Anti-dumping confusion as LEVA-EU receives new word on eBike parts

European trade organisation LEVA-EU says that it has received a letter from the Director-General of DG Trade at the European Commission affirming that “there are no anti-dumping duties on parts imported from China for the assembly of electric cycles.”

LEVA-EU, which has communicated on behalf of segments the eBike industry when addressing the appropriate measures for far-Eastern imports, maintains that its partners are nonetheless being charged with the duties, receiving fines and occasionally being threatened with criminal action.

The measures, which equate to a 48.5% duty on parts for assembly, including frames, forks and wheels, have drastically slowed the supply of Chinese-made eBikes into Europe. Nonetheless, the organisation admits after years of wrangling “this is a complicated story”.

In a letter to LEVA-EU earlier this year, the Director-General of DG Trade is said to have written: “(…), as the bicycle parts for the assembly of electrical bicycles are legally not subject to the extended anti-dumping or countervailing measures, the assembly operations of electrical bicycles remain outside the scope of the Exemption Regulation (which logically can only exempt measures which are covered by the antidumping/countervailing measures in the first place).”

LEVA-EU is not complimentary about some of the customs authorities that it describes now as “attacking” companies that assembly eBikes only, while suggesting that those firms assembling a mix of bikes and eBikes are getting a pass. “That is due to the fact that the two types of companies are subject to different rules,” so says the statement issued.

In providing an example, LEVA-EU flags a company that has applied for end-use authorisation in August of 2018, eventually receiving a denial in June of 2020. During this lengthy timeframe a new application was put in, followed by a customs raid accusing the company of circumventing the anti-dumping duties on e-bikes from China. During this time the company had apparently been paying 48.5% extended duties on bike components for the assembly of eBikes.

“Once again, those are the very components that, according to the Commission, are legally not subject to these extended duties,” remains LEVA-EU.

An bike and eBike assembler must obtain an exemption from the EU Commission. This exemption was implemented with the extension of duties to essential bicycle components in 1997. With the introduction 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 essential bicycle components for conventional bicycles, which they also used to import bicycle components for electric bicycles. However, there was uncertainty as to the legality of this procedure.

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

Companies that assemble electric bikes only must obtain exemption from 48.5% anti-circumvention duties through end-use authorisation, which is granted by national customs authorities.

It is here that LEVA-EU says some unfair applications are creeping in, describing some customs authorities as “often not properly informed on specific legislation for eBikes” and as a result “many companies fail to obtain end-use authorization.

The statement continues: “What is utterly unfair is that until a company gets the authorization, they must pay 48.5% on those very components of which the Commission states that they are legally not subject to the duties! Furthermore, the conditions for end-use authorization include extensive guarantees and sometimes very complex business administration requirements. All this is a huge obstacle to starting a new business, which ultimately is detrimental to competition and to growing the market.”

In trying to find the root cause of some of the disparity LEVA-EU claim that nomenclature is unclear.

“While electric cycles, as completed vehicles, are categorized together with motorcycles and mopeds, there is no separate categorization for electric cycle components. They all fall under the same category of non-motorized cycle components. That is how customs manage to categorise wheels with motors as conventional bicycle wheels and how companies end up paying the 48.5% extended duties for essential bicycle parts, despite the fact that it is a bicycle part legally not subject to extended duties, worse, it’s not a bicycle part full stop,” concludes LEVA-EU.

Negotiations between LEVA-EU and the European Commission continue, with a near-term goal shooting for the introduction of “suspension of payment of duties as soon as a company requests end-use authorization.”

“This would at least remove one aspect of the discrimination between bike and eBike companies and e-bike companies only,” says the organisation.