Tariff Issues

The EU Common Customs Tariff

The European Unions Common Customs Tariff sets out the rules and the rates of duty applicable to imports into the European Union.  The EU Common Customs tariff is a three volume guide setting out custom duties and other relevant information applicable to the import and export of goods. It enables importers and exporters to comply with their legal obligations.

Volume 1 of the tariff sets out a range of general information for importers and exporters including restrictions, VAT relief schemes and anti-dumping duties.

Volume 2 sets out the commodity codes for each type of product. It contains thousands of commodity codes. It lists duty rates and important information such as import licensing and preferential duties applicable to the goods. This is a 10 digit reference number for imports and an 8 digit code for consignments trading within the EU. With the correct commodity code, the tariff can be used to ascertain the current duty and import VAT rate. The tariff will also specify whether a licence is required.

Volume 3 sets out customs procedures. It explains how to complete the relevant documentation for importing and exporting.


Commodity Codes and Classification

All goods have been given classification numbers. Goods are given different classifications based on what they are, according to their constituent parts and class. The tariff is divided into chapters, sub-headings and commodity codes. Classifying goods can be a complex process involving a number of steps.  All goods must be classified under a tariff heading and commodity code.

The tariff incorporates the harmonised system developed by the World Customs Organisation.  It adopts European statistical naming conventions. The correct commodity codes are necessary to fill out customs paper work. The commodity code is an eight digit code. The commodity code must be declared under both the simplified procedures and the SAD procedure.

The commodity code identifies the goods under the Common Custom Tariff.  It allows the customs to apply appropriate controls on exportation and apply the correct rates of duty on importation. Commodity codes are held in a database called the Taric (Tariff Intégré Communautaire.- the integrated Community  tariff).  These are updated daily and provide common standards and treatment throughout the EU. The commodity codes cover 98% of the types of merchandise in over 5,000 commodity groups and is available on line.  The tariff is updated on a monthly basis by the European Union.


Interpretation of Tariff

There are a number of rules for interpretation of the tariff.  They determine how the tariff is used to establish a heading for a particular type of good. Where goods fall into two categories the most specific description takes precedence over a general description. A description by name is more specific than a description by class. Goods comprising of component parts are classified according to the material or component that gives their essential character.

There are notes on classification for incomplete or unfinished articles which have the essential character of a finished article and for mixtures or combinations of mixtures. The substance or material of the good is the determining factor in deciding its essential character.

It is possible to have goods certified under the tariff in a binding way. It is possible to apply to Revenue for a Binding Tariff Information (BTI).  This decision on the classification is binding for 6 years.


Tariff Information

The tariff will set out the following in respect of each commodity.

  • The customs procedure associated with the classification will be set out;
  • The duty rates applicable to particular goods. This will be a percentage calculated on value;
  • Preferential rates of duty, where applicable, will be specified.
  • Anti dumping duties that may apply. A business can be liable for anti duty charges under an anti dumping duty.
  • Quotas which may apply.

The commodity code must be entered on the single administrative document.

An anti-dumping levy or countervailing duty is a duty levied on goods from outside  EU to protect the EU trade. Anti-dumping duty may be imposed if goods are being “dumped” below commercial value in the EU. Countervailing duties can apply to imports that have been subsidised in the exporting country.

Traders may complain to the EU, who investigate dumping and may impose countervailing subsidies. The rate of duty applicable may depend on the origin.

There is a system of valuation for the purpose of the application of customs duties. The valuations are used for customs duties, VAT and statistics purposes. The value is generally the transactional value or price paid. There are other criteria for when this price cannot be determined.


Integrated Tariff of the European Union (TARIC).

The integrated tariff of the EU sets out the customs duty rates and rules applicable to the import of goods into the European Union. The EU Regulations adopt the standard goods classification and naming system (nomenclature) known as combined nomenclature (CN).  A Regulation is adopted each year reproducing the complete version of the combined nomenclature and customs tariff duty rates. The annex to the Regulation sets out the rates of duty applicable to each category of goods.

There is a TARIC subheading that describes each type of goods and sets out their code number.  Each subheading has an eight-digit code. The first six digits refer to the harmonised system of headings and subheadings. The seventh and eighth digit represent the CN subheading. The ninth and tenth digit represent the tariff subheadings.

The Community Customs Code incorporates the key EU customs law provisions in a single regulation. The EU Customs Regulation provides for the entry of goods into the EU. The customs authorities may examine the goods. The goods may be assigned to customs-approved treatment.


Binding Tariff Informaiton

BTI decisions are classification decisions issued by the Customs administrations in the various Member States. They are legally binding throughout the European Union. The offer legal certainty regarding tariff classification decisions. The promote the uniform application of the rules of classification throughout the European Union. BTI is normally valid for three years from the date of issue.

A BTI may be invalidated due to a change in European Union legislation. In such cases traders may be afforded a ‘period of grace’. If approved, this allows traders to complete any binding contracts entered into on the basis of that BTI.

A BTI may be invalidated when:

  • the classification code changes
  • it is affected by European Union (EU) or international customs tariff measures or
  • it is affected by a judgement of the Court of Justice of the European Union (CJEU).

Revenue may approve a ‘period of grace’. This allows the trader to continue to use a BTI for a period of up to six months to take account of binding contracts you have entered into.

BTI is void if it is based on inaccurate or incomplete data from the applicant.

The BTI database database contains classification decisions issued by EU countries. It provides details on the composition of goods (excluding any confidential information) and the justifications for the classifications. It may be accessed at BTI database.


Community Status Goods

Goods on which customs formalities have been completed and duties have been paid may be released for free circulation within the EU. They are “community” goods. No further duties or procedures can be applied to them. They may move freely within the European Union. Goods placed in temporary storage, a free zone, free warehouse or a suspensive procedure are not yet community goods

Goods are “community goods” provided they are brought from another EU country without crossing a third non-EU country or crossing a non-EU country under a transit document. There is a number of transit procedures. The internal transit procedure maintains goods as community goods. The most important procedures are Community Transit and the TIR procedure


Exempt Procedures

Certain activities can be undertaken on goods without incurring customs duties. The purpose is   to maintain and attract economic activities to the EU. Non-community goods may be imported and worked on under one of the following processors

  • inward processing;
  • processing under customs control;
  • temporary importation procedure;
  • outward processing

Goods from certain places qualify for preferential treatment. The preference may apply to developing countries under the EU generalised system of preferences. Products must be wholly from the relevant country or result from processing within that country.


Transit Procedures

The TIR and ATA procedure permit goods to be carried through the EU with duties and levies suspended while in the course of transit. The TIR procedure applies to transport without intermediate reloading between a customs office of departure and an office of destination. The journey must be by road. There are 56 countries which are parties in the TIR procedure.

Recipients of goods under a TIR carnet may qualify for authorisation as an authorised consignee.

The procedure must be discharged by the customs office of arrival or departure. Provided the office of departure is notified that the operation is completed within one month of acceptance of TIR carnet, it may be discharged. If not discharged, the guarantor associated with the carnet holder is notified.  If not discharged within four months an enquiry is initiated. If there are infringements, the duties may be recovered. The guaranteeing association may be liable.

The ATA carnet is used on the temporary importation transit or for the admission of goods for specific purposes


Infringing Goods

Goods which infringe intellectual property may not be imported into the EU, released for free circulation, exported, re-exported or placed in a suspensive arrangement. An application can be made to the customs authority for the detection and destruction of goods infringing intellectual property.  The legislation applies to counterfeit and pirated goods, breaches of industrial designs, copyright, trademarks, designations of origin, plant varieties and geographical indications.

The rights holder may lodge a written application with the customs authority. It must contain details of the goods, information concerning the nature of the infringement and details of a contact person.

It the customs authority suspects infringement of intellectual property rights, the goods may be suspended, during which time the rights holder may submit an application for action. There is a time limit during which the application must take place.


Quantitative Restrictions / Quotas

The general principle is that exports from the EU to outside the EU are not subject to quantitative restrictions or quotas.  EU states may adopt protective measures in response to unusual developments in the market. Protective measures may be imposed due to shortages of essential + must first advise and consult the EU Commission.

The EU Commission, acting on the request of an EU state may make exports subject to authorisation. This may be limited to exports from certain parts of the EU or exports to a particular country.  The Council, acting by qualified majority may adopt measures for a period.

EU states retain the power to adopt restrictions on the on the basis of public policy, morality, security and the protection of health and welfare, animal and plants, protection of national treasures and protection of industrial and commercial property.


Tariff Preferences for Developing Countries

The EU scheme of tariff preferences for certain less developed countries provides a general arrangement for all beneficiary countries and special incentive arrangement for sustainable development and good governance. re special arrangements.

Under the general arrangements, most products which are not sensitive are not subject to duty at all. The exemption does not apply to the agricultural element.  In relation to sensitive products, a tariff reduction may be applied.

Special incentive arrangements may be afforded to qualifying countries which have implemented human rights, labour rights, environmental and good governance standards. They must accept implementation and monitoring. In these cases, the duties are removed on certain specified products. Third countries may apply to the EU2 Commission for this treatment.


Tariff Preferences for Developing Countries II

The special arrangements for the least developed countries are granted to the list of LDCs published by the UN. There is a reduction of duties on most products, except military items. Many categories of goods are subject to a very substantial reduction.

The preferential arrangements may be withdrawn temporarily in the case of violations of human and labour rights, shortcomings in custom controls. unfair trading practices, fraud, irregularities and failures to comply with rules in relation to product origin

The EU reserves the right to reintroduce customs if it is likely to cause difficulties to EU producers


CITES Conventions

CITES is the Convention on International Trade in Endangered Species of wild flora or fauna. There are four categories of endangered species.

Endangered species may not be introduced into the EU without an import permit issued by the authority of the state of destination. Checks are required.The export or re-export of specimens of wild endangered species are subject to production of an export certificate.

The CITES Convention provides controls on the importation of endangered wildlife, fauna and flora. The rules apply to imports and exports. The importation of endangered species is subject to the issue of an import permit by the requisite authority and compliance with conditions.

Trade in certain specimens is prohibited. The movement of certain specimens is subject to prior authorisation from the requisite authority in the member state, which may be permitted, subject to applicable rules

Customs authorities undertake checks and formalities to verify compliance. There is a system of exchange of information between the state parties for the purpose of the implementation of the convention


Special Surveillance and Investigation

Subsidies are financial contributions made by non-EU governments, conferring benefits on exporters. The EU may impose countervailing duties for the purpose of offsetting subsidies granted by non-EU authorities, where the release into free circulation within the EU, may cause damage or injury. A countervailing measure may be specific to an industry or enterprise. The countervailing duty is calculated with reference to the benefit conferred by the subsidy.

EU countries may inform the Commission if an import trend requires surveillance or safeguarding measures. Where there is evidence to justify an investigation, the Commission investigates the volume of imports, prices and the impact on EU producers.

If there is a likelihood of serious injury to EU producers, the Commission may impose surveillance or safeguard measures. They may apply to certain categories of goods They may be required to produce further import documentation


Dumping of Products

A product may be considered to be dumped if its export price to the EU is less than the price for a comparable product in the exporting country.  If there is no comparable product or if the sale is from a non-market economy country, the prices are determined on other bases.

The dumping margin as the difference between the export price and the normal value. Adjustments are made in relation to differences in market conditions, taxation and other factors affecting price comparability.

The complaint is examined by an advisory committee consisting of representatives of the EU countries and the Commission. Where there is sufficient evidence, an investigation is carried out. Interested parties are consulted, and various views are presented. A decision may be made as to the imposition of anti-dumping duties. If protective measures are considered unnecessary, the proceedings are terminated.


Anti-Dumping Duty / Countervailing Measure

A levy may be imposed, only if the “dumping” it affects and injures EU producers. There must be evidence of this occurring. An inquiry is undertaken into alleged dumping. Its impact on the industry concerned is assessed. The proceedings are instituted on the basis of a claim by a business or business associations.

The duty may not exceed the dumping margin and should be only that required to remove the injury. The duty must be applied on a non-discriminatory basis. Anti-dumping measures may not be applied if they are not in the EU interests. This includes the interests of industry users and consumers.

Duties last for five years and are subject to review. Anti-dumping duties may be refunded where it can be shown that the dumping margin has been eliminated or reduced.


Export of Cultural Goods

An export licence is required when cultural goods are exported outside the EU.  An export licence is valid throughout the EU. The licence may be refused on the basis of that the articles are protected by national legislation in relation to historical, archaeological and artistic goods. National customs authorities must co-operate.


Export of Cash

Persons carrying cash in excess of €10,000 must declare it to the competent authorities. A full correct and valid declaration is required. The declaration must give full details of the owner of the money, the intended recipient and use.

This requirement applies under the anti-money-laundering legislation. The information received may be communicated to other countries including those subject to legal obligations.  Professional secrecy will apply to confidential information. The customs authorities may check compliance with the obligation to declare. In the event of failure to declare the cash may be detained. There are penalties applicable in the event of failure is to comply.


References and Sources

Text Books

Customs Law of the European Union 4th ed 2012 M Fabio

EC Customs Law (Oxford European Community Law Library) 2nd Edition 2008 Timothy Lyons

Customs Code of the European Union Hardcover (1996) Tom Walsh  Damian McCarthy

European Union Customs Code 2015 Tom Walsh

EU Legislation

The Union Customs Code  Regulation (EU) No 952/2013 of the European Parliament and of the Council.

amended by Regulation 2016/2339

The UCC Delegated Act Commission Delegated Regulation No 2015/2446.

The UCC Implementing Act Commission Implementing Regulation No 2015/2447.

The UCC Transitional Delegated Act wCommission Delegated Regulation No 2016/341.

Copyright (Customs) Regulations 1964, S.I. No. 231 of 1964443

Irish Legislation

Customs Act 2015

Customs-Free Airport Act 1947

Customs-free Airport Order 1947 (and numerous amendement)

Transport Customs-Free Airport (Amendment) Act 1958

Free Ports Act 1986

Customs and Excise (Mutual Assistance) Act 2001

Customs and Excise (Mutual Assistance) Act, 2001

(Commencement) Order 2002, S.I. No. 59 of 20022996

Customs and Excise (Mutual Assistance) Act 2001 (Section 8)

(Protection of Manual Data) Regulations 2004, S.I. No. 254 of 2004

Customs (Electronic Filing of Returns) Order 2014, S.I. No. 474 of 2014

Customs and Excise (Provision of Information relating to Persons, Conveyances and Goods) Regulations 2011, S.I. No.

410 of 2011

European Communities (Customs) Regulations 1972, S.I. No. 334 of 1972

European Communities (Customs) (Amendment) Regulations, S.I. No. 211 of 1980

European Communities (Customs) (No.2) Regulations, S.I. No. 202 of 1982

European Communities (Customs) Regulations, S.I. No. 78 of 1983

European Communities (Customs) Regulations, S.I. No. 365 of 1984

European Communities (Customs) (No.2) Regulations, S.I. No. 366 of 1984

European Communities (Customs) (Revocation of Statutory Instruments) Regulations

European Communities (Customs and Excise) Regulations 1991, S.I. No. 57 of 19913925

European Communities (Customs and Excise) (Amendment) Regulations 1991, S.I. No. 174 of 1991

European Communities (Customs and Excise) (Amendment) (No. 2) Regulations 1991, S.I.No. 368 of 1991

1992

European Communities (Customs and Excise) Regulations 1992, S.I. No. 394 of 1992

European Communities (Customs) (No. 2) Regulations 1992, S.I. No. 431 of 1992

European Communities (Customs) (No. 3) Regulations 1992, S.I. No. 432 of 1992

European Communities (Community Transit) Regulations 1992, S.I. No. 433 of 1992

European Communities (Tir Carnet and Ata Carnet Transit) Regulations 1993, S.I. No. 61 of 1993

European Communities (Customs Appeals) Regulations 1995, S.I. No. 355 of 1995

European Communities (Customs Declarations) Regulations 1996, S.I. No. 114 of 1996

European Communities (Customs Action against Goods suspected of Infringing certain Intellectual Property Rights) (Amendment) Regulations 2013, S.I. No. 309 of 2013

European Union (Customs enforcement of Intellectual Property Rights) Regulations 2013, S.I.No. 562 of 2013