Luxembourg

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MARKET ACCESS

 

Import regulations and customs duties  - Distribution - Transportation of goods - Standards - Patents and brands


Import regulations and customs duties

Regulations
In accordance with its European Union membership, Luxembourg applies the European Union (EU) rules that are in force in all European Union countries. While the EU has a rather liberal foreign trade policy, there is a certain number of restrictions, especially on farm products, following the implementation of the CAP (Common Agricultural Policy): the application of compensations on import and export of farm products, aimed at favouring the development of agriculture within the EU, implies a certain number of control and regulation systems for the goods entering the EU territory.
Moreover, for sanitary reasons, regarding Genetically Modified Organisms (after being allowed in the European territory), their presence should be systematically specified on packaging. Beef cattle bred on hormones is also forbidden to import.
The BSE crisis (often called the "mad cow disease") urged the European Authorities to strengthen the phytosanitary measures to make sure of the quality of meats entering and circulating in the EU territory. The principle of precaution is now widespread : in case of doubt, the import is prohibited until proof is made of the non-harmfullness of products.

 


Customs duties
Since the first of January 1993, the European Union, of which Luxembourg is part, has been a single market, without any customs barriers, which ensures free circulation of the goods. On May, 1st of 2004, ten "candidate countries" became new members of the European Union: Cyprus, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, the Slovak Republic, and Slovenia. Trade within the European Union is totally free from customs duties, provided that the country of origin of the goods is one of the 25 European Union Member States. Nevertheless, when introducing goods into Luxembourg, exporters shall fill in an intrastat declaration.
When the country of origin of the goods which are exported to Luxembourg is not part of the European Union, customs duties are calculated Ad valorem on the CIF value of the goods, in accordance with the Common Customs Tariff (CCT).

The duties for non-European countries are relatively low, especially for manufactured goods (4.2% on average for the general rate), however textile, clothing items (high duties and quota system) and food-processing industry sectors (average duties of a 17.3% and numerous tariff quotas, PAC) still know protective measures.
In order to get exhaustive regulations and customs tariffs rates regarding their products, exporters shall refer to the TARIC code and its database, which includes all applicable customs duties and customs trade policy measures for all the goods.

Moreover, many bilateral and multilateral agreements have been signed by the European Union, in order to define specific customs duties with the following countries:

- Custom agreements with Australia, Canada, United States, Mexico and South Korea.

- The EU-EFTA (European Free Trade Association) Agreement was signed in 1972 with Iceland, Liechtenstein, Norway and Switzerland.

- Free trade agreements with Bulgaria and Romania that hope joining the European Union in 2007.

- Mediterranean Agreements, concerning: Turkey, Israel, Jordan, Morocco, Palestinian Authority, Tunisia, Egypt, Lebanon and Syria.

- The ACP agreements, with 95% of the tariff lines with a rate of a 0% for developing countries in Africa, the Caribbean Islands and Pacific. The Cotonou Agreement, signed in the year 2000, defines the new EU-ACP partnership.

- The Generalised System of Preferences (GSP): 54% of the tariff lines are at 0% for developing countries outside the ACP framework.

To get an exhaustive list of the foreign trade agreements of the European Union, click here.

>> To get further information on customs policies in the European Union, please check the exhaustive report by the European Commission.

 


Import taxes
Excise duties are also levied on certain products, especially on spirit.

>> To get further information on VAT rates in Luxembourg, please check the list of VAT rates applied within the European Union, as well as the Government web site.

>> More detailed information on excise duties is available concerning alcoholic beverages, tobacco products, energy products on the European Commission website.

 






Distribution

The Grand Duchy of Luxembourg is considered amongst the elite class of the European Union due to its balanced budget, its low rate of unemployment, and its GDP growth. In 2004, its GDP reached 31.1 billion dollars with a per capita GDP of 47,926 dollars, the highest in the world. Thus, the Luxembourg consumer is ready to pay for expensive products provided he gets good quality.


The Business to Consumer (B to C) market
The importance of general trade (retail, wholesale, automobile sales and repair ) has been on the decline since 1985. Trade represented 12.2% of the total value-added economy of the country in 1985, as against only 9.5% in 2001.
The distribution market in Luxembourg is concentrated around 4 big groups:
- the national group Cactus , leader in the distribution sector in Luxembourg and owns 12 stores throughout the country.
- the group Louis Delhaize, which is the 2nd largest player in the country’s distribution system. It has stores such as Cora, Match and Smatch. The group Louis Delhaize is not to be confused with the Delhaize le Lion group which is of Belgian origin and has been in Luxembourg under the eponymous name Delhaize. This company achieved a turnover of 18.8 billion euros worldwide in 2005.
- the group Monopol with 9 stores in Luxembourg.
- the Auchan group, with 1 hypermarket employing 650 people in 2004.
These 4 groups share together this market of 455,000 inhabitants. The purchasing power of the people of Luxembourg being the highest in the world (source: Report-2000 of the Union of Swiss Banks), the distribution sector benefits from high per capita spending which is 70% higher than those of the neighbouring Belgians and Dutch. Distributors are trying to meet the demanding needs of the people of Luxembourg; for example by selling high-end perfumes in supermarkets.

The Business to Business (B to B) market
The rise and spread of shopping centres is strictly regulated in Luxembourg. The law of 4th November 1997 imposes a ceiling on the size of stores, thus discouraging the setting up and expansion of large retailers. The aim of this law was to save local small stores in order to maintain equilibrium between them and supermarkets.

Distributors or agents are the best forms of setting up in the country. Generally speaking,, they cover an area beyond Luxembourg comprising Belgium and the Netherlands.
There are 3 official languages in Luxembourg:
- French, which is the legal language.
- German and Luxembourgeois, which are used as administrative and judicial languages.

The most promising sector in Luxembourg is no doubt the financial services sector which constituted more than 30% of the country’s GDP in 2004, a growth of 7.8 points since 1995. Luxembourg has a favourable legal framework and fiscal system which has given it a financial position of power. The financial sector is thus the driving factor behind the country’s growth. This sector employs 12% of the population and contributes more than 40% of tax revenues to the State.
This is followed by trade, transportation, and communications which continue to be huge despite a small twist: its contribution to GDP growth rose by only 5% this year, thus constituting nearly 21% of GDP in 2004. The industrial sector also revived its activities in 2004 with a growth of 20.5% after a period of around 10 years during which average growth was only 3%.


 


Transportation of goods

By road
The road network covers 2.863 km among which 115 km are highways and 837 are national roads. The programme for the road network widening by the Ministry of Transport represents 88% of the future budget, giving advantage to the road transport to the detriment of the detriment of railway transport. The two main projects are the construction of the north road, on the portion Luxembourg-Mersch and the connection Luxembourg-Sarrebruck by a four-track road.


By rail
The network extends over 617 km among which 435 km are main lines and stations and 182 km are engineering tracks. The railroad of Luxembourg (CFL) has the monopoly on the network and railway transport and is planning, in the future, to modernise equipment and to extend the capacity of lines with a 75.7 billion budget. In 1998 the transportation of international freight reached 531 million kilometric tons or 15.6 million tons that is a 4% increase as compared with 1997. The transport of national freight underwent a slow decrease (-2.6%) with 90 million kilometric tons that is 2.6 million tons.


By sea
Luxembourg has an access to the North Sea by the Moselle and the Rhine. 131 shipowners are authorised in Luxembourg and 89 vessels (among which 65 from Luxembourg) are registered there, for a gross tonnage of 1 million tons. The navigation network covers 37 km and counts 3 locks. The transportation of goods is 80% ensured by Mertert's port and represents 1.9 million tons.


By air
There is a single airport in Luxembourg. Passengers transport is ensured by one company Luxair which provides with full planes assistance of all the companies serving Luxembourg, it ensures the management of the duty-free shops and has a company of catering (Airrest S.A).
The company Cargolux is the only one ensuring the transport of freight. In 1998 it transported 322,000 tons of goods against 273,700 in 1997. A second license of handling has been granted to a new company Cargo Centre Luxembourg AS".




Standards

The body of standardisation and certification in Luxembourg is the Service of the Energy of the State (SEE). Luxembourg is a member of the European Committee of Standardisation (CEN), the European Committee of Electronic Standardisation (CENELEC), the European Institute of Standardisation of Telecommunication (ETSI), the International Organization of Standardization (ISO) and the Committee(commission) International Electrotechnics.
Certain products, whatever their origin is, should be submitted to the technical rules which give rise to a ratification meeting EC standards.



Patents and brands

The body in charge of the protection of intellectual property in Luxembourg is the Service of the Intellectual property of the Ministry of the Economy.
You can obtain information on patents and trademarks with the center of public research Henri Tudor.
Concerning industrial property, Luxembourg signed the Paris Convention.
Concerning trademarks, a single recording allows to protect these at the same time in Luxembourg, in Belgium and in the Netherlands.

Texts currently applying to patents/brands

  Text Date entered into law Period of validity Comment
Patent Patent Law May 24, 1998 20 ans :
Trademark Uniform Benelux Law on Marks December 2, 1992 10 years, renewable for further 10-year periods :
Design Uniform Benelux Designs Law July 13, 1973 : :



 

Last modified in 2006 - ongoing update
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