WRITTEN QUESTION P-3644/00

by Jonas Sjöstedt (GUE/NGL) to the Commission

(17 November 2000)

Subject: EU responsibility for ferry services

Since the EU decision to abolish duty-free sales was carried out, the ferry service between Umeå (Sweden) and Vasa (Finland) has become uneconomic. The shipping company has now decided to drop the route. This is a direct result of the EU decision on duty free sales. The decision is affecting the entire region in various ways. Damage has been caused to the environment as much traffic is forced to take a detour of hundreds of kilometres. Cooperation between the affected regions in Finland and Sweden is made more difficult. Many people commuting on a weekly basis to work in the other country can no longer do so at a reasonable cost. Tourism and many other industries are likely to be hard hit.

The question is now what responsibility the EU will take for the results of its own policy. How does the EU plan to help, financially in particular, so that the ferry service can continue? Why have services in the southern Baltic been allowed to continue with duty-free sales while it was banned between Umeå and Vasa? How is this compatible with the EU's own rules on fair competition?

Answer given by Mr Bolkestein on behalf of the Commission

(15 December 2000)

The Commission always recognised the decision to abolish duty-free sales for intra-Community travellers, unanimously taken by the Council, might have an adverse impact on the Kvarken region, affecting the ferry traffic between the county of Västerbotten in Sweden and the Ostrobothnian counties in Finland(1). It therefore undertook to identify means by which Member States could address such problems. The result was a paper prepared by the Commission, clarifying the various Community instruments available to Member States to address possible consequences of the abolition of duty-free sales(2). The use of such instruments however depends on the Member State concerned. The national or regional authorities must assess the difficulties and identify what measures may be appropriate to overcome them.

It should be noted that when a ferry is going to or coming from a third country, duty-free sales may continue notwithstanding the Council's decision to abolish such sales within the Community. This also applies when the ferry has a stopover outside the fiscal area of the Community(3). To maintain duty-free activities, it is however required that the stopover is not of a purely token nature and that the passenger really has the opportunity of making purchases on land.

It has been possible to continue duty-free sales in the southern Baltic Sea partly due to the geographical situation, with the Baltic countries close by, and partly due to the special status of the Åland islands, which are considered to be outside the fiscal territory of the Community. This status was granted upon request by Finland during the accession negotiations.

With regard to support for the Kvarken area as a whole, the Community's regional policy comprises the Interrreg Community initiative, the aim of which is to encourage cross-border co-operation throughout the Community. For the period 2000-2006, Finland and Sweden, in co-operation with Norway, have submitted a programme proposal under this initiative for the Kvarken-Mittskandia area which is currently under consideration by the Commission. The proposal

includes actions to examine infrastructure and communications across the Kvarken and also between Sweden and Norway. The proposal is expected to be approved in the coming weeks, which would allow projects to be submitted to the programme early next year.

(1) Communication from the Commission to the Council concerning the employment aspects of the decision to abolish tax- and duty-free sales for intra-Community travellers, OJ C 66, 9.3.1999.

(2) Commission staff working paper clarifying Community instruments available to Member States to address possible consequences of the abolition of intra-Community duty-free sales on 1 July 1999 (SEK(1998) 1994).

(3) Commission notice concerning the VAT and excise rules to be applied from 1 July 1999 by suppliers of goods on board ferries and aircraft or in airports to passengers travelling within the European Union, OJ C 99, 10.4.1999).