When does circumvention processing occur?

Circumvention processing occurs when processing or working in a third country is deliberately carried out to circumvent trade protection measures, such as punitive tariffs. Article 33 of the Delegated Regulation to the Union Customs Code (UCC-DA) is relevant in this regard, providing the benchmark for determining whether processing is to be considered economically unjustified.

The ECJ clarified that the decisive factor is whether the main purpose of the relocation of production is to circumvent such measures. Even if other economic reasons exist, a predominant intention to circumvent them is sufficient to meet the requirements of Article 33 of the UCC-DA.

Impact on customs origin

If circumvention is detected, the affected product loses its "new" origin. It continues to be assigned to the country of origin of the raw materials for customs purposes. In this specific case, this means that even if production has been relocated to a third country such as Thailand, the goods are still considered to have originated in the original export country – in this case, the USA. Consequently, EU punitive tariffs remain applicable to US products.

Evidence: Companies have a duty

While the customs authorities generally bear the burden of proof for the existence of circumvention processing, the ECJ clarified that the company concerned is obligated to provide all relevant information that contradicts such an assumption. The reasoning is that the company is in a better position to disclose the relevant reasons for the decision to relocate.

It is also legally significant that only the reasons existing at the time of the relocation are taken into account. Subsequent economic justifications are disregarded.

Independence of Art. 33 UZK-DA confirmed

In its decision, the ECJ also reaffirmed the autonomy of Article 33 of the UCC-DA. This provision should be viewed independently of the anti-circumvention provisions of the Basic Anti-Dumping Regulation (Regulation (EU) 2016/1036). Article 33 is not a mere implementation of that provision, but rather represents an autonomous provision.

The court also rejected the objection that Article 33 UCC-DA exceeds the delegation framework of Article 62 UCC. Rather, it constitutes a permissible and appropriate interpretation of the concept of "economically justified processing" in Article 60(2) UCC within the framework of Article 290 TFEU.

Unresolved questions regarding proof of origin

However, the question of how the origin of goods is to be determined in the case of circumvention remains unanswered. While Article 33 of the UCC-DA focuses on the country of origin of the input materials, Article 60 (2) of the UCC defines origin based on the last economically justified processing or working. Whether and how these two approaches are compatible may still need to be clarified in future proceedings.

Der Beitrag EuGH-Urteil: Antidumpingzölle trotz Verarbeitung im Drittland möglich erschien zuerst auf R&U.

What is in the new customs list?

The announced measures are a direct response to US tariffs, particularly on products such as motorcycles, whiskey, and jeans. With the new catalogue, the EU aims to implement targeted countermeasures – albeit with caution. The goal is to minimize the impact on consumers and businesses in Europe.

In total, the list includes US goods worth around €95 billion. It explicitly excludes products on which the US itself does not impose tariffs, as well as digital services. The Commission emphasizes: This is a provisional list, which will be agreed and revised in the coming weeks in consultation with the Member States.

The political dimension: pressure or escalation?

At the same time, diplomatic talks between the EU and the US continue. However, an agreement does not seem to be in sight any time soon. By publishing the tariff list, the EU is sending a clear signal: It is prepared should there be no progress in the negotiations.

The strategy is clear: The EU wants to strengthen its position without unnecessary escalation. Nevertheless, concerns remain that a further escalation of the trade dispute could be economically painful for both sides.

Imbalance in trade measures

Critics note that the scope of the US tariffs is significantly greater. Despite the EU's comprehensive list, the financial equivalent of the US measures remains approximately four times higher. However, a final judgment will only be possible once the member states have provided their feedback and the EU Commission has presented its final list of measures.

Impact on German industry

German industry, especially the automotive and steel sectors, is particularly affected by the existing US tariffs. The temporary suspension of US punitive tariffs on certain products further increases the pressure on the negotiations. Similar measures have already triggered strong market reactions in the past, and a renewed "tremor on the stock markets" cannot be ruled out.

Conclusion

The EU is responding to the US measures with a targeted, but not yet finalized, list of counter-tariffs. Whether this will result in a compromise or a further escalation of the trade dispute remains to be seen. One thing is clear: political and economic pressure is growing on both sides.

Der Beitrag EU plant neue Strafzölle auf US-Waren – Vorläufige Liste veröffentlicht erschien zuerst auf R&U.