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Preparing for Brexit: Analyse the Customs and VAT impact with our free online questionnaire

8 November 2018

The UK will leave the European Union (EU) on 29 March 2019. Uncertainty remains on both whether agreement on the withdrawal terms will be reached, and the details of the future relationship. But we can say with some certainty that, whatever the outcome, Brexit will have a Customs and VAT impact for companies doing business in and/or with the UK.

In order to allow you to obtain some initial insights on the impact that Brexit might have on the Customs and VAT position of your company, Deloitte has created a self-analysis questionnaire.

New exporter of record definition

31 July 2018

With its 16 May 2018 regulation, the European Commission amended and corrected the Delegated Act to the Union Customs Code (UCC). In addition to other relatively minor changes, the new regulation amends the definition of ‘exporter’, in order to allow greater flexibility for business partners in their choice of person to act as exporter for customs purposes. The new definition will come into effect as of 31 July 2018.

Provisional anti-dumping measures imposed on electric bicycles originating in China

18 July 2018

On 18 July 2018, the European Commission imposed provisional anti-dumping duties of up to 83.6% on imports of electric bicycles (e-bikes) originating in China.

As of 19 July 2018, all imports of e-bikes originating in China entering into the EU to then be released for free circulation are subject to provisional anti-dumping duties, ranging from 21.8% to 83.6% of the net free-at-frontier price, depending on the manufacturer’s identity.

UK releases position paper on future relationship with the EU

17 July 2018

The UK government released a White Paper on 12 July 2018, setting out its proposal for a ‘principled and practical Brexit’. The White Paper covers the UK view on the future relationship with the EU, in particular:

1. The economic partnership

2. The security partnership

3. Cross-cutting and other cooperation

4. Institutional arrangements

The UK sees the economic and security partnerships as the core of the future relationship. According to the UK Prime Minister, in her introduction to the White Paper, the proposed approach respects both the UK’s and EU’s principles.

Both parties have set themselves a timeline to agree on the terms of the Withdrawal Agreement and the form of the future partnership by autumn 2018, in order to avoid the UK leaving the EU on 29 March 2019 with no transitional arrangements in place nor an agreed upon future partnership.

Use of REX system results in countries being denied GSP benefits

11 July 2018

The EU introduced origin of goods self-certification through the Registered Exporter System (REX) in 2010, to replace the  FORM system from 1 January 2017 onwards. Under the REX system, (registered) exporters can produce statements on origin themselves. The REX system is used for GSP origin certification and progressively in bilateral trade agreements (e.g. CETA). GSP beneficiary countries and territories had the possibility to notify the European Commission of their delayed use of the REX system, i.e. as of 1 January 2018 or 1 January 2019. A transition period is foreseen.

Brexit: EU Summit outcome

5 July 2018

At the European Council Meetings on 28-29 June 2018, the European ministers discussed the progress on Brexit negotiations. The Summit was the last joint gathering before the European Council meets again on 18 October 2018, repeatedly marked as the due date for an agreement by EU chief negotiator Barnier.

EU reacts to US tariff measures and imposes additional duties on certain goods originating in the US

3 July 2018

On 22 June 2018, the European Commission implemented tariff countermeasures on imports of goods of US origin pursuant to Commission Implementing Regulation (EU) 2018/724, which sets forth in Annex I a list of the goods of US origin subject to additional tariffs. When first announced, these measures had been expected to be implemented on 20 June 2018.

EU adopts tougher rules for trade defence legislation

5 June 2018

In the midst of growing challenges to global trade, and following the endorsement of the European Parliament, new rules will come into effect in the first half of June 2018 (after their publication in the Official Journal) to strengthen the EU’s anti-dumping and anti-subsidy legislation.

The new rules respond to a need, expressed by many stakeholders, to modernise the EU’s legislation to impose anti-dumping and anti-subsidy duties. Tougher tools will allow the European Commission to impose higher tariffs and in a quicker manner.

EU imports of e-bikes originating in China become subject to customs registration

7 May 2018

On 3 May 2018, the European Commission published a regulation that subjects imports of electric bicycles originating in China to registration.

Registration has been requested by European e-bike manufacturers in the context of the dual anti-dumping and anti-subsidy investigations initiated on 20 October 2017 and 21 December 2017, respectively.

Brexit: political deal on movement of goods during transition period

28 March 2018

The EU and UK negotiators reached a political deal on parts of the legal text of the Withdrawal Agreement, covering citizens’ rights, the financial settlement, various other withdrawal issues, and the terms of a transition period, which would run to 31 December 2020. On 19 March 2018, the European Commission published a Draft Agreement on the withdrawal of the UK from the European Union (“EU”) and the European Atomic Energy Community (hereinafter the “Draft Agreement”). The Draft Agreement can be consulted via this link.

Note: The text upon which the negotiators have found an agreement is marked in green. In yellow the negotiators agreed on the policy objective. Text without mark-up indicates no agreement has yet been found between the negotiators.

There are still a number of open issues on which agreement must be reached, most notably in relation to the Irish border, before the Draft Agreement is finalised.  It must also then be ratified.

EU obtains temporary exemption from US tariffs on steel and aluminium and initiates its own safeguard

26 March 2018

On 23 March 2018, tariffs of 25% on imports of steel and 10% on imports of aluminium became effective in the US. Shipments of steel and aluminium from the EU into the US have been temporarily exempted from such measures through 30 April 2018, and EU leaders are engaged in negotiations to obtain a permanent exemption. On 26 March 2018, the EU mirrored the US measure by initiating a safeguard investigation that may result in tariffs or quotas on a broad range of steel products.

EU obtains temporary exemption from US tariffs on steel and aluminium and initiates its own safeguard

26 March 2018

On 23 March 2018, tariffs of 25% on imports of steel and 10% on imports of aluminium became effective in the US. Shipments of steel and aluminium from the EU into the US have been temporarily exempted from such measures through 30 April 2018, and EU leaders are engaged in negotiations to obtain a permanent exemption. On 26 March 2018, the EU mirrored the US measure by initiating a safeguard investigation that may result in tariffs or quotas on a broad range of steel products.

EU safeguard investigation initiated on Indica rice originating in Cambodia and Myanmar

19 March 2018

On 16 March 2018, the European Commission initiated a safeguard investigation on Indica rice originating in Cambodia and Myanmar, upon a request lodged by Italy.

Compulsory excise duty exemption on energy products used for cogeneration of heat and electricity

9 March 2018

On 7 March 2018, the Court of Justice of the European Union (CJEU) issued a judgment (Case C-31/17 – Cristal Union) relating to the compulsory tax exemption for energy products used for electricity production, even when these products are used in a cogeneration unit.

US Announces Steel and Aluminium Tariffs Effective 23 March 2018

9 March 2018

On 8 March 2018, President Trump issued two proclamations formally implementing new tariffs on imports of steel and aluminium into the US. The President cited the reason for the tariffs as the threat to national security posed by declining steel and aluminium industries, stating that such decline was “weakening our internal economy” and leaving the US “at risk of becoming completely reliant on foreign producers.” These tariffs are based on the recommendations stemming from two investigations conducted by the US Department of Commerce under Section 232 of the Trade Expansion Act of 1962, as amended (19 U.S.C. 1862) that concluded in January 2018.

EU publishes guidance on Brexit consequences for Customs and VAT

15 February 2018

In a 29 January 2018 press release, the Council announced a second set of supplementing negotiating directives detailing the EU27 (EU member state gathering without the UK) position regarding a transition period in relation to Brexit. These directives present a transition period that could not last beyond 31 December 2020.

Then on 30 January 2018, the EU Commission published a document giving businesses an early warning regarding key Customs and VAT challenges that they will need to tackle the moment the United Kingdom would no longer be a Member of the European Union. Unless a transitional period is agreed upon between the EU and the UK, the EU Customs and VAT rules will no longer apply in the UK from 30 March 2019.

Using transfer prices for customs valuation: update on CJEU Hamamatsu Judgment

6 February 2018

On 20 December 2017, the Court of Justice of the European Union (CJEU) issued its judgment in the Hamamatsu Photonics Deutschland GmbH case (hereafter referred to as ‘Hamamatsu’) with respect to customs valuation in relation to transfer pricing adjustments.

Hamamatsu is part of a group of companies that have concluded an advance pricing agreement. Hamamatsu purchased imported goods from its parent company in accordance with said advance pricing agreement. Based on the transfer pricing method (Residual Profit Split Method), each company within the concern was allocated a profit to generate a minimum rate of return. Depending on whether the actual profit falls outside of the anticipated margin, the result is adjusted to the margin’s upper and/or lower limit, resulting in subsequent credit or debit notes (so-called transfer pricing adjustments).

Imports of tyres for buses and lorries originating in China subject to registration

5 February 2018

On 2 February 2018, a Regulation was published in the EU Official Journal, subjecting imports of tyres for busses and lorries originating in China to registration.

The surveillance measure has been requested in the context of the dual anti-dumping and anti-subsidy investigations, initiated by the European Commission on 11 August 2017 and 24 October 2017 respectively.

EU initiates anti-subsidy probe on Biodiesel originating in Argentina

2 February 2018

On 31 January 2018, the European Commission initiated an anti-subsidy investigation on biodiesel originating in Argentina (Notice).

The product subject to this investigation is fatty-acid mono-alkyl esters and/or paraffinic gasoils obtained from synthesis and/or hydro-treatment, of non-fossil origin, commonly known as biodiesel.

Expiry review initiated on anti-dumping measures applicable to imports of tube and pipe fittings with specific origins

30 January 2018

On 27 January 2018, the European Commission initiated an investigation related to the expiry of anti-dumping measures applicable on imports of tube and pipe fittings originating in Turkey, Russia, Korea and Malaysia (Notice).

U.S. Administration to impose safeguard tariffs on washing machines and solar panels

24 January 2018

On 22 January 2018, the U.S. Administration announced President Trump’s approval of safeguard tariffs on imported residential washing machines, as well as solar cells and modules. 

New EU Conflict minerals regulation: implications and lessons learnt from the Dodd-Frank Act in the US

15 January 2018
Introduction

On 17 May 2017, the EU Parliament and EU Council adopted new import regulation on ‘Conflict Minerals’ under Regulation 2017/821. Through the raw materials covered under the EU ‘Conflict Minerals’ Regulation, (tin, tantalum and tungsten, their ores, and gold), companies importing the minerals used in producing mobile phones, technology, automotive products, as well as jewellery or medical devices, will especially be impacted. 

Expected Anti-Dumping and Anti-Subsidy probes to start in Steel and Aluminium Sectors

12 January 2018

The steel and aluminium industry worldwide is under intense pressure. The global overcapacity fuelled by China’s 50% share in the world’s production gives rise to continued disruption in the international marketplace by increased exports, depressing prices and a subsequent increase in trade barriers and remedies.

The battle around steel and aluminium trade defence mechanisms escalated over the past days with aggressive US-led trade actions and unprecedented multiple investigations in Europe.

EU and Japan finalise negotiations on Economic Partnership Agreement

22 December 2017
Introduction

On 8 December 2017, EU Trade Commissioner Cecilia Malmström and Japanese Foreign Minister Taro Kono announced the successful conclusion of the remaining negotiations for the EU-Japan Economic Partnership Agreement (EPA). 

New EU Anti-Dumping Rules in force: Implications for China

19 December 2017

On 19 December 2017, an important change to EU anti-dumping rules has been published in the Official Journal of the European Union. The new rules will have significant consequences on dumping determination and resulting anti-dumping duties in future cases targeting imports from China.

Classification of medical screws: Regulation (EU) 1212/2014 repealed

18 December 2017
Facts for repealing

Implementing Regulation (EU) No 1212/2014 (hereafter Reg.1212/2014) classified medical or implant screws under CN code 8108 90 90.  The reasoning behind this classification was that due to their objective characteristics and properties, the screws should be considered as being of “general use”.  

Efficient use of EU free trade agreements

20 November 2017
On 9 November 2017, the European Commission published the first edition of the annual Free Trade Agreement (FTA) Implementation Report. The goal of this communication is to assess transparency and highlight progress as well as problems and shortcomings. The main conclusion of the report is that there is an untapped potential in FTAs, due to their insufficient utilisation.

New Combined Nomenclature 2018

13 November 2017
Introduction

The Combined Nomenclature (CN) forms the basis for the declaration of goods:

•      Upon importation or exportation

•      When subject to intra-Union trade statistics

The CN determines which rate of customs duty applies and how the goods are treated for statistical and commercial purposes. The CN is thus a vital working tool for businesses and EU Member States' customs and VAT administrations.

Customs duty reclaims on defective goods

30 October 2017

The Court of Justice of the European Union (CJEU) issued a judgment on 12 October 2017 (X BV v Staatssecretaris van Financiën (C-661/15)) relating to customs duty adjustments on defective goods (cars in this case). Given the Court’s position, the resulting case law creates a major opportunity for affected companies to reclaim overpaid customs duties.

Anticipating CETA: benefiting from tariff reductions

21 September 2017

As of 21 September 2017, the Comprehensive Economic and Trade Agreement (CETA) between the European Union (EU) and Canada provisionally enters into force. This means that almost all provisions under CETA, comprising 95% of its benefits, will be available to companies and consumers.

One of the main benefits of CETA is that EU and Canadian origin goods can be traded between the two signatories at a reduced or zero import duty rate, subject to origin conditions.  As CETA is a ‘Mixed Agreement’, ratification by all EU member state parliaments and the Canadian parliament will be required for the full entry into force. Some provisions, related to the Investment Court System and financial services, will only become applicable once CETA fully enters into force.

New common EU denaturant for ethyl alcohol

04 August 2017

European Member States apply an excise duty on the human consumption of alcohol and products containing alcohol. However, when alcohol is denatured, making it unsuitable for such consumption, an excise duty exemption may apply.

New European Commission rules aim to tackle illicit trafficking of artworks

26 July 2017

On 13 July 2017, a new European Commission proposal on the import of cultural goods was published, and will soon thereafter be submitted to the European Parliament and the European Council for approval. The new rules could enter into force as early as 2019, and are part of a broader plan to fight terrorist financing.

For the art market and its different stakeholders, the new rules would bring consistency and clarity on the types of restrictions and control measures proposed by the European Commission in tackling illicitly traded cultural objects. Imports of cultural objects older than 250 years into the EU will be forbidden if they are illegally exported from the source country.

EU and Japan announce political agreement on bilateral Free Trade Agreement

11 July 2017

On Thursday 6 July 2017, Prime Minister Shinzo Abe of Japan, President of the European Council Donald Tusk and European Commission President Jean-Claude Juncker announced that the two trading powers reached a general political agreement on the EU-Japan Free Trade Agreement (FTA).

Negotiations for an EU-Japan FTA were officially launched in 2013. Over the last few years, these negotiations came to a near standstill following disagreements between the parties, trade-averse sentiments among the public and an internal deadlock on decision competencies between the Commission and EU member states. A number of recent developments in and outside the EU have reinitiated talks and accelerated the pending trade deal. 

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