WRITTEN QUESTION E-0393/03 by Glyn Ford (PSE) to the Commission. Foreign sales corporation laws.
Date: 2003-02-13
Institutions: European Parliament, Provisional data
Subjects: United States, World Trade Organisation, customs duties, firm governed by commercial law, job cuts, originating product, sale, trade dispute

C 58 E/16

Official Journal of the European Union

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6.3.2004

Mr Ayadi had been similarly ill-treated on 9 January 2003 when he left for Paris. Such ill-treatment forms
part of a long catalogue of attacks carried out by the Tunisian authorities on Tunisian judges and lawyers.

What is the Commission’s opinion of the systematic use by the Tunisian authorities of various forms of
intimidation against Tunisian judges and lawyers? What measures has the Commission taken, or will it
take,
is the
to persuade the Tunisian authorities to cease such practices? More generally, what
Commission’s view of the deterioration in the human rights situation in Tunisia?

Answer given by Mr Patten on behalf of the Commission

(3 March 2003)

The Commission has been informed by both the Euro-Mediterranean Human Rights Network and the
National Council of Freedoms in Tunisia (CNLT) of the circumstances surrounding Mr Ayadi’s trips. This
information matches other facts reported by the same sources, concerning intrusions attributed to the
Tunisian police into the offices of prominent members of the Tunisian Bar and the physical intimidation of
these same lawyers.

Tunisian border control is of course strictly the responsibility of the Tunisian authorities. However, should
these controls impinge on civil liberties, it would be a matter for Article 2 of the EU-Tunisia Association
Agreement and the Commission could raise the issue in the relevant partnership fora, after discussion with
the Member States.

In the case in point, because the reported incidents are part of a general downward trend in the human
rights situation, the EU intends to remind the Tunisian authorities of their obligations and the commitment
of the Member States to these fundamental rights and principles. The EU will choose the appropriate time
and place to express its concerns.

(2004/C 58 E/017)

WRITTEN QUESTION E-0393/03

by Glyn Ford (PSE) to the Commission

(13 February 2003)

Subject: Foreign sales corporation laws

Is the Commission aware of potential job losses that could be caused by EU retaliatory measures against
the US in the framework of the foreign sales corporation laws dispute? As some of the products potentially
listed for high tariffs are produced in the south-west of England, job losses could result in an Objective 2
area adjacent to an area with Objective 1 status, and therefore one of the poorest regions in the country.

Answer given by Mr Lamy on behalf of the Commission

(24 March 2003)

The Honourable Member raises his concern on the negative effect that any eventual
sanctions on American products would have on businesses established in the South West of England.

imposition of

In that respect, it would be useful to recall the circumstances relating to the World Trade Organisation
(WTO) incompatible Foreign Sales Corporation/Extraterritorial Income (FSC/ETI) legislation which provides
an illegal export tax subsidy to American firms to the tune of roughly USD 4 000 million per year.
In particular, following the Community’s successful challenge of the FSC/ETI legislation before the WTO,
on 30 August 2002 the Community was granted by the WTO the right to impose countermeasures in the

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Official Journal of the European Union

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form of tariffs on imports of certain goods from the United States up to that amount. However, the United
States has not yet taken concrete steps towards compliance, although both the Administration and senior
members of Congress have indicated that this is their intention.

At the same time it must be made clear that the Commission’s objective in this dispute is not the
imposition of countermeasures on American products but to obtain the withdrawal of illegal measures that
adversely affect the interests of Community companies. The Commission’s aim is, therefore, to ensure that
the United States complies with the WTO ruling on FSC within the shortest time possible. But if the
United States fails to comply, the Community will have no other option than to exercise its WTO rights.

In an attempt, however, to minimise the negative consequences that any eventual countermeasures could
create for European industry, the Commission has launched a public consultation exercise on a draft list of
products so as to give economic operators the opportunity to express their views on the list; furthermore
the Commission has only inserted on the list products for which imports from the United States represent
a maximum 20 % of total
imports into the Community. The Commission is now in the process of
evaluating comments received from interested parties during the public consultation period. In carrying
out this analysis, the Commission aims to further minimise the negative consequences that any eventual
sanctions could create to Community interests which is after all the stated objective of the whole exercise.
A final decision on this will be taken following consultation of the Member States during the first quarter
of 2003.

As regards the specific situation described by the Honourable Member (where he says ‘as some of the
products potentially listed for high tariffs are produced in the south-west of England, job losses could
result’), high tariffs on certain products favour, not damage, import-competing domestic producers and
thus do not harm their personnel.

(2004/C 58 E/018)

WRITTEN QUESTION P-0415/03

by Roger Helmer (PPE-DE) to the Commission

(11 February 2003)

Subject: VAT on food in the UK and Ireland

Would the Commission confirm or deny a report that appeared in the UK’s Sunday Telegraph (25 January
2003) that the UK and Ireland will be forced to levy VAT on food if Malta’s accession to the EU is
approved, in that Malta’s accession terms to the EU say that Malta should levy VAT on food by 2010, by
which time no other EU country would have this exemption?

Answer given by Mr Bolkestein on behalf of the Commission

(17 March 2003)

The length of Malta’s transitional arrangements under the Accession Treaty is not linked to the transitional
period referred to in Article 28 l of the Sixth VAT Directive (1). During this period, Ireland and the United
Kingdom are entitled to continue to apply zero-rates. As a result, these zero-rates may only be abolished
by a unilateral decision of these Member States or by a new directive adopted by a unanimous decision of
the EU’s Council of Ministers under Article 93 of the EC Treaty.

(1) Sixth Council Directive 77/388/EEC of 17 May 1977 on the harmonisation of the laws of the Member States
relating to turnover taxes (cid:1) Common system of value added tax: uniform basis of assessment, OJ L 145,
13.6.1977.