EN EN

EUROPEAN COMMISSION

Brussels, 3.4.2020

COM(2020) 135 final

2020/0051 (COD)

Proposal for a

REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL

amending Council Regulation (EC) No 1215/2009 introducing exceptional trade

measures for countries and territories participating in or linked to the European

Union's Stabilisation and Association process

EN 1 EN

EXPLANATORY MEMORANDUM

1. CONTEXT OF THE PROPOSAL

• Reasons for and objectives of the proposal

The proposed autonomous trade measures (ATMs) are one of the instruments to implement

the EU’s policy towards the Western Balkans as defined within the Stabilisation and

Association process launched by the European Commission in May 1999. At its meeting in

Lisbon on 23 and 24 March 2000, the European Council concluded that Stabilisation and

Association Agreements with Western Balkan parties should be preceded by asymmetrical

trade liberalisation. Asymmetrical trade liberalisation has been provided for by means of

Council Regulation (EC) No 1215/2009 introducing exceptional trade measures for countries

and territories participating in or linked to the Stabilisation and Association process, with a

validity period until 31 December 2020.

Stabilisation and Association Agreements have now been concluded between the Union and

all concerned Western Balkan parties; the last one with Kosovo* entered into force on 1 April

2016.

Having regard to differences in the scope of the tariff liberalisation under the contractual

regimes which have been developed between the Union and all participants to the

Stabilisation and Association process and the preferences granted under Regulation (EC) No

1215/2009, it is suggested to prolong the duration of Regulation (EC) No 1215/2009 until 31

December 2025.

• Consistency with existing policy provisions in the policy area

The proposal is consistent with the continued support of the EU towards the region’s gradual

economic integration into the EU and the individual accession processes.

Even though most of the trade preferences initially granted to the Western Balkans through

the autonomous trade regime have now been integrated in their respective Stabilisation and

Association Agreement with the Union, the limited preferences granted through this

Regulation still provide a valuable support to the regional economy. These preferences allow

for the suspension of the specific duties normally applied to fruits and vegetables and for the

inclusion of a global wine quota available after exhaustion of the countries’ respective

national wine quotas.

The ATMs system contributed to the expansion of the total trade between the EU and the

Western Balkans which exceeded EUR 54 billion in 2018. The EU is the leading trade partner

accounting for over 72% of the region's total trade.

• Consistency with other Union policies

This proposal is fully in line with the Sofia Declaration of 17 May 2018 where the EU

committed to strengthening and intensifying its engagement at all levels to support the

region’s political, economic and social transformation. It is also consistent with the political

guidelines of the new Commission, which has reaffirmed the European perspective of the

Western Balkans and its important role in the continued reform process across the region. The

European Union aims to promote peace, stability and economic development in the region

and open up the prospect of EU integration.

* This designation is without prejudice to positions on status, and is in line with UNSCR 1244/1999 and

the ICJ Opinion on the Kosovo declaration of independence.

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2. LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY

• Legal basis

The legal basis for the proposal is Article 207(2) of the Treaty on the Functioning of the

European Union.

• Subsidiarity (for non-exclusive competence)

Not applicable.

• Proportionality

The proposed measures have shown to have had a positive impact on the beneficiary countries

by contributing to their economic development notably through the establishment of strong

partnerships between EU businesses and the local producers in the Western Balkan region.

The proposal to extend the measures for an additional five years is therefore considered the

most suitable measure to ensure the sustained economic development of the Western Balkan

partners, while avoiding a very long and complex process of amending each individual

bilateral trade agreement as part of the Stabilisation and Association Agreements.

• Choice of the instrument

Autonomous trade measures allow the European Union -under exceptional circumstances- to

grant very specific and targeted preferences, which would otherwise not be granted in the

context of a free trade agreement, as they would create precedents not in the interest of the

Union.

3. RESULTS OF EX-POST EVALUATIONS, STAKEHOLDER

CONSULTATIONS AND IMPACT ASSESSMENTS

• Ex-post evaluations/fitness checks of existing legislation

No formal ex-post evaluation has been carried out given the very limited scope of the

measures.

• Stakeholder consultations

No formal stakeholders consultations have taken place but there is a unanimous and repeated

interest for the continuation of the measures among the beneficiary parties while no objections

have been raised by European economic operators through the various communication

platforms set up by the Commission services for the EU industry.

• Collection and use of expertise

Not applicable.

• Impact assessment

The better regulation toolbox explicitly exempts prolongation of existing protocols with third

countries from impact assessments.

The proposed measures have been in place for nearly twenty years, but are now much reduced

as most of the preferences were gradually integrated in the individual Stabilisation and

Association Agreements between the EU and the beneficiaries. While the estimated impact is

considered minimal in terms of duties foregone by the EU -about EUR 23.5 million for the

combined six beneficiaries, based on import value in 2018- the prolongation of the measures

EN 3 EN

is considered the best guarantee of the EU’s commitment to the trade integration of the

Western Balkans. It would also contribute to ensuring the stability of market access

conditions for economic operators both in the region and in the EU.

Based on the Commission’s assessment following field visits in the region, the measures have

been shown to benefit a large number of small agricultural producers and many of these local

producers have established strong partnerships with businesses in the EU. Should Regulation

1215/2009 not be extended by 31 December 2020, the Western Balkans will be temporarily

deprived of this liberalised market access for key agricultural products (fruits and vegetables)

which are critically important for this sensitive region.

The EU should by all means avoid a repetition of the situation of 2010 when the extension

could not be voted in time thereby creating serious disturbances in the agricultural markets of

the Western Balkans. Retroactive application for recovery of customs duties should not be an

alternative as it is complicated/takes a lot of red tape and months before operators are

reimbursed. Disturbance in the legal framework would not only create immediate economic

damage but would also send a signal of unstable and insecure business environment.

• Regulatory fitness and simplification

As the proposed measures have already been in place for almost 20 years, the beneficiaries

are very well informed and know how to comply with the conditionalities foreseen in the

Regulation. In addition, the proposed Regulation also removes the paragraphs that have

become obsolete bringing it up to date and removing obsolete provisions.

• Fundamental rights

Article 2.1(d) of Regulation (EC) No 1215/2009 makes the entitlement to benefit from the

preferences subject to the abstention of the beneficiaries from engaging in serious and

systematic violations of human rights, including core labour rights, of fundamental principles

of democracy and of the rule of law.

4. BUDGETARY IMPLICATIONS

The proposed Regulation does not incur additional costs in the EU budget. For the years 2020

to 2025 there will be no additional tariff revenue foregone in respect of products produced by

the current beneficiaries. Hypothetical revenue that could have been collected from additional

new imports is not considered as a loss of tariff revenue.

5. OTHER ELEMENTS

• Implementation plans and monitoring, evaluation and reporting arrangements

In the context of the sub-committee meetings taking place under the umbrella of the

Stabilisation and Association Agreements, monitoring and reporting on the use of bilateral

preferences is regularly on the agenda of bilateral discussions with the Western Balkan

partners.

• Explanatory documents (for directives)

Not applicable.

• Detailed explanation of the specific provisions of the proposal

The proposal includes three sets of provisions concerning:

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(1) A change of denomination of two beneficiaries to reflect the latest agreed

terminology, namely by replacing “the former Yugoslav Republic of Macedonia” by

“North Macedonia” and replacing “the customs territory of Kosovo” by “Kosovo*”,

as used in the Stabilisation and Association Agreement with the EU. On that basis,

all references to “countries” or “countries and territories” are replaced by “parties”.

(2) An update of Article 3 following the amendments introduced in Commission

Delegated Regulation (EU) 2017/1464 of 2 June 2017: since the unilateral

preferences to Kosovo were included in the EU-Kosovo Stabilisation and

Association Agreement, which entered into force on 1 April 2016, the autonomous

trade preferences do no longer concern any fishery or beef trade concessions. For the

purpose of clarity, it is therefore proposed to remove any references to these two

categories of products.

(3) An extension of the application of the Regulation until 31 December 2025.

EN 5 EN

2020/0051 (COD)

Proposal for a

REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL

amending Council Regulation (EC) No 1215/2009 introducing exceptional trade

measures for countries and territories participating in or linked to the European

Union's Stabilisation and Association process

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty on the Functioning of the European Union, and in particular

Article 207(2) thereof,

Having regard to the proposal from the European Commission,

After transmission of the draft legislative act to the national parliaments,

Acting in accordance with the ordinary legislative procedure,

Whereas:

(1) Council Regulation (EC) No 1215/20091 provided for unlimited duty free access to the

Union market for nearly all products originating in the participants of the Stabilisation

and Association process to the extent and until such time as bilateral agreements with

those parties were concluded.

(2) Stabilisation and Association Agreements have now been concluded with all six

parties, the last one between the European Union and the European Atomic Energy

Community, of the one part, and Kosovo*, of the other part, entered into force on 1

April 2016.

(3) Commission Delegated Regulation (EU) 2017/14642 amended Regulation (EC) No

1215/2009 to remove the bilateral preferences granted to Kosovo but maintaining the

unilateral preference granted to all Western Balkan beneficiaries in the form of the

suspension of all duties for products covered by Chapters 7 and 8 of the Combined

Nomenclature and their access to the global wine tariff rate quota of 30 000 hl.

(4) Having regard to these differences in the scope of the tariff liberalisation under the

contractual regimes which have been developed between the Union and all participants

to the Stabilisation and Association process and the preferences granted under

Regulation (EC) No 1215/2009, it is suggested to extend the period of application of

Regulation (EC) No 1215/2009 until 31 December 2025.

1 Council Regulation (EC) No 1215/2009 of 30 November 2009 introducing exceptional trade measures

for countries and territories participating in or linked to the European Union’s Stabilisation and

Association process (OJ L 328, 15.12.2009, p. 1). * This designation is without prejudice to positions on status, and is in line with UNSCR 1244/1999 and

the ICJ Opinion on the Kosovo declaration of independence. 2 Commission Delegated Regulation (EU) 2017/1464 of 2 June 2017 amending Council Regulation (EC)

No 1215/2009 as regards trade concessions granted to Kosovo* following the entry into force of the

Stabilisation and Association Agreement between the European Union and the European Atomic

Energy Community, of the one part, and Kosovo, of the other part.

EN 6 EN

(5) The extension of the period of application of Regulation (EC) No 1215/2009 is

considered the best guarantee of the Union’s commitment to the trade integration of

the Western Balkans. It should also contribute to ensuring the stability of market

access conditions for economic operators both in the region and in the Union.

(6) In addition, the denomination of two beneficiaries need to be amended to reflect the

latest agreed terminology.

(7) Regulation (EC) No 1215/2009 should therefore be amended accordingly,

HAVE ADOPTED THIS REGULATION:

Article 1

Regulation (EC) No 1215/2009 is amended as follows:

(1) Article 1 is replaced by the following:

‘Article 1

Preferential arrangements

1. Products originating in Albania, Bosnia and Herzegovina, Kosovo*,

Montenegro, North Macedonia, and Serbia covered by Chapters 7 and 8 of the

Combined Nomenclature shall be admitted for import into the Union without

quantitative restrictions or measures having equivalent effect and with

exemption from custom duties and charges having equivalent effect.

2. Products originating in Albania, Bosnia and Herzegovina, Kosovo,

Montenegro, North Macedonia, and Serbia shall continue to benefit from the

provisions of this Regulation where so indicated. Such products shall also

benefit from any concession provided for in this Regulation which is more

favourable than that provided for under bilateral agreements between the Union

and those parties.’.

(2) Article 2 is amended as follows:

(a) In paragraph 1, points (a), (b), (c) and (d) are replaced by the following:

‘(a) compliance with the definition of ‘originating products’ provided for in

Commission Delegated Regulation 2015/2446 Title II, Chapter 1, Section 2,

Subsections 4 and 5, and Commission Implementing Regulation 2015/2447 Title II,

Chapter 2, Section 2, Subsections 10 and 11;

(b) the abstention of the parties referred to in Article 1 from introducing new duties

and charges having equivalent effect and new quantitative restrictions or measures

having equivalent effect in respect of imports originating in the Union or from

increasing existing levels of duties or charges or from introducing any other

restrictions from 30 September 2000;

(c) the involvement of beneficiaries in effective administrative cooperation with the

Union in order to prevent any risk of fraud; and

(d) The abstention of the parties referred to in Article 1 from engaging in serious and

systematic violations of human rights, including core labour rights, of fundamental

principles of democracy and of the rule of law.’.

* This designation is without prejudice to positions on status, and is in line with UNSCR 1244/1999 and

the ICJ Opinion on the Kosovo declaration of independence.

EN 7 EN

(b) Paragraph 3 is replaced by the following:

‘In the event of non-compliance by a party with point (a), (b) or (c) of paragraph 1 or

with paragraph 2, the Commission may, by means of implementing acts, suspend, in

whole or in part, the entitlement of the party concerned to benefits under this

Regulation. Those implementing acts shall be adopted in accordance with the

examination procedure referred to in Article 8(4).’.

(3) Article 3 is amended as follows:

(a) Paragraph 1 is replaced by the following:

‘For certain wine products, as listed in Annex I, originating in the beneficiaries

referred to in Article 1, the customs duties applicable to imports into the Union shall

be suspended during the periods, at the levels, within the limits of the Union tariff

quota and under the conditions indicated for each product and origin set out in that

Annex.’.

(b) Paragraph 2 is deleted.

(4) Article 4 is deleted.

(5) In Article 5, the first paragraph is replaced by the following:

‘The tariff quotas referred to in Article 3(1) of this Regulation shall be administered

by the Commission in accordance with Commission Implementing Regulation

2015/2447 Title II, Chapter 1, Section 1.’

(6) In Article 7, points (b) and (c) are replaced by the following:

‘(b) Necessary adjustments following the granting of trade preferences under other

arrangements between the Union and the parties referred to in Article 1;

(c) Suspension, in whole or in part, of the entitlement of a party concerned to

benefits under this Regulation, in the event of non-compliance by that party with the

conditions set out in point (d) of Article 2(1).’.

(7) Article 10(1) is amended as follows:

(a) the introductory sentence of the first subparagraph is replaced by the

following:

‘Where the Commission finds that there is sufficient evidence of fraud or failure to

provide administrative cooperation as required for the verification of evidence of

origin, or that there is a massive increase in exports into the Union above the level of

normal production and export capacity, or a failure of compliance with the provisions

of point (a), (b) or (c) of Article 2(1) by the parties referred to in Article 1, it may

take measures to suspend in whole or in part the arrangements provided for in this

Regulation for a period of three months, provided that it has first:’.

(b) points (b) and (c) of the first subparagraph are replaced by the following:

‘(b) called on the Member States to take such precautionary measures as are

necessary in order to safeguard the Union’s financial interests and/or to secure

compliance by the beneficiary parties with Article 2(1);

(8) (c) published a notice in the Official Journal of the European Union stating that there

are grounds for reasonable doubts about the application of the preferential

arrangements and/or compliance with Article 2(1) by the beneficiary party concerned

EN 8 EN

which may call into question its right to continue enjoying the benefits granted by

this Regulation.’.

(9) In Article 12, the second paragraph is replaced by the following:

‘It shall apply until 31 December 2025.’.

(10) Annex I is replaced by the text in the Annex to this Regulation.

Article 2

This Regulation shall enter into force on the seventh day following that of its publication in

the Official Journal of the European Union.

This Regulation shall be binding in its entirety and directly applicable in all Member States.

Done at Brussels,

For the European Parliament For the Council

The President The President

EN 9 EN

EN EN

EUROPEAN COMMISSION

Brussels, 3.4.2020

COM(2020) 135 final

ANNEX

ANNEX

to the

Proposal for a Regulation of the European Parliament and the Council

amending Council Regulation (EC) No 1215/2009 introducing exceptional trade

measures for countries and territories participating in or linked to the European

Union's Stabilisation and Association process

EN 1 EN

ANNEX

ANNEX I

CONCERNING THE TARIFF QUOTAS REFERRED TO IN ARTICLE 1(2)

Notwithstanding the rules for the interpretation of the Combined Nomenclature, the wording

for the description of the products is to be considered as having no more than an indicative

value, the preferential scheme being determined, within the context of this Annex, by the

coverage of the CN codes. Where ex CN codes are indicated, the preferential scheme is to be

determined by application of the CN code and corresponding description taken together.

Order No CN Code Description

Quota

volume per

year1

Beneficiaries Rate of duty

09.1530 ex 2204 21 94

ex 2204 21 95

ex 2204 21 96

ex 2204 21 97

ex 2204 21 98

ex 2204 22 93

ex 2204 22 94

ex 2204 22 95

ex 2204 29 93

ex 2204 29 94

ex 2204 29 95

Wine of fresh

grapes, of an actual

alcoholic strength

by volume not

exceeding 15 %

vol, other than

sparkling wine

30 000 hl Albania2,

Bosnia and

Herzegovina3,

Kosovo4, ,

Montenegro5,

North

Macedonia6,

Serbia7.

Exemption

1 One global volume per tariff quota accessible to imports originating in the beneficiaries.

2 Access for wine originating in Albania to the global tariff quota is subject to the prior exhaustion of the

individual tariff quota provided for in the Protocol on wine concluded with Albania. That individual

quota is opened under order No 09.1512 and 09.15.13. 3 Access for wine originating in Bosnia and Herzegovina to the global tariff quota is subject to the prior

exhaustion of both individual tariff quotas provided for in the Protocol on wine concluded with Bosnia

and Herzegovina. Those individual quotas are opened under order Nos 09.1528 and 09.1529. 4 Access for wine originating in Kosovo to the global tariff quota is subject to the prior exhaustion of

both individual tariff quotas provided for in the Protocol on wine concluded with Kosovo. Those

individual quotas are opened under order Nos 09.1570 and 09.1572. 5 Access for wine originating in Montenegro to the global tariff quota, insofar as it concerns products of

CN code 2204 21, is subject to the prior exhaustion of the individual tariff quota provided for in the

Protocol on wine concluded with Montenegro. That individual tariff quota is opened under order No

09.1514. 6 Access for wine originating in North Macedonia to the global tariff quota is subject to the prior

exhaustion of both individual tariff quotas provided for in the Additional Protocol on wine concluded

with North Macedonia. Those individual quotas are opened under order Nos 09.1558 and 09.1559. 7 Access for wine originating in Serbia to the global tariff quota is subject to the prior exhaustion of both

individual tariff quotas provided for in the Protocol on wine concluded with Serbia. Those individual

quotas are opened under order Nos 09.1526 and 09.1527.

Com 135 (2020)

Information Note

1. Proposal

Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL amending

Council Regulation (EC) No 1215/2009 introducing exceptional trade measures for countries and territories

participating in or linked to the European Union’s Stabilisation and Association process.

2. Date of Commission document

03/04/2020

3. Number of Commission document

COM (2020) 135

4. Number of Council document:

7195 2020

5. Dealt with in Brussels by

Trade Policy Committee

6. Department with primary responsibility

Department of Business, Enterprise and Innovation

7. Other Departments involved

Department of Foreign Affairs and Trade

8. Background to, Short summary and aim of the proposal

The proposed autonomous trade measures (ATMs) are one of the instruments to implement the EU’s policy

towards the Western Balkans as defined within the Stabilisation and Association process launched by the

European Commission in May 1999. In 2000 the European Council concluded that Stabilisation and

Association Agreements with Western Balkan parties should be preceded by asymmetrical trade

liberalisation by means of Council Regulation (EC) No 1215/2009 which introduced exceptional trade

measures for countries and territories participating in or linked to the Stabilisation and Association process,

with a validity period until 31 December 2020.

This proposal extends that period to 31 December 2025.

9. Legal basis of the proposal

Article 207(2) of the Treaty on the Functioning of the European Union.

10. Voting Method

QMV

11. Role of the EP

Assent

12. Category of proposal

Little significance – extension of existing Regulation.

13. Implications for Ireland & Ireland's Initial View'

Ireland supports the continued efforts of the European Union to ensure trade stability with countries within

the Balkan group (Albania, Bosnia & Herzegovina, Kosovo, Montenegro, North Macedonia and Serbia).

While the estimated impact is considered minimal in terms of duties foregone by the EU -about EUR 23.5

million for the combined six beneficiaries, based on import value in 2018- the prolongation of the measures

is considered the best guarantee of the EU’s commitment to the trade integration of the Western Balkans. It

would also contribute to ensuring the stability of market access conditions for economic operators both in

the region and in the EU.

14. Impact on the public

N/A

15. Have any consultations with Stakeholders taken place or are there any plans to do so?

No formal stakeholder consultations have taken place but there is a unanimous and repeated interest for the

continuation of the measures among the beneficiary parties while no objections have been raised by

European economic operators through the various communication platforms set up by the Commission

services for the EU industry.

16. Are there any subsidiarity issues for Ireland?

No

17. Anticipated negotiating period

N/A

18. Proposed implementation date

This Regulation shall enter into force on the seventh day following that of its publication in the Official

Journal of the European Union.

19. Consequences for national legislation

None

20. Method of Transposition into Irish law

N/A

21. Anticipated Transposition date

N/A

22. Consequences for the EU budget in Euros annually

None

23. Contact name, telephone number and e-mail address of official in Department with primary

responsibility

Alan Cromie

Trade Policy Unit

Department of Business, Enterprise and Innovation

23 Kildare Street

Dublin 2

01 631 2345

Alan.cromie@dbei.gov.ie

Date: 06 April 2020