19.9.2013

EN

Official Journal of the European Union

L 249/6

(1)

Annex III to Decision 2001/822/EC concerns the definition of the concept of ‘originating products‘�and methods of administrative cooperation. Article 37 thereto provides that derogations from those rules of origin may be adopted where justified by the development of existing industries or the creation of new industries in a country or territory.

(2)

Points (g), (j), (k) and (o) of paragraph 1 of Article 5 of Annex III to Decision 2001/822/EC provide that partial or total milling of sugar, sifting and placing in bags are considered to be operations that are insufficient to confer the status of originating products.

(3)

Paragraph 4 of Article 6 of Annex III to Decision 2001/822/EC provides that ACP/EC-OCTs cumulation for all sugar products classified within HS Chapter 17 is phased out over time and reduces the quantities for which such cumulation is allowed progressively. By setting the quantity at zero tonnes, the phasing out finally led to the prohibition of such cumulation as of 1 January 2011.

(4)

In 2002 the Netherlands requested a derogation from the rule of origin in respect of sugar products falling within CN codes 1701 11 90, 1701 99 10 and 1701 91 00 processed in the Netherlands Antilles for an annual quantity of 3 000 tonnes. That request was granted and the derogation ended on 31 December 2007.

(5)

In 2009 the Netherlands submitted a request for extension of the derogation granted in 2002, which request was rejected by Commission Decision 2009/699/EC (2). That Decision however granted a new request for derogation included in the request for extension, within the limits of the quantities for which import licences for sugar were allocated to the Netherlands Antilles in 2009 and in 2010.

(6)

In 2010, the Netherlands requested a new derogation in respect of sugar products processed in the Netherlands Antilles for the period from 2011 to 2013. By Commission Decision 2011/47/EU (3) the derogation was granted in accordance with paragraphs 1, 3 and 7 of Article 37 of Annex III to Decision 2001/822/EC and under certain conditions which aimed to balance the legitimate interests of the Overseas Countries and Territories (OCTs) operators with the objectives of the Union‘檚 common market organisation for sugar. The products for which derogation was granted were subject to actual processing activities in the Netherlands Antilles and the value added to the raw sugar in the Netherlands Antilles was considered to be at least 45 % of the value of the finished product.

(7)

Decision 2011/47/EU explained that the phasing out of the ACP/EC-OCTs cumulation of origin with regard to sugar, as provided for in paragraph 4 of Article 6 of Annex III to Decision 2001/822/EC, showed that it was the Union‘檚 intention to focus trade preferences on economic activity that contributes sustainably to OCTs development while taking due account of the Union‘檚 sugar sector. That principle was applied for the purpose of determining the quantities for which the derogation was granted by Decision 2011/47/EU. The request submitted in 2010 also indicated that the company in Curaçao benefiting from the previous derogations aimed to diversify away from sugar production requiring further derogation. Therefore the amounts for derogation were phased out over time (5 000 tonnes for 2011, 3 000 tonnes for 2012 and 1 500 tonnes for 2013).

(8)

In the request submitted in 2010, the Netherlands highlighted that the company in Curaçao, benefiting from the previous derogations, aimed to diversify into producing mixtures and ‘榖io-sugar‘�which both address distinctly different markets than the sugar products covered by the request submitted in 2010. The derogation requested in 2010 was needed to earn the necessary capital for the investments required for such diversification. Consequently, when granting the derogation by Decision 2011/47/EU, it was expected that the derogation would generate the required turnover to finance the said investments in diversification of products and activities, so that the company benefiting from the derogation would no longer be required to request derogations.

(9)

On 11 February 2013 the Netherlands requested on behalf of the government of Curaçao a new derogation from the rules of origin set out in Annex III to Decision 2001/822/EC for the period from 1 January to 31 December 2013, the date of expiry of Decision 2001/822/EC. The request covered a total annual quantity of 5 500 tonnes of sugar products of CN code 1701 14 90, described as ‘榖io-sugar‘� originating in third countries and processed in Curaçao for export to the Union.

(10)

This request was officially withdrawn by the Netherlands on 17 April 2013 because the processing activities described in the request were no longer carried out in the Netherlands Antilles. The company in Curaçao had moved part of its sugar processing activities, in particular the production of sugar lumps manufactured from raw cane sugar, packed for retail sale, to Belgium from where it currently supplies supermarkets in the Netherlands. It has reoriented its remaining production line towards sifting, cleaning, milling and simple mixing of organic sugar and packing it into 1 000 kg bags for transport.

(11)

On 17 April 2013, the Netherlands submitted a second request for derogation for 5 000 tonnes of sugar products, described as organic raw cane sugar of CN code 1701 14 90, for the period from 1 January to 31 December 2013. The Netherlands explained that it had appeared from discussions with the authorities of Curaçao that the quantities for which derogation was granted for 2013 by Decision 2011/47/EU would be insufficient to continue the activities of the company carrying out the sugar processing in Curaçao.

(12)

The second request was mainly motivated by a change of circumstances in the company involved, because the company had changed its business activity towards the processing of organic cane sugar, a change on the world sugar market, since the EU has become a net importer of sugar, the fact that the value added to the third country raw materials was more than 45 % of the ex-works price of the final product, and the creation of direct and indirect employment in Curaçao. On 14 and 28 June 2013 the Netherlands provided additional information to support its request of 17 April 2013.

(13)

By letter of 16 July 2013, the Commission requested that the Dutch authorities take note of the Commission‘檚 assessment of the request and its intention to recommend the refusal of the request. The Commission also requested that the Dutch authorities transmit this assessment to the company potentially concerned by the derogation to allow both the Netherlands and the company concerned to raise any issues of fact or law which might concern the request before the Commission reached its final decision. The deadline for reply was set at 25 July 2013. A reply was received from the Dutch authorities on 24 July 2013.

(14)

Paragraph 7 of Article 37 of Annex III to Decision 2001/822/EC provides that derogations shall be granted where the value added to the non-originating products used in the OCTs concerned is at least 45 % of the value of the finished product, provided that the derogation is not such as to cause serious injury to an economic sector of the Union or of one or more Member States.

(15)

The information received from the company in Curaçao, as transmitted by the Netherlands, regarding the calculation of the value generated in Curaçao for the production of ‘榖io cane sugar‘�in 2013 indicates the value added by the processing of 5 000 tonnes of ‘榖io-sugar‘� The company also indicated the purchase price for 1 tonne of raw ‘榖io-sugar‘�originating in third countries and the ex-works price at which 1 tonne of ‘榖io-sugar‘�is sold. According to the company, these figures generate a value added in relation to the ex-works price of 52 %. According to the same information the production of 1 500 tonnes of ‘榖io-sugar‘�would generate a value added in relation to the ex-works price of 88 %.

(16)

The information received from the company, as transmitted by the Netherlands, with regard to the calculation of the value generated in Curaçao for ‘榖rown crystal sugar‘�on 1 January 2013, indicates the value added by the working and processing of 5 500 tonnes of ‘榖rown crystal sugar‘� Where the highest available value added per tonne for ‘榖rown crystal sugar‘�is considered as realistic, the value added in relation to the ex-works price amounts to approximately 52,4 %. However, the processing operations carried out on ‘榖io-sugar‘�involve less processing than for ‘榗rystal sugar‘�packed for retail sale. The added value inherent in those operations and the actual processing costs can therefore only be lower for ‘榖io-sugar‘�packed in 1 000 kg bags for transport than for ‘榖rown crystal sugar‘�packed for retail sale.

(17)

According to the ‘楪lobal Sugar Outlook ‘�2013 Report‘�a href="#ntr4-L_2013249EN.01000601-E0004" id="ntc4-L_2013249EN.01000601-E0004" shape="rect"> (4)