Autonomous tariff suspensions and quotas

 1) OBJECTIVE

To define the guiding principles and simplify the procedures on autonomous tariff suspensions and quotas, specifying the economic reasoning behind Community policy in this sector.

2) ACT

Commission Communication concerning autonomous tariff suspensions and quotas [Official Journal C 128, 25.04.1998].

3) SUMMARY

The EC Treaty (Article 26 under the new numbering) states that autonomous tariff suspensions and quotas are approved by the Council acting on a qualified majority on a Commission proposal. In this communication, the Commission defines the guiding principles and the procedures it will follow in drawing up the proposals.

The autonomous tariff suspension is an exception to the general rule represented by the Common Customs Tariff, since the measure allows a total or partial waiver of the normal duties applicable to imported goods. If such a measure applies to a limited quantity of goods it is referred to as a quota, if the quantity is unlimited it is known as a suspension.

The aim of autonomous tariff suspensions

Suspensions allow Community businesses to bring in supplies from outside the EU for a limited period, without having to pay normal Common Customs Tariff duties, aiming, among other things:

• to stimulate economic activity within the Community;
• to improve the competitiveness of businesses;
• to create jobs.

Since customs duties have a particular economic function, suspensions can only be granted temporarily and for specific economic reasons in the general interest of the Community.

Products that may benefit from a tariff suspension

In principle, only raw materials, semi-finished goods or components not available within the Community can benefit from a suspension.

Finished products used as components in the final product may benefit from a suspension provided that the added value of the assembly is sufficiently high.

Materials to be used in the production process may benefit from a suspension provided that they are specific and necessary for the manufacture of a clearly identified product and are not jeopardising competing Community enterprises.

The following cannot benefit from a suspension:

• goods for which an equivalent or substitute product is manufactured in sufficient quantities within the Community or in a third country with preferential tariff arrangements;
• goods for which a suspension could result in a distortion of competition between Community enterprises;
• finished products intended for sale to end-consumers;
• goods subject to an exclusive trading agreement preventing importers from buying them in third countries;
• goods for which the benefits of the suspension are not passed on to the Community producers;
• cases where a suspension results in a conflict with another Community policy.

When there is production from the Community or a third country with preferential tariff arrangements but such production is insufficient, quotas covering the unavailable quantities or partial suspensions may be granted.

Only firms producing in the Community can benefit from a suspension.

The suspension procedure

Requests for suspensions should be submitted by the Member States on behalf of Community producers. Applicants should indicate that they have tried, without success, to obtain the products or equivalent or substitute goods from suppliers in the Community or a third country with preferential tariff arrangements.

The Commission only examines suspension requests if they are of benefit to the Community economy. In such cases the economic reasons are examined closely.

Requests are not considered if the amount of uncollected customs duty is estimated to be less than EUR 20 000 per year. However, small and medium-sized enterprises may group together to reach this threshold.

The Council adopts multiannual regulations granting suspensions, updated every six months to take account of new requests and technical or economic trends in products and markets.

Quotas are allocated on a "first come, first served" basis.

If the continuation of a suspension implies the lasting need to supply the Community with products at reduced or zero rates, the Commission may propose an amendment to the autonomous duty of the Common Customs Tariff.

Annex 1 contains details of the administrative procedure to be followed to obtain a suspension.

Annex 2 is a model suspension request form.

Suspensions may be deleted on the request of one of the parties concerned. Any objection to a suspension must have grounds. Such grounds must be submitted in writing using the model in Annex 3.

See also

For further information, please consult:

Full version of the communication (PDF)

The website of the Directorate-General for Taxation and the Customs Union (DG TAXUD) concerning autonomous tariff suspensions and quotas

Last updated: 26.11.2003