NATIONAL ASSEMBLY

THE KINGDOM OF CAMBODIA, of the one part, and

THE EUROPEAN COMMUNITY, of the other part,

DESIRING to promote, with a view to permanent cooperation and in conditions providing every security for trade, the orderly and equitable development of trade in textile products between the European Community (hereinafter referred to as “the Community”) and the Kingdom of Cambodia (hereinafter referred to as “Cambodia”)

Have Agreed As Follows:

Article I:

This agreement shall apply to trade in textile products listed in Annex I and originating in Cambodia.
Exports from Cambodia to the Community of products listed in Annex I and originating in Cambodia shall, at the time of entry into force of this Agreement, be free from quantitative limits. However, quantitative limits may subsequently be introduced under conditions specified in Article 4.
Should quantitative limits be introduced, exports of the textile products made subject to quantitative limits shall be subject to a double-checking system as specified in Protocol A.
At the time of entry into force of this Agreement, exports of products listed in Annex II not subject to quantitative limits shall be subject to the double checking system referred to in paragraph 3.
Following consultations in accordance with the procedures set out in Article 11, exports of products in Annex I not subject to quantitative limits other than those listed in Annex II may be subject, subsequently to the entry into force of this agreement, to the double checking system referred to in paragraph 2 or to a prior surveillance system introduced by the Community.

Article 2:

Imports into the Community of textile products covered by this Agreement shall not be subject to the quantitative limits established under this Agreement, provided that they are declared to be for re-export outside the Community in the same state or after processing, within the framework of the administrative system of control which exists within the Community.
However, the release for home use of products imported into the Community under the conditions referred to above shall be subject to the production of an export license issued by the authorities of Cambodia, and to proof of origin in accordance with the provisions of Protocol A.
Where the Community authorities ascertain that imports of textile products have been set off against a quantitative limit established under this Agreement, but that they products have subsequently been re-exported outside the Community, the authorities shall inform the Cambodian authorities within four weeks of the quantities involved and authorize imports of identical quantities of the same products, which shall not be set off against the quantitative limit established under this Agreement for the current or the following year, as appropriate.

Article 3:

Should quantitative limits be introduced under Article 4, the following provisions shall apply:

In any Agreement year advance use of a portion of the quantitative limit established for the following Agreement year is authorized for each category of products up to 5 % of the quantitative limit for the current Agreement year.
Amounts delivered in advance shall be deducted from established for the following Agreement year.
Carryover to the corresponding quantitative limit for the following agreement year of the amount not the not use during any Agreement year is authorized for each category of products up to 10% of the quantitative limit for the current Agreement year.
Transfers in respect of categories in group I shall not be made from any category except as follows:
transfers between categories 2 and 3 and from category 1 to categories 2 and 3 may be made up to 12% of the quantitative limits for the category to which the transfer is made,
transfers between categories 4, 5, 6, 7 and 8 may be made up to 12% of the quantitative limit for the category to which the transfer is made.
Transfers into any category in groups II, III, IV and V may be made from any category or categories in groups I, II, III, IV and V up to 12% of the quantitative limit for the category to which the transfer is made.
The table of equivalence applicable to the transfers referred to above is given in Annex I to this Agreement.
The increase in any category of products resulting from the cumulative application of the provisions in paragraphs 1, 2 and 3 above during an Agreement year shall not exceed the following limits:
17% for categories of products in groups I, II, III, IV and V.
Prior notification shall be given by the Cambodian authorities in the event of recourse to the provisions of paragraphs 1, 2 and 3 above, at least 15 days in advance.

Article 4:

Exports of textile products listed in Annex I to this Agreement may be made subject to quantitative limits on the conditions laid down in the following paragraphs.
Where the Community finds, under the system of administrative control set up, that the level of imports of products in a given category listed in Annex I originating in Cambodia exceeds, in relation to the preceding year's total imports into the Community from all sources of products in that category, the following rates:

2 % for categories of products in group I.
8 % for categories of products in group II,
15 % for categories of products in groups III, IV and V,

It may request the opening of consultations in accordance with the procedure described in Article II of this Agreement, with a view to reaching agreement on an appropriate restraint level for the products in such category.

3. Pending a mutually satisfactory solution, Cambodia undertakes, from the date of

notification of the request for consultations, to suspend or limit at the level

indicated by the Community exports of the category of products in question to the

Community or to the region or regions of the Community market specified by the

Community.

The Community shall authorize the importation of products of the said category shipped from Cambodia before the date on which the request for consultations was submitted.

4. Should the Contracting Parties be unable in the course of consultations to reach a

satisfactory solution within the period specified in Article 11, the Community shall

have the right to introduce a definitive quantitative limit at an annual level not lower

than the level resulting from the application of the formula set out in paragraph 2, or

106% of the level of imports reached during the calendar year preceding that in

which imports exceeded the level resulting from the application of the formula set

out in paragraph 2 and gave rise to the request for consultations, whichever is the

higher.

The annual level so fixed shall be revised upwards after consultations in accordance with the procedure referred to in Article 11, with a view to fulfilling the conditions set out in paragraph.2, should the trend of total imports into the Community of the product in question make this necessary.

The annual growth rate for the quantitative limits introduced under this article shall be determined in accordance with the provisions of Protocol B.

5. The provisions of this article shall not apply where the percentages specified in

paragraph 2 have been reached as a result of a fall in total imports into the

Community, and not as a result of an increase in exports of products originating in

Cambodia.

6. In the event of the provisions of paragraphs 2, 3 or 4 being applied, Cambodia

undertakes issue export licenses for products covered by contracts concluded

before the introduction of the quantitative limit, up to the volume of the quantitative

limit fixed.

8. Up to the date of communication of the statistics referred to in Article 9(6), the

provisions of paragraph 2 of this article shall apply on the basis of the annual

statistics previously communicated by the Community.

Article 5:

In view of ensuring the effective functioning of this Agreement, the Community and Cambodia agree to cooperate fully in order to prevent, to investigate and to take any necessary legal and/or administrative action against circumvention by transshipment, rerouting, false declaration concerning the country or place of origin, falsification of documents, false declaration concerning fibre content, quantities description or classification of merchandise and by whatever other means. Accordingly, Cambodia and the Community agree to establish, the necessary legal provisions and administrative procedures permitting effective action to be taken against such circumvention, which shall include the adoption of legally binding corrective measures against exporters and/or importers involved.
Should the Community believe on the basis of information available that the present Agreement is being circumvented, the Community will consult with Cambodia with a view to reaching a mutually satisfactory solution. These consultations will be held as early as possible and at the latest within 30 days from the date of request.
Pending the results of the consultations referred to in paragraph 2, Cambodia shall, as a Precautionary measure, if so requested by the Community, take all necessary measures to ensure that, where sufficient evidence of circumvention is provided, adjustments of quantitative limits established under Article 4 liable to be agreed following the consultations referred to in paragraph 2 may be carried out for the quota year in which the request to open consultations in accordance with paragraph 2 was made, or for the following year if the quota for the current year is exhausted.
Should the Parties be unable, in the course of the consultation referred to in paragraph 2 to reach a mutually satisfactory solution, the Community shall have the right:
(a) Where there is sufficient evidence that products originating in Cambodia have been imported in circumvention of the present Agreement, to set off the relevant quantities against the quantitative limits established under Article 4;
(b) Where sufficient evidence shows that false declaration concerning fibre content, quantities, description or classification of products originating in Cambodia has occurred, to refuse to import the products in question;
(c) Should it appear that the territory of Cambodia is involved in transshipment or rerouting of products not originating in Cambodia, to introduce quantitative limits against the same products originating in Cambodia if they are not already subject to quantitative limits, or to take any other appropriate measures.
The Parties agree to establish a system of administrative cooperation to prevent and to address effectively all problems arising from circumvention in accordance with the provisions of Protocol A of this Agreement.

Article 6:

Cambodia shall monitor its exports of products under restraint or surveillance into the Community. Should a sudden and prejudicial change in traditional trade flows arise, the Community will be entitled to request consultations in order to find a satisfactory solution to those problems. Such consultations must be held within fifteen working days of their being requested by the Community.

Cambodia shall endeavour to ensure that exports of textile products subject to quantitative limits into the Community are spaced out as evenly as possible over the year due account being taken in particular of seasonal factors.

Article 7:

In the event of denunciation of this Agreement as provided for in Article 14(3), the quantitative limits established pursuant to this Agreement shall be reduced on a pro rata temporis basis unless the Contracting Parties decide otherwise by common agreement.

Article 8:

The classification of the products covered by this Agreement is based on the tariff and statistical nomenclature of the Community (hereinafter called the "combined nomenclature", or in abbreviated form “CN”) and any amendments thereof.

Where any decision on classification results in a change of classification practice or a change of category of any product subject to this Agreement the affected products shall follow the trade regime applicable to the practice or category they fall into after such changes.

Any amendment to the combined nomenclature (CN) made in accordance with the procedures in force in the Community concerning categories of products covered by this Agreement or any decision relating to the classification of goods shall not have the effect of reducing quantitative limits introduced pursuant to this Agreement.

2. The origin of the products covered by this Agreement shall be determined in

accordance with the rules in force in the Community.

Any amendment to these rules of origin shall be communicated to Cambodia and shall not have the effect of reducing any quantitative limit established pursuant to this Agreement.

The procedures for control of the origin of the products referred to above are laid down in Protocol A.

Article 9:

Cambodia shall supply the Commission with precise statistical information on all export licences issued for categories of textile products subject to the quantitative limits established under this Agreement, or to a double checking system expressed in quantities and in terms of value and broken down by Member States of the Community.
The Community shall likewise transmit to Cambodian authorities precise statistical information on import authorizations issued by the Community authorities and import statistics for products covered by the system referred to in Article 4(2).
The information referred to above shall, for all categories of products, be forwarded before the end of the month following the month to which the statistics relate.
Upon request by the Community, Cambodia shall supply import statistics for all products covered by Annex I.
Should it be found on analysis of the information exchanged that there are significant discrepancies between the returns for exports and those for imports, consultations may be initiated in accordance with the procedure specified in Article 11 of this Agreement.
For the purpose of applying the provisions of Article 4, the Community undertakes to provide Cambodian authorities before 30 April of each year with the preceding year’s statistics on imports of all textile products covered by this Agreement, broken down by supplying country and Community Member State.

Article 10:

The Contracting Parties agree to examine the trend of trade in textile products and garments each year, in the framework of the consultations, provided for in Article 11 and on the basis of the statistics referred to in Article 9.

Article 11:

Save where it is otherwise provided for in this Agreement, the consultation procedures referred to in this Agreement shall be governed by the following provisions:

as far as possible consultations shall be held periodically. Specific additional consultations may also be held,
any request for consultations shall be notified in writing to the other Contracting Party,
where appropriate, the request for consultations shall be followed within a reasonable period and in any case not later than 15 days following the notification by a report setting out the circumstances which, in the opinion of the requesting Party, justify the submission of such a request,

2. This Agreement shall apply until 31 December 2002.

The operation of this Agreement shall be reviewed prior to the accession of Cambodia to the WTO to take account of the consequences thereof.

3. Either Contracting Party may at any time propose modifications to this Agreement

or denounce it, provided that at least six months' notice is given. In that event, the

Agreement shall come to an end on the expiry of the period of notice.

4. The Contracting Parties agree to enter into consultations not later than six months

before the expiration of the present agreement with a view to possibly concluding a

new Agreement.

5. The Annexes, Protocols, Agreed Minutes and letters exchanged or attached to

this Agreement, shall form an integral part thereof.

Article 15:

This Agreement shall be drawn up in two copies in the Danish, Dutch, English, Finnish, French, German, Greek, Italian, Portuguese, Spanish, Swedish and Khmer languages, each of these texts being equally authentic.

For the For the

European Community Kingdom of Cambodia

PROTOCOL A

TITLE I

CLASSIFICATION

Article 1:

the competent authorities of the Community undertake to inform Cambodia of any changes in the combined nomenclature (CN) before the date of their entry into force in the Community.
The competent authorities of the Community undertake to inform the competent authorities of Cambodia of any decisions relating to the classification of products subject to the present Agreement, within one month of their adoption at the latest. Such communication shall include:

(a) a description of the products concerned;

(b) the relevant category and the related CN codes;

(c) the reasons which have led to the decision.

3. Where a decision on classification results in a change of classification practice or

a change of category of any product subject to the Agreement, the competent

authorities of the Community shall provide 30 days’ notice, from the date of the

Community’s communication, before the decision is put into effect. Products

shipped before the date of entry into effect of the decision shall remain subject to

the earlier classification practice, provided that the goods in question are

presented for importation into the Community within 60 days of that date.

4. Where a Community decision on classification resulting in a change of

classification practice or a change of categorization of any product subject to the

Agreement affects a category subject to quantitative limits, the Contracting

Parties, agree to enter into consultation in accordance with the procedures

described in Article 11 of the Agreement with a view to honouring the obligation

under the second subparagraph of Article 8(l) of the Agreement.

5. In case of divergent opinions between Cambodia and the competent Community

authorities at the point of entry into the Community on the classification of

products covered by the present Agreement, classification shall provisionally be

based on indications provided by the Community, pending consultations in

accordance with Article 11 of the Agreement with a view to reaching agreement on

definitive classification of the product concerned.

TITLE II

ORIGIN

Article 2:

Products originating in Cambodia for export to the Community in accordance with the arrangements established by the Agreement shall be accompanied by a certificate of Cambodian origin conforming to the model annexed to this Protocol.
The certificate of origin shall be certified by Cambodian competent governmental authorities if the products in question can be considered products origination in that country within the meaning of the relevant rules in force in the Community.
However, the products in Groups III, IV and V may be imported into the Community in accordance with the arrangements established by the Agreement, on production of a declaration by the exporter on the invoice or, other commercial document stating that the products in question originate in Cambodia within the meaning of the relevant rules in force in the Community.
The certificate of origin referred to in paragraph I shall not be required for import of goods covered by a certificate of origin Form A completed in accordance with the relevant Community rules in order to qualify for generalized tariff preferences.

Article 3:

The certificate of origin shall be issued only on application having been made in writing by the exporter or, under the exporter’s responsibility, by his authorized representative. The competent Cambodian authorities shall ensure that the certificate of origin is properly completed and for this purpose they shall call for any necessary documentary evidence or carry out any check, which they consider appropriate.

Article 4:

Where different criteria for determining origin are laid down for products failing within the same category, the certificates or declarations of origin must contain a sufficiently detailed description of the goods, on the basis of which the certificate was issued or the declaration drawn up.

Article 5:

The discovery of slight discrepancies between the statements made in the certificate of origin and those made in the documents produced to the customs office for the purpose of carrying out the formalities for importing the products shall not ipso facto cast doubt upon the statements in the certificate.

TITLE III

DOUBLE-CHECKING SYSTEM

Section I - Exportation

Article 6:

The competent authorities of Cambodia shall issue an export license in respect of all consignments from Cambodia of textile products subject to any definitive or provisional quantitative limits established under Article 4 of the Agreement, up to the relevant quantitative limits as may be modified by Art. 3, 5 and 7 of the Agreement, as well as of all consignments of textile products subject to a double‑checking system without quantitative limits as provided for in Article 1, paragraphs 4 and 5 of the Agreement.

Article 7:

For products subject to quantitative limits under the Agreement the export license shall conform to the model I annexed to this Protocol and it shall be valid for exports throughout the customs territory to which the Treaty establishing the European Community applies.
Where quantitative limits have been introduced pursuant the Agreement, each export license must certify inter alia that the quantity of the product in question has been set off against the quantitative limit established for the category of the products concerned and shall only cover one of the categories of products subject to quantitative limits. It may be used for one or more consignments of the products in question.
For products subject to a double-checking system without quantitative limits the export license shall conform to the model 2 annexed to this Protocol. It shall only cover one category of products and may be used for one or more consignments of the products in question. It shall be valid for exports throughout the customs territory to which the Treaty establishing the European Community applies.

Article 8:

The Competent authorities of the Community must be informed immediately of the withdrawal or modification of any export license already issued.

Article 9:

Exports of textile products subject to quantitative limits pursuant the Agreement shall be set off against the quantitative limits established for the year in which the shipment of the goods has been effected even if the export license is issued after such shipment.
For the purpose of applying paragraph 1, shipment of the goods is considered to have taken place on the date of their loading onto the exporting aircraft, vehicle or vessel,

Article 10:

The presentation of an export license, in application of Article 12 hereafter, shall be effected not later than 31 March of the year following that in which the goods covered by the license have been shipped.

Section 11 - Importation

Article 11:

Importation into the Community of textile products subject to quantitative limits or to a double checking system pursuant to the Agreement shall be subject to the presentation of an import authorization.

Article 12:

The competent authorities of the Community shall issue the import authorization referred to in Article 11 above, within five working days of the presentation by the importer of the original of the corresponding export license.
The import authorizations concerning products subject to quantitative limits under the Agreement shall be valid for six months from the date of their issue for imports throughout the customs territory to which the Treaty establishing the European Community is applied.
The import authorizations for products subject to a double-checking system without quantitative limits shall be valid for six months from the date of their issue for imports throughout the customs territory to which the Treaty establishing the European Community is applicable.
The competent authorities of the Community shall cancel the import authorization already issued whenever the corresponding export license has been withdrawn.

However, if the competent authorities of the Community are notified of the withdrawal or the cancellation of the export license only after the importation of the products into the Community, the relevant quantities shall be set off against the quantitative limits established for the category and the quota year concerned.

Article 13:

If the competent authorities of the Community find that the total quantities covered by export licenses issued by the competent authorities of Cambodia for a particular category in any year exceed the quantitative limit established in accordance with Articles 4 of the Agreement for that category, as may be modified by Articles 3, 5 or 7 of the Agreement, the said authorities may suspend the further issue of import authorizations. In this event, the competent authorities of the Community shall immediately inform the authorities of Cambodia and the special consultation procedure set out in Article 11 of the Agreement shall be initiated forthwith.
Exports of products of Cambodian origin subject to quantitative limits or double checking system and not covered by Cambodian export licenses issued in accordance with the provisions of this Protocol may be refused an import authorization by the competent Community authorities.

However, without prejudice to Article 5 of the Agreement if the import of such products is allowed into the Community by the competent authorities of the Community, the quantities involved shall not be set off against the appropriate quantitative limits established pursuant to the Agreement, without the express agreement of the competent authorities of Cambodia.

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