STATE TRADING
REPLY TO THE QUESTION FROM THE EUROPEAN UNION[1]
REGARDING ICELAND's NEW AND FULL NOTIFICATION[2]
The following communication,
dated and received on 13 May 2024, is being circulated at the request of the
delegation of Iceland.
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Question
It would appear that the Act on Trade in
Alcohol and Tobacco No. 86, 23 June 2011 as amended by Act No. 126/2011 and Act
No. 69/2014
(https://www.vinbudin.is/english/Portaldata/1/Resources/um_atvr/log_og_reglur/act_on_trade.pdf) states that the
State Alcohol and Tobacco Company of Iceland (ÁTVR) has a legal monopoly on the
retail sale and distribution of alcohol, cf. Article 10 of the Alcoholic
Beverages Act. The ÁTVR has a legal monopoly on the wholesale of tobacco in
Iceland. The Alcohol and Tobacco Trading Act provides that ÁTVR handles the
importing and purchasing of ethyl alcohol, alcoholic beverages and tobacco, and
their distribution and sale on the Icelandic market, while the Alcohol Act
gives ÁTVR the exclusive right to the retail sale of alcoholic beverages in
Iceland.
Could Iceland please confirm if this
understanding is correct, whether ÁTVR would be considered as a State Trading
Enterprise pursuant to the WTO working definition, and provide more information
on the scope of operation of ÁTVR?
Reply:
We thank the EU for their question. The State
Alcohol and Tobacco Company of Iceland (ÁTVR) does enjoy a monopoly on the
retail distribution of beverages with alcohol content above 2.25% and the
wholesale of tobacco products within Iceland. The company has, however, a legal
obligation to guarantee producers and suppliers of alcohol the possibility of
selling their products in ÁTVR retail stores. It is furthermore responsible for
the collection of tobacco and alcohol related taxes and for ensuring alcohol and
tobacco products are labelled in accordance with Icelandic legislation. It does not through its operations engage in, have any influence
over, or possess the ability to influence the international trade of said
products.
Iceland is therefore of the opinion that the State Alcohol and Tobacco Company
of Iceland (ÁTVR) does not constitute a state trading enterprises within the
meaning of Article XVII:4(a) of the GATT 1994 and the working definition set
forth in the Understanding on the Interpretation of Article XVII.
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