Term
Tariff quotas
A limited quantity of goods that may be imported into the EU at a reduced or zero duty rate during a set period. Quotas are allocated in the order customs declarations are lodged or by licence, and once used up the normal rate applies.
Updated
What it means
Tariff quotas are limited quantities of goods that may be imported into the EU at a reduced or zero rate of customs duty during a set period, usually a calendar year. Once the quota is used up, the normal rate applies to further imports.
Quotas stem from EU trade agreements, autonomous EU measures or safeguard measures for sensitive goods such as agricultural products or steel. Details are in the TARIC database.
Most quotas are allocated in the order customs declarations are accepted, first come, first served. Some are managed through import licences that must be applied for in advance.
How it works in practice
An importer wishing to use a quota enters the quota number in the customs declaration and, for preferential quotas, proves preferential origin. Customs requests an allocation when the goods are released for free circulation.
Popular quotas run out quickly at the start of the year, so imports are timed to get declarations in early. Quota balances are publicly available.
The gap between quota and normal rates can mean significant savings on large volumes. Import pricing should also allow for the scenario where the quota is already exhausted.
What to watch out for
If the quota is exhausted before allocation, the importer pays the full duty rate after the fact. Customer contracts should take this risk into account.
Misclassifying goods in the Combined Nomenclature means the quota was not used lawfully. An audit can lead to back duty and penalties.
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