WRITTEN QUESTION P-1095/98

by Brigitte Langenhagen (PPE) to the Commission

(30 March 1998)

Subject: Cessation of duty-free/tax-free sales in intra-Community transport on 30 June 1999

The cessation of duty-free/tax-free sales in intra-Community transport on 30 June 1999 is likely to result in not insignificant job losses, especially in coastal regions, with all the socio-economic structural problems this will entail. I therefore wish to ask the Commission:

1. Did shore-based retailers bring an action before the European Court of Justice as long ago as 1981 against ships sailing with the sole purpose of selling duty-free/tax-free goods?

2. Did the Court of Justice rule in 1984 that the special excise duties on alcohol and tobacco and the remission of value added tax were not compatible with intra-Community transport? Is this also stated in the Maastricht Treaty or the original EEC Treaty?

3. Does the Commission have the sole right to initiate legislation in this sphere?

4. Can the Council - acting by a simply majority - request the Commission to submit proposals (Article 152 of the EC Treaty)?

5. Can the Council - acting unanimously - in principle depart from the Commission's proposals pursuant to Article 189a of the EC Treaty?

6. Can the European Parliament - acting by a majority - request the Commission to submit proposals (pursuant to the second paragraph of Article 138b of the EC Treaty)?

7. Does the Commission decide on the content of its proposal?

8. Can the derogations agreed with third countries remain in place after 30 June 1999?

9. What alternatives has the Commission devised for those directly affected?

Answer given by Mr Monti on behalf of the Commission

(2 June 1998)

1. The Commission would confirm to the Honourable Member that two parties, one a wholesaler, the other a retailer, brought an action before the European Court of Justice in Case 158/80 (see judgment of 7 February 1981 in Rewe I).

2. The Court, in its judgment of 14 February 1984 in Rewe II, a case concerning exemptions for intra-Community travellers, laid down that travellers did not qualify for the exemptions if the travel did not in fact provide an opportunity to make a purchase in another Member State. That judgment dealt with the application of Directive 69/169/EEC,(1) which was rendered inoperative for intra-Community travel by the establishment of the internal market. It did not affect the general principles applicable to VAT and excise duties.

3. Yes. The Commission enjoys general powers under the third indent of Article 155 of the EC Treaty and special powers concerning indirect taxation under Article 99 of the Treaty.

4. As the Honourable Member indicates, the Council, acting under Article 152, "may request the Commission to undertake any studies the Council considers desirable for the attainment of the common objectives, and to submit to it any appropriate proposals".

5. Under Article 189a of the Treaty, where the Council adopts an act constituting an amendment of a proposal from the Commission, unanimity is required, other than in cases where the conciliation procedure under Article 189b (4) and (5) is followed.

6. The Commission confirms to the Honourable Member that, under the second paragraph of Article 138b, the Parliament may, acting by a majority of its members, request the Commission to submit any appropriate proposal on matters on which it considers that a Community act is required.

7. The Commission is fully responsible for the content of its proposals, as may be inferred from Article 157(2) of the Treaty.

8. Yes. The derogations are offset by the principle of taxation on importations.

9. The operators affected have had a transitional period of more than seven years in which to prepare for the tax situation that will obtain after 30 June 1999. It is the Member States that have the responsibility of identifying any specific difficulties subsisting despite that long adaptation period and of adopting the appropriate measures. This may call for studies or appraisals at local or regional level.

If, following those procedures, Member States wish to secure Community support under the relevant rules (involving aid for specific maritime links, the Structural Funds, etc.), decisions will be adopted on a joint basis after the Commission has examined the applications.

(1) OJ L 133, 4.6.1969.