Problems relating to Trade and Investment on EU
9. Restrictive export/import trade, duty, and customs clearance |
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Issue |
Issue details |
Requests |
Reference |
| (1) High Import Duty | - EU levies 10% import tariff on finished cars from Japan, weakening its relative competitive edge. South Korea-EU FTA enforced since 1 July 2011, it is feared, will further aggravate the competitiveness of Japanese products against Korean products. (1) 1.5 litre or more: Tariff is repealed in 5-years stages from July 2011. (2) Over 1.5 litre: Tariff is repealed in 3-years stages from July 2011. - The tariff rate of 14% is levied on television receivers, video-cameras, etc. Example: -- PDP screens (TARIC nomenclatura: 8528726000) -- LCD screens (TARIC nomenclatura: 8528724000) -- Video camera (TARIC nomenclatura: 8525809900) - EU's levy of 5.2% customs duty on member firm's export of goods and products serves as entry barriers. |
- It is requested that GOJ proceeds with Japan-EU EPA negotiation with EU as soon as possible to repeal tariffs on finished Japanese cars. - It is requested that GOJ will achieve: -- Early ratification of Japan / EU FTA (ideally, within 2-years), -- Early ratification of expanded ITA covering broad scope, and -- Flat panel display system with digital DVI connectivity to PC and other equipment, -- WTO Panel's prompt execution concerning flat panel display system with digital DVI connectivity to PC and other equipment. - It is requested that EU takes step to review: -- Goods and products subject to (Protective) preferential measures (GAPPM) -- Tariff rates on goods and products outside the scope of GAPPM. |
- Commission Regulation (EC) No 1031/2008 - Commission Regulation (EEC) No 2658/87 |
| (Action) - From the beginning of April 2013, GOJ and the EU launched the EPA negotiation. - In May 2015, at Japan/EU Summit Meeting, on EU/Japan EPA negotiation, it was mutually agreed to aim at reaching mutual understanding on all major issues by the end of 2015. - In November 2015, at Japan/EU Summit Meeting, on EU/Japan EPA negotiation, it was agreed to exert mutually maximum effort to settle the outstanding differences with a view to reaching agreement encompassing all the key issues preferably by the end of 2015, if not in 2016 at the earliest opportunity. |
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| (Improvement) - In December 2015, agreement was reached on the Expansion of the ITA (by additional 201-Items). |
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| (2) Import Duty levied on Products covered by ITA | - Problems remain on HS code classification for toner cartridge. - Due to the reasons such as use of new fusion technology, etc., several ITA target products have already lost the zero duty status. |
- As regards HS3707, Digital Europe's proposal on "the Expansion of Trade in IT Products" is considered appropriate. - It is requested that EU will maintain and expand the scope of products subject to ITA to ensure the essential spirit of assuring market access opportunities for information technology products. |
- ITA (Information Technology Agreement) of WTO |
| (Improvement) - Effective from 1 July 2011, EU repealed tariff on Multifunction Printer, Flat Panel Display, Set-Top-box, while levying 2.2% tariff on some Multifunctional Digital Copiers of which Copying serves as its chief function. - In December 2015, agreement was reached on Expansion of Trade in ITA Products. |
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| (3) Concomitant Levy of Ad Valorem and Fixed Amount Duties | - While EU employs the ad valorem import tariff rates EU applies both the ad valorem rate of 4.5% and the fixed amount tariff (minimum and maximum tariff rates) on finished watches. On finished clock (HS9103 & 9105), only the ad valorem rates of 3.7% to 4.7% is applied. | - It is requested that EU integrates its tariff on watches based only on the ad valorem rate. | - Commission Regulation (EC) No 1031/2008 (The latest version of Explanatory Notes : Commission Regulation (EU) No 861/2010) |
| (4) Repeal of GSP | - A member firm distributes within the EU territories finished cars imported from Thailand under EU/Thai Generalised Scheme of Preferences (GSP), which allows import at 6.5% GSP rate, compared to 10% normal import duty rate. However, GSP rate application will be terminated in the beginning of 2015, so thereafter 10% rate applies. On the other hand, each of the other competing companies either import finished cars from South Africa under FTA, or assemble them in EU, therefore no import duty becomes payable. - On Shock Absorbers, 4.5% of import duty previously exempted on imports from most favoured nations, including Malaysia, Thailand, etc. has become payable in recent years. The reviews of this kind frequently take place. However, from the manufacturer's perspective, due to inability of taking a remedial action in a flash, there is no way to avoid grave negative impact on profit & loss statement. |
- It is requested that EU takes steps to: -- re-extend the current GSP, until application of the FTA tariff rate under EU/Thai FTA whose negotiation is currently under way, -- create the tariff free market to enable a difficult brand name to develop the new foothold. The Member Firm is fully aware of the shift to South Africa of the strategic production foothold, as a result of study of competing companies and the imminent repeal of EU-Thai GSP expressly stated in the GSP rule. - It is requested that EU devises GSP graduation scheme in a more visible and timely manner with ample grace period given to exporters in concern. |
- EU Generalised Scheme of Preferences |
| (5) Declined Competitive Edge of Japanese Products due to Ratification of EU-ROK FTA | - Competitive edge of Japanese products has declined due to conclusion of FTA between ROK and EU, while Import Duty is levied on tyres, etc. exported from Japan to EU. Moreover application of GSP on products exported from other ASEAN Member States to EU heavily impacts also upon export to EU of Japanese products. - Japanese finished vehicles are subject to 10% import duty levy in EU so that their competitive edge has further declined after ROK-EU FTA ratification in 2011. EU levies heavy import duty not only on finished vehicles but also on car parts, chemical raw materials, debilitating the competitive edge of Japanese manufacturers in the EU market. - Japanese manufacturers are less competitive in some business fields compared to other countries, having ratified FTA with EU ahead of Japan. |
- It is requested that GOJ takes steps to negotiate with EU toward repeal of import duty on export from Japan. - It is requested that EU repeals import duty. - It is requested that GOJ ratifies FTA with EU as soon as possible. |
- EU-Korea Free Trade Agreement |
| (Action) - Since April 2013, Japan/EU has launched negotiations of the Japan-EU EPA. - In May 2015, at Japan/EU Summit Meeting, on EU/Japan EPA negotiation, it was mutually agreed to aim at reaching mutual understanding on all major issues by the end of 2015. - In November 2015, at Japan/EU Summit Meeting, on EU/Japan EPA negotiation, it was agreed to exert mutually the maximum effort to settle the outstanding differences with a view to reaching agreement in principle, encompassing all the key issues preferably by the end of 2015, if not in 2016 at the earliest opportunity. |
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| (6) Temporarity of Suspensions and its Non-Application to Finished Products | - Concerning suspensions of customs duty set forth in the followings: -- Non-application of suspensions on finished products. -- Non-application of suspensions where identical, or equivalent products are manufactured in EU in sufficient quantity, or manufactured by third country manufacturers in the GSP Target Countries. Similarly, suspensions are not applicable, where suspensions are injurious to competition of the final finished products. (http://ec.europa.eu/taxation_customs/customs/customs_duties/tariff_aspects/ suspensions/index_en.htm) |
- Problems of suspensions include its transient validity, and its applicability, limited only to components. This issue, being resolvable by ratification of Japan/EU FTA, its early ratification is solicited. | - Council Regulation (EU) No 1344/2011 |
| (7) Excessive "Circumvention Investigation" on Anti-Dumping (AD)/Countervailing Duty (CDV) Proceedings | - EU collects the same percentages of anti-dumping duty/countervailing duty on products imported from the country(ies) as that EU has determined to be "the destination country(ies) for the circumvention purposes." Prior to Affirmative Circumvention Determination, EU conducts "Circumvention Investigation" on manufacturers in the country(ies) suspected of circumvention that includes assumption of extensive actual modes of circumventing activity. Manufacturers in the countries subject to circumvention investigation are required to respond to all items in the abovementioned investigation. Affirmative finding of circumvention will be made on manufacturers not cooperating with the investigation, with the high risk of finding for anti-dumping / countervailing duty levy in the same percentages as the anti-dumping / countervailing duty. This is the actual state of affairs. Thus, to avoid the AD/CDD levy, it is necessary for the concerned party to cooperate with the broad range of investigation that includes seemingly irrelevant, unnecessary information, far beyond the range deemed necessary for determining presence or absence of circumvention, which is the original purpose of investigation. |
- In the context of "Circumvention Investigation on anti-dumping/ countervailing duty", it is requested that EU will pay due consideration to the state of affairs of individual manufacturer, focusing upon the minimum extent necessary to complete the investigation on "presence or absence of circumvention". | - COUNCIL REGULATION (EC) No 1225/2009 of 30 November 2009 (13) |
| (8) Arbitrary Implementation of HS Code Classification | - Judgement base differs between the EU and the U.S. on parts of the main units (which is duty free) and chemical goods (consumables such as toner / ink cartridge for printers, multi-function equipment, etc., which are dutiable). | - It is requested that GOJ works toward: -- unification of the decision on duty-free as parts for the main unit, and -- addition of the printers, multi-function equipment, etc. into the expanded scope of ITA products. |
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| (Improvement) - With incorporation of the printers, multi-function equipment, etc. into the ITA products, the expanded ITA was agreed in January 2016. |
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| (9) Abrupt Change in HS Nomenclature in Classification and Tariff Rates | - Out of the blue, a Firm received Notification under Binding Tariff Information (BTI) from German Taxation Authority (GTA) that due to the change in EU Import Duty Rates, it would impose 14% Import Duty on a Product (a large Video Projector, incorporating LED) instead of Zero percent Import Duty, previously confirmed by the GTA. However, the Firm renewed its BTI application, this time as "Parts", as it had not received such notification from any other EU Member States. While finished products attract 14% Import Duty, 5% Import Duty now applies. However, abrupt future change in taxation system can result in the same set of circumstances and may disrupt the stable business activity. | - It is requested that EU: -- will provide opportunities for exchange of dialogues in expanding or changing the applicable scope of import duty, -- will ensure transparency by giving a proper and sufficient explanation, and -- harmonises the tax law implementation within the EU Regions. |
- EU Customs Regulations |
| (10) Long Period Required for BTI Approval | - It takes too long for the Commission to issue Binding Tariff Information (BTI) from the receipt of application to issuance of approvals. Normally, it takes 3-months, which are extendable, but the longest one took 9-months (on the item of security camera). | - It is requested that EU cuts down the requisite time for issuance of BTI approval. | |
| (Info) - In EU, an economic operator may obtain from the customs authorities of the member states the correct tariff classification for goods they intend to import or export under the Binding Tariff Information (BTI) system. The tariff classification obtained under BTI is valid for 6-years except for certain cases throughout the community, regardless of the member state which issued it. |
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| (11) Differences in Interpretation between Member States on Customs Valuation Audit | - A firm's subsidiary incorporated in Germany engaged in the sales and distribution across the EU received a formal document that showed the lawful deduction under the law of service cost, after the German customs auditing on customs valuation. However, the Italian customs totally disregards the German customs formal document, and insists on making its own audit, which is costly and time consuming. - MFS registered in Federal Republic of Germany (FRG) received customs auditing in detail concerning customs duty valuation. In the end, FRG approved deduction of service fee from the price. However, Italian customs, in refusal of accepting FRG custom's decision, requested to make its own investigation in detail. Responding to plural customs investigations on the same issue is costly and time consuming. |
- It is requested that EU ensures the Member States accept the customs auditing report prepared by the customs of another Member State as a result of its customs audit. - It is requested that the rest of the EU member states' customs authorities should accept the auditing results of the customs authority of one member state. |
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| (12) Disunity in Customs Clearance Procedures | - Customs clearance procedures are not harmonized among the EU Member States despite the harmonized EU customs regulations. (Example: Upon import, some Member States require submission of certificate of origin, which is not required by the EU customs regulations. Importers not only incur extra cost but also must put up with the delay in customs declaration.) - There is no harmony between the customs of the EU member states on customs clearance procedures. - The handling of customs declaration numbers at customs differs among the EU Member States. EORI (Economic Operator Registration and Identification) number, as harmonized EU number, that the customs authorities of member states allocate to each enterprise (or branch) or to each individual for use upon customs declaration. However, due to the difference in handling (in Spain, Hungary, etc.), the acquisition of the AEO (Authorised Economic Operator) status does not necessarily guarantee a simplified customs clearance, among other things. |
- It is requested that EU harmonises customs clearance procedure and operation within the Member States through use of common data request, common data exchange interface and common application of EU customs regulations within the Member States. - It is requested that EU harmonises employment of EORI numbers in regard to the customs procedures. |
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| (13) Disunity in the Export Licence Requirement | - International Trade in Endangered Species of Wild Fauna and Flora (CITES) requires to obtain export license issued in Japan in regard to exporting alligator watchbands (AWB). Some member states require importers to obtain import license that is time consuming and cumbersome. | - It is requested that EU: -- authorises import of AWB only by export license issued in Japan, and -- exempts export/import license requirement for import of AWB, as samples under ATA Carnet. |
- Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES) |
| (14) Rules of Origin | - In the past, EU established Pan-EU Regulation on Generalised System of Preferences (GSP), which has been applied uniformly for both FTA and GSP, followed by Amendment of the Rules Of Origin under GSP in 2012, which adopted the option between the Change in HS Heading criterion and Added Value criterion under Korea-EU FTA, gradually deregulating the requirements. However, basically, the Added Value criterion is used at a severely high threshold. - Under the EPAs Japan has ratified with Asian countries' Rules of Origin for many products allows manufacturers' choice of added value 40% criterion or change in HS heading (6-digits or 4-digits) criterion. For Japanese enterprises used to these criteria, the EU Rules of Origin that incorporate the rigorous added value criteria are unacceptable. |
- To enable application of the uniform Rules of Origin (ROO) for the same products, it is requested that EU/GOJ adopt the EPA Common Rules (namely, CTH criterion or less than 60% of Non-Originating Materials (= Added Value of more than 40% criterion) as ROO for GSP, provided, however, that in the case of the items where parts / sub-parts are classified in the same HS Heading of 4-digits, CTSH (Change in Tariff Sub-Heading) criterion or less than 60% of Non-Originating Materials (= Added Value of more than 40%) criterion shall apply. In addition, as to Semiconductors, it is requested that EU/GOJ adopt CTSH criterion, or Diffusion Process criterion, or less than 60% of Non-Originating Materials (= Added Value of more than 40%) criterion. - It is requested that EU / GOJ adopt FOB. Price (not Ex-Factory price) as the denominator for calculation in added value criterion to maintain uniformity with other agreements that GOJ has ratified. |
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| (15) Import Restrictions concerning Frozen Seafood | - All EU Member States supposedly apply common EU restrictions, but interpretation is different by one Member State to another. Exporter must take different actions per Member State. | - It is requested that the European Commission takes steps to ensure that customs, and governmental agencies relative to export/import of each Member State share the common recognition concerning the EU regulations, and that each Member State respect the common rules. | |
| (16) Export/Import Regulation | - Regulations of raw materials for food-products all over the world including Japan have settled individually. Therefore these differences work as non-tariff barriers on food trading. | - It is requested that plural FDA regulations are harmonised into a single regulation worldwide. | - EU Regulation |
| (17) Submission of Certification concerning Safety of Agricultural/ Fishery Products | - Producers of Agricultural/Fishery Products file application to Agricultural Administration Office, Ministry of Agriculture, Forestry and Fisheries for certificate by container that the cesium density for the products for export to EU are within the specified regulated density and that they are not products of Fukushima, Gunma, Ibaragi, Tochigi, Miyagi, Saitama, Tokyo, Chiba, Kanagawa, and Iwate Prefectures. | - The U.S. no longer requires restrictions of this kind, while EU continues to control severely. New ROK's regulation on fisheries has given an impetus for the revival of attention to the radiation issue. It is requested that EU takes steps to wipe out the harmful rumour. | |
| (18) Import Restrictions on Japanese Agro/Fishery Products | - EU restricts import of Japanese agricultural / fishery products on the Heath and Environment Grounds (such as "katsuobushi (smoke-dried bonito)" which is subjected to tightened control from its possible cancer causing risk), obstructing export from Japan of agro-fishery products. | - It is requested that GOJ exchanges dialogues with EU for deregulating or repealing import restrictions upon Japanese agro-fishery products. | - EU Food Safety Standards |
| (19) Acquisition of E-Number Disallowed | - The going EU approved additives with E-Numbers do not include additives such as rice malt, therefore, product label cannot be marked with E-numbers. Japanese exporters can only print "Koji" (Japanese for rice malt) on the product label. (Note) E numbers are codes for substances which can be used as food additives for use within the European Union and Switzerland (the "E" stands for "Europe") |
- It is requested that EU takes steps to allocate E-number for the Japanese rice malt "Koji", as soon as possible. | |
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