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Latest edition of EY Belgium’s customs and excise update


Register now for one of our export control & sanctions breakfast sessions in Antwerp, Ghent or Liège

Curious about the latest updates in export control and sanctions? Wondering how the extraterritorial impact of EU sanctions and the US policy shift might affect your business?

As global developments create uncertainty, companies face increased complexity in managing risks, ensuring compliance, and maintaining global trade operations. Join us and register here for one of our exclusive export control & sanctions breakfast sessions to understand these shifts and implement robust, dynamic internal compliance programs.

Time: 9:00-10:30 a.m. (arrival and registration from 8:30 to 9:00 a.m.)

  • 18 February 2025, at the Radisson Hotel in Berchem, Antwerp (English Session)
  • 19 February 2025, at the EY Ghent office, Ghent (English Session)
  • 20 February 2025, at the Cap Business Center Herstal, Liège (French Session)

We will cover insights on what the new US administration means for trade and sanctions and provide an understanding of how the extraterritorial reach of sanctions and export control is impacting businesses globally. Additionally, we will explore real-world examples to help you enhance your internal compliance strategies.

Don't miss this opportunity and register now to secure your spot!
 

Issue 3 2024 of our TradeWatch is out now!

The latest issue of our TradeWatch is now available on our Global trade page. In this final issue of the year, key trends and themes currently impacting global trade are explored, including trade protection measures, trade technology, and trade controversy. The focus is also on the life sciences sector, addressing important topics such as the impact of trade protection measures on this key industry and the broader implications for global trade functions. Additionally, the potential impact of the US presidential election results on global trade is discussed, highlighting how the outcome could significantly influence trade policies, international partnerships, tariff structures, and the overall economic environment both in the US and abroad.  

This edition also covers the increase in sanctions and export controls, with insights from the EU, Canada and Asia Pacific. Trade controversy is equally addressed with articles on preparing for customs audits and managing disputes from the EU, Korea, Mexico, and New Zealand. The role of technology, including artificial intelligence, in facilitating customs obligations and enhancing trade operations is examined, as well as new rules for cross-border e-commerce sales in countries like Türkiye. Sustainability continues to be a priority, with developments on the EU Carbon Border Adjustment Mechanism (“CBAM”), measures to prevent deforestation (“EUDR”), and recent legislation related to sustainability and circular trade. Looking ahead to 2025, significant legislative changes are anticipated, including EU customs reforms and a continued focus on environmental, social and governance (“ESG”). It is also envisaged that the Trump presidency will likely lead to trade developments that may influence policies in many other jurisdictions.
 

Update on EU Sanctions against Russia

On 14 January 2025, the EU began consultations with member states regarding the 16th sanctions package. The aim is to secure approval by the end of February, marking the third anniversary of Russia's invasion of Ukraine.

The EU’s 14th package of sanctions against Russia (Regulation (EU) 2024/1745) introduced a new Article 8a in Regulation (EU) 833/2014, requiring EU companies to make their best efforts to ensure that their non-EU subsidiaries do not participate in activities that undermine EU sanctions. On 22 November, the European Commission published guidance clarifying the interpretation of this article.  

The guidance distinguishes between circumventing sanctions and allowing subsidiaries to undermine them. Circumventing refers to actions by an EU company to avoid restrictive measures, such as rerouting flows to Russia via third countries. Undermining involves activities by non-EU subsidiaries of EU companies that jeopardize the sanctions' effectiveness by enabling prohibited outcomes, such as supplying restricted goods, technology, or services to Russian entities. The “best efforts” obligation also applies to non-EU subsidiaries established in Russia or Belarus that sell prohibited goods in those markets, with parallel provisions outlined in Article 8i of Regulation (EC) No 765/2006 for Belarus.  

The European Commission confirms that the EU does not have jurisdiction over entities not established under the law of an EU Member State, aligning with Article 13 of the Regulation, which defines the applicability of the sanctions. Article 8a holds EU parent companies accountable for the actions of their subsidiaries.   

Additionally, on 16 December, the EU adopted the 15th package of sanctions. This package focuses on Russia's shadow fleet and further combatting sanctions circumvention. It includes significant individual and entity listings related to the Russian military-industrial complex and enhances legal protections for EU Central Securities Depositories. Notably, for the first time, the EU has imposed comprehensive sanctions which include travel ban, assets freeze, and prohibition to make economic resources available on various Chinese actors supplying drone and microelectronic components supporting Russia’s war of aggression. The package targets 52 new vessels from Russia's shadow fleet, adds 84 new listings of individuals and entities undermining Ukraine's sovereignty, and introduces stricter export restrictions on dual-use goods and technologies for 32 new entities directly supporting Russia’s military and industrial complex with some of these entities located in third countries (such as China, India, Iran, Serbia and the UAE). It also includes measures to protect EU operators from Russian court rulings and extends certain derogations to enable EU companies to divest from Russia.
 

MASP Update: AES Go-Live, IDMS, NCTS P5   

The Belgian Customs authorities have published an update of the timeline of the Multi-Annual Strategic Plan (“MASP”) for electronic customs. The Automated Export System (“AES”) officially went live on 18 November 2024 in Belgium. Starting from 18 November 2024, PLDA ceased to function for export declarations relating to the Customs office of Export.  

For more information, consult our alert.  

Additionally, the application Import Declaration Management System or “IDMS” has been available since 22 October and will be working alongside PLDA from 23 October 2024, until 5 February 2025. Economic Operators can now start using IDMS. However, declarations for placing goods under the customs warehouse regime (“H2”) must continue to be submitted through PLDA for the time being.  

NCTS phase 5, originally scheduled to go live on 9 December 2024, has been postponed to 21 January 2025. Key stakeholders, including economic operators, trade associations, software providers, and the Belgian customs authorities, identified significant technical and practical risks associated with the initial launch date. The alignment with the ultimate deadline set by the European Union, will provide additional time for all parties to adequately prepare for the substantial changes 
 

Belgian customs authorities published new TARIC codes to include in the Single Administrative Document   

On 30 October 2024, the Belgian customs authorities published a series of new TARIC document codes to be used in the Single Administrative Document (“SAD”). These codes are to be included in box 44 of the SAD to comply with EU Regulations. The new codes are: C102 to C104, L154, Y164, Y227 to Y232, Y699, and Y870. The new codes relate to Russian sanctions, tariff quotas (to the US and from New Zealand), the no-Russia clause, and goods exported to Russia before the application of specific sanctions.
 

EU approves 12-month delay of the EUDR and publishes Implementing Regulation on the IT System  

On 2 October 2024, the Commission proposed delaying the entry into application of the EU Deforestation Regulation (“EUDR”) by 12 months. Initially, the EU Parliament approved this delay on 14 November, along with 8 amendments. However, on 3 December, the EU Council and Parliament agreed to delay the EUDR without amendments. The Council formally adopted the 12-month postponement on 18 December, and on 23 December the amended regulation was published in the Official Journal of the EU, making the 12-month delay official.  

The goal of this delay is to give the companies that fall under the Regulation the appropriate time to prepare to fully comply with its obligations. Simultaneously with the delay, the Commission has published several documents aimed at clarifying and providing more information on the interpretation and implementation of the Regulation. As of 6 November, Economic Operators can register in the EUDR Registry, as of 4 December it is also possible to submit due diligence statements into the system to gain familiarity with the system before entry into force  

On 6 December, the Commission published an Implementing Regulation detailing the rules for the EUDR Registry (“IT System”), a specialized tool designed to manage and create due diligence statements in accordance with EUDR requirements. The Implementing Regulation is divided into three chapters: the general functioning of the system, the roles and responsibilities associated with the system, and the processing of personal data within the system. Notably, the portal will feature the ability to modify or withdraw due diligence statements within 72 hours after the reference number has been issued. 
 

EU imposes definitive countervailing duties on imports of electric vehicles originating in China   

The European Commission has concluded its anti-subsidy investigation by imposing definitive countervailing duties on imports of electric vehicles (“EVs”) originating in China for a period of five years. The investigation revealed that the EV value chain in China benefits from unfair subsidization, posing a threat of economic injury to EU producers of EVs. Consequently, duties are enforced starting 30 October 2024. Specific duties have been assigned to major Chinese exporters, including BYD at 17.0%, Geely at 18.8%, and SAIC at 35.3%, while other cooperating companies to the investigation will face a duty of 20.7%. Notably, Tesla, following an individual examination, will be subject to a duty of 7.8%. These measures aim to level the playing field for EU producers and ensure fair competition in the market.  

Simultaneously, the EU and China are engaged in discussions to find alternative, WTO-compatible solutions to address the issues identified by the investigation. The European Commission remains open to negotiating price undertakings with individual exporters, as permitted by EU and WTO rule. Moving forward, the Commission will closely monitor the effectiveness of these measures to prevent circumvention. Exporting producers who cooperated or are new exporters can request an accelerated review to establish an individual duty rate. Additionally, importers may seek refunds if they can substantiate that their exporting producer is not subsidized or if the subsidy margin is less than the duties paid.
 

Updated Annex I of the Dual-Use Regulation (EU) 2021/821  

On 8 November 2024, the EU Commission published the updated Annex I of the Council Regulation (EU) 2021/821. Key changes in the updated Annex I include the introduction of the abbreviation AIP (“Air Independent Propulsion”) from the Wassenaar Arrangement, and several new definitions such as “charge multiplication,” “high output diesel engines,” and “vulnerability disclosure.” Additionally, the definition of “insulation” was removed from the Missile Technology Control Regime.   

The updated Annex I also features modifications in listed categories, such as new entries in Categories 0B and 1C, changes in dual-use item parameters (e.g., frequency range in 3A001.b.7.a-c from 90 GHz to 110 GHz), and wording updates in item classifications (e.g., “underwater” changed to “submersible” in 6A001.a.1.d). These amendments aim to enhance the regulation of dual-use items, reflecting the EU's commitment to export controls.
 

Implementing Regulation 2024/3020 concerning the classification of polypropylene pipette tips 

In accordance with Implementing Regulation 2024/3020, pipette tips, despite being designed for use solely or principally with pipetting apparatus and automated dosing systems, cannot be considered parts of these apparatuses because they are interchangeable and disposable components. Additionally, the mechanical and electrical functioning of those pipette apparatus or automated dosing systems is not dependent on the pipette tips. Therefore, the pipette tips should be classified under heading 3926.90.97 as other articles of plastics. 

The classification of pipette tips under heading 3926.90.97 as other articles of plastics is consistent with the principle that parts of general use are not classified as parts of machines or apparatus. This principle ensures that items which are interchangeable and disposable, and not integral to the mechanical or electrical functioning of the apparatus, are classified based on their material composition rather than their use.
 

EU Commission implements new trade measures to combat unfair practices  

The EU Commission has recently introduced several measures to regulate trade and protect the EU industry from unfair practices:  

  • A provisional anti-dumping duty of 56.1% has been imposed on glass fibre yarns originating in China, with an individual rate of 26.3% for Henan Guangyuan New Material Co., Ltd. The product under investigation is glass fibre yarns, whether or not twisted, excluding glass fibre slivers, glass fibre cords, and chopped strands, currently falling under TARIC Codes 7019 13 00 10, 7019 13 00 15, 7019 13 00 20, 7019 13 00 25, 7019 13 00 30, 7019 13 00 50, 7019 13 00 87, 7019 13 00 94, 7019 19 00 30, 7019 19 00 85. 

  • The Commission has also initiated an investigation for potential circumvention of anti-dumping duties on graphite electrode systems (currently classified under TARIC codes 8545 11 00 10 and 8545 11 00 15) and artificial graphite in blocks or cylinders (TARIC codes 3801 10 00 15 and 3801 90 00 80) originating in China.

  • Furthermore, two expiry reviews have been launched. One expiry review was initiated for anti-dumping measures on ironing boards from China (currently classified under TARIC codes 3924 90 00 10, 4421 99 99 10, 7323 93 00 10, 7323 99 00 10, 8516 79 70 10, and 8516 90 00 51), and a second one for mixtures of urea and ammonium nitrate (currently falling under CN code 3102 80 00) originating in Russia, Trinidad & Tobago, and the USA. These expiry reviews will determine whether the continuation of these anti-dumping measures is necessary to prevent dumping and injury to the EU industry.
     

New autonomous tariff suspensions and tariff quota for certain agricultural and industrial products 

On 19 and 27 December 2024, the EU published Council Regulations 2024/3213 and 2024/3211, respectively, amending the existing Regulations on tariff quotas and autonomous tariff suspensions. The changes are applicable as of 1 January 2025.  

The new tariff quotas include the addition of new products, amendments to the quotas, changes to product descriptions, and the removal of certain products. Specifically, the proposal for tariff quotas includes five new products, with three products being removed from the annex. The proposal for autonomous tariff suspension includes fifty-nine new products, while certain existing suspensions have been deleted.  

We recommend assessing whether you can benefit from any of the new or existing tariff suspensions and tariff quotas and consider applying for new suspensions or quotas if any of the products your business imports meet the applicable criteria.
 

New EU-Chile Interim Trade Agreement enters into force on 1 February 2025

The Interim Trade Agreement (ITA) between the EU and Chile will come into effect on 1 February 2025, replacing the existing EU-Chile Association Agreement. This new agreement introduces several significant changes that will impact businesses engaged in trade between the EU and Chile.

As of 1 February, EUR.1 movement certificates and invoice declarations will no longer be accepted under the ITA. Instead, claims for preferential origin will be based either on statements of origin made out by the exporter for single shipments or even for multiple shipments of identical products, or alternatively on importer's knowledge.

Statements of origin made out by EU exporters for consignments above the value of €6000 will require a REX number. After February 2025, the Approved Exporters number will no longer be accepted. Under the ITA, the rules of origin will be updated and simplified, easing the administrative burden and simplifying compliance for businesses and economic operators in the EU and Chile. For example, to determine the preferential origin, the Change of Tariff (Sub) Heading criteria now apply to a wider range of products.

The EU Commission is currently preparing guidance on the new provisions under the ITA, which is expected to be published soon.
 

EU-Mercosur Trade deal: Conclusion of the trade agreement between the EU and Colombia, Peru, and Ecuador  

The European Council has approved the final step to conclude the trade agreement between the EU and Colombia, Peru, and Ecuador. This agreement, which has been provisionally applied since 2013, will be fully implemented from 1 November 2024. The agreement covers services, intellectual property, public procurement, and human rights, aiming to open markets gradually and boost trade and investment. The EU is a significant trading partner for the Andean countries, with total trade worth around €33 billion in 2023. The agreement includes provisions for better trade conditions, a stable business environment, and cooperation on various fronts, including labor and environmental protection. Ecuador's accession to the agreement, signed in 2016 and provisionally applied since 2017, has also been finalized.
 

EU-Egypt Association Council amends Euro-Mediterranean Agreement and implements revised PEM rules   

The EU-Egypt Association Council has amended the Euro-Mediterranean Agreement, to align Protocol 4 with the Regional Convention on pan-Euro-Mediterranean (“PEM Convention”) preferential rules of origin. Effective from 1 October 2024, this amendment replaces Protocol 4. The amendment is another milestone in the ongoing efforts to streamline trade regulations and promote economic cooperation in the Euro-Mediterranean region.
 

Revision of the Pan-Euro-Mediterranean (“PEM”) Convention – Full implementation postponed to 1 January 2026 

The PEM rules of origin were revised and expected to be fully applicable by 1 January 2025. However, some parties are still in the process of updating their bilateral agreements, which means they are still relying on the 2012 PEM rules, as per the PEM Convention published 26 February 2013. This delay has postponed the full implementation of the new framework to 1 January 2026. To mitigate the economic impact of the delayed implementation, transitional measures have been adopted. Throughout 2025, certain countries will continue using the 2012 PEM rules for proof of preferential origin and tariff treatment.  

As of 1 January 2025, there are three possible statuses for contracting parties in the EU Matrix on diagonal cumulation in the PEM zone, which will be updated by the Commission on a regular basis throughout the year:  

  • Code CR: Countries applying the transitional provisions, i.e. the 2012 rules and the new (2023) rules. Operators can choose between both sets of rules, with cumulation possible under both. 
  • Code R: Countries applying only the new (2023) rules. Cumulation is temporarily impossible with countries using the old rules. 
  • Code C: Countries applying only the 2012 rules. Cumulation is only possible under the 2012 rules. 

To avoid compliance issues, we strongly recommend indicating which set of PEM rules was used, regardless of the destination. For proofs of origin issued under the 2023 rules, it is no longer allowed to refer to "transitional rules"; instead, from 1 January 2025 to 31 December 2025, reference should be made to the "revised rules." After 31 December 2025, this statement is no longer required, as the 2012 and 2023 rules will no longer be applicable in parallel.
 

EU proposes extension of electronic A.TR movement certificate application 

The EU has proposed a Council decision to authorize the use of electronically issued A.TR movement certificates, ensuring continuity from 8 July 2024, and supporting both digital and paper formats to facilitate trade. The proposal does not mandate the exclusive use of electronic formats; it allows for the continued use of both electronic and paper certificates. Additionally, the EU plans to develop a system for digital issuance in the future, further enhancing the efficiency of trade processes .
 

Georgia joined the Common Transit Convention  

On 23 December 2024, Georgia formally agreed to join the Common Transit Convention and the Convention on the Simplification of Formalities in Trade in Goods. Effective 1 February 2025, Georgia will officially become a member of these Conventions. 

The inclusion of Georgia in these Conventions will simplify customs procedures within its territory, making the transit of goods more efficient. Businesses in the EU, Georgia, and other participating countries will benefit from reduced costs due to streamlined border crossing rules, including mutually recognized financial guarantees and fewer controls. 

A circular providing details about Georgia's accession to these Conventions is currently being prepared by Belgium customs authorities and will be published soon. 
 

ECJ Judgement – Excise duties on irregularly imported tobacco products transported over different EU Member States   

In case C-214/24, the German Bundesfinanzhof requested a preliminary ruling on the interpretation of Articles 7 and 33 of Directive 2008/118/EC. The dispute involved A, a truck driver, and the German customs authorities.

The case focused on whether excise duty can be levied multiple times on tobacco products irregularly imported into one Member State and then transported to another Member State without a duty suspension arrangement. Directive 2008/118/EC aims to harmonize excise duty across Member States to avoid double taxation. The ECJ referred to its previous ruling in the Prankl case (C-175/14), which established that only the Member State of destination can levy excise duty on such goods.  

The ECJ ruled that excise duty on tobacco products, irregularly imported into one Member State and transported to another for commercial purposes, can only be levied by the Member State of destination, excluding transit Member States.
 

ECJ Judgement - Harley-Davidson case on supply chain relocations amid rising trade tensions  

In a landmark judgement, the ECJ ruled that companies cannot relocate production solely to evade customs duties from trade disputes. The case involved Harley-Davidson Europe Ltd. attempting to shift production from the US to Thailand to avoid additional EU tariffs. The ECJ supported the European Commission's decision to revoke the binding origin information (BOI) granted by Belgian customs authorities, citing the anti-avoidance provision in Article 33 of the Delegated Act of the Union Customs Code (“UCC-DA”). This provision deems any relocation not economically justified if its primary purpose is to circumvent trade measures. Contrary to expectations, the Court dismissed Harley-Davidson's appeal, marking a rare instance where the Advocate General's opinion was not followed.  

The judgment is particularly significant given the anticipated trade tensions following Donald Trump's election as the 47th President of the United States. Trump has proposed tariffs of 10%-20% on all imported goods, with even higher tariffs on specific products from countries like China, Mexico, Canada, and the EU. The EU already indicated it would respond with retaliatory measures if such tariffs were implemented.    

The ECJ’s judgment underscores the importance of considering economic justification in production relocations amid rising trade tensions.  

Consult our alert for more information.
 

ECJ case C-596/23 on excise duty liability of a seller indirectly involved in transportation of goods in the context of e-commerce

The ECJ recently delivered a preliminary ruling on the interpretation of Article 36 of Directive 2008/118 concerning excise duty liability for excise goods in e-commerce, impacting businesses selling across EU Member States. The judgment clarifies that vendors can be liable for excise duties in the destination country if they facilitate the transport of goods, even indirectly.

The case involved Finnish customs seizing alcoholic beverages sold by a German company, B UG, to a Finnish resident. Finnish tax authorities imposed excise duties and a penalty, arguing that B UG was liable as a distant seller. They claimed B UG indirectly participated in the transport by guiding the purchaser to use specific transport companies. B UG argued it did not organize the transport and should not be liable. Transport arrangements were facilitated through B UG's website, which featured advertisements for transport companies. Customers can choose and pay for shipping via links on the website. Despite B UG stating it did not handle shipping, the Finnish Tax Authority imposed excise duties and a fine, asserting that B UG managed the dispatch or transport. 

The ECJ ruled that the German company, B UG, is indirectly involved in the transport of the goods and thus liable for excise duty in Finland by guiding the purchaser’s choice of transport company and facilitating the transport process.
 

ECJ (C-717/22 and C-372/23) on customs penalties and confiscation of goods 

The ECJ issued a judgment in the joined cases C-717/22 and C-372/23, responding to two requests for a preliminary ruling regarding the interpretation of the rules on infringements and penalties laid down in the Union Customs Code. These cases involved the owner of the goods, a Bulgarian company Sistem Lux and a private individual, VU, the driver. The issues at hand concerned the failure to declare consignments of aluminum profiles imported into Bulgaria from Türkiye, which resulted in fines and the confiscation of the goods. 

The facts of the case centered around an inspection by a Bulgarian customs officer of an articulated lorry transporting 13 consignments of aluminum profiles from Türkiye. The inspection revealed that 8 consignments belonging to Sistem Lux were not declared in the customs declaration. Consequently, the driver was fined, and the aluminum profiles were confiscated. Sistem Lux contested the confiscation, while VU, the driver, challenged both the administrative penalty and the confiscation decision.

The ECJ ruled that the negligence of the driver can constitute a failure to comply with customs legislation and that Sistem Lux identified as consignee on the transit document and/or holder of the transit procedure needed to comply with the obligations of the transit procedure. The Court confirmed the principle of proportionality of penalties. Nevertheless, the Court stated that national laws can impose both fines and confiscation for customs violations, provided the system for is proportionate. Lastly, the Court decided that confiscation is permissible even if the goods belong to another person than the defendant.
 

Exploratory study on the possible strategic review of the Harmonized System 

The World Customs Organization (“WCO”) recently concluded a two-year study on the Harmonized System (“HS”) to address challenges such as e-commerce growth, product complexity, and sustainability demands. Key findings suggest that while the HS remains the best system for classifying goods, there is room for improvement. The study highlights the need for greater clarity in the classification process, including simplifying and clarifying the General Interpretative Rules (GIRs). Additionally, it recommends updating the language used in the HS to ensure it is clear, precise, and accessible to a diverse range of users.  

The rapid growth of e-commerce presents unique challenges, indicating that the HS should be adapted to better accommodate the classification of goods in this sector. Furthermore, the study recommends incorporating considerations for environmental impact and sustainability, which could involve developing new classifications for environmentally friendly products and technologies. The WCO Council will make the final decisions on whether to adopt any recommendations from the study and refer them to the Harmonized System Committee for further development, drafting, and implementation.