# CE2004078EN.01046101.xml

| 27.3.2004 | EN | Official Journal of the European Union | CE 78/461 |
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27.3.2004

EN

Official Journal of the European Union

CE 78/461

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(2004/C 78 E/0487)

WRITTEN QUESTION E-3086/03

by Bruno Gollnisch (NI) to the Commission

(20 October 2003)

Subject:   Tobacco trade/France

Subject:

The sharp increases in taxes on manufactured tobacco products in France have transformed the country within a few months from a place of transit for contraband cigarettes to a place of destination for such contraband.

Moreover, authorised traders, especially those working in border areas, are having to face competition from neighbouring countries, where French customers purchase in some cases in excess of their personal needs. However, these 34 000 tobacconists represent an irreplaceable network of local businesses, in particular in rural areas.

Investigations have shown that the trafficking in such products is based essentially in Eastern European countries, including some future EU Member States. The ease with which contraband products can move around the EU illustrates the adverse — and indeed criminal — effects of the absence of checks at internal borders.

With the prospect of EU enlargement in only a few months:

| — | What does the Commission intend to do to ensure that effective and efficient checks are carried out at the EU's external borders? |
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What does the Commission intend to do to ensure that effective and efficient checks are carried out at the EU's external borders?

| — | What action does it intend to take to tackle the unfair competition to which French tobacconists are subjected, especially in border areas? |
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What action does it intend to take to tackle the unfair competition to which French tobacconists are subjected, especially in border areas?

Answer given by Mr Bolkestein on behalf of the Commission

(5 December 2003)

(5 December 2003)

Firstly, it should be noted that the abolition of systematic customs controls at the European Union's internal borders has enabled the customs and excise authorities to focus their attention on the EU's external borders. The combating of cigarette trafficking is an important priority not only because it is a source of unfair competition with legitimate trade but also for budgetary reasons both at EU and Member State level.

Responsibility for combating cigarette trafficking at both individual and collective level lies with the Member States. However, where this illegal trade affects the Community's financial interests, the Community and the Member States share responsibility (Article 280 of the EC Treaty). The Commission, through the European Anti-Fraud Office (OLAF), plays an active role in coordinating action by Member States. OLAF has established a network of operational contacts in the Member States and the candidate and accession countries to ensure a rapid response in combating cigarette trafficking and the sources of such trafficking. OLAF also has a specialised department providing follow up for the Member States and candidate countries.

Through the Working Party on customs cooperation set up under the Treaty establishing the Europe Union (Third pillar — Justice and Home Affairs) the Member States implement an annual programme of common customs surveillance operations to combat trafficking in illegal goods. These operations frequently target cigarettes, tobacco and alcohol in the European Union. They are co-financed by the Commission under the AGIS programme.

External border controls have always been a priority for the Commission. It recently adopted a Communication on the role of customs in the integrated management of external frontiers (1) which sets out its strategy in this area. Its objective is to ensure greater protection for goods crossing the EU's external borders against environmental, health and public safety risks. The Communication proposes a common risk strategy for all Member States under which controls at the external borders can be prioritised to make them more effective.

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The Commission would inform the Honourable Member that the new Customs 2007 programme, like its predecessor Customs 2002, is designed to ensure that all Member States apply customs controls, particularly at the external borders, in the same and most efficient way. One of the principal objectives is to strengthen cooperation between customs authorities in order to more effectively combat fraud. This programme is open to both current and future Member States.

The Commission would also point out that one of the fundamental freedoms of European citizens under the principles governing the Internal Market is to be able to purchase excisable products in one Member State and take them for their personal consumption to the Member State where they reside without having to pay excise duty there.

As things stand at present, Community legislation lays down only minimum rates of excise duty beyond which Member States are allowed to set their own. Under the Directive a proposal by the Commission on these minimum rates of excise duties for manufactured tobacco were recently raised (2) and a minimum level of excise duty expressed in euros was introduced to ensure that a minimum level of excise duty on cigarettes is applied in all Member States.

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The Commission is, nevertheless, aware that, if the Member States fail to agree on greater harmonisation of excise duty rates, differences in these rates will create distortions of competition between traders in the Member States, particularly in border areas. The Commission has always taken the view that greater harmonisation of excise duty rates, in particular for manufactured tobaccos, will overcome this problem. The Commission continues to recommend such an approach to improve the functioning of the Internal Market.

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(1)  COM(2003) 452 final.

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(2)  Council Directive 2002/10/EC of 12 February 2002 amending Directives 92/79/EEC, 92/80/EEC and 95/59/EC as regards the structure and rates of excise duties applying to manufactured tobaccos, OJ L 46, 16.2.2002.

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