EN Official Journal of the European Union CE 88/678

(2004/C 88 E/0696)

WRITTEN QUESTION E-0034/04

by Erik Meijer (GUE/NGL) to the Commission

(20 January 2004)

Subject: Duty-free cigarettes sold over the Internet at half price in Romania and sent by private individuals

1. Is the Commission aware that the possibility appears to exist in EU Member States to order from Romania up to 160 cigarettes of various Western brands over the Internet, which are then bought by private individuals in Romania and sent in small consignments as goods of a non-commercial character, which, under Community rules on reliefs from duty, are exempt from VAT and import duty, allowing the cigarettes to be sold at around half the price that the same number of cigarettes would cost in the country of the recipient?

2. Is the Commission also aware that mediation between buyers and sellers is carried out by the company Cigarom.com on EU territory by Spanish intermediaries and that there are plans to set up ‘administrative centres’ in EU Member States to promote this kind of sale in such a way that these centres could not, in a legal sense, be viewed as shops? Is it currently impossible to confiscate these cigarettes as contraband?

3. How will the rules governing trade of this kind change when Romania becomes a Member State of the EU?

4. Does the Commission consider trade of this kind, is acceptable where the combination of profit making and low prices is made possible only by tax evasion, or does it feel that it constitutes a criminal offence that goes unpunished as a result of loopholes in current rules or a lack of customs controls?

5. In what way can these loopholes in the legislation and/or lack of customs controls be rectified?

6. What measures is the Commission preparing to prevent trade of this kind that originates in non-member states of the EU?

Source: TV Nederland 3, ‘Nova’, 30 December 2003.

Answer given by Mr Bolkestein on behalf of the Commission

(16 February 2004)

1. The Commission is not aware of the specific situation described in the Honourable Member's question. It is however the Commission's view that cigarettes imported in this way by private persons into the EU cannot be considered to be small consignments of goods of a non-commercial character, as there is always a commercial transaction underlying the shipment. Consequently, these consignments cannot benefit from the exemption for imports of small consignments of goods of a non-commercial character as they do not meet the requirements provided for in EU legislation in Articles 29 to 31 of Council Regulation (EEC) No 918/83 (1), as far as customs duty is concerned, and in Council Directive 78/1035/EEC (2), as far as VAT and excise duty are concerned. In any case, for cigarettes, these exemptions are limited to 50 pieces per consignment. Furthermore, Member States may reduce this quantity or even abolish the VAT and excise exemption for tobacco products altogether.

2. The Commission has so far not received any information concerning the setting up of such operations in the EU. However, as pointed out above, it considers these consignments as being of a commercial nature and, as a consequence, subject to customs duty, VAT and excise duty upon importation into the EU. Member States can therefore take appropriate legal measures under their domestic laws if the goods are not properly declared upon importation.

3. After accession of Romania to the EU, these consignments will have to be treated as distance sales, for which excise duty is chargeable in the Member State of destination. More detailed information on the excise duty regime applicable to distance sales can be found in the reply of the Commission to written question E-3449/03 (3).

4. 5. & 6. The Commission is of the opinion that there are no loopholes in EU legislation but recognises that there is a problem of control and enforcement of payment of duties and taxes on tobacco products offered to final consumers via the internet and sent directly to them in postal consignments from third countries or from another Member State. This problem is being actively investigated by the Commission's European Anti-Fraud Office and by the appropriate authorities in the Member States, with a view to developing measures to combat this type of fraud.

(1) Council Regulation (EEC) No 918/83 of 28 March 1983 setting up a Community system of reliefs from customs duty, OJ L 105, 23.4.1983. Regulation as last amended by Council Regulation (EC) No 355/94 of 14 February 1994, OJ L 46, 18.2.1994.

(2) Council Directive 78/1035/EEC of 19 December 1978 on the exemption from taxes of imports of small consignments of goods of a non-commercial character from third countries, OJ L 366, 28.12.1978. Directive as last amended by Council Directive 85/576/EEC of 20 December 1985, OJ L 372, 31.12.1985.

(3) See page 146.