Commission Implementing Regulation (EU) 2020/1646 of 7 November 2020 on commercial policy measures concerning certain products from the United States of America following the adjudication of a trade dispute under the Dispute Settlement Understanding of the World Trade Organization
Date: 2020-11-07
Institutions: Directorate-General for Trade and Economic Security, European Commission
Subjects: Dispute Settlement Body, United States, aircraft, commercial arbitration, customs duties, import (EU), international commercial arbitration, originating product, tariff preference, trade dispute




L_2020373EN.01000101.xml










9.11.2020   


EN


Official Journal of the European Union


L 373/1








            COMMISSION IMPLEMENTING REGULATION (EU) 2020/1646
of 7 November 2020
         
on commercial policy measures concerning certain products from the United States of America following the adjudication of a trade dispute under the Dispute Settlement Understanding of the World Trade Organization


THE EUROPEAN COMMISSION,

Having regard to the Treaty on the Functioning of the European Union,


Having regard to Regulation (EU) No 654/2014 of the European Parliament and of the Council of 15 May 2014 concerning the exercise of the Union’s rights for the application and enforcement of international trade rules and amending Council Regulation (EC) No 3286/94 laying down Community procedures in the field of the common commercial policy in order to ensure the exercise of the Community’s rights under international trade rules, in particular those established under the auspices of the World Trade Organization (1), and in particular Article 4(1) thereof,

Whereas:







(1)


On 11 April 2019, the Dispute Settlement Body of the World Trade Organization (‘WTO’) adopted its recommendations and rulings in the dispute DS353
United States – Measures Affecting Trade in Large Civil Aircraft (Second complaint) – Recourse to Article
21.5
of the DSU by the European Union, confirming that the United States has failed to bring its measures, found to be inconsistent with the Agreement on Subsidies and Countervailing Measures (‘SCM Agreement’), into conformity with its obligations under that Agreement. With respect to the FSC/ETI tax concessions, the Appellate Body confirmed that the United States has not withdrawn the subsidies and that the original recommendations and rulings remain operative (2).












(2)


With respect to the other relevant measures, in accordance with paragraph 8 of the ‘Agreed Procedures under Articles 21 and 22 of the Dispute Settlement Understanding (“DSU”) and Article 7 of the SCM Agreement’ (3) between the European Union and the United States with respect to this dispute, the European Union requested the DSU Article 22.6 arbitrator to resume its work. The arbitrator issued its decision on 13 October 2020 (4).












(3)


The arbitrator’s decision states that the European Union may request authorisation from the WTO Dispute Settlement Body to take countermeasures with respect to the United States of America (‘United States’), at a level not exceeding USD 3 993 212 564 annually. These countermeasures may take the form of (a) suspension of tariff concessions and other related obligations under the GATT 1994; (b) suspension of concessions and other obligations under the SCM Agreement; and (c) suspension of horizontal or sectoral commitments contained in the consolidated European Union’s services schedule with regard to all principal sectors identified in the Services Sectoral Classification List.












(4)


In line with Article 22.7 of the DSU, the parties shall accept the arbitrator’s decision as final. On 26 October 2020 the European Union has been authorised by the WTO Dispute Settlement Body to take countermeasures against the United States consistent with the arbitrator’s decision. The countermeasures will consist of the suspension of tariff concessions and the imposition of new or increased customs duties.












(5)


In designing and selecting appropriate measures, the Commission has taken into consideration and applied all of the objective criteria in accordance with Article 4(2)(a) and Article 4(3) of Regulation (EU) No 654/2014. In line with Article 9 of Regulation (EU) No 654/2014, the Commission has provided an opportunity for stakeholders to express their views and submit information regarding the relevant Union’s economic interests (5).












(6)


The Commission has ensured that the additional customs duties do not exceed the level authorised by the WTO Dispute Settlement Body. At present, the amount is considered appropriate to effectively induce compliance and provide relief to EU economic operators because, in the current economic climate, it permits measures to be imposed on US large civil aircraft and other products that are considered sufficiently similar to the countermeasures imposed by the United States.












(7)


These measures concern imports of products originating in the United States on which the European Union is not substantially dependent for its supply. This approach avoids as much as possible a negative impact on the various actors on the Union market, including consumers.












(8)


The commercial policy measures in the form of additional ad valorem duties on the products listed in Annex I and Annex II should be applied as follows:






(a)


additional ad valorem duties of a rate of 15 % for products specified in Annex I;










(b)


additional ad valorem duties of a rate of 25 % for products specified in Annex II.
















(9)


Negotiations between the European Union and the United States aiming at a balanced settlement of the WTO disputes on large civil aircraft have so far not yielded results. At the same time, the United States continues to apply countermeasures in the amount of USD 7,5 bn on imports of products from the European Union. The Commission intends to amend this Regulation, to take into account relevant developments, including with respect to US compliance or lack thereof. In particular, the Commission intends to suspend the application of the implementing Regulation, if the United States suspends its countermeasures against imports from the European Union, or change the level of customs duties, as necessary, to mirror the countermeasures applied by the United States.












(10)


This act should enter into force on the day following the day on which it is published in the Official Journal of the European Union.












(11)


The measures provided for in this Regulation are in accordance with the opinion of the Trade Barriers Committee, established by Regulation (EU) 2015/1843 of the European Parliament and of the Council (6),





HAS ADOPTED THIS REGULATION:



Article 1
Following the adjudications in the WTO dispute DS353 United States – Measures Affecting Trade in Large Civil Aircraft, and following the authorisation of the WTO Dispute Settlement Body, the European Union shall suspend the application to the trade of the United States of import duty concessions under the GATT 1994 in respect of the products listed in Annex I and Annex II to this Regulation.


Article 2
As a consequence, the Union shall apply additional customs duties on imports into the Union of the products listed in Annex I and II to this Regulation and originating in the United States.


Article 3

1.   Products listed in the Annexes 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 additional duty.


2.   Products listed in the Annexes for which the importers can prove that they have been exported from the United States to the Union prior to the date on which an additional duty is applied with respect to that product shall not be subject to the additional duty.



Article 4
This Regulation shall enter into force on the day following its publication in the Official Journal of the European Union.




This Regulation shall be binding in its entirety and directly applicable in all Member States.
Done at Brussels, 7 November 2020.


For the Commission


The President

Ursula VON DER LEYEN
            





(1)  
            OJ L 189, 27.6.2014, p. 50.

(2)  Appellate Body Report, US – Large Civil Aircraft (2nd Complaint) (Article
21.5
– EU), paras. 5.172 and 6.4(b); Appellate Body Report, US – Large Civil Aircraft (2nd Complaint), para. 1352 and footnote 2716; Arbitration Panel Report, US – FSC (Article
22.6
– US),
para.
8.1.

(3)  WT/DS353/14.

(4)  WT/DS353/ARB.

(5)  http://trade.ec.europa.eu/consultations/index.cfm?consul_id=261

(6)  Regulation (EU) 2015/1843 of the European Parliament and of the Council of 6 October 2015 laying down Union procedures in the field of the common commercial policy in order to ensure the exercise of the Union’s rights under international trade rules, in particular those established under the auspices of the World Trade Organization (OJ L 272, 16.10.2015, p. 1).




ANNEX I

Products subject to additional duties







TARIC codes (1)
 (2)



Additional duty




8802400013 


15 %




8802400015 


15 %




8802400017 


15 %




8802400019 


15 %




8802400021 


15 %






(1)  The nomenclature codes are taken from the integrated tariff, based on the combined nomenclature, as defined in Article 2 of Council Regulation (EEC) No 2658/87 of 23 July 1987 on the tariff and statistical nomenclature and on the Common Customs Tariff (OJ L 256, 7.9.1987, p. 1).

(2)  For the avoidance of doubt, these tariff headings are intended to cover all aircraft within the identified weight parameters imported to the European Union (entered into free circulation) and to be operated by any entity located in the European Union for any economically significant period of time, either in the European Union or between the European Union and any third country, irrespective of any formal financing arrangements that may be in place (such as leasing arrangements) and having regard to criteria such as the following (no one of which is determinative): place of incorporation of the operator; centre of operations of the operator; external painting and internal design and configuration of the aircraft in line with the branding of the operator; and intended flagging.





ANNEX II

Products subject to further additional duties







CN 2020 (1)



Additional duty




0301 11 00 


25 %




0301 19 00 


25 %




0303 13 00 


25 %




0304 81 00 


25 %




0305 41 00 


25 %




0307 22 90 


25 %




0406 10 50 


25 %




0406 90 21 


25 %




0406 90 86 


25 %




0714 20 10 


25 %




0714 20 90 


25 %




0802 90 85 


25 %




0804 10 00 


25 %




0805 40 00 


25 %




0810 40 50 


25 %




0811 90 50 


25 %




0811 90 70 


25 %




0905 10 00 


25 %




0905 20 00 


25 %




1001 99 00 


25 %




1202 41 00 


25 %




1202 42 00 


25 %




1212 29 00 


25 %




1302 19 70 


25 %




1302 39 00 


25 %




1515 90 11 


25 %




1515 90 29 


25 %




1515 90 39 


25 %




1515 90 40 


25 %




1515 90 51 


25 %




1515 90 59 


25 %




1515 90 60 


25 %




1515 90 91 


25 %




1515 90 99 


25 %




1703 10 00 


25 %




1806 10 15 


25 %




1806 10 20 


25 %




1806 10 30 


25 %




1806 10 90 


25 %




1806 20 10 


25 %




1806 20 30 


25 %




1806 20 50 


25 %




1806 20 80 


25 %




1806 20 95 


25 %




1806 31 00 


25 %




1806 32 10 


25 %




1806 32 90 


25 %




1806 90 11 


25 %




1806 90 19 


25 %




2008 19 99 


25 %




2008 30 59 


25 %




2008 30 90 


25 %




2009 11 11 


25 %




2009 11 19 


25 %




2009 11 91 


25 %




2009 11 99 


25 %




2009 21 00 


25 %




2009 29 19 


25 %




2101 11 00 


25 %




2103 20 00 


25 %




2103 90 90 


25 %




2104 10 00 


25 %




2106 90 59 


25 %




2205 10 10 


25 %




2208 20 29 


25 %




2208 20 40 


25 %




2208 20 89 


25 %




2208 40 11 


25 %




2208 40 39 


25 %




2208 40 51 


25 %




2208 40 91 


25 %




2208 40 99 


25 %




2208 60 11 


25 %




2208 60 19 


25 %




2208 60 91 


25 %




2208 60 99 


25 %




2303 20 10 


25 %




2401 10 35 


25 %




2401 10 60 


25 %




2401 10 70 


25 %




2401 10 85 


25 %




2401 10 95 


25 %




2401 20 35 


25 %




2401 20 60 


25 %




2401 20 70 


25 %




2401 20 85 


25 %




2401 20 95 


25 %




2401 30 00 


25 %




3301 19 20 


25 %




3301 25 10 


25 %




3301 25 90 


25 %




3502 90 20 


25 %




3502 90 70 


25 %




3504 00 10 


25 %




3504 00 90 


25 %




3904 10 00 


25 %




3920 10 23 


25 %




3920 10 24 


25 %




3920 10 81 


25 %




4202 19 10 


25 %




4202 19 90 


25 %




4202 21 00 


25 %




4202 22 10 


25 %




4202 22 90 


25 %




4202 32 10 


25 %




4202 32 90 


25 %




4202 91 10 


25 %




4202 91 80 


25 %




4202 92 11 


25 %




4202 92 15 


25 %




4202 92 19 


25 %




4202 92 91 


25 %




5203 00 00 


25 %




8429 51 10 


25 %




8429 51 91 


25 %




8429 51 99 


25 %




8701 91 10 


25 %




8701 91 90 


25 %




8701 92 90 


25 %




8701 93 10 


25 %




8701 93 90 


25 %




8701 94 10 


25 %




8701 94 90 


25 %




8705 90 80 


25 %




8714 91 10 


25 %




8714 91 30 


25 %




8714 91 90 


25 %




9504 20 00 


25 %




9504 30 10 


25 %




9504 30 20 


25 %




9504 30 90 


25 %




9504 50 00 


25 %




9504 90 10 


25 %




9504 90 80 


25 %




9506 91 10 


25 %




9506 91 90 


25 %






(1)  The nomenclature codes are taken from the Combined Nomenclature as defined in Article 1(2) of Council Regulation (EEC) No 2658/87 of 23 July 1987 on the tariff and statistical nomenclature and on the Common Customs Tariff (OJ L 256, 7.9.1987, p. 1) and as set out in Annex I thereto, which are valid at the time of publication of this Regulation and mutatis mutandis as amended by subsequent legislation, including most recently Commission Implementing Regulation (EU) 2019/1776 of 9 October 2019 amending Annex I to Council Regulation (EEC) No 2658/87 on the tariff and statistical nomenclature and on the Common Customs Tariff (OJ L 280, 31.10.2019, p. 1).