Trade with Asian countries is becoming increasingly important for the EU – and therefore also for Germany. This now also applies to the import of machinery, which is increasingly being transferred to the EU from China in particular.
STRONG TRADE WITH ASIA
Imports worth more than 350 billion euros came to Germany from Asia in 2022, according to analyses by the Federal Statistical Office. The most important countries here are the ASEAN member states China, Japan and India. This meant that Asian imports were still well behind those from European countries (import value around 970 billion euros).
Growing role of China as a trading partner – also for machinery imports
Nevertheless, China in particular is becoming the most important trading partner for Germany and the EU – also in terms of machinery imports. According to the German Economic Institute (IWD), 11.4% of machinery imports into the EU came from China in 2022.
While imports of Chinese machinery are growing compared to previous years, the EU market share of machinery imports is showing a downward trend. The figures from UN Comtrade illustrate the increase in exports from China: between 2010 and 2020, various segments of mechanical and plant engineering achieved triple-digit growth, including liquid pumps (+124.6%), plastics machinery (+146.3%) and textile machinery (+132.5%).
The highest growth was recorded by semiconductor manufacturing machinery (+167.5%), woodworking machinery (+184%), packaging machinery (+206.9%) and paper machinery (+266.8%). Even in “low” growth segments, growth rates were consistently in the double-digit range.
However, the conditions for importing machines from Asian countries are less clear than this development in the Chinese mechanical engineering sector. This is because – from the EU’s point of view – there are different agreements and regulations. We therefore provide an overview of everything that is important when importing machinery from Asia.
GENERAL REQUIREMENTS FOR IMPORT
Imports in general do not require a special permit, but importers do need an EORI number. This is the Economic Operators’ Registration and Identification System, an EU-wide system with which both companies and private individuals can be clearly registered and identified by the customs administration.
The EORI number is required when declaring exports and imports to customs. The number must be provided from the very first import transaction. It is applied for at the Directorate General of Customs.
Declaration of imported goods
In order to apply the import regulations correctly, imported goods must be precisely defined. General designations (e.g. “clothing”, “car” or “coffee”) are not sufficient for this purpose; the definition must follow the classification of the “List of goods for foreign trade statistics”.
The definitions of the list of goods are assigned a special number, the HS code. It forms the first six digits of the total eleven-digit customs tariff number. After classification or classification in the customs tariff using this assignment, goods can be declared and recognized worldwide. Among other things, this number is used to determine possible import duties or other regulations for placing on the market or sale.
Machinery and the various HS codes can be found in Section XVI of the list of goods for foreign trade statistics. A rough distinction is made between
- Nuclear reactors, boilers, machines, apparatus and mechanical devices as well as parts thereof;
- Electrical machinery, apparatus, equipment and other electrotechnical goods and parts thereof, as well as sound recording or reproducing apparatus, image and sound recording or reproducing apparatus for television, and parts and accessories for such apparatus.
Customs duties and taxes on the import of goods
Imports from non-EU countries are generally subject to the third country duty rate. Additional special duties (so-called anti-dumping duties) can also be levied for goods from certain countries of origin.
On the other hand, there are tariff preferences for imports from various countries. In these cases, the duty rates are reduced or even duty-free if the imported goods can be proven to originate from the supplier country.
PREFERENTIAL TRADE IN GOODS WITH OVERSEAS COUNTRIES & TERRITORIES
Since January 1, 2020, the registered exporter (REX) system has been mandatory for preferential trade in goods with overseas countries and territories (OCTs). This means that for shipments of originating products with a value of more than 10,000 euros, only such a registered exporter may issue a declaration of origin.
Documents required for import customs clearance
The documents that are generally required for import and customs clearance include
- the commercial invoice of the foreign supplier (excluding foreign VAT),
- the import declaration (a formal customs declaration can be submitted via the ATLAS system, for example),
- the customs value declaration for dutiable third country goods with a value of 20,000 euros or more per consignment,
- the aforementioned EORI number.
In individual cases, it may be necessary to submit certificates of origin, import licenses, monitoring documents or import control notifications. For some imported goods, importers require international incoming goods certificates or end-use declarations, for example for precision machine tools.
When claiming tariff preferences or tariff reductions under trade agreements, declarations of origin from a Registered Exporter (REX) or movement certificates must be submitted to customs.
BASIC PROVISIONS FOR MACHINERY IMPORTS FROM OUTSIDE THE EU
In principle, and not only for goods imported from Asia, they must comply with German or EU standards. For machines, for example, this means that they must have a CE marking confirming this compliance.
The importer is responsible in this context and must ensure in advance that the relevant standards are complied with. Unless otherwise agreed, the exporter has fulfilled his part if the machines comply with the specifications applicable in the seller’s country.
As the importer bears the liability for imported machines from non-EU countries, it is all the more important to find out about product conformity – and, if necessary, to contractually agree a conformity assessment procedure by the manufacturer.
If there is no valid CE marking or comparable certification, there is otherwise a legal obligation for the importer to provide the technical documentation for the machine in question himself and to carry out a conformity assessment procedure.
Technical documents for submission when importing machinery from non-EU countries
Customs and the market surveillance authority can and must check a number of technical documents when importing machines from a non-EU country. The importer is responsible for their correctness. The usual technical documents include
- the declaration of conformity according to the Machinery Directive 2006/42/EC according to the new Machinery Ordinance from 2027;
- a SISTEMA calculation of the machine in accordance with the legal requirements in Germany (evaluation of the safety-related machine control system);
- a risk assessment of the machine in accordance with German legal requirements;
- the operating instructions for the machine.
The declaration of conformity and operating instructions must be submitted in German and translated from English by a certified translation agency.
Further declarations of conformity may be required, for example
- the declaration of conformity in accordance with the ATEX Directive 2014/34/EU,
- the declaration of conformity in accordance with the Pressure Equipment Directive 2014/68/EU or
- the declaration of conformity in accordance with the Low Voltage Directive 2014/35/EU.
All these declarations must also be submitted in German translation (translated from English by a certified translation agency).
EVALUATION OF SAFETY-RELATED MACHINE CONTROLS WITH SISTEMA
The SISTEMA (Safety of Control Systems on Machines) software wizard is used to simulate the structure of the safety-related control parts of a machine in order to subsequently calculate reliability values at various levels.
The evaluation follows the specifications of DIN EN ISO 13849 for complex machine control systems.
Machinery imports and the new Machinery Ordinance
The new EU Machinery Regulation has been in force since July 19, 2023 and will come into force on January 20, 2027, replacing the previous Directive 2006/42/EC. Importers of machinery should therefore also prepare for the new regulations by this deadline. This is because one of the obligations that Regulation (EU) 2023/1230 lays down for them concerns the marking of machinery imports with the name and address of the importer.
For machinery that could potentially present a particular risk (now listed in Annex I of the Machinery Regulation, previously in Annex IV of the Machinery Directive), more extensive conformity assessment procedures may be required. The complexity of these procedures also depends on how the machinery in question is classified, i.e. in which part of the relevant Annex it is listed.
Part A includes machinery whose safety functions are ensured by a system with “self-developing behavior”. In these cases, one of three assessment procedures must be carried out for the conformity assessment:
- EU type examination with subsequent internal production control,
- an individual examination or
- comprehensive quality assurance in accordance with Art. 25 Para. 2 Machinery Regulation.
Part B machinery must be checked for conformity if the manufacturer has not produced it entirely in accordance with the relevant harmonized standards or common specifications (Art. 25 (3) Machinery Regulation).
TRADE AGREEMENTS & OTHER SPECIAL FEATURES OF IMPORTS FROM ASIA
Free trade agreements ensure the free movement of goods and services and are therefore a fundamental pillar of economic growth. The EU therefore concludes bilateral free trade agreements in order to remove tariff barriers (i.e. customs duties). In fact, mechanical engineering is one of the sectors that benefits most from such agreements.
On the other hand, free trade agreements also remove non-tariff barriers to trade by contributing to the harmonization of norms and standards and the simplification of conformity and recognition procedures.
The tariff preferences described above are among the customs benefits defined within the framework of trade agreements. They do not apply to all goods in all agreements, but only to those that are expressly included in the respective agreement by commodity code.
For imports from the Asian region, the EU has so far concluded free trade agreements with Japan, Singapore, South Korea and Vietnam.
EUVFTA: EU-Vietnam Trade Agreement
An important part of the trade agreement with Vietnam is the gradual abolition of customs duties on imports from Vietnam by 2027. At the same time, Vietnam has agreed to abolish existing export duties on exports to the EU and not to increase the remaining duties.
You can use the interactive My Trade Assistant tool to find out which tariff regulations apply to machinery or whether preferential treatment is possible. Incidentally, this applies not only to Vietnam, but to all countries exporting to the EU.
EUSFTA: EU-Singapore Trade Agreement
The EU concluded a free trade agreement and an investment protection agreement with Singapore in October 2018; the free trade agreement has been in force since November 2019. However, more machinery is imported between these two trading partners from the EU to Singapore than vice versa, with trade in machinery from the EU accounting for more than a quarter of exports.
However, a gradual reduction in customs duties will apply to the machines explicitly covered by the EUSFTA until November 2024.
JEFTA: EU-Japan trade agreement
The free trade agreement between the EU and Japan has been in place since February 1, 2019, and a significant part of the agreement concerns import and export regulations for agricultural goods. Gradual reductions have been agreed for machinery according to the list of goods for foreign trade statistics – insofar as customs tariffs are stipulated at all. As a rule, customs duties are 0% from the sixth year onwards.
The detailed timetable can be found in the full text of the trade agreement.
EU-Korea trade agreement
Since its conclusion in 2011, the trade agreement between the EU and South Korea has ensured that almost all tariffs have been abolished.
As part of the trade agreement, the EU and South Korea are also jointly developing technical regulations, standards and conformity assessments in order to avoid time-consuming and costly duplicate or multiple procedures in the future. However, the four sector-specific provisions of the agreement initially only concern
- electrical and electronic devices,
- Pharmaceuticals and medical devices,
- Motor vehicles and parts thereof and
- chemical products.
Regulations for other Asian countries
While there are already trade agreements with a number of ASEAN member states, talks are still ongoing with other ASEAN countries. This applies to Indonesia, Malaysia, the Philippines and Thailand. Importers have therefore not yet benefited from the advantages of a trade agreement when importing from these countries.
A uniform export control law has been in force in China since December 1, 2020, which includes export restrictions or even bans on specific goods and technologies.
There are export control lists for this purpose, but the control authorities can also impose export control restrictions on non-listed goods by means of an authorization clause. A mandatory approval procedure must be followed for the import of controlled goods from China. Importers should therefore expect that temporary control lists could become the norm.
Conclusion
Despite existing or negotiated trade agreements, importers of machinery from Asia must pay close attention to the applicable regulations. This applies not only to customs duties and possible preferences, but above all to requirements for proof of origin and product or industry-specific regulations.
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