EU Imposes Additional Duties Beginning March 1, 2004 on Selected U.S. Products Due to FSC/ETI Dispute
European Union (EU) sources have confirmed that effective March 1, 2004, the EU will impose additional customs duties on imports of certain U.S.-origin products in connection with the EU's World Trade Organization (WTO) dispute over the U.S. Foreign Sales Corporation/Extraterritorial Income Exclusion Act (FSC/ETI) tax regime.
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(On December 8, 2003, the Council of the European Union (Council) adopted a regulation that imposes, effective March 1, 2004, additional customs duties on imports of certain U.S.-origin products. According to this regulation, the Council will decide on the repeal of these additional duties once the U.S. has fully implemented the recommendation of the WTO Dispute Settlement Body (DSB).)
5% Additional Duties for One Month, to Increase by 1% Each Month Until 17%
According to the Council's December 8, 2003 regulation, additional ad valorem duties will be imposed on U.S.-origin products classified under select EU Combined Nomenclature (CN) codes (tariff numbers), as follows:
| Time Period | Additional Duty |
|---|---|
| March 1, 2004 - March 31, 2004 | 5% |
| April 1, 2004 - April 30, 2004 | 6% |
| May 1, 2004 - May 31, 2004 | 7% |
| June 1, 2004 - June 30, 2004 | 8% |
| July 1, 2004 - July 31, 2004 | 9% |
| August 1, 2004 - August 31, 2004 | 10% |
| September 1, 2004 - September 30, 2004 | 11% |
| October 1, 2004 - October 31, 2004 | 12% |
| November 1, 2004 - November 30, 2004 | 13% |
| December 1, 2004 - December 31, 2004 | 14% |
| January 1, 2005 - January 31, 2005 | 15% |
| February 1, 2005 - February 28, 2005 | 16% |
| From March 1, 2005 | 17% |
After March 1, 2005, the Council has stated that the European Commission will present a proposal to the Council for the revision of the regulation in light of developments.
U.S. Products That Would be Subject to Additional Duties
The Council's regulation also includes an Annex that contains a list of the 8-digit CN codes (tariff numbers) that would be subject to the additional duties beginning March 1, 2004. According to the Council's regulation, the specified 8-digit product codes are covered by the following CN chapters: 1, 2, 4, 5, 7, 8, 10-12, 15-17, 19-21, 23, 33-35, 41-44, 48, 49, 52, 54, 57, 61-64, 69-74, 76, 82-85, and 95.
Exemptions from the EU's Additional Duties
According to the Council's regulation, the following shall not be subject to additional duties:
products listed in the Annex for which an import license with an exemption from or a reduction of duty has been issued prior to the date of entry into force of this regulation; and
products listed in the Annex for which it can be demonstrated that they are already on their way to the European Community on the date of entry into force of this regulation, and whose destination cannot be changed.
(See ITT's Online Archives or 12/24/03 news, 03122410, for previous BP summary on the Council's December 8, 2003 regulation, which includes certain details not included above.)
Council Regulation (EC) No. 2193/2003, including list of CN codes for U.S.-origin products that would be subject to additional duties, available at
http://europa.eu.int/eur-lex/pri/en/oj/dat/2003/l_328/l_32820031217en00030012.pdf.