Common Customs Tariff for 2018 published

As always at the end of October 2017, the annual update of the EU's Common Customs Tariff was published (Commission Implementing Regulation 2017/1925). It provides the new structure of the EU's Combined Nomenclature (CN) and also amends the applicable tariff for some headings (e.g. to implement the Information Technology Agreement's latest commitments (the so-called "ITA2"). Contrary to last year (when the new version of the Harmonised System (HS2017) had to be implemented), there are only a handful of changes, in Chapters 19, 39, 38, 84 and 85. The changes will apply as of 1 January 2018.

Court judgment on the classification of "shapewear"

On 19 October 2017, the Court of Justice of the EU (CJEU) delivered its judgment in Case C-556/16 (Lutz GmbH v. Hauptzollamt Hanover) on the classification of panty girdles. Lutz, the German importer had sought Binding Tariff Information (BTI) classifying its products ("shaping knickers" or "shapewear") under CN code 6212 90 00 (the subheading for corsets (other than girdles and panty girdles), but the German customs authorities instead issued BTI classifying these under CN code 6108 22 00 ("women's or girls' slips, petticoats, briefs, panties, nightdresses, pyjamas, negliges, bathrobes, dressing gowns and similar articles"). The court to which Lutz appealed considered that either subheading 61078 22 00 or 6212 20 00 (girdles and panty girdles) was appropriate, and asked the CJEU essentially to clarify the requirement in the Explanatory Note to the CN (CNEN) relating to subheading 6212 20 00 that a product must "have vertical elasticity and restricted horizontal elasticity" in order to be classified there. The CJEU considered that the elasticity criteria in the CNEN were met "if an examination establishes that [the products] have substantially reduced horizontal elasticity in order to support the human body and create a slimming effect on the silhouette" and that this was for the referring court to decide. The CJEU therefore did not consider the CNEN to be inappropriate.

Classification Regulations

Since the last issue, the following Classification Regulations have been published:

  • Commission Implementing Regulation 2017/1971 classifies a so-called Solid State Drive (SSD) under CN code 8471 70 98 as other storage units for automatic data-processing machines.
  • Commission Implementing Regulation 2017/1983 classifies an article in a form of unworked board consisting of various veneer layers of (mixtures of) spruce or pine under CN code 4412 99 85 as other similar laminated wood.
  • Commission Implementing Regulation 2017/2157 classifies a mixture of ethyl alcohol and gasoline used a raw material to produce fuels for motor vehicles under CN code 2207 20 00 as denatured ethyl alcohol.

In addition, Commission Implementing Regulation n 2017/1977 was adopted, repealing Implementing Regulation 876/2014, which classified a portable battery-operated apparatus for capturing and recording still and video images under CN code 8525 80 99 as other video camera recorders. This Regulation implements a CJEU judgment of 22 March 2017 on GoPro cameras.

CN Explanatory Notes

The Commission has introduced new, or amended existing CNENs, for:

  • tourniquets (excluding these from CN code 9018 90 84);
  • storage cubes (declaring these to fit in heading 9403 as furniture);
  • hairbands and headbands (clarifying which of these are not classifiable in heading 9615); and
  • oranges (clarifying under which subheading of CN code 0805 10 these must be classified).

HS Explanatory Notes and Opinions endorsed

On 1 November 2017, the European Commission published a communication endorsing amendments to a series of HSENs and HS Opinions and Rulings adopted during the March 2017 session of the HS Committee. This means that EU Member States may no longer issue Binding Tariff Information (BTI), and will have to revoke BTIs that are not consistent with these HS guidance tools.

This latest HS guidance concerned, inter alia, hybrid electric vehicles, ceramic inks for inkjet devices, refrigerated outdoor cabinets, certain silos, needle roller cage assemblies for gears for motor vehicles, "Hall element devices" (for use in small accurate motors of washing machines/refrigerators, air conditioners, etc.), special tube bundle containers, screws for use in trauma surgery, covers for car seats, and a virtual reality set for a video game console, palm-sized washer devices, Insulated Gate Bipolar Transistor modules, and unassembled bicycle parts.

Nomenclature Committee/Customs Expert Group Developments

a) Agriculture/Chemistry Sector

The report of the 182nd meeting of the Agriculture/Chemistry Sub-section of the EU's Nomenclature Committee (NC) which took place on 16-17 October 2017 has been made public. It shows that the Member State experts voted favourably on a draft Classification Regulation on a mixture of ethyl alcohol and gasoline to produce biofuels and on an amendment of Additional Note 10 to Chapter 27 ("Mineral fuels, mineral oils and products of their distillation; bituminous substances; mineral waxes") and on an amendment to the CNENs for subheading 2710 19 (medium oils). They failed to adopt an opinion on an amendment of Additional Note 2(f) to Chapters 22 ("Beverages, spirits and vinegar") as regards excess pressure for sparkling fermented beverages, and the vote on a draft amendment of the CNEN for subheading 2306 50 (oilcake and other solid residues of coconut or copra) was withdrawn.

The Committee further discussed the classification of, among others, essential oils in encapsulated dispersions of ethylene-vinyl acetate or low-density polyethylene, fused alumina slag, insulin syrup, encapsulated products containing colostrum, and anti-freezing preparations. In addition, the Member State experts were updated by the Commission on the pending file for novel tobacco products (heat-not-burn) and synthetic nicotine.

b) Mechanical/Miscellaneous/Textiles Sector

The agenda of the 183rd meeting of the Textiles and Mechanical/Miscellaneous Sub-section of the NC which took place on 23-26 October 2017 (meeting report not yet available) indicates that the Member State experts were due to vote on various draft Classification Regulations (aluminium rails, printing plates, massage/heating pads/mats, an item for use in trauma surgery, guy-grip dead ends, and bathing boards).

The Commission and Member State experts were also expected to discuss, among others, the following products: superluminescence diodes, radial shaft seals, head up displays, hybrid smart watches, stylus pen with Bluetooth, oxygen analysers, and GPS trackers.

The agenda of the 184th meeting of this Sub-Section scheduled for 18-20 December 2017 reveals that a draft Classification Regulation for manual spreaders will be put to a vote, as well as an amendment to the CNENs for cameras for drones. The group should further discuss the classification of 16 products, including oxygen analysers, portable interactive educational electronic devices, glass fibre fabric, roller chains of steel, stack cables, cables for weed brushes and GPS trackers.

c) HS/WCO Coordination Sector

According to the agenda, during the 13th meeting of the HS/WCO Coordination Sector held on 29 September 2017, various (unnamed) issues related to the HS were to be discussed, as well as imminent discussions in the HS Committee related to certain tobacco-products. The agenda of the 15th meeting of this NC Sector scheduled for 23-24 November 2017 reveals similar topics in the run up to the HS Review Subcommittee meeting, as well as possible amendments to General Rules 3(a) and 3(b) for the Interpretation of the HS. Discussions will also be held on possible amendments of Chapters 72 and 73 (steel), yoghurt, offset printing plates, multichip integrated circuits, and the "parts" Notes to Sections XVI and XVII and Chapter 90, and the classification of a product referred to as "Sterilizer Formaldehyde Formomat PL 349-2".