WRITTEN QUESTION P-1799/02

by Wolfgang Ilgenfritz (NI) to the Commission

(19 June 2002)

Subject: Security-related customs duty for sugar imports from the former Yugoslavia

Since mid-May 2002, Austria has been levying a security-related customs duty on sugar imported from the former Yugoslavia (Serbia and Croatia).

The levying of this duty is jeopardising the existence of small and medium-sized firms, given that, firstly, Italy is clearly not levying this duty, which places Austrian firms at a disadvantage in terms of competition, and secondly the checks to be carried out by the Anti-Fraud Office are allegedly taking too long. The result is that small and medium-sized firms are having to pay customs duty running into millions of euros which they are unable to finance.

Can the Commission answer the following questions:

- Does it consider that this represents a breach of competition rules?

- What will it do to ensure that small and medium-sized firms are not driven into bankruptcy by measures of this kind?

- Has it also received information that the requisite checks by the Anti-Fraud Office are taking too long?

- If so, what steps will it take to ensure that the requisite checks are carried out as swiftly as possible and thereby prevent firms being driven into bankruptcy?

Answer given by Mr Bolkestein on behalf of the Commission

(18 July 2002)

In accordance with Community customs rules (Community Customs Code and its Implementing Provisions), customs authorities are entitled to require the provision of a security in order to ensure payment of a customs debt.

In the case of imports of sugar from countries in the Western Balkans, the Commission has recently identified a significant increase in their volume, together with an increase of Community exports to those countries. There is reasonable doubt as to the nature of this trade in both directions. At the same time, there are indications pointing to an incorrect declaration of origin.

The Commission has consequently decided to publish a notice to importers advising them to take precautionary measures, given the existence of reasonable doubt as to the proper application of the preferential arrangements for sugar by countries in the Western Balkans. Community operators will thereby also be informed that the release of the goods in question for free circulation may give rise to a customs debt and lead to fraud against the Community's financial interests.

In the meantime, requests for subsequent verification of the proofs of origin presented for sugar imported from countries in the Western Balkans have been sent by the importing Member States to the countries concerned. The action taken by the Austrian customs offices, i.e. the requirement that operators lodge a security on import of sugar subject to such verification, should be seen in this context and is therefore in conformity with applicable rules.

As to the time it will take until the security is released, it depends from the completion of the necessary checks showing that the claimed tariff preferences can legitimately be granted. The applicable rules foresee a maximum of ten months for receiving a reply from the exporting country.

Member States are free to decide whether they require a security or not, but they all bear the responsibility to protect the Community's financial interests and will have to ensure payment in case a customs debt is incurred. The security may be provided by either a cash deposit or a guarantor. The form in which the required security should be lodged can of course be agreed with each operator in order to avoid financial difficulties, but it is up to the customs authorities to decide which form can be accepted in order to appropriately protect the financial interests at stake.

Finally, the situation described in the question does not appear to raise any concern under the Community competition rules. It does not appear to constitute a restrictive agreement between undertakings (Article 81 of the EC Treaty), an abuse of dominant position (Article 82 of the EC Treaty) or a State aid (Article 87 of the EC Treaty).