The Agreement establishing an Association between the European Union and its Member States, on the one hand, and Central America on the other (‘the Agreement’) was signed by the Union in accordance with Council Decision 2012/734/EU1. Pursuant to Article 353(4) of the Agreement, Part IV thereof has been applied provisionally since 1 August 2013 between the Union and Nicaragua, Honduras and Panama, since 1 October 2013 between the Union and El Salvador and Costa Rica, and since 1 December 2013 between the Union and Guatemala.

Pursuant to Article 36 of Annex II to the Agreement, which concerns the definition of the concept of ‘originating products’ and methods of administrative cooperation, the Association Council established by Article 4 of the Agreement is able to decide to modify the provisions of the Appendices to Annex II. Pursuant to Article 37 of Annex II to the Agreement, the Association Council is able to approve Explanatory Notes regarding the interpretation, application and administration of Annex II.

The Association Council is to adopt a Decision modifying Appendix 2 (List of working or processing required to be carried out on non-originating materials in order that the product manufactured can obtain originating status) to Annex II, which is based on the Harmonised System (HS) 2007, to align the product-specific rules of origin with the updated HS as applicable from 2017. Such alignment includes the changes introduced by the HS 2012, and non-substantive changes for the HS 2017, to the product-specific rules of Appendix 2. For reasons of clarity, taking into account the number of amendments that need to be made in Appendix 2, that Appendix should be replaced in its entirety.

The Association Council is also to adopt a Decision introducing Explanatory Notes to Articles 15, 16, 19, 20 and 30 of Annex II to the Agreement to ensure transparency and uniformity in the application of the rules of origin regarding the movement certificate EUR.1, invoice declarations, approved exporters and verification of proofs of origin.

The adoption of the two Decisions by the Association Council is expected to take place before the end of 2021.

It is appropriate to establish the position to be taken on the Union’s behalf in the Association Council, as the two Decisions of the Association Council will have legal effect in the Union.

It is also appropriate to repeal Council Decisions (EU) 2016/10012 and (EU) 2016/13363, which establish positions to be taken on the Union’s behalf on acts no longer to be adopted by the Association Council.

The position of the Union within the Association Council should therefore be based on the two draft Decisions of the Association Council,