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PR(96)08: The EFTA Surveillance Authority withdraws case against Iceland before the EFTA Court

14.10.2002

The EFTA Surveillance Authority has today asked the EFTA Court to discontinue the proceedings in a case brought by the Authority against Iceland for failure to comply with provisions of the EEA Agreement on internal taxation.

According to Article 14 of the EEA Agreement, no State party to the Agreement shall impose on the products of other State parties any internal taxation in excess of that imposed on similar domestic products or of such a nature as to afford indirect protection of other products. The obligation became effective on 1 January 1994, when the EEA Agreement entered into force.

In considering that Iceland had failed to adjust to the requirements of Article 14 of the Agreement its legislation concerning a commodity tax levied on a wide range of products, the Authority on 18 January 1996 brought proceedings before the EFTA Court. In the Authority's view, the provisions concerning the basis for the assessment of the tax and the payment of the tax contained elements which had a discriminatory or protective effect in favour of products produced in Iceland.

As the Icelandic Government has now admitted that the provisions concerned were indeed incompatible with Article 14 of the EEA Agreement, and as amendments to the commodity tax legislation have effectively removed the discriminatory elements disputed by the Authority, there is no longer any reasons for seeking a judgment by the EFTA Court on the matter.

For further information, please contact Håkan Berglin, Director, Legal & Executive Affairs, tel. 286 18 30.

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