European Union, circular economy and customs compliance

The report “Squaring the Circle. Policies from Europe’s Circular Economy Transition” published in December 2022 by the  highlights (among other thinks) the following peculiarities of the European circular economy:

• The private sector is playing a crucial role in the enforcement of the circular economy with its trade and environmental policies;
• Customs controls on the ecodesign compliance of the products (like the batteries). Indeed: “…New policy proposals are shifting the focus upstream toward more sustainable and circular products. With the proposal for a new Ecodesign for Sustainable Products Regulation (ESPR) published in March 2022, the EC has presented a framework that will allow it to regulate circularity requirements for almost all ategories of physical goods placed on the EU market…”;
• International trade has a significant impact on the trajectory and outcomes of circular economy policy: a) EU dependency of materials directly imported from third countries; b) EU also imports materials indirectly, that is, as embedded in other products. In other words, the World Bank underlines that most materials are not shipped in their raw form but instead are incorporated in manufactured goods, which has important trade policy implications;

The last point above listed, will allow the promotion of regulations which encourage the production and the export of goods made up of recycled metals (like the copper) and recycled of sustainable plastic.

From the customs point of view, the circular economy consequences might be:

• Determination of non-preferential origin (made in);
• Knwoledge of rules of origin laid down by the free trade agreement which allow criteria for calculating the preferential status of goods recycled, reworked, etc;
• Customs classification of the goods recycled, sustainable, etc;
• The customs valuation of these goods;
• AEO compliance
• Other regulatory issues (like: waste import/export regulations).