WRITTEN QUESTION P-3230/02

by Nicholas Clegg (ELDR) to the Commission

(7 November 2002)

Subject: Burden of proof on travellers entering the UK with tobacco purchases in excess of UK guideline amounts

Does the Commission regard changes to the burden of proof on British travellers suspected of transporting alcohol and tobacco for commercial ends by the Government on 29 October 2002 as adequate?

Does the Commission agree that maintaining any burden of proof on travellers bringing in more than the UK Government's non-binding guideline amounts represents an infringement of the fundamental freedom to transport goods for personal use within the EU single market?

Joint answerto Written questions P-3216/02 and P-3230/02given by Mr Bolkestein on behalf of the Commission

(28 November 2002)

In order to establish the internal market in excise goods (which have always been sensitive to fraud, particularly in higher taxing Member States), the Community deemed it necessary to provide for a common excise duty system. This harmonised system entered into force on 1 January 1993.

At the heart of this system is a distinction between commercial operations (which, as a principle, attract excise duties in the Member State of final consumption) and goods acquired by private individuals for their own use and transported by themselves, for which excise duties are due in the Member State of acquisition. This rule on private purchases is set out in Article 8 of Council Directive 92/12 EEC(1). There is no limit on the quantity of goods that a private individual may acquire and import under this article (with the exception of the time-limited derogations granted to Denmark, Finland and Sweden).

Since different tax rules apply to these two basic categories of operations, the authorities of the Member States will, when putting the rules of the Directive into practice, be called upon to distinguish between genuine private imports and commercial operations fraudulently disguised as private. The harmonised excise system, therefore, provides for a common method which the Member States must apply when making this distinction. Moving away from the earlier system based on quantitative allowances, which was considered incompatible with the principle of free movement of goods, Article 9 of Directive 92/12/EEC requires Member States to base their determination on all relevant aspects of each individual case (taking into consideration at least those aspects mentioned in sub-Article 2 of Article 9). One of the aspects which the Member States are required to take into account is the quantity of the products. For the application of this criterion, the Member States may lay down guide levels. However, these levels may only serve as a form of evidence.

On the specific points raised by the Honourable Member:

(a) The Commission considers the guide levels provided for in Article 9, subArticle 2, of Directive 92/12/EEC to be purely indicative. The harmonised excise duty rules do not allow a Member State to apply such guide levels as limits on the quantity of products which a private individual may acquire and transport between Member States under the provisions of Article 8 of Directive 92/12/EEC.

(b) Under the provisions of Article 9 of Directive 92/12/EEC, it is for the authorities of the Member States to establish whether goods held by a private individual are in fact held not for the individual's own use, but for commercial purposes. The individual holding a large quantity of excise goods may reasonably be expected to provide an explanation as to how he intends to use those products, but may not be required to prove that the goods are held for a non-commercial purpose. The responsibility for making this determination rests entirely on the authorities of the Member State, which have to be satisfied, on all the evidence available, of the true purpose of the movement of the goods.

The Commission would like to add that these aspects of British excise law are at present the subject of infringement proceedings under Article 226 of the EC Treaty. Whether the announced measures adequately address the points raised by the Commission in these proceedings can not yet be determined, as the enquiry is still ongoing. The Commission is therefore, at this time, not in a position to comment on those parts of the Honourable Member's questions.

(1) Council Directive 92/12/EEC of 25 February 1992 on the general arrangements for products subject to excise duty and on the holding, movement and monitoring of such products, OJ L 76, 23.3.1992.