New European Web Portal on E.U. Customs Procedures
The European Commission has launched the first stage of a new web portal that is designed to serve as a single access point for businesses seeking relevant and practical information related to E.U. import/export requirements. The first stage of the portal focuses on the application of the Safety and Security Amendment to the Customs Code, which went into effect on 1 July 2009; however, the portal is being further developed to cover additional areas. The new web portal includes animated scenarios that explain each step of the import/export/transit procedure. It is hoped that the portal will help ease customs procedures and avoid duplication of procedures at the E.U. level.
New Electronic System to Monitor Movement of Excise Goods
A new computerized electronic system, designed to monitor and control the movement of excise goods and to combat excise fraud, has recently come into effect in the E.U. The Excise Movement and Control System (EMCS) will replace the current paper-based system and record the real-time movement of products that are subject to excise duties (such as alcohol, tobacco, and energy products). Instead of the paper “Accompanying Administrative Document” (ADD), the new system calls for an electronic record, called the e-AD. Under the new system, the consignor of the goods is required to send an e-AD via the electronic EMCS systems in the Members States of dispatch and destination, to the final recipient of the goods. Once the goods arrive at their final destination, the recipient is then to file an electronic receipt report, which is then sent to the consignor, who can subsequently discharge the movement. Member States and economic operators can join the system progressively until 1 January 2011, after which the EMCS will be fully applied throughout the E.U. The EMCS will make intra-E.U. trade cheaper and simpler for operators, whilst making it easier for Member States to more accurately monitor the movement of excise goods and, by extension, tackle excise fraud.
European Commission Welcomes Release of Anti-Counterfeiting Trade Agreement Documents
The negotiating parties of the multilateral Anti-Counterfeiting Trade Agreement (ACTA) recently published the documents from the eighth round of negotiations, which took place in April. Publication of the documents comes on the heels of criticism by a number of consumer groups that have expressed concerns about the agreement’s potential infringement upon privacy rights and civil liberties. Whilst the text indicates that the main objective of the agreement is to strengthen enforcement of global intellectual property rules, internet users in particular are nonetheless worried about whether their user data will remain private if Internet Service Providers (ISPs) are required to provide that information under ACTA. There have also been protests against the secretive manner in which the negotiations, governed by strict confidentiality clauses, have been carried out. Upon release of the negotiating documents, E.U. Trade Commissioner Karel De Gucht emphasized that the agreement would be fully consistent with current E.U. legislation and that it would not modify substantive intellectual property law, create new rights, or encroach upon people’s civil liberties.
Russia to Resume WTO Accession Talks
On June 17, 2010, Russia will resume negotiations to join the WTO. The announcement follows Russia’s statement that it would defer the launch of a planned customs union (originally scheduled for July 1st) with Kazakhstan and Belarus. Russia is seeking to diversify its exports away from commodities and energy, and to shift trade from slow-growing developed markets to faster-growing emerging markets. WTO membership would help Russia meet those goals. Among the key obstacles to Russia’s accession are the levels of allowable subsidies for Russian state-owned enterprises, enforcement of intellectual property rights and Russia’s agricultural subsidies.
E.U. Concludes Trade Deal with Six Central American Countries
The E.U. and six Central American countries (Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, and Panama) have reached an agreement to gradually liberalize trade and cut import tariffs. In 2009, the E.U. had approximately $12 bn in trade with these countries. As part of the deal, both sides will remove nontariff barriers for all industrial goods, and E.U. cars will receive tariff-free access for ten years. In addition, the E.U. will cut import tariffs on bananas and will increase import quotas for beef by 10,000 tons and rice by 20,000 tons. It is hoped that the trade agreement will translate into much-needed jobs and growth for both blocs.
Geneva Agreement on Trade in Bananas Signed
Trade negotiators have signed the Geneva Agreement on Trade in Bananas, effectively ending one of the longest disputes in the multilateral trading system’s post World War II history. Under the agreement, the E.U. has agreed to reduce its banana import tariff from 176 euro/ton to 114 euro/ton by January 2017. The first reduction to 148 euro/ton is already in force and has retrospective effect dating back to December 2009, thereby allowing exporters to claim compensation for duties paid at the higher level since December 2009. However, a number of countries (Colombia, Peru, Costa Rica, Guatemala, Honduras, El Salvador, Nicaragua and Peru) have recently signed bilateral accords with the E.U., securing even further tariff reductions (these countries would be entitled to a duty of 75 euro/ton by 2020). The bilateral accords do, however, include a mechanism that would allow the E.U. to limit imports if the volume of imports entering the E.U. market exceeds a certain threshold.
E.C. Publishes Study on Distorting Effects of Company Car Tax Treatment
The European Commission has completed a study that analyzes the effects of the current tax structure governing the use of company cars. The study focuses on the distorting effects of the existing subsidies on consumer choice, as well as their adverse environmental impact and resulting tax losses. The study concludes that undertaxation of company cars is generally the norm throughout the E.U. and it suggests various policy options to help Member States better align their tax structure with their policy objectives on economic efficiency, the environment, and, more specifically, on greenhouse gas reductions.
Tax Expert Group has Published its Report on Removing Tax Obstacles to Cross-Border Venture Capital Investments
The Venture Capital Tax Expert Group, established by the European Commission (E.C.), has published its report on the problem of double-taxation in cross-border investments. The E.C. set up the group as part of its ongoing effort to create a unified venture capital market that provides small businesses easier access to financing. The report offers two recommendations designed to remove the tax obstacles to cross-border investment. First, the report recommends that a Member State in which a venture capital (VC) fund is invested should not treat the VC manager’s activities in that state as creating a taxable presence for the fund or its investors. This is because if a VC manager’s local presence is deemed a taxable presence in the state where a fund is invested, this could lead to double-taxation if the return on the investment is also taxed in the country (or countries) where the fund or its investors are located. Secondly, the report recommends that all Member States should recognize the VC tax classification assigned by the Member State in which the fund is established.
Agreement on Regulation Aimed at Combating VAT Fraud
The Economic and Financial Council (Ecofin) has agreed on a draft regulation aimed at helping Member States to coordinate and strengthen their efforts at combating VAT fraud. One of the key elements of the regulation is the creation of Eurofisc, a decentralized network designed to facilitate the fast exchange of targeted information between Member States and to provide a common risk and strategic analytic framework. The regulation will be adopted without discussion at an upcoming Council meeting, once the regulation’s text has been finalized.
U.S. Signs Pact with E.U. to End Banana Dispute
The U.S. and E.U. have signed a pact under which the E.U. has agreed not to reintroduce measures that discriminate among banana distributors. The pact serves a complementary agreement to the Geneva Agreement on Trade in Bananas (Geneva Agreement), which was signed by the E.U. and a number of Latin American bananasupplying countries on May 31, 2010. The U.S. and Latin American countries had separate WTO complaints about E.U. tariffs on bananas. Although the U.S. is not an exporter of bananas, the U.S. had alleged that the E.U.’s inconsistent tariffs violated WTO rules and discriminated against U.S. producers in Latin America. According to the office of the U.S. Trade Representative (USTR), both the Geneva Agreement and the U.S.-E.U. pact will “enhance non-discriminatory market access opportunities.”