# EUR-Lex - 52009PC0370 - EN

Important legal notice

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# 52009PC0370

**Proposal for a Council Regulation temporarily suspending autonomous Common Customs Tariff duties on imports of certain industrial products into the autonomous regions of Madeira and the Azores /* COM/2009/0370 final - CNS 2009/0125 */ **

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[pic] | COMMISSION OF THE EUROPEAN COMMUNITIES |

Brussels, 7.9.2009

COM(2009) 370 final

2009/0125 (CNS)

Proposal for a

COUNCIL REGULATION

temporarily suspending autonomous Common Customs Tariff duties on imports of certain industrial products into the autonomous regions of Madeira and the Azores

EXPLANATORY MEMORANDUM

Context of the proposal

Grounds for and objectives of the proposal

The regional authorities of Madeira and Azores have requested with the support of the Portuguese Government to introduce autonomous tariff suspensions in order to strengthen the competitiveness of the local economic operators and thus securing a more stable employment on these islands.

General context

Madeira and Azores belong to the outer most regions of the Community for which special measures may be foreseen in accordance with Article 299 (2) of the Treaty establishing the European Community in order to overcome the economic disadvantages these areas suffer due to their geographical situation.

Existing provisions in the area of the proposal

Similar provisions have been introduced with Council Regulation (EC) No 704/2002 for the Canary Islands.

Consistency with the other policies and objectives of the Union

Not applicable.

Consultation of interested parties and impact assessment

Consultation of interested parties

The members of the Commission's expert working group "Economic Tariff Questions" had been consulted and didn't raise any economic objections against the suspensions proposed.

Collection and use of expertise

There was no need for external expertise.

Impact assessment

An individual impact assessment of the measure as such is not possible given the fact that the suspension of duties is only one measure in a whole row measures enacted for the improvement of the social and economic situation on these islands. To this effect the Commission publishes frequently communications setting out the effects of these measures for the different outer most regions. The last communication was forwarded to the Council on 17.10.2008 (COM/2008/0642 final)

Legal elements of the proposal

Summary of the proposed action

The proposed suspension of the Common Customs Tariff duties allows the local economic operators in Madeira and Azores to import a certain number of raw materials, parts, components and finished products duty free. In order to avoid any misuse or change in traditional trade flows of these goods it is foreseen that goods benefitting from duty suspension are subject to end use controls.

Therefore, finished goods will have to be used by local companies on the islands for a period of at least two years before they could be sold freely to other companies located in the other part of the customs territory of the European Community.

Raw materials, parts and components will have to be used for agricultural purposes, and industrial transformation and maintenance in the autonomous regions in order to benefit from the duty suspension.

Legal basis

Article 299 (2) of the Treaty establishing the European Community

Subsidiarity principle

The proposal falls under the exclusive competence of the Community. The subsidiarity principle therefore does not apply.

Proportionality principle

The proposal complies with the proportionality principle for the following reasons:

The form of action is regularly used as instrument to strengthen the competitiveness of the economic operators. The imposition of end use controls in accordance with the provisions of the Community Customs Code and its implementing provisions is an established procedure in this context and does not create significant supplementary administrative burdens to the regional and local authorities and economic operators.

Choice of instruments

Proposed instruments: Regulation.

The treaty does no allow any other means for the implementation of such measures

Budgetary implication

The proposal has implications for the Community budget. The application of the suspension will lead to loss in revenue of Community's own resources.

2009/0125 (CNS)

Proposal for a

COUNCIL REGULATION

temporarily suspending autonomous Common Customs Tariff duties on imports of certain industrial products into the autonomous regions of Madeira and the Azores

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community, and in particular Article 299 (2) thereof,

Having regard to the proposal from the Commission[1],

Having regard to the opinion of the European Parliament[2],

Having regard to the opinion of the European Economic and Social Committee[3],

Having regard to the opinion of the Committee of the Regions[4],

Whereas:

1. In August and December 2007 the regional authorities of Madeira and Azores requested with the support of the Portuguese Government an autonomous suspension of the common customs tariff duties for a number of products in accordance with Article 299 (2) of the Treaty establishing the European Community. They justified their requests that in view of the remoteness of those islands the economic operators suffer severe commercial disadvantages which have negative effects on demographic trends, employment and social and economic developments.

2. The local economies of Madeira and the Azores are to a large extent dependant on national and international tourism, a fairly volatile economic resource. It is determined by factors on which the local authorities and the Portuguese government have hardly any influence. As a result the economic development of Madeira and the Azores is severely restrained. In these circumstances it is necessary to support those economic sectors which are less dependent on the tourist industries in order to compensate the fluctuations of the touristic sector and thus to stabilise local employment.

3. Council Regulation (EEC) No 1657/93 of 24 June 1993 temporarily suspending the autonomous Common Customs Tariff duties on certain industrial products intended to equip the free zones of the Azores and Madeira[5]) did not have the wished effect in the last years before its expiry on 31.12.2008. This is very likely due to the fact that these suspensions laid down in that Regulation have been limited to the free zones of the Azores and Madeira and have therefore no longer been used in the last years before their expiry. It is therefore appropriate to provide for new suspensions which are not restricted to industries located in free zones but can benefit to all types of economic operators located on the territory of those regions. The scope of commercial sectors benefitting from the suspensions should therefore cover the fishery, agricultural, industrial and service sectors.

4. In order to ensure economic effect of the suspensions laid down in this Regulation it is appropriate to extend the range of products to finished goods for industrial use, to raw and other materials and to parts and components used for agricultural purposes, industrial transformation, maintenance and other services.

5. In order to give a long term perspective to investors and enable economic operators to reach a level of industrial and commercial activities which stabilises the economic and social environment in the regions concerned, it is appropriate to suspend in full the Common Customs Tariff duties for certain goods for a period of 10 years starting on 1 January 2010.

6. In order to ensure that only economic operators located on the territory of Madeira and the Azores benefit from these tariff measures, the suspensions should be made conditional on the end use of the products in accordance with Council Regulation (EEC) 2913/92 of 12 October 1992 establishing the Community Customs Code[6] and Commission Regulation (EC) No 2454/93 of 2 July 1993 laying down provisions for the implementation of Council Regulation (EEC) No 2913/93 establishing the Community Customs Code[7].

7. In order to allow efficient operation of the suspension the authorities of Madeira and the Azores should take the necessary implementing measures and inform the Commission thereof.

8. The Commission should be permitted to adopt, if necessary, temporary measures designed to prevent any speculative movement of deflection of trade until a definitive solution for that movement will be adopted by the Community institutions.

9. Amendments to the Combined Nomenclature may not give rise to any substantive changes to the nature of the suspension of duties. The Commission should therefore make the necessary amendments and technical adaptations of the list of goods for which a suspension applies.

HAS ADOPTED THIS REGULATION:

Article 1

From 1 January 2010 to 31 December 2019 the Common Customs Tariff duties applicable to imports into the autonomous regions of Madeira and the Azores of finished goods for agricultural, commercial or industrial use listed in Annex I shall be suspended in full.

These goods shall be used in accordance with the provisions of Council Regulation (EEC) 2913/92 of 12 October 1992 establishing the Community Customs Code and Commission Regulation (EC) No 2454/93 of 2 July 1993 laying down provisions for the implementation of Council Regulation (EEC) No 2913/93 establishing the Community Customs Code for a period of at least 24 months after the release into free circulation by economic operators located in the autonomous regions of Madeira and the Azores.

Article 2

From 1 January 2010 to 31 December 2019 the Common Customs Tariff duties applicable to imports into the autonomous regions of Madeira and the Azores of raw materials, parts and components listed in Annex II, and used for agricultural purposes, and industrial transformation or maintenance in the autonomous regions of Madeira and the Azores, shall be suspended in full.

Article 3

The competent authorities of Madeira and the Azores shall take the measures necessary to ensure compliance with Article 1 and 2.

Those authorities shall inform the Commission of those measures before 1 July 2010.

Article 4

The suspension of duties referred to in Articles 1 and 2 shall be subject to end-use in accordance with Articles 21 and 82 of Council Regulation (EEC) No 2913/92 and to the controls provided for in Articles 291 to 300 of Regulation (EC) No 2454/93.

Article 5

1. Where the Commission has reasons to believe that the suspensions laid down in this Regulation has led to a deflection of the trade for a specific product it may, in accordance with the procedure referred to in Article 7(2), provisionally repeal the suspension by Commission Regulation for a period not longer than 12 months. Import duties for products for which the suspension has been provisionally repealed shall be secured by a guarantee, and the release of the products concerned for free circulation in the autonomous regions of Madeira and the Azores shall be conditional upon the provision of such guarantee.

2. When the Council decides on a proposal from the Commission within the 12 months period that the suspension should definitively be repealed the amounts of duties secured by guarantees shall be definitively collected.

3. If no definitive decision has been adopted within the 12 month period in accordance with paragraph 2, the securities shall be released.

Article 6

When necessary the Commission may in accordance with the procedure referred to in Article 8(2) make such amendments and technical adaptations to Annexes I and II of this Regulation as are required as a consequence from amendments of the Combined Nomenclature.

Article 7

1. The Commission is assisted by the Customs Code Committee.

2. When reference is made to this paragraph, Articles 4 and 7 of Decision 1999/468/EC shall apply.

The period laid down in Article 4 (3) of Decision shall be set at three months.

Article 8

1. The Commission is assisted by the Customs Code Committee.

2. When reference is made to this paragraph, Articles 5 and 7 of Decision 1999/468/EC shall apply.

The period laid down in Article 5 (6) of Decision shall be set at three months.

Article 9

This Regulation shall enter into force on the third day following that of its publication in the Official Journal of the European Union .

It shall apply from 1 January 2010.

This Regulation shall be binding in its entirety and directly applicable in all Member States.

Done at Brussels,

For the Council

The President

ANNEX I

Finished goods for agricultural, commercial or industrial use

CN Code[8] | CN Code | CN Code | CN Code |

Budget line | Revenue[10] | period, starting dd/mm/aaaa | [Year 2010 –2019] |

Article 120 | Impact on own resources | 01/01/2010 - 31/12/2019 | - 0.12/year |

4. ANTI-FRAUD MEASURES

Checks on the end-use of all the products covered by this Council Regulation will be carried out in accordance with Articles 291 to 300 of Commission Regulation (EEC) No 2454/93 laying down provisions for the implementation of the Community Customs Code.

5. OTHER REMARKS

To enable the economic operators to make long-term investment decisions the proposed suspensions should remain in force for 10 years

It replaces the measures introduced by Council Regulation (EEC) No 1657/93 which expired on 31.12.2008

Estimated cost of this operation

On the basis of the information provided by the regional authorities, the impact on the loss of revenue resulting from this Regulation may therefore be estimated at MEUR 0.16 (gross amount, expenses incurred in collection included) x 0.75 = MEUR 0.12/year for the period 01.01.2010 - 31.12.2019.

The loss of revenue in Traditional Own Resources shall be compensated by Member States contributions based on the GNI.

[1] OJ C , , p. .

[2] OJ C , , p. .

[3] OJ C , , p. .

[4] OJ C , , p. .

[5] OJ L 158, 30.6.1993, p. 1

[6] OJ L 302, 19/10/1992, p.1

[7] OJ L 253 11.10.1993, p.1

[8] CN codes applicable on 1 January 2009, adopted by Commission Regulation (EC) No 1031/2008 of 19 September 2008 amending Annex I to Council Regulation (EEC) No 2658/87 on the tariff and statistical nomenclature and the Common Customs Tariff (OJ L 291, 31.10.2008, p. 1)

[9] CN codes applicable on 1 January 2009, adopted by Commission Regulation (EC) No 1031/2008 of 19 September 2008 amending Annex I to Council Regulation (EEC) No 2658/87 on the tariff and statistical nomenclature and the Common Customs Tariff (OJ L 291, 31.10.2008, p. 1)

[10] Regarding traditional own resources (agricultural duties, sugar levies, customs duties) the amounts indicated must be net amounts, i.e. gross amounts after deduction of 25% of collection costs.