48.5% Anti-Circumvention Duties on Certain Chinese Parts
BRUSSELS, Belgium – After the introduction of anti-dumping duties on Chinese bikes, a number of exporters and importers tried to skirt the extra levy for instance by shipping the bikes not fully assembled and declaring them as parts instead of bikes. To counter this abuse, in 1997 the Commission issued Regulation 71/97, which extended the duty on bicycle imports to the imports of certain bicycle parts.
In Regulation 88/97, the Commission specified the conditions and the administrative rules European companies have to comply with in order to obtain an exemption from these additional duties.Click here to download the official EU publication: Review Anti-dumping Duties No.171/2008.
Anti-Circumvention Duties on Chinese Parts
The anti-circumvention duties apply to the following bicycle parts:
- painted or anodized or polished and/or lacquered bicycle frames (CN 87149110)
- painted or anodized or polished and/or lacquered bicycle front forks (CN 87149130)
- derailleur gears (CN 87149950)
- crank-gear (CN 87149630)
- free-wheel sprocket-wheels (CN 87149390)
- brakes other than coaster brakes and hub brakes (CN 87149430)
- brake levers (CN 87149490)
- complete wheels with or without tubes, tires and sprockets (CN 87149990)
- handlebars (CN87149910) whether or not presented with a stem, brake and/or gear levers attached
Since 1997, a 48.5% anti-circumvention duty applies to the import of these parts into the EU. The measure will normally continue until 3 October 2016.
Assemblers who produce bicycles in the European Union and who, for that purpose, import any of the above-mentioned components from China, may apply for an exemption from these anti-circumvention duties. The basic condition for exemption is as follows. The above-mentioned Chinese parts may not constitute more than 59% of the total value of all parts of the assembled bike. Nevertheless, if during the assembly, the value added to the parts concerned is greater than 25% of the manufacturing cost, circumvention will be automatically excluded. The 59% rule only applies to Chinese parts in the above list.
Contrary to a misunderstanding that seems to be going around, the remaining 41% components do not necessarily have to be European. They may be purchased anywhere else in the world, except in China. Requests for exemption must be made in writing in one of the official languages of the European Union. They must be signed by a person authorized to represent the applicant.
They must be sent to the following address:
Directorate-General for External Economic Relations
CORT 100 4/59
Rue de la Loi 200
B – 1049 Brussels
Fax +32 2 295 65 05
The Commission shall immediately inform the applicant and the Member States of the receipt of the request. Within 45 days of that receipt, the Commission will decide if the request is admissible. Therefore, it has to contain evidence that the applicant uses at least 300 units per bicycle component in the above list per month. It also has to contain prima facie evidence that the assembly does not involve 60% or more Chinese components from the list. Third condition for a request to be admissible is that the applicant has not, within the 12 months prior to the request, been refused exemption or had an exemption revoked.
As from the date of the request, payment of anti-circumvention duties is suspended. The Commission has a maximum of 12 months to examine the request, possibly by means of on-the-spot verifications. In this period, the applicant must keep records of the Chinese parts from the list delivered to him. He must use these parts for assembly, if not, he must destroy or re-export the parts. The records have to be kept for at least 3 years. This obligation continues to apply if the applicant is exempted from the anti-circumvention duties. To date more than 250 exemptions have been granted.
The “de minimis” rule
A decision for exemption will have retroactive effect as from the date of receipt of the request. In case of a negative decision, suspension of payment will be lifted and the duties will be collected. If the imports of parts in the list are less than 300 units per part per month, then exemption applies automatically.
Also, imports of parts from the list, which are declared for free circulation by a non-exempted party, are exempted if delivered to an exempted party. The Commission and the member states can take the initiative to examine the above-mentioned parties. In case of abuse, the anti-circumvention duties will be reclaimed retroactively.