Ref. Ares(2020)771574 - 06/02/2020
Excise Contact Group
Brussels, 22 November 2019
Views on raw tobacco
Key points
The problem
The impact
The solution
2
The problem
Diversion of raw tobacco to illicit trade
- > production of illicit tobacco products
- > sold directly at retail as bulk / cut tobacco for
consumers to produce their own smoking tobacco
3
The impact
Loss in tax revenues and enforcement costs borne (affected
stakeholders: tax authorities and law enforcement)
Unfair competition brought about by illicit products (affected
stakeholders: economic operators)
4
The solution
An EU regulation to control
and trace flows of raw
tobacco from the fields
where it is grown and
harvested to the production
EU wide
tax warehouses by
authorising the economic
solution
operators involved
needed
Clarification of the smoking
tobacco definition
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The solution
1) Common administrative regulation of raw tobacco
Reintroduction of a regulatory
Requires a legislative intervention but
framework for the tobacco sector as
without the need to revise the excise
suggested by the Economisti Associati
directive
Study
Several Member States already put in place such licencing scheme (full or partially)
1) benefit all Member States
A harmonised approach would
2) Provide certainty and predictability to
all economic operators
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The solution
2) Clarification of the smoking tobacco definition (Art.5 from 2011/64/EU)
Interpretation to focus on when a product is intended to be sold to the
consumer, i.e. when products are “put up for retail sale”.
2 distinct circumstances for
Intention of retail sale
tobacco products can be deemed
to be “for retail sale”
Put up for retail sale
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Thank you for your attention
www.tobacco-europe.eu
Why EMCS would not solve the problem for raw tobacco?
Using EMCS would be ineffective as tobacco farmers would not be subject to it
Illicit manufacturers would be unaffected by the use of EMCS
EMCS would not affect the movements of raw tobacco not addressed within one Member State or when
imported from Third Countries
Implementation would incur technical difficulties and create disproportionate costs. This would hinder the
frictionless free movement of goods without real benefits
Extending EMCS to products for which it has not been designed, is neither proportional nor justified
Recommendation from Economisti Associati Study not to include raw tobacco in EMCS
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