Treaty Establishing the European Community

as Amended by Subsequent Treaties

ROME, 25 March 1957

CONTENTS

Part Three. Community Policies

TITLE I. FREE MOVEMENT OF GOODS

CHAPTER 1. THE CUSTOMS UNION

Section 1. Elimination of Customs Duties Between Member States

Section 2. Setting up of the Common Customs Tariff

CHAPTER 2. ELIMINATION OE QUANTITATIVE RESTRICTIONS BETWEEN MEMBER STATES

Part Three. Community Policies

TITLE I. FREE MOVEMENT OF GOODS

Article 9.

1. The Community shall be based upon a customs union which shall cover all trade in goods and which shall involve the prohibition between Member States of customs duties on imports and exports and of all charges having equivalent effect, and the adoption of a common customs tariff in their relations with third countries.
2. The provisions of Chapter 1, Section 1, and of Chapter 2 of this Title shall apply to products originating in Member States and to products coming from third countries which are in free circulation in Member States.

Article 10.

1. Products coming from a third country shall be considered to be in free circulation in a Member State if the import formalities have been complied with and any customs duties or charges having equivalent effect which are payable have been levied in that Member State, and if they have not benefited from a total or partial drawback of such duties or charges.
2. The Commission shall, before the end of the first year after the entry into force of this Treaty, determine the methods of administrative co-operation to be adopted for the purpose of applying Art. 9(2), taking into account the need to reduce as much as possible formalities imposed on trade.

   Before the end of the first year after the entry into force of this Treaty, the Commission shall lay down the provisions applicable, as regards trade between Member States, to goods originating in another Member State in whose manufacture products have been used on which the exporting Member State has not levied the appropriate customs duties or charges having equivalent effect, or which have benefited from a total or partial drawback of such duties or charges.

   In adopting these provisions, the Commission shall take into account the rules for the elimination of customs duties within the Community and for the progressive application of the common customs tariff.

Article 11. Member States shall take all appropriate measures to enable Governments to carry out, within the periods of time laid down, the obligations with regard to customs duties which devolve upon them pursuant to this Treaty.

CHAPTER 1. THE CUSTOMS UNION

Section 1. Elimination of Customs Duties Between Member States

Article 12. Member States shall refrain from introducing between themselves any new customs duties on imports or exports or any charges having equivalent effect, and from increasing those which they already apply in their trade with each other.

Article 13.

1. Customs duties on imports in force between Member States shall be progressively abolished by them during the transitional period in accordance with Arts. 14 and 15.
2. Charges having an effect equivalent to customs duties on imports, in force between Member States, shall be progressively abolished by them during the transitional period. The Commission shall determine by means of directives the timetable for such abolition. It shall be guided by the rules contained in Art. 14(2) and (3) and by the directives issued by the Council pursuant to Art. 14(2).

Article 14.

1. For each product, the basic duty to which the successive reductions shall be applied shall be the duty applied on I January 1957.
2. The timetable for the reductions shall be determined as follows:
   • (a) during the first stage, the first reduction shall be made one year after the date when this Treaty enters into force; the second reduction, eighteen months later; the third reduction, at the end of the fourth year after the date when this Treaty enters into force;
   • (b) during the second stage, a reduction shall be made eighteen months after that stage begins; a second reduction, eighteen months after the preceding one; a third reduction, one year later;
   • (c) any remaining reductions shall be made during the third stage; the Council shall, acting by a qualified majority on a proposal from the Commission, determine the timetable therefore by means of directives.
3. At the time of the first reduction, Member States shall introduce between themselves a duty on each product equal to the basic duty minus 10 per cent.

   At the time of each subsequent reduction, each Member State shall reduce its customs duties as a whole in such manner as to lower by lo per cent its total customs receipts as defined in paragraph 43 and to reduce the duty on each product by at least 5 per cent of the basic duty.

   In the case, however, of products on which the duty is still in excess of 30 per cent, each reduction must be at least lo per cent of the basic duty.

4. The total customs receipts of each Member State, as referred to in paragraph 3, shall be calculated by multiplying the value of imports from other Member States during 1956 by the basic duties.
5. Any special problems raised in applying paragraphs 1 to 4 shall be settled by directives issued by the Council acting by a qualified majority on a proposal from the Commission.
6. Member States shall report to the Commission on the manner in which effect has been given to the preceding rules for the reduction of duties. They shall endeavour to ensure that the reduction made in the duties of each product shall amount:
   • at the end of the first stage, to at least 25 per cent of the basic duty;
   • at the end of the second stage, to at least 50 per cent of the basic duty.

   If the Commission finds that there is a risk that the objectives laid down in Art. 13, and the percentages laid down in this paragraph, cannot be attained, it shall make all appropriate recommendations to Member States.

7. The provisions of this Article may be amended by the Council, acting unanimously on a proposal from the Commission and after consulting the European Parliament.

Article 15.

1. Irrespective of the provisions of Art. 14, any Member State may, in the course of the transitional period, suspend in whole or in part the collection of duties applied by it to products imported from other Member States. It shall inform the other Member States and the Commission thereof.
2. The Member States declare their readiness to reduce customs duties against the other Member States more rapidly than is provided for in Art. 14 if their general economic situation and the situation of the economic sector concerned so permit.

   To this end, the Commission shall make recommendations to the Member States concerned.

Article 16. Member States shall abolish between themselves customs duties on exports and charges having equivalent effect by the end of the first stage at the latest.

Article 17.

1. The provisions of Arts. 9 to 15 (1) shall also apply to customs duties of a fiscal nature. Such duties shall not, however, be taken into consideration for the purpose of calculating either total customs receipts or the reduction of customs duties as a whole as referred to in Art. 14 (3) and (4).

   Such duties shall, at each reduction, be lowered by not less than lo per cent of the basic duty. Member States may reduce such duties more rapidly than is provided for in Art. 14.

2. Member States shall, before the end of the first year after the entry into force of this Treaty, inform the Commission of their customs duties of a fiscal nature.
3. Member States shall retain the right to substitute for these duties an internal tax which complies with the provisions of Art. 95.

4. If the Commission finds that substitution for any customs duty of a fiscal nature meets with serious difficulties in a Member State, it shall authorise that State to retain the duty on condition that it shall abolish it not later than six years after the entry into force of this Treaty. Such authorisation must be applied for before the end of the first year after the entry into force of this Treaty.

Section 2. Setting up of the Common Customs Tariff

Article 18. The Member States declare their readiness to contribute to the development of international trade and the lowering of barriers to trade by entering into agreements designed, on a basis of reciprocity and mutual advantage, to reduce customs duties below the general level of which they could avail themselves as a result of the establishment of a customs union between them.

Article 19.

1. Subject to the conditions and within the limits provided for hereinafter, duties in the common customs tariff shall be at the level of the arithmetical average of the duties applied in the four customs territories comprised in the Community.
2. The duties taken as the basis for calculating this average shall be those applied by Member States on I January 1957.

   In the case of the Italian tariff, however, the duty applied shall be that without the temporary lo per cent reduction. Furthermore, with respect to items on which the Italian tariff contains a conventional duty, this duty shall be substituted for the duty applied as defined above, provided that it does not exceed the latter by more than lo per cent. Where the conventional duty exceeds the duty applied as defined above by more than lo per cent, the latter duty plus lo per cent shall be taken as the basis for calculating the arithmetical average.

   With regard to the tariff headings in List A, the duties shown in that List shall, for the purpose of calculating the arithmetical average, be substituted for the duties applied.

3. The duties in the common customs tariff shall not exceed:
   • (a) 3 per cent for products within the tariff headings in List B
   • (b) 10 per cent for products within the tariff headings in List C;
   • (c) 15 per cent for products within the tariff headings in List D;
   • (d) 25 per cent for products within the tariff headings in List E; where, in respect of such products, the tariff of the Benelux countries contains a duty not exceeding 3 per cent, such duty shall, for the purpose of calculating the arithmetical average, be raised to 12 per cent.
4. List F prescribes the duties applicable to the products listed therein.
5. The Lists of tariff headings referred to in this Article and in Art. 20 are set out in Annex I to this Treaty.

Article 20. The duties applicable to the products in List G shall be determined by negotiation between the Member States. Each Member State may add further products to this List to a value not exceeding 2 per cent of the total value of its imports from third countries in the course of the year 1956.

The Commission shall take all appropriate steps to ensure that such negotiations shall be undertaken before the end of the second year after the entry into force of this Treaty and be concluded before the end of the first stage.

If, for certain products, no agreement can be reached within these periods, the Council shall, on a proposal from the Commission, acting unanimously until the end of the second stage and by a qualified majority thereafter, determine the duties in the common customs tariff.

Article 21.

1. Technical difficulties which may arise in applying Arts. 19 and 20 shall be resolved, within two years of the entry into force of this Treaty, by directives issued by the Council acting by a qualified majority on a proposal from the Commission.
2. Before the end of the first stage, or at latest when the duties are determined, the Council shall, acting by a qualified majority on a proposal from the Commission, decide on any adjustments required in the interests of the internal consistency of the common customs tariff as a result of applying the rules set out in Arts. 19 and 20, taking into account in particular of the degree of processing undergone by various goods to which the common tariff applies.

Article 22. The Commission shall, within two years of the entry into force of this Treaty, determine the extent to which the customs duties of a fiscal nature referred to in Art. 17 (2) shall be taken into account in calculating the arithmetical average provided for in Art. 19 (1). The Commission shall take account of any protective character which such duties may have.

Within six months of such determination, any Member State may request that the procedure provided for in Art. 20 should be applied to the product in question, but in this event the percentage limit provided in that Article shall not be applicable to that State.

Article 23.

1. For the purpose of the progressive introduction of the common customs tariff, Member States shall amend their tariffs applicable to third countries as follows:
   • (a) in the case of tariff headings on which the duties applied in practice on 1 January 1957 do not differ by more than 15 per cent in either direction from the duties in the common customs tariff, the latter duties shall be applied at the end of the fourth year after the entry into force of this Treaty;
   • (b) in any other case, each Member State shall, as from the same date, apply a duty reducing by 30 per cent the difference between the duty applied in practice on 1 January 1957 and the duty in the common customs tariff;
   • (c) at the end of the second stage this difference shall again be reduced by 30 per cent;
   • (d) in the case of tariff headings for which the duties in the common customs tariff are not yet available at the end of the first stage, each Member State shall, within six months of the Council's action in accordance with Art. 20, apply such duties as would result from application of the rules contained in this paragraph.
2. Where a Member State has been granted an authorisation under Art. 17 (4), it need not, for as long as that authorisation remains valid, apply the preceding provisions to the tariff headings to which the authorisation applies. When such authorisation expires, the Member State concerned shall apply such duty as would have resulted from application of the rules contained in paragraph 1.
3. The common customs tariff shall be applied in its entirety by the end of the transitional period at the latest.

Article 24. Member States shall remain free to change their duties more rapidly than is provided for in Art. 23 in order to bring them into line with the common customs tariff.

Article 25.

1. If the Commission finds that the production in Member States of particular products contained in Lists B, C and D is insufficient to supply the demands of one of the Member States, and that such supply traditionally depends to a considerable extent on imports from third countries, the Council shall, acting by a qualified majority on a proposal from the Commission, grant the Member State concerned tariff quotas at a reduced rate of duty or duty free.

   Such quotas may not exceed the limits beyond which the risk might arise of activities being transferred to the detriment of other Member States.

2. In the case of the products in List E, and of those in List G for which the rates of duty have been determined in accordance with the procedure provided for in the third paragraph of Art. 20, the Commission shall, where a change in sources of supply or a shortage of supplies within the Community is such as to entail harmful consequences for the processing industries of a Member State, at the request of that Member State, grant it tariff quotas at a reduced rate of duty or duty free.

   Such quotas may not exceed the limits beyond which the risk might arise of activities being transferred to the detriment of other Member States.

3. In the case of the products listed in Annex II to this Treaty, the Commission may authorise any Member State to suspend, in whole or in part, collection of the duties applicable or may grant such Member State tariff quotas at a reduced rate of duty or duty free, provided that no serious disturbance of the market or the products concerned results therefrom.
4. The Commission shall periodically examine tariff quotas granted pursuant to this Article.

Article 26. The Commission may authorise any Member State encountering special difficulties to postpone the lowering or raising of duties provided for in Art. 23 in respect of particular headings in its tariff.

Such authorisation may only be granted for a limited period and in respect of tariff headings which, taken together, represent for such State not more than 5 per cent of the value of its imports from third countries in the course of the latest year for which statistical data are available.

Article 27. Before the end of the first stage, Member States shall, in so far as may be necessary, take steps to approximate their provisions laid down by law, regulation or administrative action in respect of customs matters. To this end, the Commission shall make all appropriate recommendations to Member States.

Article 28. Any autonomous alteration or suspension of duties in the common customs tariff shall be decided by the Council, acting by a qualified majority on a proposal from the Commission.

Article 29. In carrying out the tasks entrusted to it under this Section the Commission shall be guided by:

• (a) the need to promote trade between Member States and third countries;
• (b) developments in conditions of competition within the Community in so far as they lead to an improvement in the competitive capacity of undertakings;
• (c) the requirements of the Community as regards the supply of raw materials and semi-finished goods; in this connection the Commission shall take care to avoid distorting conditions of competition between Member States in respect of finished goods;
• (d) the need to avoid serious disturbances in the economies of Member States and to ensure rational development of production and an expansion of consumption within the Community.

CHAPTER 2. ELIMINATION OE QUANTITATIVE RESTRICTIONS BETWEEN MEMBER STATES

Article 30. Quantitative restrictions on imports and all measures having equivalent effect shall, without prejudice to the following provisions, be prohibited between Member States.

Article 31. Member States shall refrain from introducing between themselves any new quantitative restrictions or measures having equivalent effect.

This obligation shall, however, relate only to the degree of liberalisation attained in pursuance of the decisions of the Council of the Organisation for European Economic Co-operation of 14 January 1955. Member States shall supply the Commission, not later than six months after the entry into force of this Treaty, with lists of the products liberalised by them in pursuance of these decisions. These lists shall be consolidated between Member States.

Article 32. In their trade with one another Member States shall refrain from making more restrictive the quotas and measures having equivalent effect existing at the date of the entry into force of this Treaty.

These quotas shall be abolished by the end of the transitional period at the latest. During that period, they shall be progressively abolished in accordance with the following provisions.

Article 33.

1. One year after the entry into force of this Treaty, each Member State shall convert any bilateral quotas open to any other Member States into global quotas open without discrimination to all other Member States.

   On the same date, Member States shall increase the aggregate of the global quotas so established in such a manner as to bring about an increase of not less than 20 per cent in their total value as compared with the preceding year. The global quota for each product, however, shall be increased by not less than 10 per cent.

   The quotas shall be increased annually in accordance with the same rules and in the same proportions in relation to the preceding year.

   The fourth increase shall take place at the end of the fourth year after the entry into force of this Treaty; the fifth, one year after the beginning of the second stage.

2. Where, in the case of a product which has not been liberalised, the global quota does not amount to 3 per cent of the national production of the State concerned, a quota equal to not less than 3 per cent of such national production shall be introduced not later than one year after the entry into force of this Treaty. This quota shall be raised to 4 per cent at the end of the second year, and to 5 per cent at the end of the third. Thereafter, the Member State concerned shall increase the quota by not less than 15 per cent annually.

   Where there is no such national production, the Commission shall take a decision establishing an appropriate quota.

3. At the end of the tenth year, each quota shall be equal to not less than 20 per cent of the national production.
4. If the Commission finds by means of a decision that during two successive years the imports of any product have been below the level of the quota opened, this global quota shall not be taken into account in calculating the total value of the global quotas. In such case, the Member State shall abolish quota restrictions on the product concerned.
5. In the case of quotas representing more than 20 per cent of the national production of the product concerned, the Council may, acting by a qualified majority on a proposal from the Commission, reduce the minimum percentage of 10 per cent laid down in paragraph 1. This alteration shall not however, affect the obligation to increase the total value of global quotas by 20 per cent annually.
6. Member States which have exceeded their obligations as regards the degree of liberalisation attained in pursuanCe of the decisions of the Council of the Organisation for European Economic Co-operation of 14 January 1955 shall be entitled, when calculating the annual total increase of 20 per cent provided for in paragraph 1, to take into account the amount of imports liberalised by autonomous action. Such calculation shall be submitted to the Commission for its prior approval.
7. The Commission shall issue directives establishing the procedure and timetable in accordance with which Member States shall abolish, as between themselves, any measures in existence when this Treaty enters into force which have an effect equivalent to quotas.
8. If the Commission finds that the application of the provisions of this Article, and in particular of the provisions concerning percentages, makes it impossible to ensure that the abolition of quotas provided for in the second paragraph of Art. 32 is carried out progressively, the Council may, on a proposal from the Commission, acting unanimously during the first stage and by a qualified majority thereafter, amend the procedure laid down in this Article and may, in particular, increase the percentages fixed.

Article 34.

1. Quantitative restrictions on exports, and all measures having equivalent effect, shall be prohibited between Member States.
2. Member States shall, by the end of the first stage at the latest, abolish all quantitative restrictions on exports and any measures having equivalent effect which are in existence when this Treaty enters into force.

Article 35. The Member States declare their readiness to abolish quantitative restrictions on imports from and exports to other Member States more rapidly than is provided for in the preceding Articles, if their general economic situation of the economic sector concerned so permit.

To this end, the Commission shall make recommendations to the States concerned.

Article 36. The provisions of Arts. 30 to 34 shall not preclude prohibitions or restrictions on imports, exports or goods in transit justified on grounds of public morality, public policy or public security; the protection of health and life of humans, animals or plants; the protection of national treasures possessing artistic, historic or archaeological value; or the protection of industrial and commercial property. Such prohibitions or restrictions shall not, however, constitute a means of arbitrary discrimination or a disguised restriction on trade between Member States.

Article 37.

1. Member States shall progressively adjust any State monopolies of a commercial character so as to ensure that when the transitional period has ended no discrimination regarding the conditions under which goods are procured and marketed exists between nationals of Member States.

   The provisions of this Article shall apply to any body through which a Member State, in law or in fact, either directly or indirectly supervises, determines or appreciably influences imports or exports between Member States. These provisions shall likewise apply to monopolies delegated by the State to others.

2. Member States shall refrain from introducing any new measure which is contrary to the principles laid down in paragraph I or which restricts the scope of the Articles dealing with the abolition of customs duties and quantitative restrictions between Member States.
3. The timetable for the measures referred to in paragraph I shall be harmonised with the abolition of quantitative restrictions on the same products provided for in Arts. 30 to 34.

   If a product is subject to a State monopoly of a commercial character in only one or some Member States, the Commission may authorise the other Member States to apply protective measures until the adjustment provided for in paragraph 1 has been effected; the Commission shall determine the conditions and details of such measures.

4. If a State monopoly of a commercial character has rules which are designed to make it easier to dispose of agricultural products or obtain for them the best return, steps should be taken in applying the rules contained in this Article to ensure equivalent safeguards for the employment and standard of living of the producers concerned, account being taken of the adjustments that will be possible and the specialisation that will be needed with the passage of time.
5. The obligations on Member States shall be binding only in so far as they are compatible with existing international agreements.
6. With effect from the first stage the Commission shall make recommendations as to the manner in which and the timetable according to which the adjustment provided for in this Article shall be carried out.