WORLD TRADE G/STR/N/1/ISL
15January 1997
ORGANIZATION(97-0113)
Original: English Working Party onState Trading Enterprises
STATE TRADING
Notification Pursuant toArticle XVII:4(a) oftheGATT 1994 and
Paragraph 1oftheUnderstanding ontheInterpretation ofArticle XVII
ICELAND
Thefollowing communication, dated 6January 1997, hasbeenreceived fromthePermanent
Mission ofIceland.
_______________
I. Enumeration ofState Trading Enterprises
TheStateAlcohol andTobacco Monopoly (ATVR) isanentity owned bytheStateanddeals
withtrade inalcohol andtobacco asdescribed below. Itistheonlyenterprise inIceland which is
considered tobeastatetrading enterprise inaccordance withtheprovisions ofArticle XVII.
II. Reasons andpurpose forintroducing andmaintaining astatetrading enterprise
TheState Alcohol andTobacco Monopoly (ATVR) isbased onimportant health andsocial
policy considerations butthepurpose oftheMonopoly isalsooffiscal nature.
III. Description ofthefunctioning oftheState Trading Enterprise
TheStateAlcohol andTobacco Monopoly (ATVR) wasfounded in1922. Theentity hadan
exclusive rightontheimportation, wholesale andretaildistribution onalcohol andalcoholic beverages,
thatisalldrinks withalcoholic content above 2.25% alch/vol. Theexclusive right onimport and
wholesale trade inalcoholic beverages waseliminated asof1December 1995, byActNo.95/1995.
TheATVR wasreorganized andasystem oflicensing wassetup.Thissystem entails thatthose wishing
toimport and/or distribute alcoholic beverages atthewholesale levelmustobtain alicence fromthe
Ministry ofFinance. TheATVR stillholds themonopoly attheretail levelandontheimportation
andwholesale distribution ofethyl alcohol (CCCN 2207.1000). Theentity runsanumber ofretail
outlets throughout thecountry butitisnolonger involved inanywholesale activity ofalcoholic
beverages.
TheATVR hasanexclusive right ontheimportation, wholesale andproduction oftobacco
andtobacco products. There isnotamonopoly ontheretail distribution oftobacco products andno
specific licence isrequired toselltobacco.
TheATVR isdivided intotwodepartments, aprocurement department andasalesdepartment.
Theoperation ofthedepartments, assets, operational expenses etc.arekeptseparate inthebook-keeping.
Theprocurement department imports andprocures alcoholic beverages, alcohol, tobacco andtobaccoG/STR/N/1/ISL
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products. Thesalesdepartment runstheretail outlets, sellsalcohol, distributes tobacco products at
thewholesale levelandmanufactures snuff. Theprocurement division onlymakes purchases forthe
salesdivision butdoesnotperform anywholesale activity onitsown. Inmaking itspurchases the
enterprise actsonthebasis ofpurely commercial considerations butspecific rules onthepurchasing
procedures havebeenintroduced. Themanagement oftheATVR isinthehands ofaBoard ofDirectors
consisting ofthree persons whoareappointed bytheMinister ofFinance, buttheentity isunder
supervision oftheMinistry.
Theactivity oftheATVR isgoverned byActNo.63/1969 ontheSaleofTobacco andAlcoholic
Beverages asamended byActNo.95/1995, Regulation No.607/1995, ontheStateAlcohol andTobacco
Monopoly, rulesNo.135/1996 onthePurchase andSaleofAlcoholic Beverages andTerms ofBusiness
withSuppliers andrules No.529/1996 onthePurchase andSaleofTobacco andTerms ofBusiness
withSuppliers.
IV. Statistical information
TABLE 1
Imports ofbeer, wineandspirit drinks. National production (1992-1995)
Source: TheState Alcohol andTobacco Monopoly.
Year Imports ofbeer, wineandspirit drinks National production
Quantity
(1,000 litres)Value (f.o.b.)
ISKmillionQuantity
(1,000 litres)
1992 5,071 758 3,110
1993 4,310 731 4,107
1994 4,395 760 5,459
1995 5,409 858 5,313
TABLE 2
Imports ofethyl alcohol CCNO 2207.1000 (1992-1995). There isnonational production
Source: TheStatistical Bureau ofIceland. Statistics ofIceland. External Trade.
Year Imports ofethyl alcohol -CCNO 2207.1000
Quantity
(Tonnes)Value (f.o.b.)
ISKmillion
1992 116 9
1993 165 8
1994 216 10
1995 236 12G/STR/N/1/ISL
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TABLE 3
Imports oftobacco andtobacco products 1992-1995. National production
Source: TheStatistical Bureau ofIceland. Statistics ofIceland. External Trade.
YearImports tobacco andtobacco products National production
ofsnuff
Quantity
(Tonnes)Value (f.o.b.)
ISKmillionQuantity
(Tonnes)
1992 610 769 11.6
1993 527 840 12.4
1994 551 894 12.6
1995 541 880 12.2
TABLE 4
Exports ofbeerandspirit drinks 1992-1995
Source: TheStatistical Bureau ofIceland. Statistics ofIceland. External Trade.
Year Exports ofbeerandspirit drinks
Quantity
(1,000 litres)Value (f.o.b.)
ISKmillion
1992 32 7
1993 176 20
1994 254 40
1995 311 40
V. Reasons whynoforeign trade hastaken place inproducts affected
Question irrelevant.
VI. Additional information
None.