Duty-Free Tariff Quotas and Additional Preferences: What You Need to Know

Did you know that some goods can be imported into the EU without paying duties? Today we're talking about duty-free tariff quotas and goods eligible for additional preferences.

Duty-Free Tariff Quotas

An export quota is the maximum volume of production and exports of a certain category of goods. Under the free trade agreement with the EU, Ukraine has obtained duty-free tariff quotas for 36 types of goods, including:

• beef, pork, lamb, and poultry;
• milk, cream, yogurt, and butter;
• grains and bran;
• honey;
• sugar;
• starch;
• mushrooms;
• garlic;
• grape and apple juices;
• eggs and others.

Category of dairy products subject to duty-free tariff quotas

It's worth noting that there is no prohibition on export if the volume of imported goods exceeds the tariff quota. In this case, excess volumes fall under the general import regime of the EU. That is, the duty rate for exports within the quota is zero, while above the quota, it is subject to an import duty as defined by the EU Customs Tariff.

Additional Preferences

Some Ukrainian agricultural and food products have increased demand in EU countries, so additional preferences have been established for them. These goods include:

• honey;
• pearl barley, processed grain, and flour;
• processed tomatoes;
• grape juice;
• corn, corn flour, and pellets;
• soft wheat, wheat flour, and pellets;
• barley, barley flour, and pellets;
• oats and others.

Category of goods - honey, falling under additional preferences

Administering Tariff Quotas

To utilize tariff quotas, proof of Ukrainian origin of the goods must be provided, and the availability of unused balance must be checked. Verification is carried out in accordance with the rules for distributing tariff quotas.

Quotas, both primary and additional, are administered according to two principles: "first come, first served" (for honey, processed grain and flour, processed tomatoes, grape juice, oats, etc.) and through the system of import licenses (for wheat, corn, barley, etc.).

Trade Relations between the EU and Ukraine after Full-Scale Invasion

In a sign of support for Ukraine in its fight against occupiers, on June 4, 2022, the EU adopted Regulation No. 2022/870, abolishing any duty on Ukrainian goods for one year. Although the consequences for the EU budget were significantly felt, with approximate losses from unpaid duties amounting to 31 million euros and from unpaid anti-dumping duties to 35 million euros, in May 2023, it still extended its effect. The provisions of the regulation are aimed at:

• temporary suspension of customs payments;
• payments of equivalent effect;
• entry prices for industrial goods;
• suspension of quantitative restrictions;
• anti-dumping measures;
• temporary suspension of special measures regarding metallurgical products.

In June 2024, the term of these temporary preferences expires. The DiFFreight team will monitor further developments in trade relations between the EU and Ukraine and share relevant news in our Telegram channel. Follow: https://t.me/difreight_china