Excise progress gives hope to regional airports, not border stores

The European Travel Retail Council (ETRC) has reported progress on one of the issues raised by the European Commission’s proposed excise duty directive, which seeks to update existing legislation and pave the way for the introduction of an electronic system monitoring the movement of excise goods within the region.

 

As previously reported on DFNIonline, the wording of one section—seeking to redefine a passenger’s eligibility for duty-free based on their immediate rather than final destination—posed a threat to European regional airports whose retail business depends on passengers transferring within Europe. ETRC reported that it now has widespread support for a redrafting of the wording back to the final destination.

 

The association has been dealing with the European Parliament on the issue for about eight weeks and has reported that three committees preparing reports on the issue—including the Economic and Monetary Affairs Committee—are in agreement with the travel-retail industry’s position and are likely to suggest rewording the clause. The Slovenian presidency of the European Parliament has also proposed the rewording to the European Council’s fiscal working group.

 

ETRC secretary general Keith Spinks told DFNIonline that the outlook was favourable, although there was still work to do to ensure there was no backsliding on the stance ahead of the European Commission’s vote on the directive in November.

 

He said: “We have the support at working group level and among the parliament, and I don’t think the Commission will oppose it because in this instance they weren’t aware that the wording would have an impact.”

 

The Commission is fully aware, however, of the directive's impact on border business in Europe. The directive defines tax-free shops as being at air or sea borders, excluding borders. Spinks said that ETRC was working with the Greek and Romanian governments—the two countries that would be affected by the issue—and has support among committees and the European Parliament, but the Commission is unlikely to be swayed.

 

“The Parliament’s conclusions have political weight but they are not binding,” he said. “The Commission has clearly stated that it believes border shops should be closed because they are difficult to monitor and it is hard to enforce arrangements that don’t allow for abuse.”

 

The Greek government is understood to be prepared to veto the entire directive, which requires universal consent from member states, unless an exemption is made for the border business. But Spinks said he was not sure if that position was sustainable, particularly as only two member states are affected.

 

The directive is due to be adopted by April 2009, and although there are talks of the timeframe being extended, ETRC is working on the issues based on the original schedule, which would mean a vote on the directive in late 2008.