EN    EN EN 
EN    EN  COMMISSION OF THE E UROPEAN COMMUNITIES 
Brussels, 25.6.2008 
SEC(2008) 2067 
  
COMMISSION STAFF WORKING DOCUMENT 
 
accompanying the 
GREEN PAPER 
 
Future relations between the EU and th e Overseas Countries and Territories 
{COM(2008) 383 final} 
EN 2   EN COMMISSION STAFF WORKING DOCUMENT 
Future relations between the EU and th e Overseas Countries and Territories 
The present Commission staff wo rking document comprises the annexes to the Green paper 
on future relations between the EU and th e Overseas Countries and Territories.  
Annex I 
The diversity and common ch aracteristics of the OCTs 
There are huge differences between the OCTs themselves in terms of the degree of autonomy 
vis-à-vis the Member States to which they are linked, but also in the economic and social field 
and as regards their geographical characteristics and climate.  
The diversity in the relationships of the OCTs  with their Member States should not be 
underestimated. Even though in most cases the Me mber State remains competent for defence, 
foreign affairs, public order, justice and monetary policy (a lthough some OCTs also have a 
certain degree of autonomy in one or more of these areas), the powers devolved to the local 
authorities of the OCTs under the constitutions of  the Member States concerned vary greatly, 
including between OCTs linked to the same Member  State. Moreover, the status of an OCT in 
relation to its Member State can evolve as a result of a democratic process, not only in the direction of greater autonomy or eventual independence, but in some cases also towards 
strengthening the ties with the Member State.  
There are also huge differences between the OCTs  in terms of financia l transfers from their 
related Member States, which are often the only contributor besides the Community. In 
certain cases, the level of financial transfers from a Member State to its OCTs is very 
significant, whereas in other cases the Member State considers some of its OCTs to be no 
longer in need of direct bilate ral development assistance. The latter is the case for all the 
British OCTs, except Montserrat, Pitcairn and Saint Helena. Consequently, Anguilla, the 
Falkland Islands, and the Turks and Caicos Islands in particular rely solely on the Community for financial assistance for their sustainable development. 
The level of economic and social developmen t also differs from one OCT to another. 
According to the Developmen t Assistance Committ ee of the Organisation for Economic 
Cooperation and Development (OECD/DAC)
1, Wallis and Futuna is the only lower middle 
income territory, whereas Anguilla, Mayotte, Montserrat, Saint Hele na and the Turks and 
Caicos Islands are upper middle income territori es. In contrast, all the other OCTs are not 
considered by the OECD/DAC as eligible for official development assistance (ODA), since in 
particular Greenland, New Caledonia, French Po lynesia, Aruba, the Ne therlands Antilles and 
the Falkland Islands enjoy a relatively high stan dard of living, while the standard of living in 
the British Virgin Islands and the Cayman Isla nds (and Bermuda) is even  very high compared 
to the Community average.  
                                                 
1 List effective from 2006 for reporting on 2005, 2006 and 2007. See www.oecd.org/dac . 
EN 3   EN Of the OCTs with a permanent local population, seven are located in th e Caribbean, four in 
the Pacific, one in the Indian Ocean, two in th e North Atlantic and two in the South Atlantic2. 
This means that there are considerable differenc es between the OCTs in terms of geographical 
characteristics and climate, but also in terms of  isolation from the outsi de world. In particular, 
it is easier for some OCTs than for others to cooperate with nei ghbouring countries or 
territories. Such cooperation is especially difficult for OCTs like the Falkland Islands, Saint 
Helena, Greenland and Saint-Pier re and Miquelon, because of ge ographical, political or other 
reasons. 
However, despite the immense diversity be tween the OCTs, they also share common 
characteristics: none of them is a sovereign country, they are all parliamentary democracies, 
they are all islands, the size of their populations is very small and their ecologi cal richness is 
extraordinary compared to continental Europe. Th ey are all relatively vulnerable to external 
shocks and are in general de pendent on a narrow economic base  that mostly revolves around 
services. They are also heavily reliant on impor ts of goods and energy. In general, exports of 
goods from the OCTs to the EU or within th eir respective geograp hical regions remain 
limited. 
The trade balances of the OCTs are usually negative. Most OCTs have very few natural 
resources and most goods need to be imported, in particular from the EU (which is, for 
example, the case for most French OCTs and the Falkland Islands, Saint Helena and dependencies, and Greenland) or from major regional trade partners (like the US for a number 
of OCTs in the Caribbean). The economies of the OCTs are usually not  very diversified, and 
in several OCTs, especially in the Caribbean a nd the Pacific, are to a great extent dependent 
on tourism. As mentioned above, quite a few OC Ts are also heavily dependent on financial 
transfers from their Member States. However, there are a few OCTs with important natural 
resources or processed products that account fo r the bulk of their exports and constitute an 
important additional source of revenue, albeit ra ther volatile: nickel from New Caledonia, 
pearls from French Polynesia, ylang-ylang fr om Mayotte, fish from Greenland and from the 
Falkland Islands, etc. Moreover, several OCTs in the Caribbean are important international 
financial centres, while oil refi ning plays an important role in the economies of the Dutch 
OCTs. Some OCTs possibly also dispose of o il reserves. Yet the vulnerability of the OCTs 
can lead to a rapidly declining economy, as illustrated by the effects of the volcanic eruption in 1995 in Montserrat or the collapse of the fi shing industry in Saint-Pierre and Miquelon in 
the early 1990s. 
The total OCT population is close to 1.25 million i nhabitants, which clearly illustrates that 
individual population sizes are extremely small compared to other countries or territories. 
Once again, there are significant differences betw een the OCTs, the populations of the British 
OCTs being exceptionally small: all the British OCTs together (including Bermuda, which is the largest British OCT) account for only about  196 000 inhabitants, which corresponds to 
around 16% of the total OCT population. Saint-Pi erre and Miquelon also has a very small 
population, whereas Mayotte, New Caledonia, Fren ch Polynesia, Aruba and the Netherlands 
Antilles constitute the ‘larger’ OCTs. 
                                                
 
2 In the Caribbean: Aruba, Netherlands Antilles, A nguilla, British Virgin Islands, Cayman Islands, 
Montserrat, Turks & Caicos Islands. In the Pacifi c: New Caledonia, French Polynesia, Wallis and 
Futuna, Pitcairn. In the Indian Ocean: Mayotte. In the North Atlan tic: Greenland, Saint-Pierre and 
Miquelon. In the South Atlantic: Falkland Islands,  Saint Helena and dependencies. The OCTs that 
currently do not have a permanent local population are: French Southern and Antarctic Territories, 
South Georgia and the South Sandwich Islands, British Antarctic Territory, British Indian Ocean 
Territory. 
EN 4   EN Annex II 
The 20 OCTs covered by the Overseas Association Decision 
 
1. OVERVIEW PER OCT 
1.1. Greenland 1.11. Cayman Islands 
1.2. New Caledonia and Dependencies 1.12. Falkland islands 
1.3. French Polynesia 1.13. South Georgia and South Sandwich Islands 1.4. French Southern and Antarctic Territories 1.14. Montserrat 
1.5. Wallis and Futuna Islands 1.15. Pitcairn 
1.6. Mayotte 1.16. Saint Helena and Dependencies 1.7. Saint Pierre and Miquelon 1.17. British Antarctic Territory 
1.8. Aruba 1.18. British Indian Ocean Territory 
1.9. Netherlands Antilles 1.19. Turks and Caicos Islands 
1.10. Anguilla 1.20. British Virgin Islands 
1.1. Greenland 
EN 5   EN Constitutional 
relations An extensive form of self-govern ment (Home Rule Authority) was 
established by the Home Rule Ac t No 577 of 29 November 1978 in 
Greenland. Under this act, sovereignty continues to rest with the central 
authorities of Denmark. Some matters such as external relations, defence and monetary policy also remain the exclusive province of the central authorities and may not be transferred to Greenland Home Rule. Specific provisions apply to the mine ral resources of Greenland (joint 
decision-making power). There is c ooperation on external  relations to 
ensure Greenland’s interests are ta ken into account by Denmark in its 
foreign policy. The Danish Governme nt must thus consult the Home 
Rule authority before entering into treaties that particularly affect Greenland’s interests. The Home Rule authority is likewise obliged to consult the central authorities befo re adopting measures liable to 
prejudice Denmark’s interests (e.g. fisheries regulati on). Upon request, 
the central authorities may authorise the Home Rule authority to conduct international negotiations on  purely Greenland affairs (section 
16(3) of the Act). Moreover, since June 2005, Greenland may negotiate and conclude agreements under public  international law on behalf of 
Denmark that concern areas for wh ich full responsibility has been 
transferred to Greenland. The Home Ru le Act of 1979 is expected to be 
revised in the near future followi ng year-long consultations between the 
Danish and Greenlandic parliaments.  
Historical ties with Denmark Vikings reached the island in the 10 th century but Danish colonisation 
only began in the 18th century, and Greenland was made an integral 
part of Denmark in 1953. Greenland was granted self-government in 1979 by the Danish parliament, which came into effect the following year. Denmark continues to exercise  control of Greenland’s foreign 
affairs in consultation with Greenland’s Home Rule Government. Greenland joined the European Co mmunity with Denmark in 1973, but 
withdrew in 1985 after a national referendum in 1982. 
Capital city Nuuk 
Geography Greenland, the largest island in the wo rld, is located between the Arctic 
Ocean and the North Atlantic Ocean, northeast of Canada and 
northwest of Iceland, and has an area of 2 166 086 km². 
Population 56 648 (Jan. 2007) 
Financial 
assistance 
 • Not eligible for Official Deve lopment Assistance (2006, source: 
www.oecd.org/dac)  
• Community financial assistan ce 2007-2013: EUR 25 million (2006 
prices) per year for the sustainable development of Greenland (apart from fisheries). 
• DK: EUR 411.39 million in 2007 as an annual direct subsidy to the 
Greenlandic budget.  
EN 6   EN Per capita GDP EUR 32 030 (2005) 
Major industries Fishing, tourism and minerals.  
Major trading 
partners EU (Denmark, UK, Germany), US, Japan, China and Russia.  
Membership of 
regional integration organisations Greenland is a party to the Nordic C ouncil and participates on an equal 
footing in its work, but does not have decision-making powers. The Nordic Atlantic Cooperation and th e West Nordic Foundation provide 
the basis for cooperation with Icel and and the Faeroe Islands. As 
regards the environment, Greenland ta kes part in the Arctic Council. It 
is a member of the Inuit Circumpol ar Conference, an NGO within the 
UN which is active in the area of cooperation between the Inuit 
peoples.  
Main environmental challenges Greenland is particularly vulnerable to  the adverse effects that climate 
change is expected to have, given its dependence on the temperature of 
the sea for its fishing stocks. Furthe rmore, if the Greenland ice sheet 
were to completely melt away, sea levels would rise by more than 7 m and Greenland would most likel y become an archipelago.  
1.2. New Caledonia and Dependencies 
Constitutional 
relations The French Constitution classifies New Caledonia as a ‘sui generis 
collectivity’ of the French Republic, i.e. it has a unique status. Some State competences have been progressively and irreversibly transferred to New Caledonia, which is organised into three provinces 
(Province Nord, Province Sud, Provin ce des Iles Loyauté), which are 
competent in all the matters in whic h the State, the territory and the 33 
districts are not competent. Execu tive power in New Caledonia is 
exercised by a local government. The State is represented by the Haut-
commissaire  of the French Republic. 
Historical ties with 
France New Caledonia has been French since 1853, when Admiral Fébvrier-
Despointes took possession of the island in the name of France. It was 
a penal colony from 1864 to 18 97. During World War I, New 
Caledonia provided the French Pacifi c Battalion with 2 170 soldiers, a 
quarter of whom died in battle. Du ring World War II, the island joined 
the Free French Forces in 1940 and the Pacific Battalion was reconstituted and fought in North Africa and Europe. US and Allied 
forces built a major base in New Caledonia and Nouméa became a military headquarters where one million American soldiers passed through in the Pacific War. 
Capital city Nouméa 
Geography New Caledonia is an archipelago of  18 575 sq km situated in the 
Pacific Ocean, which comprises th e Mainland, Loyalty islands and 
dependencies: the isle of Pines, Belep archipelago and Chesterfield 
islands. The Mainland is the main island and its land area represents 
EN 7   EN almost 90% of the entire teriitor y. Taking into account the inhabited 
islands, the Exclusive Economic Zone is 1 386 588 sq km.  
Population 240 390 (estimation 2006)  
Financial assistance 
 • Not eligible for Official Deve lopment Assistan ce (2006, source: 
www.oecd.org/dac) 
• 10th EDF: EUR 19.81 million  
• FR: EUR 1 161 144 million in 2007  
Per capita GDP EUR 22 734 (est. 2006) 
Major industries Nickel, tourism.  
Major trading 
partners EU (mostly France), Singapore, Au stralia, New Zealand, Japan, 
United States.  
Membership of regional integration organisations Member of the following  regional organisations: 
Secretariat of Pacific Community (SPC), Pacific Islands Development 
Programme (PIDP) 
Associate member of the Pacific Islands Forum. 
Main 
environmental challenges New Caledonia faces three severe environmental challenges: 
- Threats to the rich biodivers ity: New Caledonia’s very high 
biodiversity, which includes large numbers of endemic species, is 
under multiple threats from e.g. th e mining industry, habitat loss, 
introduced predators and competi ng species, and illegal hunting.  
- Pollution and sedimentation of rive rs and lagoon: open-cast hilltop 
mining of nickel causes huge volumes of earth to be washed down to 
the lagoon with heavy tropical rains.  Extensive logging and traditional 
agricultural practices al so pollute and sediment the lagoon. Use of 
sand and coral reefs for construction material also severe. 
- Climate change:
 New Caledonia and in partic ular the Loyalty islands 
(Ouvéa atoll) could suffer most from  sea-level rises. Sea temperature 
rise could have impact on corals (coral bleaching on outer side of reefs). Cyclones causing devastatio n (coastal erosion and retreat). 
 
EN 8   EN 1.3. French Polynesia 
Constitutional 
relations Having been autonomous for nearly 30 years, French Polynesia saw 
its statute evolve in 2004 toward s greater responsibilities and 
reinforcement of its identity. French Polynesia is now an overseas country within the French Republic, which is governed freely and democratically by its elected re presentatives and through local 
referenda. French Polynesia is an ‘overseas collectivity’ under Article 74 of the French Constitution and benefits from ‘legislative speciality’, i.e. French laws are appl icable to French Polynesia only if 
they explicitly provide for this. Furthermore, French Polynesia is 
competent in numerous matters, al though regal competences (defence, 
civil security, justice,  money, diplomacy) are exercised by the French 
State. 
Historical ties with France The fight for influence in the Pacific between France and England 
marked the history of French Polynesia. In 1843, the Tahitian Queen Pomare IV accepted the French Protect orate for all the islands, except 
the Marquesas, which were already c onsidered as French islands since 
Admiral Marchand took possession of them in the name of France in 
1791. In 1880, the islands under the Pr otectorate were annexed to 
France. Polynesia then became a French colony under the name ‘Etablissements français de l’Océan ie’. During World War I, Papeete 
was bombed by the German navy and many Polynesian men joined the French Pacific Battalion. Du ring World War II, Polynesian 
soldiers fought in the French Pacific Battalion and the US army built a military base in Bora-Bora. In 1946, ‘les Etablissements français de l’Océanie’ became a French overseas territory with a local assembly. 
They changed their name to ‘French Polynesia’ in 1958.  
Capital city Papeete 
Geography French Polynesia is situated in the South Pacific. It is composed of 
118 islands with a total land area of 3 600 sq km scattered over a 
maritime area as vast as Europe (2.5 million sq km). The islands are grouped in 5 archipelagos: the Soci ety Islands, the Tuamotu Islands, 
the Marquesas Islands, the Gambier Islands and the Austral Islands.  
Population 259 596 (2007 census)  
Financial assistance 
 • Not eligible for Official Deve lopment Assistan ce (2006, source: 
www.oecd.org/dac) 
• 10th EDF: EUR 19.79 million  
• FR: EUR 1 373 505 million in 2007  
Per capita GDP EUR 17 090 (2004) 
Major industries Tourism, pearls, fisheries, copra. 
EN 9   EN Major trading 
partners EU (mostly France), Singapore, United States of America, China, 
New Zealand, Australia, Thailand, Japan.  
Membership of regional integration organisations Member of the following  regional organisations: 
Secretariat of the Pacific Community (SPC), Pacific Islands 
Development Programme (PIDP). 
Associate member of the Pacific Islands Forum.  
Main 
environmental challenges French Polynesia faces two seve re environmental challenges: 
- Climate change: French Polynesia is one of the Pacific countries/ 
territories that will suffer most from sea-level rises as most islands are 
very low-lying or have infrastructu re on the coast. The impact of sea 
temperature rise on corals is already evident. Cyclones can cause devastation. 
- Degradation of coral reefs and pol lution of lagoons: Coral harvesting 
for use e.g. as construction mate rial, over-fishing, invasive species 
(starfish), pollution from househol ds and tourists, black pearl 
cultivation and pig breeding (cau ses lagoon pollution), urban sprawl 
(building of roads etc on coral reefs). 
Another challenge is waste management.  
1.4. French Southern and Antarctic Territories 
No permanent local population 
1.5. Wallis and Futuna Islands 
Constitutional 
relations Wallis and Futuna is an ‘overseas collectivity’ under Article 74 of the 
French Constitution and benefits from ‘legislative speciality’, i.e. French laws are applicable to Wallis and Futuna only if they explicitly provide for this. A specific feature of Wallis and Futuna is that it is the 
only French territory where kings are legally recognised: they exercise 
customary law.  
Historical overview The Dutch navigators Schouten and Le Maire discovered the Futuna 
and Alofi islands in 1616. In 1767, the English navigator Wallis discovered Uvea (Wallis island). In 1842, the Wallis and Futuna islands opted separately to be  ‘free and independent under the 
protection of France’ and signed treaties of peace and friendship. Wallis and Futuna were placed under a French Protectorate in 1886 and 1887, respectively. A unified prot ectorate was established in 1888 
by a decision taken by the French minister for colonies. In 1942, the 
US army set up a base camp in Wallis. In the referendum on 27 December 1959, 94.4% of the electorate voted in favour of the integration of Wallis and Futuna within the French Republic as an overseas territory. This was put into  effect by the law of 27 July 1961. 
EN 10   EN Since the revision of the French Constitution of 28 March 2003, 
Wallis and Futuna has been an ‘overseas collectivity’. 
Capital city Mata-Utu 
Geography Wallis and Futuna is an archipelago situated in the South Pacific and 
composed of three main islands (Wallis, Futuna and Alofi). Wallis island is 240 km from Futuna island. 
Population 14 944 (2003 census)  
Financial assistance 
 • Lower middle income territory eligible for Official Development 
Assistance (2006, source: www.oecd.org/dac) 
• 10th EDF: EUR 16.49 million  
• FR: EUR 95 291 million in 2007  
Per capita GDP N/a 
Major industries Barter economy 
Major trading 
partners France, Singapore, Australia, New Zealand, Fiji, New Caledonia, 
China.  
Membership of 
regional integration organisations Member of the following regional orga nisations: Secretariat of Pacific 
Community (SPC). 
Observer to the Pacific Islands Forum. 
Main 
environmental challenges Wallis and Futuna faces four severe environmental challenges: 
- Soil erosion and loss of fertility  due to poor agri cultural practices: 
deforestation and stubble-burning are removing surface cover. This causes soil erosion and loss of fertility. 
- Pollution and sedimentation of the lagoon at Wallis: the run-off of 
soil from land leads to turbidity in the lagoon. Excrement from pigs 
and goats also washes into th e lagoon, causing bacteriological 
contamination and eutrophication. 
- Degradation of coral reefs: 25% of corals are at risk and very 
degraded at Futuna. Coral harvesting  for use as construction material. 
Over-fishing and use of destruct ive fishing methods. Pollution of 
lagoon by households, agriculture and pig farming. 
- Climate Change: Temperature rise  affects coral reefs. Cyclones 
break and destroy coral cover and s ubsequent avalanches damage and 
stifle corals lower down the reef. 
EN 11   EN 1.6. Mayotte 
Constitutional 
relations Since 2001, Mayotte has been a ‘collectivité départementale’ 
(departmental collectivity) with in the French Republic. Executive 
power was transferred in 2004 from th e prefect to the president of the 
general council (local assembly elect ed by the inhabitants of Mayotte). 
After the local elections  of March 2008, the general council requested 
for Mayotte the status of ‘département et région d’outre-mer’ (overseas department and region). The local representatives are in 
favour and also wish Mayotte to b ecome an outermost region of the 
European Union. 
Historical overview In 1841, Sultan Andriantsouli gave th e island of Mayotte to France in 
order to prevent external attacks, in particular from the Comoros. 
Mayotte then became a French colony, where slavery was abolished in 1846. From 1886 to 1892, France gathered the three other islands of the Comoros under a protectorate and in 1912 the colony, now called ‘Mayotte and dependencies’, was a nnexed to the French colony of 
Madagascar. In 1946, the Comoros archipelago became a French overseas territory. In December 1974, a referendum was held on the 
independence of the Comoro island s. The inhabitants of Mayotte 
(63.8% of the vote) voted against in dependence. They confirmed their 
choice in a new referendum in 1976 (99.4% of the vote). In December 1976, Mayotte was given the temporary status of a ‘territorial community’ of the French Republic. 
Capital city Dzaoudzi 
Geography Mayotte is located at the entry of  the Channel of Mozambique. It 
constitutes the eastern part of the archipelago of the Comoros. It has 
two principal islands and about th irty small islands strewn over a 
lagoon of more than 1 500 km². 
Population 186 452 (2007 census)  
Financial assistance 
 • Upper middle income territory eligible for Official Development 
Assistance (2006, source: www.oecd.org/dac) 
• 10th EDF: EUR 22.92 million  
• FR: EUR 402 271 million in 2007  
Per capita GDP EUR 3 960 (2001) 
Major industries Ylang-Ylang, aquaculture, vanilla, tourism. 
Major trading 
partners Imports: France, South Africa,  Brazil, Thailand, China. 
Exports: France, Comoros, La Réunion, Madagascar, Mauritius. 
Membership of None.  
EN 12   EN regional integration 
organisations 
Main environmental challenges Mayotte faces two severe environmental challenges: 
- Nature conservation, management of waste and water: lagoon and 
coasts polluted by lack of waste water treatment. Sedimentation of 
lagoon by agricultural practices and soil runoff due to deforestation. Current waste management practice is inadequate. 
- Climate change: sea water temperature rise has caused bleaching and 
death of corals. Coastal zones are narrow and populated. Sea-level rise 
would mean loss of infrastructu re and relocation of population. 
1.7. Saint Pierre and Miquelon 
Constitutional 
relations Saint-Pierre et Miquelon is an ‘o verseas collectivity’ of the French 
Republic under Article 74 of the Fr ench Constitution and Law No 85-
595 of 1985. It benefits from partial ‘l egislative speciality’, i.e. French 
laws are applicable except in the fields where the Territorial Council 
has specific competences (in partic ular customs, taxes and urban 
development).  
Historical ties with France First settled by the French in the early 17th century, the islands 
represent the sole remaining vest ige of France’s once vast North 
American possessions 
Capital city Saint-Pierre 
Geography Located in the North Atlantic O cean, south of Newfoundland, with an 
area of 242 km². There are eight sma ll islands in the Saint Pierre and 
Miquelon group. 
Population 6 125 (2006) 
Financial assistance 
 • Not eligible for Official Deve lopment Assistan ce (2006, source: 
www.oecd.org/dac)  
• 10th EDF: EUR 20.74 million  
• FR: EUR 61 144 million authorised for 2007 
Per capita GDP N/a 
Major industries Fish and fish products, soybeans, animal feed, molluscs and 
crustaceans, fox and mink pelts. 
Major trading partners Spain, Belgium, India, France, US (2006) 
Membership of 
regional integration N/a 
EN 13   EN organisations 
Main 
environmental challenges Climate change may have effects on the size and composition of fish 
stocks, very important for the economy  and way of life. More frequent 
and powerful storms and rising sea le vels may mean further erosion of 
coasts and the submergence of low-lying lands.  
1.8. Aruba 
Constitutional 
relations Aruba is a country forming part of  the Kingdom of the Netherlands. It 
promotes its own interests autonom ously, while the common interests 
of the Kingdom of the Netherlands — such as defence and foreign affairs — are promoted jointly and on an equal footing by the 
countries that make up the Kingdom  (i.e. the Netherlands, Aruba and 
the Netherlands Antilles).  
Historical ties with the Netherlands Aruba was acquired by the Dutch in 1636. It seceded from the 
Netherlands Antilles in 1986 and became a separate, autonomous member of the Kingdom of the Neth erlands. Movement toward full 
independence was halted at  Aruba’s request in 1990. 
Capital city Oranjestad 
Geography 193 sq km island located in the Caribbean, north of Venezuela. 
Population 71 891 (2005)  
Financial assistance 
 • Not eligible for Official Deve lopment Assistan ce (2006, source: 
www.oecd.org/dac)  
• 10th EDF: EUR 8.88 million  
• NL: EUR 154.82 million in 2008 for the promotion of the 
autonomy of Aruba and  the Netherlands Antilles (for Aruba, the 
cooperation programme will cease in 2009).  
Per capita GDP US$22 434 (2005)  
Major industries Tourism, international financial se rvices, oil refining and storage.  
Major trading 
partners USA, Netherlands, Panama, Colombia, Venezuela, Netherlands 
Antilles 
Membership of regional integration organisations Observer to CARICOM  
Main 
environmental challenges Impact of tourism industry, oil refining, desalination, waste and 
sewage on Aruba’s wealthy natural environment, with severe challenges in terms of air and wate r pollution. Aruba is particularly 
vulnerable to the adverse effects that  climate change is expected to 
EN 14   EN have, given its dependence on the tour ist industry and its  low altitude.  
Other environmental challenges in Aruba include the establishment of 
modern legal instruments for designating and managing protected areas, the full implementation of the Ramsar Convention on wetlands, 
and participation in and implemen tation of the Cartagena Convention 
for the Protection and Development of the Marine Environment of the Wider Caribbean Region a nd its three protocols.  
1.9. Netherlands Antilles 
Constitutional 
relations The Netherlands Antilles is a countr y forming part of the Kingdom of 
the Netherlands. It is composed of  five islands: Bonaire, Curaçao, 
Saba, St Eustacius and St Maarte n. The country Netherlands Antilles 
promotes its own interests autonom ously, while the common interests 
of the Kingdom of the Netherlands — such as defence and foreign affairs — are promoted jointly and on an equal footing by the 
countries that make up the Kingdom  (i.e. the Netherlands, Aruba and 
the Netherlands Antilles). Followi ng ongoing constitutional evolution, 
the country Netherlands Antilles w ill be split to form two new 
countries, Curaçao and St Maarten, each forming part of the Kingdom 
of the Netherlands, while Bonaire, Saba and St Eustatius are to strengthen their ties with the Neth erlands by becoming a sort of Dutch 
municipalities. 
Historical ties with the Netherlands In the first half of the 17th century, the islands were conquered by the 
Netherlands from Spain, but over time they have been in the possession of different European po wers. The colonial status of the 
Netherlands Antilles ended in 1954, when the Statute of the Kingdom 
of the Netherlands laid down new constitutional relations between the 
Netherlands, Suriname (until 1975) and the Netherlands Antilles. In 
1986, Aruba — hitherto part of th e Netherlands Antilles — obtained 
the status of a separate coun try within the Kingdom of the 
Netherlands. 
Capital city Willemstad, Curaçao 
Geography The Netherlands Antilles comprise 800 sq km of islands in the 
Caribbean — Leeward islands, located  off the coast of Venezuela: 
Bonaire (288 sq km), Curaçao (444  sq km); Windward islands: Saba 
(13 sq km), St Eustacius (21 sq km), St Maarten (34 sq km).  
Population Netherlands Antilles: 191 780. B onaire: 11 537. Curaçao: 137 094. 
Saba: 1 491. St Eustacius: 2 699. St Maarten: 38 959 (2007). 
Financial assistance 
 • Not eligible for Official Deve lopment Assistan ce (2006, source: 
www.oecd.org/dac) 
• 10th EDF: EUR 24 million  
• NL: EUR 154.82 million in 2008 for the promotion of the 
EN 15   EN autonomy of the Netherlands Antilles and  Aruba (projected to 
decrease gradually to EUR 97 200 in 2012).  
Per capita GNP US$17 474 (2004). 
Per island: Bonaire: EUR 13 650  (2006); Curaçao: EUR 13 128 
(2006); Saba: EUR 11 489 (2004); St  Eustacius: EUR 17 618 (2004); 
St Maarten EUR 13 778 (2006). 
Major industries Tourism, petroleum refining, inte rnational financial services.  
Major trading 
partners USA, EU.  
Membership of 
regional integration organisations Observer to CARICOM, associate member of the Association of 
Caribbean States (ACS). 
Main environmental challenges Impact of tourism, hurricanes, lack of sewage and waste water 
treatment in many areas, poor waste management and pollution in particular from oil refining. Over grazing by goats, donkeys and sheep 
on Bonaire and Curaçao. Although the Netherlands Antilles are home to many endemic species, some are threatened or have become practically extinct. The Netherla nds Antilles ar e particularly 
vulnerable to the adverse effects that  climate change is expected to 
have, given its dependen ce on the tourist industry, the low altitude of 
Bonaire and Curaçao in particular, and the Windward Islands’ exposure to hurricanes.  
1.10. Anguilla 
Constitutional 
relations 
 Anguilla is a British Overseas Te rritory. A UK-appointed Governor 
remains responsible for external affairs, offshore finance, defence and internal security (including the police force) and the public service. All citizens of Anguilla automatically benefit from British citizenship, unless they renounce it. There is an ongoing debate on the future of Anguilla’s status in relation to the UK, which could result in a free association, i.e. complete autonomy internally, with the UK retaining 
only foreign affairs and defence.  
Historical ties with the United Kingdom Colonised by British and Irish settlers in 1650, Anguilla was 
administered as a single federation with Saint Kitts and Nevis from 1958 to 1962. The islanders, believi ng their interests were being 
ignored and wishing to retain thei r direct links with Britain, sought 
separation from the federation in th e 1960s. This disquiet culminated 
in the revolution of 1967. Anguilla came under direct British rule in 
the 1970s and eventually became a separate British Dependent Territory in 1980. 
Capital city The Valley 
EN 16   EN Geography 90 sq km island located in the Caribbean. 
Population 13 600 (2005 est.) 
Financial assistance • Upper middle income territory eligible for Official Development 
Assistance (2006, source: www.oecd.org/dac) 
• 10th EDF: EUR 11.7 million  
• UK: no direct bilateral development assistance 
Per capita GDP US$9 711 (2006) 
Major industries Tourism, construction, government service, international financial 
services, banks and insurance. 
Major trading partners North America (mainly USA), Caribbean Region (CARICOM, St 
Martin/St Maarten and othe r Caribbean countries). 
Membership of 
regional integration organisations Associate member of CARICOM and of the Organisation of Eastern 
Caribbean States (OECS). 
Main environmental challenges Impact of tourist industry on Anguill a’s environment, the richness of 
its habitats and biodiversity. Depe ndent on tourism and therefore on 
the quality of its beaches, its coral reefs, its fish and its wildlife, 
Anguilla is vulnerable to the effects of climate change. Tropical storms and hurricanes are common in this region.  
1.11. Cayman Islands 
Constitutional 
relations The Cayman Islands are a British Overseas Territory with a large 
measure of self-government. A UK-appointed Governor remains 
responsible for the civil service, defe nce, external affa irs and internal 
security. All citizens of the Cayman Islands automatically benefit from British citizenship, unless they renounce it.  
Historical ties with the United Kingdom In 1670, Spain ceded the Cayman Is lands and Jamaica to Britain by 
the Treaty of Madrid. After 1863, the Caymans formally became a 
dependency of Jamaica and the legisl ature of Jamaica had the final say 
over the locally passed laws of the islands. Cayman Brac and Little Cayman were not settled until 1833, and it was not until 1887 that a formal administrative connection between them and Grand Cayman 
was established. In 1959, the islands ceased to be a dependency of Jamaica and became a unit territory w ithin the Federation of the West 
Indies. When the Federation was dissolved in 1962, the Cayman Islands chose to remain under th e British Crown, thereupon receiving 
a revised constitution, which in 1972 was modified to allow for 
directly responsible government.  
Capital city George Town, Grand Cayman 
EN 17   EN Geography 260 sq km island located in the Caribbean. 
Population 53 172 (2006 est.) 
Financial assistance 
 • Not eligible for Official Deve lopment Assistan ce (2006, source: 
www.oecd.org/dac) 
• 10th EDF: no individual allocation  
• UK: no direct bilateral development assistance 
Per capita GDP US$46 590 (2006 est.) 
Major industries Tourism, international financial services, real estate sales and 
development. 
Major trading partners USA.  
Membership of 
regional integration organisations Associate member of CARICOM. 
Main 
environmental challenges Impact of economic and population gr owth and of the tourist industry 
on the ecologically and economically important marine and wetland systems of the Cayman Islands. Besides such pressures on the Cayman Islands’ habitats and biod iversity, the main environmental 
challenges are invasive species, the adverse effects that climate change is expected to have, the is lands’ vulnerability to natural and 
environmental disasters, and wa ste management. The impact of 
development on terrestrial systems is a serious concern: there is a lack 
of protected forest and shrubland habitat to sustain endemic birds, 
plants, and the endangered Blue Iguana. Loss of this habitat will cause a critical loss of biodiversity. 
1.12. Falkland Islands 
Constitutional 
relations The Falkland Islands are a United Kingdom Overseas Territory by 
choice. Supreme authority is vested  in HM The Queen and exercised 
by a Governor on her behalf, with the advice and assistance of the 
Executive and Legislative Councils,  and in accordance with the 
Falkland Islands Constitution. The present constitution dates from October 1985 and includes the Isla nders’ right of self-determination. 
The Governor presides over an Ex ecutive Council composed of five 
members: three elected and two ex-officio (the Chief Executive and the Financial Secretary). In addi tion, the Attorney General and the 
Commander of the British Forces in the Falkland Islands attend by 
invitation. As is usual in British Overseas Territories, the elected 
Councillors have a substantial measure of responsibility for the conduct of their Territory’s affairs. The Governor is obliged to consult 
the Executive Council in the exerci se of his functions (except in 
EN 18   EN specified circumstances, for example on defence and security issues, 
where he must consult and follow the advice of the Commander of the British Forces in the Islands). A review of the Falkland Islands Constitution is currently underway. 
Historical ties with the United Kingdom Although navigators of se veral countries have be en credited with first 
sighting the Falklands, the first land ing (English) did not occur until 
almost a century later in 1690. A Br itish settlement took formal 
possession of ‘all the neighbouring is lands for King George III’ in 
1765. This settlement was withdrawn on economic grounds in 1774, but British sovereignty was never relinquished or abandoned. In 1833, 
exercising Britain’s rights of sovereignty, a British warship arrived. British occupation was therefore resumed and the Islands have been continuously, peacefully and effectiv ely inhabited and administered 
by Britain since 1833 (apart from 2 months of illegal and forced 
occupation by Argentina in 1982). 
Capital city Stanley 
Geography The Falkland Islands are an archipelago of around 700 islands in the 
South Atlantic, the larg est being East Falkland and West Falkland. 
They are situated about 770 km (480 miles) north-east of Cape Horn 
and 480 km (300 miles) from the nearest point on the South American mainland. The Islands have a to tal land area of 12 173 sq km. 
Population 2 955 (2006) 
Financial assistance 
 • Not eligible for Official Deve lopment Assistan ce (2006, source: 
www.oecd.org/dac)  
• 10th EDF: EUR 4.66 million  
• UK: no direct bilateral development assistance 
Per capita GDP £26 125 (2005) 
Major industries Fisheries, tourism, agriculture 
Major trading 
partners United Kingdom, Spain, Chile 
Membership of 
regional integration organisations N/a 
Main 
environmental challenges The environmental challenges f acing the islands are mainly the 
conservation of declining populations of seabirds and other fauna and 
flora, but also solid and liquid waste. Although significant melting of 
the Antarctic ice-sheet could ultimate ly have very grave consequences 
for the entire planet, in this centur y climate change is  not expected to 
be such a major issue to the Falklands Islands.  
EN 19   EN 1.13. South Georgia and South Sandwich Islands 
No permanent local population 
1.14. Montserrat 
Constitutional 
relations Montserrat is an intern ally self-governing Briti sh Overseas Territory. 
A UK-appointed Governor remains re sponsible for internal security 
(including the police), external affair s, defence, the public service and 
offshore finance. All citizens of Mont serrat automatically benefit from 
British citizenship, unless they renounce it. 
Historical ties with the United Kingdom Montserrat became a British Colony in 1632 although the first settlers 
were largely Irish. Montserrat was captured by the French twice for short periods, but was finally  restored to Britain in 1783. 
Soufriere Hills 
volcano In 1995, the Soufriere Hills volcano in  the south of the island became 
active and by 1997 more than two thirds of the island were destroyed. Since August 2005 there has been renewed dome growth. After 
heightened volcanic activity be tween December 2006 and February 
2007, growth of the current volcani c dome has slowed since April 
2007 and the latest scientific  advice is that the volcano is in a state of 
‘pause’, but with the danger of a large hot dome remaining.  
Capital city Plymouth (now destroyed by the volcano) 
Geography 102 sq km island located in the Caribbean. 
Population 4 655 (2006) 
Financial assistance 
 • Upper middle income territory eligible for Official Development 
Assistance (2006, source: www.oecd.org/dac) 
• 10th EDF: EUR 15.66 million  
• UK: Direct bilateral developm ent assistance of £15.5 million in 
2006/07 
Per capita GDP US$4 814 (2005) 
Major industries Limited economic activity in cluding mining and quarrying, 
construction, international financial services, professional services and tourism. 
Major trading partners USA, UK, Japan, Trinidad & Tobago, Puerto Rico. 
Membership of 
regional integration organisations Full member of CARICOM and of  the Organisation of Eastern 
Caribbean States (OECS). 
Main Montserrat is exposed to multiple  natural hazards, in particular 
EN 20   EN environmental 
challenges significant vulcanism and seismic ity. The volcanic activity that 
destroyed more than two thirds of  the island in 1995 also had severe 
environmental effects. Moreover, the ensuing relocation of a large part 
of the population to the northern part of the island has created 
pressures on natural habitats there.  
1.15. Pitcairn 
Constitutional 
relations The Pitcairn Islands are a UK Overs eas Territory. Its constitution was 
first established in 1838. It was reformed in 1904 with additional 
reforms in 1940. It was further re fined by the Local Government 
Ordinance of 1964. 
Historical ties with 
the United Kingdom Pitcairn was first inhabited by the British mutineers from HMAV 
Bounty in 1790. The island became a British Colony in 1838. 
Main town Adamstown 
Geography Pitcairn is situated in the S outh Pacific, mid-way between New 
Zealand and Panama. It is approxim ately 2 miles by 1 mile. There are 
three other (uninhabited) islands in the Pitcairn group, Oeno, Ducie 
and Henderson. 
Population 55 (2006) 
Financial assistance 
 • Not eligible for Official Deve lopment Assistan ce (2006, source: 
www.oecd.org/dac). 
• 10th EDF — EUR 3 million 
• UK: £1.8 million in 2006/07 
Per capita GDP £1 800 (2006) 
Major industries The Territory has few natural resources. Tourism is the main 
economic activity. 
Major trading partners None. Developing low-level market  garden exports to French 
Polynesia. 
Membership of regional integration organisations Secretariat of the Pacific Community 
Main 
environmental challenges Pitcairn is developing an Environm ental Management Plan. This will 
raise environmental awareness of  existing biodiversity and aid 
development of the island while inte grating environmental protection. 
Henderson Island (one of the four  Pitcairn Islands) is a World 
Heritage Site. 
1.16. Saint Helena and Dependencies 
EN 21   EN Constitutional 
relations Saint Helena and Dependencies are a UK Overseas Territory. Its 
constitution came into force in 1989. The British Government is 
responsible for St Helena’s exte rnal relations and defence. A 
Governor exercises executive authority and is advised by an Executive Council and an elected Legislativ e Council. The Executive Council 
consists of the Governor, 3 ex-offi cio officers, and 5 elected members 
of the Legislative Council. 
Historical ties with the United Kingdom St Helena was discovered on St He lena day (21 May) in 1502 by the 
Portuguese navigator Joan da Nova . In 1658, Richard, Lord Protector, 
authorised the British East India Co mpany to colonise and fortify the 
island. Napoleon Bonaparte was ex iled to St Helena in 1815 and 
remained there until his death in 1821. St Helena became a Crown Colony in 1834. The Zulu Chief, Dini zulu, was exiled to the island in 
1890 and up to 6000 Boer prisoners we re held there between 1900 and 
1903. 
Capital city Jamestown 
Geography Saint Helena is situated in the South Atlantic about 1200 miles from 
the south west coast of Africa a nd has an area of 122 sq km.  
Population 5 326 (2005) 
Financial assistance 
 • Upper middle income territory  benefiting from Official 
Development Assistance (2006, source: www.oecd.org/dac) 
• 10th EDF: EUR 16.63 million  
• UK: Direct bilateral developm ent assistance of £15.7 million in 
2006/07 
Per capita GDP £3 453 (2006/07) 
Major industries The territory has few natural re sources. Agriculture, fishing and 
tourism are the main economic activities, apart from retail and construction. 
Major trading partners UK and South Africa. 
Membership of 
regional integration organisations N/a 
Main 
environmental challenges Conservation of the islands’ uni que biodiversity, sustainable 
environmental management, lack of adequate resources (human, physical and financial). 
1.17. British Antarctic Territory 
EN 22   EN No permanent local population 
1.18. British Indian Ocean Territory 
No permanent local population 
1.19. Turks and Caicos Islands 
Constitutional 
relations The Turks and Caicos Islands are an internal self-governing British 
Overseas Territory. A UK-appointed Governor remains responsible for external affairs, defence, internal security, the regulation of international financial services and certain other matters, but is otherwise normally required to ac t on the advice of the Cabinet. All 
citizens of the Turks and Caicos Islands automatically benefit from British citizenship, unless they renounce it. 
Historical ties with the United Kingdom The islands became a formal part of the Bahamas in 1799. In 1848, 
the islanders petitioned for and were granted separate colonial status 
with an elected Legislative Board an d an administrative President. In 
1872, the islands were annexed by Jama ica and remained tied to them 
until Jamaica became independent in 1962. The Turks and Caicos Islands then became a Crown colony with an Administrator rather 
than a Governor. In 1965, the Governor of the Bahamas also became the Governor of the Turks and Ca icos Islands. When the Bahamas 
became independent in 1973, the Turks and Caicos Islands got their own Governor. 
Capital city Cockburn Town, Grand Turk 
Geography 430 sq km island located in th e Caribbean. Main permanently 
inhabited islands: Grand Turk, Salt Cay, South Caicos, Middle Caicos, 
North Caicos and Providenciales (whe re the majority of the tourism 
development is). 
Population 32 000 (2006 est.) 
Financial assistance 
 • Upper middle income territory eligible for Official Development 
Assistance (2006, source: www.oecd.org/dac) 
• 10th EDF: EUR 11.85 million  
• UK: no direct bilateral development assistance 
Per capita GDP US$15 683 (2005) 
Major industries Tourism, property development, real  estate, international financial 
services and fishing. 
Major trading partners USA 
EN 23   EN Membership of 
regional integration organisations Associate member of CARICOM. 
Main 
environmental challenges The importance of the tourist industry and the very low altitude of the 
land mean that climate change poses a critical threat to the Turks and 
Caicos Islands. Impact of the t ourism industry on the environment on 
Providenciales. Fresh water is a valued resource and effective 
management will be an increasing challenge as the islands develop.  
1.20. British Virgin Islands 
Constitutional 
relations The British Virgin Islands are a British Overseas Territory with a 
large measure of internal self- government. A UK-appoi nted Governor 
remains responsible for external affa irs, defence and in ternal security 
(including the police), the public serv ice and the administration of the 
courts. All citizens of the British Vi rgin Islands automatically benefit 
from British citizenship, unless they renounce it. 
Historical ties with the United Kingdom The islands came into British possess ion in 1666 when planters took 
control from the original Dutch set tlers. The islands were annexed by 
the British in 1672. In 1872, they were  incorporated into the British 
colony of the Leeward Islands. These islands were administered under a federal system until 1956 when the Federation was dissolved. The Governor of the Leeward Islands co ntinued to run the British Virgin 
Islands until 1960 when an appointed Administrator (later a Governor) 
assumed direct responsibility. 
Capital city Road Town, Tortola 
Geography Islands located in the Caribbean  with an area of 153 sq km. 
Population 27 000 (2005 est.) 
Financial assistance 
 • Not eligible for Official Deve lopment Assistan ce (2006, source: 
www.oecd.org/dac) 
• 10th EDF: no individual allocation  
• UK: no direct bilateral development assistance 
Per capita GDP US$41 700 (2006 est.) 
Major industries Tourism, international financial services. 
Major trading 
partners US Virgin Islands and the USA. 
Membership of 
regional integration organisations Associate member of CARICOM and of the Organisation of Eastern 
Caribbean States (OECS). 
EN 24   EN Main 
environmental challenges Particularly rich marine habitats  are under multiple threats and have 
undergone major losses as a result of  development asso ciated with an 
increasing population and the expans ion of tourism. Limited natural 
fresh water resources. Land and s ea pollution. Subject to hurricanes 
and tropical storms. Eart hquake and tsunami risk.  
EN 25   EN 2. KEY STATISTICAL TRADE DATA  
 New 
Caledonia French 
Polynesia W & F Mayotte SPM 
Exports in goods (€m) 2005 or most recent year 871.9 169.6 0.04 5.21 5.46 
Imports in goods (€m) 2005 or most recent year 1 430 1 371.1 49.27 274.34 68.2 
Trade balance  (goods): exports-imports (€m) 
2005 -558.1 -1201.5 -49.23 -269.13 -62.74 
Goods coverage rate (%) 61.10 12.4 0.08 1.90 8.10 
Tourist revenues (€m) 2005 154.2 421.1 Na 10 Na 
Tourist revenues per inhabitant (€) 663.9 1665 Na 57 Na 
Taxes on imports (€m) 2005 290.8 153.8 8.18 81.9 12.919 
Taxes on trade/imports (%) 20.3 11.2 16.6 29.85 21.59 
OCT imports from ACP Region (€m) 2005 
including South Africa 5.2 Max 6.8 Approx. 
2.7 42.13 Na 
OCT exports to ACP Region (€m) 2005 including 
South Africa 9.95 0.14 Unknown 2.09 Na 
Trade balance with ACP Region (€m) 2005 
including South Africa 4.73 Na Approx.-
2.7 -40.04 Na 
Imports from ACP Region /total (%) 0.36 Max 0.5 Max 9 15.36 Na 
Exports to ACP Region /total (%) 1.14 0.09  40.12 Na 
OCT imports from EU (€m) 2007 863.1 607.9 8.9 249.1 22.1 
OCT exports to EU (€m) 2007 640.8 24.8 0.05 3.2 6.2 
1 euro = XFP 119.332 (XFP 1 = 0.00838 euro) 
Source: for the OTCS FR IEOM, territorial statistical inst itutes, except for tax data in St Pierre and Miquelon 
and Eurostat (2006) 
 Anguilla BVI Cayman Montserra
t TCI Neth. 
Antilles Aruba 
Monetary unit used in the table US$ US$ US$ US$ US$ US$ US$ 
Exports in goods (million) 2005 or most 
recent year 15.02 22.309 1.625 4.24 10.80 1 739 101.79 
Imports in goods (million) 2005 or most 
recent year 132.30 270.783 1238.0 28.73 303.85 4 091.0 1 028.51 
Trade balance (goods): exports-imports (million) 2005 -117.28 -248.474 -1 236.375 -24.49 -293.05 -2352 -926.72 
Goods coverage rate (%) 11.36 8.24 0.13 14.76 3.55 42.51 9.90 
Tourist revenues (million) 2005 69.2 461.703 648.75 8.99 317.9 765.00 1 082.96 
Tourist revenues per inhabitant  5 074 21 676 30 458 1913 10 388 4124 10 602 
EN 26   EN Taxes on imports (million) 2005        
Taxes on trade/imports (%) 14.53 7.70 15.72 19.00 14.06 8.4 (excl. 
oil) 14.39 
OCT imports from ACP Region (million) 
2005 including South Africa Np 7.435 2.5 3177 2.5 Na 15.62 
OCT exports to ACP Region (million) 2005 including South Africa Np 4.902 Na 2193 0.1 Na 1.12 
Trade balance with ACP Region (million) 2005 including South Africa Np -2.533 Na -984 -2.4 Na -14.50 
Imports from ACP Region/total (%) Np 2.74 0.20 11 1.44 Na 1.52 
Exports to ACP Region/total (%) Np 21.97 Na 52 0.75 Na 1.21 
OCT imports from EU (€m) 2007 17.4 489.2 1169.2 3.4 40 748.9 211.1 
OCT exports to EU (€m) 2007 0.2 122.0 599.2 1.0 4 227.6 223.8 
Source: 
For BVI: data provided by DPU. 
For Netherlands Antilles: ECLAC (2006). 
For Turks & Caicos: statistical office and CDB. 
For Montserrat: territorial authorities, CDB. 
For Cayma2n: territorial authorities, CDB. 
For Aruba: Eclac (2006), IMF (2005) and Aruba CBA: exports-im ports and tariffs to imports ratio: excluding fuels. 
For Anguilla: Department of Statistics (Ministry of Finance), CDB. 
Eurostat 
 Falklands St Helena Greenland 
Monetary unit used in the table € € US$ 
Exports in goods (million) 2005 or most recent 
year 125.0 0.36 346.86 
Imports in goods (million) 2005 or most recent 
year 70.0 9.6585 460.10 
Trade balance (goods): exports-imports (million) 
2005 55 -9.2985 -113.24 
Goods coverage rate (%) 178.57 3.73 75.39 
Tourist revenues (million) 2005  0.6465  
EN 27   EN Tourist revenues per inhabitant   153  
Taxes on imports (million) 2005    
Taxes on trade/imports (%) Unknown 11.65 27.21 
OCT import from ACP Region (million) 2005 
including South Africa - - - 
OCT exports to ACP Region (million) 2005 
including South Africa - - - 
Trade balance with ACP Region (million) 2005 
including South Africa - - - 
Imports from ACP Region/total (%) - - - 
Exports to ACP Region /total (%) - - - 
OCT imports from EU (€m) 2007 47 24.2 491.6 
OCT exports to EU (€m) 2007 96 1.4 316.3 
Euro (£1 = €1.5)  
Source: 
For Falklands: UE-OCT database, official Falkland Islands portal. 
For Greenland: HRG statistics, EU-OCT database. For St Helena: territory’s authorities
 
Eurostat  
EN 28   EN Annex III 
The Overseas Association Decision of 27 November 2001 
1. I NTRODUCTION  
The provisions of the Overseas Asso ciation Decision of 27 November 20013 can be divided 
into two main categories: provisions on deve lopment finance cooperation and provisions on 
economic and trade cooperation. 
In addition, the 2001 Overseas Association D ecision contains general provisions on the 
association of the OCTs w ith the Community, which incl ude provisions on dialogue and 
partnership for a broad-based exchange of views on the implementation of the OCT-EC 
association. Given the constitutiona l links between the OCTs and the Member States to which 
they are related, such a dialogue has since 1991 b een held systematically  on a trilateral basis, 
i.e. between the Community, the OCTs and the related Member States. In this respect, the 2001 Overseas Association Decision  contains a number of furthe r innovations, as a result of 
which the main platforms for discussion t oday are the annual OCT-EU Forum and more 
individualised Partnership Working Parties on specific issues. In addition, there are regular 
informal meetings between the Commission, the Member States to which the OCTs are linked 
and the OCTs (represented by th e Brussels-based ‘OCT Associ ation’, which has no formal 
role in the OCT-EC partnership). 
Whereas the current Overseas Association Decision was initially applicable until 31 
December 2011, its duration has been exte nded until 31 December 2013 following technical 
amendments made in 2007, in order to coinci de with the duration of the 10th European 
Development Fund (EDF) covering the pe riod 2008 to 2013 and the multiannual financial 
framework for the period 2007 to 2013. However,  these technical amendments remain 
without prejudice to later revision of the Decision before its expiry in 2013, in particular for 
the subsequent application of the principles se t out in Articles 182 to 186 of the EC Treaty
4. 
2. D EVELOPMENT FINANCE COOPERATION  
The Overseas Association Decision’s presen t provisions on development finance cooperation 
are intended to promote the sustainable development of the OCTs, with a focus on the 
reduction, prevention and, eventually, eradic ation of poverty. Accordingly, development 
finance cooperation with the OCTs has until now been financed from the EDF, which is the 
financing instrument also used for development finance cooperation with the ACP states. As a consequence, EDF procedures ap ply at present to developmen t finance cooperation with the 
OCTs, even though the OCTs benefit from somewh at specific procedures  in comparison with 
                                                
 
3 Decision 2001/822/EC of the Council of 27 November 2001 on the association of the overseas countries 
and territories with the European Community, OJ L 314, 30.11.2001, p. 1. Decision as amended by Decision 2007/249/EC (OJ L 109, 26.4.2007, p. 33). 
4 See Article 62 of the revised Overseas Association Decision, as well as recital 14 of Council Decision 
2007/249/EC. 
EN 29   EN the ACP states. A number of OCT-specific si mplifications were introduced by the 2001 
Overseas Association Deci sion and fine-tuned in 2007. 
Even though the OCTs are not part of the ACP- EC Partnership Agreement and are, strictly 
speaking, not covered by the Community’s devel opment cooperation (given the structure of 
the EC Treaty), the classic development coopera tion logic based on th e fight against poverty 
has been applied to them, even though this appr oach is no longer suitable for the present-day 
OCTs. This parallelism between the OCT-EC  association and ACP-EC relations can, 
however, be explained historically, given the common origin of the relations of both the 
OCTs and the ACP states with the Community. In fact, the list of OCTs in the Treaty of 
Rome of 1957 included Member States’ colo nies that have in the meantime become 
independent sovereign countries, most  of them currently ACP states.  
Under the current Overseas Association D ecision, only OCTs with a per capita GNP not 
exceeding the Community per capita GNP bene fit from a territorial EDF allocation5. Of all 
the OCTs with a permanent local population, onl y the Cayman Islands and the British Virgin 
Islands — with levels of pe r capita GNP far above the Community average — do not qualify 
for a territorial allocation. In a ddition to support at terr itorial level, all the OCTs, regardless of 
the level of per capita GNP (a nd thus including the Cayman Islands and British Virgin 
Islands), are eligible for support given to regional cooperation and integration.  
It should also be mentioned th at individuals from an OCT a nd, where applicable, relevant 
public and/or private bodies and institutions in an OCT are eligible to the same extent and 
under the same conditions as legal entities from  the member States to which the OCTs are 
linked for participation in and funding from Community programmes such as the Research 
Framework Programme, education and training programmes, the Competitiveness and Innovation Framework Programme, cultura l and audiovisual programmes, etc
6. In fact, the 
eligibility of entities of the OCTs for horizontal Community programmes has been generalised since 1 January 2007, subject to the rules and objectives  of each individual 
programme and the arrangements applicable to the Member States to which the OCTs are 
linked. 
In addition, the OCTs have access to a number of actions adopted for developing countries 
within the general budget of th e EU, such as the thematic programmes covered by the 
Instrument for Development Cooperation (DCI)
7.  
3. E CONOMIC AND TRADE COOPERATION  
According to Part Four of the EC Treaty, th e establishment of close economic relations 
between the OCTs and the Community as a whole is part of the overall purpose of the OCT-
EC association, and the objectives of the asso ciation include the ex tension by the Member 
States of the same treatment to their trade with the OCTs as that which they accord to each 
other, as well as the extension by the OCTs of the same treatment to their trade with the 
Member States and the other OCTs as that wh ich they apply to the Member State to which 
                                                 
5 The amount allocated to each beneficiary OCT is  calculated by taking into account the size of the 
population, the level of GNP, the level and use of previous EDF allocations, constraints due to 
geographical isolation and, for the OCTs listed in  Annex IB to the Overseas Association Decision, 
structural and other obstacles. 
6 See Article 58 of and Annex II F to  the Overseas Association Decision. 
7 See Annex II E to the Overseas Association Decision. 
EN 30   EN they are linked. The Overseas Association Deci sion furthermore specifies  that the objectives 
of the OCT-EC association also have to be pursued by focusing on the gradual integration of 
the OCTs within the regional and world economies.  
Since the revision of the Overseas Associat ion Decision in 1991, the OCTs have benefited 
from the most generous tariff regime granted by the Community, under which all ‘ products 
originating in the OCTs’  can be imported into the Commun ity free of duty and free of quota. 
Furthermore, the OCTs are allowed, unlike th e Community, to retain or introduce customs 
duties or quantitative re strictions under specific conditions la id down in the EC Treaty and the 
Overseas Association Decision. In this respec t, however, the result ing trade arrangements 
applied by an OCT to the Community may not be any less favourable than  those it applies to 
third countries, in accordance with the most fa voured nation principle,  unless another OCT or 
developing country is involved. In addition, these one-sided arrangements may not give rise to 
any discrimination between Memb er States, which means that  an OCT may not treat the 
Member State to which it is linked more favourably than the other Member States.  
The definition of ‘ products originating in the OCTs’  (and which can be imported into the 
Community free of import duty and quota) is laid down in Annex III to the Overseas 
Association Decision, which contai ns favourable rules of origi n. These also provide for the 
possibility of cumulation of or igin, which allows materials or iginating in the Community or 
the ACP states to be considered as if they or iginated in an OCT when incorporated into a 
product obtained in that OCT. As a conseque nce, such products ac quire OCT originating 
status and thus benefit from the ta riff regime applicable to OCTs8.  
In addition, transh ipment enables products not originating in an OCT, but which are in free 
circulation in that OCT and ar e re-exported to the Community, to  be accepted for import into 
the Community free of customs duties and taxes with equivalent effect9. However, the 
products must comply with the conditions laid  down in the Overseas Association Decision 
and must in principle have been subject to a change in the means of transportation in the 
OCT, implying at least the unloading and relo ading of the goods. The Overseas Association 
Decision specifies that, for th ese products, customs duties comparable to the customs duties 
applicable in the Community must have been  paid in the OCT concerned, and that any 
refunding of such payments is prohibited. Neve rtheless, at the request of an OCT, the 
Commission may authorise this OCT to provide  public financial aid to those using the 
transhipment procedure.  
The EC Treaty and the Overseas Association Decision also contain provisions relating to 
services and investment. More precisely, on th e Community side the OCTs benefit from a 
comprehensive liberal regime across servic e sectors and modes of supply, including 
commercial establishment. The OCTs for their part must in principle grant just most-
favoured-nation and non-discriminatory treatmen t to Member States, whereas the Overseas 
Association Decision allows them one-sidedly to adopt regulations to aid their inhabitants and 
                                                 
8 However, there are annual limits on cumulation of origin for two sensitive products, rice and sugar (for 
sugar, cumulation possibilities will be phased out by 2011). These annual limits were introduced in 
2001 as a consequence of safeguard measures a dopted by the Commission in response to a massive 
influx of products obtained from ACP rice and sugar into the Community via the more favourable tariff 
applicable to OCTs (which constitutes a good illustra tion of the ‘OCT route’ which was very attractive 
for economic operators as it allowed them to avoid duties and quotas). 
9 The transhipment procedure does not apply to agricultural products or goods resulting from the 
processing of agricultural products, with the exception of the potential import into the Community of a 
limited volume of specific fishery products from Greenland and Saint-Pierre-et-Miquelon. 
EN 31   EN local activities. With regard to certain h ealth care professions, a list of professional 
qualifications specific to OCT inhabitants is to be recogni sed in the Member States.  
It is important to recall that , though not third countries, the OCTs do not form part of the 
Community single market. Therefore, the relate d four freedoms (free movement of people, 
goods, services and capital) that  apply within the Community  do not cover the OCT-EC 
association, although this doe s not affect the rights conf erred upon OCT inhabitants by 
citizenship of the Union within  the meaning of the EC Treaty10. Instead, the above-mentioned 
arrangements for trade in goods, establishment and the provision of services apply to trade and economic relations between the Community  and the OCTs. The Overseas Association 
Decision also contains provision s on current payments and capital movements. Furthermore, 
the free movement of workers between the OCTs and the Member States is mentioned in the 
EC Treaty, but this issue is to be governed by ag reements to be concluded subsequently with 
the unanimous approval of the Member Stat es. However, given this very cumbersome 
procedure laid down in Article 186 of the EC  Treaty, such agreements have never been 
adopted so far. In this respect, it should be  noted that the Treaty of Lisbon of 13 December 
2007 makes the regulation of the free movement  of workers between  the OCTs and the 
Member States subject to the common procedur e of Article 187 of the EC Treaty for adopting 
the detailed rules and procedures for the OCT-EC association, wh ich could facilitate 
regulation of this issue.  
                                                
 
10 With regard to citizenship of the Union, see section 3.1.1 of the Green Paper to which the present 
Commission staff working document is attached. 
EN 32   EN Annex IV 
Working document on the trade arrangements between the Community and the OCTs 
No review of the present trade arrangements between the Community and the OCTs can take 
place without taking into account the change s in the wider world, which affect the 
Community and the OCTs themselves, as well as  the OCTs’ principal tr ading partners and in 
particular their ACP neighbours. The Community  has for many years c onsistently supported 
regional economic integration as a priority for the ACP states, because integration regionally 
and within multilateral trading systems offer new trade opportunities that could lead to 
economic growth and thus a path out of pove rty for these countries.  This is also the 
underlying rationale of the development coope ration logic of the Economic Partnership 
Agreements (EPAs) negotiated with the ACP states.  
It is also a fact that the theo retical benefits offered to the OCTs by the current OCT-EC trade 
regime in terms of preferential access to th e Community market are eroding as a result of 
progressive trade liberalisation on a global and regional scale. This is an inevitable process for 
which the OCTs need to prepare, in particul ar because the OCTs already benefit from the 
most generous tariff regime ever granted by the Community, which leav es no real room for 
improving the their preferential  access to the EU market.  
In this context, the Commission has since 2003 invited the OCTs located in an ACP region 
and the Member States to which they are li nked to examine their position on the regional 
economic integration of these OCTs with their ne ighbouring ACP countries, and what these 
OCTs stand to lose or gain from participa ting in such regional economic integration. As 
mentioned above, the rationale  behind the EPAs is regi onal economic integration. 
Determining the added value for OCTs of greater  regional integration an d/or EPA-like trade 
arrangements is an extremely complex tas k, both for the OCTs and the Commission, in 
particular as long as the EPAs have not entered into force. In any case,  it is clear that the 
choice by an OCT (in conjunction with the related Member State) to join — fully or partly — 
regional trade arrangements applicable to  its ACP neighbours cannot be imposed by the 
Community. The specific OCT-EC trade regime, whose basic principles are guaranteed by the 
EC Treaty, can continue to coex ist with the EPAs, should an OCT not proceed towards more 
regional integration (or should it  be unable to do so, for exam ple because of its geographical 
isolation).  
It should, however, be noted th at it is possible, following a fo rmal request by an OCT (via the 
Member State to which it is linked), to broa den or supplement the scope of the EPAs, in 
accordance with the usual procedure for their re vision, and in particular without prejudice to 
the Commission’s institutional prerogatives and subject to the agreement of the ACP states 
concerned, to bring an OCT within the scope of  an EPA. Without prejudice to the details of 
each case and subject to the necessary modificati ons of the applicable legal framework, there 
appear to be three main possi bilities, depending first and fore most on the choice to be made 
by each OCT and the Member State to which it is linked: 1) an OCT remains subject in full to 
the OCT-EC trade regime, based on the principl es laid down in the EC Treaty; 2) an OCT 
opts for full or partial regional integration, which would in prin ciple entail the application of 
the related regional trade arrangements, but wh ile maintaining the OCT-EC trade regime; 3) 
an OCT opts for full or partial regional integrat ion and also becomes subj ect to the reciprocal 
EN 33   EN EPA arrangements that apply to trade betw een the Community and the ACP states in 
question, which would fully or partially replace th e OCT-EC trade regime for that given OCT. 
With regard to trade in services and unlike the arrangements for trade in goods, the Overseas 
Association Decision does not pr ovide for an exception to the mo st favoured nation clause for 
trade between an OCT and other OCTs or develo ping countries. However, it could be relevant 
to examine whether this constitutes an obstacl e to OCT regional economic integration in 
certain cases. In this respect, one could refer as an  example to the fact that the participation of 
Montserrat in the Caribbean Single Market and Economy would under the current rules entail 
an obligation for this OCT to apply to the Comm unity trade arrangements for services that are 
not less favourable than those applied to th e members of the Caribbean Single Market and 
Economy, which is seen as an obstacle to Montserr at’s participation in th is initiative despite 
its membership of CARICOM. 
On the other hand, a modernisation of the rule s of origin (primarily regarding fisheries 
products), tailored to the OCTs’ specific situ ation, or the strengthening of the OCTs’ 
capacities to comply with obligations on impor ts of goods into the Community, could help 
maximise the benefits that the OCTs derive  from the OCT-EC trade regime despite the 
decreasing theoretical value of  their tariff preferences. In  the same vein, the current 
transhipment procedure should be subject to a critical assessment. Last but not least, the 
Overseas Association Decision al so provides for cooperation in "t rade-related areas" that are 
becoming increasingly important to trade in genera l but also between the EC and ACP 
neighbours of OCTs. 
1. R ULES OF ORIGIN  
Some OCTs have suggested establ ishing a specific set of rules of  origin for OCTs in order to 
facilitate the access of thei r products to the Community market. As stated in a 2005 
Communication on the future rules of origin, the Commission is in favour of a possible 
modernisation of the rules for both ACP stat es and OCTs (e.g. regarding the crewing of 
vessels). However, establishing a specific set of rules of origin for OCTs might impose 
administrative and operational burdens with regard to OCT-ACP cumulation, which would 
run counter to the objective of simplifying the current rules and the need for an easy to 
operate system. It is also clear that a modernisa tion of the rules of orig in should contribute to 
the OCTs’ sustainable development and should t hus avoid OCTs merely becoming a platform 
for products of other countries trying to reach  the EU market under the OCT preferences, so 
as not to open the door to trade deflections. Fu rthermore, it is necessary to take into account 
the geographical range of the OCTs, which could make it interesting for some OCTs (those in 
an ACP region) but not for others (the most isol ated OCTs and those whose interests lie in the 
European Economic Area) to engage in OCT-ACP cumulation activities. If  a specific set of 
rules of origin is established for the OCTs, dero gations from the rules of origin would, ideally, 
no longer be required. 
At the same time, it should be borne in mind that, if the possibility of OCT-ACP cumulation 
is to be maintained, the OCTs should, as a matter of policy, be subject to  rules of origin that 
are identical to those applicable to the ACP states, which will sometimes vary per region depending on the regimes provided for in the different EPAs. In addition, administrative 
cooperation agreements between the OCT and ACP cumulating partners need to be in place. 
In any event, the present provisions of Anne x III to the Overseas Association Decision on 
cumulation of origin between OCTs and ACPs n eed to be amended, as these provisions refer 
EN 34   EN to cumulation using materials originating in th e ‘ACP states’ in general. This particular 
reference to the ‘ACP states’ is however not supported by a clear outline of the composition of this group of countries: as of 1 January 2008, the ACP st ates that have not signed 
agreements with the EU establishing, or leading to the establishment of, EPAs only benefit from the less favourable General System of Pref erences (GSP) and its ru les of origin, whereas 
those who benefit from th e Market Access Regulation
11 come under the rules of origin laid 
down in Annex II to that regula tion. This not only means that ACP states are already subject 
to different rules of origin than those appli cable to OCTs, but also means that some ACP 
states apply different rules of origin than others, which seriously complicates cumulation of origin between the OCTs and ACP states, and will make cumulation of origin between the OCTs and all ACP states impossible once the EPA or igin protocols enter into force. 
The bottom line is that the choi ce is between either OCT-specific rules or maintaining the 
possibility of cumulation by applying rules of or igin identical to those applicable to the ACP 
states that an OCT would want to  cumulate with. However, it is  necessary to take into account 
the geographical diversity of the OCTs, which c ould make it interesting for some OCTs (those 
in an ACP region) but not for others (the most isolated OCTs and those whose interests lie in 
the European Economic Area) to maintain the po ssibility of OCT-ACP cu mulation rather than 
become subject to OCT-specific rules. 
It is therefore up to an OCT to indicate if it would like 1) a specific set of rules of origin for 
the OCTs, which would be applicable to all th e OCTs choosing this op tion and would rule out 
the possibility of cumulation of or igin, or 2) a regional set of rules of origin compatible with 
the rules of origin applicable  to the ACP states of the re gion in question, which allow for 
cumulation of origin with these ACP states. For example, the Caribbean OCTs could prefer to apply the same rules of origin as the 15 ACP states that partic ipate in the EC-Cariforum EPA, 
whereas OCTs such as St Pierre and Mique lon and Greenland could prefer OCT-specific 
rules.  
Whereas cumulation of origin between ACP countries and OCTs might offer certain 
possibilities for the economic development of some OCTs (for example, ACP-OCT 
cumulation in the Netherlands Antilles and Aruba with regard to rice and sugar products), the real added value of maintaini ng cumulation should be subject to  a critical assessment, in 
particular because cumulation carri es the risk that products from  ACP countries simply transit 
through certain OCTs without strengthening the OCTs’ economic development or without 
contributing to ACP-OCT economic coopera tion. Moreover, the added value for ACP 
countries to pass through an OCT will most pr obably decrease significantly or even disappear 
when the ACP countries obtain quota-free and dut y-free access to the EU  market, which will 
be the case with the entry into force of the EPAs or, pending that , is already the case for those 
ACP countries that come under the Market Access Regulation
12. Even if there are limited 
exceptions for imports into the EU of ACP sugar and rice, these will be phased out as well. 
                                                 
11 Council Regulation (EC) 1528/2007 of 20 Decem ber 2007 applying the arrangements for products 
originating in certain states which are part of the African, Caribbean and Pacific (ACP) Group of States 
provided for in agreements establishing, or leading to the establishment of, Economic Partnership Agreements, OJ L348, 31.12.2007, p. 1. 
12 Least Developed Countries (LDC) already have duty -free, quota-free access under the ‘Everything But 
Arms’ initiative, irrespective of what they do on EPAs.  
EN 35   EN 2. T RADE -RELATED AREAS  
With the ongoing trade liberalisat ion of goods and services and the conclusion of the EPAs, 
increased emphasis is being put  on ‘behind the border measur es’, such as trade-related 
legislation and regulatory reform in the trad e field, in order to secure more effective 
participation, under the most favourable conditions, in Comm unity, domestic, sub-regional, 
regional and international mark ets. In addition, trade fac ilitation (including customs duty 
structures and customs regimes to avoid st andards being set arbi trarily and becoming 
obstacles to trade) and human resource development are of gr owing importance with a view 
to fully engaging in regional  or international trade.  
The Overseas Association Decision already id entifies support for trade-related areas as 
possible areas of cooperation between the Commun ity and the OCTs. At the same time, these 
are increasingly becoming areas for coope ration between the Community and ACP 
neighbours of OCTs. Today, the Community is av ailable to help reinforce, within the 
association strategies of each OC T, the capacity of the OCTs to handle all areas related to 
trade, including where necessary improvi ng and supporting the institutional framework. 
However, not least because of the limited funds available for Community financial assistance, 
this possibility is at present not exploited by the OCTs, which assume the primary responsibility for the formulation of  their association strategies.  
At the same time, trade-related cooperation co uld be developed in a number of areas. For 
example, harmonising certain part s of locally applicable legislation in the OCTs in the 
sanitary and phytosanitary field with Community legislation may facilitate trade flows into 
the Community for economic operators within the OCTs. This can be illustrated by the 
Community's sanitary and phytosanitary system. It  has evolved from a fragmented to a highly 
harmonised system, which now enables the movement of animals and products with minimum restrictions, official checks and paperwork. There is a harm onised legislative system and 
strong capacity in the areas of animal and plant health and food safety, which allows avoiding 
possible trade-barriers arising from controls, checks and certif ications at border inspection 
posts, while ensuring that the Community's hi gh standards in his field are maintained. 
In fact, such an approach is currently being considered in Greenland, which has requested to 
be allowed to trade in fishery products, liv e bivalve molluscs, echinoderms, tunicates and 
marine gastropods and certain animal by-products  of fish origin with the Community in 
accordance with intra-Community rules. Under a proposal for a Council Decision laying 
down trade provisions between the Community and Greenland, the latter will undertake to 
transpose, adopt and comply with  all the relevant Community pr ovisions. The in tention is to 
secure the free circulation of certain Greenlandic fishery produc ts between Greenland and the 
Community.  
However, this also requires the administrations of the OCTs concerned to be capable of 
conducting veterinary border controls on third c ountry imports and to be authorised to do so, 
which might also require action on behalf of the Member State to which the OCT is linked. 
Under the Community's sanitary and phytosanitar y system, the harmonised requirement for all 
checks to be carried out at exte rnal border inspection posts is essential for the free movement 
of the products concerned within  the single market. Consequentl y, a third country or territory 
must prove that (1) adequate prevention and control measures are in place, as well as effective organisation and administration, co mpetent authority and veterinary  control systems; (2) it is 
able to provide rapid and regular data on the existence of important animal diseases on its 
territory; (3) its legisl ation, rules and livestock  health status satisf y Community requirements 
EN 36   EN for the animals or products in question; (4) it  or its region is free of the most important 
diseases; (5) it has acceptable public health stan dards (e.g. an approved residues control plan). 
In most cases, the Commission's Food and Veteri nary Office first carries out on-the-spot 
inspections to ascertain the respect of the a bove conditions. In addition, all live animals and 
products must be accompanied by a health certifi cate and must enter via an external border 
inspection post, where checks are carried out. 
According to the assessment of a number of OCTs by the Food and Veterinary Office, a huge 
challenge remains for them to upgrade their st andards and to improve their regulatory and 
control framework, enabling to certify the above steps on beha lf of the Community. Many 
OCTs still lack the necessary capacities, sometimes due to infrastructural problems (e.g. the 
use of old facilities that do not meet modern structural and hygiene requirements to comply 
with good manufacturing practice) . Major investments are needed  in structures, equipment, 
water quality, sewage and hygien e practices, management and wo rker training, in order to 
strengthen food safety and quality management sy stems, such as the use of ‘hazard analysis 
and critical control point’ (HACCP ). This represents a major chal lenge, in particular for small 
businesses, but is essential for a competitive and viable industry. 
Because the OCTs are not part of the Commun ity's single market, they must comply with 
obligations on imports of goods into the Commun ity concerning trade and sanitary measures. 
Thus, improved standards in the OCTs in the sa nitary and phytosanitar y field, inspired by the 
Community's harmonisation experience, may ge nerate mutual benefits, competitive and 
flexible markets, economies of scale and improved consumer choice. 
Another area for trade-related cooperation could be  tax and tariff regulation: first, to improve 
the institutional, administrative,  regulatory and procedural matte rs relating to tax; second, to 
adapt the fiscal systems of cer tain OCTs, for instance by intr oducing a regionally coordinated 
system of value added tax, in order to facil itate regional economic in tegration. Furthermore, 
closer cooperation could be pursued on public pr ocurement rules, intellectual property rights, 
effective enforcement measures both at an OCT’ s borders and internally, and effective dispute 
settlement provisions, in order to make an OCT’s market more transparent, accessible for 
relevant information and open for foreign investment. In a ddition, concrete measures to 
support trade development in ge neral, such as ac tivities aimed at im proving the business 
climate to attract foreign inve stment, access to trade finance,  trade promotion, and market 
development in the productive and services sector s, including at instit utional and enterprise 
levels, are areas where the Community could usefu lly assist OCTs in order to secure a more 
viable private sector and a shift from a pr edominant public sector (seen in many OCTs) 
towards more private initiative. Moreover, w ith reference to the Community acquis in the 
field of aviation and in part icular the Common Aviation Area,  strengthened cooperation in 
this field would also allow market  access barriers to be lifted. 
3. T RANSHIPMENT  
Transhipment is only theoretically relevant for a small group of OCTs and is only one of 
several instruments available to promote th e OCTs’ economic development. Historically, 
transhipment was introduced following a request  by one particular OCT (the Netherlands 
Antilles) with developed but under-utilised ha rbour facilities, based on the loading and 
unloading of goods. The original aim of the tran shipment procedure was therefore to promote 
the exploitation of existing infrastructures a nd create local economic growth. This has not 
happened.  
EN 37   EN The regularity of some early transhipment attempts in the 1990s was questioned, namely 
because certain OCTs encouraged third-country economic operators to use this procedure by 
repaying them part of the customs duties they pa id to the OCTs, in particular as compensation 
for the additional transport costs involved in passing through an OCT rather than exporting 
directly to the Community. Ho wever, notwithstanding the seri ous problems encountered, all 
four Member States to which the OCTs are linked insisted that the procedure should be 
maintained and improved. As a consequence, the Overseas Association Decision adopted in 
2001 did eventually maintain the possibility of  transhipment, but also introduced conditions 
for granting OCT aid to economic operators to pr omote the use of transhipment. In particular, 
the possibility of OCT public financial aid to those using the transhipment procedure became 
subject to preliminary aut horisation by the Commission on a case by case basis.  
However, despite the possibility of OCT public financial aid on a case by case basis to cover 
the additional costs generated by the re-routing of  products via an OCT, the lack of requests 
by OCTs to grant such aid indicate that thir d-country economic operators do not make use of 
this possibility in practice (at least not in forms eligible for authorised public aid), and the 
possibility of transhipment does not therefore s eem to provide any impetus for the social and 
economic development of the OCTs. Moreover, apart from the lack of success of the instrument itself, the theoretical attractiveness of transhipment is decreasing as a result of 
increasing fuel costs and the progressive libe ralisation of trade between the Community and 
its trade partners (both ACP countri es and other third countries).  
In view of the above, the Commission is of the opinion that transhipment  has not yielded the 
expected results, because it implies purely artifi cial trade routes that  present no added value 
for third-country economic operato rs to pass through an OCT.  
Some OCTs are of the opinion th at transhipment could still be  relevant, and have suggested 
that the procedure should be made more opera tional. In particular, they have asked the 
Commission to drop its insistence that the transh ipped products must in principle have been 
subject to a change in the means of transportation in the OCT. However, these suggestions fail 
to take into account that such  an approach would entail seri ous risks for certain economic 
sectors of the Community or of one or more Member States, while the bulk of the financial 
benefits would go to third-coun try economic operators rather th an the OCTs themselves (as 
illustrated by the above-mentioned transhipment attempts in the 1990s). Allowing just the 
transit of products th rough an OCT without any unloading and reloading would not only be 
difficult to reconcile with the generally accep ted definition of transhipment (a definition 
accepted by the OCTs themselves in their re lations with partners other than the 
Community)
13, but also with the original aim of th e transhipment procedure (to promote the 
exploitation of developed but under-u tilised harbour infrastructures).  
Moreover, several OCTs have asked the Commi ssion to develop clear guidelines for the use 
of this instrument, namely as regards the aut horisation of OCT public aid to those who use the 
procedure. However, it should be noted that  the Commission has over several years already 
provided guidance to OCTs on transhipment, though without establis hing one-size-fits-all 
guidelines that would apply in each and every case. It is indeed not possible to develop 
guidelines to determine, ex ante  and once and for all, the acceptable level of OCT public 
financial aid to third-country economic operato rs, as the risk that such aid would provoke 
                                                 
13 It should also be stressed that, in relation to fisheries management measures agreed in the context of 
Regional Fisheries Organisations, transhipment of fish is subject to very strict conditions, and in some 
cases even prohibited. 
EN 38   EN serious disturbances or difficulties for an economic sector in the Community or in one or 
more Member States can only be examined on a case by case basis.  
Nevertheless, the Commission acknowledges that the aim of transhipment, i.e. to make 
existing (or future) well-developed but under-utilise d harbour infrastructure in the OCTs more 
competitive, remains relevant for OCTs with such infrastructure. It could therefore be 
examined how this objective could be best achieved, taking due account of the potential in certain OCTs (but not in all of them) to provid e safe and efficient tran shipment or temporary 
warehousing in their harbours for pr oducts destined for the Community. 
EN 39   EN Annex V 
Working document on the vulnerability and diversity of the OCTs 
On 2 October 1997, the Conference of the Head s of State and Governme nt that adopted the 
Treaty of Amsterdam made  a declaration on the OCTs in whic h it called for a review of the 
OCT-EC association arrangements with the obj ective of, among other things, taking greater 
account of the diversity and specific ch aracteristics of the individual OCTs14. Consequently, 
the 2001 Overseas Association Deci sion introduced a number of innovations in this respect. 
Whereas until the 8th EDF, programmable aid was divided among the French, Dutch and 
British OCTs as a group, leaving it up to the Me mber States concerned to allocate these 
resources between their own OCTs, the 2001 Over seas Association Decision introduced the 
allocation of Community financial assistance di rectly to individual OCTs and provided for 
greater subsidiarity as regards the management of the financial instrument. It also included 
provisions on the needs of the most isolated  and least developed OCTs. However, based on 
the experience acquired since then, the Green Paper to which the present Commission staff 
working document is attached should now critic ally assess a number of  further challenges 
concerning the OCTs' vulnerabil ity and diversity, w ithout prejudice to the other questions 
raised in the Green Paper.  
1. T HE VULNERABILITY OF THE OCT S 
Due to their geographical characteristics, the OCTs suffer from narrow-based markets, which 
prevent them from reaching a sufficient level of  scale in order to develop diverse economic 
activities. Most product s are imported at high transport cost s whereas the local production that 
can be exported is insufficient to ensure a positive trade balance. This situation makes the OCTs vulnerable to any fluctuation in trad e exchanges. This dependency on external 
resources also applies to  the provision of energy. 
Moreover, the insular characteristics of the OC Ts mean they are particularly exposed to 
environmental shocks as well as natural disast ers, whose frequency a nd force are increasing 
with global warming. The OCTs are particularly  vulnerable to climatic, seismic and volcanic 
risks and to tsunamis. Such natural disasters can  easily destroy the infr astructures and the few 
activities that are possible given the reduced size  of the OCTs’ economies. Besides the risk of 
economic paralysis, these phenomena can ca use a heavy human toll and lead to the 
displacement of populations, an d are thus likely to disr upt the economic and social 
organisation of the OCTs. 
Against this background, the OC Ts and the Member States to which they are linked have 
consistently indicated that the Overseas A ssociation Decision should be improved to take 
better account of the OCTs’ vulnerability as micr o-island economies and that specific criteria 
and instruments should be identified in line with  their specific situation. In the context of the 
revision of the Overseas Association D ecision in 2007, the Council and the Commission 
                                                
 
14 Declaration No 36 on the Overseas Countries an d Territories annexed to the Final Act of the 
Conference of the Heads of State and Government that adopted the Treaty of Amsterdam (OJ C 340, 
10.11.1997).  
EN 40   EN stressed that greater coordi nation between support at regiona l and territorial level could 
contribute to enhancing th e resilience of the OCTs towards the challenges that they are facing 
regardless of the level of per capita GNP or other elements used to determine the territorial allocations. Nonetheless, the Commission di d not propose a fundamental revision of the 
existing criteria and instruments, because it felt that such issues  should be discussed in the 
context of a wider dialogue on the overall philosophy underpinning the OCT-EC association. 
Moreover, if it were accepted that allocation cr iteria should be more vulnerability-oriented, 
the ancillary challenge of quantif ying vulnerability in an obj ective way on the basis of other 
elements than those already taken into acc ount today would require  further reflection. 
2. T
HE DIVERSITY OF THE OCT S 
Besides examining whether and how the OCTs’ vul nerability should be taken into account in 
the context of the OCT-EC association, the Commi ssion would also like to  raise issues related 
to the diversity of OCTs. Even though the OCTs have common characteristics (small 
population sizes, islands, biodivers ity, etc.), there are huge di fferences between them, for 
example in terms of relative wealth, actual pop ulation size, natural resources, geographical 
characteristics, physical isolat ion, climate, possibilities for ec onomic diversific ation, etc. 
Nevertheless, despite the innovations introduced  in 2001, the current Overseas Association 
Decision and in particular the fi nancial instrument continue to be based largely on a ‘one size 
fits all’ approach. For example, the Commu nity’s development finance cooperation is 
currently based on a common set of standards, treating OCTs like Anguilla and Mayotte in the same way, even though the challenges they face are radically different. Similarly, no 
distinction is made between OCTs that benefit from considerable financial transfers from the 
Member State to which they are linked and those for which the Community is in fact the only 
donor. Even the provisions for the most isolat ed OCTs and even more so for the least 
developed OCTs
15 are based on generalisations that do not  reflect the differences between the 
OCTs concerned. 
On the other hand, and quite apart from the cha llenges set out above with  regard to the trade 
regime applicable to the OCTs, the range of possible areas of coopera tion identified in the 
current Overseas Association Decision is very  wide and, according to the principles and 
procedures of the partnership between the OC Ts and the Community, the authorities of each 
beneficiary OCT are primarily responsible fo r formulating the association strategies, 
including the choice of focal area for Community  financial assistance. In this respect, it 
should also be noted that, beca use the funds available are lim ited, the Commission insists on 
funds being concentrated in one sector, fo llowing a comprehensive approach taking into 
account complementarity with other actions and other partners. This has the advantage that 
Community assistance has more leverage and in creased efficiency, while at the same time 
minimising the burden of managing these funds.  
On the basis of the experience acquired and in response to the dialogue with the OCTs and the 
Member States to which they are linked, th e Commission wishes to  examine whether the 
individualised approach based on each bene ficiary OCT’s ownership of the association 
strategies supported by the Commun ity should be complemented by further action to take the 
specific characteristics of the individual OCTs into account. This should further facilitate 
                                                 
15 The OCTs considered the least developed for the purpose of the Overseas Association Decision are 
listed in Annex IB to that Decision. The OCTs listed are Anguilla, Mayotte, Montserrat, Saint Helena 
and dependencies, Turks and Caicos Islands, Wallis an d Futuna Islands, and Saint-Pierre and Miquelon. 
EN 41   EN targeting the particular situation in a given OC T, such as increasing the accessibility of an 
isolated OCT, reducing the development gap of an OCT facing real development needs, 
strengthening an OCT’s instit utional and administrative capac ities where relevant, improving 
the competitiveness of an OCT in areas where it  has specific potential, or strengthening an 
OCT’s resilience to cope with the specific challe nges it faces, such as natural disasters or 
environmental sustainability. At the same time,  disproportionate administrative burdens or 
fragmentation of the limited funds available should be avoided.