Explanatory Memorandum to COM(2021)704 - Suspension of the Common Customs Tariff duties referred to in Article 56(2) point (c) of Regulation (EU) No 952/2013 on certain agricultural and industrial products - Main contents
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| dossier | COM(2021)704 - Suspension of the Common Customs Tariff duties referred to in Article 56(2) point (c) of Regulation (EU) No 952/2013 on ... |
|---|---|
| source | COM(2021)704  |
| date | 18-11-2021 |
1. CONTEXT OF THE PROPOSAL
Council Regulation (EU) 1387/2013 of 17 December 2013 1 suspends the Common Customs Tariff duties on certain agricultural and industrial products listed in its Annex. This Regulation is amended every semester in order to accommodate the needs of the EU industry. In view of the fact that:
·the Regulation has been amended already 15 times,
·it is necessary to make several amendments to the Combined Nomenclature codes listed in the Annex to Regulation (EU) No 1387/2013 as the product codes of the Combined Nomenclature have been updated by Commission Regulation (EU) 2021/1832 2 in order to fulfil international commitments related to the changes in the Harmonized System nomenclature of 2022,
in the interests of clarity, it is proposed to repeal Council Regulation (EU) 1387/2013 and replace it by the current proposal.
The production in the Union of the products specified in the Annex to this Regulation does not exist or is inadequate, therefore the needs of user industries in the Union cannot be met. Allowing enterprises to obtain supplies of those products at a lower cost for a certain period, would stimulate economic activity within the Union, improve the competitive capacity of these enterprises and enable the latter to maintain or create employment, modernise their structures, etc.
In this context, it should be pointed out that goods imported under the tariff suspension arrangements enjoy freedom of movement throughout the Union; consequently, once a tariff suspension is granted, any enterprise in any Member State is eligible to benefit from it.
Since autonomous tariff suspensions constitute an exception to the general rule represented by the Common Customs Tariff, they must, like all derogations, be monitored and reviewed systematically. Moreover, it should always be possible to terminate earlier the suspension of the concerned Common Customs Tariff duties, if it is no longer in the Union's interest to maintain it or due to technical product developments, changed circumstances or economic trends on the market. Where the Commission considers, as a result of the review, that a suspension for a certain product is to be changed or terminated, it will submit to the Council a proposal to amend the list set out in the Annex accordingly.
The Annex of the attached proposal contains products for which duties were already suspended by virtue of Council Regulation (EU) No 1387/2013 as last amended by Regulation (EU) No 1052/2021 as well as a number of agricultural and industrial products which were reviewed since this last amendment.
In addition, the Annex of the attached proposal contains all the new requests for temporarily autonomously suspending Common Customs Tariff duties which were accepted by the Economic Tariff Questions Group (ETQG) during the examination phase. These new requests for suspension were examined in the light of the criteria set out in the Communication from the Commission concerning autonomous tariff suspensions and quotas 3 .
The proposal is in line with the trade, entreprise, development and external relations policies. Especially this proposal is not at the expense of countries enjoying a preferential trading agreement with the EU (e.g. GSP, ACP regime, candidate countries and potential candidates).
2. LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY
Legal basis
The legal basis of this proposal is Article 31 of the Treaty on the Functioning of the European Union (TFEU).
• Subsidiarity (for non-exclusive competence)
The proposal falls under the exclusive competence of the Union. The subsidiarity principle therefore does not apply.
• Proportionality
The proposal complies with the principle of proportionality. The measures envisaged are in line with the principles for simplifying procedures for enterprises engaged in foreign trade, as stated in the Commission Communication concerning autonomous tariff suspensions and quotas. This Regulation does not go beyond what is necessary to achieve the objectives pursued in accordance with Article 5 i of the Treaty on European Union (TEU).
• Choice of the instrument
By virtue of Article 31 of the TFEU, 'Common Customs Tariff duties shall be fixed by the Council on a proposal from the Commission'. Therefore, a Council Regulation is the appropriate instrument.
3. RESULTS OF EX-POST EVALUATIONS, STAKEHOLDER CONSULTATIONS AND IMPACT ASSESSMENTS
• Ex-post evaluations/fitness checks of existing legislation
The autonomous suspensions scheme was subject to an evaluation study carried out in 2013. The evaluation concluded that the core rationale for the scheme remains valid. The cost savings for EU enterprises importing goods under the scheme can be significant. In turn, depending on the product, company and sector, these savings can have wider benefits, such as boosting competitiveness, making production methods more efficient, and creating or keeping jobs in the Union. Details of the savings related to this Regulation can be found in point 4 and in the attached legislative financial statement.
• Stakeholder consultations
The Economic Tariff Questions Group (ETQG), which consists of representatives from all Member States plus Turkey, was consulted. All listed suspensions correspond to agreements or compromises reached in the discussions of the group.
The ETQG carefully examined each case to ensure that it would not cause any harm to Union enterprises and would strengthen and consolidate the competitiveness of Union's production. The members of the ETQG carried out the assessment through discussions, and Member States, in turn, consulted the concerned industries, associations, chambers of commerce and other stakeholders involved.
No potential serious risk with irreversible consequences was identified
• Impact assessment
The proposed amendment is of a purely technical nature and concerns only the coverage of the suspensions currently listed in the Annex to Council Regulation (EU) No 1387/2013 (which is repealed and replaced by the current proposal). An impact assessment was not carried out because the proposed changes in the list of products that would benefit from the autonomous Common Customs Tariff duties suspension are not expected to have significant impacts.
• Fundamental rights
The proposal has no consequences on fundamental rights.
4. BUDGETARY IMPLICATIONS
This proposal has no financial impact on expenditure, but has a financial impact on revenue. Uncollected customs duties corresponding to the suspension amount approximately EUR 1 294 million per year. The negative effect on the budget’s traditional own resources is EUR 970,5 million per year (i.e. 75 % of the total). The legislative financial statement sets out the budgetary implications of the proposal in greater detail.
The loss of revenue in traditional own resources shall be compensated by Member States Gross National Income (GNI) based own resource contributions.