By Chris Connery – Vice President, PC and Large Format Commercial Displays, DisplaySearch and Deborah Yang – Research Director, Monitor & TV, DisplaySearch
Recent media reports about legal rulings on duty suspension for 16:9 desktop displays in Europe have implied that the decision covers LCD panels. However, LCD panels imported to Europe are duty free (a previous 5% import tariff on LCD panels has been suspended). The rulings have nothing to do with panels, only LCD monitors. The confusion may arise from the fact that the media in Europe often uses the word ‘panel’ to describe TVs and monitors.
As reported by Meko, on April 28, Dutch customs classified a range of wide format monitors up to 27″ with features like DVI-D with HDCP and DisplayPort as being usable as data monitors, meaning that the would not be subject to any duty. The lifting of the import tariff now applies to 22″W and larger LCD monitors (not 19″W and above as reported in the media) with DVI functionality; it is likely that this applies to LCD monitors with HDMI functionality as well.
This case has a long history, and is connected to a case lodged by Kamino International Logistics, when an EU court ruled that customs could not automatically apply a 14% tariff on such screens purely on the grounds that they could be used as a TV (previously, 14% tariff was applied regardless of the intended use). The EU court ruled that if the screen is to be used as a monitor, then 0% tariff will be applied; however, if it is to be used as a monitor TV or a TV, then the 14% tariff will continue to be applied. Since the Kamino case began in 2008, the EU has relaxed its stance towards the tariff, and now allows individual governments to make their own decisions. (This is different from media reports that the tariff will be lifted before the final outcome of the ruling).
The EU is under pressure from a forthcoming decision in a case brought before the WTO by Taiwan. Should Taiwan win the suit, then the EU will likely improve the related law, and Taiwan or other members of the WTO may request compensation. A related issue is that the EU is in the process of ratifying a free trade agreement with Korea, which would put Taiwanese companies at significant disadvantage unless the duty issue is resolved.
The underlying issue is that the boundary between small TVs and monitors is increasingly blurred. The problems started with the narrowing of the gap between TV and monitor functionality, which made it possible to watch TV by using a monitor and DVB-T set top box. Eventually the duty definition of a TV was simply defined as having a 16:9 aspect ratio. However, as this was happening in 2008, panel makers forced a switch to 16:9 for monitors, which caused confusion between TVs and monitors. With connected TVs acquiring network connections and advanced processors, they will increasingly overlap with all-in-one PC functionality. The duty definition problem can be expected to return!
