WRITTEN QUESTION E-2135/99 by Bart Staes (Verts/ALE) to the Commission. Abolition of tax-free shopping and the impact on jobs.
Date: 1999-11-24
Institutions: European Parliament, Provisional data
Subjects: directive (EU), duty-free sale, economic consequence, economic statistics, exemption from customs duties, job cuts, retail outlet

8.8.2000

EN

Official Journal of the European Communities

C 225 E/57

(2000/C 225 E/056)

WRITTEN QUESTION E-2135/99

by Bart Staes (Verts/ALE) to the Commission

(24 November 1999)

Subject: Abolition of tax-free shopping and the impact on jobs

On 1 July 1999 sales of duty-free goods in (cid:145)tax-free shops(cid:146) finally came to an end. These shops sold certain
products (e.g. perfume, cigarettes and alcohol) tax-free to passengers on international flights. The ban
followed a decision by the European Summit in Cologne on 3 and 4 June 1999 to apply Article 12 of the
Sixth Council directive on VAT No 77/388/EEC (1) of 17 May 1977 in full. The article in question
permitted intra-Community sales free of tax until 30 June 1999.

For a variety of reasons there was considerable opposition to the abolition of tax-free shopping in the
European Union, e.g. because of the negative effect on jobs. The Commission and the Council have always
argued that the ban on tax-free shopping would not lead to a loss of jobs. However, the evidence emerging
from the industry is different. For example, sales at Sky Shops in Zaventem have fallen by a quarter since
30 June 1999. Management have been obliged to make 60 full-time employees redundant.

How many persons were employed full-time in tax-free shops in the European Union on

1.
1 January 1999?

2.

How many persons were employed full-time in tax-free shops in the European Union on 1 June 1999?

3.

How many persons were employed full-time in tax-free shops in the European Union on 1 July 1999?

How many persons were employed full-time in tax-free shops in the European Union on

4.
1 October 1999?

On the basis of the answers to questions 1-4, does the Commission acknowledge that the number of

5.
full-time jobs in tax-free shops in the European Union has fallen?

6.
Does the Commission feel that these job losses are due to the abolition of tax-free shopping in the
European Union? If so, is the Commission prepared to review the ban on tax-free shopping? If not, to
what does the Commission attribute the loss of jobs in the tax-free shops sector?

(1) OJ L 145, 13.6.1977, p. 1.

Answer given by Mr Bolkestein on behalf of the Commission

(6 January 2000)

The Commission always recognised that the abolition of duty-free sales for intra-Community travellers
might have an impact on employment. This was the reason it could agree with the Council in 1991 to
grant a transitional period for the phasing out of duty-free arrangements.

More recently, in its communication to the Council concerning the employment aspects of the decision to
abolish tax- and duty-free sales for intra-Community travellers (1), the Commission once again acknowl-
edged that the abolition of duty-free sales is likely to affect employment. The impact was estimated by the
Commission to be time limited and specific in terms both of localities and sectors affected, with maritime
activities being potentially the most affected. This result was corroborated by estimates supplied by
Member States on the foreseeable employment effects of implementing the Council(cid:146)s decision to abolish
intra-Community duty-free sales. The Commission(cid:146)s analysis however also showed that, in the medium
term, revenue recycling and sales re-location could well lead to a net creation of jobs.

C 225 E/58

Official Journal of the European Communities

EN

8.8.2000

The Commission does not have the requested information regarding the number of people employed in
duty-free shops. The reason for this is that statistical data is only available on employment in the whole
retail sector as such (2). In its analysis of the employment aspects of the Council(cid:146)s decision, the Commission
therefore based itself on industry estimates of jobs affected by the abolition of duty-free sales (3). These
aggregate estimates however did not disclose the underlying employment figures for duty-free shops.

As regards the employment impact of the abolition, the Commission would refer the Honourable Member
to the reply given to written question E-1999/99 by Mr Davies (4).

(1) COM(1999) 65.
(2)

(cid:145)Retailing in the European Economic Area 1997, Luxembourg 1998(cid:146) by the European Commission (Statistical
Office of the European Communities, DG XXI).
See point 5 of the communication.

(3)
(4) OJ C 203 E, 18.7.2000, p. 109.

(2000/C 225 E/057)

WRITTEN QUESTION E-2141/99

by Concepci(cid:243) Ferrer (PPE-DE) to the Commission

(24 November 1999)

Subject: Consulting operators in the AL-Invest Programme

On 23 September last the LAADC committee approved a new financial framework for the AL-Invest
Programme covering the next four years. The programme(cid:146)s operators apparently had little opportunity to
participate in the preparatory discussions. To be more precise, the European side was not consulted at all,
whilst just one meeting was held with the Latin American side.

Does the Commission not believe that a system of communication ought to be set up to guarantee closer
involvement for those concerned, with a view to enhancing the programme(cid:146)s effectiveness and guaran-
teeing the transparency in the Commission services called for by Parliament?

Answer given by Mr Patten on behalf of the Commission

(6 December 1999)

As to the first part of the question, the Commission would emphasise that direct contact with the
operators is paramount. To this end, meetings were held in London (1998) and Barcelona (1999) under
the title (cid:145)Connect(cid:146) to enable operators to exchange ideas with the Commission over two days (in addition
to the direct contacts between operators to prepare proposals for business encounters, which was the
primary function of Connect). Each of these meetings enabled us to take stock of all the technical,
administrative and financial aspects on which the success of the programme depends. Connect will be held
in autumn each year between 2000 and 2004. In addition, direct and individual contact with operators
takes place as necessary by e-mail and by post. Moreover a Web site has been set up, with a (cid:145)members
only(cid:146) Intranet section reserved for operators (www.al-invest.org). The technical secretariat set up to support
and advise operators will be maintained up to the end of 2005.

This demonstrates the extent of the communications system made available to operators.

As to the conferences organised in 1999 in connection with Phase 2 of Al-Invest, one was held for
European operators (February 1999), one for Latin American operators (June 1999), and one for both
European and Latin American operators (October 1999, Connect, Barcelona).

There was only one significant change to the timetable: Phase 2 was presented to the LAADC Committee
on 23 September 1999 instead of 14 October 1999: this may perhaps have taken some operators by
surprise. The reason was quite simply that this enabled Phase 2 to be financed from 1999 instead of from
the 2000 budget as initially proposed, which obviated the need for a stop-gap between Phases 1 and 2 of
Al-Invest.