EU legislation generally takes two forms: regulations and directives. Regulations contain mandatory language and are directly and uniformly applicable to all Member States when that regulation comes into effect. Directives provide a general framework, set regulatory objectives, and must be transposed into national legislation at the Member State level, and national authorities have the choice of form and method for implementation. As Member States have different legal systems and regulatory practices, there are differences in how directives are implemented, which complicates compliance for U.S. companies doing business in the European Union.
The division of competences between the European Union and its Member States is categorized by three main categories: the exclusive competences of the EU, shared competences, and supporting competences. The European Union has exclusive competences in the areas of the customs union, establishing the competition rules, the monetary policy for area countries, conversation of marine biological resources and the common commercial policy. The European Union shares with its Member States the competence for legislative harmonization, which it exercises in areas such as the free circulation of goods, services, capital, and in such sectors as agriculture, fisheries, transport, and energy. Meanwhile, health, tourism, and civil protection are examples of areas where the European Union can legislate only in support of Member States’ initiatives.
While the European Union is moving in the direction of a single market, the reality is that U.S. exporters continue to face barriers to entry and challenges with the fragmentation of legislation, testing, and standards at the Member State level. In some industries, such as information technology, pharmaceuticals, chemicals, telecommunications, legal services, and government procurement, some of these barriers are more pronounced. In addition, across many sectors, there is concern that more protectionist measures will be introduced in the name of a more strategically autonomous economic union.
Trade Barriers
For information on existing trade barriers, please see the most recent National Trade Estimate Report on Foreign Trade Barriers published by USTR. Information on agricultural trade barriers can be found at the website of the Foreign Agricultural Service. To report existing or new trade barriers and get assistance in removing them, contact either the U.S. Mission to the European Union or the Office of Trade Agreements Negotiations and Compliance at the U.S. Department of Commerce.
For a list of trade agreements between the European Union and other countries in the world, as well as concise explanations of these agreements, please consult the website of the European Commission, which maintains information on trade agreements.
Import Tariffs
When products enter the European Union, they need to be declared to customs authorities according to their classification in the Combined Nomenclature. All products entering the European Union are classified under a tariff code that carries information on duty rates and other levies on imports and exports, any applicable protective measures (e.g., anti-dumping); external trade statistics, import and export formalities, and other non-tariff requirements.
The EU classification system consists of three integrated components. The first component is the Harmonized System, which is a nomenclature developed by the World Customs Organization comprising 5,000 commodity groups and organized in a hierarchical structure by sections, chapters (two digits), headings (four digits), and subheadings (six digits). The second component is the Combined Nomenclature, which adds EU specific codes and information, serving as the European Union’s eight-digit coding system (i.e., Harmonized System codes with further EU specific subdivisions). This serves as the European Union’s common customs tariff and provides statistics for trade both inside the European Union and between the European Union and the rest of the world. The third component is the Integrated Tariff (Tarif Intégré de la Communauté or TARIC), which provides information on all trade policy and tariff measures applicable to specific goods in the European Union (e.g., temporary suspension of duties and antidumping duties). It is comprised of the eight-digit code of the Combined Nomenclature plus two additional digits (TARIC subheadings). Information on the Combined Nomenclature is updated every year and can be found on the European Commission’s website.
U.S. exporters should consult the Integrated Tariff, which is updated daily, to identify the various rules that apply to specific products being imported into the customs territory of the European Union. The Integrated Tariff can be searched by country of origin, Harmonized System code, and product description on the interactive website of the EU Directorate-General for Taxation and the Customs Union. Customs Duties and Taxes may also be viewed by using Custom Info Tariff Look-up Tool.