ANNEX III

AGREEMENT

in the form of an Exchange of Letters between the European Community and the Republic of Hungary on reciprocal preferential trade concessions for certain wines and spirits

A. Letter from the Community

Brussels, 22 March 2001

Sir,

I have the honour to refer to the Agreement of 29 November 1993 in the form of an Exchange of Letters between the European Community and the Republic of Hungary on the reciprocal establishment of tariff quotas for certain wines and to the negotiations which have taken place between the European Community and the Republic of Hungary with a view to concluding an additional Protocol to the Europe Agreement covering both wines and spirits.

I hereby confirm that, following the negotiations and pending the procedure for the adoption and the entering into force of the additional Protocol to the Europe Agreement and in order to implement from 1 January 2001 the results of the negotiations on new bilateral trade concessions for certain wines and spirits, the European Community and the Republic of Hungary have agreed on the following:

1. Imports into Hungary of the following products originating in the Community shall be subject to the concessions set out below.

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2. Imports into the Community of the following products originating in Hungary shall be subject to the concessions set out below.

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3. For the purposes of this Agreement, wine will be deemed to originate in the Community or in Hungary:

(a) if it has been produced from fresh grapes entirely produced and harvested in the territory of the Contracting Party in question, and

(b) if it has been produced in accordance with the rules governing the oenological practices and processes referred to in Title V of Regulation (EC) No 1493/1999.

4. Imports of wine under the concessions provided for in this Agreement will be subject to the presentation of a certificate issued by a mutually recognised official body appearing on the list drawn up jointly, to the effect that the wine in question complies with point 3(b).

5. The Parties shall ensure that the trade concessions granted reciprocally are not called into question by other measures.

6. Consultations are to take place at the request of either Party on any problem relating to the way this Agreement operates.

7. This Agreement shall apply, on the one hand, to the territories in which the Treaty establishing the European Community is applied and under the conditions laid down in that Treaty and, on the other hand, in the territory of the Republic of Hungary.

8. This Agreement will be approved by the Parties in accordance with their respective procedures.

This Agreement shall enter into force on 1 January 2001. It shall expire on the entry into force of the additional Protocol to the Europe Agreement on wines and spirits.

I should be obliged if you would confirm that your Government is in agreement with the content of this letter.

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

For the European Community

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B. Letter from the Republic of Hungary

Brussels, 22 March 2001

Sir,

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

"I have the honour to refer to the Agreement of 29 November 1993 in the form of an Exchange of Letters between the European Community and the Republic of Hungary on the reciprocal establishment of tariff quotas for certain wines and to the negotiations which have taken place between the European Community and the Republic of Hungary with a view to concluding an additional Protocol to the Europe Agreement covering both wines and spirits.

I hereby confirm that, following the negotiations and pending the procedure for the adoption and the entering into force of the additional Protocol to the Europe Agreement and in order to implement from 1 January 2001 the results of the negotiations on new bilateral trade concessions for certain wines and spirits, the European Community and the Republic of Hungary have agreed on the following:

1. Imports into Hungary of the following products originating in the Community shall be subject to the concessions set out below.

>TABLE>

2. Imports into the Community of the following products originating in Hungary shall be subject to the concessions set out below.

>TABLE>

3. For the purposes of this Agreement, wine will be deemed to originate in the Community or in Hungary:

(a) if it has been produced from fresh grapes entirely produced and harvested in the territory of the Party in question, and

(b) if it has been produced in accordance with the rules governing the oenological practices and processes referred to in Title V of Regulation (EC) No 1493/1999.

4. Imports of wine under the concessions provided for in this Agreement will be subject to the presentation of a certificate issued by a mutually recognised official body appearing on the list drawn up jointly, to the effect that the wine in question complies with point 3(b).

5. The Parties shall ensure that the trade concessions granted reciprocally are not called into question by other measures.

6. Consultations are to take place at the request of either Party on any problem relating to the way this Agreement operates.

7. This Agreement shall apply, on the one hand, to the territories in which the Treaty establishing the European Community is applied and under the conditions laid down in that Treaty and, on the other hand, in the territory of the Republic of Hungary.

8. This Agreement will be approved by the Parties in accordance with their respective procedures.

This Agreement shall enter into force on 1 January 2001. It shall expire on the entry into force of the additional Protocol to the Europe Agreement on wines and spirits.

I should be obliged if you would confirm that your Government is in agreement with the content of this letter."

I have the honour to confirm that my Government is in agreement with the content of your letter.

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

For the Government of the Republic of Hungary

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