Explanatory Memorandum to COM(2025)27 - Amendment of Regulation 2018/196 on additional customs duties on imports of certain products from the USA - Main contents
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| dossier | COM(2025)27 - Amendment of Regulation 2018/196 on additional customs duties on imports of certain products from the USA. |
|---|---|
| source | COM(2025)27  |
| date | 03-02-2025 |
1. CONTEXT OF THE PROPOSAL
• Reasons for and objectives of the proposal
This proposal seeks to amend Regulation (EU) 2018/196 by including a de minimis threshold for the imposition of retaliation applied in relation to the WTO dispute on the United States’ Continued Dumping and Subsidy Offset Act of 2000 (‘CDSOA’, or the Byrd Amendment). It also seeks to align the regulation to what is provided in the Interinstitutional Agreement on Better Law-Making.
The CDSOA mandates the yearly distribution of the anti-dumping and countervailing duties collected during the previous fiscal year to US companies. The CDSOA was found incompatible with the United States' WTO obligations in January 2003.
Given that the United States failed to bring itself in compliance with its obligations under the WTO agreements, the Union was authorised to impose an additional import duty above bound customs duties on a list of US products covering on a yearly basis a total value of trade not exceeding the amount of 72 % of the CDSOA disbursement from duties collected on imports from the Union for the most recent year for which data are available. Since 1 May 2005, the Union applies an ad valorem additional customs duty on imports of certain products originating in the United States 1 on a yearly basis, adjusting the level of retaliation proportionately to the amount disbursed from duties collected on Union products in the most recent distribution.
Given the large number of modifications of the initial legal basis (i.e., Council Regulation (EC) No 673/2005) via delegated acts, a codification exercise was undertaken in February 2018. A codified version of the legal basis, Regulation (EU) 2018/196, was adopted by the European Parliament and the Council on 7 February 2018.
By applying the mandated formula to the latest CDSOA distribution of anti-dumping and anti‑subsidy duties collected during the Fiscal Year 2023 (1 October 2022 – 30 September 2023), the resulting level of retaliation to apply as from 1 May 2024 amounted to USD 34,98. That level of retaliation of USD 34,98 represented a significant decrease as compared to the previous level of retaliation and was economically negligible. It would have resulted in subjecting sweet corn, frames and mountings for spectacles, crane lorries, and certain items of women’s or girls’ apparel in denim that originate in the US to an ad valorem additional rate of duty of 0,00002% as from 1 May 2024. As applying such a low duty would have had no trade impact and would have imposed a disproportionate administrative cost to the Union, with Commission Delegated Regulation (EU) 2024/1239 the additional rate of duty as from 1 May 2024 was set at 0 %. In order to set the duty to 0 % and respect the obligations imposed by the basic Regulation on the Commission, a Delegated Regulation had to enter into force.
The Byrd Amendment was repealed in 2006, but the US created a transitional period whereby disbursements would continue as long as they concerned duties collected before 1 October 2007. Given that the mandated formula is based on the amount of disbursements made in one fiscal year and that the last remaining imports subject to the CDSOA have been liquidated in Fiscal Year 2023, it is expected that in the future the authorised level of retaliation will continue to remain low and will go towards exhaustion. However, it is not possible to determine when the distribution process will end, as disbursements connected to these final imports and amounts held pending litigation are still expected to be made.
Having to adopt a Commission Delegated Regulation each year, even when retaliation is negligible, is not an efficient use of resources. Thus, in order to promote efficiency and proportionality, a de minimis threshold below which additional import duties should not be imposed should be added to Regulation (EU) 2018/196. This threshold should be set at USD 30 000 of CDSOA disbursements made by US authorities in relation to Union imports in one fiscal year (which would correspond to an authorised level of retaliation of USD 21 600).
Disbursement amounting to USD 30 000, keeping the current list of goods in Annex I, would result in an additional rate of duty of about 0,01 %. Additional custom duties equal or below 0,01 % that would apply in the absence of a de minimis provision on the few tariff lines currently included in Annex I do not appear to justify the administrative costs that would be incurred by the Union if these duties were imposed. Below this threshold the duties have no trade impact and are thus economically negligible.
• Consistency with existing policy provisions in the policy area
The proposal is consistent with existing Union trade policy insofar as it preserves the Union’s rights under WTO law while ensuring an efficient use of the Union’s resources.
• Consistency with other Union policies
The proposal is consistent with the Union policies that strive for a more efficient use of human and administrative resources.
2. LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY
• Legal basis
The legal basis for this Regulation Amendment is Article 207 i of the Treaty on the Functioning of the European Union.
• Subsidiarity (for non-exclusive competence)
The common commercial policy, in accordance with Article 3(1), point (e) of the TFEU, is defined as an exclusive Union competence. Therefore, the subsidiarity principle does not apply.
• Proportionality
This proposal is proportionate as it is necessary in order to ensure an efficient use of the Union’s resources. Having to adopt a Commission Delegated Regulation when retaliation is negligible is not an efficient use of resources.
• Choice of the instrument
This proposal is in accordance with Article 207 i TFEU, which envisages common commercial policy measures.
3. RESULTS OF EX-POST EVALUATIONS, STAKEHOLDER CONSULTATIONS AND IMPACT ASSESSMENTS
• Ex-post evaluations/fitness checks of existing legislation
Not applicable.
• Stakeholder consultations
Not applicable.
• Collection and use of expertise
Not applicable.
• Impact assessment
The legislative proposal is not supported by an impact assessment. This is in line with the better regulation toolbox, which provides that an impact assessment may not be necessary for ‘policy initiatives that propose limited changes based on a thorough evaluation, which has clearly identified the necessary amendments to a policy or legislation’. The Commission considers that the proposed regulation fulfils these criteria.
• Regulatory fitness and simplification
The measure does not increase the regulatory burden of companies.
• Fundamental rights
The proposal has no consequences for the protection of fundamental rights.
4. BUDGETARY IMPLICATIONS
Whenever the de minimis would apply, the European Union would see a loss of maximum USD 21 600 (which is the authorised level of retaliation corresponding to USD 30 000 of CDSOA related disbursements) of customs revenue in one fiscal year. On the other hand, the human and administrative resources necessary to adjust and impose the additional customs duty would not be used. Therefore, the impact on Union’s own resources will be very limited.
5. OTHER ELEMENTS
• Implementation plans and monitoring, evaluation and reporting arrangements
Not envisaged.
• Explanatory documents (for directives)
Not applicable.
• Detailed explanation of the specific provisions of the proposal
This proposal introduces a de minimis threshold below which additional import duties should not be imposed. This threshold should be set at USD 30 000 of relevant disbursements made by US authorities in one fiscal year. Disbursement amounting to USD 30 000, keeping the current list of goods in Annex I, would result in an additional rate of duty of about 0,01 %. Additional custom duties equal or below 0,01 % that would apply in the absence of a de minimis provision on the few tariff lines currently included in Annex I do not appear to justify the administrative costs that would be incurred by the Union if these duties were imposed. Below this threshold the duties have no trade impact and are thus economically negligible.
Moreover, this proposal adjusts the language of Article 3(3) of Regulation (EU) 2018/196 in order to align it to the standard clauses contained in the Interinstitutional Agreement on Better Law-Making.