WRITTEN QUESTION E-3449/03 by Peter Skinner (PSE) to the Commission. Smokes Direct, Spain.
Date: 2003-11-20
Institutions: European Parliament, Provisional data
Subjects: Spain, United Kingdom, distance selling, distributor, electronic commerce, excise duty, free movement of goods, power of attorney, tax system, tobacco

C 88 E/146

Official Journal of the European Union

EN

8.4.2004

With regard to the Palestinian commercial activities, investments and off-budget revenue referred to in the
IMF report, the Commission formally obliged the PA to consolidate these funds into the Palestinian
Investment Fund under the full control of the Ministry of Finance. This has been achieved by the PA
Finance Minister Salam Fayaad. These funds are now being audited by the international firm, Standard and
Poor’s, and the results to date of this audit have been published on the Internet. It is a direct result of the
conditions attached to the Commission financial support that this practice of off-budget accounts has
ended.

In compliance with conditions attached to Commission’s financial support, the PA is required to provide
extensive budget and expenditure reporting. This is now published on a monthly basis, broken down by
wages, operating expenses and transfers and is available to the Palestinian Legislative Council
for
parliamentary scrutiny.

As concerns the current and future support to the Palestinian Authority, the Commission will continue to
attach reform conditions which require the PA to continuously improve the system of financial control,
sound financial management, and overall accountability.

The Commission is, furthermore, supplementing this conditioned support with customised institution
building programmes to strengthen the administrative capacity of the PA. An example of this is an
extensive training programme for Ministry of Finance staff on modern methods of internal audit.

(2004/C 88 E/0155)

WRITTEN QUESTION E-3449/03

by Peter Skinner (PSE) to the Commission

(20 November 2003)

Subject: Smokes Direct, Spain

A company named Smokes Direct is operating in Malaga, Spain, offering consumers cigarettes without
having to pay any further duty or VAT. A complaint has been made by one of my constituents after
purchasing such cigarettes which were then seized by HMCE upon entry into the UK due to non-payment
of duty. Smokes Direct advertise stating that they can act as agents on behalf of the consumer to purchase
and courier the cigarettes to a third party, who is not involved in payment in any way, therefore requiring
no further duty to be paid. The cigarettes would then be classed as a gift between the third party and the
consumer so Smokes Direct, as an agent, are acting on behalf of the buyer in assisting in the delivery of a
‘gift’.

After referring my constituent to Council Directive 92/12/EEC (1) it remains unclear as to whether Smokes
Direct, a profit-making organisation, can advertise themselves as being able to act as agents and not
vendors and the technicalities of what classes as a ‘gift’
in such circumstances. Can the Commission
therefore investigate the actions of this company and confirm whether or not this practice is legal?

(1) OJ L 76, 23.3.1992, p. 1.

Answer given by Mr Bolkestein on behalf of the Commission

(18 December 2003)

The Commission informs the Honourable Member that the position regarding the intra-Community
movement of cigarettes and other excise products subject to Union harmonised rules is contained in
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.

8.4.2004

EN

Official Journal of the European Union

C 88 E/147

Transactions of the type described as being operated by Smokes Direct are known as distance selling and
are covered by Article 10 of the Directive. Briefly, it provides that where a private individual purchases
excise goods that are dispatched or transported directly or indirectly by the vendor or on his behalf, excise
duty is due in the Member State of destination, i.e. the Member State to which the goods are dispatched.
Furthermore,
the excise duty is chargeable to the vendor at the time of delivery, who may claim
reimbursement of the duty previously paid in the Member State of dispatch. The position regarding ‘agents’
in transactions of this kind is subject to Community case law C-296/95 (1), and does not affect the above
position.

As, within the Internal Market, the scope for the Member State of destination to ensure respect of these
provisions is limited, responsibility for ensuring that vendors comply with the requirements set down in
Article 10 rests to a large extent with the Member State in which the vendor is established, as provided for
in paragraph 3 of that Article.

The sale of tobacco products, particularly through the internet, to individuals in other Member States by
companies falsely claiming that excise duty is not due in the Member State of destination is a growing
problem within the Union and is being actively investigated by the Commission’s European Anti-Fraud
Office and by the appropriate authorities in the Member States, with a view to developing measures to
combat this type of fraud.

So far as gifts are concerned, it is the Commission’s view that they are not subject to payment of the excise
duty in the Member State of destination, providing the gift is sent by a private individual in one Member
State to a private individual
in another Member State, that it is intended for the personal use of the
individual, that it is of an occasional nature and that it is not subject to payment of any kind. The
transactions operated by Smokes Direct do not meet these requirements and cannot, therefore, be treated
as gifts.

Finally, the Commission would point out that it will soon present a review of Articles 7 to 10 of Directive
92/12/EEC which will, amongst others, clarify the issues raised by the Honourable Member.

(1)

Judgement of the Court of 2 April 1998 (cid:1) European Court reports 1998 Page I-01605.

(2004/C 88 E/0156)

WRITTEN QUESTION E-3462/03

by Helmuth Markov (GUE/NGL) to the Commission

(21 November 2003)

Subject: Plans for weight restrictions at the Guben-Gubinek border crossing and EU funds

The district of Spree-Neisse (in Brandenburg Land, Federal Republic of Germany) intends to restrict the
total weight of vehicles crossing the border at Guben-Gubinek to 20 tons. This restriction on goods
transport is to apply in one direction only (cid:1) Germany to Poland (cid:1) and will create a range of problems for
the local economy. The Guben-Gubinek border crossing at Schlagsdorf was also set up with EU funding.
On the exporting side, therefore, part of the funding invested by the EU will be practically worthless.
In addition, such a unilateral restriction is contrary to the spirit of the EU funding, the intention being to
promote goods transport between the accession countries and the EU.

The Commission:

(cid:1) what view does it take of the restriction on goods transport at the Guben-Gubinek border crossing in

the light of the EU funding used to set up that crossing;

(cid:1) can it take measures against this restriction and, if so, will it;

(cid:1) what form might/will those measures take?