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EC issues warning on Caribbean rum quotas
Impact International / March 1, 1996

By Larry Luxner

Caribbean rum distillers are protesting what they say are unfair duties being levied on light rum exports by German, Dutch and other European Union countries, following an EU decree last October that light rum wouldn't be assessed any duties after Jan. 1, 1996.

"There's been an administrative misunderstanding," an EC official in Brussels told the Inter Press Service news agency, stressing that the foul-up wasn't deliberate. "Customs officials in the member states just haven't realized that imports of light rum are now free."

Light rum represents about 80% of the region's 244,000 hectoliters in rum exports to Europe. Dark or traditional rum, meanwhile, is subject to an annual quota of 58,000 hectoliters -- to be increased by 3,000 hectoliters a year until 2000, after which the quota will be eliminated. This was done to temporarily preserve trading advantages for the French overseas departments of Guadeloupe and Martinique, which produce dark rum.

Although the EU liberalized light-rum imports in order to promote Caribbean industrial development, EU officials never advised their member countries' customs offices of the change. Ironically, Germany and the Netherlands -- two countries named in the protest -- actually voted in favor of liberalizing light rum imports when the issue came to a ballot last year.

According to IPS, the Commission was alerted about the problem in mid-January. Protests have since been lodged by the West Indies Rum and Spirits Producers Associa-tion, and by individual Caribbean governments. Since then, EU officials have sent out letters to all 15 member governments warning them to stop taxing Caribbean light rum. "We're asking for a clarification," the official said. "Clearly, customs officials cannot violate an EU regulation."

The EU says any duties unlawfully demanded by European customs officials will be paid back to the rum exporters. In the meantime, however, Caribbean rum distillers aren't happy. "We are very disappointed with the Dutch and German governments' deci-sion," Evan Brown, chairman of the West Indies Rum and Spirits Producers Association in Jamaica, was quoted as saying. "After a long and hard struggle to achieve equity in the rum market, we never expected that this would happen."

Gerard Porsius, managing director of Breitenstein Products Ltd., a subsidiary of Guyana's Demerara Distillers Ltd., said his company doesn't intend to pay duties to either Holland or Germany. "We have received verbal assurance from customs that if we deliver a letter of protest upon receipt of such duties, the matter will be dealt with in March, by which time the duty would have been removed."

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