Resolution No 1/98 On the changes of Protocol A to the Free Trade Agreement between the Republic of Estonia, the Republic of Latvia and the Republic of Lithuania signed on September 13,1993

THE JOINT COMMITTEE,

making reference to the Free Trade Agreement between the Republic of Estonia, the Republic of Latvia and the Republic of Lithuania, signed on September 13, 1993 and the amendments to Protocol A of the Free Trade Agreement between the Republic of Estonia, Republic of Latvia and the Republic of Lithuania signed on February 6,1997 by the Resolution of the Joint Committee No 1/97;

making reference to Article 24 of the Free Trade Agreement between the Republic of Estonia, The Republic of Latvia and the Republic of Lithuania (hereinafter referred to as Agreement);

whereas 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 Estonia, Latvia, Lithuania, Slovak Republic, the European Union, Poland, Hungary, the Czech Republic, Turkey, Bulgaria, Romania, Slovenia, Iceland, Norway and Switzerland (including Liechtenstein);

whereas to facilitate trade and simplify administrative tasks it would be desirable to amend the wording of Articles 4,12 and 15;

whereas, to take 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 fulfill to qualify for originating status,

HAS DECIDED AS FOLLOWS:

Article 1

Protocol A on the definition of the concept of "originating products" and methods of administrative cooperation is hereby amended as follows:

l. Article 1 (i) 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 Article 4 or, where the customs value is not known or cannot be ascertained, the first price verifiably paid for the products in the Party."

2. Article 3 shall be abolished.

3. Article 4 shall be replaced by:

" Article 4

Cumulation of Origin

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

3. Products, originating in one of the countries referred to in paragraph l, which do not undergo any working or processing in the Party, 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.

4. Article 12 shall be replaced by the following:

"Principle of territoriality

1. Except as provided for in Article 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 the Parties.

2. Except as provided for in Article 4, where originating goods exported from one of the Parties 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 the Parties on materials exported from one of the Parties and subsequently reimported there, provided:

(a) the said materials are wholly obtained in one of the Parties 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

ū) the total added value acquired outside the Parties 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 the Parties. But where, in the list in Annex II, a rule setting a maximum value for all the nonoriginating 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 of the Party concerned, taken together with the total added value acquired outside the Party 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 the Parties, including the value of the materials incorporated there.

6. The provisions of paragraphs 3 and 4 shall not apply to products which do not fulfill the conditions set out in the list in Annex II or which can be considered sufficiently 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 Harmonized System.

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

5. In Article 15 following paragraph shall be added:

"6. Notwithstanding paragraph 1, Parties may apply arrangements for drawback of, or exemption from, customs duties or charges having equivalent effect, applicable to materials used in the manufacture of originating products, subject to the following provisions:

(a) a 5 per cent rate of customs charge shall be retained in respect of products falling within chapters 25 to 49 and 64 to 97 of the Harmonized System, or such lower rate as in force in the Party.

(b) a 10 per cent rate of customs charge shall be retained in respect of products falling within chapters 50 to 63 of the Harmonized System, or such lower rate as in force in the Party.

The provisions of this paragraph shall apply until 31 December 2000 and may be reviewed by common accord."

6. In Article 26 the reference "C2/CP3" shall be replaced by "CN22/CN23".

7. In Annex I, Note 5.2, "current conducting filaments" shall be added between

"artificial man-made filaments" and "synthetic man-made staple fibres of polypropylene".

8. In Annex I, Note 5.2 the fifth example ("A carpet with tufts. . . are met. ") shall be deleted.

9. In Annex II, between the rules for HS headings 2202 and 2208 the following rule shall be inserted:

10. In Annex II the text of the rule for Chapter 57 shall be replaced by:

1 For special conditions relating to products made of a mixture of textile materials, see Introductory Note 5

2 The use of jute is authorised from 1 July 2000.";

11. In Annex II the text of the rule for HS heading7006 shall be replaced by:

1 SEMII - Semiconductor Equipment and Materials Institute Incorporated."

12. In Annex II the text of the rule for HS heading 7601 shall be replaced by:

Article 2

This Resolution shall enter into force on this first day of the second month after all the parties have notified the Depositary of completing the internal legal procedures necessary for the entry into force of this Resolution.

In respect or the Republic of Estonia and the Republic of Latvia, this Resolution shall be provisionally applied from January 1, 1999.

This Resolution shall be deposited with the Depositary of the Free Trade Agreement between the Republic of Estonia, the Republic of Latvia and the Republic of Lithuania signed on 13 September, 1993, the Republic of Estonia.

IN WITNESS WHEREOF the undersigned plenipotentiaries, being duly authorised thereto, have signed this Resolution.

DONE at Vilnius, this 22 day of December one thousand nine hundred and ninety eight in one copy in the English, Estonian, Latvian and Lithuanian languages. In case of divergence the English text shall prevail.

On behalf of the On behalf of the On behalf of the

Republic of Estonia Republic of Latvia Republic of Lithuania

Tiit Naber Jānis Vanags Algimantas Rimkunas

Director of Foreign Economic State Secretary Vice Minister,

Policy Department, Ministry of the Ministry of Economy Ministry of Foreign

of Foreign Affairs of of the Republic Affairs of the Republic

the Republic of Estonia of Latvia