EU tariffs cut on network interface cards

Network interface cards must be tariffed as data-processing equipment, not telecommunications equipment, the European Court of...

Network interface cards must be tariffed as data-processing equipment, not telecommunications equipment, the European Court of Justice has ruled, bringing to an end a six-year case. Some of the duty paid on such items imported into the European Union between 1995 and 2000 will be refunded.

The decision is "a substantial win" for the entire network communications industry, said Piyush Patel, chairman, president and chief executive officer of equipment manufacturer Cabletron Systems, which brought the case.

The industry and its customers overpaid hundreds of millions of dollars in duty, according to Cabletron Systems.

"It's our understanding that customers will be reimbursed for the duties they were charged in error," said Annemarie McIntyre, director of international trade regulations at the AeA, a manufacturers' organisation formerly known as the American Electronics Association.

Cabletron, however, expects the money to be repaid to manufacturers. "We estimate about $10m (£7m) to $15m will come back to us from customs," said Jennifer Kirn, spokeswoman for Cabletron Systems.

In 1995 the difference in tariff nomenclature meant that network interface cards were tariffed with telecommunications equipment, at 7.5%, rather than with data-processing equipment, at 3.5%.

The origins of the difference in tariffs imposed by the European Union member states may have been protectionist, according to Timothy Bennett, senior vice-president for international affairs at the AeA. "They certainly have a long track record of taking measures for that reason," he said.

But the effects of the court's decision on future equipment imports and prices in Europe will be minimal: since 2000 both categories of goods have been exempt from import duties, according to AeA officials.

Read more on IT legislation and regulation

SearchCIO
SearchSecurity
SearchNetworking
SearchDataCenter
SearchDataManagement
Close