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EU Opens up Quotas, Suspends Tariffs on Wide Range of Goods, Bringing Opportunities for Traders

On 30 December 2016, the Official Journal published two important product-related Regulations: one which opens and provides for the management of autonomous tariff quotas for certain agricultural and industrial products, and the other which suspends the autonomous Common Customs Tariff duties on certain agricultural and industrial products. Both provide for trading opportunities for Hong Kong sellers, to which they should be alerted.

Regarding the first of the two, namely Council Regulation 2016/2389, the text states that in order to ensure the sufficient and uninterrupted supply of certain goods insufficiently produced in the EU, and so as to avoid disturbances on the market for certain agricultural and industrial products, autonomous tariff quotas had already been opened by Council Regulation 1388/2013 (a framework Regulation). Products within those tariff quotas can be imported into the EU at reduced or zero duty rates. For those reasons, it has now become necessary to open, with effect from 1 January 2017, tariff quotas at zero duty rates for an appropriate volume as regards eleven new products. These are listed in the Regulation’s Annex.

Furthermore, among other changes, in the case of one product, the quota volumes have been increased in the interests of the EU’s economic operators. Hong Kong suppliers should, however, note that in two cases the quota volume has actually been decreased. Moreover, in the case of six products, the autonomous tariff quotas have had to
be closed with effect from 1 January 2017, as it is not in the EU’s interest to maintain those quotas any

Helpfully, given the number of amendments to be made, the Annex to framework Regulation 1388/2013 has been replaced with the Annex to new Council Regulation 2016/2389. Moreover, the changes regarding the tariff quotas for the products concerned, provided for in the Regulation, have to apply from 1 January 2017. As a result, the Regulation has been made to enter into force as a matter of urgency, i.e., on the same day as its publication.

Hong Kong traders are advised to examine new Council Regulation 2016/2389 closely, in order to evaluate the changes made to the Annex in respect of the products covered and the conditions attached thereto. Products mentioned in the Annex include corn cobs, mushrooms, sweet cherries, tobacco, a number of chemicals, spectacle frames, woven and laminated rubberised textile fabric with certain characteristics, as well as components for electronic goods such as an assembly for a GPS system.

Also published on 30 December 2016 is Council Regulation 2016/2390. This text amends Regulation 1387/2013 (a framework Regulation as well), which suspends the autonomous Common Customs Tariff duties on certain agricultural and industrial products.

Of significant interest to Hong Kong sellers, the first paragraph of this new Regulation states that the EU production of 110 agricultural and industrial products that are not currently listed in the Annex to Council Regulation 1387/2013 is believed to be inadequate or non-existent. It is therefore in the interest of the EU to totally suspend the autonomous Common Customs Tariff (CCT) duties on those products.

Moreover and also positively, it is felt necessary, in the interests of the EU, to amend the end date for the mandatory review of 206 products listed in the Annex to framework Regulation 1387/2013, in order to allow duty-free imports beyond that date. The autonomous CCT duty suspensions for those products have been reviewed and new revised dates have been set for their next mandatory review.

Unfortunately, it is also felt no longer to be in the interests of the EU to maintain the suspension of autonomous CCT duties for 18 of the products that are listed in the Annex to framework Regulation 1387/2013. Moreover, according to a Communication from the European Commission concerning autonomous tariff suspensions and quotas, for administrative and financial reasons, requests 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 71 suspensions do not reach that threshold. Those suspensions have therefore been deleted from the Regulation’s Annex.

In addition, 27 suspensions have had to be deleted from that Annex as a result of the agreement in the form of the Declaration on the Expansion of Trade in Information Technology Products, which reduced the duty rate for the products concerned to zero.

In the interests of clarity, and taking into account the number of amendments to be made, the Annex to Regulation 1387/2013 is replaced by the text set out in the Annex to the new Regulation. Furthermore, in order to avoid any interruption of the application of the autonomous suspensions scheme and to comply with the rules set out in the Commission Communication, the changes regarding the suspensions for the products concerned provided for in the Regulation have to apply from 1 January 2017. Therefore, the Regulation entered into force as a matter of urgency on the same day that it was published.

Hong Kong traders are advised to closely examine new Council Regulation 2016/2390 for the abovementioned and other changes made to the framework Regulation 1387/2013.

Among the hundreds of products covered, included are bamboo shoots, mushrooms, cranberries, dates, Chinese water chestnuts and several other agricultural products, as well as a large number of chemicals, a variety of film and glass products, television pedestal stands, various batteries, certain keypads of silicone or plastic, parts for vehicles, water treatment-related apparatus, and electronic components, among others.

Content provided by Picture: HKTDC Research
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