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Cigarettes: Minimum Duty Levels

Volume 687: debated on Wednesday 29 November 2006

My honourable friend the Financial Secretary (John Healey) has made the following Written Ministerial Statement.

I am today laying legislation confirming the introduction of quantitative restrictions on travellers bringing cigarettes from the newest EU member states, who are taking advantage of a derogation allowing them to delay meeting minimum duty levels on cigarettes. The restrictions will apply from 1 January 2007 to cigarettes bought duty-paid in Bulgaria and Romania. From that date, travellers to the UK bringing in cigarettes from Bulgaria and Romania will be restricted, as they are currently, to a limit of 200 cigarettes.

The Excise Duty Points (Etc.) (New Member States) (Amendment) Regulations 2006 and the Customs and Excise Duties (Travellers’ Allowances and Personal Reliefs) (New Member States) (Amendment) Order 2006 allow the UK to maintain these restrictions on travellers who are bringing back cigarettes from Bulgaria or Romania. The Relief for Legacies Imported from Third Countries (Application) Order 2006 makes consequential amendments to the Customs and Excise Duties (Personal Reliefs for Goods Permanently Imported) Order 1992 (S.I.1992/3193) so that its territorial application includes Bulgaria and Romania.

While the minimum duty rates are not met, concerns and uncertainties over the impact of EU enlargement on excise smuggling and cross-border shopping are heightened. Therefore where new member states take advantage of a derogation, existing member states are entitled to maintain the same restrictions on the import of cigarettes bought in those countries for a travellers’ own use, as are currently applied to travellers arriving from third countries.

Imposing restrictions in respect of Bulgaria and Romania will maintain consistency of approach taken by the UK with other countries that have yet to reach the EU minimum rates of duty, extending to Bulgaria and Romania the current restrictions imposed on eight countries that joined in 2004. These restrictions will provide certainty for both travellers and HM Revenue and Customs (HMRC) officers, and will also reduce the front-line cost of countering smuggling.

Once the legislation is passed, HMRC has plans in place to explain the restrictions to the travel industry and general public.