EU Suspends its Additional Duties on Selected U.S. Products Imposed in FSC/ETI Trade Dispute Retroactive to January 1, 2005
On January 31, 2005, the Council of the European Union (Council) adopted a regulation which suspends, retroactive to January 1, 2005, the additional customs duties it has been imposing on certain U.S.-origin products in connection with the European Union's (EU's) dispute over the U.S. Foreign Sales Corporation (FSC)/FSC Replacement and Extraterritorial Income Exclusion Act (ETI) tax regime.
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Repayment/Remission of January 2005 Additional Duties Must be Applied For
According to the EU, as of January 1, 2005, such additional duties are not legally owed. Accordingly, interested parties are informed that they may apply for repayment or remission of these duties from the national customs authorities to which a payment has been made or is due in accordance with Article 236 of the Community Customs Code.
Additional Duties Suspended Until January 1, 2006 or 60 Days After WTO Decision that JOBS Act is WTO-Incompatible
According to the Council's regulation, the suspension of such additional duties is effective until January 1, 2006 or 60 days after confirmation by the World Trade Organization's (WTO's) Dispute Settlement Body (DSB), whichever date is later, that certain aspects of the American JOBS Creation Act of 2004 (JOBS Act), which repealed the FSC/ETI tax regime, are inconsistent with the WTO obligations of the U.S.
(Although the American JOBS Creation Act of 2004 repealed the FSC/ETI tax regime, the EU requested WTO consultations over the legislation's transitional and grandfathering provisions, which the EU claims are not WTO-compliant. (See ITT's Online Archives or 01/04/05 news, 05010433, for BP summary of the Office of the U.S. Trade Representative (USTR) notice on the EU's request for WTO consultations.)
If Reimposed, Additional Duties Would be 14%, Apply to Revised Product List
EU sources have confirmed that according to the Council's regulation, if additional duties are reimposed, they would be set at 14% (in addition to the normally applicable customs duties) and would be applied to products listed in the regulation's Annex. According to EU sources, the annex of the new regulation contains approximately 100 fewer CN codes (i.e., fewer U.S.-origin products) than the original list of CN codes subject to additional duties.
(Since March 1, 2004, the EU has imposed additional customs duties on imports of certain U.S. origin products in connection with the FSC/ETI tax regime dispute. As of January 1, 2005, the level of additional duties was 15%.)
Council press release (dated 01/31/05) available at
http://ue.eu.int/ueDocs/cms_Data/docs/pressData/en/er/83507.pdf.
EU Notice to Importers (published in the Official Journal of the EU on 02/01/05) available at http://europa.eu.int/eur-lex/lex/LexUriServ/site/en/oj/2005/c_025/c_02520050201en00020002.pdf.
Council Regulation No. 171/2005 (published in the Official Journal of the EU on 02/01/05) available at http://europa.eu.int/eur-lex/lex/LexUriServ/site/en/oj/2005/l_028/l_02820050201en00310040.pdf.