WORLD TRADE  
ORGANIZATION  WT/DS375/1 
G/L/851 2 June 2008 
 
 
(08-2565) 
 Original:   English 
  
 
EUROPEAN COMMUNITIES AND ITS MEM BER STATES – TARIFF TREATMENT  
OF CERTAIN INFORMATION TECHNOLOGY PRODUCTS 
 
Request for Consultations by the United States
 
 
 
 The following communication, dated 28 May 2008, from the delegation of the United States to the delegation of the European Communities and to the Chairman of the Dispute Settlement Body, 
is circulated in accordance with Article 4.4 of the DSU.  
_______________ 
 
  My authorities have instructed me to request  consultations with the European Communities 
("EC") and its member States pursuant to Article 4 of the Understanding on Rules and Procedures 
Governing the Settlement of Disputes  ("DSU") and Article XXII:1 of the General Agreement on 
Tariffs and Trade 1994  ("GATT 1994") regarding the tariff treatme nt the EC and its member States 
accord to set-top boxes with a communication function,  flat panel displays, "input or output units," 
and facsimile machines.  
The EC, in its Schedule of Concessions to the GATT 1994 ("Schedule"), and its member 
States, in their Schedules of Concessions to the GATT 1994, committed to provide duty-free 
treatment for these products.  The EC and its member States granted these tariff concessions as a 
result of the Information Technology Agreement ("ITA").   
 However, the EC and its member States im pose duties on these products.  The measures 
pursuant to which these duties are imposed include:   
 
− Set-top boxes with a communication function
.  On 7 May 2008, the EC published an 
amendment to the Explanatory Notes to the EC's Combined Nomenclature (CN), 
which provides that the duty-free heading CN 8528 71 13 ("set-top boxes with a communication function") no longer includes set-top boxes with modems of certain types ( e.g., Ethernet modems) or set-top boxes which "incorporate a device 
performing a recording or reproducing func tion (for example, a hard disk or DVD 
drive)."
1  As a result of this exclusion, the EC and its member States impose a duty on 
these set-top boxes.  In addition, the EC adde d an explanatory note to CN 8521 90 00 
indicating that the subheading includes set -top boxes "which incorporate a device 
performing a recording or reproducing func tion (for example, a hard disk or DVD 
drive)."2  Products classified in CN 8521 90 00  are subject to an MFN duty of 13.9%. 
                                                      
1   Explanatory Notes to the Combined Nomenclature of the European Communities, 2008/C 112/03, 
O.J. C 112 (7 May 2008), pp. 8-9. 
2   Explanatory Notes to the Combined Nomenclature of the European Communities, 2008/C 112/03, 
O.J. C 112 (7 May 2008), pp. 8-9. WT/DS375/1 
G/L/851 Page 2 
 
 
  EC member States assess duties on set-top boxes with a communication function.   
 
− Flat panel displays (including LCD, el ectro luminescence, plasma and other 
technologies) .  On 31 March 2005, the EC published Council Regulation (EC) 
No 493/2005, stating that certain flat pane l displays using LCD technology that are 
"capable of reproducing video images from a source other than an automatic data-
processing machine" are not covered by the ITA or by the Communication on its implementation (Council Decisi on 97/359/EC of 24 March 1997).
3  O n  
26 April 2005, the EC published Commission Regulation (EC) No 634/2005, stating that flat panel displays with certain attr ibutes, including DVI, would be classified in a 
dutiable tariff line.
4  On 29 December 2005, the EC published Commission 
Regulation (EC) No 2171/2005, which also pr ovided that certain flat panel displays 
would be classified in a dutiable tariff line if they had certain attributes, including 
DVI.5  On 30 December 2006, the EC published amendments to the Explanatory 
Notes to accompany CN 8471 60 80 and 8528 21 90.6  Like the regulations, the 
Explanatory Notes provide that flat panel displays with certain attributes, such as 
DVI, may not be classified in the duty-free tariff line 8471 60 80 and would be classified in a dutiable tariff line.  
EC member States assess duties on flat panel displays.  Furthermore, while the EC has temporarily 
suspended the collection of duties on some flat panel displays, it appears to fail to accord tariff treatment that is no less favorable than that provided for in its Schedule.    
− "Input or output units" and facsimile machines
.  In 1999, the EC published 
Commission Regulation (EC) No 517/99, whic h provided that certain "output units" 
would be classified in a tariff line with a 6% MFN duty.7  On 9 March 2006, the EC 
published Commission Regulation (EC) No 400/2006, which classified certain "output units" or facsimile machines, under CN subheading 9009 12 00, as indirect 
process electrostatic photocopiers.
8  The EC Customs Code Committee also issued a 
statement indicating that "if a multifunctional device (fax, printer, scanner, copier) has 
the capability of photocopying in black a nd white 12 or more pages per minute (A4 
format) this indicates that the product is classifiable in heading 9009 as a 
photocopying apparatus."9  Consistent with that statement, on 31 October 2006, the 
EC published Commission Regulation (EC) No 1549/2006, which provides that 
certain "output units" or facsimile machin es capable of copying more than 12 
monochrome pages per minute are classified in a dutiable tariff line.10 
EC member States assess duties on certain "input or output units" and facsimile machines.  
                                                      
3 Council Regulation (EC) No 493/2005 of 16 March 2005, O.J. L 82 (31 March 2005), pp. 1-2. 
4 Commission Regulation (EC) No 634/2005 of 26 April 2005, O.J. L 106 (27 April 2005), pp. 7-9. 
5 Commission Regulation (EC) No 2171/2005 of 23 December 2005, O.J. L 346 (29 December 2005), 
pp. 7-9. 
6 Explanatory notes adopted in acco rdance with the procedure define d in Article 10 (1) of Council 
Regulation (EEC) No 2658/87 of 23 July 1987 on the tariff and statistical nomenclature and on the Common 
Customs Tariff, 2006/C 332/05, O.J. C 332 (30 December 2006), pp. 7-9.   
7 Commission Regulation (EC) No 517/99 of 9 March 1999, O.J. L 61 (10 March 1999), pp. 23-24. 
8 Commission Regulation (EC)  No 400/2006 of 8 March 2006, O.J. L 70 (9 March 2006), pp. 9-11. 
9 Customs Code Committee, Tariff and Statistical Nomenclature Section, Report of conclusions of the 
360th meeting of the Committee , TAXUD/555/2005-EN, Annex VII (March 2005). 
10 Commission Regulation (EC)  No 1549/2006 of 17 October 2006, O.J. L 31.10.2006 
(31 October 2006), pp. 1, 541.     WT/DS375/1 
 G/L/851 
 Page 3 
 
 
   
The United States considers that these measures, alone or in combination with Council 
Regulation (EEC) No 2658/87 of 23 July 1987 on th e tariff and statistical nomenclature and on the 
Common Customs Tariff, including all annexes thereto,  as amended, appear to be inconsistent with 
the EC's obligations under Articles II:1(a) and II: 1(b) of the GATT 1994 and its Schedule and with 
the member States' obligations under Articles II:1(a) and II:1(b) of the GATT 1994 and their 
Schedules and to nullify or impair benefits accr uing to the United States under the GATT 1994.  In 
addition, with respect to set-top boxes, the Tariff a nd Statistical Nomenclature Section of the Customs 
Code Committee delivered favorable opinions with respect to the proposed amendments to the 
Explanatory Notes contained in 2008/C 112/03 in Oc tober 2006 and May 2007, respectively.  It did 
not publish the amended explanatory notes in the EC O fficial Journal until 7 May 2008.  Furthermore, 
member States were applying duties to set-top box es using the approach specified in 2008/C 112/03 
prior to 7 May 2008.  The United States considers that  these actions appear to be inconsistent with the 
EC's obligations under GATT 1994 Articles X:1 and X:2.   
 
We look forward to receiving your reply to this request and to fixing a mutually acceptable 
date for consultations. 
 
__________