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En En Notice to Members European Parliament 2019-2024 Committee on Petitions 16.3.2020 NOTICE TO MEMBERS Subject: Petition No 0293/2019 by Michele Canesi (Italian), on behalf of the Campione d’Italia Citizens’ Committee, bearing 1 605 signatures, against the inclusion of the municipality of Campione d’Italia in the EU customs territory and in support of its continued status as Swiss territory 1. Summary of petition The petitioner describes the specific geographical and legal situation of Campione d’Italia. This n Italian exclave is administratively attached to the Province of Como and politically forms part of Italy, even though it lies wholly on Swiss territory. He points out that, for customs purposes, this municipality has always been considered Swiss territory both under the relevant Swiss regulations and in consuetudinary international law. The petitioner considers that the recent Directive (EU) 2019/475, which has included both the Italian municipality of Campione d’Italia and the Italian waters of Lake Lugano in the EU customs territory, is unlawful and unacceptable. Directive 2008/118/EC on excise duty also applies to this territory. The petitioner is concerned about being left without essential public services (health care, ambulances, fire brigade, waste collection and disposal, transport, post, telephones/Internet, sewerage, and road maintenance), which Switzerland alone is in a position to provide, given that, physically, Campione d’Italia is completely separated from the rest of Italy. He also argues that the change is unlawful in international terms because it was not first agreed with Switzerland and the Canton of Ticino and fears Swiss retaliation against the local population because of this. 2. Admissibility Declared admissible on 8 August 2019. Information requested from Commission under Rule 227(6). 3. Commission reply, received on 16 March 2020 CM\1201343EN.docx PE648.532v01-00 EN United in diversityEN The Commission’s observations The petitioner refers in his petition to Community Directive 2018/0124. This reference is the Council reference number for the Commission proposal for a Directive which was ultimately adopted as Council Directive (EU) 2019/4751. This Directive is not, however, the act that provided for the inclusion of Campione d’Italia and the Italian waters of Lake Lugano in the customs territory of the Union. Regulation (EU) 2019/4742 amending the Union Customs Code (UCC) is the Regulation that provided for the inclusion of the two territories in the EU customs territory. Meanwhile, Council Directive (EU) 2019/475 amended Council Directive 2008/118/EC3 and Council Directive 2006/112/EC (VAT Directive)4 so as to, respectively, bring the two Italian territories within the scope of application of the EU excise framework while maintaining their exclusion from the EU Value Added Tax (VAT) regime. The customs and excises changes concerning Campione d’Italia are due to take effect from 1 January 2020. These two amendments were implemented following a request of the government of Italy in 2017. Italy officially motivated its request by saying that the isolated geographical position of Campione d’Italia and related economic disadvantages had historically justified the exclusion of Campione from the customs territory but that these disadvantages no longer applied. The request was also motivated by Italy’s wish to react to Switzerland’s unilateral move in 2005 to bring Campione d’Italia into its customs territory5. Italy informed the Commission and Member States6 that this move by Switzerland, and the consequent imposition of Swiss VAT in Campione, has had a negative impact on Campione citizens and economic operators; they face road controls by Swiss police and fines for “smuggling” in respect of goods bought in Italy and intended to be brought into Campione. Italy and Switzerland discussed several options to solve the Campione problem in bilateral talks that started in 2008. In these talks, Switzerland made it clear that the main concern on its side was the need to avoid having a place within its territory where Swiss citizens do not pay customs duties and VAT on purchases. As no other solution seemed possible, Italy asked the Commission to make a proposal for the inclusion of Campione in the EU customs territory and in the EU excise regime (because the latter is equivalent to the excise regime applied in Switzerland). At the same time, Italy asked for Campione to be kept outside the scope of the VAT Directive given the difference between the Swiss and Italian VAT rates (8% v. 22%). Instead, Italy wishes to introduce a local sales tax in Campione, at a rate equivalent to the Swiss VAT rate so as to ensure a level playing field for economic operators in Campione vis-à-vis their Swiss counterparts. In the Commission’s view, the request from a Member State to change the customs status of a 1 Council Directive (EU) 2019/475 of 18 February 2019 amending Directives 2006/112/EC and 2008/118/EC as regards the inclusion of the Italian municipality of Campione d'Italia and the Italian waters of Lake Lugano in the customs territory of the Union and in the territorial application of Directive 2008/118/EC, OJ L 83, 25.3.2019, p. 42–43. 2 Regulation (EU) 2019/474 of the European Parliament and of the Council of 19 March 2019 amending Regulation (EU) No 952/2013 laying down the Union Customs Code, OJ L 83, 25.3.2019, p. 38–41. 3 Council Directive 2008/118/EC of 16 December 2008 concerning the general arrangements for excise duty and repealing Directive 92/12/EEC, OJ L 9, 14.1.2009, p. 12–30. 4 Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax, OJ L 347, 11.12.2006, p. 1–118. 5 631.0 Legge sulle dogane (LD) del 18 marzo 2005, Articolo 3. 6 https://ec.europa.eu/transparency/regexpert/index.cfm?do=groupDetail.groupMeetingDoc&docid=12210 PE648.532v01-00 2/3 CM\1201343EN.docx EN part of its territory over which it exercises sovereignty was legitimate, particularly in light of Italy’s motivation for that request as explained to the Commission and Member States. It follows that it is for Italy to take all the measures necessary to ensure proper and smooth implementation of the new customs and tax status of Campione d’Italia, both in regard to the citizens concerned and in regard to Switzerland. These measures would include ensuring the provision of all essential public services in the territory of Campione d’Italia and ensuring the smooth functioning of customs controls. The Commission would like to reassure the petitioner that the inclusion of Campione d’Italia in the customs territory will not impact on the right of the residents in Campione to move freely. Free movement of persons is ensured at the border between Switzerland and Italy by virtue of the Schengen acquis which is fully applicable to Switzerland7. Concerning the alleged violation of international customary law and the petitioner’s fears of retaliation by Switzerland, Italy, as noted above, engaged in exchanges and discussions with Switzerland from 2005 onwards in an attempt to find a solution to the Campione problem. In the Commission’s discussions with Italy prior to launching the tax and customs proposals for legislation, Italy confirmed that Switzerland had no objection to the change of status of the territory. Swiss customs also confirmed this to the Commission. Therefore, the Swiss authorities were not only aware of the Italian plan concerning the inclusion of Campione in the customs territory, but also apparently welcomed a solution that put an end to years of discussions. As for the customs formalities to be applied from 1 January 2020, the Commission understands that the two administrations are currently engaged in talks at political and operational level in order to find practical and flexible solutions that will not disrupt the movement of goods and persons between the two countries. Conclusions Taking into account the above, and noting that an action is ongoing before the General Court of the Union by which the applicant seeks in particular the annulment of Regulation (EU) 2019/474 and that Council Directive (EU) 2019/475 be declared void, the Commission does not consider it appropriate to respond positively to the petitioner’s request. In addition, the Commission notes that Italy, as a Member State entitled to exercise sovereignty over its national territory and as a Member State responsible for managing customs on the ground under the Union Customs Code (UCC), is working bilaterally with Switzerland in order to provide practical and flexible solutions to ease as much as possible the movements of persons and goods at the Swiss/Italian border. Nevertheless, the Commission has asked to be informed regularly about progress in the Swiss/Italian discussions and stands ready to provide assistance to address any difficulties in the technical implementation of the new customs regime at the border. 7 Council Decision of 27 November 2008 on the full application of the provisions of the Schengen acquis in the Swiss Confederation (2008/903/EC), OJ 5-12-2008, L 327/15. CM\1201343EN.docx 3/3 PE648.532v01-00 EN.
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