EUROPEAN COMMISSION Brussels, 26.4.2022 COM(2022) 183 final 2022/0124(NLE) Proposal for a COUNCIL REGULATION amending Regulation (EU) 2021/2278 suspending the Common Customs Tariff duties referred to in Article 56(2), point (c), of Regulation (EU) No 952/2013 on certain agricultural and industrial products



EXPLANATORY MEMORANDUM 1.CONTEXT OF THE PROPOSAL •Reasons for and objectives of the proposal In order to ensure sufficient and uninterrupted supplies of certain agricultural and industrial products which are insufficiently produced or not produced at all in the Union and to avoid any disturbances on the market for these products, some Common Customs Tariff duties have been partially or totally suspended by Council Regulation (EU) No 2021/2278 (hereinafter "the Regulation"). The Regulation is updated every six months to accommodate the needs of 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 the suspension of duties is justified for some new products, currently not listed in the Annex of the Regulation. In relation to some other products, it is necessary to modify the conditions in terms of product description and classification. Products for which a tariff suspension is no longer in the Union's economic interest are proposed to be withdrawn.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 nor 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 in the area of agriculture, trade, enterprise, environment, 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 exclusive competence of the Union. 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 TFEU, "Common Customs Tariff duties shall be fixed by the Council on a proposal from the Commission". Therefore, a Council 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 autonomous suspensions scheme was subject to an evaluation study carried out in 2013. The evaluation concluded that the core rationale for the scheme remains valid. The cost savings for EU businesses importing goods under the scheme can be significant. In turn, depending on the product, company and sector, these savings can have wider benefits, such as boosting competitiveness, making production methods more efficient, and creating or keeping jobs in the Union. Details of the savings stemming from this regulation can be found in the attached legislative financial statement. •Stakeholder consultations The Economic Tariff Questions Group (ETQG), which consists of representatives from all Member States plus Turkey, assisted the Commission in the preparation of this proposal The ETQG carefully examined each case to ensure that it would not cause any harm to Union enterprises and would strengthen and consolidate the competitiveness of Union's production. The members of the ETQG carried out the assessment through discussions, and Member States, in turn, consulted the concerned industries, associations, chambers of commerce and other stakeholders involved. All listed suspensions correspond to agreements or compromises reached in the discussions of the ETQG. No potential serious risk with irreversible consequences was identified. •Impact assessment The proposed amendment is of a purely technical nature and concerns only the coverage of the suspensions currently listed in the Annex to Council Regulation (EU) No 2021/2278. An impact assessment was not carried out because the proposed changes in the list of products that would benefit from the autonomous Common Customs Tariff duties suspension are not expected to have significant impacts. •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 corresponding to the suspension will amount approximately EUR 39 725 358 per year. The negative effect on the budget’s traditional own resources is EUR 29 794 018 per year (i.e. 75 % 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 on resource contributions. 5.OTHER ELEMENTS •Implementation plans and monitoring, evaluation and reporting arrangements The proposed measures are managed within the framework of the Integrated Tariff of the European Union (TARIC) and applied by customs administrations of the Member States. 2022/0124 (NLE) Proposal for a

COUNCIL REGULATION amending Regulation (EU) 2021/2278 suspending the Common Customs Tariff duties referred to in Article 56(2), point (c), of Regulation (EU) No 952/2013 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 not produced in the Union and thereby avoid any disturbances on the market for those products, Common Customs Tariff duties of the type referred to in Article 56(2), point (c), of Regulation (EU) No 952/2013 of the European Parliament and of the Council (‘CCT duties’) on those products have been suspended by Council Regulation (EU) 2021/2278. As a result, the products listed in the Annex to Regulation (EU) 2021/2278 can be imported into the Union at reduced or zero duty rates. (2)The Union production of certain products that are not listed in the Annex to Regulation (EU) 2021/2278 is inadequate to meet the specific requirements of the user industries in the Union. As it is in the Union's interest to ensure an adequate supply of certain products and having regard to the fact that that identical, equivalent or substitute products are not produced in sufficient quantities within the Union, it is necessary to grant a complete suspension of the CCT duties on those products. (3)With a view to promoting integrated battery production in the Union in accordance with the Communication from the Commission of 17 May 2018 entitled ‘Europe on the Move – Sustainable Mobility for Europe: safe, connected, and clean’, a partial suspension of the CCT duties should be granted in respect of certain products related to the battery productionthat are currently not listed in the Annex to Regulation (EU) 2021/2278. (4)The date for the mandatory review of those suspensions concerning products related to battery production should be 31 December 2022, in order for that review to take into account the short-term evolution of the battery sector in the Union. (5)It is necessary to amend the product description and classification for certain CCT duty suspensions listed in the Annex to Regulation (EU) 2021/2278 in order to take into account technical product developments and economic trends in the market. (6)It is no longer in the interest of the Union to maintain the suspension of CCT duties for certain products listed in the Annex to Regulation (EU) 2021/2278. The suspensions for those products should therefore be deleted. (7)Regulation (EU) 2021/2278 should therefore be amended accordingly. (8)In order to avoid any interruption in the application of the autonomous tariff suspension scheme and to comply with the guidelines set out in the Communication from the Commission of 13 December 2011 concerning autonomous tariff suspensions and quotas, the changes provided for in this Regulation regarding the tariff suspensions for the products concerned should apply from 1 July 2022. This Regulation should therefore enter into force as a matter of urgency, HAS ADOPTED THIS REGULATION: Article 1 The Annex to Regulation (EU) 2021/2278 is amended in accordance with the Annex to this Regulation. 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 2022.

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: Proposal for amending Regulation (EU) 2021/2278 suspending the Common Customs Tariff duties referred to in Article 56(2) point (c) of Regulation (EU) No 952/2013 on certain agricultural and industrial products 2.BUDGET LINES: Chapter and Article: Chapter 12, Article 120 Amount budgeted for the year 2022: 17 912 606 159 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) Budget line Revenue 6 month period, starting dd/mm/yyyy [Year: second half of 2022] Article 120 Impact on own resources 01/07/2022 -14,9 Situation following action [2022 – 2026] Article 120 - 29,8 EUR million/ year The Annex contains 55 new products. The uncollected duties corresponding to these suspensions, calculated on the basis of requesting Member State projections for the period 2022 to 2026, amount to EUR 30 203 402 per year. On the basis of the existing statistics for preceding years, it would appear, however, necessary to increase this amount by an average factor, estimated at 1,8 to take account of imports into other Member States using the same suspensions. This means uncollected duties of some EUR 54 366 124 per year. Eight products have been withdrawn from this Annex reflecting the reintroduction of customs duties. This represents an increase of EUR 14 640 766 per year in the collection of duties, as estimated on the basis of 2021 statistics.