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Country Commercial Guides FY 2000: France Report prepared by U.S. Embassy Paris, released July 1999 Note*

CHAPTER VI. TRADE REGULATIONS AND STANDARDS

A. Tariffs and Import Taxes

The member states of the European Union have established a Community Integrated Tariff (TARIC) system, under which duties are applied to imports from non-EU countries. TARIC was established by the 1958 Treaty of Rome as part of the European Economic Community (EEC).

The duties levied on imports from non-EU countries, including the United States, are moderate. Most raw materials enter duty-free or at low rates, while most manufactured goods are subject to rates of between 5 and 17 percent. Most agricultural product imports are covered by the Common Agricultural Policy (CAP), under which many items are subject to variable levies designed to equalize the prices of imported commodities with those produced in the EU.

France and other EU member states extend varying preferential tariff treatment to imports from the African, Caribbean and Pacific developing countries (under the Lomé Conventions), several French and Dutch territories and departments, Turkey, Egypt, Morocco, Tunisia, Algeria, Israel, Malta, Cyprus, Jordan, Lebanon and Syria. Tariff preferences are also extended to over 100 developing countries under the Generalized System of Preferences (GSP).

To export consumer-ready food products to France, a U.S. exporter should consider market access restrictions and food laws. Most processed products entering the European Union and France are subject to additional import charges based on the percentage of sugar, milk fat, milk protein and starch in the product. These additional import charges may make certain imported processed products non-competitive in the European market, vis-a-vis similar products produced in the EU. The situation should improve over the next few years because these charges will be converted to fixed tariff equivalents and reduced under the World Trade Organization. Interested U.S. exporters should contact the Office of Agricultural Affairs for up-to-date information on this issue.

The EU tariff schedule is based on the Customs Cooperation Council Nomenclature (CCCN), also referred to as the Harmonized System. This system was introduced to provide a standard tariff classification regime for all products imported and exported throughout the world.

B. Trade Barriers

U.S. companies sometimes complain of France's complex technical standards and of unduly long testing procedures. Testing requirements (usually done in France) and standards sometimes appear to exceed reasonable requirement levels needed to assure proper performance and safety. Most of the complaints have involved electronics, telecommunications equipment and agriculture phytosanitary standards.

The 1989 EU Broadcast Directive requiring a "majority proportion" of programming to be of European origin was incorporated into French legislation on January 21, 1992. France, however, specifies a percentage of European programming (60 percent) and French programming (40 percent). These broadcast quotas were approved by the EU Commission and became effective on July 1, 1992. They are less stringent than France's previous quota provisions which required that 60 percent of all broadcasts be of EU origin and that 50 percent be originally produced in French. The 60 percent European/40 percent French quotas are applicable throughout the day, as well as during prime time slots. The prime time rules go beyond the requirements of the EU Broadcast Directive and will limit the access of U.S. programs to the French market. Nevertheless, the market share of U.S. films and television shows remains high.

The French government has recently revised its legal services system. Non-EU lawyers may no longer practice as legal consultants and are required to qualify as "avocats," on the basis of full-fledged membership in the French bar. Under the implementing legislation which went into effect on January 29, 1993, this means that non-EU lawyers will have to pass either a "short-form" exam or the full French bar exam. Non-EU lawyers will qualify for a "short-form" exam provided they are able to prove that the foreign state or territorial unit in which they practice allows French lawyers to practice law "under the same conditions." Failing that, they will have to take the full French bar exam. Due to EU regulations, France is required to recognize law degrees for EU nationals but not third country nationals. Nevertheless, non-French EU lawyers, who are also required to qualify as "avocats", may do so via exams less stringent that those for non-EU lawyers. Meaningful access will now hinge on how implementing regulations are administered, including the interpretation of what is meant by granting access on a 'reciprocal basis' and the nature of the exam to be imposed on the non-EU lawyers.

C. Customs Valuation

Import duties are calculated on an ad valorem basis, i.e. expressed as a percentage of the value of the imported goods. This dutiable value is the "transaction value" plus freight, insurance, commissions, and all other charges and expenses incidental to the sale and delivery of the goods to the point of entry into EU customs territory. The invoice price will normally be accepted as the transaction value if the seller and the buyer are not related.

Under Article VII of the General Agreement on Tariffs and Trade (GATT), there are four additional methods for the determination of customs valuation in the event that the method described above is rejected by customs authorities.

These methods are to be applied in the following order: (1) the transaction value of incidental goods; (2) the transaction value of similar goods; (3) the deduction method, i.e. the resale price, less such costs as customs duties, taxes and commissions; and (4) the computed value, utilizing costs of production, profit, and other expenses.

D. Internal Taxes

In addition to the duties levied under the Common External Tariff, goods imported into France are also subject to a Value-Added Tax (VAT). Currently, the VAT in France is generally charged at one of two rates:

- the standard rate of 20.6 percent
- the reduced rate of 5.5 percent, applicable mostly to agricultural products
- and foodstuffs, original artworks and certain medicines.

VAT must be added to the price of all goods and services sold in France in connection with an industrial or commercial activity. The supplier of any good or service bills his customer at his selling price, plus the amount of VAT at the applicable rate. The supplier collects the full amount, subtracts his own VAT expenditures from the total amount of VAT collected, and periodically pays over the difference to the tax authorities.

E. Export Controls

France cooperates with her trading partners, including the U.S., to control the export of products and technologies with potentially strategic applications. There are no restrictions or regulations on the export of merchandise from France, with the exception of strategic products (including arms and dual-use technologies) and antiques. Before exporting these items, special license must be obtained from customs officials to insure that the objects being exported are not a part of the national heritage of France.

Information on U.S. export controls is available from:

Office of Export Administration
U.S. Department of Commerce
Washington, DC 22030
Tel: (202) 482-4811
Fax: (202) 482-3617
For overseas companies: Tel. (202) 482-2547
Email: www.bxa.doc.gov

F. Import/Export Documentation

Import and export transactions exceeding FRF 250,000 in value must be conducted through an approved banking intermediary. Goods must be imported/exported no later than six months after all financial and customs arrangements have been completed.

For products originating in countries other than EU member states or participants in the World Trade Organization (WTO), and for a limited number of products considered to be sensitive, a specific import/export license may be required by product or by category of products. Otherwise, the following documents are required to import into France:

Shipping Documents. The documents generally required by France on all sea and air shipments from the United States include the commercial invoice, the bill of landing or air waybill, and a certificate of origin.

Commercial Invoice. As in a domestic transaction, the commercial invoice is a bill for the goods from the buyer to the seller. No special form of commercial invoice is prescribed; the firm's letterhead may be used. The invoice should contain the following details both in English and French:

- Names and addresses of seller and buyer.
- Place and date the invoice was prepared.
- Method of shipment.
- Number, kind and markings of the packages and their numerical order.
- Exact description of the goods-customary commercial description according to kind, quality, grade, etc., with special emphasis on factors increasing or decreasing their value.
- Quantity of goods, expressed in units customary in international trade.
- Agreed price of the goods (unit cost, total cost, including shipping and insurance charges, as well as other expenses charged to the costs of the goods).
- Delivery and payment terms.
- Although not a requirement, it is advisable to have the signature of a responsible official of the exporting firm on each invoice.

Bill of Landing or Air Waybill. This is a contract between the owner of the goods and the carrier. Either a straight or negotiable bill of landing is acceptable. No consular formalities are required and shipments may be made freight collect.

Certificate of Origin. This document certifies that the goods entering French territory are made in the United States, and thus are subject to the duties, taxes and restrictions that apply to U.S. goods. Although certificates of origin are not expressly required for all imports into France, they are strongly recommended. If a shipment is not accompanied by a certificate of origin, it may be held up by customs. French authorities accept certificates of origin certified by local U.S. Chambers of Commerce.

Other Documents. Information on documents required for exportation to France of agricultural products (including food items), plants and animals is available from the Foreign Agricultural Service of the Department of Agriculture. Owing to the complexities of these regulations, U.S. exporters should also obtain information directly from the importer prior to shipment.

For information on duties, taxes, and documentation, contact one of the following two offices:

Office of European Community Affairs
U.S. Department of Commerce
14th & Constitution, Rm. 3314
Washington, D.C. 20230
Tel: (202) 482-5276
Fax: (202) 482-2897
Email: tic@ita.doc.gov

Centre de Renseignements des Douanes
84 Rue d'Hauteville
75010 Paris
France
Tel: (33) 1.53.24.68.24
Fax: (33) 1.53.24.68.30
Email: dgdddicrt01@calva.net

G. Temporary Entry

Samples and Carnets. Samples of no commercial value enter France free of duties and taxes. When sending such samples parcel post, the sender must specify what type of samples are being shipped. "No commercial value" should be written on the appropriate shipping documents.

In order for samples of commercial value to enter France duty- and tax-free, a bond or deposit of the total amount of duties and taxes must be arranged. Samples must be reexported within one year if the deposit is to be recouped. An alternative to placing such a deposit is applying for an ATA Carnet.

ATA Carnet. An ATA carnet is a special international customs document designed to simplify and streamline customs entry procedures for merchandise into participation countries for up to one year. The initials "ATA" are an abbreviation of the French and English words "Admission Temporaire/Temporary Admission." Customs authorities in the United States and France accept carnets as a guarantee that all customs duties and excise taxes will be paid if any of the items covered by the carnet are not reexported within the time period allowed. Carnets may be used for commercial samples, professional equipment, and goods destined for exhibitions and fairs.

To inquire about or apply for an ATA Carnet, contact the U.S. Council for International Business:

USCIB
1212 Avenue of The Americas
New York, NY 10036
Tel: (212) 354-4480
Fax: (212) 575-0327
Email: www.uscib.org

H. Labeling and Marking Requirements

Labeling must provide consumers with precise information which answers six basic questions about the product:

- What is it?
- What is it used for?
- What is it made of?
- What does it cost?
- How is it used?
- When should it be used?

As labeling is strictly controlled in France, the answers are found in many regulatory texts.

U.S. firms entering the French market are strongly advised to examine EU as well as French laws. Each European Union country is integrating the rulings of the EU into its national legislation. As much legislation regarding labeling is still in the developmental stage, EU labeling regulations and standards need to be carefully monitored.

For agricultural products, the Office of Agricultural Affairs has an up-to-date extensive listing of labeling and packaging regulations and requirements on a product by product basis.

Labeling in France serves an increasingly informational and even promotional role. Labels often act as "silent salespeople," especially due to the recent growth of large retail stores offering little sales assistance.

Basic Labeling Requirements. Though many labeling regulations are sector related, the following information is generally required for all categories of products:

Language: Labels must be written in French. Any foreign words or abbreviations must have been authorized by French or international law. The writing must be clear and non-promotional.

Designation: State what the product is. For example: "olive oil."

Brand Names/Trademarks: Any names, symbols and marks relating to the product must be found on the exterior of the packaging, the product label, and the bottle-top or lid, as the case applies. Registered brand names and trademarks can only be used by the manufacturer.

Composition: All ingredients or materials constituting the product must be listed.

Usage Instructions: Explain how the product is to be used.

Required Dates: These include when the product was made, the consumption limit for perishable items, and recommended "use by" date for pre-packaged and frozen food products.

Qualifiers: For example: "made by hand" on leather goods.

Name/Address of Manufacturer or Vendor

Specifications: Labels must inform the consumer of any particular product limitations or sales conditions.

Price: The price (including all taxes) must be marked on all pre-packaged goods, unless they are sold by mail order.

Bar Code Price Labeling (GENCOD): Stores are increasingly using this system to speed up the passage of clients at cash registers. GENCOD, France's bar code price labeling system, is generally used for products with a low per-unit value and rapid turnover, as well as for food and non-food products requiring an individual price marking because of their value, nature, or presentation.

Quality and Ecological Labels. More established quality seals and labels exist in France than in any other European country. Though desirable because they offer extra information to the customer, they are not mandatory.

Quality Labels: There are two types of French quality certificates: - Certificates issued by professional associations; each must be contacted individually for more information. For a list of professional associations, contact the Conseil National du Patronat Français (CNPF):

CNPF
31, avenue Pierre-1er-de-Serbie
75784 Paris Cedex 16
France
Tel: (33) 1.40.69.44.44
Fax: (33) 1.47.23.47.32
Email: www.medef.fr
- Certificates issued by AFNOR, which controls the coveted and highly regarded French "NF" Mark. This quality seal certifies that a product complies with all applicable French standards.

Environmental Labels: AFNOR also issues the "NF Environment" label, which certifies that a specific product meets the environmental criteria to qualify for an NF mark. This label is only available for a limited number of goods, as it is still in the early stages of development. Currently, an "NF Environment" label can be issued for paints, lubricants, trash bags, household chemicals, heating equipment, cosmetics, insulating materials and papers.

The member states of the European Union are currently developing a European Ecolabel, which would certify products as environmentally friendly across the EU. AFNOR is the issuer of the Ecolabel for products manufactured in, first marketed in, or imported to France. An Ecolabel can already be issued for washing machines and dishwashers. There are a further twenty-five products for which certification criteria are currently being drawn up by member states.

For information on the "NF" and the "NF Environment" marks, contact AFNOR directly. (See section J)

I. Prohibited Imports

While not traditionally considered to be a "closed market", certain regulations exist in both France and the EU which limit the market access for specific U.S. agricultural exports. The ongoing harmonization of EU import regulations will hopefully result in the revocation of several French regulations that currently prohibit the importation of some agricultural and food products. Products which are subject to restrictive regulations include: poultry meat, enriched flour, genetic material, "exotic meats" such as alligator and buffalo, crayfish, and certain fruits and vegetables which are subject to seasonal price restrictions. Other fruits such as pineapples and bananas are subject to import certificates. Fresh vegetables such as artichokes, cucumbers, eggplants, tomatoes, lettuce, and squash are also subject to seasonal price restrictions.

J. Standards

U.S. exporters should note that all goods entering France should conform to French and European Union standards. This is mandatory for all products satisfying publicly-funded contracts, as well as for all machinery, tools, household appliances, sporting equipment, toys, etc. Conformity is generally optional for other goods satisfying private contracts. Products which meet French and EU standards have increased marketability.

These standards often differ substantially from those in the U.S. In many cases, particularly with goods of a technologically complex or potentially harmful nature, rigorous testing and approval procedures must be undertaken before the goods in question can be sold in France. Although one of the goals of the European Union is to harmonize standards across the twelve EU member states, many of these EU standards remain in the developmental stage. Where an EU standard does not currently exist, French standards apply.

United States companies often complain of France's complex standards and of unduly long testing procedures. Testing requirements sometimes appear to exceed reasonable requirement levels needed to ensure proper performance and safety. Most of the complaints have involved electronics, telecommunications equipment, medical/veterinary equipment, and agricultural phytosanitary products.

Mutual Recognition Agreements covering the testing and certification of specified regulated products have been proposed to permit U.S. companies to obtain product certification in the United States which will be recognized by the EU members. Such recognition will enable U.S. firms to market their products throughout the EU and could eliminate the expense of multiple testing and certification procedures. However, certain regulated products covered by MRA's may still be required to have some testing or evaluation done in Europe. MRA's have been proposed in the following sectors: telecommunications terminal equipment, medical devices, pressure equipment and simple pressure vessels, personal protective equipment, visual display units, construction projects, lawn mower noise, recreational craft, equipment for use in explosive atmospheres, and measuring devices.

The Association Français de Normalisation (AFNOR) is the French authority in charge of coordinating the establishment of standards. AFNOR prepares new and revised standards, subjects them to public enquiry, and finally submits them to the relevant ministry for approval. Copies of the most up-to-date standards can be obtained directly from AFNOR:

AFNOR
Tour Europe
92049 Paris La Defense Cedex
France
Tel: (33) 1.42.91.55.55
Fax: (33) 1.42.91.56.56
Email: www.afnor.fr

Information on standards may also be requested from:

American National Standards Institute
11 West 42nd Street, 13th Floor
New York, NY 10036
Tel: (212) 642-4900
Fax: (212) 302-1286
Email: info@ansi.org

National Institute of Standards and Technology (NIST)
National Center for Standards and Certification Information
U.S. Department of Commerce
Building 820, Rm. 164
Gaithersburg, MD 20899
Tel: (301) 975-4040
Fax: (301) 926-1559
Email: www.nist.gov

EU Hotline (on draft standards of the CEN, CENELEC, and ETSI).
Tel: (301) 921-4164

Underwriters Laboratories, Inc. can assist U.S. exporters in understanding and complying with French and EU standards. UL is authorized by the French government to test and certify electrical equipment:

Underwriters Laboratories
International Compliance Services Department
1285 Walt Whitman Road
Melville, NY 11747
Tel: (516) 271-6200
Fax: (516) 271-8259
Email: www.ul.com

Standards and testing for medical devices:

Commission National d'Homologation (CNH)
1, place de Fontenoy
75350 Paris 07
France
Tel: (33) 1.40.56.47.56
Fax: (33) 1.40.56.50.89

Laboratoire National d'Essais
1, rue Gaston Boissier
75015 Paris
France
Tel: (33) 1.40.43.37.00
Fax: (33) 1.40.43.37.37
Email: www.lne.fr

Questions regarding standards and certification of machinery, heavy equipment, and plant facilities should be directed to U.S. the office of APAVE, the primary French technical inspection organization:

APAVE
American European Services, Inc.
Suite 120 1054 31st Street, NW
Washington, DC 20007

Standards - ISO 9000 Certification

The AFNOR (Association Française de Normalisation) coordinates work and research relating to standardization in France. AFNOR prepares new and revised standards, subjects them to public inquiry, and then submits them to the relevant ministry for approval. It is the French branch of the European Standardization System (CEN) and a member of the International Organization for Standardization (ISO). Following EU harmonization policy, the official French standards or "Normes Françaises" (NF) are now in line with those of ISO 9000. In France, compliance with national standards is mandatory for only 5% of the cases. These are for the most part safety and health standards on the product itself. However, one must bear in mind that ISO 9000 certifies the company's management organization, not its products. Hence, the ISO 9000 certification will not necessarily fulfill these product-related requirements.

The recognition and use of ISO 9000 in France is expanding at a very fast pace. The ISO 9000 certification is never mandatory, but it increasingly plays a determining role, especially for sub-contracting companies. Contracts between firms now often include a request for quality assurance. In this respect, ISO 9000 is the most widespread and recognized quality management program in France.

A source at AFNOR noted that ISO 9000 has become a great marketing tool in France, sometimes more cost-effective than advertizing. However, its efficiency as a marketing device varies from sector to sector. ISO 9000 is meant to provide quality recognition from firm to firm, rather than from a firm to end-users. For sub-contractors in the public sector or in a heavily competitive field in the private sector, ISO 9000 generally provides added-value. In fields such as those under EH directives (i.e. medical equipment) or subcontracting in the auto-industry, conformity to ISO 9000 is crucial to stay competitive.

The AFAQ (Association Française pour l'Assurance de la Qualité) is the French quality system registrar, which delivers ISO 9000 certifications. The AFAQ has issued approximately 1200 companies with ISO 9000 certifications and it is estimated that about 200 more companies in France have the certification. Requests are now booming, with 3500 being processed by the AFAQ. The certification takes about 6 months to complete. A foreign company with an ISO 9000 certification from abroad simply needs to contact the AFAQ in order to be certified in France.

The demand for ISO 9000 registration in France, as well as in Europe, comes primarily from the marketplace as a contractual rather than a regulatory requirement. As compliance with the ISO 9000 standards becomes recognized and required by foreign and domestic buyers and used by manufacturers as a competitive marketing tool, the demand for ISO 9000 conformity will increase. It is therefore critical for manufacturers to determine what are their buyers' requirements regarding ISO 9000 compliance.

Useful Addresses:

AFNOR - Association Française de Normalisation
Tour Europe
92049 Paris La Defense Cedex 7
France
Tel: (33) 1.42.91.55.55
Fax: (33) 1.42.91.56.56
Email: www.afnor.fr

AFAQ - Association Française pour l'Assurance de la Qualité
B.P. 40
92225 Bagneux Cedex
France
Tel: (33) 1.46.11.38.50; (33) 1.46.11.37.11
Fax: (33) 1.46.11.37.77
mary.francoise.goubaux@afaq.org

In the United States:

AFAQ, Inc.
Woodfield Executive Center
1101 Perimeter Drive, Suite 450
Schaumburg, IL 60173
Tel: (847) 755-9125
Fax: (847) 330-0707

AES - American European Services
1054 31st Street, NW Ste. 320
Washington, D.C. 20007
Tel: (202) 337-3214
Fax: (202) 337-3709
Email: ascert@aol.com

K. Membership in Free Trade Zone/Warehouse Agreements

As a member of the European Union, France is subject to all European Union Free Trade Arrangements. European Union laws and regulations provide that member states may designate parts of the customs territory of the Community as free trade zones and free warehouses. Information on free trade zones and free warehouses is contained in Title IV, Chapter Three, of Council Regulation (EEC) No. 2913/92 of October 12, 1992, establishing the Community Customs Code, titled, "Free Zones and Free Warehouses" (Articles 166 through 182).

Article 166 states that free zones and free warehouses are part of the customs territory of the Community or premises situated in that territory and separated from the rest of it in which:

- Community goods are considered, for the purposes of import duties and commercial policy import measures, as not being on Community customs territory, provided they are not released for free circulation or placed under another customs procedure or used or consumed under conditions other that those provided for in customs regulations;

- Community goods for which such provision is made under Community legislation governing specific fields qualify, by virtue of being placed in a free zone or free warehouse, for measures normally attaching to the export of goods.

Articles 167-182 details the customs control procedures, how goods are placed in or removed from free zones and free warehouses and their operation.

The use of free trade zones vary from member state to member state. In France, the process of applying for the status of a free trade zone or free warehouse is administered by the Ministry of Economy/Budget at the following address:

Ministry of Economy/Finance
139, rue de Bercy
75572 Paris Cedex 12
France
Tel: (33) 1.53.18.93.14
Fax: (33) 1.53.18.96.03
Email: www.finances.gouv.fr