Proposal for a Council Regulation establishing additional customs duties on imports of certain products originating in the United States of America
Date: 2005-03-31
Institutions: European Commission
Subjects: CCT duties, United States, common tariff policy, import, suspension of customs duties

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 31.3.2005 
COM(2005) 103 final 

2005/0022 (ACC) 

Proposal for a 

COUNCIL REGULATION 

establishing additional customs duties on imports of certain products originating in the 
United States of America 

(presented by the Commission) 

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EXPLANATORY MEMORANDUM 

On  28  October  2000,  the  United  States  of  America  (‘United  States’)  enacted the Continued 
Dumping  and  Subsidy  Offset  Act  (‘CDSOA’).  This  legislation  mandates  the  yearly 
distribution  of  the  anti-dumping  and  countervailing  duties  collected  during  the  preceding 
fiscal year to the companies that brought or supported the complaint at the origin of the anti-
dumping or countervailing duty order. 

Following a joint request of the Community and 10 other WTO Members (Australia, Brazil, 
Canada,  Chile,  India,  Indonesia,  Japan,  Korea,  Mexico  and  Thailand),  a  WTO  Panel  in 
September  2002  and  the  Appellate  Body  in  January  2003  found  that  the  CDSOA  provides 
remedies  against  dumping  or  a  subsidy  which  are  not  allowed  by  the  Agreement  on 
Implementation  of  Article  VI  of  the  General  Agreement  on  Tariffs  and  Trade  1994  and  the 
Agreement  on  Subsidies  and  Countervailing  Measures.  The  two  reports  were  adopted  at  a 
special meeting of the Dispute Settlement Body (‘DSB’) on 27 January 2003 thus putting on 
the United States the obligation to bring its legislation into conformity with the WTO rules. 
The United States was subsequently awarded until 27 December 2003 to do so. To date, the 
United States has still not implemented the WTO ruling and recommendation. 

On  26  January  2004,  the  Community  exercised  its  rights  under  Article  22.2  of  the 
Understanding  on  Rules  and  Procedures  governing  the  Settlement  of  Disputes  (‘DSU’)  and 
requested to the DSB the authorisation to suspend the application of its tariff concessions and 
related  obligations  under  the  General  Agreement  on  Tariff  and  Trade  1994  to  the  United 
States. 

The  United  States  objected  to  the  level  of  suspension  of  tariff  concessions  and  related 
obligations and the matter was referred to arbitration. In  the  award circulated on 31 August 
2004,  the  Arbitrator  determined  that  the  level  of  nullification  or  impairment  caused  to  the 
Community in a particular year was equal to 72% of the amount of disbursements relating to 
duties paid on imports from the EC for the most recent year for which data are available at 
that time. The Arbitrator concluded that the suspension by the Community of concessions, in 
the form of the imposition of an additional import duty above bound customs duties, on a list 
of products originating in the United States covering, on a yearly basis, a total value of trade 
not exceeding the amount of nullification or impairment would be consistent with Article 22.4 
of the DSU. 

On  10  November  2004,  the  Community  presented  a  new  request  to  suspend  every  year  the 
application  of  its  tariff  concessions  to  the  United  States  at  a  level  not  exceeding  the  annual 
level  of  nullification  or  impairment  determined  in  accordance  with  the  result  of  the 
arbitration. The suspension of concessions would take the form of an additional import duty 
on imports from the United States of products selected from an indicative list notified in the 
request. The DSB granted the requested authorisation on 26 November 2004. The imposition 
of the additional import duty is postponed to 1 May 2005 so as to leave to the United States 
the  opportunity  to  bring  its  legislation  into  conformity  with  the  WTO  ruling  and 
recommendation. 

At  the  time  of  adopting  the  present  proposal  for  a  Council  Regulation,  the  most  recent 
distribution  for  which  data  were  published  by  the  United  States’  authorities  relates  to  the 
disbursements of the anti-dumping and countervailing duties collected during the fiscal year 

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2004. On that basis, the level of nullification or impairment to the Community is USD 27,81 
million. 

If the non-implementation of the DSB ruling and recommendation persists, the Commission 
will, annually, adjust the level of suspension to the level of nullification or impairment caused 
to the Community by the CDSOA at that time. The Commission will modify the rate of the 
additional  import  duty  or  the  list  of  products  subject  to  the  additional  import  duty  in 
accordance with the criteria and procedures laid down in the basic Council Regulation. 

The  selection  of  products  was  initiated  on  the  basis  of  the  list  of  United  States’  products 
which  would  have  been  subject  to  an  additional  import  duty  if  the  US  had  not  repealed  its 
safeguard  measures  on  steel  (annex  II  of  Council  Regulation  1031/2002  of  13  June  2002 
establishing additional customs duties on imports of certain products originating in the United 
States  of  America,  OJ  L  157  of  15  June  2002,  p.  8).  Member  States  presented  requests  to 
exclude  products  from  that  list  or  to  add  products  to  it.  On  that  basis,  the  indicative  list 
notified to the WTO was established and subsequently split into two lists: 

–  The  first  list  (Annex  I  of  the  proposed  Regulation)  contains  those  products  that  will  be 
subject to a 15% ad valorem additional import duty as from 1 May 2005. The effect of the 
additional import duty over one year on imports of the selected products originating in the 
United States represents a value of trade that does not exceed USD 27,81 million. 

–  The  second  list  (Annex  II  of  the  proposed  Regulation)  is  a  reserve  list.  If  the  level  of 
suspension  increases,  products  may  be  added  to  the  list  of  products  subject  to  the 
additional import duty. The selection of new products will be made from the reserve list in 
an automatic fashion by following the order of that list. 

Prior to the application of a new level of suspension, the Community will notify to the DSB 
the new level of suspension, the rate of the additional import duty, the list of products and the 
amount of imports from the United States of the selected products that will be affected by the 
measure. 

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2005/0022 (ACC) 

Proposal for a 

COUNCIL REGULATION 

establishing additional customs duties on imports of certain products originating in the 
United States of America 

THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  establishing  the  European  Community,  and  in  particular 
Article 133 thereof, 

Having regard to the proposal from the Commission1, 

Whereas: 

(1) 

(2) 

(3) 

On  27  January  2003,  the  Dispute  Settlement  Body  (‘DSB’)  of  the  World  Trade 
Organisation (‘WTO’), adopted the Appellate Body report (2) and the Panel report (3), 
as  upheld  by  the  Appellate  Body  report,  finding  that  the  Continued  Dumping  and 
Subsidy Offset Act (‘CDSOA’) was incompatible with the United States’ obligations 
under the WTO agreements. 

Since  the  United  States  failed  to  bring  its  legislation  in  conformity  with  the  covered 
agreements,  the  Community  requested  to  the  DSB  the  authorisation  to  suspend  the 
application  of  its  tariff  concessions  and  related  obligations  under  GATT  1994  to  the 
United  States  (4).  The  United  States  objected  to  the  level  of  suspension  of  tariff 
concessions and related obligations and the matter was referred to arbitration. 

On  31  August  2004,  the  arbitrators  determined  that  the  level  of  nullification  or 
impairment caused every year to the Community was equal to 72% of the amount of 
CDSOA  disbursements  relating  to  anti-dumping  or  countervailing  duties  paid  on 
imports from the Community for the most recent year for which data are available at 
that time, as published by the United States’ authorities. The Arbitrator concluded that 
the suspension by the Community of concessions or other obligations, in the form of 
the  imposition  of  an  additional  import  duty  above  bound  custom  duties,  on  a  list  of 
products originating in the United States covering, on a yearly basis, a total value of 
trade  not  exceeding  the  amount  of  nullification  or  impairment  would  be  consistent 
with WTO rules. On 26 November 2004, the DSB granted the authorisation to suspend 

1 
2 

3 

4 

OJ C , , p. . 
United  States  –  Offset  Act  (Byrd  Amendment),  Appellate  Body  report  (WT/DS217/AB/R, 
WT/DS234/AB/R, 16 January 2003). 
United States – Offset Act (Byrd Amendment), Panel report (WT/DS217/R, WT/DS234/R, 16 September 
2002). 
United States – Offset Act (Byrd Amendment), Recourse by the European Communities to Article 22.2 
of the DSU (WT/DS217/22, 16 January 2004). 

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(4) 

(5) 

(6) 

(7) 

(8) 

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the application to the United States of tariff concessions and related obligations under 
GATT 1994 in accordance with the decision of the arbitrator. 

The CDSOA disbursements for the most recent year for which data are available relate 
to  the  distribution  of  anti-dumping  and  countervailing  duties  collected  during  the 
Fiscal  Year  2004  (1  October  2003  to  30  September  2004).  On  the  basis  of  the  data 
published  by  the  United  States’  Customs  and  Border  Protection,  the  level  of 
nullification  or  impairment  caused  to  the  Community  is  calculated  at  USD  27,81 
million.  The  Community  may,  therefore,  suspend  the  application  of  its  tariff 
concessions  to  the  United  States  at  an  equivalent  amount.  The  effect  of  a  15%  ad 
valorem  additional  import  duty  on  imports  of  the  products  in  Annex  I  originating  in 
the United States represents, over one year, a value of trade that does not exceed USD 
27,81  million.  In  respect  of  these  products,  the  Community  shall  suspend  the 
application of its tariff concessions to the United States from 1 May 2005. 

If  the  non  implementation  of  the  DSB  ruling  and  recommendation  persists,  the 
Commission shall adjust annually the level of suspension to the level of nullification 
or impairment caused by the CDSOA to the Community at that time. The Commission 
shall  amend  the  list  in  Annex  I  or  the  rate  of  the  additional  import  duty  so  that  the 
effect of the additional duty on imports from the United States of the selected products 
represents,  over  one  year,  a  value  of  trade  that  does  not  exceed  the  amount  of 
nullification or impairment. 

The Commission shall respect the following criteria: (a) The Commission shall amend 
the rate of the additional import duty when adding or removing products from the list 
in Annex I does not allow to adjust the level of suspension to the level of nullification 
or impairment. Otherwise, the Commission shall add products to the list in Annex I if 
the  level  of  suspension  increases  or  withdraw  products  from  this  list  if  the  level  of 
suspension  decreases.  (b)  If  products  are  added,  the  Commission  shall  select  the 
products  from  the  list  in  Annex  II  in  an  automatic  fashion  by  following  the  order  in 
which the products are listed. As a consequence, the Commission shall also amend the 
list  in  annex  II  by  removing  from  it  the  products  added  to  the  list  in  annex  I.  (c)  If 
products are withdrawn, the Commission shall, first, remove products that were added 
to  the  list  in  Annex  I  at  a  later  stage.  The  Commission  shall  then  remove  products 
presently in the list in Annex I by following the order of that list. 

The Decision will be adopted in accordance with Council Decision 1999/468/EC of 28 
June  1999  laying  down  the  procedures  for  the  exercise  of  implementing  powers 
conferred on the Commission (5). 

The  origin  of  any  product  to  which  this  Regulation  applies  shall  be  determined  in 
accordance with the provisions of Council Regulation (EEC) No 2913/92 establishing 
the Community Customs Code (6). 

OJ L 184, 17.7.1999, p. 23. 
OJ  L  302,  19.10.1992,  p.  1.  Regulation  as  last  amended  by  the  Act  concerning  the  conditions  of 
accession  of  the  Czech  Republic,  the  Republic  of  Estonia,  the  Republic  of  Cyprus,  the  Republic  of 
Latvia,  the  Republic  of  Lithuania,  the  Republic  of  Hungary,  the  Republic  of  Malta,  the  Republic  of 
Poland, the Republic of Slovenia and the Slovak Republic and the adjustments to the Treaties on which 
the European Union is founded (OJ L 236, 23.09.2003, p. 940). 

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(9) 

Products for which an import licence with an exemption from, or a reduction of, duty 
has been issued prior to the date of entry into force of this Regulation should not be 
subject to the additional customs duty. 

(10)  Products for which it can be proved that they were already en route to the Community 
on  the  date  of  application  of  this  Regulation,  and  whose  destination  could  not  be 
changed should not be subject to the additional customs duties. 

(11) 

Imports of a selected product which enjoy relief from the application of import duties 
pursuant  to  Council  Regulation  (EEC)  No  918/83  (7)  should  not  be  subject  to  the 
additional import duty. 

(12)  Products  affected  by  the  suspension  of  concessions  should  be  placed  under  the 
customs  procedure  “Processing  under  Customs  Control”  under  Part  II,  Title  III, 
Chapter  IV  of  Commission  Regulation  (EEC)  No  2454/93  (8)  only  pursuant  to  an 
examination in the Committee of the Customs Code. 

(13)  To avoid circumvention of the additional duty, the Regulation shall enter into force on 

the day of its publication. 

HAS ADOPTED THIS REGULATION: 

Article 1 

The  tariff  concessions  and  related  obligations  under  GATT  1994  of  the  Community  are 
hereby suspended in respect of products originating in the United States of America listed in 
Annex I to this Regulation. 

Article 2  

An  ad  valorem  duty  of  15  %  additional  to  the  customs  duty  applicable  under  Regulation 
(EEC)  No  2913/92  shall  be  imposed  on  the  products  originating  in  the  United  States  of 
America listed in Annex I to this Regulation. 

1. 

The  Commission  shall  adjust  the  level  of  suspension  annually  to  the  level  of 
nullification  or  impairment  caused  by  the  CDSOA  to  the  Community  at  that  time. 

Article 3  

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Council Regulation (EEC) No 918/83 of 28 March 1983 setting up a Community system of reliefs from 
customs  duty,  OJ  L  105,  23.04.1983,  p.  1.  Regulation  as  last  amended  by  the  Act  concerning  the 
conditions  of  accession  of  the  Czech  Republic,  the  Republic  of  Estonia,  the  Republic  of  Cyprus,  the 
Republic  of  Latvia,  the  Republic  of  Lithuania,  the  Republic  of  Hungary,  the  Republic  of  Malta,  the 
Republic  of  Poland,  the  Republic  of  Slovenia  and  the  Slovak  Republic  and  the  adjustments  to  the 
Treaties on which the European Union is founded - Protocol No 3 on the sovereign base areas of the 
United Kingdom of Great Britain and Northern Ireland in Cyprus (OJ L 236, 23.09.2003, p. 940). 
Commission  Regulation  (EEC)  No  2454/93  of  2  July  1993  laying  down  provisions  for  the 
implementation of Council Regulation (EEC) No 2913/92 establishing the Community Customs Code, 
OJ L 253, 11.10.1993, p. 1. Regulation as last amended by Regulation (EC) No 2286/2003 (OJ L 343, 
31.12.2003, p. 1). 

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The  Commission  shall  amend  the  rate  of  the  additional  duty  or  the  list  in  Annex  I 
under the following conditions: 

a) 

b) 

c) 

d) 

The level of nullification or impairment shall be equal to 72% of the amount of 
disbursements  under  the  CDSOA  relating  to  anti-dumping  and  countervailing 
duties paid on imports from the Community for the most recent year for which 
data are available at that time, as published by the United States’ authorities. 

The amendment shall be made so that the effect of the additional import duty 
on imports of the selected products originating in the United States represents, 
over one year, a value of trade that does not exceed the level of nullification or 
impairment. 

Except  in  circumstances  foreseen  in  Article  3(1)(e),  when  the  level  of 
suspension increases, the Commission shall add products to the list in Annex I. 
These products shall be selected from the list in Annex II following the order 
of that list. 

Except  in  circumstances  foreseen  in  Article  3(1)(e),  when  the  level  of 
suspension  decreases,  products  shall  be  withdrawn  from  the  list  in  Annex  I. 
The  Commission  shall  remove,  first,  products  that  are  presently  in  the  list  in 
annex II and were added to the list in annex I at a later stage. The Commission 
shall then remove products that are presently in the list in annex I following the 
order of that list. 

e) 

The commission shall amend the rate of the additional duty when the level of 
suspension  cannot  be  adjusted  to  the  level  of  nullification  or  impairment  by 
adding or removing products from the list in Annex I. 

When  products  are  added  to  the  list  in  annex  I,  the  Commission  shall,  at  the  same 
time, amend the list in annex II by removing those products from the list in annex II. 
The order of the products remaining in the list in annex II shall not be modified. 

The  decisions under this  Article shall be adopted in accordance with the procedure 
laid down in Article 4(2). 

Article 4 

The Commission shall be assisted by a Committee composed of the representatives 
of the Member States and chaired by a representative of the Commission. 

Where reference is made to this paragraph, Article 5 of Decision 1999/468/EC shall 
apply. 

The  period  laid  down  in  Article  5(6)  of  Decision  1999/468/EC  shall  be  set  at  1 
month. 

The Committee shall adopt its rules of procedure. 

2. 

3. 

1. 

2. 

3. 

4. 

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The origin of any product to which this Regulation applies shall be determined in accordance 
with the provisions of Regulation (EEC) No 2913/92. 

Article 5 

Article 6 

1. 

2. 

3. 

4. 

Products listed in Annex I for which an import licence with an exemption from or a 
reduction  of  duty  has  been  issued  prior  to  the  date  of  entry  into  force  of  this 
Regulation shall not be subject to the additional duty. 

Products listed in Annex I for which it can be demonstrated that they are already en 
route  to  the  Community  on  the  date  of  application  of  this  Regulation,  and  whose 
destination cannot be changed, shall not be subject to the additional duty. 

Products  listed  in  Annex  I  which  are  admitted  free  of  import  duties  pursuant  to 
Regulation (EEC) No 918/83 shall not be subject to the additional duty. 

Products listed in Annex I may be placed under the customs procedure “Processing 
under  Customs  Control”  in  accordance  with  Article  551(1)  first  subparagraph  of 
Regulation  (EEC)  No  2454/93  only  where  the  examination  of  the  economic 
conditions  has  taken  place  in  the  Committee  of  the  Customs  Code  unless  the 
products and operations are mentioned in Annex 76, Part A of that Regulation. 

The Council shall decide on the repeal of this Regulation once the United States of America 
have fully implemented the recommendation of the WTO Dispute Settlement Body. 

Article 7 

Article 8 

This Regulation shall enter into force on the day of its publication in the Official Journal of 
the European Union. 

It shall apply from 1 May 2005. 

This Regulation shall be binding in its entirety and directly applicable in all Member States. 

Done at Brussels,  

For the Council 
The President 

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ANNEX I  

The  products  on  which  additional  duties  are  to  apply  are  identified  by  their  eight-digit  CN 
codes.  The  description  of  products  classified  under  these  codes  can  be  found  in  Annex  I  to 
Council  Regulation  (EEC)  No  2658/87  of  23  July  1987  on  the  tariff  and  statistical 
nomenclature and on the Common Customs Tariff (9). 

4820 10 90 

4820 50 00 

4820 90 00 

4820 30 00 

4820 10 50 

6204 63 11 

6204 69 18 

6204 63 90 

6104 63 00 

6203 43 11 

6103 43 00 

6204 63 18 

6203 43 19 

6204 69 90 

6203 43 90 

0710 40 00 

9003 19 30 

8705 10 00 

9 

OJ L 256, 7.9.1987, p. 1. Regulation as last amended by Commission Regulation (EC) No 1810/2004 
(OJ L 327, 30.10.2004, p. 1). 

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ANNEX II 

The  products  in  this  annex  are  identified  by  their  eight-digit  CN  codes.  The  description  of 
products classified under these codes can be found in Annex I to Council Regulation (EEC) 
No  2658/87  of  23  July  1987  on  the  tariff  and  statistical  nomenclature  and  on  the  Common 
Customs Tariff (10). 

6301 40 10 

6301 30 10 

6301 30 90 

6301 40 90 

4818 50 00 

9009 11 00 

9009 12 00 

8467 21 99 

4803 00 31 

4818 30 00 

4818 20 10 

9403 70 90 

6110 90 10 

6110 19 10 

6110 19 90 

6110 12 10 

6110 11 10 

6110 30 10 

6110 12 90 

6110 20 10 

6110 11 30 

6110 11 90 

10 

OJ L 256, 7.9.1987, p. 1. Regulation as last amended by Commission Regulation (EC) No 1810/2004 
(OJ 327, 30.10.2004, p.1). 

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6110 90 90 

6110 30 91 

6110 30 99 

6110 20 99 

6110 20 91 

9608 10 10 

6402 19 00 

6404 11 00 

6403 19 00 

6105 20 90 

6105 20 10 

6106 10 00 

6206 40 00 

6205 30 00 

6206 30 00 

6105 10 00 

6205 20 00 

9406 00 11 

9406 00 38 

6101 30 10 

6102 30 10 

6201 12 10 

6201 13 10 

6102 30 90 

6201 92 00 

6101 30 90 

6202 93 00 

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6202 11 00 

6201 13 90 

6201 93 00 

6201 12 90 

6204 42 00 

6104 43 00 

6204 49 10 

6204 44 00 

6204 43 00 

6203 42 31 

6204 62 31 

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