15 Mar '24
The European Commission has instructed Member States' customs authorities to register imports into the EU of new battery electric vehicles (so-called: BEV’s) originating in China from 7 March 2024[1]. The cars in question are electric passenger vehicles (currently) classified under CN code 8703 80 10.
The reason for the registration requirement is an anti-subsidy investigation launched by the European Commission on 4 October 2023.[2] Although this investigation is still ongoing, the European Commission believes that there is currently sufficient evidence that the Chinese government is subsidising exports of Chinese electric passenger cars to the EU. As a result, there is a risk that EU producers of new battery electric passenger vehicles will be disadvantaged and face declining sales and lower production levels.
If, after the completion of the anti-subsidy investigation, the European Commission indeed concludes that the Chinese government subsidises exports of Chinese electric passenger cars, the registration now established will allow the then established anti-subsidy measure to be applied retroactively to the registered imports. This means the anti-subsidy duty is retrospectively owed in addition to the applicable 10% customs duty. The imposition of registration on a product at the time of an investigation into dumping or subsidisation practices is insidious in the sense that the declarant of the registered import is not financially aware of it at the time of import, apart from the registration. The levy is not felt until afterwards, possibly months later, when the customs authorities of the Member States are instructed to collect the levy on the registered imports when the measure is adopted.
The expected amount of the anti-subsidy levy that might be imposed on Chinese BEV’s is yet to be decided. The European Commission has indicated that at this stage of the investigation it is not yet possible to accurately estimate the amount of subsidisation and therefore does not consider it appropriate to provide an estimate of the amount of future liability.
It is clear that in practice, especially in the case of anti-dumping duties, but also in the case of countervailing duties, the percentages applied on the CIF value EU Border can usually be significant.
Interested parties, following the announced measures, may make their views known in writing, submit evidence or request a hearing within 21 days from 6 March 2024. Importers of the product concerned are also advised to prepare for the impact of countervailing duties, which will thus eventually be able to be applied retroactively to registered imports from 7 March 2024.
For customs representatives handling import declarations related to electric passenger cars originating in China on behalf of customers, extra alertness is required and it is wise to take additional measures to avoid risks.
Should you have any questions following the above information, please feel free to contact us (j.biermasz@ploum.nl and/or a.wolkers@ploum.nl). Ploum's Customs, Trade and Logistics team regularly advises on anti-dumping and anti-subsidy investigations and measures.
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