Reasons for Vitorino’s recommendations on private copying and reprography levies: the general “leviability” of products and the country of destination principle in cross-border transactions

Consumers enjoy increasing possibilities to make private copies (for instance of CDs) and to store them on multiple devices. The same applies as regards reprographic copies. The need to compensate for such acts of private copying will not vanish from one day to the next. Therefore, although the importance of levy systems will probably decline over time, they will not be simply abolished in the near future, as some stakeholders would prefer.

The general “leviability” of media, device or equipment should solely depends on whether a product is technically capable of making copies. Whether a product is subject to a levy or not should be left to Member States and they could ‘translate’ the ‘harm’ sustained by the rightholder into the decision of which products should be subject to a levy and which tariffs should apply. It could be done via (i) a shift of the liability to pay the levy to the entity selling to the end user or, alternatively, through clear and predictable ex ante exemption schemes, (ii) ensuring the visibility of the levy to the final customer, and (iii) more coherence with regard to the process of setting levies, in particular through a common pan European definition of ‘harm’, and some basic procedural requirements applicable to the process of levy setting.

Levies should only be collected in the country in which the final user has his residence. This is the country where the reproduction will most likely be made and, therefore, also the country where the ‘harm’ will occur. While some stakeholders support the country of destination approach, others argue that levies should only be collected in the Member State where a product is manufactured, or where it enters the EU for the first time, regardless of where the product will be finally used for private copying purposes (country of origin approach). As a consequence, it would no longer be possible to collect the levy in any other Member State. In their view, the main advantage of such a solution would be that a levy must only be paid once, and that moving a product across borders within the EU would not attract further levies. The product could simply be imported for the first time into the EU in e.g. a Member State where levy tariffs are extremely low, or where levies (on that product) do not even exist at all.

Collect levies in cross-border transactions exclusively in the Member State in which the final customer resides.