The final phase of the relations between the EC and Turkey under the Ankara Association Agreement 1963 was to achieve the EC-Turkey Customs Union. This final phase entered into force on 1 July 1996.
The scope of this customs union, based on the status of goods in free circulation, is however limited to products other than agricultural products, as defined in Annex I of the Amsterdam Treaty, and coal and steel products, which are subject only to preferential agreements based on their originating status.
Moreover, industrial products originating in Turkey, including processed agricultural products and coal and steel products, benefit from the pan-European system of cumulation of origin. That is not the case for agricultural products.
The Ankara Agreement of 12.09.1963 (OJ L 217, 29.12.1964) and its Additional Protocol of 23.11.1970 (OJ L 293, 29.12.1972) define the scope and content of the association relationship, while the final phase of the customs union is defined in Decision 1/95 of the Association Council of 22.12.1995 (OJ L 35, 13.02.1996).
Decision No 1/2001 of the EC-Turkey Customs Co-operation Committee of 28.03.2001 (OJ L 98, 7.04.2001) (so-called 'bridging-legislation') sets out implementing customs provisions of Decision No 1/95, applicable to trade in goods between the two parts of the customs union and with third countries (amended by Decision No 1/ 2003 of 30.01.2003, OJ L 28, 4.02.2003 - corrigendum OJ L 74, 20.03.2003).
The EC-Turkey trade agreement for agricultural products (Annex I Amsterdam Treaty: see list of products concerned) results from Decision No 1/98 of the Association Council of 25.02.1998 (OJ L 86 of 20.03.1998) as last amended by Decision No 3/2006 of the EC-Turkey Association Council of 19 December 2006, amending Protocol 3 on rules of origin
The trade arrangement for coal and steel products results from an Agreement of 25.07.1996 between Turkey and the then still existing ECSC (OJ L 227, 7.09.1996). Those products are now covered by the EC Treaty but remain outside of the scope of the customs union. Rules of origin are laid down in its Protocol No 1, as amended by Decision No 2/99 of the ECSC-Turkey Joint Committee (OJ L 212, 12.08.1999).
NOTICE: Where reference is made to general concepts such as "minimal operations", "drawback", "bilateral cumulation", "territoriality" and "accounting segregation", the reader should see the explanations given in Preferential origin, General aspects of Preferential origin, under Provisions common to most preferential arrangements.
Decision No 1/95 implies:
Protocol No 3 of Decision No 1/98 is in line with the pan-European Protocol, subject to the following exceptions.
Its Annex II with the 'list rules' is limited to agricultural products. It only allows bilateral cumulation between the EC and Turkey . The list of 'minimal' operations has not still been brought into line with the list used in the pan-European system of cumulation. There is no derogation to the principle of territoriality and no accounting segregation.
There is a prohibition of drawback but a special provision allows Turkey to apply, to this end, the Community rate of duty applicable to the non originating materials used, when this rate is lower than the Turkish one.
Protocol No 1 of the 1996 Agreement is in line with the pan-European Protocol, including pan-European cumulation, subject to the following exceptions.
Its Annex II with the 'list rules' is limited to coal and steel products. The list of 'minimal' operations has not still been brought into line with the list used in the pan-European system of cumulation and there is no accounting segregation.
In the context of pan-European cumulation, it may be necessary to determine the originating status of goods, which are in free circulation in the Customs Union but will be exported or used in the production of products to be exported to other countries belonging to the pan-European system of cumulation. For that purpose, Decision No 1/1999 of the EC-Turkey Customs Co-operation Committee of 28.05.1999 (OJ L 204, 04.08.1999, p.43) provides for a 'supplier's declaration' to be furnished to the exporter and used by him as supporting evidence to establish the proof of origin in the context of the preferential agreements with other countries in the pan-European system of cumulation.
On the other way round, thanks to Decision No 1/2000 of the EC-Turkey Customs Co-operation Committee of 25.07.2000 (OJ L 211, 22.08.2000), goods fulfilling the condition for free movement within the customs union but traded between the EC and Turkey through other countries belonging to the pan-European system of cumulation can benefit from the customs union insofar as proofs of Community or Turkish origin are established in one of the countries concerned.
Of course, those provisions do not apply to agricultural products, which are excluded from pan-European cumulation (through a footnote referring to an Annex, included in each origin protocol of the agreements between the EC and the other partners in the pan-European system of cumulation).