EUROPEAN COMMISSION Brussels, 28.5.2018 COM(2018) 343 final 2018/0174(NLE) Proposal for a COUNCIL REGULATION amending Regulation (EU) No 1387/2013 suspending the autonomous Common Customs Tariff duties on certain agricultural and industrial products



EXPLANATORY MEMORANDUM 1.CONTEXT OF THE PROPOSAL •Reasons for and objectives of the proposal Certain agricultural and industrial products are not produced in the Union, or produced in insufficient quantities. To ensure sufficient and uninterrupted supplies and to prevent market disturbance for these products, Council Regulation (EU) No 1387/2013 partially or totally suspended some autonomous Common Customs Tariff duties. The Regulation is updated every six months to accommodate the needs of the Union industry. The Commission, assisted by the Economic Tariff Questions Group, has reviewed all requests from the Member States for autonomous tariff suspensions. Following this review, the Commission considers that a suspension of duties is justified for some new products, currently not listed in the Annex to Council Regulation (EU) No 1387/2013. The conditions governing the description, classification or end-use requirement of some other products should be changed. Products for which a tariff suspension is no longer in the economic interest of the Union should be withdrawn. •Consistency with existing policy provisions in the policy area This proposal does not affect countries that have a preferential trading agreement with the Union, candidate countries or potential candidates for preferential agreements with the Union (e.g. Generalised System of Preferences; the African, Caribbean and Pacific group trade regime; Free Trade Agreements). •Consistency with other Union policies The proposal is in line with Union policies on agriculture, trade, enterprise, development and external relations. 2.LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY •Legal basis The legal basis of this proposal is Article 31 of the Treaty on the Functioning of the European Union (TFEU). •Subsidiarity (for non-exclusive competence) The proposal falls under the Union’s exclusive competence. The subsidiarity principle therefore does not apply. •Proportionality The proposal complies with the principle of proportionality. The measures envisaged are in line with the principles for simplifying procedures for operators engaged in foreign trade, as stated in the Commission communication concerning autonomous tariff suspensions and quotas. This Regulation does not go beyond what is necessary to achieve the objectives pursued in accordance with Article 5(4) of the Treaty on European Union (TEU). •Choice of the instrument By virtue of Article 31 of the Treaty on the Functioning of the European Union (TFEU), "Common Customs Tariff duties shall be fixed by the Council on a proposal from the Commission". Therefore, a regulation is the appropriate instrument.

3.RESULTS OF EX-POST EVALUATIONS, STAKEHOLDER CONSULTATIONS AND IMPACT ASSESSMENTS •Ex-post evaluations/fitness checks of existing legislation The entire autonomous suspensions scheme was the subject of an evaluation study which was carried out in 2013. The study concluded that the core rationale for the scheme remains valid. The cost savings for Union businesses importing goods under the scheme can be significant. In turn, depending on the product, company and sector, those savings can have wider benefits, such as boosting competitiveness, making production methods more efficient, and creating and keeping jobs in the Union. Details of the savings of this regulation can be found in the attached legislative financial statement. •Stakeholder consultations The Economic Tariff Questions Group, which brings together delegates from all Member States plus Turkey, assisted the Commission to assess this proposal. The group met three times before agreeing the changes in this proposal. It carefully assessed each request (new, or for an amendment). It focused especially on the need to prevent any harm to Union producers, and to strengthen and consolidate the competitiveness of Union production. All listed suspensions were the subject of agreements or compromises reached in the discussions held at the Economic Tariff Questions Group. No potentially serious risks with irreversible consequences were mentioned. •Impact assessment The proposed amendment is of a purely technical nature and concerns only the coverage of suspensions listed in the Annex to Council Regulation (EU) No 1387/2013. Therefore, no impact assessment was carried out for this proposal. •Fundamental rights The proposal has no consequences on fundamental rights. 4.BUDGETARY IMPLICATIONS This proposal has no financial impact on expenditure but has a financial impact on revenue. Uncollected customs duties total approximately EUR 25 million per year. The effect on budget’s traditional own resources of the budget is EUR 20 million per year (i.e. 80 % of the total). The legislative financial statement sets out the budgetary implications of the proposal in greater detail. The loss of revenue in traditional own resources shall be compensated by Member States’ Gross National Income (GNI) based own resource contributions. 5.OTHER ELEMENTS •Implementation plans and monitoring, evaluation and reporting arrangements The measures proposed are managed within the framework of the Integrated Tariff of the European Union (TARIC) and applied by Member States’ customs administrations. 2018/0174 (NLE) Proposal for a COUNCIL REGULATION

amending Regulation (EU) No 1387/2013 suspending the autonomous Common Customs Tariff duties on certain agricultural and industrial products THE COUNCIL OF THE EUROPEAN UNION, Having regard to the Treaty on the Functioning of the European Union, and in particular Article 31 thereof, Having regard to the proposal from the European Commission, Whereas: (1)In order to ensure a sufficient and uninterrupted supply of certain agricultural and industrial products which are unavailable in the Union or only available in inadequate quantities and thereby avoid any disturbances on the market for those products, autonomous Common Customs Tariff duties on those products have been suspended by Council Regulation (EU) No 1387/2013. Those products can be imported into the Union at reduced or zero duty rates. (2)It is no longer in the interest of the Union to maintain the suspension of autonomous Common Customs Tariff duties for 5 products currently listed in the Annex to Regulation (EU) No 1387/2013. The products in question are those identified in Annex I to this Regulation by CN and TARIC codes which are not at the same time listed in Annex II to this Regulation. Suspensions for those products should therefore be deleted. (3)The production in the Union of 85 products that are currently not listed in the Annex to Regulation (EU) No 1387/2013 is inadequate or non-existent. The products in question are those identified in Annex II to this Regulation by CN and TARIC codes which are not at the same time listed in Annex I to this Regulation. It is therefore in the interest of the Union to suspend the autonomous Common Customs Tariff duties on those products. (4)It is necessary to modify the conditions for the suspension of autonomous Common Customs Tariff duties for certain products currently listed in the Annex to Regulation (EU) No 1387/2013 in order to take into account technical product developments and economic trends on the market. In particular: ·for one suspension, it is necessary to adapt the end-use requirements; ·for another the applicable duty rate should be amended; ·for 19 suspensions the description should be clarified or aligned; ·for 14 suspensions it is necessary to change the classification; ·for 18 suspensions the supplementary unit needs to be adapted. (5)Regulation (EU) No 1387/2013 should therefore be amended accordingly. (6)In order to avoid any interruption of the application of the autonomous suspension scheme, the changes provided for in this Regulation regarding the suspensions for the products concerned should apply from 1 July 2018. This Regulation should therefore enter into force as a matter of urgency, HAS ADOPTED THIS REGULATION: Article 1 In the Annex to Regulation (EU) No 1387/2013, the table is amended as follows: (1) all asterisks and endnote (*) containing the text ‘A newly introduced measure or a measure with amended conditions.' are deleted;

(2) the rows relating to suspensions for the products for which the CN and TARIC codes are set out in Annex I to this Regulation are deleted; (3) the rows for the products listed in Annex II to this Regulation are inserted following the order of the CN and TARIC codes indicated in the first and second columns of that table, respectively. Article 2 This Regulation shall enter into force on the day following that of its publication in the Official Journal of the European Union. It shall apply from 1 July 2018. This Regulation shall be binding in its entirety and directly applicable in all Member States. Done at Brussels, For the Council The President LEGISLATIVE FINANCIAL STATEMENT 1. NAME OF THE PROPOSAL: Council Regulation amending Regulation (EU) No 1387/2013 suspending the autonomous Common Customs Tariff duties on certain agricultural and industrial products 2. BUDGET LINES: Chapter and Article:

Chapter 1 2 and Article 1 2 0 – Customs duties and other duties referred to in point (a) of Article 2(1) of Decision 2014/335/EU, Euratom; Amount budgeted for the year 2018 (22 844 000 000 EUR) 3. FINANCIAL IMPACT ◻ Proposal has no financial implications X Proposal has no financial impact on expenditure but has a financial impact on revenue -the effect is as follows: (EUR million to one decimal place)