title: 2000/182/EC: Commission Decision of 14 September 1999 relating to a proceeding pursuant to Article 81 of the EC Treaty (Case IV/36.213/F2 - GEAE/P & W) (notified under document number C(1999) 2901) (Text with EEA relevance) (Only the English text is authentic)

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text: L 58/16 EN Official Journal of the European Communities 3. 3. 2000 II (Acts whose publication is not obligatory) COMMISSION COMMISSION DECISION of 14 September 1999 relating to a proceeding pursuant to Article 81 of the EC Treaty (Case IV/36. 213/F2 — GEAE/P & W) (notified under document number C(1999) 2901) (Only the English text is authentic) (Text with EEA relevance) (2000/182/EC) THE COMMISSION OF THE EUROPEAN COMMUNITIES, Having regard to the Treaty establishing the European Community, Having regard to the Agreement on the European Economic Area, Having regard to Council Regulation No 17 of 6 February 1962, First Regulation implementing Articles 85 and 86 of the Treaty (1), as last amended by Regulation (EC) No 1216/ 1999 (2), and in particular Articles 6 and 8 thereof, Having regard to the application for negative clearance and the notification for exemption submitted, pursuant to Articles 2 and 4 of Regulation No 17, on 26 September 1996, Having published a summary of fication pursuant to Article 19(3) of Regulation No 17 (3), the application and noti- After consulting the Advisory Committee for Restrictive Prac- tices and Dominant Positions, Whereas: I. THE FACTS (2) A. INTRODUCTION (1) On 26 September 1996, General Electric Aircraft Engines (GEAE) and Pratt & Whitney (P & W) notified three agreements to the Commission regarding the crea- (1) OJ 13, 21. 2. 1962, p. 204/62. (2) OJ L 148, 15. 6. 1999, p. 5. (3) OJ C 339, 7. 11. 1998, p. 3. tion of a joint venture formed by the two companies, the GE-P & W Engine Alliance LLC (‘the Engine Alli- ance’). The Engine Alliance was formed to develop, manufacture, sell and support a new aircraft engine, known as the GP7000 engine (‘the new engine’). The new engine is intended for future, very large commercial aircraft, namely the envisaged Airbus A3XX aircraft and possible Stretch versions of the Boeing B747-400 aircraft. There are only three full-capacity manufacturers on the market for jet engines intended for such aircraft: GEAE, P & W and Rolls-Royce plc (‘Rolls-Royce’). B. BACKGROUND The Engine Alliance was initially formed to develop a new jet engine for the Growth version of the B747-400 aircraft that the Boeing company (‘Boeing’) planned to develop, known as the Growth 747. The Growth 747 was intended to be a long-range, four-engine, aircraft with 450-550 seats, scheduled to enter into service at the end of the year 2000. The Growth 747 required a technically advanced engine with a thrust of 70 000 to 85 000 lbs requirements very regarding size, weight, noise level, emissions and oper- ating costs. None of the three engine manufacturers stringent fulfilling 3. 3. 2000 EN Official Journal of the European Communities L 58/17 (7) (8) (9) could offer an existing engine fulfilling all these criteria. Rolls-Royce did not, however, have to develop a completely new engine, but could offer a derivative of an existing engine. After several unsuccessful attempts to develop derivatives of their existing engines, P & W and GEAE decided to create the Engine Alliance. Boeing announced in January 1997 that it would not pursue its Growth 747 project, due to insufficient and uncertain demand and high development costs. Airbus Industrie (‘Airbus’), the other manufacturer of large commercial aircraft, announced that it would pursue its plans to develop a new long-range, four-engine aircraft, known as the A3XX. (3) On 6 November 1997, the Engine Alliance amended the notification and declared that, following Boeing's decision to abandon the Growth 747 project, the Engine Alliance would instead develop a new engine for the envisaged A3XX aircraft. The A3XX is intended to carry 480-650 passengers and scheduled to enter into service in the year 2004. It will require engines with approxi- mately the same technical requirements as the Boeing Growth 747. The thrust range was extended to cover 70 000 to 85 000 lbs ± 10 %, i. e. 63 000 to 93 500 lbs. Airbus has signed Memoranda of Understanding for an engine to equip the A3XX with the Engine Alliance as well as with Rolls-Royce. Instead of developing the Growth 747, Boeing is currently considering launching Stretch versions of its B747-400 aircraft, but has not yet taken a definite decision. The new engine may also be suitable for certain Stretch versions. (4) The Engine Alliance was notified to the US Federal Trade Commission, which declared on 22 November 1996 that it had closed its investigation. This decision was confirmed in October 1997. The parties have under- taken to inform the Federal Trade Commission of any change in scope of the Engine Alliance. C. THE PARTIES (10) 1. General Electric Aircraft Engines (5) General Electric Aircraft Engines (GEAE) is one of 11 businesses of the General Electric Company of Fairfield, Connecticut, United States of America. GEAE manufac- in the tures aircraft engines and related services, commercial as well as in the military field. The General Electric Company is active in the field of aircraft leasing through GE Capital Aviation Services (GECAS) which is a unit of its finance business GE Capital Services. 2. Pratt & Whitney Pratt & Whitney (P & W) is a division of United Technol- ogies Corporation (UTC) of Hartford, Connecticut, large United States of America. P & W produces commercial aircraft engines. Other activities include military aircraft engines, propulsion systems for missiles and industrial turbines. In 1998, the total turnover of UTC was USD 25 715 million. The turnover of P & W in 1998 was USD 7 876 million. D. THE NOTIFIED AGREEMENTS 1. The agreements agreements were originally notified on 26 Three September 1996: — the Memorandum of Understanding of 16 August 1996 concluded between the Engine Alliance and Boeing concerning an engine for the larger versions of the 747-400 aircraft including the commitment to cooperate, the list price for the new engine and the technical requirements to be fulfilled, — the Transaction Agreement of 28 August 1996 including the general framework for the cooperation describing the legal representations, warranties and covenants made by the parties, grounds and condi- tions for termination, and — the Limited Liability Company Agreement of 28 August 1996 (LLC Agreement) between GEAE, P & W and the Engine Alliance containing the terms of the functioning of the Engine Alliance. The Memorandum of Understanding concluded with Boeing on 16 August 1996 concerning the Growth 747 is no longer valid following Boeing's decision not to develop the Growth 747 aircraft. It has been replaced by a Memorandum of Understanding of 27 May 1998 between the Engine Alliance and Airbus concerning the envisaged A3XX aircraft. The Transaction Agreement and the Limited Liability Company Agreement remain in force. 2. Contractual provisions a) Management structure of the Engine Alliance (6) the total In 1998, the General Electric turnover of Company was USD 100 469 million. The turnover of GEAE in 1998 was USD 10 294 million. (11) The Engine Alliance is a joint venture between GEAE and P & W, created for an unlimited period, with the following management structure. L 58/18 EN Official Journal of the European Communities 3. 3. 2000 (12) Each party will have a 50 % equity interest, ‘membership interest’, in the joint venture and will share programme revenues and responsibilities [. ] (*). The parties will establish a Committee consisting of six representatives, three from each party. The Committee will have the authority to conduct the affairs of the Engine Alliance and be responsible for the establishment of general policy, approval of major projects, contracts, purchase orders and product and service distribution decisions. The Committee will hold regular meetings. All six repre- sentatives constitute a quorum. Unanimous consent of the Committee is necessary for organisational matters of importance, such as any amendment to the LLC Agree- ment or any change in the scope of the company's business or transactions, such as the acquisition of another person or of assets outside the ordinary course of the company's business. (13) The President will serve for a term of three years. The members will select the assembly site and principal offices/headquarters of the company with the intention of achieving the lowest cost and best integration for the new engine. The member not having the assembly site and principal offices/headquarters will nominate the first President. Thereafter alternate between the parties. The President will be responsible for the general management of the company's business and affairs, in particular for overseeing the company's sales and marketing of the new engine. the Presidency will (14) The sale of the new engine will be the responsibility of the Engine Alliance. Officers and company personnel with responsibility for the new engine will not partici- pate in the sale or marketing of any of the party's other engine programmes. (15) The company will maintain proper and complete books and records with all transactions and other matters relating to the company's business entered fully and accurately. The financial statements will be kept on an (United accrual basis and in accordance with ‘GAAP’ States' generally accepted accounting principles) consist- ently applied. The financial statements will be audited annually by independent public accountants. (*) Business secret. (16) (17) (18) (19) (20) b) The functioning of the Engine Alliance The Engine Alliance will not itself produce the new engine, but coordinate the parent companies' activities for the design and production of the new engine. Each party will bear all production costs relating to its manu- facture of parts and modules. The party who produces a module is responsible for the design of such module. The design responsibilities have been allocated as follows: GEAE will be responsible for the design of the core system, and P & W for the design of the low-pres- sure system. The parties will perform an equal amount of the development programme. If it is not possible to balance the development programme, one party may be required to make cash payments to the other party. The parties may subcontract any portion of its member- ship interest to any supplier who meets the source approval requirements. The parties may also transfer a portion of its new engine programme and related risk and revenues to any third party provided that the other party is consulted and informed of the party's identity and responsibilities [. ] (*). The parties will establish an integrated product support services programme to provide the customers with low- cost service and maintenance. The overhaul and repair of the new engine will be coordinated by and performed in the name of the Engine Alliance by utilising the existing capabilities of the parties. Customers for the new engine who want to invest in the overhaul and the product can be granted non-exclusive repair of licenses for an agreed fee. c) Intellectual property is and will remain the property of The proprietary information disclosed under the LLC Agreement the disclosing party. Each party will establish reasonable procedures to ensure that the other party's employees located in its facility will not have access to its undis- closed proprietary information located at its facility. The parties will establish appropriate procedures and training to ensure that these procedures are met. The parties agree to grant each other a free, worldwide, non-exclusive licence to use the existing technology (background technology) for the purpose of: (i) the joint interface of the operation and review of the new engine, and (iii) obtaining certification the components, (ii) 3. 3. 2000 EN Official Journal of the European Communities L 58/19 or performing maintenance, overhaul and repair of the new engine. The parties may only disclose such back- ground technology to third parties with the permission of the owning party, to the extent necessary for the parties to carry out of their duties under the LLC Agree- ment and provided that third parties agree in writing not to disclose such information. d) The use of parts or components (21) [. ] (*). (22) Notwithstanding the above, the parties may use the technology developed or acquired either in the course of its participation in the Engine Alliance or in rendering performance under the LLC Agreement at their discre- including on any other engine programme. tion, E. THE MARKETS CONCERNED 1. The relevant product market and cargo versions as well as in combi versions carrying both passengers and cargo. Airbus plans to first launch the A3XX-100 (550 seats) followed by the A3XX-200 (656 seats), both with a range of 7 650 to 8 750 naut- ical miles. Airbus is also studying the possibility of launching a reduced version, the A3XX-50 (481 seats). Airbus' current estimate is that the A3XX-100 version will require engines with a thrust of 67 000 lbs and the A3XX-200 version engines with a thrust of 75 000 lbs. According to Airbus's preliminary plans, a smaller deriv- ative A3XX-50R would need engines with a thrust of 67 000 lbs. The thrust requirements have not yet been finally determined by Airbus. The possible Stretch versions of the Boeing B747-400 aircraft will, according to Boeing's current estimates, require engines with a thrust of 67 000 lbs. (27) The envisaged A3XX aircraft, as well as possible Stretch versions of require jet the B747-400 aircraft, will engines with very specific and demanding technical characteristics relating to thrust power, size, weight, noise level, emission, fuel consumption and operational costs. Because of the specific characteristics, the new engine cannot, from the point of view of the demand side, be substituted by any existing engine. The market for jet engines developed for the envis- aged Airbus A3XX aircraft and possible Stretch versions of the Boeing B747-400 aircraft (28) (23) (24) (25) (26) The parties have identified the relevant market as the market for jet engines with a thrust power of 70 000 to 85 000 lbs ± 10 % (i. e. 63 000 to 93 500 lbs) intended to equip the envisaged Airbus A3XX aircraft and possible future Stretch versions of Boeing's B747-400 aircraft. it does not Certain third parties have submitted that this market definition is too narrow and that take account of the fact that the new engine could be adapted also for use on other aircraft. According to them, the relevant product market is wider and should be defined as the market for jet engines with a thrust power of 63 000 to 93 500 lbs able to equip existing commercial wide-body aircraft. the demand side, From the point of view of the Commission takes account of the intended use of the new engine. Jet engines are specifically designed and developed to fit the requirements of a specific aircraft model. The requirements, which relate to the engine's thrust power, size, weight, noise level, emission, fuel consumption and operational costs, differ depending on the type and size of aircraft. Those requirements are set by the airframe manufacturers in cooperation with the airlines. The envisaged A3XX four-engine aircraft, for which the new engine is intended, will be the first twin-aisle, twin- deck aircraft on the market with a bigger passenger capacity aircraft currently operating. It will be available in both passenger (480-650 passengers) than any (*) Business secret. From the point of view of the supply side, the manufac- turers cannot offer their existing engines for the above- mentioned aircraft, nor can they adapt their engines in the short term to fulfil the specific characteristics. The three manufacturers can only develop an engine fulfil- ling the characteristics in the medium term, either by developing a derivative of an existing engine (Rolls- Royce) or by developing a new engine (P & W and GEAE). (29) The Commission concludes, in the light of the above, that the relevant product market is the market for jet engines intended for the envisaged Airbus A3XX aircraft and possible Stretch versions of Boeing B747-400 aircraft. 2. Neighbouring product market The market for jet engines for existing commercial wide-body aircraft (30) It would not be possible to offer the new engine for use on any other aircraft than the envisaged A3XX aircraft and possible Stretch versions of the B747-400 aircraft without adaptation. However, the notifying parties, as well as Rolls-Royce, have confirmed that it would be possible to adapt the new engine, in the medium term, L 58/20 EN Official Journal of the European Communities 3. 3. 2000 (34) for use on other commercial wide-body aircraft, but that it would entail high costs and be time-consuming (at least 36 months). The market for jet engines for existing commercial wide-body aircraft is therefore a neigh- bouring market to the market for jet engines developed for the envisaged A3XX aircraft and possible Stretch versions of the B747-400 aircraft. It could be argued that there are different sub-markets within the market for for existing commercial wide-body aircraft. However, this question can be left open for the assessment of the notified arrangement. jet engines (31) Commercial wide-body aircraft are usually defined as commercial aircraft with more than 200 seats (4). Commercial wide-body aircraft require more powerful engines than commercial narrow-body aircraft. The latter are usually defined as commercial aircraft with 100-200 seats. The jet engines that equip existing narrow-body aircraft have a thrust of less than 45 000 lbs and are not substitutable with engines for wide-body aircraft, all of which require engines with a minimum thrust power of approximately 60 000 lbs. (32) The wide-body commercial aircraft currently in produc- tion can be divided into twin-engine and four-engine aircraft. The only three-engine commercial aircraft still in production is the freighter version of the MD-11. Existing commercial wide-body aircraft Type of aircraft Twin-engine Four-engine Boeing B767 B777 B747 Airbus A300 A310 A330 A340 additional to provide Experience in the aero-engine industry shows that jet engines for commercial wide-body aircraft are often modified characteristics or performance to be fitted on other aircraft than originally intended. In this respect, engines developed for a specific four-engine aircraft cannot only be modified to fit on another four-engine aircraft, but also for use on a twin- engine aircraft. The three manufacturers have in the past developed such derivatives by adapting engines ori- ginally intended for the B747-400 aircraft for use on a twin-engine aircraft. Therefore, although the new engine will be developed, in the first place, for a four-engine wide-body aircraft, this does not exclude the possibility of later adapting it for use on a twin-engine wide-body aircraft. (35) The market for jet engines for existing commercial wide- body aircraft is characterised by the development of ‘families’ of engines with a number of derivatives. Exam- ples of such ‘families’ of engines are the Rolls-Royce's Trent engine, P & W's PW4000 engine GEAE's CFM56 and CF6 engines which are developed in cooperation with the French manufacturer Snecma. These ‘families’ include engines for the whole range of existing commer- cial wide-body aircraft. Engine family Applications PW4000 CF-6 Trent B747-400 B767 B777 A300/A310 A330 B747-400 B767 A310 A330 B767 B777 A330 A340 (33) The indicated thrust range of the new engine is 63 000 to 93 500 lbs. All of the abovementioned commercial wide-body aircraft are equipped with engines, which have a thrust capacity within this thrust range. The thrust required of an engine depends not only on the size of the aircraft which it equips, but also on the number of engines. A twin-engine aircraft requires, for example, engines with a higher thrust than a four-engine aircraft of equivalent size. (4) Commission Decision 97/816/EC, Case IV/M. 887 — Boeing/McDon- nell Douglas (OJ L 336, 8. 12. 1997, p. 16, paragraphs 16 and 38). (36) The fact that all three manufacturers have developed ‘families’ of engines which can power the whole range of existing commercial wide-body aircraft suggests that also the new engine could, in the medium term, be adapted for use on other commercial wide-body aircraft than the envisaged A3XX aircraft and possible Stretch versions of the B747-400 aircraft. 3. 3. 2000 EN Official Journal of the European Communities (37) (38) (39) for the market jet The Commission considers that engines intended for existing commercial wide-body aircraft is a neighbouring market, since it follows from the above that derivatives of the new engine could, in the medium term, be adapted for use on existing for which it was not commercial wide-body aircraft initially intended. 3. The relevant geographic market The Engine Alliance will market, sell and support the new engine on a worldwide basis. The transportation costs of delivery will be negligible. The Commission therefore considers the geographic market for jet engines intended for the envisaged A3XX aircraft and possible Stretch versions of the B747-400 aircraft to be world- wide. This applies also to the market for jet engines for existing commercial wide-body aircraft which are sold on a worldwide basis under similar conditions of competition. Relative transportation costs of delivery are negligible. All three manufacturers, GEAE, P & W and Rolls-Royce, are active on this market on a worldwide basis. The market for jet engines for existing commercial wide-body aircraft is therefore worldwide. 4. Market shares (40) There are no market-share figures available for the market for jet engines intended to equip the envisaged A3XX aircraft or possible Stretch versions of the B747-400 aircraft, since there are currently not engines on this market. The market shares shown below concern the neighbouring market for jet engines for existing commercial wide-body aircraft. (41) Market shares can be calculated either on the basis of the number of engines installed, on the order backlog or on the number of orders received. The number of engines installed shows the existing situation in the sector as a whole. The yearly backlog numbers reflect the develop- ment of net orders (number of new firm orders minus number of cancelled orders) over a certain period and thus show the development. The number of orders received reflects the situation at a certain time. a) Jet engines installed on existing commercial wide-body aircraft (42) The market shares by units of the world market for engines installed on existing commercial wide-body aircraft delivered between January 1996 and March 1999 are the following. L 58/21 (%) 1996-1999 34 29 16 20 GEAE P & W Rolls-Royce CFMI (1) (1) CFMI is a 50/50 cooperation between GEAE and Snecma. Source: Airbus Industrie and Boeing. b) Backlog for jet engines for existing commercial wide-body aircraft (43) The worldwide market shares in the market for jet engines for existing commercial wide-body aircraft in terms of order backlog (by units) are the following. (%) 1997 (August) 1998 (April) 32 30 14 17 6 29 27 11 25 8 GEAE P & W CFMI Rolls-Royce Undecided (1) (1) Aircraft for which an engine has not yet been selected. Source: Air Transport Intelligence. c) Orders received for jet engines for existing commercial wide-body aircraft (44) The worldwide market shares for engines for commer- cial wide-body aircraft on the basis of orders received in terms of units are the following. 1997 1998 [. ] (*) [. ] (*) [. ] (*) [. ] (*) [. ] (*) [. ] (*) [. ] (*) [. ] (*) GEAE CFMI P & W Rolls-Royce (*) Business secret. Source: GEAE. L 58/22 EN Official Journal of the European Communities 3. 3. 2000 (45) The market shares show that the notifying parties have a very high combined market share on the market for jet engines for existing commercial wide-body aircraft, both in terms of backlog and in terms of engines installed and on order. However, the figures for orders received show that Rolls-Royce's market share is increasing. envisaged A3XX are routes on which the B-747 fleet is currently employed, i. e. Transatlantic, Trans-Pacific, Asia-Europe and within Asia. (46) (47) (48) 5. Estimated demand for the new engine The demand forecast until the year 2020 for the envis- aged A3XX aircraft is estimated to be approximately [. ] (*) aircraft according to the Engine Alliance. The estimated demand will thus be at least [. ] (*) engines excluding spare engines and parts. The demand for the A3XX aircraft and possible Stretch versions of the B747-400 aircraft is, however, uncertain and depends factors. Boeing currently makes a on a number of different market forecast from Airbus and considers the demand for a new ‘super jumbo’ aircraft to be too small to justify the very high development cost. The demand depends, inter alia, whether or not the airline traffic will go towards an increased ‘fragmentation’ of hubs. Such development could push airlines towards the purchase of smaller aircraft, such as the A340, instead of very large ‘super jumbo’ aircraft such as the A3XX. in cooperation with Boeing for Boeing does not currently plan to build a new very large aircraft, but considers the possibility of developing Stretch versions of its existing B747-400 aircraft. The Engine Alliance is continuing to study engine configur- ations the Stretch versions. Boeing is currently considering developing two larger versions of its 747-400 model, the 747-400X Stretch (approximately 485 passengers) and the 747- 400Y Stretch (approximately 500 passengers), for which the new engine may be suitable. However, Boeing has not yet taken a definite decision whether or not to launch these models. Rolls-Royce is expected to be able to offer a derivative of its Trent 600 engine for the 747-400X/Y Stretch models. networks long-distance The potential customers for the new engine are Airbus and Boeing and ultimately certain airlines with extensive flights. route operating According to Airbus's estimates, over half of the projected deliveries (58 %) are expected to go to airlines in the Asia-Pacific region. Around 20 % of the projected deliveries are expected to go to North America and around 20 % to Europe. In terms of customers, 20 airlines are expected to purchase 72 % of the aircraft and 42 other airlines the remaining part. The potential customers for the A3XX are big airlines which typically have a strong bargaining position against airframe and aircraft engine manufacturers. The major routes for the (*) Business secret. 6. Structure of the market for the new engine and for jet engines for the neighbouring market existing commercial wide-body aircraft a) Supply (49) (50) (51) the neighbouring market The structure of the market for the new engine is very similar to that of for jet engines for existing commercial wide-body aircraft. Currently, three engine manufacturers have the capa- bility to develop independently jet engines intended for these markets: GEAE, P & W and Rolls Royce (5). Each of those three aircraft engine manufacturers offers a number of engine ‘families’ based on common elements and technology. Rolls-Royce has an increasing market share and a good capacity for developing new engines and derivatives of existing ones, as shown by the Trent family. The French manufacturer, Snecma, is active in the manufacture of jet engines in cooperation with GEAE through the CFMI, but does not produce such engines by itself. In the light of the above, no entries are foreseen on this market in the near future. The barriers to entry are very high to the abovemen- tioned markets. The development of such jet engines entails very high costs (approximately USD 1 billion) on research and development, product design, testing, production tooling, and related marketing and after-sale service. A large part of these costs are incurred before any engines are sold. GEAE and P & W estimate the non-recurring costs of developing the new engine to exceed USD 800 million. Aircraft engine manufacturers typically do not recover their investment until after 15 to 20 years. The life cycle of an engine is approximately 40 years. engine Jet engines for existing commercial wide-body aircraft are usually manufactured by consortia including one manufacturer having a complete capability (GEAE, P & W or Rolls-Royce) and a number of engine component manufacturers which share the work, revenue and investment risks. These component manu- facturers are called risk- and revenue-sharing participants (RSPs). In general, a ‘programme share’ percentage is negotiated with the RSP to reflect the scope of work provided by the latter during the programme. The engine manufacturer then compensates the RSP from revenues actually generated from sales of engines and (5) Snecma and BMW do not have the capacity to develop such jet engines independently, but can only do so in cooperation with one of the three manufacturers GEA, P & W and Rolls-Royce. 3. 3. 2000 EN Official Journal of the European Communities L 58/23 spare parts based on that RSP's programme-share percentage. Certain obligations and liabilities are also shared by the RSP based on the same percentage. RSPs may also be restricted in their ability to conclude agree- ments to participate in programmes led by competing prime manufacturers. an engine development programme, since it is important to have the engine selected for a new airframe by a substantial airline. However, even after airlines have selected an engine supplier, it sometimes occurs that they switch engine supplier. Airlines typically prefer a degree of engine manufacture commonality throughout their fleet. This gives the advantage of commonality of spare and replacement parts as well as advantages in technical training and general care and maintenance of the engines. (52) (53) (54) The notified cooperation is an example of the increasing cooperation between manufacturers for the development of new jet engines. Other examples include Rolls-Royce and P & W who are shareholders in International Aero Engines (IAE), a project involving also Daimler Chrysler Aerospace Motoren- (MTU) (Germany), Fiat Avio (Italy) and Japanese Aircraft Engines Corporation (JAEC) (Japan). IAE is active in the thrust range 22 000 to 33 000 lbs where it manufac- tures the engine V2500. Another example of coopera- tion is the joint venture CFMI between GEAE and Snecma, producer of the CMF56 engine which equips the Airbus 320 aircraft and, as a sole supplier, the Boeing B-737 and Airbus A340. Turbinen-Union und b) Demand The engine manufacturers must, at a first stage, compete to satisfy the requirements of the airframe manufacturer to be able to offer engines for a particular airframe. At this stage, the engine manufacturer typically deals ‘prin- cipally with the airframe manufacturer, who collaborates closely with its prospective airline customers to define the airframe and engine requirements. The airframe the engine manufacturers (Boeing and Airbus) airline requirements based on demand from the customers. The airframe manufacturer thus acts largely as a representative for the airlines. However, since engines typically take longer to develop than the corre- sponding airframes, the engine manufacturer must also anticipate airlines’ needs when launching development work. The ultimate customers for commercial wide-body aircraft are the airlines, which frequently purchase airframes and engines separately. Such aircraft are typically offered with more than one type of engine. jet engines for set concerns The airlines have typically a strong bargaining power. Competition price, performance, reliability and longevity of the competing engines as well as likely repair and maintenance costs. Competition is particularly intense in the early phases of life-cycle costs, i. e. F. OBSERVATIONS FROM THIRD PARTIES (55) A number of interested third parties submitted observa- tions in response to the Notice published pursuant to Article 19(3) of Regulation No 17 (‘the Notice’) (6). The submissions concern primarily the content and wording of the undertakings given by the parties and, in partic- ular, the scope of the Engine Alliance. According to certain third parties, the increased thrust range of the new engine has become too wide and may reduce competition between the parties in engine segments where they currently compete. Other third parties have commented on the undertaking concerning the access of third parties to perform aircraft engine maintenance including repair and overhaul. (56) Airbus has stated that it is in favour of the Engine Alliance, since this will increase its choice of engine for the envisaged A3XX aircraft from one supplier (Rolls- Royce) to two. (57) The third engine manufacturer, Rolls-Royce, has on several occasions made observations concerning the Engine Alliance. Rolls-Royce also submitted comments in the form of a formal complaint pursuant to Article 3 of Regulation No 17. The complaint was subsequently withdrawn. Rolls-Royce believes that the Engine Alliance restricts both actual and potential competition between the parties and that the scope of the Engine Alliance, as is so wide that its approval described in the Notice, would restrict competition and affect trade between to a significant degree. Rolls-Royce Member States believes that the undertakings listed in the Notice are not sufficiently stringent and submits that the Engine Alli- ance should be permitted to exist only under certain additional conditions. ' (58) In this respect, Rolls-Royce believes that the scope of the Engine Alliance should be strictly limited to the develop- ment, manufacture, sales and marketing of a new engine with a minimum thrust of 67 000 lbs ± 15 % to allow for engine growth. The scope of the Engine Alliance should also exclude any joint design and development (6) See footnote 3. L 58/24 EN Official Journal of the European Communities 3. 3. 2000 (59) (60) than that necessary for module integration, other application of the engine to the airframe, testing and validation. The application of the new engine should be strictly limited to aircraft carrying more than 475 passengers, which would accommodate Airbus' current specification for the A3XX. Finally, the Engine Alliance should be required to notify any change in scope to the Commission without delay and not to put into effect any such change prior to receiving Commission approval. in order Rolls-Royce further submits that the Engine Alliance should be required to trade at arm's length with its parents to preclude the Engine Alliance receiving any cross-subsidy from its parent companies. The Engine Alliance should be an independent, self standing entity without any direct or indirect subsidy or the support Engine Alliance an accounting system separate from that of the parents which should also be audited every year by an indepen- dent auditor and published on an annual basis. from its parent companies. Moreover, should be obliged to adopt suggests that GEAE and its Rolls-Royce also considers that the Engine Alliance should be prohibited from entering into any exclusive arrangements for the new engine with airframe manu- facturers. Rolls-Royce fears that GEAE and P & W could exercise their combined market power and ‘buy’ exclu- sivity in an airframe, which would create a significant risk of foreclosure with regard to Rolls-Royce. Finally, Rolls-Royce leasing subsidiary, GECAS, should be obliged to offer prospec- tive customers a genuine choice of engine and support services on non-preferential terms if it is to finance the purchase of any four-engine aircraft with more than 475 passengers. This would prevent GECAS from being able, due to its considerable strength and bargaining power, to commit its customers to leasing aircraft equipped with GEAE or Engine Alliance engines, which would restrict the choice of potential customers and distort competition between the Engine Alliance and Rolls- Royce. G. UNDERTAKINGS OFFERED BY THE PARTIES (61) The Commission has carefully reviewed all comments received and has concluded that they were not of such a nature so as to make it modify its preliminary favourable position as expressed in the Notice. Nevertheless, following further discussions, the parties have offered a number of undertakings concerning the possibility for third parties to perform service and maintenance of the new engine, exclusivity agreements with regard to the new engine and the activities of General Electric Com- pany's leasing subsidiary GECAS. The undertakings, of which the Commission takes note, are the following. The Engine Alliance will make available to third parties, on terms customary in the industry, the engine manuals and related technical publications required in order to perform basic service and maintenance on the new engine. The Engine Alliance will not seek, solicit or impose conditions of exclusivity in its bids or contracts for the development or supply of the new engine to airframe manufacturers, except for campaigns in which another engine manufacturer has offered to enter into an exclusive agreement. (62) (63) (64) GEAE will report to the Commission in writing of any purchase orders placed by its subsidiary General Electric Capital Aviation Services (GECAS) for any new aircraft powered by the new engine. II. LEGAL ANALYSIS A. ARTICLE 81(1) OF THE EC TREATY AND ARTICLE 53(1) OF THE EEA AGREEMENT 1. Cooperative joint venture (65) (66) The Engine Alliance must be assessed pursuant to the rules applicable at the time of the notification which was before Council Regulation (EEC) No 4064/89 of 21 December 1989 on the control of concentrations between undertakings (7) was amended by Regulation (EC) No 1310/97 (8). The joint venture is under the joint control of the parent companies. The governing structure of the Engine Alli- ance implies that no single parent company is in a position to separately exercise a decisive influence on the decision-making of the joint venture. Unanimous consent of all members of the Committee is required for all organisational matters of importance. (67) While the parent companies will remain responsible for the design and production of the components of the new engine, the Engine Alliance will be in charge of the final assembly, sales and marketing of the new engine independently from its parent companies. The new engine will be marketed under the name of the Engine Alliance. GEAE and P & W will sell to the Engine Alli- ance the parts for which they have the production responsibility at a price determined on the basis of a fixed formula. The Engine Alliance will have its own profit and loss accounts. The profits and losses will be allocated between the parent companies at the end of each fiscal year. (7) OJ L 395, 30. 12. 1989, p. 1; corrected version in OJ L 257, 21. 9. 1990, p. 13. (8) OJ L 180, 9. 7. 1997, p. 1. 3. 3. 2000 EN Official Journal of the European Communities L 58/25 (73) (74) (68) On the basis of the above elements, the Engine Alliance is considered to perform, on a lasting basis, all the functions of an autonomous undertaking. It is therefore a full-function joint venture within the meaning of Article 3(2) of Regulation (EEC) No 4064/89. (69) However, since the creation of the Engine Alliance could the parent companies' give rise to coordination of behaviour on the neighbouring market for jet engines for existing commercial wide-body aircraft, on which the parties currently compete (9), it is excluded from the scope of Regulation (EEC) No 4064/89. In conclusion, the parties have, through the creation of the Engine Alliance, set up a cooperative joint venture over which they have joint control and which falls to be assessed under Article 81(1) of the Treaty. 2. Applicability of Article 81(1) of the EC Treaty and Article 53(1) of the EEA Agreement to the creation and functioning of the Engine Alliance (70) An agreement to set up a joint venture does not, in itself constitute a restriction of competition, but can be caught by the prohibition in Article 81(1) (ex Article 85(1)) of the EC Treaty if all the prerequisites set out in that Article are fulfilled. Cooperative joint ventures may prevent, restrict or distort competition between the parent companies to the extent the parties are already actual or potential competitors. (71) The parties claim that they are neither actual nor poten- tial competitors for the new engine, since they can only develop it within the stipulated time schedule by combining their complementary technologies. However, the time pressure has considerably decreased since the time of the initial notification in 1996, where the aircraft engine had to be developed within a very short time. According to Airbus's current estimates, the envis- aged A3XX aircraft will not enter into service before, at the earliest, the year 2004. means that they do not have to overcome any substan- tial barriers to entry. The parties further claim that they would not carry the financial risk of developing the new engine indepen- dently due to the high development costs and the uncer- tain and limited demand. The investment costs of indi- vidually developing a new engine would have been approximately USD 1 billion compared to the estimated cost of USD 800 million of jointly developing it. The parties claim that they would only make this investment individually if GEAE and P & W could expect to earn a sufficient profit to recoup its investment and obtain a sufficient return to compensate it for the significant risks involved. The parties estimate that the break-even point will not occur before the year 2020. considerable companies with for just a few years (e. g. Even though the development cost for the new engine is very high, this in itself would not be a fundamental obstacle to the parties developing the new engine inde- pendently of each other. The parties have, until now, separately undertaken substantial investment in respect of their current families of engines, some of which have been in the market the P & W 4000). Moreover, both parties belong to inter- national financial resources. GEAE forms part of the General Electric the world's largest company, and P & W Company, belongs to the United Technologies Corporation, both of which are financial resources see recitals 5 to 8). Both parties could there- fore, on their own, be reasonably expected to bear the technical and financial risks associated with the develop- ment and production of a new engine. It would also be possible for the parties to reduce the financial risk by sharing the cost with risk- and revenue-sharing partici- pants (RSPs), who would act as suppliers and subcon- tractors. companies with considerable (72) Moreover, both parties are active on the neighbouring market for jet engines for existing commercial wide- body aircraft. On this market, both parties offer competing jet engines within the thrust range of the new engine, i. e. 63 000 to 93 500 lbs. The fact that both parties have succeeded in the past in developing new engines independently within the thrust range in ques- tion indicates that both parties possess the necessary technical know-how and production technique to be able to produce the new engine independently. The fact that they already are active on the neighbouring market (9) For a definition of the neighbouring market, see recitals 30-37. (75) In the light of the above, the Commission considers that, while it may be economically more efficient for the parties to develop the new engine in cooperation, it would be technically and economically feasible for both parties to develop the new engine independently. The parties are thus potential competitors for the new engine in what would be a tight oligopoly containing, at most, three manufacturers. The creation and functioning of the Engine Alliance appreciably restricts competition for the new engine, since it reduces the choice of suppliers from three potential suppliers (GEAE, P & W and Rolls-Royce) to two (the Engine Alliance and Rolls-Royce). L 58/26 EN Official Journal of the European Communities 3. 3. 2000 3. Effect on trade between Member States (76) Since the potential customers for the new engine are primarily airlines with extensive route networks oper- ating on long-distance flights, mainly in the Asia-Pacific region, the effects of the Engine Alliance will mainly be felt in that region. However, jet aircraft are bought and used by airlines throughout the EEA and by airlines outside the EEA, carrying passengers between EEA coun- tries. The potential customers for the new engine also include airlines based in the EEA as well as one of the airframe manufacturers, Airbus, which is based in France. Moreover, both GEAE and P & W market their products through sales representatives located in the EEA and maintain overhaul and repair facilities and spare-parts inventories there. The creation of the Engine Alliance may thus appreciably affect trade between Member States within the meaning of Article 81(1) of the EC Treaty. which they have a technological advantage, i. e. the fan- blade technology of P & W and the technology for the high pressure compressor of GEAE. The cooperation will enable the parties to develop an engine that is less expensive in maintenance and cost per passenger and per mile covered, has lower gas and noise emissions than the existing engines of the parties. There is no engine fulfilling these criteria on the market. (80) The design and production responsibilities within the Engine Alliance will be allocated between the parties according to their technological advantages. This will allow the parties to develop the new engine within a shorter time-frame frame than would otherwise have been possible. The cooperation will also lead to substan- tial cost savings. The investment cost of individually developing the new engine would, according to the parties, have been approximately USD 1 billion compared to approximately USD 800 million for the joint development. B. ARTICLE 81(3) OF THE EC TREATY AND ARTICLE 53(3) OF THE EEA AGREEMENT 2. Benefit for consumers (77) The notified cooperation between GEAE and P & W is characterised by the following elements. It concerns the development of a new aircraft engine for envisaged aircraft, which are not yet launched, and for which the demand is uncertain. It involves high financial invest- ments, which are not likely to be recovered before at least 15 years. Moreover, while it reduces the number of potential competitors, it offers a realistic alternative to the one, remaining engine supplier, Rolls-Royce, who will be able to offer a derivative of an existing engine. (78) Taking account of those circumstances, the Commission finds that the notified arrangement between GEAE and P & W fulfil the four conditions for an exemption pursuant to Article 81(3) of the EC Treaty and Article 53(3) of the EEA Agreement. 1. Technical and economic progress (79) The competitive pressure in the air transport sector results in stricter performance targets, especially with regard to operating costs and environmental standards. The performance targets apply to new aircraft operating long distance routes as well as for the engines for such aircraft. The new engine needs stricter performance targets than any existing engine. The cooperation enables the parties to concentrate on the development of the specific elements of the engine in to fulfil (81) (82) (83) The new engine will offer both airframe manufacturers In this and airlines a technically advanced engine. respect, Airbus has declared that it is in favour of the Engine Alliance, which will provide it with an additional offer of engines for the envisaged A3XX aircraft. The new engine may also offer other benefits, since it will reduce operating costs, service longer routes on a non-stop basis and meet new airport noise restrictions. The reduced operating costs are likely to benefit airframe manufacturers and airlines and also, ultimately, airline passengers by means of lower prices, due to the strong competitive pressure on the market. 3. Indispensability Even though the parties would be technically and finan- cially able to develop the new engine independently, that could not be achieved within the same time-frame and at the same cost as the Engine Alliance. There is currently no competing engine on the market, but Rolls- Royce is developing a derivative of its Trent engine for the envisaged A3XX aircraft. The cooperation is there- fore necessary in order to have a competing engine on the market at an earlier stage than would otherwise be possible. 3. 3. 2000 EN Official Journal of the European Communities L 58/27 (84) (85) The creation and functioning of the Engine Alliance can therefore be considered indispensable to achieve the abovementioned benefits. However, it is important to ensure that the cooperation does not extend beyond what has been notified and regarded as indispensable to achieve the abovementioned benefits. The Commission considers that there is a risk that the new engine could be adapted, at a later stage, for use on for which it was originally aircraft other than that intended. The parties have themselves confirmed that the new engine could be adapted for use on other aircraft, even though that such adaptation would be costly and time-consuming. As explained in recitals 34 and 35, jet engines are often modified to provide additional charac- teristics to be fitted on aircraft other than those for which they were originally intended. The three manufac- turers have in the past developed ‘families’ of engines powering a range of different aircraft. Such development is often encouraged by airlines and airframe manufac- turers who are looking for new and better-performing engines for new aircraft models and ask the engine manufacturers to develop derivatives of existing engines. The indicated thrust range of the new engine is finally sufficiently wide to make such developments possible. instead of (86) Assuming that the new engine, with its unique combina- tion of features, is a success, the parties would have an incentive to adapt it for use on existing commercial wide-body aircraft individually developing derivatives of their engines. The parties would have an incentive to develop such derivatives in order to recover their investments for the new engine. This would have the effect of reducing competition between the parties on the market for jet engines for commercial wide-body aircraft where the parties currently compete and have very high combined market shares (see recitals 42 to 45). It would also reduce the choice of the customers. The market for jet engines for existing commercial wide- body aircraft is characterised by very high barriers to entry and a very high concentration with only three manufacturers. It also represents a high financial value. (87) In the light of the above, the Commission considers it necessary to impose a condition that the cooperation is strictly limited to a specific engine exclusively intended for the envisaged A3XX aircraft and possible Stretch versions of the B747-400 aircraft. In order to monitor that the cooperation does not extend beyond this, it is also necessary to impose a number of obligations on the parties. 4. No elimination of competition (88) Competitive pressure in relation to the new engine will exist, since Rolls-Royce will offer its Trent 900 engine for the envisaged A3XX aircraft. A Memorandum of Understanding has already been signed between Airbus and Rolls-Royce to that effect. Rolls-Royce is also a potential competitor for an engine for possible Stretch the B747-400 aircraft. The cooperation versions of between the parties will competition for the supply of the new engine. therefore not eliminate (89) (90) (91) (92) C. CONDITION TO BE ATTACHED TO THE DECISION to Article 8 of Regulation No 17 and to Pursuant Protocol 21 to the EEA Agreement, the Commission may attach conditions to a Decision pursuant to Article 81(3) of the EC Treaty and Article 53(3) of the EEA Agreement. For the reasons explained in recitals 85, 86 and 87, the Decision must be subject to a condition whereby the Engine Alliance is strictly devoted to a new engine for the envisaged A3XX aircraft and for possible future Stretch versions of the B747-400 aircraft. It must also be ensured that the parent companies independently develop the technology necessary to develop the compo- nents for which they are responsible. The scope of the Engine Alliance is described by refer- ence to the specific future aircraft applications of the new engine. Another possibility would have been to define the scope by reference to the thrust of the new engine. However, such definition is difficult to make in the present case, since neither Airbus nor Boeing has, at this stage, taken a final decision as to the engine thrust required for their envisaged aircraft. Moreover, the thrust range of an engine is often increased at the request of the airframe manufacturer. The Engine Alliance must therefore enjoy sufficient flexibility to adapt the thrust range in accordance with the manufacturers' require- ments. In order to ensure that the new engine will only be offered for very large, future commercial aircraft, it is also necessary to determine the possible applications for the new engine with reference to the number of passen- gers. The Commission therefore finds it appropriate to limit the application of the new engine to the A3XX aircraft and any possible Stretch versions of the Boeing B747-400 aircraft which are designed, in their standard configuration, for more than 450 passengers (10). D. OBLIGATIONS TO BE ATTACHED TO THE DECISION In order to enable the Commission to monitor the parties' compliance with the above condition, the Decision must also be made subject to a number of obligations pursuant to Article 8 of Regulation No 17 and to Protocol 21 to the EEA Agreement. To allow the Commission to verify that the scope of the cooperation is not extended without its knowledge, the parties must notify the Commission of any proposed change of the scope of the Engine Alliance as soon as possible and in any event before implementing any such change. (10) Boeing's latest estimate for the B747-400X Stretch is approximately 485 passengers. L 58/28 EN Official Journal of the European Communities 3. 3. 2000 (93) In order to verify that the scope of the Engine Alliance remains limited to what is notified, the Engine Alliance should be a separate legal entity trading in its own right and at arm's length with its parents in the supply of aircraft engines. It shall also have separate accounts. The LLC Agreement provides that the Engine Alliance will be audited annually by independent auditors. In addition to this, the Engine Alliance should also be obliged to submit the audit reports to the Commission. On request of the Commission, the same obligation should also apply to the accounting records. (94) As concerns the parent companies' ability to give finan- cial support to the Engine Alliance, the Commission does not consider it economically realistic to require that the Engine Alliance receive no direct or indirect subsidy or support from its parent companies. In view of the characteristics of the market, that would not be possible, due to the very high development costs and long devel- opment periods. (95) (96) The Engine Alliance must sell and market only the new engine. If the joint venture were allowed to sell and market also the parties' own engine programmes, this could have the effect of reducing competition between the parties with regard to their existing engine programmes. The notified LLC Agreement provides that the sale of the new engine is to be the responsibility of the Engine Alliance and that the Engine Alliance will not market any of the parties' other engine programmes. It is, in addition, necessary to specify the role of the sales and marketing personnel of P & W and GEAE. The parent companies may thus not market the new engine or be given access to the responses given to potential clients of if a customer requests a bid for multiple engines, including on the one hand, the new engine and, on the other hand, any of the parties' own engines, the discounts, rebates or other terms of sale of the new engine must be kept separately. The parent companies may not disclose to the Engine Alliance or each other the terms of their separate offerings. the new engine. Moreover, In order to maintain competition between the parties outside the Engine Alliance, it is further necessary that the exchange of confidential information be limited to what is necessary to ensure the proper functioning of the joint venture. According to the LLC Agreement, the Engine Alliance and the parties are to establish a number of safeguards to prevent the exchange of competitively sensitive information. This includes an obligation for all proprietary information not required to be disclosed for the purposes of the new engine to be kept separately in each party's facilities and for each party to train its staff confidentiality guarantees to ensure are it is necessary to specify that respected. tech- proprietary information, prices, nology, marketing the In addition, including confidential quantities, strategies, that discounts, rebates or other terms of sales may not be exchanged between GEAE, P & W and the Engine Alli- ance with respect to GEAE and P & W's respective sepa- rate engine offerings. It is also necessary to impose an obligation on the Engine Alliance personnel to sign a confidentiality agreement to ensure the respect of those principles. E. DURATION OF THE EXEMPTION (97) (98) In accordance with Article 8 of Regulation No 17 and Protocol 21 to the EEA Agreement, a decision in application of Article 81(3) of the Treaty must be issued for a specified period. Pursuant to Article 6 of Regula- tion No 17, the date from which such a decision takes effect may not be earlier than the date of notification. This Decision concerns a sector with long development periods in which investments are typically not recovered before a period of at least 15 years. In view of this and in accordance with Article 6 of Regulation No 17, this Decision should take effect from the date of notification, and for a period of 15 years. The exemption is granted until 26 September 2011. (99) This Decision is without prejudice to the application of Article 82 (ex Article 86) of the EC Treaty and Article 54 of the EEA Agreement, HAS ADOPTED THIS DECISION: Article 1 In accordance with Article 81(3) of the EC Treaty and Article 53(3) of the EEA Agreement, the provisions of Article 81(1) of the EC Treaty and Article 53(1) of the EEA Agreement are hereby declared inapplicable to: (i) the Memorandum of Under- standing of 27 May 1998 between the GE-P & W Engine Alli- ance LLC and Airbus Industrie, (ii) the Transaction Agreement of 28 August 1996, and (iii) the Limited Liability Company Agreement of 28 August 1996. Article 2 This Decision shall be subject to the following condition: the scope of the Engine Alliance will be limited to the design, development, marketing, sales, support and service of the noti- fied new aircraft engine and its derivatives. The applications of this engine and its derivatives will be limited to the envisaged Airbus A3XX aircraft and any of its passenger or freighter derivatives and to any future four-engine aircraft of Boeing, which is, in its standard configuration, designed for more than 450 passengers. The joint development will be limited to devel- opment necessary for module integration and the application of the engine to the airframe. In particular, GEAE and P & W the major will independently develop the technology for 3. 3. 2000 EN Official Journal of the European Communities L 58/29 modules for which each is responsible, specifically, the high the high pressure turbine, and the pressure compressor, combustor of GEAE and the fan module, low pressure compressor, low pressure turbine, and turbine exhaust casing for P & W. Article 3 This Decision will be subject to the following obligations: 1. the parties will notify the Commission of any proposed change in the scope of the Engine Alliance as soon as possible and in any case before implementation thereof; 2. the Engine Alliance will be a separate legal entity trading in its own right which will contract directly with its customers and at arm's length with its parents in the supply of aircraft engines. The Engine Alliance's accounting records and auditing records will be maintained in a separate accounting system from P & W and from GEAE. The auditing reports will be submitted to the Commission. The Engine Alliance will, on request, also make available its accounting records to the Commission. Information regarding actual P & W costs will not be shared with GEAE, and information regarding actual GEAE costs will not be shared with P & W; 3. the role of P & W and GEAE sales and marketing personnel will be limited to acting as client contacts and as a conduit for requests for and supply of general product and technical information relating to the new engine. P & W and GEAE personnel will not have access to the responses given to clients by the Engine Alliance; 4. if a customer requests a bid for multiple engines, including, on the one hand, engines manufactured by P & W and/or International Aero-Engines, or engines manufactured by GEAE and/or CFMI and, on the other hand, the new engine, the discounts, rebates or other terms of sale of the new engine will be stated separately and neither GEAE nor P & W will disclose to the Engine Alliance or to each other the nature of the terms that either of them elect to offer on their respective separate engine offerings; 5. with respect to GEAE and P & W's respective separate engine offerings, the Engine Alliance, P & W and GEAE will establish safeguards to prevent the exchange of competi- tively sensitive, non-public information including confiden- tial technology, marketing strategies, quantities, prices or the matters mentioned in point 4 (‘proprietary information’) between them including a requirement that the Engine Alli- ance personnel sign a confidentiality agreement to ensure respect for these principles. Article 4 This Decision shall apply from the date of notification of the agreements referred to in Article 1 until 26 September 2011. This Decision is addressed to the following undertakings: Article 5 1. General Electric Company 1299 Pennsylvania Avenue, N. W. Suite 1100W Washington, D. C. 20004 USA 2. United Technologies Corporation United Technologies Building Hartford, Connecticut 06101 USA Done at Brussels, 14 September 1999. For the Commission Karel VAN MIERT Member of the Commission


title: KIRJALLINEN KYSYMYS P-1660/99 esittäjä(t): Massimo Carraro (PSE) komissiolle. Neuvoston 19. lokakuuta 1992 antama direktiivi 92/0081/ETY kivennäisöljyjen valmisteverojen rakenteiden yhdenmukaistamisesta.

eurovoc_concepts:
Slovenia
environmental risk prevention
natural hazard
nuclear policy
nuclear power station
nuclear safety

text: C 170 E/66 Euroopan yhteis(cid:246)jen virallinen lehti FI 20. 6. 2000 (2000/C 170 E/074) KIRJALLINEN KYSYMYS P-1659/99 esitt(cid:228)j(cid:228)(t): Hubert Pirker (PPE-DE) komissiolle (14. syyskuuta 1999) Aihe: Sloveniassa sijaitseva Krskon ydinvoimala Komission j(cid:228)senehdokas G(cid:252)nther Verheugen painotti Euroopan parlamentin j(cid:228)rjest(cid:228)m(cid:228)ss(cid:228) kuulemistilai- suudessa, ett(cid:228) yksitt(cid:228)isten hakijamaiden Euroopan unioniin liittymisen ehtona on riskialttiiden ydinvoima- loiden sulkeminen tai niiden s(cid:228)hk(cid:246)ntuotannon lopettamista koskevien suunnitelmien esitt(cid:228)minen. Verheu- genin mukaan ydinvoimaloiden turvallisuudesta ei voida tinki(cid:228). H(cid:228)n ei kuitenkaan maininnut t(cid:228)ss(cid:228) yhteydess(cid:228) Krskon ydinvoimalaa, vaikka se sijaitsee maanj(cid:228)ristysalueella ja on t(cid:228)st(cid:228) syyst(cid:228) erityisen riskialtis. Mit(cid:228) komissio aikoo tehd(cid:228), jotta hakijamaassa Sloveniassa sijaitseva Krskon riskialtis ydinvoimala suljetaan ja jotta se ei vaaranna rajanaapurin It(cid:228)vallan K(cid:228)rntenin ja Steiermarkin osavaltioita? Onko komissio Verheugenin esitt(cid:228)m(cid:228)(cid:228) kantaa silm(cid:228)ll(cid:228) pit(cid:228)en sit(cid:228) mielt(cid:228), ett(cid:228) Krskon ydinvoimalan sulkeminen on asetettava liittymisen ehdoksi? G(cid:252)nter Verheugenin komission puolesta antama vastaus (8. lokakuuta 1999) Komissio on jo todennut, ett(cid:228) ehdokasmaissa toimivat Neuvostoliitossa suunnitellut ydinvoimalat, joiden nykyaikaistamista pidet(cid:228)(cid:228)n mahdottomana, olisi suljettava sovittujen aikataulujen mukaisesti niin pian kuin k(cid:228)yt(cid:228)nn(cid:246)ss(cid:228) on mahdollista. T(cid:228)m(cid:228) koskee Liettuassa sijaitsevaa Ignalinaa, Bulgariassa sijaitsevan Kozlodujin yksik(cid:246)it(cid:228) 1(cid:129)4 sek(cid:228) Slovakiassa sijaitsevaa Bohunice V1:t(cid:228). Jotta t(cid:228)h(cid:228)n tavoitteeseen p(cid:228)(cid:228)st(cid:228)(cid:228)n, komissio neuvottelee n(cid:228)iden kolmen maan kanssa yhteisiss(cid:228) ty(cid:246)ryhmiss(cid:228). Sloveniassa sijaitseva Krskon ydinvoimalaitos on eri asia. Kyse on l(cid:228)nness(cid:228) suunnitellusta voimalaitoksesta, joka on samanlainen kuin yhteis(cid:246)n j(cid:228)senvaltioissa ja muissa l(cid:228)nsimaissa toimivat t(cid:228)m(cid:228)ntyyppiset laitokset. Slovenia jatkaa ohjelmia, joilla pyrit(cid:228)(cid:228)n parantamaan voimalaitoksen turvallisuutta. Agenda 2000 -asiakir- jassa todetaan, ett(cid:228) siell(cid:228), miss(cid:228) k(cid:228)ytet(cid:228)(cid:228)n l(cid:228)nness(cid:228) suunniteltuja ydinvoimaloita (Romania ja Slovenia), kehityst(cid:228) on seurattava sen varmistamiseksi, ett(cid:228) laitosten toiminta on asianmukaisten turvallisuusnormien mukaista. Teknist(cid:228) apua voidaan antaa tarvittaessa. Slovenian liittymiskumppanuuteen sis(cid:228)ltyy kaksi keskipitk(cid:228)n aikav(cid:228)lin ensisijaista tavoitetta t(cid:228)ll(cid:228) alalla, nimitt(cid:228)in ydinturvallisuusviranomaisen toiminnan lujittaminen sek(cid:228) Slovenian ydinvoimapolitiikan ja investointisuunnitelmien mukauttaminen Krskon ydinvoimalan ymp(cid:228)rist(cid:246)ss(cid:228) suoritettavan maanj(cid:228)ristysris- kien arvioinnin tuloksiin. T(cid:228)h(cid:228)n liittyen Phare-ohjelmasta on osoitettu yli miljoona euroa Slovenian turvallisuusviranomaisten tukemiseen. Tarkoituksena on erityisesti v(cid:228)litt(cid:228)(cid:228) heille tietoa yhteis(cid:246)n ydinturvallisuusviranomaisten mene- telmist(cid:228) ja k(cid:228)yt(cid:228)nn(cid:246)ist(cid:228). Phare-ohjelmasta my(cid:246)nnet(cid:228)(cid:228)n lis(cid:228)ksi 500 000 euroa Krskon ydinvoimalaitokselle alueen maanj(cid:228)ristysalttiuden sek(cid:228) sen mahdollisten laitoksen suunnittelua koskevien vaikutusten uudel- leenarviointiin. Ensimm(cid:228)isi(cid:228) tutkimustuloksia voidaan odottaa vuoden loppuun menness(cid:228). (2000/C 170 E/075) KIRJALLINEN KYSYMYS P-1660/99 esitt(cid:228)j(cid:228)(t): Massimo Carraro (PSE) komissiolle (14. syyskuuta 1999) Aihe: Neuvoston 19. lokakuuta 1992 antama direktiivi 92/0081/ETY kivenn(cid:228)is(cid:246)ljyjen valmisteverojen rakenteiden yhdenmukaistamisesta Italian parlamentin vuonna 1998 hyv(cid:228)ksym(cid:228)ss(cid:228) laissa N:o 448 s(cid:228)(cid:228)det(cid:228)(cid:228)n l(cid:228)mmityspolttoaineen ja nestey- tetyn maa(cid:246)ljykaasun hintojen alentamisesta tietyiss(cid:228) Italian kunnissa erityisist(cid:228) maantieteellisist(cid:228) tai 20. 6. 2000 FI Euroopan yhteis(cid:246)jen virallinen lehti C 170 E/67 ilmastollisista tai muista syist(cid:228), kuten metaanikaasun puutteen vuoksi, koska n(cid:228)iden k(cid:228)ytt(cid:246) tulee huomat- tavan kalliiksi. Kyse on siis toimesta, jolla voidaan helpottaa n(cid:228)ill(cid:228) alueilla asuvien perheiden elinehtoja. Luigi Olivieri tiedusteli rahoituskysymyksist(cid:228) vastaavalta valtiosihteeri Ferdinando de Franciscisilta edusta- jainhuoneen 15. hein(cid:228)kuuta 1999 pit(cid:228)m(cid:228)ss(cid:228) istunnossa syyt(cid:228) vuonna 1998 annetun lain N:o 448 jonka Italian ministerineuvosto oli hyv(cid:228)ksynyt jo 9. maaliskuuta toimeenpanoasetuksen viiv(cid:228)stymiseen, tarvitaan Euroopan unionin 1999. Valtiosihteeri hyv(cid:228)ksynt(cid:228), jotta l(cid:228)mmityspolttoaineen ja nesteytetyn maa(cid:246)ljykaasun hintaa voidaan alentaa. Lupa on n(cid:228)in ollen saatava ennen kuin asianomainen t(cid:228)yt(cid:228)nt(cid:246)(cid:246)npanoasetus voidaan antaa. ilmoitti, ett(cid:228) direktiivin 92/0081/ETY (1) mukaisesti Valtiovarainministeri(cid:246) v(cid:228)litti lupaa koskevan pyynn(cid:246)n 3. joulukuuta 1998 yhteis(cid:246)n toimielimille, mutta Euroopan unioni ei ole viel(cid:228)k(cid:228)(cid:228)n antanut lausuntoaan, huolimatta siit(cid:228), ett(cid:228) komission virkamiehet ovat saaneet Italiasta kaikki tarvittavat tiedot, jotta se voisi esitt(cid:228)(cid:228) arvionsa t(cid:228)st(cid:228) asiasta. Voisiko komissio ilmoittaa, miksi luvan saaminen on kest(cid:228)nyt n(cid:228)inkin kauan tai perustelut mahdolliseen luvan ep(cid:228)(cid:228)miseen? Milloin asiasta p(cid:228)(cid:228)tet(cid:228)(cid:228)n? (1) EYVL L 316, 31. 10. 1992, s. 12. Frits Bolkesteinin komission puolesta antama vastaus (11. lokakuuta 1999) pyysi hallitus kivenn(cid:228)is(cid:246)ljyjen Italian yhdenmukaistamisesta 19 p(cid:228)iv(cid:228)n(cid:228) lokakuuta 1992 annetun neuvoston direktiivin 92/0081/ETY 8 artiklan 4 kohdan nojalla lupaa alentaa arvoisan parlamentin j(cid:228)senen mainitsemien tuotteiden valmisteveroa tietyill(cid:228) erityisill(cid:228) maantieteellisill(cid:228) alueilla. Kyseisen artiklan mukaan neuvosto voi yksimielisesti komission ehdotuksesta antaa j(cid:228)senvaltiolle luvan ottaa k(cid:228)ytt(cid:246)(cid:246)n erityisist(cid:228) poliittisista syist(cid:228) vapautuksia tai alennuksia kivenn(cid:228)i- s(cid:246)ljyjen valmisteveroista. valmisteverojen rakenteiden Italian viranomaiset ilmoittivat komissiolle 3. joulukuuta 1998 aikomuksestaan toteuttaa kyseinen toimen- pide. Ilmoitus ei kuitenkaan sis(cid:228)lt(cid:228)nyt riitt(cid:228)v(cid:228)sti tietoa, jotta komissio olisi voinut k(cid:228)sitell(cid:228) pyynn(cid:246)n ja valmistella ehdotuksen. Vuoden 1999 helmi- ja maaliskuussa k(cid:228)ytiin kirjeenvaihtoa, kunnes komission ehdotuksesta pidettiin kokous Roomassa. Kokouksessa komissio ilmoitti, mit(cid:228) tietoja se tarvitsee voidak- seen k(cid:228)sitell(cid:228) pyynn(cid:246)n. ja 29. kes(cid:228)kuuta 1999 komissiolla oli Kokouksen j(cid:228)lkeen Italian hallitus selvensi pyynt(cid:246)(cid:228)(cid:228)n kirjeitse, pyynn(cid:246)n k(cid:228)sittelemiseen tarvittavat tiedot. Niinp(cid:228) komissio kirjasi alkuper(cid:228)isen pyynn(cid:246)n ja sit(cid:228) seuranneet selvent(cid:228)v(cid:228)t kirjeet kyseiselle p(cid:228)iv(cid:228)lle. Direktiivin 92/0081/ETY 8 artiklan 4 kohdan mukaan komission on ilmoitettava ehdotetusta toimenpi- teest(cid:228) muille j(cid:228)senvaltioille kuukauden kuluessa. Komissio l(cid:228)hetti ilmoituskirjeet 28. hein(cid:228)kuuta 1999. Samassa artiklassa annetaan kaikille j(cid:228)senvaltioille ja komissiolle kaksi kuukautta aikaa pyyt(cid:228)(cid:228) neuvostoa tutkimaan asiaa. Asian k(cid:228)sittely on viime aikoina viiv(cid:228)stynyt muutamalla p(cid:228)iv(cid:228)ll(cid:228) uuden komission nimitt(cid:228)misen vuoksi. Arvoisa parlamentin j(cid:228)sen voi olla varma, ett(cid:228) uusi komissio k(cid:228)sittelee Italian hallituksen pyynn(cid:246)n heti ensimm(cid:228)isen tilaisuuden tullen. Kun komissio on hyv(cid:228)ksynyt pyynn(cid:246)n, tarvittava ehdotus toimitetaan neuvostolle viipym(cid:228)tt(cid:228)


title: Harmonized indices of consumer prices : July 1999.

eurovoc_concepts:
consumer price
economic statistics
inflation
price index


title: Proposition de décision du Conseil concernant une position communautaire portant sur une modification du protocole n° 4 relatif à la définition de la notion de "produits originaires" et aux méthodes de coopération administrative annexé à l'accord européen entre les Communautés européennes et la République de Hongrie

eurovoc_concepts:
Hungary
administrative cooperation
agreement (EU)
originating product
processing industry

formats: html pdf

text: COMMISSION DES COMMUNAUTÉS EUROPÉENNES Bruxelles, le 14. 09. 1999 COM(1999)417 final 99/0185 (ACC) Proposition de DÉCISION DU CONSEIL concernant une position communautaire portant sur une modification du protocole n° 4 relatif à la définition de la notion de "produits originaires" et aux méthodes de coopération administrative annexé à l’accord européen entre les Communautés européennes et la République de Hongrie (présentée par la Commission) EXPOSÉ DES MOTIFS 1. GÉNÉRALITÉS règles d’origine Les au fonctionnement correct des accords de libre-échange que la Communauté a conclus avec ses partenaires commerciaux. indispensable l’instrument constituent Le Conseil européen, réuni à Essen en décembre 1994, a fait remarquer que les différences concernant les règles d’origine figurant dans les divers accords signés par la Communauté constituaient un obstacle au commerce. Un programme a donc été lancé afin de faire appliquer des règles d’origine identiques la les Communauté, les PECO, les États baltes et les pays de l’AELE et de l’EEE sur un pied d’égalité. Le Conseil a décidé par ailleurs que d’autres pays se trouvant dans une situation analogue à celle des pays précités pourraient être intégrés au système en temps voulu, ce qui a été fait le 1. 1. 1999 pour la Turquie et ses produits industriels. et de mettre ainsi commerciales relations entre Les règles d’origine ne sont pas immuables. Elles doivent pouvoir s’adapter aux nécessités politiques et économiques de la zone de libre-échange à laquelle elles s’appliquent. Il a donc été jugé nécessaire de procéder à certains changements des règles applicables depuis 1997. Une modification, d’ores et déjà adoptée dans le cadre de tous les accords, est entrée en vigueur le 1er janvier 1999. 2. MODIFICATIONS DES RÈGLES D’ORIGINE FIGURANT DANS LES ACCORDS UE-PECO, UE-AELE ET EEE Depuis l’entrée en vigueur du protocole-type sur les règles d’origine et de sa version modifiée de 1999, il est apparu qu’un certain nombre de techniques de l’annexe II des protocoles étaient déjà modifications nécessaires. Elles sont proposées ci-joint. Ces modifications concernent des produits fabriqués à partir d’une matière première dont l’offre dans la zone de libre-échange est restreinte. 3. CONCLUSION La proposition annexée est l'une d'une série de 14 propositions tendant à améliorer le fonctionnement du système Commun des règles d'origine. Les 14 propositions doivent être considérées comme un paquet unique. En effet, afin que le cumul des ouvraisons et transformations autorisé actuellement puisse continuer à fonctionner, il est indispensable qu'elles entrent en vigueur toutes au même moment, soit le 1er janvier 2000. La Commission invite donc le Conseil à définir la position commune à présenter aux différents comités prévus par chacun des accords. 2 Proposition de DÉCISION DU CONSEIL concernant une position communautaire portant sur une modification du protocole n° 4 relatif à la définition de la notion de "produits originaires" et aux méthodes de coopération administrative annexé à l’accord européen entre les Communautés européennes et la République de Hongrie (Texte présentant de l'intérêt pour l'EEE) LE CONSEIL DE L’UNION EUROPÉENNE, vu le traité instituant la Communauté européenne, et notamment son article 133, vu l'article 2, paragraphe 1, de la décision du Conseil et de la Commission, du 13 décembre 1993, relative à la conclusion de l'accord européen établissant une association entre les Communautés européennes et leurs États membres, d’une part, et la République de Hongrie, d'autre part, vu la proposition de la Commission, considérant que l'article 38 du protocole n° 4 dudit accord européen prévoit que le conseil d’association peut modifier les dispositions de ce protocole, DÉCIDE: La position que la Communauté adoptera au sein du conseil d'association institué en vertu de l'article 104 de l'accord européen établissant une association entre les Communautés européennes et leurs États membres, d'une part, et la République de Hongrie, d'autre part, concernant une modification du protocole n° 4 relatif à la définition de la notion de "produits originaires" et aux méthodes de coopération administrative définies dans ledit accord, est fondée sur le projet de décision du conseil d'association annexé à la présente décision. Fait à Bruxelles, Par le Conseil Le président 3 ANNEXE ACCORD EUROPÉEN établissant une association entre les Communautés européennes et leurs États membres, d'une part, et la République de Hongrie, d'autre part DÉCISION N°. /. du CONSEIL D'ASSOCIATION modifiant le protocole n° 4 relatif à la définition de la notion de "produits originaires" et aux méthodes de coopération administrative LE CONSEIL D'ASSOCIATION, vu l'accord européen établissant une association entre les Communautés européennes et leurs États membres, d'une part, et la République de Hongrie, d'autre part, signé à Bruxelles le 16 décembre 1991, et notamment l'article 38 de son protocole n° 4, considérant qu’afin d’assurer le bon fonctionnement du système de cumul élargi permettant d'utiliser des matières originaires de la Communauté, de Pologne, de Hongrie, de la République tchèque, de la République slovaque, de Bulgarie, de Roumanie, de Lettonie, de Lituanie, d'Estonie, de Slovénie, de Turquie, de l'Espace économique européen (ci-après dénommé l'EEE), d'Islande, de Norvège ou de Suisse, des modifications doivent être apportées à la définition de la notion de "produits originaires"; considérant qu’il semble approprié de réviser les articles concernant les montants afin de tenir compte de l’entrée en vigueur de l’euro; considérant que, compte tenu de l'évolution des techniques de transformation et des situations de pénurie de matière premières, il s’avère indispensable d’apporter quelques corrections à la liste des ouvraisons ou transformations à appliquer aux matières non originaires pour que celles-ci puissent obtenir le caractère de produits originaires, DÉCIDE: Article premier Le protocole n° 4 relatif à la définition de la notion de "produits originaires" et aux méthodes de coopération administrative est modifié comme suit : 1. Aux articles 21 et 26, le terme "écu" est remplacé par "euro". 4 2. L'article 30 est remplacé par le texte suivant : "Article 30 Montants exprimés en euros 1. Les montants en monnaie nationale du pays d’exportation équivalant aux montants exprimés en euros sont fixés par le pays d’exportation et communiqués aux pays d’importation par la Commission européenne. 2. Lorsque les montants sont supérieurs aux montants correspondants fixés par le pays d’importation, ce dernier les accepte si les produits sont facturés dans la monnaie du pays d’exportation. Lorsque les produits sont facturés dans la monnaie d’un État membre de la Communauté européenne ou d’un autre pays visé aux articles 3 et 4, le pays d’importation reconnaît le montant notifié par le pays concerné. 3. Les montants à utiliser dans une monnaie nationale sont la contre- valeur dans cette monnaie nationale des montants exprimés en euros au premier jour ouvrable du mois d’octobre 1999. Les montants exprimés en euros et 4. leur contre-valeur dans les monnaies nationales des États membres et de la Hongrie font l’objet d’un réexamen par le comité d’association sur demande de la Communauté ou de la Hongrie. Lors de ce réexamen, le comité d’association veille à ce que les montants à utiliser dans une monnaie nationale ne diminuent pas et envisage, en outre, l’opportunité de préserver les effets des limites concernées en termes réels. À cette fin, il est habilité à décider de modifier les montants exprimés en euros. " 5 3. L’annexe II est modifiée comme suit: a) la position SH 1904 est remplacée par le texte suivant: 1904 Produits à base de céréales obtenus par soufflage ou grillage (corn flakes, par exemple); céréales (autres que le maïs) en grains ou sous forme de flocons ou d'autres grains travaillés (à l'exception de la farine et de la semoule), précuites ou autrement préparées, ni non comprises ailleurs dénommées Fabrication: - à partir de matières non classées dans la position no 1806; - dans laquelle toutes la les céréales et farine utilisées (à l’exception du blé ses dur dérivés ainsi que la du maïs variété Zea doivent indurata) être entièrement obtenues¹; de de et - dans laquelle la valeur de toutes les du matières chapitre 17 utilisées ne doit pas excéder 30% du prix départ usine du produit ¹ 31. 12. 2002. L’exception concernant le maïs de la variété Zea indurata est applicable jusqu’au b) la position SH 2207 est remplacée par le texte suivant : 2207 Alcool éthylique non dénaturé d'un titre alcoométrique volumique de 80% vol ou plus; alcool éthylique et eaux-de-vie dénaturés de tous titres Fabrication: - à partir de matières non classées dans nos les positions 2207 et 2208, laquelle ou le - dans les raisin matières dérivées du raisin utilisés être doivent entièrement dans obtenus ou laquelle, si toutes les autres matières utilisées sont déjà de originaires, être l’arak une utilisé proportion n’excédant pas 5% en volume peut dans 6 c) le chapitre 57 du SH est remplacé par le texte suivant : Chapter 57 Tapis et autres revêtements de sol en matières textiles : - en feutre aiguilleté Fabrication à partir¹ : - de fibres naturelles ou - de matières chimiques ou de pâtes textiles Toutefois : - des fils filaments polypropylène n° 5402 ou de de du - des de fibres polypropylène des nos 5503 ou 5506 ou - des câbles de de filaments du polypropylène le n° 5501, dont titre chaque de fibre ou filament constitutif est, dans cas, tous les inférieur 9 décitex; à - en autres feutres peuvent être utilisés pour autant que leur valeur n’excède pas 40% du prix départ usine du produit De la toile de jute peut être utilisée en tant que support. cardées Fabrication à partir¹ : - de fibres naturelles ni ou non peignées autrement travaillées pour la filature, ou - de matières chimiques ou de pâtes textiles 7 - en autres matières textiles Fabrication à partir¹: - de fils de coco ou de jute, - de fils de filaments synthétiques ou artificiels, - de fibres naturelles, ou - de fibres synthétiques ou artificielles discontinues non cardées ni peignées ou autrement travaillées pour la filature. De la toile de jute peut être utilisée en tant que support ¹ matières textiles figurent dans la note introductive n° 5. Les conditions particulières applicables aux produits constitués d’un mélange de d) la position SH 8401 est remplacée par le texte suivant: ex 8401 Éléments nucléaire de combustible toutes dans Fabrication les laquelle matières utilisées doivent être classées dans position différente de celle du produit1 une Fabrication dans laquelle la valeur de toutes les matières utilisées ne doit excéder pas 30% du prix départ usine du produit ¹ Cette règle s’applique jusqu’au 31 décembre 2005. (e) entre les positions SH 9606 et 9612, le texte suivant est inséré: une toutes dans Fabrication les laquelle matières utilisées doivent être classées dans position différente de celle du produit. Toutefois, des plumes à écrire ou des pointes pour plumes classées dans la même position peuvent être utilisées 9608 stylos; Stylos et crayons à bille; stylos et marqueurs à mèche feutre ou à autres pointes poreuses; stylos à plume et pour autres stylets duplicateurs; porte- porte-mines; articles plumes, porte-crayons et similaires; parties les (y compris les agrafes) de ces capuchons et articles, à l'exclusion de celles du n° 9609 8 Article 2 La présente décision entre en vigueur le jour de son adoption. Elle est applicable à partir du 1er janvier 2000. Fait à Bruxelles, Par le conseil d’association Le président 9 FICHE FINANCIÈRE 1. LIGNE BUDGÉTAIRE CONCERNÉE Chapitre 12, article 120 (droit nul) 2. BASE JURIDIQUE Article 133 du traité. 3. INTITULÉ DES MESURES Proposition de modification de la définition des "produits originaires" et des méthodes de coopération administrative exposées dans le protocole n° 4 des accords européens entre la CE et les PECO, la CE et les États baltes, la CE et la Slovénie ainsi que de l'accord sur l'Espace économique européen (EEE) et dans le protocole n° 3 des accords de libre-échange entre la CEE et l’AELE. 4. OBJECTIF Réviser certaines règles concernant matières non originaires conférant prendre en compte l’introduction de l’euro. l’ouvraison ou la transformation de la qualité de produits originaires et 5. COÛT DE L’OPÉRATION L’objectif des modifications proposées étant essentiellement de réviser certaines des règles d’origine sans que cela ne porte atteinte aux concessions tarifaires accordées dans le cadre de l’accord, cette proposition ne semble pas avoir de conséquences financières. 10


title: Proposal for a Council Decision on a Community position on an amendment to Protocol 3 on the definition of the concept of "originating products" and methods of administrative cooperation set out in the Europe Agreement between the European Communities and the Republic of Lithuania

eurovoc_concepts:
Lithuania
administrative cooperation
agreement (EU)
originating product
processing industry

text: COMMISSION OF THE EUROPEAN COMMUNITIES Brussels, 14. 09. 1999 COM(1999) 422 final 99/0181 (ACC) Proposal for a COUNCIL DECISION on a Community position on an amendment to Protocol 3 on the definition of the concept of "originating products" and methods of administrative cooperation set out in the Europe Agreement between the European Communities and the Republic of Lithuania (presented by the Commission) EXPLANATORY MEMORANDUM 1. GENERAL The rules of origin are essential to the correct functioning of the free trade agreements between the Community and its trading partners. The European Council meeting in Essen in December 1994 drew attention to the fact that differences in the origin rules included in the different agreements signed by the Community constituted a barrier to trade. Therefore a programme was initiated aimed at applying identical origin rules and thereby putting trade between the Community, the CEECs, the Baltic States, the EFTA and the EEA countries on the same footing. It also decided that other countries in a situation similar to those mentioned above could be similarly integrated into the system when the time came and that was done for Turkish industrial products from 1. 1. 1999. The origin rules are not immutable. They must be adaptable to the political and economic requirements of the free trade area in which they apply. Therefore, some changes have already been deemed necessary to the rules which entered into force in 1997 and an amendment has already been adopted in the framework of all the agreement to enter into force on 1st January 1999. 2. AMENDMENTS TO THE RULES OF ORIGIN IN THE EU-CEECS, EU-EFTA AND EEA AGREEMENTS Since the entry into force of the standard protocol on rules of origin and of its amendment of 1999, a few technical amendments to Annex II to the protocols are already necessary and therefore proposed. Those amendments concern products whose raw materials are in short supply in the trade zone. 3. CONCLUSION The annexed proposal is one of a series of 14 proposals intended to improve the functioning of the common system of origin rules. These 14 proposals should be taken as a single package. If the current arrangements allowing cumulation of working and processing are to remain in force, it is essential that they enter into force at the same time, i. e. on 1 January 2000. The Commission therefore calls on the Council to draw up a common position for presentation to the committees provided for in each of the Agreements. 2 Proposal for a COUNCIL DECISION on a Community position on an amendment to Protocol 3 on the definition of the concept of "originating products" and methods of administrative cooperation set out in the Europe Agreement between the European Communities and the Republic of Lithuania (Text with EEA relevance) THE COUNCIL OF THE EUROPEAN UNION, Having regard to the Treaty establishing the European Community, and in particular Article 133 thereof, Having regard to Article 2(1) of the Council and Commission Decision of 19 December 1997 on the conclusion of the Europe Agreement establishing an association between the European Communities and their Member States, of the one part, and the Republic of Lithuania, of the other part, Having regard to the Commission proposal, Whereas Article 38 of Protocol 3 to the said Europe Agreement provides that the Association Council may amend the provisions of the Protocol, HAS DECIDED AS FOLLOWS: The position to be adopted by the Community within the Association Council created by virtue of Article 111 of the Europe Agreement establishing an association between the European Communities and their Member States, of the one part, and the Republic of Lithuania, of the other part, on an amendment to Protocol 3 on the definition of the concept of “originating products” and methods of administrative cooperation set out in the Agreement shall be based on the draft Association Council decision annexed to this Decision. Done at Brussels, For the Council The President 3 ANNEX EUROPE AGREEMENT establishing an association between the European Communities and their Member States, of the one part, and the Republic of Lithuania, of the other part DECISION No …/… of the ASSOCIATION COUNCIL amending Protocol 3 on the definition of the concept of "originating products" and methods of administrative cooperation THE ASSOCIATION COUNCIL, Having regard to the Europe Agreement establishing an association between the European Communities and their Member States, of the one part, and the Republic of Lithuania, of the other part, signed in Luxembourg on 12 June 1995 and in particular Article 38 of Protocol 3 thereof, 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 the European Community, Poland, Hungary, the Czech Republic, Turkey, the Slovak Republic, Bulgaria, Romania, Latvia, Lithuania, Estonia, Slovenia, the European Economic Area (hereinafter referred to as the EEA), Iceland, Norway and Switzerland; Whereas it would seem advisable to revise the Articles concerning the amounts in order to fully take into consideration the entry into force of the euro; 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 fulfil to qualify for originating status, HAS DECIDED AS FOLLOWS: Article 1 Protocol 3 on the definition of the concept of “originating products” and methods of administrative cooperation is hereby amended as follows: 1. In Articles 21 and 26 the word "Ecu" shall be replaced by "euro". 4 2. Article 30 shall be replaced by the following: "Article 30 Amounts expressed in euro 1. Amounts in the national currency of the exporting country equivalent to the amounts expressed in euro shall be fixed by the exporting country and communicated to the importing countries through the European Commission. 2. When the amounts exceed the corresponding amounts fixed by the importing country, the latter shall accept them if the products are invoiced in the currency of the exporting country. When the products are invoiced in the currency of EC Member States or another country referred to in Articles 3 and 4, the importing country shall recognise the amount notified by the country concerned. 3. The amounts to be used in any given national currency shall be the equivalent in that national currency of the amounts expressed in euro as at the first working day of October 1999. 4. The amounts expressed in euro and their equivalents in the national currencies of Member States and Lithuania shall be reviewed by the Association Committee at the request of the Community or Lithuania. When carrying out this review, the Association Committee shall ensure that there will be no decrease in the amounts to be used in national currency and shall furthermore consider the desirability of preserving the effects of the limits concerned in real terms. For this purpose, it may decide to modify the amounts expressed in euro. " 5 3. Annex II shall be amended as follows: (a) the entry for HS heading 1904 shall be replaced by: 1904 foods obtained by the Prepared swelling or roasting of cereal or cereal products (for example, corn flakes); cereals (other than maize (corn)) in grain form or in the form of flakes or other worked grains (except flour and meal), pre-cooked, or otherwise prepared, not elsewhere specified or included Manufacture: - from materials not within classified heading No 1806; and the - in which all flour cereals and durum (except wheat its derivatives and Zea maize) indurata used must be wholly obtained;¹ - in which the value of any materials of Chapter 17 used does not exceed 30% of the ex- works price of the product ¹ The exception concerning the Zea indurata maize is applicable until 31. 12. 2002. (b) the entry for HS heading 2207 shall be replaced by: 2207 Undenatured ethyl alcohol of an alcoholic strength by volume of 80 % vol or higher; ethyl alcohol and other spirits, denatured, of any strength Manufacture: - from materials not within classified heading Nos 2207 or 2208, - in which all or the any grapes material derived from grapes used must be wholly obtained or if all the other materials used are already originating, arrack may be used up to a limit of 5% by volume 6 (c) the entry for HS Chapter 57 shall be replaced by: Manufacture from¹: - natural fibres or - chemical materials or textile pulp However: - polypropylene filament of heading No 5402, or - polypropylene fibres of heading Nos 5503 or 5506, or - polypropylene filament tow of heading No 5501, the which of denomination in all cases of a single filament or fibre is less than 9 decitex, may used be provided their value does not exceed 40% of the ex-works price of the product Jute fabric may be used as backing Manufacture from ¹: - natural fibres not carded or combed otherwise or processed for spinning, or - chemical materials or textile pulp Chapter 57 Carpets and other textile floor coverings: - Of needleloom felt - Of other felt 7 - Of other textiles materials or jute yarn, Manufacture from ¹: - coir - synthetic artificial yarn, or filament - natural fibres, or - man-made staple fibres not carded or or combed otherwise processed spinning for Jute fabric may be used as backing ¹ see Introductory Note 5. For special conditions relating to products made of a mixture of textile materials, (d) the entry for HS heading 8401 shall be replaced by: ex 8401 Nuclear fuel elements Manufacture in which all the materials used are classified within a heading other than that of the product¹ Manufacture in which the value of the all materials does not exceed 30% of the ex-works price of the final product ¹ This rule shall apply until 31 December 2005. (e) the following shall be inserted between the entries for HS heading Nos 9606 and 9612: 9608 pens; duplicating Ball-point pens; felt-tipped and other porous-tipped pens and markers; fountain pens, stylograph pens and stylos; other propelling or sliding pencils; pen- holders, pencil-holders and similar holders; parts (including caps and clips) of the foregoing articles, other than those of heading No 9609 Manufacture in which all the materials used are classified within a than heading other that of the product. However, nibs or nib- classified points within same heading may be used the That Decision shall enter into force on the day of its adoption. Article 2 It is applicable from 1 January 2000. Done at Brussels, For the Association Council The President 8 FINANCIAL STATEMENT 1. BUDGET HEADING INVOLVED Chapter 12, Article 120 (zero-rated duty) 2. LEGAL BASIS Article 133 of the Treaty. 3. TITLE OF THE MEASURES Proposal for an amendment to the definition of the concept of “originating products” and the methods of administrative cooperation set out in Protocol 4 to the different Europe Agreements between the EC and the CEECs, the Baltic States and Slovenia and the Agreement on the European Economic Area, and in Protocol 3 to the free trade agreements between the EEC and the EFTA countries 4. OBJECTIVE To revise certain rules concerning the working or processing of non- originating materials that confers originating status and to take into account the introduction of the euro. 5. COST OF THE OPERATION As the purpose of the amendments is essentially to revise some of the origin rules without any implication on the concessions granted by the agreement, this proposal would not seem to have any financial implications. 9


title: Quality work and quality assurance within statistics : DGINS Conference in Stockholm, 28 to 29 May 1998.

eurovoc_concepts:
access to information
product quality
statistics