New Items Added To Byrd Law Sanction List

by Ulrika Lomas, for LawAndTax-News.com, Brussels

04 May 2006

The European Union on Monday imposed adjusted counter-balancing measures in response to the continuation of payments by the US government to US companies under the terms of the Byrd Amendment, which has been ruled by the World Trade Organisation to be incompatible with WTO rules.

The annual adjustment is required by the WTO, because the duties are tied to the annual disbursement by the US government.

Since the amount paid to US companies from duties collected on EC products has increased in 2005, the level of retaliation will also increase. From Monday, measures were set at USD 36.91 million, an increase on the USD 27.81 million applied in 2005.

8 new products were added to the list of products subject to the 15% additional import duty. These products are different type of blankets, paper products, photocopying apparatus and drills.

In a statement published this week, the EC explained the reasoning behind the continued imposition of sanctions despite the fact that the US has repealed the Byrd Amendment, observing that:

"The repeal of the Byrd Amendment contains a transition clause that allows the US government to continue paying anti-dumping and countervailing duties collected on imports made before 1 October 2007 to US companies."

"In the US, such duties are often collected several years after the import took place. This means, in turn, that the Byrd Amendment will remain in operation for a number of years even after October 2007, even if it has technically been repealed."

It continued:

"As long as distributions continue, the United States will not be in compliance with WTO rules. Because our counterbalancing measures are tied directly and exclusively to the Byrd payments they will cease immediately the payments cease."

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