The Customs Tariff
The customs tariff of the European Union determines the basis upon which customs obligations arise. The tariff was formerly published in a multi-volume looseleaf form in several volumes reaching many thousand pages. Tariff is now available online and is updated on an ongoing basis by the European Union. It is also published on EU states revenue websites.
In essence, the customs tariff is a list of goods classifications, sub-classifications and lower sub-classifications in which is listed the general duties chargeable as regards all third countries together with preferential duties under trade agreements or unilateral reductions by the EU (in particular for developing countries.
The duties are usually set and listed as a percentage of the value of the goods in most cases. However, there are other bases of charges such as weight units etcetera depending on the nature of the goods. They are set out in the relevant tariff.
Combined Nomenclature (Classification System)
The combined nomenclature of goods is a standardised categorisation of goods into major categories and layers of subcategories. In the paper version of the tariff, they appear as major divisions, with each division containing subdivisions and subcategories down to the particular tariff with the requisite information as above for the goods concerned. In the online version, it is a question of navigating or clicking down through the hierarchy of categories down to the particular category of goods concerned
Because customs apply to much trade across the world and because every import transaction is also an export transaction, there are harmonised combined nomenclature for goods based on the World Customs Organisation International Convention on the Harmonised Commodity Description and Coding System; the (HS) harmonised system.
It must be recalled that every import and every export must be declared to customs. Depending on whether the trader is an exporter or importer every movement across EU external borders (which will include the UK after Brexit) will have this dual obligation for the seller and buyer under EU law and the law of the third state (in this case the United Kingdom).
The Harmonised System
The harmonised system is governed by the International Convention on the harmonised commodity description and coding system. There are copious explanatory notes available in a hard form and online that assist in the classification. The harmonised system is updated on an ongoing basis which is now greatly facilitated by its availability online. Formerly customs tariffs comprise loosely large volumes which were updated on an ongoing basis.
Each state party to the convention undertakes to maintain the harmonised system in its naming and categorising of goods for customs and statistical purposes. Each state is to make available at import and export trade statistics conformity with the six-digit codes of the harmonised system or at the initiative of another state beyond that level to the extent that publication is not precluded for exceptional reasons such as commercial confidentiality and national security.
States are allowed to create further sub-classifications and subdivisions beyond the harmonised system provided that any subdivision is added and coded at a level beyond the six digits numeric code set out in the Convention.
The European Community combined nomenclature is based on the six-digit code of the harmonised system and is extended to an eight-digit combined nomenclature. Nomenclature designates goods and merchandise for the purpose of the application of the tariff and trade statistics.
Combined nomenclature subheadings have an eight digit code. The first six refer to the harmonised system of naming. The seventh and eighth refer to the subheadings. Where there is no further subdivision, the seventh an eight digits are 00.
The ninth is for use by member states for national statistics.
The TARIC further subheadings are the 10th and 11th digits. Where there is no further TARIC subdivision they are 00
TARIC Product Information I
TARIC is the online EU community tariff. It is published in several languages. It incorporates all the measures relating to the EU customs tariff including tariffs on agricultural duties. The purpose is by integrating all the required information; the traders are facilitated in imports and exports.
There may be duties other than ordinary customs/ import duties applicable to the particular goods. An example is price maintenance duties applicable under the Common Agricultural Policy. These duties were once significant but have been greatly reduced in recent decades.
In some cases, there are quotas which apply to imports which set out a limit on the total volume that may be imported. A licence is likely to be required where goods are subject to a quota. The licence may be given on a first-come-first-served or another basis depending on the reason for the quota.
TARIC Product Information II
The principal headings or details in the TARIC are tariff measures comprising
- general third country rates as defined in the combined nomenclature
- tariff preferences
- suspension of duties
- tariff quotas
It may include
- Agricultural measures
- Agricultural components
- additional duties for sugar sugar content and flour content
- representative poultry prices
- standard import values and unit prices for fruit and vegetables
- export refunds for basic and process agricultural products
It may include Trade defence measures which are usually anti-dumping duties and countervailing duties which may be applied to various countries pursuant to trade remedies.
It may set out prohibitions and restrictions on import and export. They may relate to
- certain goods
- goods originating in blacklisted countries
- quantitative limits for trade policy purpose
- CITES convention matters (see other articles)
- certain luxury goods
- certain cultural goods
- greenhouse gases
- dual use (potential military use) goods
- surveillance of movements of goods.
Claiming Preferential Rates
The preferential treatment set out in the TARIC for the product must be specifically claimed by the importer. This usually requires proof that the goods originated in a state with which there is a preferential trade agreement or the EU grants unilateral preferential rates.
Unilateral preferences are granted to many developing countries. This usually requires proof that goods originate in the territory or country enjoying the preferential rate. This will require a certificate of origin in most cases.
Depending on the treaty, the nature of the goods and circumstances the certificate of origin may be permitted to be self-certified in some cases. More commonly, it is issued by governmental or governmental approved bodies, such as a chamber of commerce in the state of export. The position is determined by the relevant preferential trade agreement.
Anti-dumping and countervailing duties are additional duties applied by the European Union to counteract unlawful subsidies and breaches of trade obligations by other third countries. They typically seek to counter subsidies in the country of origin. Traders may make complaints to the EU Commission which examines them. It may decide to apply a countervailing duty following an investigation.
The may be provisional anti-dumping or countervailing duties for a period up to 9 months while an investigation is taking place If a full investigation confirms something unlawful has occurred subsidies have been introduced the charges usually apply definitively. They usually last five years.
In some cases retrospective anti-dumping or countervailing duties may be applied, In these cases, registration measures may be imposed on the products to seek to recoup an existing benefit by reason of dumping ng et cetera. It may be dated back up to 9 months.
Particulars of anti-dumping duties and countervailing duties are set forth in the TARIC.
Excise and VAT
Excise Duty is charged on alcohol and tobacco products and is separate from Customs Duty. The Excise Duty on wines and spirits depends on the volume of alcohol and whether wine is still or sparkling.
Excise Duty on cigarettes is based on a percentage of the recommended retail price combined with a quantity charge.
Excise Duty on other tobacco products is based on the net weight. Information on the current rates of Excise Duty in Excise Duty rates on the Revenue website.
Value Added Tax is charged on goods at the point of importation at the same rate that applies to similar goods sold in Ireland. The value of the goods for the purpose of calculating the amount of VAT payable at import is their value for customs purposes, as described above. This is increased by the amount of any duty or other tax (but not including VAT). F
Using the Tariff
The TARIC is available at the Directorate General for Taxation and Customs Union website. Excel files are available with the various data for download and use.
The tariff formation is also available at www.WTO.org
- open http//tdf.wto..org/ReportersandProducts.aspx#
- In the reporters part of the page scroll down and click on the blank white box beside European Union
- in the product part of the page scroll down to find 73 article of iron or steel
- click on the cross to open section 73 (not the blank white box)
- click on the cross at section 7316 to identify all and steel products
- select product code 731600, anchors et cetera
- ensure that both ‘is European Union’ is an ‘is products) sections have been selected and click next in either the top or bottom right-hand corner
An Excel report is opened providing the full range of tariff data for the product.
In this case, the maximum bound ad valorem (percentage value) tariff for this product range is 2.7%. To find the tariff select the bound sheets – tab in the Excel document and go to column K
the weight-based tariff of the product range is 2.7% to find the tariff in the Excel document and go to column Q
The full tariff is 5.4%. In this case, it is made of a bound ad valorem tariff and a weight-based tariff
The inbound tariff is the specific tariff amount made by the individual WTO member. This is the maximum most-favoured-nation tariff level for a given commodity line.