10. IMPORT DUTIES ON CERTAIN WEAPONS AND
Draft Council Regulation suspending import duties on certain weapons and military equipment.
|Legal base:||Article 26 EC; qualified majority voting
|Department:||HM Customs and Excise
|Basis of consideration:||EM of 1 November 2002
|Previous Committee Report:||None
|To be discussed in Council:||14-15 November 2002
|Committee's assessment:||Politically important
10.1 The draft Council Regulation concerns the importation
of military goods into the Community and would provide for the
suspension of import duties on certain weapons and military equipment
and on related parts, components and sub-assemblies (listed by
reference to the Customs Code at Annex 1 to the draft) when imported
for use by the military forces of a Member State. It also applies
to goods used for testing of items listed in Annex 1. Import duty
would not be charged at the time of importation of the goods provided
that they were accompanied by a certificate issued by the competent
authority (for the UK the Ministry of Defence) of the Member State
for whose military forces the goods are destined.
10.2 Following discussion of a revised Presidency text
of the proposal by the Working Party on Customs Union (Common
Customs Tariff) a complete draft proposal is expected to go to
the Council on 14-15 November 2002 for political agreement.
The Government's view
10.3 The Chief Secretary to the Treasury (Mr Paul Boateng)
"The Government welcomes the Presidency compromise text.
It would allow Member States to suspend customs duty on the importation
of certain weapons and military equipment. The current proposal
therefore potentially brings to an end the legal uncertainty in
the Community about the suspension of such customs duties which
had resulted in the Commission commencing infraction proceedings
against 12 Member States, including the UK.
"In April 2002, the UK conceded the Commission's infraction
case, having regard to the relative weakness of the legal case
and the fact that interest would have been accruing on arrears.
The UK settled payment of Own Resources in terms that reserved
our right to reopen the issue in the future. The total amount
paid was some £74.5m (£90.4m less the amount which Member
States are allowed to retain in respect of collection costs).
No request for interest has yet been made by the Commission. Should
the Regulation resolve the legal position (particularly in relation
to the other outstanding cases) the Commission will be asked to
refund the previously paid funds.
"The Government will wish to ensure that scope of the Regulation
fully accommodates current UK practice in relation to military
importations and provides a stable regime for the future. The
Government welcomes the fact that the new Regulation protects
national security interests by requiring information to be provided
to the Commission at a sufficiently high level (overall number
of certificates issued, total value and gross weight) to prevent
10.4 The Minister tells us also that the amount of customs
duties suspended, which would accrue to the Community Budget as
Own Resources, depends on the level of military importations in
any one year. The Ministry of Defence estimates that on average
the duty relief is worth about £30m per year.
10.5 It is important that imports to meet the UK's
military requirements should not be subject to duty. We note with
approval the Minister's expectation that this draft Regulation
will not only solve the existing problem but allow recovery of
the duty already paid. We are content to clear the document.