The term “Eastern Europe” covers a diverse group of countries, which sometimes means an equally wide variety of customs and import regulations. While some of the countries are firmly integrated into the EU internal market, others fall under the regulations for the movement of goods for non-EU states. We provide an overview of the most important information for importers from Eastern Europe.
EASTERN EUROPE: NOT ONLY INTERESTING AS A SALES MARKET
The countries of Eastern Europe are interesting as growing foreign markets, while at the same time some countries are developing into important exporters of machines, machine parts and components.
According to the German Engineering Federation, Poland, for example, managed to achieve an export volume of 15.1 billion euros in intra-EU-27 trade in 2020. Polish companies have long been very popular, especially as suppliers of parts and components for machines.
The Czech Republic has also become an important sourcing country for the mechanical engineering industry, as evidenced by machinery imports worth almost EUR 10 billion to other EU partner countries in 2020.
WHICH COUNTRIES BELONG TO THE “EASTERN EUROPE” REGION?
The term “Eastern Europe” or “Eastern Europe” easily obscures the fact that the term can refer to different countries depending on the perspective. The EU therefore often refers to Central and Eastern European countries (CEECs).
This means in the narrower sense:
- the Baltic states of Estonia, Latvia and Lithuania,
- the Visegrád Group consisting of Poland, the Czech Republic, Slovakia and Hungary,
- the states on the territory of the former Yugoslavia – Bosnia and Herzegovina, Croatia, Montenegro, North Macedonia, Serbia and Slovenia,
- Albania,
- Bulgaria and
- Romania.
If the term CEEC is defined more broadly, it can also include the countries of the Eastern Partnership, i.e. Belarus, Ukraine, Moldova, Azerbaijan, Georgia and Armenia.
EASTERN EUROPEAN COUNTRIES WITH EU MEMBERSHIP
A not inconsiderable number of Eastern European countries are already members of the European Union and therefore also belong to the EU-27 internal market. This applies to Bulgaria, Estonia, Croatia, Latvia, Lithuania, Poland, Romania, Slovenia, Slovakia, the Czech Republic and Hungary.
Possible EU enlargements are also currently on the table; the countries of the Western Balkans, for example, have already been in the EU accession process for several years. In addition to Bosnia and Herzegovina, Kosovo, Montenegro, North Macedonia and Serbia, the EU membership of Albania, Georgia, Moldova and Ukraine is also being examined.
From EU member to third country
From an economic perspective, the Eastern European region is hardly less complicated. While some countries are EU member states and thus firmly integrated into the EU’s internal trade, many are non-EU third countries.
A distinction must be made here between those countries that have now moved closer to the EU in terms of foreign trade and others that must actually be treated as third countries outside the EU internal market.
In addition to these differences, trade relations with many Eastern European countries are repeatedly influenced by political uncertainties. In many cases, this not only restricts trade opportunities in general, but also means that importers may have to adjust to new customs regulations, import and export bans and similar hurdles.
TRADE BETWEEN EU AND UKRAINE
Trade relations between the EU and Ukraine are an extreme example of the effects of political uncertainty, as they are at least partially affected by the Russian war of aggression against Ukraine.
However, the legal basis for trade between the EU and Ukraine was agreed long beforehand in the form of an association agreement, which has been in force since September 2017 and provides for a Deep and Comprehensive Free Trade Area (DCFTA).
The aim of the agreement is the mutual opening of markets, which is to be achieved through the abolition of customs barriers on the one hand and the adoption of legal and economic EU standards on the other. Ukraine has also had candidate status since June 2022, having applied for EU membership shortly after the start of the war.
As part of a European Council regulation, a temporary liberalization of trade has also been in force since 25 June 2022, which initially eliminates import duties on Ukrainian exports to the EU for one year. The regulation was extended once again and is valid until June 5, 2024.
MACHINERY IMPORTS FROM EU MEMBER STATES & FROM NON-EU THIRD COUNTRIES – THESE ARE THE DIFFERENCES
When importing machines and machine parts from abroad, it is important to ensure that they comply with EU harmonization regulations. This means that
- The machines in question must have a valid CE marking and
- manufactured in accordance with applicable guidelines and standards
A presumption of conformity applies to machinery manufactured in other EU countries. This is because, in principle, production takes place within the scope of the Machinery Directive.
Machines from non-EU countries require a conformity assessment
In contrast to machinery manufactured within the EU, the presumption of conformity does not apply to products from outside the EU. If other legal conditions apply to the production and placing on the market of the machinery in the country of manufacture, its legal conformity cannot simply be assumed to be fulfilled – especially in the case of a legal framework that may not be comparable to the EU harmonization regulations.
Even in cases where such machines are delivered with a certificate, the importer must ensure that the imported goods are legally compliant. One of the problems is that even certified machines usually do not meet the EU standards for machine safety.
Prepare for possible conformity problems in good time
For importers importing machinery from outside the EU, it is highly advisable to establish contact with the manufacturer regarding the standards applied for the conformity assessment. This is an important reason for obtaining this information at an early stage: The importer can be held fully liable under applicable law when importing machinery from outside the EU.
The importer is also responsible,
- to provide technical documentation if a machine is supplied from a non-EU country without CE marking or comparable certification, and
- to have a conformity assessment procedure carried out for the machine in question.
In order not to delay or completely prevent import, it is advisable to ask the manufacturer of the machinery about product conformity before purchasing. If this does not meet EU standards, it is possible to make a conformity assessment procedure by the manufacturer part of the contractual provisions for the purchase.
FREE TRADE AGREEMENTS WITH EASTERN EUROPEAN TRADING PARTNERS: WESTERN BALKANS
The Stabilization and Association Agreement (SAA) forms the basis for trade relations with the countries of the Western Balkans. It serves to align the legal and economic standards of potential accession candidates with those of the European Union.
The EU has concluded such an agreement with all six countries in the Western Balkans, which also includes the establishment of a free trade area for a certain transitional period. However, Kosovo is excluded from this.
The objectives of the agreements primarily include the elimination of customs duties and non-tariff restrictions for bilateral trade. They apply to all goods in the Harmonized System; the few exceptions relate to agricultural and fisheries products.
The rules of origin are governed by the Pan-Euro-Mediterranean Agreement (PEM), in which the EU and the respective contracting parties (in addition to the countries of the Western Balkans, these are the EFTA states Iceland, Liechtenstein, Norway and Switzerland, Turkey, the Faroe Islands, the Republic of Moldova, Georgia and Ukraine) have agreed on common rules of origin and cumulation. The PEM also regulates the rules for direct transportation, customs refunds and applications for preferential customs duties.
DEEP AND COMPREHENSIVE FREE TRADE AGREEMENTS WITH EASTERN EUROPEAN TRADING PARTNERS: GEORGIA, MOLDOVA AND UKRAINE
The EU has concluded in-depth and comprehensive free trade agreements with some countries in Eastern Europe. These include:
- the EU-Georgia Deep and Comprehensive Free Trade Area,
- the deepened and comprehensive EU-Moldova free trade area and
- the deepened and comprehensive EU-Ukraine free trade area (see info box above).
The association agreements in all three cases were signed in 2014 and have been in force since 2016. The free trade zones mean the abolition of most customs duties and more efficient customs procedures. Machinery and equipment are important export goods for Georgia and Moldova in particular – and the EU is one of their most important trading partners.
The legal and economic adjustments also include legislation, standards and procedures with regard to product requirements. These relate to product safety and conformity assessments, among other things.
There are some differences between the three countries that need to be taken into account when importing machinery.
Product requirements for imports from Georgia
As part of the agreement, Georgia has adopted international and European technical standards. At 98 percent, the majority of registered Georgian standards comply with these standards. Georgian manufacturers can therefore use the following standards on a voluntary basis:
- international and regional CIS standards,
- standards of an EU or OECD member state,
- Georgian standards and
- Georgian corporate standards.
On this basis, it is possible for Georgian manufacturers to prove the conformity of machinery with an EU declaration of conformity. However, this can sometimes mean higher costs and a greater expenditure of time. It may be sufficient to apply the relevant harmonized EU standards.
Product requirements for imports from Moldova
The Republic of Moldova has also agreed to converge with the EU in terms of safety requirements and standards. In addition to adopting international and European standards, this also means abolishing conflicting national standards. This relates in particular to the GOST standards used in post-Soviet states (Gossudarstvenny Standart / Государственный Стандарт (ГОСТ)).
Similar to machinery imports from Georgia, proof of conformity in the form of an EU declaration of conformity can lead to higher costs and longer waiting times for the importer.
EU DECLARATIONS OF CONFORMITY FOR MACHINERY FROM GEORGIA AND MOLDOVA
In the event that a manufacturer from Georgia or Moldova opts for national standards for the production of machinery intended for import into the EU, the importer must be able to present an EU Declaration of Conformity signed by this manufacturer.
Otherwise, it can be cheaper and faster if the manufacturer complies with the harmonized standards.
Overall, the Incoterms are divided into four groups:
- Group E deals with the collection clauses.
- Group F contains dispatch clauses without assumption of costs.
- Group C comprises dispatch clauses with cost absorption.
- Group D is used for arrival clauses.
Of the 11 Incoterms, seven can be applied to all goods traffic, regardless of the means of transportation used. The four remaining clauses are specifically geared towards transportation by ship.
Product requirements for imports from Ukraine
For Ukraine, the harmonization of norms and standards related to product safety and conformity of Ukrainian products for export to the EU is also part of the Association Agreement process. As in the case of the Republic of Moldova, Ukraine is obliged to abolish deviating national standards such as GOST standards.
An EU Declaration of Conformity signed by the manufacturer is required for the import of goods from Ukraine into the EU. If this is available, the manufacturer can affix the CE marking.
Conclusion
The generalized term “Eastern Europe” should not obscure the fact that import regulations within this large region can vary greatly in some cases. After all, the Eastern European countries include EU member states, EU candidate countries and non-EU third countries.
This means that importers not only have to pay attention to customs regulations and proof of origin, but also often have to find out about the applicable product requirements on a case-by-case basis. An important point of contact for an initial overview is Access2Markets from the European Commission. All relevant information on customs duties, taxes, import procedures, requirements, rules of origin, etc. can be found here.
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Image 5: Adobe Stock © monticello
