WRITTEN QUESTION E-0979/00

by Niels Busk (ELDR) to the Commission

(31 March 2000)

Subject: Re-importation of goods eligible for refunds

European exporters are in practice being held accountable for the illegal re-importation into the Community of a number of sensitive products which are eligible for refunds and are thereby being held to account for circumstances beyond their control.

Will the Commission take steps to ensure that the legal and financial responsibility for any illegal re-importation into the Community of goods eligible for refunds is placed on third country exporters and/or authorities by requiring certificates of authenticity, for example?

Will the Commission introduce a rule whereby responsibility is transferred to the importer once the customs formalities in respect of an exported product in a third country are completed?

Does the Commission agree that repayment should be required only insofar as the authorities are able to prove the exporter's complicity or that re-importation occurred under circumstances within the exporter's control?

Answer given by Mr Fischler on behalf of the Commission

(25 May 2000)

The Commission and the Member States have held numerous discussions on the question of reimporting into the Community products eligible for export refunds, with a view to determining what mechanism could be set up in order to prevent Community funds from being granted in respect of economic operations for which the export refund system is not intended.

Recovering refunds from third-country exporters is not feasible. The existence of authenticity certificates would in no way resolve the problem because products which are reimported may quite legally be eligible for a reduction in, or exemption from, import duty.

Since the GATT (General Agreement on Tariffs and Trade) agreements' entry into force, it has no longer been possible to stipulate in a regulation that the importer is responsible for reimbursing the export refund on reimportation into the Community. To do so would run counter to the Community's international obligations.

Nor has it been possible to adopt the Honourable Member's proposed approach (whereby repayment would be required only if the Community exporter's complicity could be proved) in respect of return under preferential arrangements. Someone located outside the Community could arrange for trade to be deflected by instructing firm A to export refund-eligible products to firm B for light processing in a third country, after which firm C would import them into the Community and benefit quite legally from reduced or zero import duty. Although it would be impossible to prove the Community exporter's complicity in those circumstances, the operation would have been set up solely in order to divert Community funds and nothing could be done about it.

Under Article 20(4)(d) of Commission Regulation (EC) No 800/1999 of 15 April 1999 laying down common detailed rules for the application of the system of export refunds on agricultural products(1), the refund must be reimbursed if the exported products are reimported into the Community without having undergone substantial processing and are subject to reduced or zero customs duty at the time of reimportation. So that this clearly deterrent provision does not result in excessive restrictions for exporters, it has been applied only to certain products which are particularly sensitive to deflections of trade. Nor does the measure apply if such products are reimported under the returned goods system provided for in Council Regulation (EEC) No 2913/92 of 12 October 1992 establishing the Community Customs Code(2) or if more than two years elapse between when they are exported from the Community and subsequently reimported.

(1) OJ L 102, 17.4.1999.

(2) OJ L 302, 19.10.1992.