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Legal Focus

SEPTEMBER 2014

International Trade

Germany forming part of the European Union, trans-border trade inside the European Union is exempt of any customs duties formalities. Shipping of goods only needs to be accompanied by certain documents such as the commercial invoice with the intra-community VAT number of the seller and the buyer, usually a delivery note and in the case of certain specific goods such as live animals, a sanitary and phytosanitary certificate. We find out more about the ins-and-outs and legal implications of International Trade by speaking to Dr. Thomas Rinne one of the senior Partners, heading the international Trade Law Department in Frankfurt/Main’s law firm v. Einem & Partner.

What are the local International Trade Compliance regulations?

When it comes to International Trade beyond the countries of the European Union, from the German perspective International Trade is basically free. However, there may be limitations or restrictions due to the nature of the operation or due to bilateral or multilateral treaties. As a matter of principle, all imports from outside the European Union are subject to a 19 % duty which is equivalent to the turnover tax levied on all domestic sales of products and services. This import tax is supposed to place the same tax burden on imported goods as on those sold inside the country.

As a member of the European Union, Germany has to apply the regulations which are set by the European Union. Basically, the European Union has a very liberal approach to trade, although there are a certain number of restrictions, especially for agricultural products or restrictions for sanitary reasons (for example, importing beef fed on hormones is prohibited).

There are de facto trade barriers which are set by relatively complex safety standards for

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some types of products, for example electronic devices. These safety standards are not supposed to discriminate foreign exporters, but, of course, they have to be taken into account. There are also formal requirements for importing goods into Germany as part of the European Union. Imported goods, for example, must be accompanied by the customs declaration and a duplicate invoice showing a certain number of information such like name of the seller and buyer, precise description of the product, invoice price, delivery and payment terms.

Please can you explain the recent World Trade Organisation ruling concerning a dispute over tariffs imposed by China on US luxury cars?

The World Trade Organization in its ruling concerning tariffs imposed by China on US luxury cars decided that duties imposed by China on certain luxury cars and SUVs were considered to be punitive duties which were levied in violation of the SCM Agreement (Agreement on Subsidies and Countervailing Measures). China had tried to convince the WTO that those cars were being manufactured in the US by state sponsored car manufacturers. The WTO panel, however, found that China