CD-ROM classification to affect multimedia-product tariffs

CD-ROM classification to affect multimedia-product tariffs

CD-ROMs are a top priority in discussions within the Brussels-based World Customs Organisation (WCO), according to an official of the organisation.

The WCO, which is an arm of the World Trade Organisation, was set up to standardise product classifications for member countries. Product classifications determine the import duty imposed on a product.

In the case of CD-ROMS, the discussions will eventually determine whether they are subject to the low - roughly 3 per cent - duty imposed on computer equipment or the 14 per cent duty theoretically imposed by the European Union, which classifies CD-ROMs as video-recording equipment.

Right now, the duty on CD-ROMs in Europe would have no practical effect, since the EU grants tariff suspensions on the devices because its computer industry imports 80 per cent of the CD-ROMs that it uses. But the way CD-ROMs are classified will set a precedent for the entire multimedia sector, according to Eurobit, the Frankfurt-based European Association of Manufacturers of Business Machines and Information Technology Industry.

Last September the European Union classified the products as video-recording equipment and is now in the process of reviewing classifications for a whole series of products such as modem cards, multimedia communications devices and LAN-related equipment.

"The industry is very concerned by this [EU] trend," said Michael Towara, Eurobit's expert on the subject.

Prior to the September decision, each of the 15 member states classified the products as they saw fit, leading to confusion as some classified them as computer equipment subject to a 3.9 per cent tariff, and others as video recorders, subject to 14 per cent.

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