Five import companies are calling on the Icelandic government to reimburse them for import tariffs they paid on agricultural products, Fréttablaðið reports. The companies are claiming ISK 3 billion ($28m/€24m) in reimbursements, and an additional ISK 1 billion ($9m/€8m) in interest payments.
Páll Rúnar M. Kristjánsson, supreme court judge and lawyer for the Icelandic Federation of Trade, is representing the companies. The lawyer has won similar cases against the government in recent years for members of the Icelandic Federation of Trade. He says the bill will continue to grow as long as the government keeps collecting the illegal tariffs. Iceland’s system of giving ministers the power to impose taxes in the form of import tariffs is unconstitutional, Páll says. He hopes to receive a ruling in the District Court of Reykjavík before the end of the year.
Ólafur Stephensen, Secretary General of the Icelandic Federation of Trade, says it’s both illegal and unwise to assign ministers the power to decide on agricultural import tariffs. They can have a doubly negative effect on the consumer, he asserts, both by raising the prices of imported products, and making it possible for domestic producers to sell their products at higher prices. “If it were generally justified to protect domestic production with tariffs then that production would have to meet demand. Here there are import tariffs on many types of food products that are not even produced in Iceland. One has to ask what interests are being protected by that,” Ólafur stated.
Þorgerður Katrín Gunnarsdóttir, Reform Party Chairperson and former Minister of Fisheries and Agriculture, says the lawsuit is a sign that it is time to switch up the system. “There is a pressing need to re-evaluate the agricultural industry and nobody needs to be afraid of that,” Þorgerður Katrín stated. “It’s possible to support farmers in other ways than protecting them with import tariffs.” The politician called protective tariffs “an old-fashioned approach,” saying her party supports a free and open market.