Tariff quotas in the European Union: an introduction

The objectif of tariff quotas, as approved on the basis of Article 31 of the Treaty of the Functioning of the European Union (TFEU), is to permit, during the period of validity of the measure and for a limited quantity, the total (total suspension) or partial waiver (partial suspension) of the normal duties applicable to imported goods. Antidumping duties are not affected by these suspensions.

What are preferential tariff quotas?

In the framework of several agreements that the European Union has concluded with third countries/territories, as well as in the framework of autonomous preferential arrangements for some beneficiary countries/territoiries, tariff concessions are provided for a pre-determined volume of goods. These tariff concessions are called “preferential tariff quotas”.

Within these preferential tariff quotas, a predetermined volume of goods originating in a specified country/territory can benefit at import into the Union from a more favourable rate of duty than the normal third countries/territories duty mentioned in the combined nomenclature.

Entitlement to benefit from preferential tariff quotas is of course subject to presentation of the necessary evidence of origin.

Low tariffs to stimulate competition

For some economic sectors it is necessary to stimulate competition by low tariffs, as we find in numerous industrial sectors. Their role is to stimulate economic activity of industries, improving competitive capacity, creating employment, modernising structures, etc.

They are normally granted to raw materials, semi-finished goods or components not available in the EU (suspensions) or which are available but in insufficient quantities (tariff quotas), but no tariff quotas are granted for finished products.

A request to open an autonomous tariff quota may be presented as such or result from the examination of a suspension request. In this connection, account will be taken, where appropriate, of consequential damage to any new production and of any manufacturing capacity, which could be made available in the Union or in a third country/territory with preferential tariff arrangements.

When identical, equivalent or substitute products are manufactured in sufficient quantities within the EU or by producers in a third country/territory with preferential tariff arrangements, the granting of a quota is normally excluded.

The same applies where the measure could result in a distortion of competition in respect of the final products.

Management of tariff quotas

Most tariff quotas are managed by the Commission’s Directorate-General responsible for Taxation and Customs Union on a ‘first-come first-served’ basis irrespective of where the goods are imported into the EU. The legal provisions governing the management of these tariff quotas are contained in Articles 49 to 54 of of Commission Implementing Regulation (EU) 2015/2447 of 24 November 2015 laying down detailed rules for implementing certain provisions of the UCC.

Some tariff quotas are managed by the Commission’s Directorate-General responsible for Agriculture and Rural Development through a system of import licences. Various Council and Commission Regulations contain the specific provisions for the management of these tariff quotas.

Source: https://ec.europa.eu/taxation_customs/business/calculation-customs-duties/what-is-common-customs-tariff/tariff-quotas_en

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