Proposal for a COUNCIL REGULATION on amending Council Regulation (EU) 2018/1977 opening and providing for the management of autonomous Union tariff quotas for certain fishery products for the period 2019-2020
Date: 2020-01-10
Institutions: Directorate-General for Maritime Affairs and Fisheries, European Commission
Subjects: Combined Nomenclature, Taric, fish product, fishery product, import (EU), originating product, tariff quota

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   EUROPEAN COMMISSION  Brussels, 10.1.2020  COM(2020) 5 final 2020/0004 (NLE)  Proposal for a COUNCIL REGULATION on amending Council Regulation (EU) 2018/1977 opening and providing for the management of autonomous Union tariff quotas for certain fishery products for the period 2019-2020  
 
EXPLANATORY MEMORANDUM 

1. 

CONTEXT OF THE PROPOSAL 

Council Regulation No 2018/1977 opening and providing for the management of autonomous 
Union tariff quotas (ATQs) for certain fishery products for the period 2019-2020 was adopted 
on 14 December 2018.  

The  objective  of  the  Regulation  is  to  ensure  the  competitiveness  of  the  Union  processing 
industry  and  avoid  jeopardising  Union  production  of  fishery  products  by  guaranteeing  an 
adequate  supply  of  fishery  products  to  the  industry.  To  this  end,  the  Regulation  reduces  or 
suspends import duties for a number of fishery products within tariff quotas of an appropriate 
volume. It also defines which processing operations (‘qualifying operations’) allow the use of 
the tariff quotas and which do not. 

2. 

RESULTS OF CONSULTATIONS WITH THE INTERESTED PARTIES  

Following  the  adoption  of  Council  Regulation  No  2018/1977,  some  EU  processors  and  a 
Member  State  informed  the  Commission  that  since  CN  code  1604 32 00  (caviar  substitute) 
had  been  deleted  from  the  ATQ  09.2750  set  out  in  the  previous  Council  Regulation  (No 
2015/2265),  processors  could  no  longer  import  processed  hard  fish  roes  falling  under  that 
specific CN code as they had done under the previous regime. In the current ATQ regulation 
(2019-2020),  CN  code  1604 32 00  (caviar  substitute)  was  replaced  by  CN  code  0305 20 00 
(livers,  roes  and  milt  of  fish,  dried,  smoked,  salted  or  in  brine)  to  better  reflect  the  product 
description (hard fish roes, washed, cleaned of adherent organs and simply salted or in brine, 
for manufacture of caviar substitutes). 

The deletion of the CN code 1604 32 00 resulted in an increase in duty from 0% to 20% for 
these  products,  since  they  can  no  longer  benefit  from  the  ATQ  regime.  This  resulted  in 
significant  losses  due  to  the  amounts  concerned  and  the  existence  of  ongoing  long-term 
contracts.  Since  the  Commission  proposal  had  retained  CN  code  1604 32 00  and  the  new 
Regulation,  which  came 
into  force  on  1  January  2019,  was  adopted  only  on 
14 December 2018,  the  companies  argue  that  this  change  was  unpredictable  and  did  not 
provide  them  with  sufficient  time  to  adapt  since  the  contracts  with  their  suppliers  run  over 
long periods. 

An  in-depth  analysis  has  confirmed  a  significant  drop  in  the  imports  concerned  due  to  the 
change of code (only 400 tonnes of the 1 500 tonnes of the ATQ has been used, compared to 
958 tonnes in 2018).  

On the other hand, the objective of the ATQs is to create added value and employment. In this 
perspective,  thawing,  repacking  and  pasteurising  cannot  be  considered  as  ‘processing’  that 
would  create  significant  added  value.  It  is  in  this  context  that  CN  code  1604 32 00  (caviar 
substitute) was replaced by CN code 0305 20 00 (livers, roes and milt of fish, dried, smoked, 
salted or in brine).  

In discussions on the 2019-2020 ATQ regulation with regards to hard fish roes, the Customs 
Code Committee adopted new Explanatory Notes to the Combined Nomenclature (CNEN) for 

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subheading  0305 20 00,  clarifying  the  scope  of  that  subheading  by  providing  further 
definitions.  The  new  CNENs  explain  that  salted  fish  roes  that  are  unsuitable  for  immediate 
consumption as caviar or caviar substitutes in the state as presented without further processing 
but are intended for the manufacture of caviar substitutes are classified under this subheading. 

It  can  therefore  be  concluded  that  the  replacement  of  CN  code  1604 32 00  by  CN  code 
0305 20 00  in  the  new  ATQ  Regulation  (2019-2020)  is  in  line  with  the  objectives  of  the 
ATQs.  However,  the  late  adoption  of  the  Regulation  with  a  CN  code  for  the  same  ATQ 
09.2750  that  differed  from  that  mentioned  in  the  Commission  proposal  and  in  the  previous 
legislation, and the lack of clear understanding by industry of the difference between the two 
CN codes (reinforced by the fact that they fall under the same order number), had a significant 
negative  impact  on  the  fish  roe  industry  in  the  EU.  Trade  flows  should  not  abruptly  be 
discontinued due to this change of CN code. 

2. 

• 

LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY 

Legal basis 

Article 31 TFEU. 

• 

Subsidiarity (for non-exclusive competence)  

Common  Customs  Tariff  duties  fall  under  the  exclusive  competence  of  the  Union.  The 
subsidiarity principle therefore does not apply to these provisions. 

• 

Proportionality 

The  policy  choice  is  proportionate  because  for  each  product  only  a  limited  quantity  is 
authorised, taking account of the utilisation rate, a level playing field between EU and non-
EU producers, value added and other trade preferences. 

The  proposal  complies  with  the  principle  of  proportionality  because  the  customs  union  is  a 
common  policy  and  should  therefore  be  implemented  through  a  regulation  adopted  by  the 
Council. 

• 

Choice of the instrument 

Not applicable. 

3. 

 BUDGETARY IMPLICATIONS 

The proposal has a budgetary impact on revenue. 

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2020/0004 (NLE) 

Proposal for a 

COUNCIL REGULATION 

on amending Council Regulation (EU) 2018/1977 opening and providing for the 
management of autonomous Union tariff quotas for certain fishery products for the 
period 2019-2020 

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) 

Council  Regulation  (EU)  2018/19771  opens  and  provides  for  the  management  of 
autonomous Union tariff quotas for certain fishery products for the period 2019-2020. 
Appropriate  volumes  have  been  decided  for  each  tariff  quota  to  ensure  an  adequate 
supply to the Union industry for the period 2019-2020.  

(2)  Within  the  autonomous  tariff  rate  quota  with  order  number  09.2750,  listed  in  the 
Annex to Regulation 2018/1977, the only products that corresponds to the description 
hard fish roes washed, cleaned of adherent organs and simply salted or in brine, for the 
manufacture of caviar substitutes is the CN code ex 0305 20 00 with TARIC code 35. 

(3) 

(4) 

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Under  Council  Regulation  2015/22652  which  preceded  Regulation  (EU)  2018/1977, 
the tariff quota concerned was however provided differently, and referred to CN code 
ex  1604  32  00  with  TARIC  code  20  as  the  only  product  covered  by  the  description 
“hard fish roes washed, cleaned of adherent organs and simply salted or in brine, for 
the processing of caviar substitutes”.   

The change as regards the CN code for order number 09.2750, resulted in a difficulty 
for  the  industry  to  interpret  the  provision  concerned  and  in  a  lack  of  clear 
understanding  from  the  industry  on  the  difference  between  the  two  CN  codes 
(reinforced  by  the  fact  that  they  fall  under  the  same  order  number),  this  caused  a 
negative impact on the EU processing industry.  

Council  Regulation  (EU)  2018/1977  of  14  December  2018  opening  and  providing  for  the  management  of  autonomous 
Union tariff quotas for certain fishery products for the period 2019-2020 (OJ L 317, 14.12.2018, p. 2). 
Council Regulation (EU) 2015/2265 of 7 December 2015 opening and providing for the management of 
autonomous  Union  tariff  quotas  for  certain  fishery  products  for  the  period  2016-2018  (OJ  L  322, 
8.12.2015, p. 4) 

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(5) 

It is appropriate to modify the products covered by the tariff quota for order number 
09.2750 so as to also include, for a limited period of one year, the CN code ex 1604 32 
00  with  TARIC  code  20,  as  well  as  a  footnote  that  refers  to  these  CN  and  TARIC 
codes mentioning a period from 1 January 2019 to 31 December 2019.  

(6) 

Regulation (EU) 2018/1977 should therefore be amended accordingly. 

(7) 

The  period  in  which  the  quotas  opened  by  Regulation  (EU)  2018/1977  apply  in  the 
first  year  runs  from  1 January 2019  to  31 December 2019.  Since  it  is  necessary  to 
ensure  equal  treatment  of  economic  operators  and  taking  into  account  that  the  tariff 
quota  under  order  09.2752  is  not  yet  exhausted,  this  Regulation  should  be  applied 
retroactively  with  effect  from  1 January 2019  so  as  to  offer  the  opportunity  for 
economic operators using hard fish roes (finished products) to keep the benefit of the 
favourable quota duty without interruption for a limited period of time. For the same 
reasons, it should enter into force immediately.  

HAS ADOPTED THIS REGULATION:  

Article 1 

The  third  row  of  the  Annex  to  Council  Regulation  (EU)  2018/1977  (order  No  09.2750),  is 
amended as follows: 

(1) 

the entry under the column “CN code” is replaced by the following:  

“ex 0305 20 00 

 ex 1604 32 00”;  

(2) 

the entry under the column “TARIC code” is replaced by the following: 

“35 

  20”; 

(3) 

the  following  footnote  is  added  to  the  column  “description”  after  the  word  “caviar 
substitutes”:  

“For  TARIC  code  1604 32 00 20  this  tariff  quota  applies  from  1 January 2019  to 
31 December 2019”. 

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 January 2019. 

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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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LEGISLATIVE FINANCIAL STATEMENT 

1. 

1. 

NAME OF THE PROPOSAL 

Proposal  for  an  amendment  of  Council  Regulation  (EU)  2018/1977  opening  and 
providing for the management of autonomous Union tariff quotas for certain fishery 
products for the period 2019-2020. 

2. 

BUDGET LINES 

Revenue line: Chapter 1 2 , Article 1 2 0 – Customs duties and other duties referred 
to in point (a) of Article 2(1) of Decision 2014/335/EU, Euratom (Budgeted amount 
for financial year 2019 – 21 471,2 mio EUR) 

(only in  case of assigned revenues) The revenues will be assigned to  the following 
expenditure chapter:  

3. 

FINANCIAL IMPACT 

 

Proposal has no financial implications 

X  Proposal  has  no  financial  impact  on  expenditure  but  has  a  financial  impact  on 
revenue 

 

Proposal has a financial impact on assigned revenue – the effect is as follows: 

(EUR) 

Revenue line3 

Article  –  1  2  0  -  Customs 
duties and other duties 

Year 2019 

3.561.518 

4. 

ANTI-FRAUD MEASURES 

Checks  on  the  end-use  of  some  of  the  products  covered  by  this  Council  Regulation  will  be 
carried  out  in  accordance  with  Article  254  of  Regulation  (EU)  No  952/2013  laying  down 
provisions for the implementation of the Community Customs Code. 

5. 

1. 

2. 

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OTHER REMARKS 

The  main  impact  of  the  Regulation  is  the  loss  of  revenue  for  the  European  Union, 
given that the tariff quota for order number 09.2750 is modified so as to also include, 
for a limited period of one year, the CN code ex 1604 32 00 with TARIC code 20, as 
well  as  a  footnote  that  refers  to  these  CN  and  TARIC  codes  mentioning  a  period 
from 1 January 2019 to 31 December 2019. 

The  gross  amount  has  been  calculated  on  the  basis  of  outstanding  balance  ATQ 
09.2750  (implying  maximum  utilisation  of  the  quota),  average  price  of  the  product 
during the last two years, the 20 % MFN duty rate on the product  

In the case of traditional own resources (agricultural duties, sugar levies, customs duties), the amounts 
indicated must be net amounts, i.e. gross amounts after deduction of 20 % for collection costs.  

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1.097.066,78 (tonnage)* 20.29(average price/kg) * 20% (tariff) 

It  marks,  therefore,  the  maximum  level  of  loss  of  revenue  since  the  Community 
grants more favourable trade preferences to different groups of third countries (GSP, 
GSP+, FTAs).  

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