European Tariffs Seen Rising on Digital Cameras, PDAs with GPS
GENEVA -- Europe is poised to raise tariffs this fall on digital cameras with a high-resolution video function, and eliminate tariffs on low-resolution video camcorders, but no ruling was made for tariff suspension for LCD monitors with DVI connections, according to preliminary reports by industry from a July 12-13 meeting of the EC Customs Code Committee Nomenclature section.
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Mobile phones remain duty-free, but preliminary indications are the group voted to reclassify telephone PDAs with a GPS, resulting in a 3.7 percent duty on those products. Industry officials are waiting for a copy of the decision, not to be circulated officially for months, before commenting, one official said.
The EC move reclassifies some models of digital camera, meaning their customs duty will move from zero to 4.9 percent. For digital cameras to remain tariff-free, they may not record more than 800x600 pixels, more than 23 frames per second or for more than 30 minutes in a single sequence, an EC spokesman said. The move also reclassifies some camcorder models, now at either a 4.9 percent or 12.5 percent customs duty. Camcorders are excluded from existing duties if they record less than 800x600 pixels, less than 23 frames per second and less than 30 minutes in a single video sequence. The EC may finalize the regulation in the next two to three months.
The EC is not reclassifying products to a higher duty rate, the spokesman said, but it is acting to ensure digital cameras and camcorders are classified uniformly across the EU. Not all digital cameras with a video recording feature will cost more by fall, the official said. Some cameras marketed as digital may be subject to duty because they have better video recording functionality, “but the measure should not affect the models sold to the ordinary consumer,” the official said.
Preliminary reports indicate the Customs Code Committee also reclassified phone/PDAs with built-in GPS for tariff purposes, so the World Trade Organization Information Technology Agreement no longer covers the products, said an industry official. The tariff will go from zero to 3.7 percent. Examples of reclassified products are the Nokia N95, Mio A701 and the HP iPAQ rx5720. Mobile phone classification has not yet been discussed among EU member states, the EC spokesman said. “This means that they are always classified as mobile phones.” The recording function is still considered secondary.
Industry officials still are waiting for the Commission to draft a proposal to suspend the duty on LCD monitors larger than 19” with DVI for niche commercial markets, an industry official said. “The EC considers all LCD monitors as video monitors, claiming that whenever a monitor has a DVI connector, it’s multifunctional so it should be seen as a video monitor as well,” said the chairman of the EICTA (European Information & Communications Technology Industry Association) LCD working group. The products are classified with TV monitors at 14 percent duty, he said. IT companies whose monitors are used only in data and computer applications are fighting the tariff classification, which has been around for a couple of years, by pushing for a duty suspension.
An EICTA proposal to the Commission details a list of technical criteria to discern between LCD monitors designed for computer use and those for home entertainment, an official said. They could include criteria like the density and size of a screen’s pixels and its aspect ratio, a volume control and other technical criteria, the EICTA LCD working group chairman said. The proposal wasn’t considered during the two-day EC meeting, according to preliminary industry reports.
European countries are the only WTO members restrictively interpreting products covered in the WTO Information Technology Agreement (ITA) for preferential tariff treatment, an official said. Their position is that electronic products with new functionalities are new products, and thus never were incorporated under the ITA. Other products and issues being examined by the Customs Code Committee include touch-screen monitors, LED modules and video walls, CRTs, surface-mount technology chips and draft explanatory notes on telecom cables.
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A revised draft negotiating text on cutting industrial tariffs for the World Trade Organization in the WTO Doha Round of talks were released Tuesday. General cuts in industrial tariffs under negotiation may be augmented later by sector-specific tariff cuts in markets such as CE. “The sectoral negotiations are not far enough advanced” to draw conclusions about their effect on the Doha negotiations, said Canadian Ambassador Don Stephenson, speaking as chairman of the WTO’s Non-Agricultural Market Access negotiating committee. Many WTO member countries consider sectoral negotiations voluntary and complementary to any agreement on broad industrial tariff cuts, Stephenson said.