Jul 01

On Tuesday the European Commission adopted amendments to the EU Combined Nomenclature in line with the expanded Information Technology Agreement ('ITA'). The changes cover both the classification of certain items in the EU Combined Nomenclature as well as their MFN duties. The changes will be applicable as of 1st of July, 2016. Benefits should be expected for both consumers and firms thanks to the elimination or reduction of EU import duties on a wide range of goods, including medical equipment, video games and consoles, home hi-fi systems, headphones, blue-ray/DVR players, semi-conductors and GPS devices.

 

The Ministerial Declaration on Trade in Information Technology Products, commonly referred to as the Information Technology Agreement ('ITA'), was adopted in Singapore on 13 December 1996. Paragraph 3 of the Annex to the ITA states that participants are to meet periodically under the auspices of the Council on Trade in Goods of the World Trade Organisation (WTO) to review the product coverage with a view to agreeing, by consensus, whether it is appropriate to modify the Attachments to that Annex to incorporate additional products in the light of technological developments, experience in applying the tariff concessions or changes to the Harmonised System nomenclature.

 

On the EU side, negotiations on the expansion of the ITA have been conducted by the Commission with a view to expanding its product coverage to reflect technological developments and convergence. Besides the European Union, other 21 countries have agreed to lower their import duties on technology, among which the USA, Canada, Australia, Singapore, China, Japan and South Korea. On 28 July 2015, the participants in the negotiations issued a Declaration on the Expansion of Trade in Information Technology Products ('the Declaration on the expansion of the ITA'), which records the results of the negotiations and which has been endorsed during the 10th WTO Ministerial Conference held in Nairobi from 15 to 18 December 2015. The European Union submitted to the WTO the necessary modifications to its schedule of commitments in terms of MFN duties, annexed to the General Agreement on Tariffs and Trade 1994 ('GATT 1994').

 

According to the European Commission (link) (http://trade.ec.europa.eu/doclib/press/index.cfm?id=1355), the deal will cover €1 trillion in global trade, covering close to 90% of world trade in the products concerned. The companies taking advantage of these changes should be mainly the ones trading in multimedia, electronics, medical equipment, aeronautics and automotive, photographic and cinematographic laboratories as well as printing business.

 

As far as the EU is concerned, a Commission Implementing Regulation has been adopted in order to amend both the classification of technology and the applicable EU MFN duties. The products affected by the changes are 'multi-component integrated circuits' (MCOs) as well as a wide range of devices from Chapters 84, 85, 90, 91 and 93.

 

Here a non-exhaustive list of products affected by the amendments:

 

  • Multimedia: DVDs; microphones, loudspeakers (whether single or multiple), headphones and earphones; television cameras, digital cameras and video camera recorders;
  • Computers: accumulator chargers, rectifiers, inverters and other inductors; fans  of a kind used solely or principally for cooling microprocessors, telecommunication apparatus, computers or units of computers;
  • Payments sector: weighing and money-changing machinery; cards incorporating magnetic stripes;
  • Photographic and cinematographic laboratories, printing business: printers and ink cartridges; machinery for phototypesetting, typesetting or printing as well as their parts; machines which perform two or more of the functions of printing, copying or facsimile transmission; apparatus and equipment for photographic and cinematographic laboratories;
  • Machinery in general: machines for making optical fibres; heat-exchange units; machinery and apparatus for filtering or purifying air or gases; machines and apparatus for the manufacture of flat panel displays; calendering or other rolling machines; vacuum pumps;
  • Aeronautics and automotive: radar apparatus, radio navigational aid apparatus and radio remote control apparatus; radio-broadcast receivers of a kind used in motor vehicles; signal generators; telescopes and periscopes;
  • Medical equipment: microscopes; instruments and apparatus for measuring or detecting ionising radiation;
  • Other: instruments and apparatus for measuring or checking voltage, current, resistance or power; electricity meters; parts and accessories for machines, appliances, instruments or apparatus of Chapter 90.

 

In terms of elimination of tariffs in other participating countries, the European Commission informed that procedural delays have occurred in China, Japan and Korea, but implementation by these countries is expected soon. The last participating countries (Australia, Iceland, the Philippines and Switzerland) will implement the agreement as of 1 January 2017. (link) (http://trade.ec.europa.eu/doclib/press/index.cfm?id=1522&newsletter_id=230&utm_source=trade_newsletter&utm_medium=email&utm_campaign=EU%20Trade%20&utm_content=WTO&lang=en)

 

The text of the Commission Implementing Regulation is available at the following (link) (http://eur-lex.europa.eu/legal-content/EN/TXT/?qid=1467215915105&uri=CELEX:32016R1047#ntr2-L_2016170EN.01003601-E0002).

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