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I
(Acts whose publication is obligatory)
COUNCIL REGULATION (EC)No 1177/2002 of 27 June 2002 concerning a temporary defensive mechanism to shipbuilding
THE COUNCIL OF THE EUROPEAN UNION,
Having regard to the Treaty establishing the European Community, and in particular Articles 87(3)(e),89 and 133 thereof,
Having regard to the proposal from the Commission (1),
Having regard to the Opinion of the European Parliament (2),
Whereas:
| 1. |
The European Commission and the Government of the Republic of Korea, hereinafter
'Korea', signed the Agreed Minutes relating to world shipbuilding on 22 June 2000,
hereinafter 'the Agreed Minutes', with the aim of restoring fair and transparent
competitive conditions. However, the commitments under the Agreed Minutes, notably
the commitment of ensuring an effective price surveillance mechanism, have not
been effectively implemented by the Korean side and therefore a satisfactory result
has not been obtained. |
| 2. |
Operating aid has not been effective in ensuring that the European shipbuilding
industry is not injured by competition not respecting normal competitive conditions
in the shipbuilding market. Accordingly, as follows from Article 3 of Council
Regulation (EC)No 1540/98 of 29 June 1998 establishing new rules on aid to shipbuilding
(3), contract-related operating aid to shipbuilding
may not be granted in respect of contracts agreed as from 1 January 2001. |
| 3. |
However, as an exceptional and temporary measure, and in order to assist Community
shipyards in those segments that have suffered adverse effects in the form of
material injury and serious prejudice caused by unfair Korean competition, a temporary
defensive mechanism should be authorised for limited market segments and for a
short and limited period only. Regulation (EC)No 1540/98 should apply mutatis
mutandis. |
| 4. |
The situation in the Community shipbuilding industry is heterogeneous. According
to the Commission's Fourth and Fifth Reports on the Situation in World Shipbuilding,
approximately half of compensated gross tonnage produced in Community shipyards
concerns the market segments in which Community shipyards are in a strong position
on the international market. However, in other segments, there is evidence that
Community shipyards have suffered adverse effects in the form of material injury
and serious prejudice caused by unfair Korean competition. Therefore, contract-related
temporary support may be authorised in certain circumstances in those segments,
namely container ships and product and chemical tankers. |
| 5. |
Considering the exceptional development in the sector of LNG carriers, the
Commission will continue to monitor this market. Contract-related temporary support
may be authorised in this sector if the Commission confirms, on the basis of investigations
covering the period of 2002, that the Community industiy has suffered material
injury and serious prejudice in this sector caused by unfair Korean practices
to the same extent as has been found for container ships and product and chemical
tankers. |
| 6. |
Support of 6 per cent of contract value before aid may be authorised in order
to effectively enable Community shipyards to overcome unfair Korean competition. |
| 7. |
The temporary defensive mechanism should only be authonsed after the Community
initiates dispute settlement proceedings against Korea, by requesting consultations
with Korea, in accordance with the World Trade Organisation's Understanding on
the Rules and Procedures for the Settlement of Disputes and may no longer be authorised
if these dispute settlement proceedings are resolved, or suspended on the grounds
that the Community considers that the Agreed Minutes have been effectively implemented. |
HAS ADOPTED THIS REGULATION:
Article 1
For the purposes of this Regulation, the relevant definitions listed in Article 1 of Regulation (EC)No 1540/98 shall apply. In addition, the following definitions shall apply:
| (a) |
'container ships' shall mean ships designed with a single deck hull with an
arrangement of holds to carry containers (standard or non-standard; refrigerated
or non-refrigerated), whose holds are fitted with cell guides to facilitate the
positioning of the containers, as may be some of the deck storage space. Other
ships combining cargo carrying capacity for containers and other cargo are considered
as container ships if the larger part of the cargo carrying capacity is dedicated
to containers; |
| (b) |
'chemical tankers' shall mean ships designed with a single deck hull with
an arrangement of integral and/or independent tanks suited to carry chemical products
in liquid form. Chemical tankers are characterised by the ability to carry and
handle several substances at the same time and the particular equipment of the
tanks with coatings, reflecting the nature and hazard of the cargo carried; |
| (c) |
'product tankers' shall mean ships designed with a single deck hull with an
arrangement of integral and/or independent tanks suited to carry refined petroleum
products in liquid form; |
| (d) |
'LNG carriers' (Liquefied Natural Gas carriers) shall mean ships designed
with a single deck hull with fixed integral and/or independent tanks suited to
carry natural gas in liquid form. |
Article 2
| 1. |
Subject to paragraphs 2 to 6, direct aid in support of contracts for the building
of container ships, product and chemical tankers as well as LNG carriers shall
be considered compatible with the common market when there has been competition
for the contract from a Korean shipyard offering a lower price. |
| 2. |
Direct aid in support of contracts for the building of LNG carriers may only
be authorised under this Article for final contracts signed after the Commission
gives notice in the Official Journal of the European Communities that it confirms,
on the basis of investigations covering the period of 2002, that Community industry
has suffered material injury and serious prejudice in this market segment caused
by unfair Korean practices. |
| 3. |
Aid under this Article may be authorised for shipbuilding contracts up to
a maximum intensity of 6 per cent of contract value before aid. |
| 4. |
This Regulation shall not apply in respect of any ship delivered more than
three years from the date of signing of the final contract. The Commission may,
however, grant an extension of the three-year delivery limit when this is found
justified by the technical complexity of the individual shipbuilding project concerned
or by delays resulting from unexpected disruptions of a substantial and defensible
nature in the working programme of a yard due to exceptional circumstances, unforeseeable
and external to the company. |
| 5. |
The Commission will keep under review the market segments eligible for aid
under paragraph 1, with regard to evidence clearly proving that a specific market
segment within the Community has been directly injured by unfair and non-transparent
competitive conditions. |
| 6. |
Regulation (EC)No 1540/98 shall apply mutatis mutandis. |
Article 3
Aid covered by Article 2 shall be subject to the provisions of Article 88 of the Treaty. The Commission shall adopt a decision in accordance with Regulation (EC)No 659/1999 of 22 March 1999 laying down detailed rules for the application of Article 88 (4) of the EC Treaty (5)
Article 4
The Regulation shall be applied to final contracts signed from the entry into force of this Regulation until its expiry, with the exception of final contracts signed before the Community gives notice in the Official Journal of the European Communities that it has initiated dispute settlement proceedings against Korea by requesting consultations in accordance with the World Trade Organisation's Understanding on the Rules and Procedures for the Settlement of Disputes and final contracts signed one month or more after the Commission gives notice in the Official Journal of the European Communities that these dispute settlement proceedings are resolved, or suspended on the grounds that the Community considers that the Agreed Minutes have been effectively implemented.
Article 5
This Regulation shall enter into force on the day following that of its publication in the Official Journal of the European Communities and shall expire on 31 March 2004.
This Regulation shall be binding in its entirety and directly applicable in all Member States.
Done at Luxembourg, 27 June 2002.
For the Council
The President
M. ARIAS CAÑETE
1 OJC 304 E, 30.10.2001, p.208.
2 OJC 140 E, 13.6.2002, p.380.
3 OJL 202, 18.7.1998, p.1.
4 The numbering of Articles in the Treaty establishing the European Community has been changed in the Treaty of Amsterdam.
5 OJL 83, 27.3.1999, p.1
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