European Lighting Industry (ELC-CELMA) Statement on Import Duties for LEDs 25 June 2012 Summary of the Current Situation The lighting industry is currently undergoing a paradigm shift from conventional to LED lighting and the development of new LED lighting products is continuously moving forward very rapidly. The clear distinction between lamps, luminaires, control-gear, etc. which was well-defined in the Harmonized System for conventional lighting (i.e. non-led lighting) is not automatically applicable to LED lighting. In LED lighting, we have new types of components and products and the conventional boundaries between such products and components are dissolving, respectively need re-definition. European lighting companies as represented by their European Associations CELMA and ELC are concerned about customs tariff classification of LED lighting products imported into the EU. Due to the new LED lighting products and their configuration, the predictability of classification has become less apparent; we witness diverging classification practices within EU for similar products. This results in application of different duty rates and thus a non-level playing field for the industry. Currently, the classification of LED products seems to mainly evolve around three HS headings/cn subheadings: As an example, LEDs (Light Emitting Diodes) products are sometimes classified by national customs offices into CN subheading 8541 4010: Diodes, transistors and similar semiconductor devices, photosensitive semiconductor devices, incl. photovoltaic cells whether or not assembled in modules or made up into panels (excl. photovoltaic generators), light emitting diodes, mounted piezoelectric crystals, parts thereof In other instances LED products are classified into CN subheading 8543 7090: Electrical machines and apparatus, having individual functions, not specified or included elsewhere in this chapter Finally, we also find LED products being classified into CN subheadings 9405 4039 or 9405 4099 under HS heading 9405: Lamps and lighting fittings, incl. searchlights and spotlights, and parts thereof, n.e.s, illuminated signs, illuminated nameplates and the like having a permanently fixed light source, and parts thereof, n.e.s. It should be noted that the duty implication for CN subheading 9405 4039 is 4.7%, for 8543 7090 it is 3,7% and for 8541 4010 it is 0%. Accordingly, this classification can have a significant impact on the costs for related products and the profitability of a corresponding business line. It is a fair observation that the current Harmonized System (2012) headings and text are not discriminatory enough to distinguish the different LED products in a careful manner. In fact, the approach of different national customs offices towards LED lighting products appears currently inconsistent. Technical explanations on presumed product differences provided by the national customs offices are not always in line with the actual product use and seem at odds with product classification schemes developed by national and international standardization committees.
In view of this situation, it is desirable to have classification regulations together with clear and transparent guidelines (CN-explanatory notes) to ensure a correct and consistent classification throughout the Customs Union securing a level playing field for the industry. In fact, as industry, we see the need for two complementary measures: Short-term measure: Provide transparent guidelines for classification of LED products into the existing scheme with the understanding, as explained above, that the existing scheme is not fully appropriate for all the new LED products which are already on the market and which will be developed in the future. Long-term measure: Extend the existing scheme in the context of the HS review in 2017 to be better adopted for the different LED products and to facilitate uniform classification of these products throughout the world. CELMA and ELC have already started corresponding discussions among their members and are currently working on further analysis and initial proposals. European Lighting Industry (CELMA-ELC) request to the European Commission - Nomenclature Committee: European lighting companies as represented by the European Associations CELMA and ELC are seriously concerned about inappropriate classification of LED lighting products resulting in certain cases in significant cost disadvantages for the European lighting industry. Therefore, CELMA and ELC request a thorough review of the current practice for classification of LED products into customs tariff classes in the different European countries and by the different customs offices. Furthermore, CELMA and ELC request the publication of relevant classification regulations supported by transparent guidelines (CN-explanatory notes) for product classification which are necessary for reliable and accurate business planning. CELMA and ELC also suggest considering a review and if necessary appropriate extension/adaption of the existing nomenclature to better accommodate LED lighting products. CELMA and ELC and their member companies would welcome any opportunity to explain the situation and concerns in more detail and will be happy to provide their support and technical expertise in conduction of the review.
Examples of LED Products The examples shown below are intended to illustrate the diversity of the LED products and are grouped along their position in the typical LED value chain. Example of LED Wafer: Examples of LED Packages (THT and SMD): Examples of LED Modules: Examples of LED Lamps: Examples of LED Luminaires:
Examples of current LED Tariff Classification The selection of examples shown below is taken from the official BTI database (see http://ec.europa.eu/taxation_customs/dds2/ebti/ebti_consultation.jsp?lang=en) and is by no means complete, but it illustrates the issues related to a consistent tariff classification. Examples of LED Products Classified into CN Subheading 8541 4010: Green LED Typical example of a 5mm THT LED (LED package) BTI reference: DE M/6514706-1 LED XLamp XR-E Typical example of an SMD LED (LED package) BTI reference: DE 17744/10-1 Multi SMD LED Example of a more sophisticated LED Package composed of multiple individual LEDs BTI reference: AT 2011-000134
Multi-Chip LED 26W LED with 144 individual chips connected to each other BTI reference: GB 120454023 SuperFlux LED Typical example of an SMD LED (LED package) BTI reference: DE12626/10-1 LED Wafer Semiconductor wafer with p-n junction to be divided into multiple individual LED chips used for production of LED packages (and modules) No picture available BTI reference: DE17749/10-1 LED Module White LED panel light source (LED module) for luminaires for various lighting applications, including 6 LEDs on a PCB, covered by lenses, and to be powered by 24 VDC power supply. No picture available BTI reference: GB119993917
Examples of LED Products Classified into CN Subheading 8543 7090: Intuos Multi-Die LED Example of advanced LED system between Package and Module Tariff class: 8543 7090 BTI reference: NLRTD-2007-002161 LED GU10 Lamp Typical example of an LED replacement lamp Tariff class: 8543 7090 BTI reference: GB 117636959
Examples of LED Products Classified into CN Subheading 9405 4039: LED XLamp MC-E Another example of an SMD LED (LED package) for use in LED modules or LED lamps Tariff class: 9405 4039 BTI reference: DE 17746/10-1 Explanation provided by customs office: Due to the fact that the LEDs (chips) are connected with protective diodes (Zener diodes), these products cannot be considered as LEDs according tariff class 8541 4010. Note/Observation: It is remarkable that a similar product is on the one hand regarded as a basic semiconductor product and on the other hand as a complete luminaire. It illustrates very clearly the difficulty of classifying these products consistently. Components for LED Luminaire Example of LED module with lens (Corresponding driver is required for connection to mains) Tariff class: 9405 4039 BTI reference: DE 2319/11-1 Examples of LED Products Classified into CN Subheading 9405 4099: SLM Spot Light Module Typical example of an LED light source (LED module) for installation in a LED luminaire Tariff class: 9405 4099 BTI reference: NLRTD-2011-003711 LED High-Power Module Another example of a LED module
Tariff class: 9405 4099 BTI reference: DE 8280/11-1 Note/Observation: It is remarkable that a wide variety of LED modules (generally used as basic component for a variety of finished products, i.e. luminaires) are classified in the category of complete luminaires. It seems to indicate that no clear demarcation lines are currently available. LED Outdoor Spot Example of a LED luminaire for outdoor installation and direct connection to mains Tariff class: 9405 4099 BTI reference: DE 2319/11-1 LED Garden Lantern Solar powered LED luminaire with solar panels and rechargeable batteries Tariff class: 9405 4099 BTI reference: GB 120544414