EU Member-states Will be Able to Export 1600 Tons of Cigarettes to Serbia Annually

Source from:  Balkans.com (cy)  05/21/2014

As of July 1, EU member-states will be able to export 1,600 tons of cigarettes to Serbia annually, at a reduced customs rate of 15%, which has resulted from the months-long Belgrade-Brussels talks following Croatia's admission to the EU and the agreed quota equals the quantity of annual exports of Croatian cigarettes to Serbia. Although local tobacco industry representatives support Serbia's EU course, they are concerned about the influence of that agreement on their own business.

The Serbian Parliament's EU Integrations Committee has adopted a report on the supplementary protocol to the Stabilization and Association Agreement with the EU, which enables privileged import of cigarettes at a reduced customs rate. That means that as of July 1, EU member-states will be able to export 1,600 tons of cigarettes to Serbia annually, at a reduced customs rate of 15%. For higher quotas, the rate shall amount to 53.6%, as it is now. The protocol has resulted from the months-long Belgrade-Brussels talks following Croatia's admission to the EU. Croatia wanted to retain a privileged position for export of cigarettes to the Serbian market, which it acquired as a CEFTA region member-state.

Upon admission to the EU, Croatia received the same treatment as other member-states, which implies higher customs rate for exports to Serbia. As it is official Brussels that represents Croatia's interests, the talks commenced and the proposed quota equalled the quantity of exports of Croatian cigarettes to Serbia at the time. Belgrade entered the negotiations with the position that, should it accept the request, Serbia should be approved aditional quantities for export of other products to the EU market. Serbia has obtained increased quotas, so it will be able to export by 4,300 more hectoliters of wine, while fish export quotas have been increased by 26 tons and sugar export quotas by 1,000 tons.

According to the president of the Serbian Chamber of Commerce, Željko Sertić, the reached agreemetn forms part of Serbia's EU and common market accession process. He said that the state should apply some benefits to help the local tobacco industry and reduced negative effects on its business activities. Serbia has three large cigarette manufactures, which have invested more than one billion euros in the tobacco industry. Those are multinational companies „Philip Morris", „British American Tobacco" and „Japan Tobacco International", which are interested in continuing their business in Serbia.

In 2013, they produced a total of seven thousand tons of cigarettes and tripled their exports, especially to the Asian market, above all, to Japan and China. They also contribute to the Serbian budget by paying tax, contributions and excise tax. What interestd them most is on the basis of which criteria the quota is to be distributed. They are interested in taking part in the privileged export of cigarettes to Serbia from their European affiliates. However, the preparations would take much time and it is only the Rovinj Tobacco Factory from Croatia that has been prepared as they have already exported cigarettes in accordance with Serbian regulations. If the quota is based on the first on border principle, it is the Croatian manufacturer that is to have the advantage and if the market participation principle is applied, it is the foreign companies with factories in Serbia that have greater chances. The significance of this question is best testified to by the fact that the value of the agreed quota amountes to some EUR 50 million, which sum is to amount to twice as much after Serbia joins the EU. Enditem