RESTRICTED
WORLD TRADE G/STR/N/1/EEC
8December 1995
ORGANIZATION(95-4000)
Original: English
STATE TRADING
Notification Pursuant toArticle XVII:4(a) oftheGATT 1994 and
Paragraph 1oftheUnderstanding ontheInterpretation ofArticle XVII
EUROPEAN COMMUNITIES
Thefollowing communication, dated 9November 1995, hasbeenreceived fromthePermanent
Delegation oftheEuropean Commission.
_______________
Pursuant totheprovisions ofArticle XVII:4(a) oftheGATT 1994 andparagraph 1ofthe
Understanding ontheInterpretation ofArticle XVII, andinaccordance withthedecision oftheCouncil
forTrade inGoods of20February 1995, theEuropean Community hasthehonour tosubmit herewith
notifications ofstatetrading enterprises inFrance, ItalyandAustria. TheEuropean Community would
alsoliketoinform thatthere isnostatetrading inBelgium, Denmark, Finland, Germany, Greece,
Ireland, Luxembourg, theNetherlands, Portugal, Spain, Sweden andtheUK.State-Trading EnterprisesG/STR/N/1/EEC
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French Customs Tariff No. Product Description Import Control Agencies
27-05 bis Lighting gas,producer gas,water gasand
similar gasesGAZ DEFRANCE
23,ruePhilibert Delorme
PARIS 17ème
27-17 Electrical energy ELECTRICITE DEFRANCE
2,RueMurat
PARIS 8ème
State Monopoly
HSTariff Code Type ofProduct Observations Regulations
28.34.21.00
28.35.24.00
28.36.40.00
31.04.10.00
31.04.20
31.04.30.00
31.04.90.00
31.05.10.00
31.05.20
31.05.60
31.05.90Nitrates ofpotassium
Phosphates ofpotassium
Potassium carbonate
Carnallite, sylvite andother crude natural potassium salts
Potassium chloride
Potassium sulphate
Other
Goods ofthischapter intablets orsimilar forms orin
packages ofagross weight notexceeding 10kg.
Mineral orchemical fertilizers containing thethree
fertilizing elements nitrogen, phosphorus andpotassium
Mineral orchemical fertilizers containing thetwo
fertilizing elements nitrogen andphosphorus
OtherState monopoly delegated tothe
Entreprise Minière etChimique
fordirect imports from third
countriesArticle 183oftheMining
Code Lawof23January
1937 (Article 11)Decrees
73-379 of23March 1973
and74-93 of6Feb.1974
authorizing freemovement
within theCommunity.G/STR/N/1/EEC
Page3
ITALY
State trading enterprise
Amministrazione Autonoma deiMonopoli diStato.
Products forwhich astatetrading enterprise ismaintained
Manufactured tobacco (HSNo.2402 and2403.10).
Description ofthefunctioning ofthestatetrading enterprise
Law17.7.1942, n.907 granted exclusive rights totheState, through the"Amministrazione
Autonoma deiMonopoli diStato -AAMS", foralleconomic activities related totobacco, including
production. Thescope oftheexclusive rights granted toAAMS wassubstantially modified andreduced
following theinstitution oftheEEC.
Atpresent, under Law22.12.1957, n.1293, asamended byLaw10.12.1975, n.724, AAMS
operates afiscal monopoly relating to:
- production oftobacco manufactured inItaly;
- importation anddistribution oftobacco products manufactured innon-EC countries;
- saleoftobacco products tothepublic through authorized dealers.
AAMS isabody oftheMinistry ofFinance, withaseparate andautonomous budget.
Statistical information
Total Domestic Production ofManufactured Tobacco
1992
(tons)1993
(tons)1994
(tons)
Foreign brands produced
under licence11,776.7 12,445.3 13,368.2
Domestic brands 42,887.4 43,345.3 42,582.6
Total 54,664.1 55,790.6 55,950.8G/STR/N/1/EEC
Page4
SaleofManufactured Tobacco inItaly
Quantity
(tons)Value
(million lit)
1992
Domestic brands 43,658.4 4,643,350.3
Foreign brands produced under licence 11,040.8 1,564,705.9
Foreign brands (imports) 34,865.5 5,650,836.2
Total 89,564.7 11,858,882.5
1993
Domestic brands 40,848.9 5,098,157.7
Foreign brands produced under licence 12,506.9 1,985,117.7
Foreign brands (imports) 36,855.4 6,705,354.1
Total 90,210.3 13,785,629.5
1994
Domestic brands 39,564.7 5,344,632.9
Foreign brands produced under licence 14,233.8 2,382,839.3
Foreign brands (imports) 36,884.5 7,211,157.2
Total 90,683.0 14,938,629.4
Source: Ministry ofFinance.
AUSTRIA
Financial Monopolies
1. Enumeration ofstatetrading enterprises
InAustria there existed state trading intheform ofthree financial monopolies until
31December 1994:
(a) Tobacco Monopoly
(b) Alcohol Monopoly
(c) SaltMonopoly
By1January 1995theSaltMonopoly wasreduced tothestages ofextraction andproduction
ofsalt. Thus onlytheremaining monopolies (ontobacco andalcohol) aretobeconsidered asstate
trading enterprises inaccordance withtheprovisions ofArticle XVII.G/STR/N/1/EEC
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II. Reason andpurpose forintroducing andmaintaining statetrading enterprises
Theprincipal purpose oftheAustrian monopolies isoffiscal nature. Additionally, the
monopolies asmarket regulations havetofulfilsignificant tasksinthefieldofeconomic, agricultural,
social andpublic health policies.
TheTobacco Monopoly, apart fromitsfiscal purposes, hassocial functions insofar asshops
fortobacco products (wholesale andretail shops) arereserved mainly forwarandcivilinvalids and
forvictims ofthefightforafreeanddemocratic Austria.
TheAlcohol Monopoly serves toachieve agricultural purposes (production ofefficient feeding
stuffs andfertilizers). Owing tothegeographical situation ofAustria -wideagricultural areas have
unfavourable soilandclimate conditions -these agricultural purposes areofspecial importance. In
order tomaintain thefertility andproductivity ofthese areas andtherewith toenable anestablished
position tothefarms intheseareas, adequate cultivation ofhoedcrop-especially potatoes -isnecessary.
Agricultural distilleries havebeenestablished tocommercialize these agricultural products from the
above-mentioned areas, which areinanextremely unfavourable traffic situation. Additionally, the
residues ofthese distilleries form animportant basis forfeeding stuffs andenable intensive cattle
breeding. Furthermore, theAlcohol Monopoly hastofulfil important social andpublic health tasks
owing tothefactthatithastosupervise thequality ofthealcohol produced inAustria.
III. Description ofthefunctioning ofthestate-trading enterprises
(a) Until31December1994tobacco,rawormanufactured,tobaccorefuse,tobaccoextracts,
tobacco essences, tobacco substitutes andcertain products thereof weresubject totheTobacco
Monopoly. TheTobacco Monopoly covered theproduction, theprocessing, theimportation
andtheuseofmonopoly goods andtrade withsuchgoods.
Since Austria 'saccession totheEuropean Union on1January 1995 rawtobacco is
covered bytheECmarket organization onrawtobacco andtherefore nolonger subject tothe
Tobacco Monopoly.
Theproduction andtheprocessing ofmanufactured tobacco remain reserved tothe
Tobacco Monopoly. According toArticle 71oftheActconcerning theconditions ofaccession
andtheadjustments totheTreaties onwhich theUnion isfounded, which ispartofthe
Accession Treaty, Austria progressively adjusts asfrom thedateofaccession itsmonopoly
ofmanufactured tobacco soastoensure that,atthelatest threeyears fromthedateofaccession,
nodiscrimination regarding theconditions under which goods areprocured andmarketed exists
between nationals ofMember States oftheUnion. Theexclusive import rightshallbeabolished
atlatest onexpiry ofaperiod ofthree years from thedateofaccession, bytheprogressive
opening, asfrom thedateofaccession, ofquotas fortheimport ofproducts from Member
States. Atthebeginning ofeachofthethree years under consideration, Austria isobliged
toopenaquota calculated onthebasis ofthefollowing percentages ofnational consumption:
15percentforthefirstyear, 40percentforthesecond year, 70percentforthethirdyear.
These quotas shallbeopentoalloperators, without restriction, andproducts imported under
these quotas mustnotbesubject toanexclusive marketing rightatwholesale trade level. As
regards retail saleofproducts imported under quotas, disposal ofsuchproducts toconsumers
must becarried outinanon-discriminatory manner. Importation ofmanufactured tobacco
from thirdcountries however remains reserved tothemonopoly administration.
Themonopoly authority istheFederal Ministry ofFinance (anditssubordinated
authorities). Themonopoly authority isresponsible forfixing prices ofmanufactured tobaccoG/STR/N/1/EEC
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(except forproducts imported under theaforementioned quotas), forpublishing several prices
andforgranting monopoly licences.
TheeconomicadministrationofthemonopolyiscarriedoutbytheAustrianTabakwerke
AG(formerly Österreichische Tabakregie). Thesingle shareholder ofthiscompany isthe
Federal Republic ofAustria. After Austria 'saccession totheUnion onlytheproduction and
theimport ofmonopoly goods from third countries and-basically -trade withsuchgoods
arereserved totheAustrian Tabakwerke AGOperators established intheEuropean Union
mayapply forlicences aswholesale traders totheFederal Ministry ofFinance. Until
1January 1998 wholesale trade withmanufactured tobacco fromother Member States ofthe
European Union willonlybelegalasfarasthequantities imported intoAustria donotexceed
theaforementioned quotas. Asfarastrade withmonopoly goods isnotcarried outbythe
Austrian Tabakwerke AG(orbyawholesale trader), itisreserved totobacco retailers
contractually bound totheAustrian Tabakwerke AG. Theretailers needamonopoly licence,
which istobegranted bytheFederal Ministry ofFinance.
Until 31December 1994 theimportation ofmonopoly products wasreserved tothe
monopoly administration, asfarasthemonopoly provisions didnotprovide forexemptions.
Since 1995 onlycommercial imports ofmonopoly goods from thirdcountries aresubject to
themonopoly. However, there aregeneral exemptions forgoods imported bythemonopoly
administration andgoods which areexempted fromimport duties. Furthermore, theFederal
Ministry ofFinance isauthorized topermit inindividual cases theimport ofmonopoly goods
which areforpersonal useandnotdestined fortrade.
Thedomestic selling prices oftobacco products (except forproducts imported under
theaforementioned quotas) arefixed bytheFederal Minister ofFinance. These prices have
tobeapproved bytheMain Committee ofParliament.
Theexport prices oftobacco products aredetermined bythecosts ofproduction and
theconditionsprevailingonmarketsabroad.Themark-uponimportedtobaccoproductsconsists
ofthetotalinternal selling costs (especially alltaxes, margin charged ontheresale andother
charges) plustheprofit margin realized ondomestically-produced tobacco products ofthiskind.
Therelationbetweensalepricesofimportedtobaccoproductsandthesalepricesofdomestically-
produced tobacco products equals therelation between thecostprices oftheimports andthe
production costsofdomestically-produced products. They aresubstantially onthesame level
considering existing differences inquality andtheabove-mentioned mark-up.
TheAustrianTabakwerkeAGasmonopolyadministrationinprincipledoesnotconclude
long-term contracts with thesuppliers oftobacco. Orders areplaced according tothe
requirements. Purchases from abroad areundertaken inaccordance with commercial
considerations andtaking intoaccount customers 'tastes. Bearing inmind Austria 'scharacter
asacountry oftourism, high-quality foreign tobacco products areimported inorder tosatisfy
demand offoreign tourists.
Asaprinciple itisnotincumbent ontheAustrian Tabakwerke AGtofulfilcontractual
obligations undertaken bytheGovernment. Quotas sometimes granted within theframework
oftrade arrangements, mainly forrawandmanufactured tobacco, donotconstitute astrict
obligation topurchase those quantities.
(b) TheAlcohol monopoly -partially -covers theproduction, thecleansing (refining) and
theimportation ofethyl alcohol andthetrade withethyl alcohol.G/STR/N/1/EEC
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Theproduction ofalcohol falling within CN-code 2207andtheproduction ofalcohol
frompotatoes, cereals, otherproducts containing starch andfrombeetsisreserved todistilleries
working forthemonopoly administration.
The"Verwertungsstelle desÖsterreichischen Alkoholmonopols", anagency which is
responsible forthecommercial administration oftheAustrian alcohol monopoly andwhich
issupervised bytheFederal Ministry ofFinance, hastocalculate thedomestic demand for
ethylalcohol every year. Eachdistillery working forthemonopoly administration mayhand
overacertain fixed quantity of(raw) alcohol tothe"Verwertungsstelle", which inturnhas
thealcohol purified (distilled) byprivate enterprises andfinally stores andsellstherefined
products. Theproduction monopoly isaimed atgranting aprice tothedistillers (farmers)
which ishigher thantheinternational market prices, thusallowing them adequate profits.
Theprices foranyethyl alcohol handed overtothe"Verwertungsstelle" andthefees
paidforpurifying thisalcohol, aswellastheprices foranyalcohol soldbythemonopoly
administration arefixed bytheFederal Minister ofFinance. Thedomestic selling prices of
thisalcohol havetobeapproved bytheMain Committee ofParliament.
Basically alcohol falling within theCN-code 2207 mayonlybesoldbywarehouses
which sellalcohol bothinbulkquantities andasretailers insmaller quantities. Thepurpose
ofthisprovision istofacilitate themonitoring ofanytrade withethyl alcohol. However, the
monopoly provisions provide forexemptions, especially foroperators dealing under acontract
withthe"Verwertungsstelle" orselling smaller quantities topharmacies orchemist 'sshops.
Theimportationofunmanufacturedethylalcoholandalcoholicbeveragesfromcountries
outside theEuropean Union ("third countries") isreserved tothemonopoly administration.
Apart fromethanol imports bythe"Verwertungsstelle" foritsownrequirements, imports are
carried outbyprivate enterprises. Inaccordance withdomestic demand, withregard toexisting
international agreements butalsobearing inmind Austria 'scharacter asacountry oftourism,
theFederal Minister ofFinance grants import licences toprivate enterprises inaliberal manner.
Themonopoly provisions alsoprovide forexemptions from theimport monopoly, e.g.for
alcohol which isexempted fromimport duties andforadditional quantities ofalcohol brought
intoAustria bytourists.
Products falling within CN-code 2208 arecovered bytheEEA Agreement. Until
1January 1996Austria hastoremove customs duties forspirituous beverages andundenatured
ethylalcohol withanalcoholic strength byvolume oflessthan80percentvol.,falling within
CN-code 2208, gradually. Since theentry intoforce oftheEEA Agreement import licences
forthese products areawarded automatically, inanon-discriminatory manner, which means
thattheymerely serve forstatistical purposes andforcalculating thedomestic demand. This
regime continues tobeapplicable according toArt.72oftheActconcerning theconditions
ofaccession andtheadjustments totheTreaties onwhich theEuropean Union isfounded.
Intracommunity trade withalcohol falling within CN-code 2207 wasliberalized completely
by1January 1995.
(c) There arenostatetrading activities inthefieldofsalt(cf.1.).
IV. Statistical information
Therelevant datafortheyear1994 havealready beennotified.G/STR/N/1/EEC
Page8
V. Additional information
None.