Proposal for a COUNCIL DIRECTIVE amending Directives 69/169/EEC and 92/12/EEC as regards temporary quantitative restrictions on beer imports into Finland

(presented by the Commission)

EXPLANATORY MEMORANDUM

General background

Under Article 26 of Directive 92/12/EEC and the terms of the Treaty of Accession that refer to this provision, Finland is authorised to restrict the quantities of alcoholic beverages and tobacco products which may be brought into its national territory from other Member States without payment of excise duties to certain limits. With regard to imports of beer, the limit set out in the Treaty of Accession is 15 litres. The derogation was granted until 31 December 1996. Furthermore, Finland was obliged to take measures to ensure that imports of beer from third countries are not allowed under more favourable conditions than such imports from other Member States. According to this obligation Finland increased its allowance for beer imports from third countries from 2 litres to 15 litres.

Before the expiry of the derogation Finland realised that the abolition of the derogation would cause greater problems than had been envisaged and asked for its prolongation. In December 1996 Article 26 of Directive 92/12/EEC was amended. Until 31 December 2003, Finland and Denmark were authorised to continue to apply the same restrictions on the quantity of goods which may be brought into their territories without further excise-duty payment as they applied on 31 December 1996. In addition to the prolongation, the Member States were asked to remove these restrictions progressively. Furthermore, the Member States were authorised to restrict the grant of admission without payment of duty to their own residents who have been absent from their territory for a period of more than 24 hours.

The request by Finland

Owing to fiscal, economic, social, health and public order problems, Finland has requested a separate restriction of 6 litres on beer imports from countries other than Member States from 1 April 2000 until 1 January 2006. The request is due to the increased imports of alcoholic beverages, especially beer, from Russia and Estonia. These imports have negative effects on the operating conditions for Finnish retail traders and on the employment in the border regions. In addition, the increased imports of beer are causing a considerable loss of revenues. With the growing alcohol consumption, health problems have increased as well.

Analysis

The effect of existing law is to permit Finland to maintain the same level of allowance for countries other than Member States as for intra-Community trade. Correspondingly, when Finland raises its intra-Community levels as it is required to do so by Article 26 of Directive 92/12/EEC, Finland will also have to increase its third-country allowance.

Before the accession to the Community, Finland granted a travellers' allowance of only 2 litres of beer. It goes without saying that the increase to 15 litres created a big incentive for private beer imports. If the derogation laid down in Article 26 of Directive 92/12/EEC expires at the end of 2003 there would be no reason for less favourable restrictions of beer imports from countries other than Member States than those laid down in Directive 69/169/EEC. In this case, the general allowance of 175 euro would apply. In practice, private travellers would be entitled to import up to 200 litres of beer from countries other than Member States into Finland. Between Finland and the neighbouring third countries there still exists a considerable disparity in prices. The negative effects of cross-border shopping on the economic situation of Finnish retail traders are reinforced by the existence of duty-free shops located in the border regions of Russia. Besides the negative consequences for retail shops and tax revenues, the increased beer imports are causing social and health problems.

It would therefore be necessary to provide for a temporary derogation. Finland should be authorised to apply a quantitative limitation for beer imports from countries other than Member States. This limitation should be fixed at an amount of not less than 6 litres and, according to the Finnish request, introduced by 1 April 2000 at the latest. This measure would solve the current fiscal and economic problems and facilitate the phasing-out of the current intra-Community allowances. However, this derogation should be restricted to a definite time period taking into account the necessity of equal Community rules to prevent distortions of competition resulting from the application of different limits when external frontiers linking the Community to third countries are crossed. Since an expiry date of 1 January 2004 would coincide with the expiry of the intra-Community allowances, it should be fixed two years later, at 31 December 2005.

The derogation granted to Finland by Article 26 of Directive 92/12/EEC represents an exemption from a fundamental principle of the internal market, namely the right of its citizens to transport goods purchased for their own use throughout the Community without any further payment of VAT and excise duties, so that it is necessary to limit its effects as far as possible. In view of the fact that Finland is obliged to remove progressively the restrictions on the quantity of excisable goods brought into its territory by citizens of other Member States, it has to be considered appropriate at this juncture to fix the subsequent stages Finland has to follow with a view to aligning itself on the Community rules laid down in Articles 8 and 9 of Directive 92/12/EEC by 1 January 2004. To compensate for the decrease of the third-country allowance for beer from the current 15 litres to 6 litres, the first step increasing the intra-Community allowance should be 24 litres from the entry into force of the Finnish legislation introducing the quantitative limit of not less than 6 litres for duty and tax-free imports of beer from countries other than Member States. The second step should be not less than 32 litres from 1 January 2001, the third step should be not less than 64 litres from 1 January 2003. By 1 January 2004 at the latest, Finland should apply the general rules in force in the Community.

A proposal for a regulation concerning the customs aspects is being presented at the same time.

2000/0038 (CNS)

Proposal for a

COUNCIL DIRECTIVE

amending Directives 69/169/EEC and 92/12/EEC as regards temporary quantitative restrictions on beer imports into Finland

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community, and in particular Article 93 thereof,

Having regard to the proposal from the Commission [1],

[1] OJ C

Having regard to the opinion of the European Parliament [2],

[2] OJ C

Having regard to the opinion of the Economic and Social Committee [3],

[3] OJ C

Whereas:

(1) Article 26 of 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 [4], grants Finland the right to maintain a quantitative limit for beer acquisitions from other Member States of 15 litres, as laid down in the Act of Accession of Austria, Finland and Sweden, which are exempted from Finnish taxes.

[4] OJ L 76, 23.3.1992, p. 1; Directive as last amended by Directive 96/99/EC (OJ L 8, 11.1.1997, p. 12).

(2) Finland should take measures to ensure that imports of beer from third countries are not allowed under more favourable conditions than such imports from other Member States.

(3) Article 26 of Directive 92/12/EEC authorises Finland until 31 December 2003 to continue to apply the same restrictions on the quantity of goods which may be brought into its territory without further excise-duty payment as it applied on 31 December 1996, those restrictions being progressively removed.

(4) Articles 4 and 5 of Council Directive 69/169/EEC of 28 May 1969 on the harmonisation of provisions laid down by law, regulation or administrative action relating to exemption from turnover taxes and excise duty on imports in international travel [5], provides for allowances in respect of excisable goods contained in the personal luggage of travellers coming from countries other than Member States on condition that such imports have no commercial character.

[5] OJ L 133, 4.6.1969, p. 6; Directive as last amended by Directive 94/4/EC (OJ L 60, 3.3.1994, p. 14).

(5) The provisions of Article 26 of Directive 92/12/EEC represent a derogation from a fundamental principle of the internal market, namely the right of its citizens to transport goods purchased for their own use throughout the Community without incurring liability to new duty charges, so that it is necessary to limit its effects as far as possible.

(6) It is appropriate, at this juncture, to raise the current quantitative limit for beer acquisitions from other Member States in several steps in order to align Finland gradually on the Community rules laid down in Articles 8 and 9 of Directive 92/12/EEC and to ensure a complete removal of intra-Community allowances for beer by 31 December 2003, as provided for in Article 26(1) of that Directive.

(7) Finland has experienced problems in respect of alcohol policy and social and health policy, as well as public order, as a result of increased private imports inter alia of beer.

(8) Finland has requested a derogation to apply a limitation for beer imports from countries other than Member States, of not less than 6 litres.

(9) Account is taken of the geographical situation of Finland, the economic difficulties of Finnish retail traders located in the border regions and the considerable loss of revenues caused by the increased imports of beer from countries other than Member States.

(10) It is therefore necessary to authorise Finland to apply a restriction of not less than 6 litres on beer imports from countries other than Member States.

(11) It is appropriate to maintain this derogation two years longer than the restriction on beer brought to Finland from other Member States, in order to allow the Finnish retail trade to adapt to the new situation.

HAS ADOPTED THIS DIRECTIVE:

Article 1

In Article 5 of Directive 69/169/EEC, the following paragraph is added:

"9. By way of derogation from Article 4 (1), Finland shall be authorised to apply a quantitative limit of not less than 6 litres for the importation of beer from countries other than Member States, until 31 December 2005."

Article 2

In the second subparagraph of Article 26(1) of Directive 92/12/EEC, the following sentence is added:

"Finland shall increase the quantitative restrictions for beer to at least 24 litres from the entry into force of the Finnish legislation implementing Article 5(9) of Directive 69/169/EEC, to at least 32 litres from 1 January 2001 and to at least 64 litres from 1 January 2003."

Article 3

1. Member States shall bring into force the laws, regulations and administrative provisions necessary to comply with this Directive by 1 April 2000 at the latest. They shall forthwith inform the Commission thereof.

When Member States adopt those provisions, they shall contain a reference to this Directive or be accompanied by such a reference on the occasion of their official publication. Member States shall determine how such reference is to be made.

2. Member States shall communicate to the Commission the text of the provisions of domestic law which they adopt in the field covered by this Directive.

Article 4

This Directive shall enter into force on the third day following that of its publication in the Official Journal of the European Communities.

Article 5

This Directive is addressed to the Member States.

Done at Brussels,

For the Council

The President