EU MCCIP Proposals: Impact on Customs Value and Royalties

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Explanation of EU proposals to prohibit first sale for export and new rules on royalties for customs value

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EU MCCIP Proposals: Impact on Customs Value and Royalties

  1. 1. AmCham EU MCCIP<br />Brussels, 24 & 25 September 2009<br />Jasper Helder, Bird & Bird LLP, Brussels/The Hague<br />Brian Mulier, Bird & Bird LLP,Brussels/The Hague<br />
  2. 2. Agenda<br />Case Study 1: impact of removing First Sale for Export on royalties<br />Case Study 2: impact of new royalty criteria in MCCIP<br />Conclusions<br />
  3. 3. Case Study 1<br />First Sale for Export: CV = Price 1 (art. 29 CCC & art. 147 ICCC)<br />Royalty excluded, is not condition of sale (art. 160 ICCC)<br />
  4. 4. Case Study 1<br />MCCIP: First Sale no longer applies, so CV = Price 2 (art. 230 (2) MCCIP)<br />Royalty = Condition of Sale (art. 230 (11) para 3 a & b & c MCCIP) because: <br />Royalty is paid to party related to seller under CV transaction<br />Royalty = Related to imported products (art. 230 (11) para 2) because:<br />Rights transferred for royalty are embodied in products<br />
  5. 5. Case Study 2<br />CV = Price<br />Trademark royalty excluded, Company Europe is free to buy from other suppliers (art. 159 ICCC)<br />Distribution royalty is excluded, Company Europe is free to buy from other suppliers (art. 32 para 5 (b) CCC)<br />
  6. 6. Case Study 2<br />Art. 159 ICCC no longer exists, freedom to source from unrelated suppliers is no longer relevant<br />Royalty = Condition of Sale (art. 230 (11) para 3 a & b & c MCCIP) because: <br />Royalty is paid to party related to seller under CV transaction<br />Royalty = Related to imported products (art. 230 (11) para 2) because:<br />Rights transferred for royalty are embodied in products<br />
  7. 7. Conclusions<br />MCCIP: all royalties must be added to CV<br />Not under CCC<br />Contrary to Valuation Agreement (art. 8)?<br />Royalty = Condition of Sale if (art. 230 (11) para 3 MCCIP): <br />seller or related party requires payment, or <br />payment fulfills obligation of seller, or <br />products may not be made/sold without royalty this is the case for all IP protected intangibles<br />Royalty = Related to imported goods if (art. 230 para 2 MCCIP): <br />intangibles for which royalty is paid are “ embodied” in products<br />
  8. 8. Thank you !<br />Jasper Helder, Brian Mulier<br />Tel: +31 6 53 29 00 22<br />brian.mulier@twobirds.com<br />Tel + 31 6 46 17 94 82 jasper.helder@twobirds.com<br />

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