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European Union Imposes Retaliatory Tarriffs on Many Items, Some Horses
The European Union (EU) has imposed sanctions, effective March 1, 2004, in the form of a tariff on hundreds of US items, including certain horses. The action stems from a long-simmering EU dispute with the US over American export-subsidy laws. The tariff is 5% of the value of the horse and increases 1% per month to a maximum of 17% and is in addition to any Value Added Tax (VAT) that would normally apply to good entering the EU.
“Although the AHC has not yet seen any official directives from the EU on the application of the new tariff, we have been advised by entities involved in the international movement of horses that in their opinion the tariff has limited application,” said Jay Hickey, AHC President.
It will apply to geldings, but is not believed to apply to purebred horses, breeding stock or any horses entering the EU temporarily for competition, such as racing, showing or eventing. “But now horses temporarily imported into the EU may be required to post a bond to ensure they leave. Since there has not been a tariff previously, no bond has been required,” Hickey noted. “As clarifications are issued or we receive more definitive information we will distribute it. Horse owners planning on exporting horses to the EU should watch the AHC Website for updates.”
The EU apparently imposed the various tariffs because the US has not yet repealed tax breaks provided to US corporations under the Foreign Sales Corporation Act that were ruled illegal by the World Trade Organization two years ago. The EU has been threatening the imposition of tariffs for some time if the export-subsidy laws were not repealed. Once the US provisions are repealed, the EU is expected to lift the new tariffs immediately.
Both the House and Senate have been working on legislation to repeal the offending provisions for some time. The Senate hopes to pass the legislation shortly after the mid-March recess, which ends March 22.