WORLD TRADE
ORGANIZATIONG/STR/N/4/EEC/Add.1
7 July 1999
(99-2803)
Working Party on
State Trading EnterprisesOriginal:  French
STATE TRADING
New and Full Notification Pursuant to Article XVII:4(a) of the GATT 1994 and
Paragraph 1 of the Understanding on the Interpretation of Article XVII
EUROPEAN COMMUNITIES
Addendum
The following communication, dated 27 May 1999, has been received from the Permanent
Delegation of the European Commission.
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You will find in annex an addendum to the EC notification on state trading.  It concerns the
Italian "administration autonome des monopoles d'Etat" (tobacco).G/STR/N/4/EEC/Add.1
Page 2
I
- Autonomous State Monopoly Administration (AAMS)
Manufactured tobacco (see "Combined Nomenclature 2402")
II
A. The direct administration by the State of manufactured tobacco production and marketing
activities is justified by fiscal requirements connected with the special tax regime in force in the
sector.
B. The legal basis for the exclusive rights exercised by the AAMS, as a State agency under the
Ministry of Finance, is laid down in Law 17/7/ 1942, No. 907 (which confirmed the exclusive rights of
the State via the Monopoly Administration with respect to all economic and productive activities
relating to tobacco).
The absolute monopoly regime in question was drastically modified by the following
legislation:
- D.L. 30.11.1970, No. 870, converted, with modifications, into Law 27.1.1971, No. 3
(liberalization of economic and productive activities relating to unmanufacturedtobacco).
- L. 10.12.1975, No. 724 (liberalization of importation and wholesale distribution of
manufactured tobacco of Community origin).
III
A. In the tobacco sector, the Administration provides for:1. The purchase and initial processing of the tobacco leaves for use in making manufactured
products and the possible sale of the tobacco processing residues which cannot be used, together with
the purchase of other unmanufactured tobacco, whether domestic or foreign, needed to meet itsmanufacturing requirements;
2. The production – under a fiscal monopoly regime and hence with related responsibilities for
the administration of the consumer tax on smoking materials – of manufactured tobacco within the
national territory, together with its distribution and sale on the Italian market in accordance with therelevant disciplines, including Law 22.12.1957, No. 1293, relating to the implementing regulations
(D.P.R. 14.10.1958, No. 1074) and Law 13.7.1955, No. 825 ;  in particular, manufactured tobacco is
sold to the public through special private concession holders (licensed tobacconists);  for
manufactured tobacco of Community origin the Ad ministration organizes wholesale distribution on a
contractual basis.
3. The exportation of its production.B. The Monopoly Administration has a monopoly over the manufacture of smoking products
and over the importation and distribution of products of non-Community origin within the nationalterritory.G/STR/N/4/EEC/Add.1
Page 3
C. Exporting is an activity reserved for the Administration which has the exclusive right of
manufacture (although there is no legal provision to this effect, the Administration is the only
manufacturer at the national level).
Importing, more especially importing from Community countries, has been liberalized,
whereas the exclusive right to import smoking products from non-Community countries has been
maintained.
D. The levels of import-export activity are determined on the basis of the demand from the
various markets.
E. Export prices are determined on the basis of the enterprise's economic and financial
requirements in relation to international prices.
F. At the request of the producer firms, the various brands of manufactured tobacco are entered
in the retail price tariff (under Art. 27 of D.L. 30.8.1993, No. 331, converted into Law 29.10.1993,
No. 427) within the price range requested by the firms.
G. The Administration specifies contracts which last several years and are strictly linked to its
activities; on the other hand, the Administration does not specify contracts further to commitments
undersigned by the Government.
H. In 1997, a total of 90,504,065,317 kg. was sold on the Italian market.  Of this total 37.7 per
cent related to domestic firms, 16.21 per cent to firms under licence, and 46.09 per cent to foreign
firms.  The corresponding values were Lit. 17,849,022,200,000, Lit. 2,686,711,000,000 and
Lit. 9,559,056,000,000, respectively.
With reference to the above, since 1.1.1999 tobacco production and distribution have been
transferred to the Italian Tobacco Office, a public economy office, under the provisions of
D.L. 9.7.1998, No. 283.G/STR/N/4/EEC/Add.1
Page 4TABLE I
STATE TRADING:  NAME OF STATE TRADING ENTERPRISE
AMMINISTRAZIONE AUTONOMOA MONOPOLI DI STATO (AAMS)
STATISTICAL INFORMATION, IMPORTS
Description of product(s)
(including HS number(s))Total quantity imported1Quantity imported by
state trading enterprise1Average import price Average representative
domestic sales priceMark-up2National production
12 3 4 5 6 7
Finished tobacco
products41,714,618.926* 41,714,618.926 254, 615/kg. 219,131/kg. - 52,471,665.8
* Kg. 2,525.55 from extra EU countries.
                                                     
1 In cases where no imports have taken place under columns 2 or 3, provide an explanation under Section V of this questionnaire.
2 Members may report either under columns 4 and 5 or under column 6.G/STR/N/4/EEC/Add.1
Page 5TABLE II
STATE TRADING:  NAME OF STATE TRADING ENTERPRISE
AMMINISTRAZIONE AUTONOMA MONOPOLI DI STATO (AAMS)
STATISTICAL INFORMATION, EXPORTS
Description of product(s)
(including HS number(s))Total quantity exported1Quantity exported by state
trading enterprise1Average procurement
price2Average representative
domestic sales priceAverage export
priceNational production
1234 5 6 7
2402
Finished tobacco
productsKg. 528,920.375 Kg. 528,920.375 - 219,131/kg. 42,317.76 52,471,665.8
Excluding sales tax
(around 57%) and
excluding VAT
(around 16.666%)
based on sales price
2401Unprocessed tobaccoKg. 121,000,000 Kg. 7,341,000 1,450/kg. 694/kg. 1,647/kg. 130,000,000
                                                     
1 In cases where no exports have taken place under columns 2 or 3,  provide an explanation under Section V of this questionnaire.
2 In cases where the initial procurement price is augmented by other payments, additional payments should also be reported.G/STR/N/4/EEC/Add.1
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TABLE III
STATE TRADING:  NAME OF STATE TRADING ENTERPRISE
AMMINISTRAZIONE AUTONOMA MONOPOLI DI STATO (AAMS)
STATISTICAL INFORMATION, DOMESTIC ACTIVITIES
Description of product(S)
(including HS number(s))Domestic purchases  by
state trading enterpriseNational production Domestic sales by
state trading enterpriseNational
consumption
1 234 5
Finished tobacco products - 52,471,6 65.8 90,504,065.317 90,504,065.317
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