CELEX: 52013PC0186
Language: en
Date: 2013-04-10
Title: Proposal for a COUNCIL REGULATION amending Annex I to Regulation (EEC) No 2658/87 on the Tariff and Statistical Nomenclature and on the Common Customs Tariff

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		52013PC0186
		
			Proposal for a COUNCIL REGULATION amending Annex I to Regulation (EEC) No 2658/87 on the Tariff and Statistical Nomenclature and on the Common Customs Tariff /* COM/2013/0186 final - 2013/0098 (NLE) */
			
				
		
		
			
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EXPLANATORY MEMORANDUM
1.           CONTEXT OF THE PROPOSAL
The purpose of the present draft Council
Regulation is to provide, on an autonomous basis, duty free treatment for flat
panel displays which are able to display signals from automatic data-processing
(ADP) machines with an acceptable level of functionality. This expression
refers to flat panel displays which, even though they are not solely or
principally used in an ADP system, are able to display signals from ADP
machines with a sufficient standard of performance for the user.
Harmonised System (HS) subheading 8528 51 comprises
monitors "of a kind solely or principally used in an ADP system of heading
8471". The conventional duty rate for these monitors is "free".
Monitors "other than of a kind solely or principally used in an automatic
data-processing system of heading 8471" are classified under HS subheading
8528 59. The conventional duty rate for this second type of monitors is "14
%".
In its ruling in case C-376/07 (Kamino),
the Court of Justice of the European Union stated that classification of
monitors should be made in the light of the characteristics and objective
properties of those monitors, both as to the degree to which they are capable
of performing a number of functions and as to the standard of performance which
they achieve when performing those functions. 
The convergence of digital technologies has
however led to a situation where it has become very difficult to determine, by
reference to mere technical and objective characteristics, whether or not a
particular monitor is of a kind solely or principally used in an ADP system of
heading 8471. In particular, ensuring the correct and uniform classification of
flat panel displays which can display, with an acceptable level of
functionality, signals from both ADP systems and other sources (for example,
DVD players, video cameras, satellite receivers), has become technically
impossible. 
Currently, a significant part of the monitors
imported to the EU are flat panel displays which can display, with an
acceptable level of functionality, signals from both ADP systems and other
sources. This in particular applies to the highly professional types which are
used in specialised sectors (such as in diagnostics or research). In order to
ensure a rational development of production and an expansion of consumption
within the territory of the EU and to promote trade between Member States and third countries, it is both in the interest of European consumers and
industry to provide duty free treatment for the above-mentioned monitors. 
The attached proposal is considered to be a
balanced approach taking into account the legal context and the interests of
European consumers and industry. 
The proposal is in line with the Union's external trade and industry policies. 
In the light of the foregoing it is
proposed to amend Council Regulation (EEC) No 2658/87 accordingly.
2.           RESULTS OF CONSULTATIONS WITH THE
INTERESTED PARTIES AND IMPACT ASSESSMENTS
The Tariff and Statistical Nomenclature
Section of the Customs Code Committee was consulted on 27 September 2012.
The Union Industry was consulted on 13
November 2012.
3.           LEGAL ELEMENTS OF THE PROPOSAL
The legal basis of this proposal is Article
31 and 32 of the Treaty on the Functioning of the European Union.
The subsidiarity principle does not apply,
as the proposal falls under the exclusive competence of the Union.
The proposal complies with the
proportionality principle given that, as foreseen in the Treaty, it promotes
trade between Member States and third countries and balances the commercial
interest of economic operators (manufacturers in the Union and importers)
without changing the EU WTO schedule.
By virtue of Article 31 of the Treaty on
the Functioning of the European Union autonomous tariff rate is fixed by the
Council acting by qualified majority on the basis of a Commission proposal. 
4.           BUDGETARY IMPLICATION
Loss of revenue in Traditional Own
Resources in the range of 20.5 Million Euros on an annual basis (based on the
import statistics of 2011).
2013/0098 (NLE)
Proposal for a
COUNCIL REGULATION
amending Annex I to Regulation (EEC) No
2658/87 on the Tariff and Statistical Nomenclature and on the Common Customs
Tariff
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)       HS subheading 8528 51 comprises
monitors, other than cathode-ray tube (CRT) monitors, of a kind solely or
principally used in an automatic data-processing system of heading 8471. Monitors
other than of a kind solely or principally used in an automatic data-processing
system of heading 8471 are classified under HS subheading 8528 59.
(2)       In accordance with settled
case- law of the Court of Justice of the European Union[1], classification of monitors
under either HS subheading 8528 51 or 8528 59 has to be based on an overall
assessment of the objective characteristics and properties of each particular
monitor. 
(3)       Due to the convergence of
digital technologies it has become very difficult to determine, by reference to
mere technical characteristics, whether or not a particular monitor is of a
kind solely or principally used in an automatic data-processing system of
heading 8471. In particular, ensuring the correct and uniform classification of
flat panel displays which can display, with an acceptable level of
functionality, signals from both automatic data-processing systems and other
sources has become technically impossible.
(4)       In order to ensure a
rational development of production and an expansion of consumption within the
territory of the Union and to promote trade between Member States and third countries, it is both in the interest of Union consumers and industry to
provide for a duty free treatment for the above-mentioned monitors. 
(5)       Annex I to Regulation
(EEC) No 2658/87 should therefore be amended accordingly,
HAS ADOPTED THIS REGULATION:
Article 1
1. Annex I to Regulation (EEC) No 2658/87 is
amended as set out in the Annex to this Regulation.
2. The amendments to the CN subheadings
provided for in this Regulation shall be applicable as TARIC subheadings until
they are inserted into the Combined Nomenclature in accordance with Article 12
of Regulation (EEC) No 2658/87.
Article 2
This Regulation shall enter into force on 1
June 2013.
This Regulation shall be binding
in its entirety and directly applicable in all Member States.
Done at Brussels, 
                                                                       For
the Council
                                                                       The
President
ANNEX
In Part Two, Section XVI, Chapter 85 of
Annex I to Regulation (EEC) No 2658/87 the rows for CN codes 8528 59, 8528 59 10,
8528 59 40 and 8528 59 80 are replaced by the following:
 "8528 59 || – – Other: ||   ||   
   || – – – Flat Panel Displays able to display signals from automatic data-processing machines with an acceptable level of functionality: ||   ||   
 8528 59 20(1) || – – – – Monochrome || 14(5) || p/st 
   || – – – – Colour: ||   ||   
 8528 59 31(2) || – – – – – With a screen of the liquid crystal display (LCD) technology || 14(5) || p/st 
 8528 59 39(3) || – – – – – Other || 14(5) || p/st 
 8528 59 70(4) || – – – Other || 14 || p/st. 
(1)        TARIC code 8528 59 10 20
(2)        TARIC code 8528 59 40 91
(3)        TARIC code 8528 59 80 91
(4)        TARIC codes 8528 59 10 90, 8528
59 40 99 and 8528 59 80 99
(5)        Autonomous rate of duty: Free"
LEGISLATIVE FINANCIAL STATEMENT
1.           FRAMEWORK OF THE PROPOSAL/INITIATIVE 
              1.1.    Title of the proposal/initiative
Council Regulation amending Annex I to Council Regulation
(EEC) No 2658/87 on the Tariff and Statistical Nomenclature and on the Common
Customs Tariff.
              1.2.    Nature
of the proposal/initiative
Provide autonomous exemption from duties for
certain industrial products falling under heading 8528 of 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.
              1.3.    Objective
To provide, on an autonomous basis, duty free
treatment for flat panel displays which are able to display signals from
automatic data-processing (ADP) machines with an acceptable level of
functionality. This expression refers to flat panel displays which, even though
they are not solely or principally used in an ADP system, are able to display
signals from ADP machines with a sufficient standard of performance for the
user.
              1.4.    Grounds
for the proposal/initiative
The convergence of digital technologies has led
to a situation where it has become very difficult to determine, by reference to
mere technical and objective characteristics, whether or not a particular
monitor is of a kind solely or principally used in an ADP system of heading
8471. In particular, ensuring the correct and uniform classification of flat
panel displays which can display, with an acceptable level of functionality,
signals from both ADP systems and other sources (for example, DVD players,
video cameras, satellite receivers), has become technically impossible. 
Currently, a significant part of the monitors
imported to the EU are flat panel displays which can display, with an
acceptable level of functionality, signals from both ADP systems and other
sources. This in particular applies to the highly professional types which are
used in specialised sectors (such as in diagnostics or research). In order to
ensure a rational development of production and an expansion of consumption
within the territory of the EU and to promote trade between Member States and third countries, it is both in the interest of European consumers and
industry to provide duty free treatment for the above-mentioned monitors. 
              1.5.    Duration
and financial impact
Duration: proposal of unlimited duration.
Financial impact: loss of revenue in Traditional
Own Resources in the range of 20.5 Million Euros on an annual basis (based on
the import statistics of 2011).
              1.6.    Management
method envisaged
Application of the monitoring, control and management
provisions of the Union Customs Code.
2.           ESTIMATED FINANCIAL IMPACT OF THE
PROPOSAL 
              Estimated impact on revenue 
–     
¨  Proposal/initiative has no financial impact on revenue.
–     
x   Proposal/initiative has the following
financial impact:
–                   
x           on own resources 
–                   
¨         on miscellaneous revenue 
EUR million (to 3 decimal places)
 Budget revenue line: || Appropriations available for the ongoing budget year || Impact of the proposal/initiative[2] 
 Year N || Year N+1 
 Article 120 || / || 8 months x 20.5 MEUR 12 months || 20.5 MEUR 
The proposal is of unlimited duration.
Specify the method for
calculating the impact on revenue.
The calculation of the loss of revenue in Traditional Own Resources is
based on the value of imports in the EU during the year 2011 of products under TARIC
codes 8528 59 10 90, 8528 59 40 90 and 8528 89 80 90. The figures were provided
by Eurostat.
Firstly, the total value of imports of monitors with TARIC codes
8528 59 10 90, 8528 59 40 90 and 8528 89 80 90 during the reference year 2011
was multiplied by the ad valorem duty rate (14%). 
Secondly, the amount of the collection costs (25%) has been deduced
to obtain the total revenue of Traditional Own Resources for the EU for the
year 2011. 
The result of this calculation is as follows:
- TARIC code 8528 59 10 90: (€ 10 891 640 x 14%) x 75% = € 1 143 622,
20
- TARIC code 8528 59 40 90: (€ 233 167 690 x 14%) x 75% = € 24 482
607, 45
- TARIC code 8528 89 80 90: no trade in 2011
With the adoption of this draft proposal not all products which are
classified under these TARIC codes will enjoy duty free treatment. The measure
is only applicable to certain monitors ("flat panel displays which are
able to display signals from automatic data-processing machines with an
acceptable level of functionality"). 
Taken into account the intended scope of the measure and the nature
of the products available on the EU market, it can be estimated that at least
80 % of the products which are currently imported under the mentioned TARIC
codes will fall within the scope of this definition. 
The estimated total loss of revenue in Traditional Own Resources on
an annual basis should therefore be calculated as follows:
(€ 1 143 622, 20 + € 24 482 607, 45) * 80% = € 20 500 983, 72
For the year in which the proposal will enter into force the
financial impact is to be calculated proportionally.
The loss of revenue in Traditional Own Resources shall be
compensated by Member States contributions based on the GNI. 
[1]               Case
C-376/07 Kamino [2009] ECR I-1167.
[2]               As
regards traditional own resources (customs duties, sugar levies), the amounts
indicated must be net amounts, i.e. gross amounts after deduction of 25% for collection
costs.