Announcement
On the joyous occasion of the expiry of Valtour’s Ltd travel agency license on June 30th 2008, we hereby want to inform our esteemed clients (along with our faithful readers at the Iceland Tourism Board, in various Ministries, and other bureaucratic backrooms, who we feel sorry to disappoint), that it has been decided to conduct the company’s activities in strictly the same manner after that date as it has before it.
The reasons for that are twofold.
A) License. A comprehensive study of the working environment of travel agencies in the other Nordic countries in particular, and in the European Economic Area in general has revealed the the requirement of a travel agency license is unknown there, in other words, that such licenses are not necessary, nobody demands them. In this same EEA area, on the other hand, it is an essential requirement that certain rules of competition shall prevail throughout, and furthermore, it is also a fundamental requirement that the idea of a “level playing field” also prevails. It is obvious that the cumbersome, time consuming and costly Icelandic agency license system, which was introduced by way of the Tourism Act of parliament, the Althing, #73/2005, creates a highly unfavorable working environment for Icelandic travel agents from a competition point of view, vis-à-vis similar agencies from the EEA area. Therefore, our company Valtours Ltd, has decided , by a formal complaint the EEA commission ESA, case nr 64180, to not to accept this state of affairs, and reserve the right to continue it’s operations, similar to it’s fellow European counterparts, without a travel agency license, after the fateful date of June 30th 2008.
B) Guarantees. By the above mentioned Tourism Act #73/2005, Chapter V, a very expensive and, cumbersome system of control in the matter of travel agency guarantees was also made mandatory by law. On the other hand, in a European resolution (Directive 2006/123/EC) on the Services in the Internal Market, a diametrically opposite stand, on the organisation of such professional guarantees, was taken: In the first instance, in the Directive’s preamble # (99), it says that it “is not necessary for an obligation of appropriate insurance to be laid down by law”, that on the contrary “it should be sufficient, if an insurance obligation is part of the ethical rules laid down by professional bodies”. In the second instance, in this Directive, it is almost taken for granted,(Article 23.1) that service providers will have acces to insurance companies which are willing to provide them with a “professional liability insurance” coverage, and that the amount of that insurance should be a flexible matter of negotiations between the service provider and the insurance company, the amount being precisely targeted to the nature and the extent of the risk. Now, as it happens, what is considered matter of fact and commonly available services in mainstream continental Europe, are by no means so in off the beaten track Iceland. Even though some very limited professional liability insurance (mainly for lawyers, dentists, etc against litigation) can be found in this country, there has never (as far as we know) been an insurance company willing to offer an insurance of the kind required by the above mentioned law #73/2005, and therefore nobody for an Icelandic travel agency to negotiate with on the amount or the premium of such an insurance. Insurance companies specialized in this field operating in the countries of mainland Europe, have, for some unknown reason, only offered their services on a country to country basis, in each local market and never offering it across boundaries. Valtours Ltd, having several times requested such cross border services and always having come up with a flat refusal, have also mentioned this strange state of affairs in it’s above mentioned complaint to ESA, requesting that the Authority carry out a so-called “sector inquiry” into the insurance sector in the EEA area.
Conclusion While waiting for the outcome of such a sector inquiry and that similar insurance services become available in Iceland as in the rest of the EEA area, our travel agency Valtours Ltd, has decided to take matters into it’s own hands, by negotiating with an old and financially sound holding company, Vallía sf, to make available the necessary guarantee funds, as required by the European Directive 90/314/CEE on Inclusive Tours. The amount of this guarantee, deposited in an escrow account at Landsbanki Islands, Mjodd Branch, Reykjavík, is as of July 1st 2008, ISK 1,300,000.- and it will be revised quarterly according to the risk involved, by negotiation between the two companies, following the EEC guidelines. Thus, Valtours will continue to provide equally good and reliable service to it’s clients as it has for the past thirteen years.
On behalf of Valferðir Ltd
Björn Jónsson, CEO.