Proposal for a COUNCIL REGULATION amending Council Regulation (EEC) No 918/83 as regards a temporary derogation for duty-free imports of beer into Finland

(presented by the Commission)

EXPLANATORY MEMORANDUM

General background

Under Article 26 of Directive 92/12/EEC and the terms of the Treaty of Accession that refer to this provision, Finland is authorised to restrict the quantities of alcoholic beverages and tobacco products which may be brought into its national territory without payment of excise duties to certain limits. With regard to beer, the limit set out in the Treaty of Accession is 15 litres. The derogation was initially granted until 31 December 1996.

Following an amendment of Article 26 of Directive 92/12/EEC, Finland was authorised to continue its restrictions on the quantity of goods which would be brought into its territory without further excise-duty payment. In addition, Finland was asked to remove those restrictions progressively until 31 December 2003 at the latest. Furthermore, Finland was authorised to restrict the duty-free admission to its own residents who had been absent from its territory for a period of more than 24 hours.

The Finnish request

Since Finland borders directly on Russia and the Baltic States, and owing to fiscal and economic problems, it has to limit duty-free imports of beer of a non-commercial nature from third countries in the personal luggage of travellers, from 1 April 2000 until 1 January 2006, to not less than 6 litres. The request is due to the increased imports of alcoholic beverages, especially beer, from Russia and Estonia. These imports have negative effects on the operating conditions for Finnish retail traders and on the employment in the border regions. In addition the increased imports of beer are causing a considerable loss of revenues. With the growing alcohol consumption, health problems have increased as well.

Analysis

Under Article 47 of Council Regulation (EEC) No 918/83, the duty-free import of beer of a non-commercial nature from third countries in the personal luggage of travellers is limited to 175 euro per traveller. This means that travellers would be entitled to import up to 200 litres of beer from third countries into Finland. Since there is a considerable disparity in prices between Finland and its neighbouring third countries, the negative effects of cross-border shopping on the economic situation of Finnish retail traders are reinforced by the existence of duty-free shops located in the border regions of Russia and on the ferries connecting Finland with Estonia. Besides the negative consequences for retail shops and tax revenues, the increased beer imports are causing social and health problems.

It seems necessary to allow Finland to apply a temporary derogation from Article 47 of Council Regulation (EEC) No 918/83. Finland should, therefore, be authorised to apply a lower threshold for duty-free imports of beer from third countries. This limitation should be fixed at an amount of not less than 6 litres and according to the Finnish request introduced from 1 April 2000. This measure would solve the current fiscal and economic problems and facilitate the phasing-in of the Community allowances. The derogation should be restricted to a certain time period taking into account the necessity of uniform Community rules to prevent distortions of competition resulting from the application of different limits when external frontiers of the Community are crossed. In order to allow Finland to adapt to the increased duty- and tax-free import possibilities for beer, it is appropriate to postpone the expiry of this derogation to 31 December 2005, i.e. for two years after the expiry concerning the restriction of the intra-Community allowances on 1 January 2004.

A proposal for a directive concerning the exemption from turnover taxes and excise duty on imports from countries other than Member States is being presented at the same time.

2000/0039 (CNS)

Proposal for a

COUNCIL REGULATION

amending Council Regulation (EEC) No 918/83 as regards a temporary derogation for duty-free imports of beer into Finland

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community, and in particular Article 26 thereof,

Having regard to the proposal from the Commission [6],

[6] OJ C

Having regard to the opinion of the European Parliament [7],

[7] OJ C

Having regard to the opinion of the Economic and Social Committee [8],

[8] OJ C

Whereas:

(1) Article 26 of Council Directive 92/12/EEC of 25 February 1992 on the general arrangements for products subject to excise duty and on the holding, movement and monitoring of such products [9], grants Finland the right to maintain a quantitative limit for beer acquisitions from other Member States of 15 litres, as laid down in the Act of Accession of Austria, Finland and Sweden, which are exempted from Finnish taxes.

[9] OJ L 76, 23.3.1992, p. 1; Directive as last amended by Directive 96/99/EC (OJ L 8, 11.1.1997, p. 12).

(2) Finland should take measures to ensure that imports of beer from third countries are not allowed under more favourable conditions than the acquisitions from other Member States.

(3) Whereas Article 45 of Council Regulation (EEC) No 918/83 of 28 March 1983 setting up a system of reliefs from customs duty [10], provides that goods contained in the personal luggage of travellers coming from a third country shall be admitted free of import duties, provided that such imports are of a non-commercial nature.

[10] OJ L 105, 23.4.1983, p. 1; Regulation as last amended by Regulation (EC) No 355/94 (OJ L 46, 18.2.1994, p. 5).

(4) In accordance with Article 47 of Regulation (EEC) No 918/83, the total value of beer admissible free of import duties may not exceed 175 euro per traveller; in accordance with the second subparagraph of Article 47, Member States may reduce this amount to 90 euro for travellers under 15 years of age.

(5) Finland has requested a derogation from these values and has asked to apply a quantitative limitation for duty-free beer imports from third countries.

(6) A limit of not less than 6 litres of beer seems appropriate, regard being had to the geographical situation of Finland and the economic difficulties of Finnish retailers located in the border regions and the considerable loss of revenues caused by the increased duty-free imports of beer from third countries.

(7) It is necessary to set a time-limit for this derogation in order to ensure that the equal treatment of travellers throughout the Community is ensured after a transitional period.

(8) It is appropriate to maintain this derogation two years longer than the restriction for beer brought to Finland from other Member States, in order to allow the Finnish retail trade to adapt to the new situation.

HAS ADOPTED THIS REGULATION:

Article 1

In Regulation (EEC) No 918/83, the following Article 47b is inserted:

"Article 47b

By way of derogation from the values set out in Article 47, Finland shall be authorised until 31 December 2005 to apply a quantitative limit of not less than 6 litres for duty-free imports of beer."

Article 2

This Regulation shall enter into force on 1 April 2000.

This Regulation shall be binding in its entirety and directly applicable in all Member States.

Done at Brussels,

For the Council

The President