Annex IV to the Agreement (to reserve minimum quantities of textile raw materials to the Community industry and operators) can in no way be construed or applied in such a way that will negatively affect the rights granted to Community operators under Article 11, paragraph 1, of the Agreement and Article 12 of the Agreement initialled on 19 January 1995.2. Declaration made by China in responseThe Chinese Delegation declares that it considers that export of textile raw materials by China to the European Community has been developing normally within the availability of supply and in conformity with demand as stipulated in the bilateral Agreement, and that the Chinese side has no intention to impose any restrictions.Therefore, the Chinese Delegation maintains that there is no necessity for the European Community to raise this issue by making a unilateral declaration.Appendix 7 AGREED MINUTE 1. Delegations of the European Community and the People's Republic of China met in Brussels from 12 to 13 December 1995 in accordance with Article 7 of the bilateral Agreement on Trade in Textiles initialled on 9 December 1988, as last amended by the Exchanges of Letters initialled on 14 December 1994, and with Articles 17 and 18 of Protocol A to the Agreement to resume the consultations held in Beijing from 30 October to 3 November and in Brussels from 27 November to 1 December 1995 on the question of the circumvention of the Agreement and the search for a satisfactory solution.2. The Community Delegation in the course of the discussion recalled(a) that by Notes Verbales of 9 February and 16 June 1995, the Community had transmitted to the Chinese authorities documents showing that the following pieces of textile products had been imported into the Community either under a false declaration of origin or illegally without being declared for customs clearance:15 367 194 pieces of category 4,304 040 pieces of category 6,20 016 pieces of category 7,15 438 pieces of category 8 and9 000 pieces (2 tonnes) of category 78;(b) that on the basis of the enquiries carried out in the territory of the Community and third countries, it had appeared that these products physically emanated from the territory of the People's Republic of China before either having been transhipped and imported into the Community under false declaration of origin or introduced illegally without being declared for customs clearance, that there were sufficient grounds to conclude that they had for origin the People's Republic of China, that they had been imported into the Community without having been set off against the quantitative limits established under the bilateral Agreement, and that they had, therefore, been imported into the Community in circumvention of the Agreement.3. The Chinese Delegation, after having carried out enquiries on the circumvention cases presented by the European Commission in the territory of the People's Republic of China, agreed with respect to the following pieces of textile products on the Chinese origin:13 077 778 pieces of category 4,121 904 pieces of category 6,20 016 pieces of category 7,15 438 pieces of category 8 and9 000 pieces (2 tonnes) of category 78.The Chinese Delegation contested the Chinese origin in regard to 2 298 416 pieces of textile products of category 4 and 182 136 pieces of textile products of category 6.4. The Chinese Delegation maintained that quota deductions should not be carried out in cases where the Community authorities have not demonstrated the intentional involvement of Chinese companies in the fraudulent importation into the Community.5. The Community Delegation contested this opinion and maintained the view that, under the bilateral Agreement, nothing compelled the Community to demonstrate an active involvement of Chinese companies in order to seek an adjustment of the quantitative limits, equivalent to the quantities imported in circumvention of the Agreement.6. As a consequence, the Delegation of the Community maintained that an adjustment be operated on the quantitative limits applicable to categories 4, 6, 7, 8 and 78.7. While holding its positions unchanged, the Chinese Delegation accepted as a sign of goodwill that an adjustment be made on the 1995 quantitative limits applicable to categories 4, 6, 7, 8 and 78 as follows:cat. 4: 13 077 778 piecescat. 6: 121 904 piecescat. 7: 20 016 piecescat. 8: 15 438 piecescat. 78: 9 000 pieces (2 tonnes)8. In the course of consultations both parties reaffirmed the usefulness of strengthening cooperation in order to prevent circumvention of the provisions of the bilateral Agreement. Such cooperation should also provide for an exchange of information regarding Chinese exports to third countries and territories.Brussels, 13 December 1995.For the People's Republic of ChinaFor the European Community(1) For the purpose of setting off exports against the agreed quantitative limits a conversion rate of 5 garments (other than babies' garments) of a maximum commercial size of 130 cm, for 3 garments whose commercial size exceeds 130 cm may be applied for up to 5 % of the quantitative limits.(2) These figures include the following quantities reserved for European industry for a period of 180 days each year:Discarding a