Anti-dumping confusion when LEVA-EU received new information on eBike parts

European Trade Organization LEFT EU reports that it has received a letter from the Director-General of the European Commission’s Directorate-General for Trade confirming that “there are no anti-dumping duties on parts imported from China for the assembly of electric cycles”.

LEFT-EU, which has communicates on behalf of segments of the eBike industry, considering appropriate measures for Far Eastern imports, says its partners are nevertheless being charged duties, fines and sometimes facing criminal prosecution.

The measures, which equate to a 48.5% duty on assembly parts including frames, forks and wheels, have slowed down sharply deliveries to Europe of Chinese-made electronic bicycles. Still, after years of controversy, the organization admits that “it’s a complicated story.”

In a letter to LEVA-EU earlier this year, the Director General of the Directorate General for Trade wrote: “(…)as bicycle parts for assembling electric bicycles legally not subject to before extended anti-dumping or countervailing measures, electric bicycle assembly operations remain outside the scope of the Exemption Provision (which logically can only exempt measures that are primarily covered by anti-dumping/countervailing measures).»

LEVA-EU does not praise some customs authorities, which are now being described as “attacking” companies that only assemble e-bikes, while suggesting that those firms that assemble a mix of bicycles and e-bikes are getting a pass. “This is because the two types of companies are subject to different rules,” the statement said.

As an example, LEVA-EU refers to a company that applied for an end-use permit in August 2018, but was ultimately rejected in June 2020. During this long period of time, a new application was submitted, followed by a customs raid with accusing the company of evading anti-dumping duties on e-bikes from China. During this time, the company apparently paid 48.5% of the enhanced duties on bicycle components for the assembly of e-bikes.

“Again, these are the very components that, according to the Commission, are not legally subject to these extended duties,” LEVA-EU continues.

A bicycle and e-bike assembler must obtain an exemption from the EU Commission. This exemption was implemented with the extension of duties on basic bicycle components in 1997. With the imposition of anti-dumping duties on electric bicycles from China in 2018, some companies moved their assembly to Europe. In some cases, companies had an exemption for basic bicycle components for conventional bicycles, which they also used to import bicycle components for electric bicycles. However, there was uncertainty about the legality of this procedure.

In an attempt to provide legal certainty, the European Commission published Regulation 2020/1296. With this Regulation, the Commission confirmed that companies in the EU assembling both conventional and electric bicycles were allowed to use their exemption originally granted for the assembly of conventional bicycles to import duty-free essential bicycle components for the assembly of electric bicycles.

Companies that assemble only electric bicycles must be exempted from the 48.5% anti-circumvention duty through an end-use permit issued by national customs authorities.

It is here that LEVA-EU claims that some unfair applications are creeping in, describing some customs authorities as “often insufficiently informed about the specific legislation for e-bikes” and as a result “many companies are unable to obtain end-use permits”.

The statement continued: “It is completely unfair that until a company is granted permission, it has to pay 48.5% for the very components that the Commission claims they own. legally not subject to to duties! In addition, the terms of the end-use permit include extensive warranties and sometimes very complex business management requirements. All of this is a big barrier to opening new businesses, which ultimately hurts competition and market growth.”

Trying to find the root cause of some disparity, LEVA-EU claims that the nomenclature is unclear.

“While electric cycles, as complete vehicles, are classified together with motorcycles and mopeds, there is no separate categorization for the components of electric cycles. They all fall under the same category of non-motorized bicycle components. This is how customs manages to classify motorized wheels as normal bicycle wheels and how companies end up paying enhanced duties of 48.5% on basic bicycle parts, despite being a bicycle part, legally not subject to enhanced duties, what else worse, it’s not a bicycle, full stop,” concludes LEVA-EU.

Negotiations between LEVA-EU and the European Commission are ongoing, with the near term target shooting for the introduction of a “suspension of duty payments as soon as a company requests an end-use permit”.

“This will eliminate at least one aspect of discrimination between bicycle and e-bike companies and only e-bike companies,” the organization said.