Export licences - textile products (quota charges): introduction
The EC has concluded agreements with a number of exporting countries limiting textile imports. Observance of the import quotas is ensured by a system of double-checking whereby export licences are issued in the exporting country and import licences within the EC. Presentation of an export licence is a precondition to obtaining permission to import into the EC.
There is no single way of administering ‘quotas’ in the exporting countries. However, the normal procedure is for a designated official body to allocate quota annually ‘free of charge’ to exporters on the basis of their past export performance. Alternatively in some countries exporters have to bid for an allocation of quota at an auction.
It is common practice for holders of unused quotas to sell them to other exporters, who wish to meet orders in excess of their own quota allocation, or to quota brokers who then sell on to the highest bidders. Quota charges are the cost of acquisition of export licences (quotas) (see also CVS Conclusion 11).