title: 2011/824/EU: Council Decision of 20 October 2011 on the conclusion of the Agreement in the form of an Exchange of Letters between the European Union, of the one part, and the Palestinian Authority of the West Bank and the Gaza Strip, of the other part, providing further liberalisation of agricultural products, processed agricultural products and fish and fishery products and amending the Euro-Mediterranean Interim Association Agreement on trade and cooperation between the European Community, of the one part, and the Palestine Liberation Organization (PLO) for the benefit of the Palestinian Authority of the West Bank and the Gaza Strip, of the other part#Agreement in the form of an Exchange of Letters between the European Union, of the one part, and the Palestinian Authority of the West Bank and the Gaza Strip, of the other part, providing further liberalisation of agricultural products, processed agricultural products and fish and fishery products and amending the Euro-Mediterranean Interim Association Agreement on trade and cooperation between the European Community, of the one part, and the Palestine Liberation Organization (PLO) for the benefit of the Palestinian Authority of the West Bank and the Gaza Strip, of the other

text:
               10.12.2011

               EN

               Official Journal of the European Union

               L 328/2

         COUNCIL DECISION
   of 20 October 2011
   on the conclusion of the Agreement in the form of an Exchange of Letters between the European Union, of the one part, and the Palestinian Authority of the West Bank and the Gaza Strip, of the other part, providing further liberalisation of agricultural products, processed agricultural products and fish and fishery products and amending the Euro-Mediterranean Interim Association Agreement on trade and cooperation between the European Community, of the one part, and the Palestine Liberation Organization (PLO) for the benefit of the Palestinian Authority of the West Bank and the Gaza Strip, of the other part
   (2011/824/EU)
   THE COUNCIL OF THE EUROPEAN UNION,
   Having regard to the Treaty on the Functioning of the European Union, and in particular the first subparagraph of Article 207(4), in conjunction with Article 218(6)(a), thereof,
   Having regard to the proposal from the European Commission,
   Having regard to the consent of the European Parliament (1),
   Whereas:

               (1)

               The relationship between the Union and the Palestinian Authority of the West Bank and the Gaza Strip (‘the Palestinian Authority’) builds on the Euro-Mediterranean Interim Association Agreement on trade and cooperation between the European Community, of the one part, and the Palestine Liberation Organization (PLO) for the benefit of the Palestinian Authority of the West Bank and the Gaza Strip, of the other part (2) (‘Interim Agreement’), which was signed in February 1997 and whose trade provisions entered into force on 1 July 1997. Its main objective is to promote trade and investment and harmonious economic relations between the Parties thereby fostering their sustainable economic development.

               (2)

               The Interim Agreement provides for duty-free access to the Union markets for Palestinian industrial goods, and a phasing-out of duties on the Union exports to the occupied Palestinian territory over 5 years. The possibility of granting the Palestinian Authority additional trade preferences is envisaged in the Interim Agreement. Article 12 of the Interim Agreement provides that the Community and the Palestinian Authority shall progressively establish a greater liberalisation of their trade in agricultural and fishery products of interest to both Parties. Article 14(2) of the Interim Agreement provides that the Community and the Palestinian Authority shall examine, in the Joint Committee, the possibility of granting each other further concessions.

               (3)

               The European Neighbourhood Policy Action Plan (‘ENP Action Plan’) for the Palestinian Authority, which was approved in May 2005 and subsequently extended, also contains provisions concerning the gradual liberalisation of trade in agriculture and fishery products.

               (4)

                  The Euro-Mediterranean Roadmap for agriculture (Rabat Roadmap) adopted by the Euro-Mediterranean Ministers of Foreign Affairs on 28 November 2005 provides that a high degree of trade liberalisation for agricultural products, processed agricultural products and fish and fishery products is desirable; the objective is full liberalisation of such trade by 2010, possibly excluding a very limited number of sensitive products.

               (5)

               At the last Trade Euro-Mediterranean Ministerial meeting in December 2009, Ministers of Trade of the Euro-Mediterranean region committed themselves to facilitate the trade of Palestinian products, as stated in the document The Euromed Trade Roadmap beyond 2010. In addition, a comprehensive package of measures to facilitate trade of Palestinian products with other Euro-Mediterranean partners on a bilateral and regional basis has been agreed by Ministers of Trade in 2010.

               (6)

               Negotiations with the Palestinian Authority concerning greater liberalisation of trade in agricultural products, processed agricultural products and fish and fishery products were successfully concluded by signing the Agreement in the form of an Exchange of Letters between the European Union, of the one part, and the Palestinian Authority of the West Bank and the Gaza Strip, of the other part, providing further liberalisation of agricultural products, processed agricultural products and fish and fishery products and amending the Euro-Mediterranean Interim Association Agreement on trade and cooperation between the European Community, of the one part, and the Palestine Liberation Organization (PLO) for the benefit of the Palestinian Authority of the West Bank and the Gaza Strip, of the other part (‘the Agreement’), in accordance with Council Decision 2011/248/EU (3).

               (7)

               The occupied Palestinian territory governed by the Palestinian Authority is a state in the making. It is therefore not listed under any United Nations classification and therefore cannot benefit from the Union’s Generalised System of Preferences (4).

               (8)

               The Palestinian Authority is the smallest trading partner for the Union in the Euro-Mediterranean region and almost worldwide, with total trade amounting to EUR 56,6 million in 2009 where the vast majority of it is accounted for by EU exports (EUR 50,5 million). Union imports from the Palestinian Authority amount to just EUR 6,1 million in 2009 and consist mainly of agricultural products and processed agricultural products (approximately 70,1 % of total Union imports). In 2009, the Union exported EUR 1,7 million of agricultural goods, EUR 3,3 million of processed agricultural products and EUR 0,1 million of fish and fishery products. Further market opening is expected to support the development of the economy of the West Bank and the Gaza Strip through increased export performance while not creating negative effects for the Union. It is therefore appropriate to grant additional trade preferences to the Palestinian Authority by improving access to the Union market for agricultural products.

               (9)

               In accordance with the ENP Action Plan, the level of ambition of the Union-Palestinian Authority relationship will depend on the degree of the Palestinian Authority’s commitment to common values as well as its capacity to implement jointly agreed priorities. The Union is planning to complement the granting of additional trade preferences with a package of trade related technical assistance which will further help the Palestinian Authority to prepare for a future Palestinian State.

               (10)

               In addition, entitlement to benefit from the additional trade preferences granted by the Union is conditional upon the Palestinian Authority’s compliance with the relevant rules of origin and the procedures related thereto as well as the provision of effective administrative cooperation and assistance to the European Union. Any serious and systematic violations of these conditions, or other findings of fraud or irregularity, may lead to the adoption of measures by the Union following the relevant procedures in Article 23 bis of the Interim Agreement.

               (11)

               For the purposes of defining the concept of originating products, certification of origin and administrative cooperation procedures, Protocol 3 to the Interim Agreement concerning the definition of the concept of ‘originating products’ and methods of administrative cooperation applies.

               (12)

               If the imports of agricultural products, processed agricultural products and fish and fishery products originating in the territory of the Palestinian Authority significantly increase and thereby cause serious distortion to the Union internal market, the Union should be able to adopt, if appropriate, safeguard measures in accordance with this Decision.

               (13)

               The import arrangements adopted by the Agreement should be renewed on the basis of the conditions established by the Council and in the light of the experience gained in granting them. It is therefore appropriate to limit their duration to 10 years. However, taking into account the economic situation of the West Bank and Gaza Strip, the Parties should prolong the application of duty-free quota-free treatment should they consider that the Palestinian economy needs an additional transitional period in order to be ready to enter into negotiations leading to further reciprocal concessions.

               (14)

               The Union and the Palestinian Authority should meet 5 years from the date of entry into force of the Agreement to consider the possibility of granting each other further permanent concessions of trade in agricultural products, processed agricultural products, fish and fishery products in accordance with the objective laid down in Article 12 of the Interim Agreement. If this will be considered as not appropriate due to the limited future economic developments of the occupied Palestinian territory, such discussions should take place at later stage.

               (15)

               The Agreement should be concluded,

         HAS ADOPTED THIS DECISION:
   Article 1
   The Agreement in the form of an Exchange of Letters between the European Union, of the one part, and the Palestinian Authority of the West Bank and the Gaza Strip, of the other part, providing further liberalisation of agricultural products, processed agricultural products and fish and fishery products and amending the Euro-Mediterranean Interim Association Agreement on trade and cooperation between the European Community, of the one part, and the Palestine Liberation Organization (PLO) for the benefit of the Palestinian Authority of the West Bank and the Gaza Strip, of the other part (‘the Agreement’), is hereby approved on behalf of the Union.
   The text of the Agreement is attached to this Decision.
   Article 2
   Where the Union needs to take a safeguard measure concerning agricultural products and fish and fishery products, as provided for in the Article 23 of the Interim Association Agreement, that measure shall be adopted in accordance with the procedures provided for in Article 159(2) of Council Regulation (EC) No 1234/2007 of 22 October 2007 establishing a common organisation of agricultural markets and on specific provisions for certain agricultural products (Single CMO Regulation) (5), or by Article 30 of Council Regulation (EC) No 104/2000 of 17 December 1999 on the common organisation of the markets in fishery and aquaculture products (6). For processed agricultural products, such safeguard measures shall be adopted in accordance with the procedures provided for, as appropriate, in Article 7(2) of Council Regulation (EC) No 614/2009 of 7 July 2009 on the common system of trade for ovalbumin and lactalbumin (7), or in Article 11(4) of Council Regulation (EC) No 1216/2009 of 30 November 2009 laying down the trade arrangements applicable to certain goods resulting from the processing of agricultural products (8).
   Article 3
   The President of the Council shall designate the person empowered to proceed, on behalf of the Union, with the deposit of the instrument of approval provided in the Agreement, in order to express the consent of the Union to be bound by it (9).
   Article 4
   This Decision shall enter into force on the day of its adoption.

      Done at Luxembourg, 20 October 2011.

            For the Council

            The President

         M. SAWICKI

      (1)  Consent of 5 September 2011 (not yet published in the Official Journal).

      (2)  OJ L 187, 16.7.1997, p. 3.

      (3)  OJ L 104, 20.4.2011, p. 2.

      (4)  OJ L 169, 30.6.2005, p. 1.

      (5)  OJ L 299, 16.11.2007, p. 1.

      (6)  OJ L 17, 21.1.2000, p. 22.

      (7)  OJ L 181, 14.7.2009, p. 8.

      (8)  OJ L 328, 15.12.2009, p. 10.

      (9)  The date of entry into force of the Agreement will be published in the Official Journal of the European Union by the General Secretariat of the Council.

      AGREEMENT
      in the form of an Exchange of Letters between the European Union, of the one part, and the Palestinian Authority of the West Bank and the Gaza Strip, of the other part, providing further liberalisation of agricultural products, processed agricultural products and fish and fishery products and amending the Euro-Mediterranean Interim Association Agreement on trade and cooperation between the European Community, of the one part, and the Palestine Liberation Organization (PLO) for the benefit of the Palestinian Authority of the West Bank and the Gaza Strip, of the other
      Sir,
      I have the honour of referring to the negotiations which took place in accordance with the spirit of the Euro-Mediterranean Roadmap for agriculture (Rabat Roadmap), adopted by the Euro-Mediterranean Ministers of Foreign Affairs on 28 November 2005, for the acceleration of liberalisation of trade in agricultural products, processed agricultural products and fish and fishery products, and under Articles 7, 12 and 14 (2) of the Euro-Mediterranean Interim Association Agreement on trade and cooperation between the European Community, of the one part, and the Palestine Liberation Organization (PLO) for the benefit of the Palestinian Authority of the West Bank and the Gaza Strip (hereinafter referred to as ‘Palestinian Authority’), of the other part (hereinafter referred to as the ‘Interim Association Agreement’), in force since 1 July 1997, which states that the Community and the Palestinian Authority shall progressively establish greater liberalisation, inter alia, of their trade in agricultural products of interest to both Parties.

                  A.

                  The Parties have agreed on the following temporary amendment to the Interim Association Agreement:

                              1.

                              Protocol 1 shall be replaced by that appearing in Annex I to this Agreement in the form of an Exchange of Letters, subject to the provisions of point C thereof.

                  B.

                  The Parties have also agreed on the following permanent amendments to the Interim Association Agreement:

                              1.

                              Article 4 shall be replaced by the following:
                              ‘The provisions of this Chapter shall apply to products originating in the European Union and in the West Bank and the Gaza Strip other than those listed in chapters 1 to 24 of the Combined Nomenclature (CN) and of the customs tariff of the Palestinian Authority, and those listed in Annex 1(1)(ii) of the Agreement on Agriculture of the GATT. However, this Chapter shall continue to apply to chemically pure lactose of CN code 1702 11 00 and glucose and glucose syrup, containing in the dry state 99 % or more by weight of glucose of CN codes ex 1702 30 50 and ex 1702 30 90.’.

                              2.

                              The title of Chapter 2 shall be replaced by the following:

                              3.

                              Article 11 shall be replaced by the following:
                              ‘The provisions of this Chapter shall apply to products originating in the European Union and in the West Bank and the Gaza Strip listed in chapters 1 to 24 of the Combined Nomenclature (CN) and of the customs tariff of the Palestinian Authority, and those listed in Annex 1(1)(ii) of the Agreement on Agriculture of the GATT, with exception of chemically pure lactose of CN code 1702 11 00 and of glucose and glucose syrup, containing in the dry state, 99 % or more by weight of glucose of CN codes ex 1702 30 50 and ex 1702 30 90, for which duty free market access was already granted within Chapter 1.’.

                              4.

                              Article 12 shall be replaced by the following:
                              ‘The European Union and the Palestinian Authority shall progressively establish greater liberalisation of their trade in agricultural products, processed agricultural products and fish and fishery products of interest to both Parties.’.

                              5.

                              Article 13 shall be replaced by the following:
                              ‘1.   Agricultural products, processed agricultural products and fish and fishery products originating in the West Bank and the Gaza Strip listed in Protocol 1, on importation into the European Union shall be subject to the arrangements set out in that Protocol.
                              2.   Agricultural products, processed agricultural products and fish and fishery products originating in the European Union listed in Protocol 2, on importation into the West Bank and the Gaza Strip shall be subject to the arrangements set out in that Protocol.’.

                              6.

                              Article 23bis shall be added:
                              ‘Temporary Withdrawal of Preferences
                              1.   The Parties agree that administrative cooperation and assistance are essential for the implementation and the control of the preferential treatment granted under this Agreement and underline their commitment to combat irregularities and fraud in customs and related matters.
                              2.   Where a Party has made a finding, on the basis of objective information, of a failure to provide administrative cooperation/assistance and/or of irregularities or fraud under this Agreement, the Party concerned may temporarily suspend the relevant preferential treatment of the product(s) concerned in accordance with this Article.
                              3.   For the purpose of this Article a failure to provide administrative cooperation/assistance shall mean, inter alia:

                                          (a)

                                          a repeated failure to respect the obligations to verify the originating status of the product(s) concerned;

                                          (b)

                                          a repeated refusal or undue delay in carrying out and/or communicating the results of subsequent verification of the proof of origin;

                                          (c)

                                          a repeated refusal or undue delay in obtaining authorisation to conduct enquiry visits to determine the authenticity of documents or accuracy of information relevant to the granting of the preferential treatment in question.

                                    4.   For the purpose of this Article a finding of irregularities or fraud may be made, inter alia, where there is a rapid increase, without satisfactory explanation, in imports of goods exceeding the usual level of production and export capacity of the other Party that is linked to objective information concerning irregularities or fraud.
                              5.   The application of a temporary suspension shall be subject to the following conditions:

                                          (a)

                                          The Party which has made a finding, on the basis of objective information, of a failure to provide administrative cooperation/assistance and/or of irregularities or fraud shall without undue delay notify the Joint Committee of its finding together with the objective information and enter into consultations within the Joint Committee, on the basis of all relevant information and objective findings, with a view to reaching a solution acceptable to both Parties.

                                          (b)

                                          Where the Parties have entered into consultations within the Joint Committee and have failed to agree on an acceptable solution within 3 months following the notification, the Party concerned may temporarily suspend the relevant preferential treatment of the product(s) concerned. A temporary suspension shall be notified to the Joint Committee without undue delay.

                                          (c)

                                          Temporary suspensions under this Article shall be limited to that necessary to protect the financial interests of the Party concerned. They shall not exceed a period of 6 months, which may be renewed if at the date of expiry nothing has changed with respect to the conditions that gave rise to the initial suspension. They shall be subject to periodic consultations within the Joint Committee, in particular with a view to their termination as soon as the conditions for their application no longer apply.

                                    Each Party shall publish according to its internal procedures, in the case of the European Union in the Official Journal of the European Union, notices to importers concerning any: notification referred to in paragraph 5 (a); decision referred to in paragraph 5 (b); and extension or termination referred to in paragraph 5 (c).’.

                              7.

                              Protocol 2 and its Annexes shall be replaced by those appearing in Annex II to this Agreement in the form of an Exchange of Letters.

                              8.

                              A Common Declaration on sanitary and phytosanitary or technical barriers to trade issues, appearing in Annex III to this Agreement in the form of an Exchange of Letters, shall be added to the Interim Association Agreement.

                  C.

                  The Parties have agreed on the following additional provisions:

                              1.

                                          (a)

                                          The temporary amendments provided for under point A shall apply for a period of 10 years from the entry into force of this Agreement in the form of an Exchange of Letters. However, depending on the future economic development of the West Bank and Gaza Strip, a possible extension for an additional period of those amendments could be considered by the Joint Committee. Such a decision shall be taken by the Joint Committee at the latest 1 year before the expiration of the 10 years period as provided by this Agreement in the form of an Exchange of Letters.

                                          (b)

                                          The European Union and the Palestinian Authority shall meet 5 years from the date of entry into force of this Agreement in the form of an Exchange of Letters, to consider the possibility of granting each other further permanent concessions of trade in agricultural products, processed agricultural products and fish and fishery products with the objective laid down in Article 12 of the Interim Association Agreement.

                                          (c)

                                          The starting point for future reciprocal negotiations will be the consolidated concessions of the Interim Association Agreement, which are listed in Annexes II and IV of this Agreement in the form of an Exchange of Letters.

                                          (d)

                                          It is understood that the trade conditions to be granted by the European Union as a result of these future negotiations may be less favourable than those granted under the this Agreement in the form of an Exchange of Letters.

                              2.

                              Article 7(1) of the Interim Association Agreement shall not apply pending the application of the temporary amendments provided for under point A of this Agreement in the form of an Exchange of Letters.

            This Agreement in the form of an Exchange of Letters shall enter into force on the first day of the third month following the date of the deposit of the last instrument of approval.
      I have the honour to confirm that the European Union is in agreement with the content of this letter.
      I would be grateful if you could confirm the agreement of your Government to the above.
      Please accept, Sir, the assurance of my highest consideration.
      Съставено в Брюксел на
      Hecho en Bruselas, el
      V Bruselu dne
      Udfærdiget i Bruxelles, den
      Geschehen zu Brüssel am
      Brüssel,
      Έγινε στις Βρυξέλλες, στις
      Done at Brussels,
      Fait à Bruxelles, le
      Fatto a Bruxelles, addì
      Briselē,
      Priimta Briuselyje,
      Kelt Brüsszelben,
      Magħmul fi Brussell,
      Gedaan te Brussel,
      Sporządzono w Brukseli dnia
      Feito em Bruxelas,
      Întocmit la Bruxelles,
      V Bruseli
      V Bruslju,
      Tehty Brysselissä
      Utfärdat i Bryssel den

         За Европейския съюз
         Por la Unión Europea
         Za Evropskou unii
         For Den Europæiske Union
         Für die Europäische Union
         Euroopa Liidu nimel
         Гια την Ευρωπαϊκή Ένωση
         For the European Union
         Pour l’Union européenne
         Per l’Unione europea
         Eiropas Savienības vārdā –
         Europos Sąjungos vardu
         Az Európai Unió részéről
         Għall-Unjoni Ewropea
         Voor de Europese Unie
         W imieniu Unii Europejskiej
         Pela União Europeia
         Pentru Uniunea Europeană
         Za Európsku úniu
         Za Evropsko unijo
         Euroopan unionin puolesta
         För Europeiska unionen

         ANNEX I

            PROTOCOL 1
            concerning the provisional arrangements applicable to imports into the European Union of agricultural products, processed agricultural products and fish and fishery products originating in the West Bank and the Gaza Strip

                        1.

                        Customs duties and charges having equivalent effect (including their agricultural component), which are applicable on the import into the European Union of products originating in the West Bank and the Gaza Strip and listed in chapters 1 to 24 of the Combined Nomenclature (CN) and of the customs tariff of the Palestinian Authority, and those listed in Annex 1(1)(ii) of the Agreement on Agriculture of the GATT, with exception of chemically pure lactose of CN code 1702 11 00 and of glucose and glucose syrup, containing in the dry state, 99 % or more by weight of glucose of CN codes ex 1702 30 50 and ex 1702 30 90 covered by Chapter 1, shall be temporarily eliminated in accordance with the provisions of point C.1(a) of the Agreement in the form of Exchange of Letters between the European Union and the Palestinian Authority providing further liberalisation of agricultural products, processed agricultural products and fish and fishery products and amending this Agreement, signed in 2011.

                        2.

                        Notwithstanding the conditions under point 1 of this Protocol, for the products to which an entry price applies in accordance with Article 140a of Council Regulation (EC) No 1234/2007 (1), and for which the Common Customs Tariff provides for the application of ad valorem customs duties and a specific customs duty, the elimination applies only to the ad valorem part of the duty.

         ANNEX II

            PROTOCOL 2
            on the arrangements applying to imports into the West Bank and the Gaza Strip of agricultural products, processed agricultural products and fish and fishery products originating in the European Union

                        1.

                        The products listed in the Annexes originating in the European Union shall be admitted for importation into the West Bank and the Gaza Strip according to the conditions contained herein and in the Annexes.

                        2.

                        Import duties on imports are either eliminated or reduced to the level indicated in column ‘a’, within the limit of the annual tariff quota listed in column ‘b’, and subject to the specific provisions indicated in column ‘c’.

                        3.

                        For the quantities imported in excess of the tariff quotas, the general customs duties applied to third countries shall apply, subject to the specific provisions indicated in column ‘c’.

                        4.

                        For the first year of application, the volumes of the tariff quotas and the reference quantities shall be calculated as a pro rata of the basic volumes, taking into account the period elapsed before the date of entry into force of this Protocol.

            ANNEX 1 TO PROTOCOL 2

                        CN Code

                        Description

                        Duty (%)

                        Tariff quota
                        (t, unless otherwise indicated)

                        Specific provisions

                        a

                        b

                        c

                        0102 90 71

                        Live bovine animals, of a weight exceeding 300 kg, for slaughter, ther than heifers and cows

                        0

                        300

                        0202 30 90

                        Meat of bovine animals, boneless excluding fore-quarters, ‘compensated’ quarters, crop, chuck and blade and brisket cuts, frozen

                        0

                        200

                        0206 22 00

                        Edible livers of bovine animals frozen

                        0

                        100

                        0406

                        Cheese and curd

                        0

                        200

                        0407 00 19

                        Poultry eggs for hatching, other than those of turkeys or geese

                        0

                        120 000 pieces

                        1101 00 15

                        Flour of common wheat and spelt

                        0

                        13 000

                        2309 90 99

                        Other preparations of a kind used in animal feeding

                        2

                        100

            ANNEX 2 TO PROTOCOL 2

               PRODUCTS REFERRED TO IN ARTICLE 7(2) OF THE EURO-MEDITERRANEAN INTERIM ASSOCIATION AGREEMENT

                        CN code

                        Description

                        1902

                        Pasta and couscous:

                        A

                                    —

                                    of durum wheat,

                        B

                                    —

                                    other,

                        1905 10

                        Crisp bread

                        1905 20 90

                        Gingerbread and the like, not especially for diabetics:

                        A

                                    —

                                    containing over 15 % by weight of flour from cereals other than wheat in relation to the total flour content,

                        B

                                    —

                                    other,

                        ex 1905 32 A

                        Waffles and wafers

                        Al

                                    —

                                    not filled, whether or not coated,

                        Ala

                                    —

                                    containing over 15 % by weight of flour from cereals other than wheat in relation to the total flour content,

                        Alb

                                    —

                                    other,

                        A2

                                    —

                                    other,

                        A2a

                                    —

                                    containing not less than 1,5 % milk fats or not less than 2,5 % of milk proteins,

                        A2b

                                    —

                                    other,

                        1905 40 10

                        Rusk, containing added sugar, honey, other sweetening matter, eggs, fat, cheese, fruit, cocoa or similar:

                        A

                                    —

                                    containing over 15 % by weight of flour from cereals other than wheat in relation to the total flour content,

                        B

                                    —

                                    other,

                        1905
                        ex 31) B + ex 90)

                        Other bakers’ wares, containing added sugar, honey, other sweetening matter, eggs, fat, cheese, fruit, cocoa or similar:

                        Bl

                                    —

                                    containing added eggs, not less than 2,5 % by weight,

                        B2

                                    —

                                    containing added dried fruits or nuts:

                        B2a

                                    —

                                    containing not less than 1,5 % milk fats and not less than 2,5 % milk proteins; see Annex V,

                        B2b

                                    —

                                    other,

                        ВЗ

                                    —

                                    containing less than 10 % by weight of added sugar and not containing added eggs, dried fruits or nuts,

         ANNEX III

            COMMON DECLARATION
            COOPERATION ON SANITARY AND PHYTOSANITARY OR TECHNICAL BARRIERS TO TRADE ISSUES
            The Parties shall solve any problems, in particular sanitary, phytosanitary or technical barriers to trade, hindering the implementation of this Agreement, by means of existing administrative arrangements. The results shall then be reported to the relevant Sub-committees and to the Joint Committee. The Parties commit to examine and solve such cases with the shortest possible delay in a friendly manner, in line with their respective applicable laws and with WTO, OIE, IPPC and Codex Alimentarius standards.

         ANNEX IV

            A:   CONSOLIDATED LIST OF CONCESSIONS APPLIED TO IMPORTS INTO THE EUROPEAN UNION OF AGRICULTURAL PRODUCTS AND FISHERY PRODUCTS ORIGINATING IN THE WEST BANK AND THE GAZA STRIP BEFORE THE ENTRY INTO FORCE OF THIS AGREEMENT IN THE FORM OF AN EXCHANGE OF LETTERS

                     1.

                     The products listed in the Annex, originating in the West Bank and the Gaza Strip shall be admitted for importation into the European Union, according to the conditions contained hereafter and in the Annex.

                                 (a)

                                 Customs duties are eliminated or reduced as indicated in column ‘a’.

                                 (b)

                                 For certain products, for which the Common Customs Tariff provides the application of an ad valorem duty and a specific duty, the rates of reduction, indicated in columns ‘a’ and ‘c’, only apply to the ad valorem duty. However, for the product corresponding to the subheading 1509 10, the duty reduction applies to the specific duty.

                                 (c)

                                 For certain products, customs duties are eliminated within the limit of the tariff quotas listed in column ‘b’ for each of them; the tariff quotas shall apply on an annual basis from 1 January to 31 December, unless otherwise specified.

                                 (d)

                                 For the quantities imported in excess of the quotas, the common customs duties are, according to the product concerned, applied in full or reduced, as indicated in column ‘c’.

                     2.

                     For certain products, the exemption of customs duties is granted in the framework of reference quantities as indicated in column ‘d’.
                     Should the volume of imports of one of these products exceed the reference quantity, the European Union, having regard to an annual review of trade flows which it shall carry out, may make the product in question subject to a tariff quota of the Union, the volume of which shall be equal to the reference quantity. In that case, for quantities imported in excess of the quota, the common customs duty is, according to the product concerned, applied in full or reduced as indicated in column ‘c’.

                     3.

                     For the first year of application, the volumes of the tariff quotas and the reference quantities shall be calculated as a pro rata of the basic volumes, taking into account the period elapsed before the date of entry into force of this Protocol.

                     4.

                     For some products listed in the Annex, the volume of the tariff quota is increased twice, on the basis of the volume indicated in column ‘e’. The first increase takes place on the date when each tariff quota is opened for the second time.

                     CN Code (2)

                     Description (3)

                     Reduction of the MFN customs duty
                     (%) (4)

                     Tariff quota
                     (t, unless otherwise indicated)

                     Reduction of the MFN customs duty beyond current or possible tariff quota
                     (%) (4)

                     Reference quantity
                     (t, unless otherwise indicated)

                     Specific provisions

                     a

                     b

                     c

                     d

                     e

                     0409 00 00

                     Natural honey

                     100

                     500

                     0

                     point 4 — yearly increase of 250 t

                     0603 11 00
                     0603 12 00
                     0603 13 00
                     0603 14 00
                     0603 19 10
                     0603 19 90

                     Cut flowers and flower buds, fresh, of a kind suitable for bouquets or for ornamental purposes

                     100

                     2 000

                     0

                     point 4 — yearly increase of 250 t

                     0702 00 00

                     Tomatoes, fresh or chilled, from 1 December to 31 March

                     100

                     60

                     2 000

                     0703 10 11
                     0703 10 19

                     Onions, fresh or chilled, from 15 February to 15 May

                     100

                     60

                     0709 30 00

                     Aubergines (eggplants), fresh or chilled, from 15 January to 30 April

                     100

                     60

                     3 000

                     ex 0709 60

                     Fruits of the genus Capsicum or of the genus Pimenta, fresh or chilled:

                     0709 60 10

                     Sweet peppers

                     100

                     40

                     1 000

                     0709 60 99

                     Other

                     100

                     80

                     0709 90 70

                     Courgettes, fresh or chilled, from 1 December to end of February

                     100

                     60

                     300

                     ex 0709 90 90

                     Wild onions of the species Muscari comosum, fresh or chilled, from 15 February to 15 May

                     100

                     60

                     0710 80 59

                     Fruits of the genus Capsicum or Pimenta, other than sweet peppers, uncooked or cooked by steaming or boiling in water, frozen

                     100

                     80

                     0711 90 10

                     Fruits of the genus Capsicum or Pimenta, other than sweet peppers, provisionally preserved but unsuitable in that state for immediate consumption

                     100

                     80

                     0712 31 00
                     0712 32 00
                     0712 33 00
                     0712 39 00

                     Mushrooms, wood ears (Auri-cularia spp.), jelly fungi (Tremella spp.) and truffles, dried

                     100

                     500

                     0

                     ex 0805 10

                     Oranges, fresh

                     100

                     60

                     25 000

                     ex 0805 20

                     Mandarins (including tangerines and satsumas); clementines, wilkings and similar citrus hybrids, fresh

                     100

                     60

                     500

                     0805 40 00

                     Grapefruit

                     100

                     80

                     ex 0805 50 10

                     Lemons (Citrus limon, Citrus limonum), fresh

                     100

                     40

                     800

                     0806 10 10

                     Fresh table grapes, from 1 February to 14 July

                     100

                     1 000

                     0

                     point 4 — yearly increase of 500 t

                     0807 19 00

                     Melons (excluding water melons), fresh, from 1 November to 31 May

                     100

                     50

                     10 000

                     0810 10 00

                     Fresh strawberries, from 1 November to 31 March

                     100

                     2 000

                     0

                     point 4 — yearly increase of 500 t

                     0812 90 20

                     Oranges, provisionally preserved, but unsuitable in that state for immediate consumption

                     100

                     80

                     0904 20 30

                     Fruits of the genus Capscium or of the genus Pimenta, other than sweet peppers, dried, neither crushed or ground

                     100

                     80

                     1509 10

                     Virgin olive oil

                     100

                     2 000

                     0

                     point 4 — yearly increase of 500 t

                     2001 90 20

                     Fruits of the genus Capsicum, other than sweet peppers or pimentos, prepared or preserved by vinegar or acetic acid

                     100

                     80

                     2005 99 10

                     Fruits of the genus Capsicum, other than sweet peppers or pimentos, prepared or preserved otherwise than by vinegar or acetic acid, not frozen

                     100

                     80

            B:   CONSOLIDATED LIST OF CONCESSIONS APPLYING TO IMPORTS INTO THE EUROPEAN UNION OF PROCESSED AGRICULTURAL PRODUCTS ORIGINATING IN THE WEST BANK AND THE GAZA STRIP REFERRED TO IN ARTICLE 7(1) OF THE EURO-MEDITERRANEAN INTERIM ASSOCIATION AGREEMENT BEFORE THE ENTRY INTO FORCE OF THIS AGREEMENT IN THE FORM OF AN EXCHANGE OF LETTERS

                     CN code

                     Description

                     0403

                     Buttermilk, curdled milk and cream, yogurt, kephir and other fermented or acidified milk and cream, whether or not concentrated or containing added sugar or other sweetening matter or flavoured or containing added fruit, nuts or cocoa:

                     0403 10 51 to 0403 10 99

                     Yoghurt, flavoured or containing added fruit, nuts or cocoa

                     0403 90 71 to 0403 90 99

                     Buttermilk, curdled milk and cream, kephir and other fermented or acidified milk and cream, flavoured or containing added fruit, nuts or cocoa

                     0710 40 00

                     Sweetcorn (uncooked or cooked by steaming or boiling in water), frozen

                     0711 90 30

                     Sweetcorn provisionally preserved (for example, by sulphur dioxide gas, in brine, in sulphur water or in other preservative solutions), but unsuitable in that state for immediate consumption

                     ex 1517

                     Margarine; edible mixtures or preparations of animal or vegetable fats or oils or of fractions of different fats or oils of this Chapter, other than edible fats or oils or their fractions of No 1516:

                     1517 10 10

                     Margarine, excluding liquid margarine, containing more than 10 % but not more than 15 % by weight of milk fats

                     1517 90 10

                     Other, containing more than 10 % but not more than 15 % by weight of milk fats

                     ex 1704

                     Sugar confectionery (including white chocolate), not containing cocoa; excluding liquorice extract containing more than 10 % by weight of sucrose but not containing other added substances, falling within CN code 1704 90 10

                     1806

                     Chocolate and other food preparations containing cocoa

                     ex 1901

                     Malt extract; food preparations of flour, groats, meal, starch or malt extract, not containing cocoa or containing less than 40 % by weight of cocoa calculated on a totally defatted basis, not elsewhere specified or included; food preparations of goods of headings 0401 to 0404, not containing cocoa or containing less than 5 % by weight of cocoa calculated on a totally defatted basis, not elsewhere specified or included, excluding preparations falling within CN code 1901 90 91

                     ex 1902

                     Pasta, excluding stuffed pasta falling within CN codes 1902 20 10 and 1902 20 30; couscous, whether or not prepared

                     1903

                     Tapioca and substitutes thereof prepared from starch, in the form of flakes, grains, pearls, siftings or similar forms

                     1904

                     Prepared foods obtained by the swelling or roasting of cereals or cereal products (for example cornflakes); cereals (other than maize (corn)) in grain form or in the form of flakes or other worked grains (except flour, groats and meal), pre-cooked or otherwise prepared, not elsewhere specified or included

                     1905

                     Bread, pastry, cakes, biscuits and other bakers’ wares, whether or not containing cocoa; communion wafers, empty cachets of a kind suitable for pharmaceutical use, sealing wafers, rice paper and similar products

                     2001 90 30

                     Sweetcorn (Zea mays var. saccharata), prepared or preserved by vinegar or acetic acid

                     2001 90 40

                     Yams, sweet potatoes and similar edible parts of plants containing 5 % or more by weight of starch, prepared or preserved by vinegar or acetic acid

                     2004 10 91

                     Potatoes in the form of flour, meal or flakes, prepared or preserved otherwise than by vinegar or acetic acid, frozen

                     2004 90 10

                     Sweetcorn (Zea mays var. saccharata), prepared or preserved otherwise than by vinegar or acetic acid, frozen

                     2005 20 10

                     Potatoes in the form of flour, meal or flakes, prepared or preserved otherwise than by vinegar or acetic acid, not frozen

                     2005 80 00

                     Sweetcorn (Zea mays var. saccharata), prepared or preserved otherwise than by vinegar or acetic acid, not frozen

                     1904 20 10

                     Preparation of the Müsli type based on unroasted cereal flakes

                     2008 99 85

                     Maize (corn), other than sweetcorn (Zea mays var. saccharata) otherwise prepared or preserved, not containing added spirit or added sugar

                     2008 99 91

                     Yams, sweet potatoes and similar edible parts of plants, containing 5 % or more by weight of starch, otherwise prepared or preserved, not containing added spirit or added sugar

                     2101 12 98

                     Preparations with a basis of coffee

                     2101 20 98

                     Preparations with a basis of tea or mate

                     2101 30 19

                     Roasted coffee substitutes excluding roasted chicory

                     2101 30 99

                     Extracts, essences and concentrates of roasted coffee substitutes excluding those of roasted chicory

                     2102 10 31
                     2102 10 39

                     Bakers’ yeasts

                     ex 2103 90 90

                     Sauces and preparations therefor:

                                 —

                                 Mayonnaise

                     2105 00

                     Ice cream and other edible ice, whether or not containing cocoa

                     ex 2106

                     Food preparations not elsewhere specified or included other than those falling within CN codes 2106 10 20 and 2106 90 92 and other than flavoured or coloured sugar syrups of CN codes 2106 90 30 to 2106 90 59

                     2202 90 91
                     2202 90 95
                     2202 90 99

                     Non-alcoholic beverages, not including fruit or vegetable juices of heading 2009, containing products of headings 0401 to 0404 or fat obtained from products of headings 0401 to 0404

                     2905 43 00

                     Mannitol

                     2905 44

                     D-Glucitol (sorbitol)

                     ex 3505 10

                     Dextrins and other modified starches, excluding esterified and etherified starches of CN code 3505 10 50

                     3505 20

                     Glues based on starches or on dextrins or other modified starches

                     3809 10

                     Finishing agents, dye carriers to accelerate the dyeing or fixing of dyestuffs and other products and preparations (for example, dressings and mordants), of a kind used in the textile, paper, leather or like industries, not elsewhere specified or included, with a basis of amylaceous substances

                     3824 60

                     Sorbitol other than that of subheading 2905 44

      Sir/Madam,
      I have the honour to acknowledge receipt of your letter of today’s date which reads as follows:
      ‘I have the honour of referring to the negotiations which took place in accordance with the spirit of the Euro-Mediterranean Roadmap for agriculture (Rabat Roadmap), adopted by the Euro-Mediterranean Ministers of Foreign Affairs on 28 November 2005, for the acceleration of liberalisation of trade in agricultural products, processed agricultural products and fish and fishery products, and under Articles 7, 12 and 14 (2) of the Euro-Mediterranean Interim Association Agreement on trade and cooperation between the European Community, of the one part, and the Palestine Liberation Organization (PLO) for the benefit of the Palestinian Authority of the West Bank and the Gaza Strip (hereinafter referred to as ‘Palestinian Authority’), of the other part (hereinafter referred to as the ‘Interim Association Agreement’), in force since 1 July 1997, which states that the Community and the Palestinian Authority shall progressively establish greater liberalisation, inter alia, of their trade in agricultural products of interest to both Parties.

                  A.

                  The Parties have agreed on the following temporary amendments to the Interim Association Agreement:

                              1.

                              Protocol 1 shall be replaced by that appearing in Annex I to this Agreement in the form of an Exchange of Letters, subject to the provisions of point C thereof.

                  B.

                  The Parties have also agreed on the following permanent amendments to the Interim Association Agreement:

                              1.

                              Article 4 shall be replaced by the following:
                              ‘The provisions of this Chapter shall apply to products originating in the European Union and in the West Bank and the Gaza Strip other than those listed in chapters 1 to 24 of the Combined Nomenclature (CN) and of the customs tariff of the Palestinian Authority, and those listed in Annex 1(1)(ii) of the Agreement on Agriculture of the GATT. However, this Chapter shall continue to apply to chemically pure lactose of CN code 1702 11 00 and glucose and glucose syrup, containing in the dry state 99 % or more by weight of glucose of CN codes ex 1702 30 50 and ex 1702 30 90.’.

                              2.

                              The title of Chapter 2 shall be replaced by the following:

                              3.

                              Article 11 shall be replaced by the following:
                              ‘The provisions of this Chapter shall apply to products originating in the European Union and in the West Bank and the Gaza Strip listed in chapters 1 to 24 of the Combined Nomenclature (CN) and of the customs tariff of the Palestinian Authority, and those listed in Annex 1(1)(ii) of the Agreement on Agriculture of the GATT, with exception of chemically pure lactose of CN code 1702 11 00 and of glucose and glucose syrup, containing in the dry state, 99 % or more by weight of glucose of CN codes ex 1702 30 50 and ex 1702 30 90, for which duty free market access was already granted within Chapter 1.’.

                              4.

                              Article 12 shall be replaced by the following:
                              ‘The European Union and the Palestinian Authority shall progressively establish greater liberalisation of their trade in agricultural products, processed agricultural products and fish and fishery products of interest to both Parties.’.

                              5.

                              Article 13 shall be replaced by the following:
                              ‘1.   Agricultural products, processed agricultural products and fish and fishery products originating in the West Bank and the Gaza Strip listed in Protocol 1, on importation into the European Union shall be subject to the arrangements set out in that Protocol.
                              2.   Agricultural products, processed agricultural products and fish and fishery products originating in the European Union listed in Protocol 2, on importation into the West Bank and the Gaza Strip shall be subject to the arrangements set out in that Protocol.’.

                              6.

                              Article 23bis shall be added:
                              ‘Temporary Withdrawal of Preferences
                              1.   The Parties agree that administrative cooperation and assistance are essential for the implementation and the control of the preferential treatment granted under this Agreement and underline their commitment to combat irregularities and fraud in customs and related matters.
                              2.   Where a Party has made a finding, on the basis of objective information, of a failure to provide administrative cooperation/assistance and/or of irregularities or fraud under this Agreement, the Party concerned may temporarily suspend the relevant preferential treatment of the product(s) concerned in accordance with this Article.
                              3.   For the purpose of this Article a failure to provide administrative cooperation/assistance shall mean, inter alia:

                                          (a)

                                          a repeated failure to respect the obligations to verify the originating status of the product(s) concerned;

                                          (b)

                                          a repeated refusal or undue delay in carrying out and/or communicating the results of subsequent verification of the proof of origin;

                                          (c)

                                          a repeated refusal or undue delay in obtaining authorisation to conduct enquiry visits to determine the authenticity of documents or accuracy of information relevant to the granting of the preferential treatment in question.

                                    4.   For the purpose of this Article a finding of irregularities or fraud may be made, inter alia, where there is a rapid increase, without satisfactory explanation, in imports of goods exceeding the usual level of production and export capacity of the other Party that is linked to objective information concerning irregularities or fraud.
                              5.   The application of a temporary suspension shall be subject to the following conditions:

                                          (a)

                                          The Party which has made a finding, on the basis of objective information, of a failure to provide administrative cooperation/assistance and/or of irregularities or fraud shall without undue delay notify the Joint Committee of its finding together with the objective information and enter into consultations within the Joint Committee, on the basis of all relevant information and objective findings, with a view to reaching a solution acceptable to both Parties.

                                          (b)

                                          Where the Parties have entered into consultations within the Joint Committee and have failed to agree on an acceptable solution within 3 months following the notification, the Party concerned may temporarily suspend the relevant preferential treatment of the product(s) concerned. A temporary suspension shall be notified to the Joint Committee without undue delay.

                                          (c)

                                          Temporary suspensions under this Article shall be limited to that necessary to protect the financial interests of the Party concerned. They shall not exceed a period of 6 months, which may be renewed if at the date of expiry nothing has changed with respect to the conditions that gave rise to the initial suspension. They shall be subject to periodic consultations within the Joint Committee, in particular with a view to their termination as soon as the conditions for their application no longer apply.

                                    Each Party shall publish according to its internal procedures, in the case of the European Union in the Official Journal of the European Union, notices to importers concerning any: notification referred to in paragraph 5 (a); decision referred to in paragraph 5 (b); and extension or termination referred to in paragraph 5 (c).’.

                              7.

                              Protocol 2 and its Annexes shall be replaced by those appearing in Annex II to this Agreement in the form of an Exchange of Letters.

                              8.

                              A Common Declaration on sanitary and phytosanitary or technical barriers to trade issues, appearing in Annex III to this Agreement in the form of an Exchange of Letters, shall be added to the Interim Association Agreement.

                  C.

                  The Parties have agreed on the following additional provisions:

                              1.

                                          (a)

                                          The temporary amendments provided for under point A shall apply for a period of 10 years from the entry into force of this Agreement in the form of an Exchange of Letters. However, depending on the future economic development of the West Bank and Gaza Strip, a possible extension for an additional period of those amendments could be considered by the Joint Committee. Such a decision shall be taken by the Joint Committee at the latest 1 year before the expiration of the 10 years period as provided by this Agreement in the form of an Exchange of Letters.

                                          (b)

                                          The European Union and the Palestinian Authority shall meet 5 years from the date of entry into force of this Agreement in the form of an Exchange of Letters, to consider the possibility of granting each other further permanent concessions of trade in agricultural products, processed agricultural products and fish and fishery products with the objective laid down in Article 12 of the Interim Association Agreement.

                                          (c)

                                          The starting point for future reciprocal negotiations will be the consolidated concessions of the Interim Association Agreement, which are listed in Annexes II and IV of this Agreement in the form of an Exchange of Letters.

                                          (d)

                                          It is understood that the trade conditions to be granted by the European Union as a result of these future negotiations may be less favourable than those granted under the this Agreement in the form of an Exchange of Letters.

                              2.

                              Article 7(1) of the Interim Association Agreement shall not apply pending the application of the temporary amendments provided for under point A of this Agreement in the form of an Exchange of Letters.

            This Agreement in the form of an Exchange of Letters shall enter into force on the first day of the third month following the date of the deposit of the last instrument of approval.’.
      I have the honour to confirm that the Palestinian Authority is in agreement with the content of your letter.
      Please accept, Sir/Madam, the assurance of my highest consideration.
      Done at Brussels,
      Съставено в Брюксел на
      Hecho en Bruselas, el
      V Bruselu dne
      Udfærdiget i Bruxelles, den
      Geschehen zu Brüssel am
      Brüssel,
      Έγινε στις Βρυξέλλες, στις
      Fait à Bruxelles, le
      Fatto a Bruxelles, addì
      Briselē,
      Priimta Briuselyje,
      Kelt Brüsszelben,
      Magħmul fi Brussell,
      Gedaan te Brussel,
      Sporządzono w Brukseli dnia
      Feito em Bruxelas,
      Întocmit la Bruxelles,
      V Bruseli
      V Bruslju,
      Tehty Brysselissä
      Utfärdat i Bryssel den

         For the Palestinian Authority
         За Палестинската администрация
         Por la Autoridad Palestina
         Za palestinskou samosprávu
         For Den Palæstinensiske Myndighed
         Für die Palästinensische Behörde
         Palestiina omavalitsuse nimel
         Για την Παλαιστινιακή Αρχή
         Pour l'Autorité palestinienne
         Per l'Autorità palestinese
         Palestīniešu pašpārvaldes vārdā –
         Palestinos Administracijos vardu
         A Palesztin Hatóság részéről
         Għall-Awtorità Palestinjana
         Voor de Palestijnse Autoriteit
         W imieniu Autonomii Palestyńskiej
         Pela Autoridade Palestiniana
         Pentru Autoritatea Palestiniană
         V mene Palestínskej samosprávy
         Za Palestinsko upravo
         Palestiinalaishallinnon puolesta
         För den palestinska myndigheten

         (1)  OJ L 299, 16.11.2007, p. 1.

         (2)  CN codes corresponding to Regulation (EC) No 948/2009 (OJ L 287, 31.10.2009, p. 1).

         (3)  Without prejudice to the rules for the interpretation of the combined nomenclature, the description of the products is deemed to be indicative only, the preferential scheme being determined, for the purposes of this Annex, by the coverage of the CN codes. Where ex CN codes are indicated, the preferential scheme is to be determined by application of the CN code and corresponding description taken together.

         (4)  Duty reduction applies only to ad valorem customs duties. However, for the product corresponding to the subheading 1509 10, the duty reduction applies to the specific duty.


title: 2012/608/EU: Decision of the European Parliament of 10 May 2012 on discharge in respect of the implementation of the budget of the ENIAC Joint Undertaking for the financial year 2010#Resolution of the European Parliament of 10 May 2012 with observations forming an integral part of its Decision on discharge in respect of the implementation of the budget of the ENIAC Joint Undertaking for the financial year 2010

text:
               17.10.2012

               EN

               Official Journal of the European Union

               L 286/320

         DECISION OF THE EUROPEAN PARLIAMENT
   of 10 May 2012
   on discharge in respect of the implementation of the budget of the ENIAC Joint Undertaking for the financial year 2010
   (2012/608/EU)
   THE EUROPEAN PARLIAMENT,

               —

               having regard to the final annual accounts of the ENIAC Joint Undertaking for the financial year 2010,

               —

               having regard to the Court of Auditors’ report on the annual accounts of the ENIAC Joint Undertaking for the financial year 2010, together with the replies of the Joint Undertaking (1),

               —

               having regard to the Council’s recommendation of 21 February 2012 (06086/2012 - C7-0050/2012),

               —

               having regard to Article 319 of the Treaty on the Functioning of the European Union,

               —

               having regard to Council Regulation (EC, Euratom) No 1605/2002 of 25 June 2002 on the Financial Regulation applicable to the general budget of the European Communities (2), and in particular Article 185 thereof,

               —

               having regard to Council Regulation (EC) No 72/2008 of 20 December 2007 setting up the ENIAC Joint Undertaking (3),

               —

               having regard to Commission Regulation (EC, Euratom) No 2343/2002 of 19 November 2002 on the framework Financial Regulation for the bodies referred to in Article 185 of Council Regulation (EC, Euratom) No 1605/2002 on the Financial Regulation applicable to the general budget of the European Communities (4), and in particular Article 94 thereof,

               —

               having regard to Rule 77 of, and Annex VI to, its Rules of Procedure,

               —

               having regard to the report of the Committee on Budgetary Control (A7-0112/2012),

               1.

               Grants the Executive Director of the ENIAC Joint Undertaking discharge in respect of the implementation of the Joint Undertaking’s budget for the financial year 2010;

               2.

               Sets out its observations in the resolution below;

               3.

               Instructs its President to forward this Decision and the resolution that forms an integral part of it to the Executive Director of the ENIAC Joint Undertaking, the Council, the Commission and the Court of Auditors, and to arrange for their publication in the Official Journal of the European Union (L series).

            The President

         Martin SCHULZ

            The Secretary-General

         Klaus WELLE

      (1)  OJ C 368, 16.12.2011, p. 48.

      (2)  OJ L 248, 16.9.2002, p. 1.

      (3)  OJ L 30, 4.2.2008, p. 21.

      (4)  OJ L 357, 31.12.2002, p. 72.

      RESOLUTION OF THE EUROPEAN PARLIAMENT
      of 10 May 2012
      with observations forming an integral part of its Decision on discharge in respect of the implementation of the budget of the ENIAC Joint Undertaking for the financial year 2010
      THE EUROPEAN PARLIAMENT,

                  —

                  having regard to the final annual accounts of the ENIAC Joint Undertaking for the financial year 2010,

                  —

                  having regard to the Court of Auditors’ report on the annual accounts of the ENIAC Joint Undertaking for the financial year 2010, together with the replies of the Joint Undertaking (1),

                  —

                  having regard to the Council’s recommendation of 21 February 2012 (06086/2012 - C7-0050/2012),

                  —

                  having regard to Article 319 of the Treaty on the Functioning of the European Union,

                  —

                  having regard to Council Regulation (EC, Euratom) No 1605/2002 of 25 June 2002 on the Financial Regulation applicable to the general budget of the European Communities (2), and in particular Article 185 thereof,

                  —

                  having regard to Council Regulation (EC) No 72/2008 of 20 December 2007 setting up the ENIAC Joint Undertaking (3),

                  —

                  having regard to Commission Regulation (EC, Euratom) No 2343/2002 of 19 November 2002 on the framework Financial Regulation for the bodies referred to in Article 185 of Council Regulation (EC, Euratom) No 1605/2002 on the Financial Regulation applicable to the general budget of the European Communities (4), and in particular Article 94 thereof,

                  —

                  having regard to Rule 77 of, and Annex VI to, its Rules of Procedure,

                  —

                  having regard to the report of the Committee on Budgetary Control (A7-0112/2012),

                  A.

                  whereas the ENIAC Joint Undertaking (‘the Joint Undertaking’) was set up in 20 December 2007 for a period of 10 years to define and implement a ‘research agenda’ for the development of key competences for nanoelectronics across different application areas,

                  B.

                  whereas the Joint Undertaking was granted its financial autonomy in July 2010,

                  C.

                  whereas the Joint Undertaking is in a start-up phase and had not yet fully established its internal control and financial reporting systems by the end of 2010,

                  D.

                  whereas the Court of Auditors in its reports on the annual accounts of the Joint Undertaking for the financial year 2010, qualified its opinion with regard to the reliability of the accounts on the grounds that the Joint Undertaking has not included in the accounts the Budgetary Outturn Account and its reconciliation to the Economic Outturn Account,

                  E.

                  whereas the Court of Auditors in its reports on the annual accounts of the Joint Undertaking for the financial year 2010 states that it has obtained reasonable assurance that the underlying transactions are legal and regular,

                  F.

                  whereas the maximum contribution for the period of 10 years from the Union to the Joint Undertaking is EUR 450 000 000 to be paid from the budget of the seventh research framework programme,

                  G.

                  whereas the budget of the Joint Undertaking for the financial year 2010 amounted to EUR 38 440 000,

         Reliability of the Joint Undertaking’s accounts

                  1.

                  Is concerned that the Joint Undertaking received a qualified opinion from the Court of Auditors on the reliability of the accounts, on the grounds that it has not included in the accounts the Budgetary Outturn Account and its reconciliation to the Economic Outturn Account as required by EC Accounting Rule 16 ‘Presentation of budget information in the annual accounts’;

                  2.

                  Notes from the Joint Undertaking that the qualified opinion is due to the fact that the Joint Undertaking and the Court of Auditors referred to different dates to establish when the Joint Undertaking started to work autonomously;

         Budget and financial management

                  3.

                  Acknowledges that the Joint Undertaking’s budget was managed by DG INFSO from 1 January 2010 to 4 May 2010; notes that the administrative appropriations were transferred to the Joint Undertaking in May 2010 but that the operational budget lines were not transferred and remained inaccessible in the accounting system until the Joint Undertaking was officially granted financial autonomy on 26 July 2010; highlights that the Joint Undertaking acquired the capacity to implement its own budget from 22 September 2010 with the transfer of appropriations for the operational activities;

                  4.

                  Notes from the Joint Undertaking that the final budget included commitment and payment appropriations amounting to EUR 38 440 000, of which EUR 36 168 000 is devoted to the Call 2010;

                  5.

                  Acknowledges that the utilisation rates for the available commitment and payment appropriations were 99 % and 24 % respectively; is concerned about the low implementation rate of the payments’ budget and, moreover, about the underlying activities of the Joint Undertaking; underlines that the cash balance stood at EUR 20 000 000 at the end of the year representing 53 % of the available payment appropriations for 2010;

                  6.

                  Remarks that the low implementation of the payment appropriations is the result of the delayed transfer of the operational activities and the corresponding funding from the Commission to the Joint Undertaking;

                  7.

                  Notes from comments of the Joint Undertaking that a Manual of Procedures ensuring segregation of duties has been elaborated and has enabled the identification of the five following exceptions that happened in the initial phase of implementing the own budget:

                              —

                              three contracts signed while the ABAC transactions were still progressing towards completion, because the duration of the ABAC procedure had been underestimated,

                              —

                              one contract linked to an existing commitment has been signed prior to determining that it required a new commitment,

                              —

                              one missing contract has been discovered during the handover at autonomy and has been signed after the first payments were approved,

                        takes note that the corrective actions have been implemented and no further exceptions were recorded;

         Internal control systems

                  8.

                  Urges the Joint Undertaking to complete its internal controls and financial information systems; calls on the Joint Undertaking in particular, to establish and document important elements of its internal control system, such as accounting procedures and controls relating to the closure of the accounts and to the recognition and measurement of the operational expenditure;

                  9.

                  Notes the Court of Auditors’ finding that control weaknesses were detected in the area of ex-ante financial verification of pre-financing payments, in particular regarding the calculation and validation of the amounts paid; underlines that full reliance was placed on the certificates received from the National Funding Authorities for pre-financing payments and for acceptance of costs and that no other checks were performed to ensure the legality and regularity of the expenses declared;

                  10.

                  Notes that the ex-post audit of cost claims related to the projects has been fully delegated to the Member States; finds it important, nevertheless, that the Joint Undertaking ensures that the financial interests of its members are adequately protected and that the underlying transactions are legal and regular; is therefore of the opinion that the Joint Undertaking will have difficulties in ensuring that the financial interests of its members are adequately protected and that the underlying transactions are legal and regular; calls on the Joint Undertaking to reconsider its strategy of ex-post audit of cost claims and to inform the discharge authority of the mechanism implemented to ensure compliance with Article 12 of its Founding Regulation (EC) No 72/2008;

                  11.

                  Takes note that the Accounting Officer of the Joint Undertaking validated the financial and accounting systems (ABAC and SAP); notes however that the underlying business processes were not validated, in particular the one providing financial information about the validation and payment of the cost claims received from the national authorities; asks the Joint Undertaking to inform the discharge authority about the state of validation of the underlying business processes;

                  12.

                  Notes the Court of Auditors’ finding that the Joint Undertaking has an adequate level of IT governance and practice for its size and mission; stresses, however, that the IT strategic planning cycle, the data classification according to confidentiality and integrity requirements and Disaster Recovery Plan is lagging behind; calls on the Joint Undertaking to remedy the situation and provide the discharge authority with an up-to-date report on the matter;

         Internal audit

                  13.

                  Takes note that the Joint Undertaking’s financial rules have not yet been amended to include the provision referring to the powers of the Commission’s internal auditor regarding the general budget as a whole;

                  14.

                  Notes, however, that the mission charter of the Commission’s Internal Audit Service was adopted by the Governing Board of the Joint Undertaking;

         Delayed financial autonomy

                  15.

                  Reiterates that the Joint Undertaking was set up in February 2008 but started to work autonomously in July 2010; expresses its great concern that the Joint Undertaking has used one quarter of its envisaged duration, up to 31 December 2017, to achieve financial autonomy; notes that it was just after September 2010, when the cash transfer from the Commission to the Joint Undertaking covering the operational appropriations was made, that the Joint Undertaking was able to make operational payments; insists that these delays should not, however, cause a prolongation of the 10-year period of its existence but should embolden the management of the Joint Undertaking to address all shortcomings and reach its objectives within the envisaged 10-year period;

         Call for proposals and project management

         Call 2010

                  16.

                  Notes from the Joint Undertaking that the response to Call 3 for proposals has been strong; takes note that 10 proposals have been selected for funding but that 11 projects above threshold could not be funded because the available budget had been exhausted;

         Calls 2008 and 2009

                  17.

                  Is deeply concerned by the slow progression of the projects under Call 1 (2008) and Call 2 (2009);

                  18.

                  Notes from the Joint Undertaking’s 2010 Annual Activity Report (AAR) that for Call 1 the situation at year-end 2010 is as follows:

                              —

                              of the total 166 partners, six partners (3,6 %) did not have an National Grants Agreements mainly due to paperwork in progress after changes,

                              —

                              15,1 % of the partners (25, mainly Italian partners) have closed a National Grants Agreements but did not sign the Accession Form;

                  19.

                  Acknowledges from comments of the Joint Undertaking that the contracts progressed even slower for the projects arising from Call 2 for which only six Joint Undertaking Grant agreements could be signed before the end of 2010 while the remaining five projects have been delayed for the following reasons:

                              —

                              three projects have Italian project coordinators who are still waiting for the national decree and did not agree to be replaced by partners from other countries,

                              —

                              the SMART project has been redefined after France cancelled funding due to budgetary cuts several months after the Public Authorities Board funding decision,

                              —

                              Mirandela was ready for signature but had a last minute change in the responsible person authorised to sign;

                  20.

                  Establishes from the AAR that since the inception of the programme until the end of 2010, the Joint Undertaking executed more than 300 grant payments for a total of EUR 9 800 000; notes that the Joint Undertaking considers the situation of contracts and payments unacceptable and decided to take actions to:

                              —

                              make sure that the entities involved in the process are knowledgeable on the procedures,

                              —

                              clarify the sequence of events and the exchanges that must take place with the National Funding Authorities,

                              —

                              define steps to be taken and accelerate the procedures,

                              —

                              follow up on the progress through visits to the national entities to review status or clarify procedures;

                  21.

                  Calls on the Joint Undertaking to provide the discharge authority with:

                              —

                              an up-to-date report on the current situation regarding projects under Calls 1 and 2 in terms of progression of contract settlement and grant payments,

                              —

                              an evaluation report on the measures undertaken to speed-up the contracting and payment process and the progress achieved through their implementation,

                              —

                              an up-to-date report on the current situation regarding the projects under Call 3 both in terms of contracting and payment;

         Performance

                  22.

                  Notes from the AAR that the Commission’s report on the first interim evaluation of the Artemis and ENIAC Joint Technology Initiatives was adopted on 16 December 2010;

                  23.

                  Underlines that the interim evaluation formulated three recommendations to the Joint Undertaking:

                              —

                              to solve the ‘free riding’ problem, the Joint Undertaking should establish a system where each non-member beneficiary pays a percentage of its Union contribution as a fee to the costs of the Joint Undertaking,

                              —

                              the evaluation and selection processes should be modified to improve the match of the portfolio of supported projects to the strategic European aims of the programme,

                              —

                              Member States and the Industrial Associations should work together to establish processes whereby potential proposers can be given early, constructive feedback on their prospects for support,

                        asks the Joint Undertaking to inform the discharge authority about the measures introduced following the results of this first interim evaluation;

                  24.

                  Notes that the Joint Undertaking considers the underspending of its operational budget as the most important issue affecting its ability to fulfil its mission; notes that as a consequence the Joint Undertaking engaged in 2010 in identifying action items that would induce a positive evolution of the situation, including:

                              —

                              the stimulation of the definition of strategically relevant projects,

                              —

                              the identification of national programmes that would benefit from being elevated in a European context,

                              —

                              the engagement of additional national funding entities,

                              —

                              the optimisation of the funding split between Eureka cluster Catrene and the Joint Undertaking,

                        calls on the Joint Undertaking to inform the discharge authority of the state of implementation of these action items and on the results achieved;

                  25.

                  Takes note of the Commission’s proposal establishing the Specific Programme Implementing Horizon 2020 — The Framework Programme for Research and Innovation (2014-2020) — where the Commission raises a possibility of combining Artemis and ENIAC into one initiative and the possibility to set up new Joint Undertakings in the context of implementing the ‘Societal challenges’ part of Horizon 2020; calls on the Commission to keep the discharge authority informed on this matter;

         Lack of host State agreement

                  26.

                  Reiterates that the Joint Undertaking should rapidly conclude a host agreement with Belgium concerning office accommodation, privileges and immunities and other support to be provided by Belgium to it as provided by its Founding Regulation (EC) No 72/2008;

         Horizontal observations on the Joint Undertakings

                  27.

                  Underlines that seven Joint Undertakings have so far been established by the Commission under Article 187 of the Treaty on the Functioning of the European Union; notes that six Joint Undertakings (IMI, Artemis, ENIAC, Clean Sky, FCH and ITER-F4E) are in the research area under the Commission’s DGs RTD and INFSO and one is charged with developing the new air traffic management system (SESAR) in the transport domain whose activities are supervised by DG MOVE;

                  28.

                  Notes that the total indicative resources deemed necessary for the Joint Undertakings for their period of existence amounts to EUR 21 793 000 000;

                  29.

                  Notes that the total Union contribution deemed necessary for the Joint Undertakings for their period of existence amounts to EUR 11 489 000 000;

                  30.

                  Notes that, for the financial year 2010, the overall Union contribution to the budget of the Joint Undertakings amounted to EUR 505 000 000;

                  31.

                  Calls on the Commission to provide the discharge authority annually with consolidated information on the total annual funding per Joint Undertaking made from the general budget of the Union in order to ensure transparency and clarity on the use of the Union’s funds and restore trust among the European taxpayers;

                  32.

                  Welcomes the initiative of Artemis to include information in its AAR on the monitoring and review of its ongoing projects; believes this is a practice that should be followed by the other Joint Undertakings;

                  33.

                  Recalls that Joint Undertakings are public-private partnerships and that as a consequence public and private interests are intertwined; is of the opinion that under the circumstances the likelihood of conflicts of interest should not be dismissed but addressed properly; calls therefore on the Joint Undertakings to inform the discharge authority on the verification mechanisms which exist in their respective structures to enable a proper management and prevention of conflicts of interest;

                  34.

                  Notes, with the notable exception of the Joint Undertaking for ITER and the Development of Fusion Energy, that Joint Undertakings are relatively small structures and geographically-concentrated; believes therefore that they should pool their resources where possible;

                  35.

                  Calls on the Court of Auditors to provide the discharge authority with a follow-up on the comments it has made for each of the Joint Undertakings in their respective report on the annual accounts for the financial year 2011;

                  36.

                  Invites the Court of Auditors to provide, within a reasonable deadline, a special report to Parliament, on the added value of the establishment of the Joint Undertakings for the efficient execution of Union research, technological development and demonstration programmes; further notes that the same report should include an assessment of the effectiveness of the Joint Undertakings’ establishment.

         (1)  OJ C 368, 16.12.2011, p. 48.

         (2)  OJ L 248, 16.9.2002, p. 1.

         (3)  OJ L 30, 4.2.2008, p. 21.

         (4)  OJ L 357, 31.12.2002, p. 72.