4 Jan 2019
EU Opens New Quotas, Reduces Tariffs for Large Number of Products
Council Regulation 2018/2069 is the first of the two new Regulations. It amends Regulation 1387/2013 (a so-called Framework Regulation), which suspends the autonomous common customs tariff duties on certain agricultural and industrial products. Interestingly for Hong Kong traders, this new Regulation states that the EU production of 87 products that have not thus far been listed in the Annex to Regulation 1387/2013 is inadequate or non-existent. It is therefore in the interests of the EU to totally suspend the autonomous CCT duties on those products.
In another positive development for Hong Kong traders, it is also felt necessary and in the interests of the EU to amend the end-date for the mandatory review of 720 products listed in the Annex to Framework Regulation 1387/2013. This will allow duty-free imports beyond that date. The autonomous CCT duty suspensions for those products have been reviewed and new revised dates are set for their next mandatory review.
In developments that can be adverse to Hong Kong traders’ interests, it is no longer deemed to be in the interests of the EU to maintain the suspension of autonomous CCT duties for 13 products listed in the Annex to Framework Regulation 1387/2013. The suspensions for those products are therefore deleted. Moreover, it is deemed that for practical reasons, requests for tariff suspensions or quotas where the amount of uncollected customs duty is estimated to be less than EUR 15,000 per year cannot be taken into consideration. The mandatory review of the existing suspensions has indicated that imports in relation to 197 products listed in the Annex to Regulation 1387/2013 do not reach that threshold. Those suspensions are likewise deleted.
In order to avoid confusion, and taking into account the number of amendments to be made, the Annex to Framework Regulation 1387/2013 is entirely replaced by the Annex to the new Regulation 2018/2069.
The Annex lists several hundred products and it is therefore in the interests of Hong Kong traders to carefully go through the list to see how they might benefit or to check if previous entries which benefited them have now been deleted. Entries in the Annex include:
- types of Chinese water chestnuts and other edible (agricultural) products;
- hundreds of chemicals including a wide variety of colorants;
- ink including disposable cartridge ink;
- a vast number of films of different kinds (including a type of laminated film);
- parts for motor vehicles;
- parts of TV apparatus;
- printed circuit boards for LCD modules, and LCD modules themselves;
- and a large number of other products intended for electrical and electronic equipment.
Finally, it is stated that, in order to avoid any interruption of the application of the autonomous suspension scheme, the changes provided for in the new Regulation regarding the suspensions for the products concerned shall apply, as a matter of urgency, from 1 January 2019. Hong Kong traders are advised to closely examine the new Council Regulation to evaluate how best they may benefit from the introduced zero-rated duties, and the other changes that have been made pursuant to the Regulation.
Council Regulation 2018/2070 is the second of the two new Regulations. It recounts that, in order to ensure the sufficient and uninterrupted supply of certain goods insufficiently produced in the European Union and so as to avoid disturbances on the market for certain agricultural and industrial products, autonomous tariff quotas were previously opened by Framework Council Regulation 1388/2013.
According to the newly published Regulation, for those reasons, it is necessary to open, with effect from 1 January 2019, six new tariff quotas (the new Regulation should be examined for the details). Of undoubted interest to some Hong Kong traders exporting to the EU, products within the tariff quotas can be imported into the EU at reduced or zero duty rates.
Regarding the products for which quota volumes can be imported duty free, these include corn cobs, mushrooms, sweet cherries and soya bean protein, natural unmanufactured tobacco, a number of chemicals, and products for use in different types of electrical and electronic equipment.
In the interests of clarity, and taking into account the number of amendments to be made, the Annex to Framework Regulation 1388/2013 has been entirely replaced with the new Regulation’s Annex.
Regulation 2018/2070 has entered into force as a matter of urgency in order to avoid any interruption of the application of the quota scheme. Thus, the changes brought about by means of this latest Regulation 2018/2070 have begun applying from 1 January 2019. Hong Kong traders are advised to examine the Regulation including its Annex in order to evaluate how best they may benefit from its relevant provisions.