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Introduction

The European Union is a customs union which means that the same import duty rates are applicable in all member states. The tariff applicable to imports from the U.S. is the MFN (Most-Favored-Nation) tariff which also applies to other signatories to the WTO-agreement. However, many countries enjoy lower preferential tariffs within the scope of various trade agreements. Under the Uruguay Round Agreement, the EU committed to reduce import tariffs for agricultural products by 36% on average over the 6-year implementation period. The last tariff rate reduction took place on July 1, 2000.
 

Combined Nomenclature

Council Regulation 2658/87 on the tariff and statistical nomenclature and on the Common Customs Tariff established the "Combined Nomenclature" (CN), which is the EU’s coding system for classifying products for customs and statistical purposes. This classification is based on the Harmonized System (HS), which is also the basis for the import and export codes used by the U.S. The Harmonized System assigns a 6-digit code for general categories. All counties which use the Harmonized System are allowed to define commodities at a more detailed level than 6-digits.

The Combined Nomenclature is an 8-digit coding system, structured as follows:

HS chapter - 2 digits, e.g. "Chapter 18 Cocoa and Cocoa Preparations"

HS heading - 4 digits, e.g. "1806 chocolate and other food preparations containing cocoa"

HS subheading - 6 digits, e.g. "1806 10 cocoa powder, containing added sugar or sweetening matter"

CN subheading - 8 digits, e.g. "1806 10 15 cocoa powder with 0-5 pct sucrose"

Agricultural, food and fishery products are listed under chapters 1 to 24 and wood and wood products under chapter 44. An update of the CN (Tariff Schedule) is published annually by October 31 to enter into force on January 1 of the following year. Commission Regulation 861/2010 (Official Journal L 284 - October 29, 2010) is the most recent update. It provides the rates of duty on products entering the Union’s territory under the standard import regime, including imports from the U.S. 
 

TARIC (TARif Intégré Communautaire)

"TARIC" is the acronym for the Integrated Tariff of the European Communities and was introduced at the same time as the CN by regulation 2658/87. The codes used are a further breakdown of the Combined Nomenclature to the 10-digit level. The TARIC further contains information on tariff quotas, all third country and preferential duty rates, tariff suspensions and other trade measures. TARIC does not have the status of a legal instrument but its 10-digit codes must be used in customs and statistical declarations in trade with third countries.  The Commission's on-line customs database can be consulted to look up commodity codes and relevant import duties.
 

Tariffs

In general the import tariffs applied to goods imported in the EU, can be found in the tariff schedule referred to above.  However, the EU applies tariffs to processed products that depend on the content of certain ingredients, tariffs on fruits and vegetables that depend on a daily fixed import price and the season and maintains a margin of preference for cereals and rice. Customs offices in EU Member States can also provide information from the tariff schedule.

In the EU Tariff Schedule import duty rates are expressed as:

- ad valorem tariffs equal to a percentage of the product’s value

- specific tariffs per unit weight/volume/number of pieces

- a combination of ad valorem and specific tariffs
 

Processed products

	the symbol EA in the tariff schedule: indicates that products are chargeable with an "agricultural component" (in Euro per 100 kg net)
	the symbol AD S/Z in the tariff schedule indicates an additional duty for certain forms of sugar
	the symbol AD F/M indicates an additional duty for flour (in Euro per 100 kg net)

For many processed products, the quantities of basic products used to manufacture them can not be shown for each tariff line because of their diversity. Import duties on these products are linked to the import duties on basic agricultural products through the following mechanism.

Based on its contents of milk fat, milk proteins, starch/glucose and sucrose/invert sugar/isoglucose, an imported product corresponds with a code in a matrix, called the Meursing table. For each of these codes, the agricultural component/additional duty for sugar or flour have been calculated based on the quantities of notional basic products (skimmed-milk powder, whole milk powder, butter, sugar, common wheat and corn) in the corresponding standard recipe composition.

Example: a product containing 6-9% milk fat, 4-15% milk proteins, 5-25% starch/glucose and 30-50% sucrose/invert sugar/isoglucose would refer to code 7307 in the Meursing table.

For code 7307 the agricultural component (EA) would be 86.23 Euro/100 kg net, the additional duty for sugar (AD S/Z) 20.44 Euro/100 kg net and the additional duty for flour (AD F/M) 4.94 Euro/100 kg net.

The tariff schedule will indicate which of the three duties apply, possibly in combination of an ad-valorem duty. If the word MAX is mentioned in the tariff, e.g. 9.5 + EA MAX 21.5 + AD S/Z, a comparison needs to be made between the two duties levels and the lowest of the two applies.

Fruits and vegetables - Entry Price System

Fruits and vegetables imported at or over an established entry price are charged an ad valorem duty only. Produce valued below the entry price are charged a tariff equivalent in addition to the ad valorem duty. The tariff equivalent is graduated for products valued between 92 and 100 percent of the entry price. The ad valorem duty and the full tariff equivalent are levied on imports valued at less than 92 percent of the entry price.