PURPOSE: to authorise France to apply a reduced rate
of certain indirect taxes on traditional rum produced
in Guadeloupe, French Guiana, Martinique and
Réunion.
PROPOSED ACT: Council Decision.
ROLE OF THE EUROPEAN PARLIAMENT: the Council adopts
the act after consulting the European Parliament but without being
obliged to follow its opinion.
BACKGROUND: traditional rum from Frances
outermost regions has been subject to special excise duty
arrangements on the French mainland market since 1923. Since the
creation of the internal market and the harmonisation of excise
duty in Europe, these special excise duty arrangements have been
extended with EU approval.
Council
Decision No 189/2014/EU authorised France to extend
the application on the French mainland, to traditional
rum produced in Guadeloupe, French Guiana, Martinique and
Réunion, of a rate of excise duty lower than the full rate for
alcohol set by Council Directive 92/84/EEC and to apply a rate of
the levy known in French as cotisation sur les boissons
alcooliques (VSS) lower than the full rate applicable under
French national legislation to traditional rum produced
in Guadeloupe, French Guiana, Martinique and
Réunion.
According to Council Decision No 189/2014/EU, the
reduced rates of excise duty and of VSS applicable to
traditional rum shall be confined to an annual quota
of 120 000 hectolitres of pure alcohol
(hap).
On 22 September 2016, the French authorities
asked the Commission to present a draft technical adaptation of
Council Decision No 189/2014/EU increasing the annual
quota from 120 000 to 144 000 hap.
The Commission emphasises that the urgency of the
increase is evident:
- the quota of 120 000 hap for 2016 was used before
the end of 2016; without a retroactive increase with effect from 1
January 2016, producers will suffer significant and likely
irreparable harm;
- not increasing the quota would weaken rum producers in
Frances outermost regions in terms of their commercial
strategies for 2017;
- exports of traditional rum to the EU from Guadeloupe,
French Guiana, Martinique and Réunion has drastically fallen
since 2012.
Therefore, the annual quota shall be increased from
120 000 hap to 144 000 hap.
CONTENT: the proposal amending Council Decision
No 189/2014/EU provides that the reduced rates of excise duty
and of VSS and applicable to the rum shall be confined, for the
period between 1 January 2016 and 31 December 2020,
to an annual quota of 144 000 hectolitres of pure
alcohol.
The increase in the quota is a retroactive and limited
adaptation bringing it up to a level consistent with the annual
growth rates already envisaged by the Council. The other parameters
of Decision No 189/2014/EU are unchanged.
An independent economic analysis carried out by the
Commission concluded that French imports of traditional rum from
Guadeloupe, French Guiana, Martinique and Réunion represented
only a small proportion of total alcohol consumption in France.
Therefore, the presence of a reduced rate for rum was not likely
to create distortions of competition on the French rum
market.