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New EU Regulations Reduce Tariffs and Open Up Quotas for Large Number of Products

On 27 December 2019, the Official Journal published Council Regulation 2019/2197 which amends framework Regulation 1387/2013 suspending the autonomous Common Customs Tariff duties on certain agricultural and industrial products. On the same day, Council Regulation 2019/2220 amending Regulation 1388/2013, which opens and provides for the management of autonomous tariff quotas of the Union for certain agricultural and industrial products, was also published. Both Regulations create new or renew opportunities for low or nil-rated tariffs on a wide variety of goods, some of which may be of interest to Hong Kong traders.

Council Regulation 2019/2197: As with all EU regulations, this Regulation applies directly in the EU Member States. It states that, in order to ensure a sufficient and uninterrupted supply of certain agricultural and industrial products which are unavailable in the European Union and thereby avoid any disturbances on the market for those products, Common Customs Tariff (CCT) duties on those products have been suspended by Council Regulation 1387/2013 (a so-called framework Regulation). Those products can be imported into the EU at reduced or zero duty rates. The products concerned are set out in the Annex to the latter-mentioned Regulation.

In order to promote integrated battery production in the EU, a partial suspension of the CCT duties should be granted for certain products in this connection, that have not so far been listed in the Annex to Regulation 1387/2013. In addition, only a partial suspension of the CCT duties should be granted in respect of certain products currently subject to complete suspensions. The date set for the mandatory review of those suspensions should be 31 December 2020 in order to allow for the prompt review thereof having regard to the evolution of the battery sector in the Union.

In addition, among other changes, it is felt no longer to be in the interest of the EU to maintain the suspension of CCT duties for certain products listed in the Annex to Regulation 1387/2013. The suspensions for those products have therefore now be deleted.

In the interests of clarity, and considering the number of amendments to be made, the Annex to framework Regulation 1387/2013 has been replaced by the Annex to new Regulation 2019/2197. The Annex lists hundreds of products, some or several of which Hong Kong traders may be interested in exporting to the EU. The Annex is almost 720 pages long and is worthy of careful study by traders who might benefit from the new trading opportunities brought by it.

Council Regulation 2019/2197 entered into force on the day following that of its publication in the Official Journal of the EU and applies from 1 January 2020.

Council Regulation 2019/2220: This law, which also applies EU-wide, explains that in order to ensure a sufficient and uninterrupted supply of certain agricultural and industrial products which are produced in insufficient quantities in the European Union, and thereby avoid any disturbances on the market for those products, autonomous tariff quotas were opened by Council Regulation 1388/2013. Within those tariff quotas, products can be imported into the Union at reduced or zero duty rates.

Of particular note, new tariff quotas, with order numbers 09.2586 to 09.2593 inclusive, have been opened, at zero duty rates for appropriate quantities of those products. These include a certain type of LCD display for use in motor vehicles, and frames constructed from aluminium or aluminium and carbon fibres, for the use in the manufacture of bicycles (including electric bicycles).

Other changes include an increase in quota volumes for tariff quotas with order numbers 09.2594, 09.2595, 09.2596, 09.2597, 09.2598, 09.2599, 09.2738, 09.2742 and 09.2872; and the closure of tariff quotas with order numbers 09.2690, 09.2850, 09.2878, 09.2906, 09.2909, 09.2929 and 09.2932 with effect from 1 January 2020 (this is because it is no longer in the EU’s interest to maintain them).

Considering the amendments to be made and for the sake of clarity, the Annex to framework Regulation 1388/2013 is completely replaced with the Annex to the new Regulation 2019/2197. Therefore, Hong Kong traders, especially those who feel they could benefit from the newly opened trading opportunities, should examine the new Regulation including its Annex in detail.

The Regulation entered into force on the day following that of its publication in the Official Journal of the European Union and applies from 1 January 2020. There is one exception: the quota volume for the tariff quota with order number 09.2872 applies with retroactive effect to cover the period from 1 January 2019 to 31 December 2019.

Content provided by Picture: HKTDC Research
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