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Shipping U.S. boats raises EU tariff questions

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By Simon Beck

New EU tariffs associated with imports from the United States came into force on June 22. Since then, there has been a lot of confusion around what this means for the marine industry. Over the past month, the team at Peters & May transport specialists has been contacted by a number of EU and U.S. dealers seeking clarification of the new regulations.

The following questions and answers are intended to set the record straight and explain exactly what the tariffs mean for customers and the marine industry in general.

Working in conjunction with British Marine, Peters & May has opposed the enforcement of tariffs on imports already in transit prior to the regulations coming into place. We can now confirm that boats imported from the U.S. still in transit, with dispatch prior to the enforcement date, will be exempt from the 25 percent tariffs.

With so many questions around this topic, let’s get some answers:

Beck

Q. Do the tariffs apply to all boats?
The only boats not included are inflatable boats.

Q: What are the new tariffs?
An additional duty of 25 percent is being applied to the CIF value (cost, insurance and freight) of the boat. This is over and above any duty currently charged. (In the EU, VAT is charged on the CIF plus duty value of the boat.)

Q: Do the tariffs apply to second-hand boats?
Yes, if the boat is of U.S. origin.

Q: Do the tariffs apply to outboard powered boats?
Yes, they apply to all boats except inflatable boats.

Q: I can’t find the U.S. HS code for outboard boats in the EU list. Why is that?
The Harmonised Tariff Schedule is only harmonized to the first six digits. The U.S. tariff 89039920 equates to EU tariffs 89039910, 89039991 and 89039999.

Q: If I ship my boat without an inboard engine, can I classify the hull in Chapter 8906 and pay a lower rate of duty?
You can only classify an unassembled or disassembled boat in Chapter 8906 if it does not  have the essential character of a vessel of a particular kind.

Q: I buy outboard-powered boats as a package from the U.S. Do I have to pay the additional duty on the whole package?
If the outboard is invoiced separately, then it can be declared as a separate item at import. Duty rates on outboard engines range from 4.2 to 6.2 percent, depending on power output.

Q: If I ship my boat to a non-EU country and pay the taxes there, then ship it into the EU, will I still have to pay the new tariff?
The new tariff applies to U.S.-origin boats as opposed to boats exported from the U.S. It is unlikely that using this method would meet the criteria required for a change of origin to be allowed.

This list of questions is not exhaustive and is based on our understanding of the current situation. For other questions, feel free to contact Peters & May.

These new regulations are set to have a major impact on the marine industry, especially smaller businesses. Peters & May often works with U.S. manufacturers exporting yachts to the EU. As a result of these new regulations, our team is seeing the impact. As we ship the majority of small boats from the U.S. to Europe, the new regulations have already had a negative impact on our business. We have already had over 40 cancellations as EU dealers place orders for new boats on hold.

Despite an unsure future, it is the mission of Peters & May, alongside British Marine, to keep people updated. With the impending exit of the UK from the EU, tariffs may again change. We hope these questions and answers provide some clarity, at least for now.

Simon Beck is customs manager at Peters & May. To contact him or Peters & May, visit www.petersandmay.com.

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