Tariffs Levied By The EU: Common Customs Tariff

A tariff refers to a tax that governments of nations impose on imported goods and services from other countries. The result of tariffs is a rise in the prices of these goods and services. This is why tariffs need to be handled with care because of being less attractive or competitive. The EU countries also use tariffs on non-EU countries. This tariff is known as the Common Customs Tariff.

Internal Market

The Internal Market refers to the European Single Market. It is also called the Common Market. It is a single market that contains European Union member nations that are 27 in total. It also includes Switzerland through bilateral treaties. Moreover, nations like Norway, Liechtenstein, and Iceland are also a part of it through the Agreement on the European Economic Area.

In the internal market or the European Single Market, there is free movement of the following:

• Goods
• Services
• Capital
• Persons

Moreover, in this market, the citizens have the freedom to live, work, and study wherever they want.

Common Customs Tariff

Since the inception of the European Single Market, the circulation of goods can take place freely between the various member states. A tariff known as the Common Customs Tariff (CCT) is applied to importing goods from countries outside the EU.

The tariff is common to all members of the European Union. However, there can be differences between rates of duty pertaining to the types of imports. This depends on where these imports come from and where they are. The rates are in accordance with the economic sensitivity of products.

The Common Customs Tariff refers to the combination of the following:

• Nomenclature (or classification of goods)
• Duty rates whose application takes place to each goods class

Moreover, the Common Customs Tariff is inclusive of all other community legislation that impacts customs duty payable on a particular import.

Instead of involving a single codified law, the Common Customs Tariff is a collection of laws.

Community Legislation

The law of the European Union involves several treaties, the European Court of Justice decisions, and community legislation.

This legislation is in the form of:

• Regulations
• Directives
• Decisions

These decisions, directives, or regulations are of general application that is legally binding. The community legislation is applicable in all member states in a direct manner. There is no need for individual member states to enact this legislation domestically.

Combined Nomenclature

The Combined Nomenclature (CN) refers to a tool for the classification of goods. The idea behind setting it up is to meet the requirements of the following:

• Common Customs
• EU’s external trade statistics

The utilisation of Combined Nomenclature takes place in intra-EU trade statistics.

Combined Nomenclature (CN) classifies most goods when their declaration takes place to EU customs. This helps in the application of the Common Customs Tariff.

There is a determination of the following by Combined Nomenclature subheading that is in declarations for imported and exported goods:

• Rate of customs duty whose application takes place
• How the treatment of goods takes place for statistical purposes or policies

The combined nomenclature includes the following:

• Supplementary units
• Preliminary provisions
• Additional section/chapter notes and footnotes pertaining to Combined Nomenclature subdivisions
• Conventional duty rates
• A set of tariff-related annexes and a special coding system
• Descriptions of the goods
• Each subdivision has a ‘CN code’ with an 8-digit code number. This is followed by a description, duty rate, and supplementary unit

Conclusion

A tariff refers to a tax that nations impose on imported goods and services from other countries. This causes a rise in the prices of these goods and services. The EU countries also use tariffs on non-EU countries, which is known as the Common Customs Tariff. The internal market or the European Single Market involves a free movement of individuals, capital, services, and goods. The community legislation in the European Union is in the form of decisions, directives, and regulations. A tool for the classification of goods in the EU for tariffs is known as the Combined Nomenclature (CN).