Explanatory Memorandum to COM(2022)644 - Amendment to the suspending of the Common Customs Tariff duties on certain agricultural and industrial products - Main contents
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| dossier | COM(2022)644 - Amendment to the suspending of the Common Customs Tariff duties on certain agricultural and industrial products. |
|---|---|
| source | COM(2022)644  |
| date | 15-11-2022 |
1. CONTEXT OF THE PROPOSAL
• Reasons for and objectives of the proposal
In order to ensure sufficient and uninterrupted supplies of certain agricultural and industrial products which are insufficiently produced or not produced at all in the Union and to avoid any disturbances on the market for these products, some Common Customs Tariff duties have been partially or totally suspended by Council Regulation (EU) No 2021/2278 (hereinafter 'the Regulation') 1 .
The Regulation is updated every six months to accommodate the needs of Union industry.
The Commission, assisted by the Economic Tariff Questions Group, has reviewed all requests from the Member States for autonomous tariff suspensions.
Following this review, the Commission considers that the suspension of duties is justified for some new products, currently not listed in the Annex of the Regulation. In relation to some other products, it is necessary to modify the conditions in terms of product description, classification, date envisaged for mandatory review and supplementary unit. Products for which a tariff suspension is no longer in the Union's economic interest are proposed to be withdrawn.
• Consistency with existing policy provisions in the policy area
This proposal does not affect countries that have a preferential trading agreement with the Union nor candidate countries or potential candidates for preferential agreements with the Union (e.g. Generalised System of Preferences; the African, Caribbean and Pacific group trade regime; Free Trade Agreements).
• Consistency with other Union policies
The proposal is in line with Union policies in the area of agriculture, trade, enterprise, environment, development and external relations.
The trade-liberalising measures that are contained in this proposal aim at ensuring that the temporary suspension of the Union’s common customs tariff is conducted in the context of the principles and objectives of the Union’s external action set out in Article 21 TEU and that different areas of external action of the Union, as well as its external action and other Union policies, be consistent with another. It is therefore appropriate to exclude a number of products originating in Russia and Belarus from the tariff reduction, in order to ensure consistency with the restrictive measures taken by the Union against these countries following Russia’s aggression against Ukraine. However, in order to ensure appropriate supply and avoid serious disturbances in some EU markets, it is necessary to retain the suspension of CCT duties for certain products originating from Belarus and Russia.
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 operators engaged in foreign trade, as stated in the Commission communication concerning autonomous tariff suspensions and quotas 2 . 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 businesses 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 stemming from this regulation can be found in the attached legislative financial statement.
• Stakeholder consultations
The Economic Tariff Questions Group (ETQG), which consists of representatives from all Member States plus Turkey, assisted the Commission in the preparation of this proposal
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.
All listed suspensions correspond to agreements or compromises reached in the discussions of the ETQG. 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 2021/2278. 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 will amount approximately EUR 70 747 802 per year. The negative effect on the budget’s traditional own resources is EUR 53 060 852 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 on resource contributions.
5. OTHER ELEMENTS
• Implementation plans and monitoring, evaluation and reporting arrangements
The proposed measures are managed within the framework of the Integrated Tariff of the European Union (TARIC) and applied by customs administrations of the Member States.