AGREEMENT IN THE FORM OF AN EXCHANGE OF LETTERS between the Community and the Palestinian Authority relating to Article 1 of Protocol 1 and concerning imports into the Community of fresh cut flowers and flower buds falling within subheading 0603 10 of the Common Customs Tariff

A. Letter from the Community

Sir . . .,

The following was agreed between the Community and the Palestinian Authority:

Article 1 of Protocol 1 provides for the elimination of customs duties on imports into the Community of cut flowers and flower buds, fresh, falling within subheading 0603 10 of the Common Customs Tariff and originating in the West Bank and the Gaza Strip, subject to a limit of 1 500 tonnes.

The Palestinian Authority undertakes to abide by the conditions laid down below for imports into the Community of roses and carnations which qualify for the elimination of this tariff:

- the price level of imports into the Community must be at least equal to 85 % of the Community price level for the same products over the same periods,

- the Palestinian price level shall be determined by recording the prices of the imported products, on representative Community import markets,

- the Community price level shall be based on the producer prices recorded on representative markets of the main producer Member States,

- price levels will be recorded on a fortnightly basis and weighted by the respective quantities. This provision is valid for Community prices and for Palestinian prices,

- for both Community producer prices and the import prices of Palestinian products, a distinction shall be made between large-flowered and small-flowered roses and between unifloral and multifloral carnations,

- if the Palestinian price level for any one type of product is below 85 % of the Community price level, the tariff preference shall be suspended. The Community shall reinstate the tariff preference when a Palestinian price level equal to 85 % or more of the Community price level is recorded.

I should be obliged if you would confirm that the Palestinian Authority is in agreement with the contents of this letter.

Please accept, Sir, the assurance of my highest consideration.

On behalf of the Council of the European Union

B. Letter from the Palestinian Authority

Sir . . .,

I have the honour to acknowledge receipt of your letter of today's date which reads as follows:

'The following was agreed between the Community and the Palestinian Authority:

Article 1 of Protocol 1 provides for the elimination of customs duties on imports into the Community of cut flowers and flower buds, fresh, falling within subheading 0603 10 of the Common Customs Tariff and originating in the West Bank and the Gaza Strip, subject to a limit of 1 500 tonnes.

The Palestinian Authority undertakes to abide by the conditions laid down below for imports into the Community of roses and carnations which qualify for the elimination of this tariff:

- the price level of imports into the Community must be at least equal to 85 % of the Community price level for the same products over the same periods,

- the Palestinian price level shall be determined by recording the prices of the imported products, on representative Community import markets,

- the Community price level shall be based on the producer prices recorded on representative markets of the main producer Member States,

- price levels will be recorded on a fortnightly basis and weighted by the respective quantities. This provision is valid for Community prices and for Palestinian prices,

- for both Community producer prices and the import prices of Palestinian products, a distinction shall be made between large-flowered and small-flowered roses and between unifloral and multifloral carnations,

- if the Palestinian price level for any one type of product is below 85 % of the Community price level, the tariff preference shall be suspended. The Community shall reinstate the tariff preference when a Palestinian price level equal to 85 % or more of the Community price level is recorded.

I should be obliged if you would confirm that the Palestinian Authority is in agreement with the contents of this letter.`

I have the honour to confirm that the Palestinian Authority is in agreement with the contents of your letter.

Please accept, Sir, the assurance of my highest consideration.

For the Palestinian Authority

DECLARATION BY THE EUROPEAN COMMUNITY

Declaration on cumulation of origin

In line with political developments, if and when the Palestinian Authority and one or more Mediterranean countries conclude Agreements to establish free trade among themselves, the European Community is prepared to implement cumulation of origin in its trade arrangements with those countries.