No C 81/8 Official Journal of the European Communities 26. 3. 91 
Article 6 
Countries eligible shall be those that have concluded a 
cooperation or association agreement with the 
Community. 
Article 7 
The financial incentives for the EC-IIP facility in the 
context of cooperation arrangements shall take the form 
of outright grants, interest-free advances, equity holdings 
or equity loans. 
THE COUNCIL OF THE EUROPEAN COMMUNITIES, 
Having regard to the Treaty establishing the European 
Economic Community, 
Having regard to the Act of Accession of Spain and 
Portugal, 
Having regard to the proposal from the Commission, 
Having regard to the opinion of the European 
Parliament, 
Having regard to the opinion of the Economic and 
Social Committee, 
Whereas the autonomous Portuguese regions of the 
Azores and Madeira belong politically and economically 
to the Community by virtue of the Act of Accession, 
which did, however, recognize some of their specific 
characteristics by allowing various isolated exceptions in 
the application of the common policies; Article 8 
The Commission shall send to the European Parliament 
and to the Council an annual progress report and an 
appraisal report at the halfway stage and at the end of 
the five-year period. 
Article 9 
This Regulation shall enter into force on the third day 
following that of its publication in the Official Journal of 
the European Communities. 
This Regulation shall be binding in its entirety and 
directly applicable in all Member States. 
Community institutions to devote special attention to the 
development policies of the two regions, 'the object of 
which is to overcome the handicaps of these regions, 
which arise from their geographical situation, far away 
from the mainland of Europe, their physical geographical 
features, the serious deficiency of infrastructures and 
their economic backwardness'; 
Whereas the European Parliament, in its resolution of 14 
April 1989 on Community programmes to help the 
Portuguese autonomous island regions (*), considered 
that in view of their island status and highly peripheral 
situation the Azores and Madeira deserve special 
treatment from the Community; 
Whereas the Azores and Madeira suffer from a serious 
structural lack of development aggravated by a number 
of constraints (remoteness, isolation, small size, difficult 
terrain and climate) whose unchanging nature and 
combined impact have serious effects on their economic 
and social development and place them among the least-
favoured regions of the Community; whereas these 
special constraints make it necessary to step up 
Community support in order to ensure that the Azores 
and Madeira are fully involved in the dynamic of the 
internal market; whereas this Community support takes 
the form of operations under the reformed Structural 
Funds (enjoying the priority given to the Objective 1 
regions), but must also ensure that the special constraints Proposal for a Council Decision setting up a programme of options specific to the remote and 
insular nature of Madeira and the Azores (Poseima) 
(91/C 81/08) 
COM(90) 687 final 
(Submitted by the Commission on 20 December 1990) 
Whereas the Member States, in a joint declaration 
annexed to the Act of Accession, called on the 0) OJ No C 120, 16. 5. 1989, p. 321. 
26. 3. 91 Official Journal of the European Communities No C 81/9 
affecting the Azores and Madeira are taken into account 
in the application of common policies, in accordance 
with the Community approach to the remoter regions, of 
which the adoption and implementation of the Poseidom 
programme for the French overseas departments is the 
first practical example; 
Whereas an overall, multi-sector approach is necessary 
to allow for the special constraints on the Azores and 
Madeira in the application of common policies; whereas 
a coherent line must be taken as part of an overall action 
programme involving legislative measures and financial 
commitments; 
Whereas, for the purposes of implementing this 
programme, the necessary legal acts will be adopted 
either by the Council or by the Commission, as appro­
priate, before 31 December 1992; whereas the 
application of certain measures in this programme could 
extend beyond the process of completing the internal 
market, given the permanent constraints which are a 
particular feature of the Azores and Madeira; 
Whereas this programme must be based on the twofold 
principle that the Azores and Madeira form an integral 
part of the Community and that the regional reality 
deriving from their particular geographical situation must 
be recognized; 
Whereas the measures contained in the programme must 
accordingly take into account the special characteristics 
and constraints of the Azores and Madeira without 
undermining the integrity and coherence of the 
Community legal order; whereas the economic effects of 
specific measures must therefore remain limited to the 
territory of the Azores and Madeira without affecting 
directly the functioning of the common market; 
Whereas Community policies already provide many 
instruments and programmes which could deal with 
some of the specific problems and constraints of the 
Azores and Madeira, notably concerning fisheries, 
energy, environment, the craft industry and research and 
development; whereas steps should be taken to put these 
instruments and programmes to best use in the Azores 
and Madeira, especially by ensuring that they reach these 
remote regions and by developing appropriate technical 
assistance measures; 
Whereas Community rules must take account of the 
specific nature of the Azores and Madeira and permit 
their economic and social development, particularly in those areas where the fragile nature of island territories 
is particularly acute, such as transport, taxation, the 
social sector, research and development, or the 
protection of the environment in view of the vulnerability 
of the Azores and Madeira to the risks of environmental 
or natural disasters; 
Whereas, with respect to taxation, the special charac­
teristics of the Azores and Madeira can be catered for by 
allowing special indirect taxation arrangements 
compatible with the rules of the Treaty and capable of 
promoting their economic and social development; 
Whereas it is important to provide regular transport links 
at the lowest possible cost to alleviate the drawbacks of 
remoteness and the island location; whereas air transport 
is an instrument of regional development and the most 
appropriate forms of greater liberalization should be 
worked out, notably under partnership arrangements; 
Whereas the exceptional geographical situation of the 
Azores and Madeira in relation to sources of supply for 
products used as inputs in certain food sectors, which are 
essential for current consumption or processing in the 
archipelago, entails costs that are a severe handicap for 
this area; whereas there is a need, in this connection, to 
make special arrangements for the supply of these 
products within the limits of market needs for the two 
regions and taking account of local production and 
traditional trade flows; 
Whereas the extreme remoteness of the Azores and 
Madeira in relation to sources of supply of refined 
petroleum products, coupled with the heavy reliance on 
these products to meet energy needs and the compart-
mentalization of the market, means that supply costs in 
the Azores and Madeira are much higher than in 
mainland Portugal; whereas these costs are at present 
borne by the regional budgets, which limits corre­
spondingly their capability for action to promote 
economic and social development; whereas these higher 
costs should be offset by temporary Community aid tied 
to the application by the two regions of incentive 
programmes to promote investment in energy saving and 
the development of local, renewable energy sources to 
improve the energy supply and demand situation on the 
islands; 
Whereas free zones can be an appreciable instrument of 
economic development in the remote island regions of 
the Azores and Madeira; whereas customs measures may 
be appropriate regarding the arrangements applicable to 
No C 81/10 Official Journal of the European Communities 26. 3. 91 
the free zones in the Azores and Madeira, in view of 
their special geographical situation; 
Whereas, in view of the dependence of the Azores and 
Madeira on the outside world for supplies of steel 
products, it would be appropriate to take temporary 
measures, to extend beyond 31 December 1992 the 
provisions concerning the pricing of these products 
contained in Article 376 of the Act of Accession; 
Whereas the special production conditions in the Azores 
and Madeira require that particular attention be paid to 
applying the common agricultural policy to this region; 
whereas appropriate measures are needed to assist the 
development of the fruit and vegetable and flowers and 
live plant sectors; whereas these measures will have to 
promote the growing of tropical products in particular; 
whereas special attention will have to be given to 
Madeira bananas in view of their crucial economic and 
social importance for the island and with due account 
for aspects relating to ecological balance and the 
countryside; whereas other market and structural 
measures will be required to support local products, 
especially for the milk sector in the Azores in view of the 
social importance for small producers; 
Whereas, in view of the considerable social importance 
of maintaining craft activities in the two regions, specific 
Community measures should be taken to fit in with those 
already planned under the Community support 
framework; whereas these measures should aim at 
promoting vocational training, access to new technology 
and the use of such technology, and access to new 
markets; 
Whereas the preparation, implementation, monitoring 
and evaluation of the measures provided for in this 
programme require a partnership between the 
Commission and the competent national and regional 
authorities; whereas this partnership must permit 
complementarity between the measures laid down in the 
programme and those applied at national and regional 
level; Whereas Portugal and the region must take account of 
the measures and operations under this programme in 
drafting future regional development plans; whereas the 
Commission, within the scope of its powers, will take 
steps to ensure that this programme is consistent with the • 
operations of the Structural Funds and other Community 
financial instruments, 
HAS DECIDED AS FOLLOWS: 
Article 1 
1. An action programme for Madeira and the Azores, 
known as Poseima (Programme of options specific to the 
remote and insular nature of Madeira and the Azores) 
and set out in the Annex, is hereby established. This 
programme shall cover legislative measures and financial 
commitments. 
2. Within the context of the powers conferred upon it 
by the Treaty, the Council shall adopt the provisions 
necessary for the execution of this programme and invite 
the Commission to submit the relevant proposals as soon 
as possible. 
Article 2 
The financial resources required to implement the 
measures relating to agricultural structures appearing in 
this programme shall be determined in the annual 
budgetary procedures. 
Article 3 
This Decision shall take effect on ... 1991. 
Article 4 
This Decision shall be published in the Official Journal of 
the European Communities. 
26. 3. 91 Official Journal of the European Communities No C 81/11 
ANNEX 
PROGRAMME OF OPTIONS SPECIFIC TO THE REMOTE AND INSULAR NATURE OF 
MADEIRA AND THE AZORES (POSEIMA) 
TITLE I 
General principles 
1. Poseima will be based on the twofold principle that Madeira and the Azores form an integral pan of 
the Community and that the regional reality, characterized by the special features and constraints 
specific to the regions concerned as distinct from the Community as a whole, must be recognized. 
2. Implementation of the measures and operations set out in the Poseima programme will in principle be 
carried out before 31 December 1992, through the adoption either by the Council or by the 
Commission, as appropriate, of the necessary legal acts, in accordance with the provisions and 
procedures laid down in the Treaty. 
3.1. The Poseima programme will help attain the general aims of the Treaty by contributing to the 
achievement of the following specific objectives: 
— better integration of Madeira and the Azores into the Community by establishing an appropriate 
framework for the application of common policies in this area, 
— the full involvement of the Azores and Madeira in the dynamic of the internal market by making 
optimum use of existing Community regulations and instruments, 
— assisting the Azores and Madeira to catch up economically and socially, principally through 
Community financing of the specific measures contained in Poseima. 
3.2. The Member State and the regions concerned will take into account the specific measures and oper­
ations contained in Poseima when drawing up future regional development plans. Within the scope 
of its powers, the Commission, for its part, will take steps to ensure that the operations conducted 
under Poseima are consistent with the operations of the Structural Funds and other Community 
financial instruments. 
3.3. The drafting, implementation, monitoring and evaluation of the operations and measures contained 
in Poseima will be carried out in partnership by the Commission and the competent national and 
regional authorities. Efforts will be made to ensure that Poseima operations and those conducted at 
national and regional levels complement each other as far as possible. 
4. The measures and operations contained in Poseima should enable the specific nature and constraints 
of the Azores and Madeira to be taken into account without undermining the integrity and 
coherence of the Community legal order. 
TITLE II 
Optimum use of existing policies and instruments 
5. The Commission, in partnership with the Member State and the two regions concerned, and within 
the framework of the existing regulations, will endeavour to ensure that optimum use is made of 
existing Community instruments and programmes in the Azores and Madeira, in particular by 
developing appropriate technical assistance programmes. 
TITLE III 
Application of common policies in the Azores and Madeira 
6. Directives or other measures adopted in connection with the internal market and other common 
policies will have to take account of the special characteristics of the Azores and Madeira and make 
their economic and social development possible, particularly in the fields of transport and taxation, 
social matters, research and technological development (without prejudice to the Community 
framework programme on this topic), and protection of the environment. 
No C 81/12 Official Journal of the European Communities 26. 3. 91 
7.1. Due allowance will be made in the Community tax regulations for the special characteristics of the 
Azores and Madeira to admit an indirect taxation system specific to these regions, compatible with 
the rules of the Treaty and capable of promoting their economic and social development. 
7.2. As regards VAT this means maintaining special arrangements for the Azores and Madeira in 
accordance with the Act of Accession. 
7.3. A special arrangement for excise duties on manufactured tobacco, spirits and other alcoholic 
beverages, and petroleum products after 31 December 1992 taking account of,the problems of 
extreme remoteness will have to be incorporated into the general framework of the Commission's 
proposals on excise duties. 
8. The Community and the Member State will develop any actions designed to enable the many 
different Community airlines, particularly local airlines, to serve the Azores and Madeira in the 
interests of their development. 
TITLE IV 
Specific measures to mitigate the effects of the exceptional geographical situation 
9.1. Within six months from the date on which this Decision takes effect, the Council or the Commission, 
as appropriate, will adopt the measures laid down in this article which are intended to alleviate the 
impact of the additional costs involved in maintaining supplies of agricultural products resulting from 
the remote and insular nature of the Azores and Madeira. 
9.2. In the case of essential agricultural products for consumption or processing in the two regions, this 
Community action will consist, within the limits of local market requirements and taking into 
account local production and traditional trade flows, in: 
— exempting from level and/or customs duties products originating in non-member countries, 
— permitting, in parallel and in competition with products from non-member countries and on equi­
valent terms, the supply of Community products taken into intervention storage or available on 
the Community market. 
The principles underlying the application of this system will be as follows: 
— in order to ensure that these measures have an impact on the level of production costs and 
consumer prices, a mechanism will have to be set up to monitor this impact up to the end-user 
stage, 
— with respect to raw sugar supplies for the Azores, the system will be applicable until such time as 
local production of sugar beet is sufficient to satisfy local market needs and as long as the total 
volume of sugar refined in the Azores does not exceed 10 000 tonnes, 
— with respect to supplies of compound feedingstuffs in Madeira, the system will be applied tempo­
rarily pending an increase in capacity and the modernization of the industry producing these 
feedingstuffs, subject to the limits of local market needs and taking account of local production. 
This measure could be applied for three marketing years for the products coming under CN 
codes 2309 90 31, 33, 41, 43, 51 and 53. 
9.3. In the Azores, for the purposes of genetic improvement, aid may be granted for the purchase of male 
breeding animals originating in the Community (beef breeds). 
9.4. In Madeira, specific measures will be necessary to develop livestock farming for local market needs: 
— aid for the purchase of breeding animals (cattle, pigs, chicks and hatching eggs) originating in the 
Community, 
26. 3. 91 Official Journal of the European Communities No C 81/13 
— on a temporary basis, limited to decreasing quantities pending the development of local 
production, exemption from levies and/or customs duties for the purchase of cattle for fattening 
originating in non-member countries; in the light of this exemption, aid for the supply of 
Community products will be granted to facilitate the access of these products on equivalent 
conditions. After four years of application of the system, the situation would be reviewed. 
9.5. For the production of liqueur wines in Madeira solely to satisfy local market needs, aid will be 
provided for the purchase of rectified concentrated musts in the Community, pending the result of a 
feasibility study on the construction of a wine alcohol distillery. 
10.1. In the course of 1991 specific Community aid to compensate for the extra cost of supplying oil to the 
Azores and Madeira will be introduced for a three-year period on the terms laid down in paragraphs 
10.2 to 10.5. 
10.2. The extra costs to be offset by this aid are those related to the transport by sea of petroleum products 
between the mainland and the main depots on the islands of the Azores and Madeira, and between 
the main depots and the secondary depots on the other islands. 
10.3. The reference year for the calculation of Community aid will be 1989: account will be taken only of 
the costs of sea transport — and not of the cost of storage and distribution on the islands — on the 
basis of the quantities of petroleum products actually transported in 1989, the average transport costs 
by category of product in 1989 and the average ecu/escudo exchange rate in that year. 
10.4. Aid will be granted for three years from 1 January 1991 up to 31 December 1993. During these three 
years, annual Community aid will remain constant and equal to the extra cost of supplies, as defined 
above, in the reference year (1989). 
10.5. Community aid will be granted subject to the condition that over the same period the beneficiary 
regions devote at least 50 % of the amount of Community aid to incentive programmes to promote 
investment in energy saving and the development of local, renewable energy sources to improve the 
situation of energy supply and demand on the islands. The regional authorities will present an annual 
report to the Commission to enable it to monitor observance of this condition. 
11. Inward processing operations carried out in the Azores and Madeira free zones will not be subject to 
the economic conditions attaching to these arrangements. 
12. The provisions concerning the pricing of steel products contained in Article 376 of the Act of 
Accession will be extended for three years beyond 31 December 1992. During the year preceding the 
expiry of this period the Commission will evaluate this measure and review the situation. 
TITLE V 
Specific measures to support products of Madeira and the Azores 
13. In view of the economic and social importance of bananas for Madeira and the objective of a fair 
standard of living for producers, the Commission will, without waiting for the adoption of common 
rules, decide on structural action to assist this sector. With a view to improving the conditions of 
production and competition, such action will include measures concerning research, harvesting, pres­
entation and processing, transport, storage, marketing and commercial promotion. 
The Council, acting on a proposal from the Commission, will lay down provisions for bananas before 
31 December 1992 with a view to the completion of the single market. 
14.1. Within six months from the date on which this Decision takes effect the Council or the Commission, 
as appropriate, will adopt the measures referred to in this Article. 
No C 81/14 Official Journal of the European Communities 26. 3. 91 
14.2. Measures for the fruit and vegetable and live plants and flowers sectors in the Azores and Madeira 
may take the form of: 
— temporary aid per hectare for programmes of measures carried out by producers and producer 
groups or organizations to diversify production and/or improve product quality; these 
programmes should serve to develop tropical products in particular. The aid may be increased in 
cases where the implementation of these programmes involves technial assistance measures, 
— aid for the marketing of tropical products where the volume of trade does not exceed 3 000 
tonnes for each product and for each of the two regions, under marketing season contracts 
between producers in these regions and operators in other parts of the Community, 
— the funding of an economic analysis and forward planning study of the processed fruit and 
vegetable sector (particularly tropical fruit and vegetables). 
14.3. Other measures to help support and develop local production on Madeira may take the form of: 
— specific aid per hectare for potato-growing, within the limits of the present areas under culti­
vation, irrespective of any measures which might be adopted in the context of a market organ­
ization for this product, 
— as regards sugar cane: 
— specific aid per hectare for producers and producer groups or organizations growing sugar 
cane under a restructuring plan to be submitted by the Portuguese authorities. After five years 
this aid may be granted solely to producer groups or organizations, 
— aid for the direct processing of sugar cane into sugar syrup ('Mel de cana') or farm rum, 
where a minimum price is paid to the cane-grower, 
— specific aid for grapes to be used in the making of quality wines psr, to be granted to producers 
and producer groups or organizations, subject to appropriate limits on the yield per hectare. 
Quantities delivered for distillation will not be taken into account. After five years this aid will be 
granted solely to producer groups or organizations, 
— specific aid to support products of traditional stockfarming on Madeira and intended for local 
consumption (fresh milk and fresh meat). 
14.4. Other measures to help support local production in the Azores may take the form of: 
— in the case of sugar beet: 
— flat-rate aid per hectare for the development of local production, subject to a limit on quan­
tities corresponding to production of 10 000 tonnes of sugar, 
— specific aid for the processing of locally grown beet into white sugar, with a view to 
stabilizing supply costs, 
— specific aid per hectare for the growing of seed potatoes (subject to a maximum of 200 hectares) 
and for the growing of chicory (subject to a maximum of 400 hectares), 
— specific aid for the collection of tobacco and for the traditional local production of leaf tobacco, 
subject to maximum guaranteed quantities, 
— temporary aid per hectare for the growing of vines to produce quality wines psr, to be granted to 
producers and producer groups or organizations pending the results of restructuring and subject 
to a maximum of 1 700 hectares, 
— specific aid designed to ensure the survival of traditional economic activities in the milk sector, 
— specific additional aid for the fattening of adult male catde, within the limits of traditional levels 
of production. 
26. 3. 91 Official Journal of the European Communities No C 81/15 
14.5. As regards animal and plant health, appropriate measures will be taken to safeguard Madeira and the 
Azores from certain harmful diseases and organisms against which they are not yet protected. A 
Community financial contribution may also be made towards prevention or eradication programmes. 
14.6. To encourage agricultural producers in the Azores to supply high-quality products and to promote 
the marketing of such products, the Community may finance the design and promotion of a logo for 
each of these regions. 
14.7. Special exceptions may be made, on the basis of duly substantiated applications from the Portuguese 
authorities, to provisions restricting or preventing the granting of certain types of structural aid to 
reflect the special characteristics of agriculture in the Azores and Madeira, with due account being 
taken of the measures already adopted to assist Portugal. 
14.8. New forms of structural assistance may also be envisaged within the framework of programmes to be 
submitted by the Portuguese authorities: 
(a) Madeira: 
— aids to improve and diversify production and to improve product quality, particularly in the 
case of wine, fruit and vegetables, flowers and live plants, animal products and forestry 
products; 
(b) the Azores: 
— aids to improve and diversify production and to improve product quality, particularly in the 
case of milk, animal products, fruit and vegetables, flowers and live plants, wine and forestry 
products, 
— aid to offset the additional cost of agricultural investments because of the need for protection 
against natural disasters and, where production has been diversified, aid for the establishment 
of a solidarity fund for the restoration of production potential damaged by natural disasters. 
15.1. Community measures will be introduced to assist small businesses in the Azores and Madeira in the 
fields of occupational training, access to new technology and the use of such technology, and access 
to new markets. 
15.2. Such projects must be selected, on the one hand, on a partnership basis in close collaboration with 
the regional and local authorities concerned and, on the other hand, be consistent with the schemes 
implemented by the Commission in other regions of the Community. 
15.3. The Commission and the Member State will introduce the necessary measures to improve the 
dissemination and accessibility of the programmes and networks available under the Community's 
enterprise policy, with a view to increasing the productivity of the craft sector in the Azores and 
Madeira and increasing their outlets on the Community market. 
TITLE VI 
Final provision 
16. The Commission will report annually to the Council on progress in the implementation of the 
Poseima programme.