WRITTEN QUESTION E-3717/97 by Raimo Ilaskivi (PPE) to the Commission (19 November 1997)

Subject: Report on the economic consequences of the ending of tax-free sales

In my written question E-2777/97 ((OJ C 117, 16.4.1998, p. 65. )) I asked whether the Commission considered the wishes of Parliament and the Member States' Ministers of Transport to be of no account, given that the requested report on the economic consequences of the ending of tax-free sales had not been submitted. I stressed that the problem was also important as regards parliamentary prerogatives.

In his reply, Commissioner Monti did not answer my question. He merely repeated the views which were already known, to the effect that such a report was unnecessary. In particular he referred to the grounds of the 1991 decision.

Finland was not a Member State of the European Union in 1991. Finland's overseas geographical situation means that sea as well as air transport is of central importance to communications. Finnish reports show that the country will lose thousands of jobs in the sea and air transport sector if tax-free sales are not continued. The indirect consequences in other areas, including the shipbuilding industry, will be significant. The seminars which have been held and the hearings of Parliament's Economic Affairs Committee have shown that the effects in the Member States will be serious, mainly in terms of unemployment, which it is reckoned will increase by hundreds of thousands. However, at the same time the EU stresses the importance of a wide-ranging employment policy. The abolition of tax-free sales is a blow against these efforts.

I repeat my question and ask whether the situation in the new Member States, which could not be taken into account in 1991, will have any impact at all on the Commission's dismissive attitude to parliamentary prerogatives?

Answer given by Mr Monti on behalf of the Commission (6 January 1998)

The Commission is mindful of the fact that the Council's decision to abolish duty-free sales within the Community was taken before Austria, Finland and Sweden became members of the Community. As with any legal decision taken by the Community prior to any enlargement, this decision constituted part of Community acquis which acceding Member States were obliged to accept and indeed did accept.

As to the remote geographical location of Finland to which the Honourable Member refers, this was a subject of talks during the accession negotiations, notably with a view to possible negative consequences of the 1991 decision to abolish duty-free sales. Without questioning the Council's decision, a concession was requested by Finland and granted by the Council, allowing, for indirect taxation purposes, to consider the Åland islands as a third territory ((Protocol 2 of the Accession Treaty of Finland. )) and not part of the Community.

The Commission has previously ((See answer to Parliamentary question E-3271/97 by Mrs Matikainen-Kallström (OJ C 117, 16.4.1998, p. 168). )) pointed out that, by virtue of export, duty-free sales will continue to be available to people travelling to third countries or third territories. Beyond that, the Commission would consider it most inappropriate if matters which have been decided during accession negotiations were to be rediscussed.