Malta concludes Transport Chapter Negotiations and secures four transition periods

Malta and the European Union today concluded negotiations on the Transport Chapter, making Malta only the second of the twelve candidates to provisionally close this chapter. The European Union also confirmed its acceptance of Malta’s requests for transition periods in four areas that fall under this Chapter.

This recommendation for provisional closure of the Transport Chapter brings the total number of chapters closed so far by Malta to eighteen.

The European Union’s acceptance of all four Maltese requests for transition periods was confirmed on Friday afternoon during a meeting in Brussels held at the level of Deputies of the Inter-Governmental Conference on Malta’s Accession to the European Union. The Maltese delegation at this afternoon’s meeting of the accession conference was led by the Chairman of Malta’s Core Negotiating Group, Mr Richard Cachia Caruana.

The transition periods agreed this afternoon are as follows:

• a three year transition period for the retro-fitting of speed limitation devices;

• a two year transition period for the obligatory roadworthiness testing of vehicle suspension and general conditions of the vehicle;

• a three year transition period for the harmonisation of road taxes on Maltese registered heavy vehicles operating exclusively on Maltese territory;

• a two year transition period for the harmonisation of road taxes on Maltese registered heavy goods vehicles that operate internationally.

A new round of discussions was also held this afternoon on the Chapter that deals with the Free Movement of Capital. Broad agreement has now been reached on all but one of the issues falling under this chapter. Further discussions will be held on the issue of the acquisition of property.

During this afternoon’s meeting, the Chairman of the Core Negotiating Group, Mr. Richard Cachia Caruana, welcomed the closure of the Transport Chapter and the agreements that had been reached on the transition periods. He added that closure of this Chapter with Malta is another instance where the principle of differentiation is allowing a candidate that commenced its negotiations at a later date to catch up with those candidates that had commenced their negotiations earlier.

Turning to the Free Movement of Capital Chapter, Mr. Cachia Caruana referred to the agreement that has been reached on aspects dealing with capital movement, payment systems, direct investment and money laundering. He noted that this has been done without any request for any special arrangement on our part. On questions relating to money laundering, Mr. Cachia Caruana described Malta’s high level of preparedness in this area together with the additional measures being taken, including the establishment of the Financial Intelligence Unit.

Summary of Transition Period Requests

Directive 96/96/EC on the approximation of the laws of Member States relating to roadworthiness tests for motor vehicles and their trailers.

The Motor Vehicle (Roadworthiness Test) Regulations, 1998 were passed through Parliament before Malta had reactivated its bid for membership of the European Union. These Regulations were based on manuals issued by the Vehicle Inspectorate of the UK and are therefore fully in line with EU Directives on the subject.

In 1999, in order to minimise the sudden impact of introducing roadworthiness testing of motor vehicles for the first time, the Government decided that the regulations would be introduced in three phases spreading over a period of 5 years.

Phase I which has been in force since October 1999 involves the obligatory testing in all vehicles of steering equipment, lighting equipment, braking systems, side cars and vehicle identification.

Phase II shall be introduced in January 2002 and shall involve the obligatory testing of tyres and wheels and the general items of vehicles. This phase shall include exhaust emission testing.

Phase III of the regulations under the five year plan were scheduled to be introduced in 2005. These tests include the general condition of the vehicle and vehicle suspension.

A two-year transition period until the 31^st December 2004 has been requested for the implementation of Phase III of the motor vehicle test in order to maintain the national programme for phasing-in vehicle roadworthiness tests.

Council Directive 92/6/EEC on the installation and use of speed limitation devices for certain categories of vehicles in the Community

This Council Directive requires that all passenger transport vehicles exceeding 10 metric tonnes g.v.w (referred to as category M3 vehicles) and goods carrying vehicles exceeding 12 metric tonnes g.v.w. (referred to as category N3 vehicle) be equipped with a speed limitation device. The function of a speed limitation device is to prevent the heaviest categories of vehicles and vehicles carrying dangerous goods from over-speeding. Over the years, European studies have revealed that the installation of such devices not only serves to reduce road traffic accidents and deaths on the road but also reduces environmental problems of vehicle exhaust emissions.

The harmonisation of Maltese law in this area of the acquis shallmainly impact on M3 and N3 vehicles manufactured after 1987 that are either:

1. Not equipped with a speed limitation device as standard form the manufacturer
2. Not permitted automatic exemption under EU law due to the nature of use or construction of vehicle.

Malta has asked for a three-year transition period until 31^st December 2005 for the retro-fitting of speed limitation devices to these vehicles in order to increase consumer preparedness and allow for a number of the older vehicles to be naturally removed from circulation through the full implementation of the roadworthiness test.

Directive 1999/62/EEC on the charging of heavy goods vehicles for the use of certain infrastructures

This Directive introduces minimum rates of vehicle tax rates on the heavier goods vehicles (exceeding 12 metric tonnes g.v.w.) that are in circulation within the Community. The objective behind this directive is to bring about fiscal harmonisation between Member States in order to avoid any distortions of competition and to encourage the use of ‘greener’ lorries by introducing tax differentiation between environmentally friendly vehicles and the heavy polluters.

There are around 15 companies in Malta engaged primarily in international road freight transport. These companies are currently required to pay an annual vehicle tax (driving licence fee) of Lm58 per vehicle. The introduction of the EU minimum vehicle tax rates would result in tax increases depending on the weight, axle configuration and suspension mechanism.

The request for a transitional period shall allow for an incremental introduction of higher vehicle taxes in two stages in 2003 and 2004

In the case of heavy goods vehicles (exceeding 12 metric tonnes g.v.w) operating exclusively on national territory as three-year transition period has been requested for the introduction of EU minimum vehicle tax rates.

As with the planned programme of road tax alignment for internationally operating vehicles, the minimum EU rates shall be phased-in over the three years until 31^st December 2005.

Malta has informed the Commission that upon accession to the Union, it shall be exploring the possibility of applying as a member State for exemption implementing the vehicle tax increase in full in the case of vehicles operating exclusively on national territory.