A carpet with tufts ...are met") shall be deleted;

8. In Annex II shall be amended as follows:

- between the rules for HS headings 2202 and 2208 the rule of the following text shall be inserted:

(b) In Annex II the text of the rule for Chapter 57 shall be replaced by:

(c)In Annex II the text of the rule for HS heading 7006 shall be replaced by:

1 SEMII - Semiconductor Equipment and Materials Institute Incorporated."

(d) In Annex II the text of the rule for HS heading 7601 shall be replaced by:

9. In Annex IV, the Slovenian version of the invoice declaration shall be replaced by the following text: "Izvoznik blaga, zajetega s tem dokumentom (pooblastilo carisnkih organov št...(1)) izjavljam, da, razen ce ni drugace jasno navedeno, ima to blago preferencialno...(2) poreklo."

Article 2

1. The Protocol shall enter into force on the date of the last notification on the fulfilment of internal legal requirements for its entry into force.

2. The Republic of Latvia and the Republic of Slovenia shall apply this Protocol provisionally from the first day of the month following the date of the signature.

Done at Riga, this 30th day of December 1998, in two originals in the English language.

For the Republic For the Republic

of Latvia of Slovenia

Jānis Vanags Boris Frlec

State Secretary Minister of Foreign

of the Ministry of Affairs

Economy of the of the Republic

Republic of Latvia of Slovenia