MercoPress. South Atlantic News Agency

EU and Uruguay reach agreement on whisky import taxes

Uruguay’s whisky imports are almost 30 million USD

European Union closed an investigation into Uruguayan taxing of spirit imports after the country removed “unfair barriers” avoiding a complaint at the World Trade Organization.

The EU opened the probe after the Scotch Whisky Association said obstacles including a discriminatory excise tax hindered sales in Uruguay. Other barriers included a lack of transparency of excise taxes in general, exclusion of whiskies matured for three or more years from the lowest category of taxation and requirements to affix tax stamps on imported whiskies and pre- pay excise taxes at the time of customs clearance.

“All of these barriers have been addressed,” the European Commission, the EU’s executive, said in a statement from Brussels.

The volume and value of exports of Scotch whisky to Uruguay have climbed more than 30% to 18.2 million pounds (29 million USD) since the law change was enacted, said Martin Bell, international affairs manager for the Scotch Whisky Association.

“This is an important market for us in Latin America and this had an effect on trade flows, so we’re very pleased,” Bell said from Edinburgh. “The deal was concluded very quickly, but it was just a question of making sure everything was delivered.”

The Scotch Whisky Association complained to the EU in 2004 because rather than using the actual transaction value of liquor at the point of first sale as the taxable base, Uruguay divided the spirits into categories on a price-per-litre basis, putting the EU products in the highest-priced category.

Uruguay agreed to change its legislation so there is a single tax rate, removing the discrimination, the commission said. “I am delighted that we have solved this issue without having to resort to WTO litigation” said EU Trade Commissioner Catherine Ashton.