The importance of tariff classification and its impact on statistical and economic data – German imports of hardwood plywood from China continue to be affected by a dispute between the German trade and customs officials. In the last three years, customs officials, particularly at the port of Bremerhaven, have been checking Chinese plywood to ensure that boards are cross-laminated rather than laid parallel to each other.
According to German customs, boards should be reclassified as Laminated Veneer Lumber (LVL) if not fully cross-laminated. This is frequently the case with lower-quality Chinese plywood manufactured using small veneer pieces for the cores. LVL incurs a higher rate of duty of 10% compared to 7% for plywood. Roughly 40% of Chinese hardwood plywood deliveries into Germany were reclassified in this way in 2012.
German import merchants and the timber trade federation GD Holz have held talks with German customs to try to more clearly define which products should be considered plywood and which LVL. According to GD Holz, these talks have been unproductive so far and customs continue to reclassify Chinese plywood. Several German importers have now filed lawsuits and results are still pending. At the same time, GD Holz report that since 2014, several importers have been reimbursed for some instances of excessive duty paid. However, customs has not revealed why reimbursements were offered in some cases but not in others.
The uncertainty created by the dispute in Germany may partly explain the recent rise in imports of Chinese hardwood plywood into ports in Belgium and Netherlands. German buyers may be avoiding excess duty by buying from stocks landed in these neighbouring European countries.
The reclassification process has led to inconsistencies in the statistical data on German hardwood plywood imports. Data derived from Eurostat indicates that German imports fell by 18.3% to 34,700 cu.m in the first five months of 2015. This followed a decline of 5.5% to 103,000 cu.m for the whole year 2014.
However, the Eurostat data deviates from figures published by the German Federal Statistical Office (Destatis) which indicate a 62% increase in German hardwood plywood imports from China in the first quarter of 2015. On enquiry, Destatis note that they have adjusted their data downwards for 2014 to take account of plywood reclassified as LVL.
However Destatis have not yet made the same adjustment to the 2015 data. As a result, Destatis data on deliveries to Germany appear to surge this year. Overall, once all adjustments are made, Destatis reckon German imports of Chinese hardwood plywood in the first five months of 2015 were probably around the same as last year.