Working Party on State Trading Enterprises - State Trading - Reply to the question from the European Union regarding Iceland's new and full notification

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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[1] _G/STR/Q1/ISL/1.

[2] _G/STR/N/20/ISL.