COMMISSION RECOMMENDATION of 2 August 1974 to the French Republic concerning the adjustment of the state monopoly of a commercial character in manufactured tobacco vis-à-vis the new Member States (74/435/EEC)

I

In France, manufactured tobacco is subject to a State monopoly of a commercial character within the meaning of Article 37 (1) of the EEC Treaty. Under Order No 59.80 of 7 January 1959 and Decree No 61-15 of 15 January 1961 on the organization of the Service d'exploitation industrielle des tabacs et allumettes (SEITA) ; SEITA still holds the exclusive rights to import and market manufactured tobaccos.

Under the first subparagraph of Article 44 (1) of the Act concerning the Conditions of Accession and the Adjustments to the Treaties, the new Member States are progressively to adjust their State monopolies of a commercial character within the meaning of Article 37 (1) of the EEC Treaty, so as to ensure that by 31 December 1977 no discrimination regarding the conditions under which goods are procured and marketed exists between nationals of Member States. Moreover, the second subparagraph of Article 44 (1) imposes equivalent obligations on the original Member States in relation to the new Member States.

Article 44 (2) reads : "From the beginning of 1973 the Commission shall make recommendations as to the manner in which and the timetable according to which the adjustment provided for in this Article must be carried out, it being understood that the manner and timetable must be the same for the new Member States and the original Member States".

This Recommendation will not - indeed it cannot - deal with the question whether the monopoly is compatible with Article 37 (1) of the EEC Treaty as regards the original Member States, particularly as far as retail trading is concerned. Since, in the new Member States, there are no monopolies of a commercial character in this particular industry, there is no need to address recommendations to them under the first subparagraph of Article 44 (1).

However, since SEITA still retains its exclusive right to import and market manufactured tobacco, the Commission feels that the adjustment provided for in Article 44 (1) of the Act concerning the Conditions of Accession and the Adjustments to the Treaties should consist, firstly, of progressively eliminating that form of discrimination which consists of imposing quantitative restrictions on imports of manufactured tobacco from the new Member States, deriving from SEITA's discretionary power to grant or refuse import licences. Secondly, it should lead to termination by 31 December 1977 of the exclusive right held by SEITA to import, export and market tobacco wholesale from the new Member States.

II

Subsequently for these reasons, and whilst reserving the right to take such further action as it may consider necessary in the light of the results obtained by the application of this Recommendation, the Commission recommends the French Republic, pursuant to Article 44 (2) of the Act concerning the Conditions of Accession and the Adjustments to the Treaties: 1. to open an import quota for manufactured tobacco from the new Member States of: - 3 % of 1973 national production for 1974,

- 5 % of 1974 national production for 1975,

- 9 % of 1975 national production for 1976,

- 15 % of 1976 national production for 1977.

it being understood that by 31 December 1977 all quantitative restrictions on imports of manufactured tobacco from the new Member States will have been removed;

2. to inform all concerned, by appropriate publicity, of the new opportunities offered to them by these quotas to obtain supplies of manufactured tobacco from the new Member States;

3. to terminate by 31 December 1977 SEITA's exclusive right to import, export and sell on the wholesale market manufactured tobacco from the new Member States.

Done at Brussels, 2 August 1974.

For the Commission

The President

François-Xavier ORTOLI