Here’s a breakdown of Regulation (EU) 2025/1227:
**1. Essence of the Act:**
This regulation introduces increased customs duties on specific goods originating from or exported from Russia and Belarus. The goal is to reduce the EU’s economic dependence on these countries, safeguard the EU market, and protect food security in light of the war in Ukraine and broader concerns about international law. The regulation targets both agricultural products and fertilizers, applying different tariff increases and monitoring mechanisms to each category.
**2. Structure and Main Provisions:**
* **Article 1:** This is the core of the regulation, outlining the new customs duties.
* **Annex I Goods:** Goods listed here (various agricultural products, animal products, etc.) will face an additional 50% *ad valorem* customs duty on top of existing tariffs. These goods also lose eligibility for lower tariff rate quotas.
* **Annex II Goods:** These are specific nitrogenous and compound fertilizers. Instead of an immediate 50% increase, these goods will be subject to a phased increase in duties, combining an *ad valorem* percentage with a fixed amount per tonne, escalating annually from July 2025 to July 2028.
* **Safeguard Mechanism:** Article 1(3) introduces a mechanism that, if cumulative import volumes of Annex II goods reach certain thresholds before 2028, the Commission *must* immediately impose the highest duty level specified for 2028.
* **Monitoring:** Article 1(4) allows the Commission to implement measures for monitoring import volumes.
* **Article 2:** Mandates the Commission to monitor the prices of Annex II goods within the EU for four years. If prices substantially exceed 2024 levels, the Commission must assess the situation and take action, potentially including suspending tariffs on these goods from countries *other* than Russia or Belarus.
* **Article 3:** Establishes the Customs Code Committee to assist the Commission in implementing the regulation.
* **Article 4:** Specifies the entry into force and application dates.
**3. Main Provisions for Practical Use:**
* **** The key element is the *immediate* increase in customs duties for goods listed in Annex I from 20 July 2025. Businesses importing these goods from Russia or Belarus need to factor in the additional 50% tariff.
* For fertilizers (Annex II), the phased increase provides a transition period, but the safeguard mechanism in Article 1(3) means businesses need to be aware that the highest tariff level could be triggered sooner if import volumes are high.
* The Commission’s monitoring of fertilizer prices (Article 2) and its power to take remedial action, including tariff suspensions, could significantly impact the market. Businesses should closely watch for any such interventions.
* **** The regulation explicitly targets goods “originating in or exported, directly or indirectly, from the Russian Federation or the Republic of Belarus.” This suggests a broad interpretation to prevent circumvention, so businesses need to be careful about supply chains and potential transshipment.
* **** For Ukrainian businesses it means that they will be able to increase export of goods listed in Annex I and Annex II to EU, because Russian and Belorussian goods will be uncompetitive.
