1. Prior consultations shall take place concerning the application of the safeguard clause, both when such measures are first adopted and when such measutes are extended. The Community shall provide the ACP States with all the information necessary for such consultations and shall provide the necessary data from which to determine to what extent imports from an ACP State or ACP States of a specific product have caused the effects mentioned in Article 12 (1).
2. Where consultations have taken place, safeguard measures, or arrangements jointly agreed upon by the ACP States concerned and the Community, shall enter into force thereafter.
3. However, the prior consultations provided for in paragraphs 1 and 2 shall not prevent any immediate decisions which the Community or its Member States, in accordance with Article 12 (1), might take where special factors have necessitated these decisions.
4. In order to facilitate the examination of facts that may cause market disturbances a mechanism shall be instituted designed to ensure statistical surveillance of certain ACP exports to the Community.
5. The Contracting Parties undertake to hold regular consultations with the view to finding satisfactory solutions to problems which might result from the application of the safeguard clause.
Article 14.
The Council of Ministers shall, at the request of any Contracting Party concerned, consider the economic and social effects of the application of the safeguard clause.
Article 15.
When safeguard measures are being taken, modified or removed, particular attention will be paid to the interests of the least-developed, fand-locked and island ACP States.
Article 16.
In order to ensure effective implementation of the provisions of this Convention in the field of trade cooperation, the Contracting Parties agree to inform and consult each other.
In addition to the cases for which consultations are specifically provided in Articles 1 to 15, consultations shall also take place, at the request of the Community or of the ACP States, and in accordance with the conditions provided for in the rules of procedure in Article 168, particularly in the following cases:
1. where Contracting Parties envisage taking any trade measures affecting the interests of one or more Contracting Parties under this Convention, they shall inform the Council of Ministers thereof. Consultations shall take place, where the Contracting Parties concerned so request, in order to take account of their respective interests;
2. if, during the application of this Convention, the ACP States consider that agricultural products covered by Article 2 (2) (a) other than those subject to special treatment should benefit from such treatment, consultations may take place within the Council of Ministers;
3. where a Contracting Party considers that obstacles to the movement of goods arise as a result of the existing rules of another Contracting Party or the interpretation, application or administration thereof;
4. where the Community envisages concluding a preferential agreement with third States, it shall inform the ACP States thereof. Consultations shall take place, where the ACP States so request, in order to safeguard their interests;
5. where the Community or the Member States take safeguard measures in accordance with Article 12, consultations on these measures may take place within the Council of Ministers, where the Contracting Parties concerned so request, notably with a view to ensuring compliance with Article 12 (3).
Chapter 2. Special Undertakings on Rum and Bananas
Article 17.
Until the entry into force of a common organization of the market in spirits and notwithstanding the provisions of Article 2 (1), entry into the Community of products of subheading 22.09 C I - rum, arrack, tafia - originating in the ACP States shall be governed by the provisions of Protocol 5.
Article 18.
In order to permit the improvement of the conditions under which bananas originating in the ACP States are produced and marketed, the Contracting Parties agree to the objectives set out in Protocol 4.
Article 19.
This Chapter and Protocols 4 and 5 shall not apply to relations between the ACP States and the French overseas departments.
Chapter 3. Trade Promotion
Article 20.
With a view to attaining the objectives set in Article 1, the Contracting Parties shall implement trade promotion measures from the production stage to the final stage of distribution. The object is to ensure that the ACP States derive maximum benefit from the provisions of this Convention in the fields of trade, agricultural and industrial cooperation and can participate under the most favourable conditions in the Community, domestic, regional and international markets by diversifying the range and increasing the value and volume of ACP exports.
Article 21.
The trade promotion measures provided for in Article 20 shall include the provision of technical and financial assistance for achieving the following objectives:
(a) the establishment and/or improvement of the structure of organizations, centres or firms involved in the development of the trade of ACP States and the assessment of their staffing requirements, financial management and working methods;
(b) basic training, management training, and vocational training of technicians in fields related to the development and promotion of national and international trade;
(c) product policy inclusive of research, processing, quality guarantee and control, packaging and presentation;
(d) development of supportive infrastructure, including transport and storage facilities, in order to facilitate the flow of exports from ACP States;
(e) advertising;
(f) establishing, promoting and improving cooperation among economic operators in ACP States and between such operators and those in the Member States of the Community and in third countries and introducing appropriate measures to promote such cooperation;
(g) carrying out and making use of market research and marketing studies;
(h) collecting, analysing and disseminating quantitative and qualitative trade information and facilitating free access to existing or future information systems or bodies in the Community and in the ACP States;
(i) participation by the ACP States in fairs, exhibitions and, in particular, specialized international shows, the list of which shall be drawn up in consultation with the ACP States, and the organization of trade events;
(j) special assistance to small- and medium-sized undertakings for product identification and development, market outlets and joint marketing ventures;
(k) the participation of the least-developed ACP States in the various trade promotion activities envisaged shall be encouraged by special provisions inter alia the payment of travel expenses of personnel and costs of transporting articles and goods that are to be exhibited, on the occasion of their participation in fairs and exhibitions.
Article 22.
In addition to the appropriations which, within the framework of the national indicative programme referred to in Article 109 may be allocated by each ACP State to the financing of trade promotion activities on the basis of their development aims and priorities, the contribution of the Community to the financing of this type of activity, on a regional basis, could reach - within the framework of the regional development cooperation programmes mentioned in Article 133 - a sum of 40 million European units of account (hereinafter referred to as "EUA").
Title II. EXPORT EARNINGS FROM COMMODITIES
Chapter 1. Stabilization of Export Earnings
Article 23.
1. With the aim of remedying the harmful effects of the instability of export earnings and to help the ACP States overcome one of the main obstacles to the stability, profitability and sustained growth of their economies, to support their development efforts and to enable them in this way to ensure economic and social progress for their peoples by helping to safeguard their purchasing power, a system shall be operated to guarantee the stabilization of earnings derived from the ACP States' exports to the Community of products on which their economies are dependent and which are affected by fluctuations in price or quantity or both these factors.
2. In order to attain these objectives, transfers must be devoted to maintaining financial flows in the sector in question or, for the purpose of promoting diversification, directed towards other appropriate sectors and used for economic and social development.
Article 24.
Export earnings to which the stabilization system applies shall be those accruing from the export by each ACP State to the Community of each of the products on the following list, in the drawing up of which account has been taken of factors such as employment, deterioration of the terms of trade between the Community and the ACP State concerned and the level of development of that ACP State.
Article 25.
1. The following products shall be covered:
| NIMEXE Codes | |
| 1. Groundnuts, shelled or not | 12.01-31 to 12.01-35 |
| 2. Groundnut oil | 15.07-74 and 15.07-87 |
| 3. Cocoa beans | 18.01-00 |
| 4. Cocoa paste | 18.03-10 to 18.03-30 |
| 5. Cocoa butter | 18.04-00 |
| 6. Raw or roasted coffee | 09.01-11 to 09.01-17 |
| 7. Extracts, essences or concentrates of coffee | 21.02-11 to 21.02-15 |
| 8. Cotton, not carded or combed | 55.01-10 to 55.01-90 |
| 9. Cotton linters | 55.02-10 to 55.02-90 |
| 10. Coconuts | 08.01-71 to 08.01-75 |
| 11. Copra | 12.01-42 |
| 12. Coconut oil | 15.07-29, 15.07-77 and 15.07-92 |
| 13. Palm oil | 15.07-19, 15.07-61 and 15.07-63 |
| 14. Palm nut and kernel oil | 15.07-31, 15.07-78 and 15.07-93 |
| 15. Palm nuts and kernels | 12.01-44 |
| 16. Raw hides and skins | 41.01-11 to 41.01-95 |
| 17. Bovine cattle leather | 41.02-05 to 41.02-98 |
| 18. Sheep and lamb skin leather | 41.03-10 to 41.03-99 |
| 19. Goat and kid skin leather | 41.04-10 to 41.04-99 |
| 20. Wood in the rough | 44.03-20 to 44.03-99 |
| 21. Wood roughly squared or half-squared, but not further manufactured | 44.04-20 to 44.04-98 |
| 22. Wood sawn lengthwise, but not further prepared | 44.05-10 to 44.05-79 |
| 23. Fresh bananas | 08.01-31 |
| 24. Tea | 09.02-10 to 09.02-90 |
| 25. Raw sisal | 57.04-10 |
| 26. Vanilla | 09.05-00 |
| 27. Cloves - whole fruit, cloves and stems | 09.07-00 |
| 28. Sheep's or lambs' wool, not carded or combed | 53.01-10 to 53.01-40 |
| 29. Fine animal hair of Angora goats' mohair | 53.02-95 |
| 30. Gum arabic | 13.02-91 |
| 31. Pyrethrum - flowers, leaves, stems, peel and roots; saps and extracts from pyrethrum | 12.07-10 and 13.03-15 |
| 32. Essential oils, not terpeneless, of cloves, of niaouli and of ylang-ylang | 33.01-23 |
| 33. Sesame seed | 12.01-68 |
| 34. Cashew nuts and kernels | 08.01-77 |
| 35. Pepper | 09.04-11 and 09.04-70 |
| 36. Shrimps and prawns | 03.03-43 |
| 37. Squid | 03.03-68 |
| 38. Cotton seeds | 12.01-66 |
| 39. Oil-cake | 23.04-01 to 23.04-99 |
| 40. Rubber | 40.01-20 to 40.01-60 |
| 41. Peas | 07.01-41 to 07.01-43, 07.05-21 and 07.05-61 |
| 42. Beans | 07.01-45 to 07.01-47, 07.05-25 and 07.05-65 |
| 43. Lentils | 07.05-30 and 07.05-70 |
| 44. Iron ore (ores, concentrates, and roasted iron pyrites) | 26.01-12 to 26.01-18 |
2. Exports of iron ores (ores, concentrates, roasted iron pyrites) from sites being worked when this Convention is signed shall be covered by Articles 23 to 47 for a period limited to the first five financial years of this system.
Upon expiry of that period, iron ore shall be wholly covered by Articles 49 to 59.
3. Upon presentation of each transfer request the ACP State shall choose between the following systems:
(a) each product listed in Article 25 (1) shall constitute a product within the meaning of Article 27 and 44
(b) product groups 1 and 2, 3 to5, 6 and 7, 8 and 9, 10 to 12, 13 to 15, 16 to 19 and 20 to 22 shall each constitute a product within the meaning of Articles 27, 29, 36, 37, 38, 39, 42, 43 and 44.
Article 26.
If, 12 months after the entry into force of this Convention, one or more products not contained in the list in Article 25, but upon which the economies of one or more ACP States depend to a considerable extent, are affected by sharp fluctuations, the Council of Ministers shall decide, not later than six months after the presentation of a request by the ACP State or States concerned, whether or not to include the said product or products in the list.
Article 27.
If so requested by one or more ACP States in respect of one or more of the products listed in Article 25, the Council of Ministers may decide, on the basis of a report established by the Commission of the European Communities, hereinafter referred to as "the Commission", in liaison with the requesting ACP State or States, to apply the system to exports of the products in question from the said ACP State or States to other ACP States.
Article 28.
Each ACP State concerned shall certify that the products to which the system applies have originated in its territory within the meaning of Article 2 of Protocol 1.
Article 29.
The system shall apply to the earnings derived from an ACP State's exports of the products listed in Article 25 if, during the year preceding the year of application, earnings from the export of each product to all destinations, re-exports excluded, represented at least 6-5 % of its total export earnings from their goods. The percentage shall be 5 % for sisal.
Article 30.
1. The system shall be implemented in respect of the products listed in Article 25 where they are:
(a) released for home use in the Community, or
(b) brought under the inward processing arrangements there in order to be processed.
2. The statistics used to implement the system shall be:
(a) those obtained by cross-checking Community and ACP State statistics, account being taken of fob values, or
(b) those obtained by multiplying the unit values for the exports of the ACP State in question, as given in that ACP State's statistics, by the quantities imported by the Community, as shown in Community statistics.
3. When submitting the transfer request for each product, the requesting ACP State shall choose one of the two systems set out above.
Article 31.
For the purposes specified in Article 23, the Community shall allocate to the system, for the duration of this Convention, an amount of $50 million EUA to cover all its commitments under the system. This amount shall be managed by the Commission.
Article 32.
1. The overall amount referred to in Article 31 shall be divided into a number of equal annual instalments corresponding to the number of years of application.
2. Whatever balance remains at the end of each of the first four years of application of the Convention shall be carried forward automatically to the following year.
Article 33.
The resources available for each year of application are made up of the sum of the following elements:
1. the annual instalment, reduced by any amounts used under Article 34 (1);
2. the sums carried forward under Article 32 (2);
3. the amounts replenished under Articles 42 and 43;
4. any amounts made available under Article 34 (1).
Article 34.
In the case of an insufficiency of funds for a year of application the Council of Ministers, on the basis of a report submitted to it by the Commission, may:
1. authorize, for each year except the last, the use in advance of a maximum of 20 % of the following yearâs instalment;
2. reduce the amount of the transfers to be made.
Article 35.
Before the expiry of the period referred to in Article 31, the Council of Ministers shall decide on the use of any balance remaining from the overall amount established in Article 31, as well as on the conditions for further use of any amounts still to be replenished by the ACP States under Articles 42 and 43, following the expiry of the period referred to in Article 31.
Article 36.
1. In order to implement the system -a reference level shall be calculated for each ACP State and for each product.
2. This reference level shall correspond to the average of export earnings in the four years preceding each year of application.
3. Where, however, an ACP State:
- starts processing a product traditionally exported in the raw state, or
- begins exporting a product which it did not traditionally produce,
the system may be put into operation on the basis of a reference level calculated on the three years preceding the year of application.
Article 37.
An ACP State shall be entitled to request a transfer if, on the basis of the results of a calendar year, its actual earnings, as defined in Article 30, from its exports of each product to the Community and, in the cases referred to in Article 27, to other ACP States or, in the cases referred to in Article 46 (3), to all destinations; are at least 6-5 % below the reference level.
Article 38.
1. Requests for transfers shall be inadmissible in the following cases:
(a) if the request is presented after 31 March of the year following the year of application;
(b) if it emerges from the examination of the request, to be undertaken by the Commission in conjunction with the ACP State concerned, that the fall in earnings from exports to the Community is the result of a trade policy of that ACP State concerned advesely affecting exports to the Community in particular.
2. Requests for transfers may also be declared inadmissible if it emerges from the request, after
consultations, that the requesting ACP State has recorded earnings from its exports to all destinations during the year of application in excess of the average of its export earnings to all destinations in the four years preceding the year of application for each product for which a request has been made.
Article 39.
1. Every request for transfer shall be addressed to the Commission, which shall examine it in conjunction with the ACP State concerned.
2. The difference between the reference level and actual earnings, plus 1% for statistical errors and omissions, shall constitute the basis of the transfer.
3. Should examination of the trend of the requesting ACP State's exports to all destinations and of the production of the product in question and of demand in the Community reveal significant changes, consultations shall take place between the Commission and the requesting State to determine whether those changes are such as to affect the amount of the transfer, and if so to what extent.
Article 40.
1. The Commission shall adopt a transfer decision on completion of the examination carried out in conjunction with the requesting ACP State.
2. For each transfer a transfer agreement shall be concluded between the Commission and the ACP State concerned.
3. The Commission and the ACP State concerned shall take such steps as are required to ensure that transfers are made rapidly. To that end, provision shall be made for the payment of advances.
4. The amounts transferred shall not bear interest.
Article 41.
1. The recipient ACP State shall decide how the resources will be used, subject to compliance with the objectives laid down in Article 23.
2. During the examination of the request, and in any case before the transfer agreement is signed, the requesting ACP State shall give the Commission some indication of the probable use to which the transfer will be put.
3. Within the 12 months following the signing of the transfer agreement the recipient ACP State shall inform the Commission of the use to which the funds transferred have been put.
Article 42.
Subject to the provisions .of Article 46 (1) (c), ACP States which have received transfers shall, in accordance with the provisions of Article 43, contribute during the seven years following the year in which the transfer was paid, to the replenishment of the resources made available for the system by the Community.
Article 43.
1. Where the trend of the export earnings derived from the product which sustained the drop in export earnings that gave rise to the transfer so permits, the ACP State concerned shall help replenish the resources of the system.
2. For the purposes of paragraph 1, the Commission shall determine:
- at the beginning of each year during the seven years following the year during which the transfer was paid,
- until such time as the whole amount of the transfer has been paid back into the system,
- in accordance with the provisions of Article 30,
whether, for the preceding year:
(a) the unit value of the product under consideration exported to the Community was higher than the average unit value during the four years prior to the preceding year;
(b) the quantity of the same product actually exported to the Community was at least equal to the average of the quantities exported to the Community during the four years prior to the preceding year;
(c) the earnings for the year and the product in question amount to at least 106-5 % of the average of earnings from exports to the Community during the four years prior to the preceding year.
3. If the three conditions set out in paragraph 2 are fulfilled simultaneously, the ACP State shall contribute to the system an amount equal to the difference between the actual earnings derived in the preceding year from exports to the Community and the average of earnings from exports to the Community during the four years prior to the preceding year, but in no case shall the amount of the contribution towards the replenishment of the resources of the system exceed the transfer in question.
4. This amount shall be contributed to the system at the rate of one fifth per year after a period of deferment of two years beginning in the year during which the obligation to contribute towards replenishment was established.
5. Should examination of the trend of exports to all destinations and of production of the product in question in the ACP State concerned as well as of demand in the Community reveal significant changes, consultations shall be held between the Commission and the ACP State concerned in order to establish whether these changes are such as to justify a contribution to the replenishment of the resources of the system, and if so to what extent.
Where such justification exists, the ACP State shall contribute to the system, under the conditions set out in paragraph 4, the amount determined in the consultations.
6. On the basis of decisions taken by the Council of Ministers pursuant to Article 27, exports to other ACP States shall be added to the exports to the Community referred to in this Article.
Article 44.
If, on expiry of the seven-year period referred to in Article 42, the resources have not been fully replenished, the Council of Ministers, taking into consideration in particular the situation of and prospects for the balance of payments, exchange reserves and foreign indebtedness of the ACP State concerned, may decide that:
- the sums outstanding are to be replenished wholly or partially, in one or more instalments,
- rights to repayment are to be waived.
Article 45.
1. In order to ensure that the stabilization system functions efficiently and rapidly, statistical and customs cooperation shall be instituted between each ACP State and the Commission.
2. The ACP States and the Commission shall adopt by mutual agreement any measures facilitating inter alia the exchange of necessary information, the submission of requests for transfers, the provision of information concerning the use of transfers, the implementation of the replenishment provisions and of any other aspect of the system by means of the widest possible use of standard forms.
Article 46.
1. For the ACP: State listed in Article 155 (3) (a):
(a) the percentage fixed in Article 29 shall be 2 %;
(b) the percentage fixed in Article 37 shall be 2 %;
(c) no contribution shall be required towards the replenishment of the resources made available to the system.
2. In the application of Articles 24, 34 and 37 the special difficulties of the ACP States referred to above shall be taken into account.
3. In the case of certain ACP States which do not send the bulk of their exports to the Community, the Council of Ministers may decide, by way of derogation from Articles 24 and 30, that the system shall apply to their exports of the products in question whatever their destination. The system shall then operate on the basis of the export statistics of the ACP State in question.