No C 39/6 Official Journal of the European Communities 16. 2. 89 
II 
(Preparatory Acts) 
COMMISSION 
Proposal for a Council Decision concerning the dock dues arrangements in the French overseas 
departments 
COM(88) 730 final 
(Submitted by the Commission on 1 December 1988) 
(89/C 39/07) 
THE COUNCIL OF THE EUROPEAN COMMUNITIES, 
Having regard to the Treaty establishing the European 
Economic Community, and in particular Article 227 (2) 
thereof, 
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 Article 227 (2) of the Treaty stipulates that a 
number of provisions of the Treaty shall apply to the 
French overseas departments (OD) as from the entry 
into force of the Treaty; whereas the conditions under 
which the other provisions were to apply were to be 
determined within two years of the entry into force of 
the Treaty by decisions of the Council, acting unan­
imously on a proposal from the Commission; whereas 
this Article has been interpreted by the Court of Justice 
to mean that after the expiry of the stipulated two years 
all the provisions of the Treaty and of secondary legis­
lation became applicable automatically in the OD, it 
being understood however that there still remains the 
possibility of making subsequent provision for specific 
measures in order to meet the needs of the territories 
concerned; 
Whereas action to promote the economic and social 
development of the OD in the past has been in the form 
of isolated measures; whereas, however, the Joint 
Decision of the Council and the Commission of . . . 
established an action programme for the OD known as 
'Poseidom'; whereas this programme contains a tax 
component which needs to be implemented; 
Whereas the Eleventh Council Directive 80/368/EEC of 
26 March 1980 on the harmonization of the laws of the 
Member States relating to turnover taxes (') excluded the 
OD from the scope of the Sixth Directive 77/388/EEC 
(*) OJ No L 90, 3. 4. 1980, p. 41. on the common system of VAT; whereas, however, each 
OD imposes a special charge on all goods imported into 
its territory, known as dock dues; 
Whereas the dock dues, which originated in the 19th 
century, at present constitute a means of support for 
local industries, which have to contend with the 
problems of remoteness and insularity; whereas they also 
constitute a vital instrument of self-reliance and local 
democracy and provide resources which contribute to 
the communal development of the OD; 
Whereas the dock dues system in its present form has 
features, however, which necessitate its reform as a 
means of integrating the OD fully into the process of 
completing the internal market, while taking account of 
their fragile economic structure; 
Whereas this system should be converted, over a period 
of time that is convenient for both local and national 
authorities, into a system of internal taxation applicable 
to all products marketed in the OD; whereas such a 
system comes within the scope of Articles 95 et seq. of 
the Treaty. 
Whereas, however, for the purposes of maintaining and 
developing industrial activities in the OD it would be 
advisable to authorize the local authorities to exempt 
local industries either totally or partially, according to 
economic requirements, from the application of the new 
tax for a period not exceeding, in principle, 10 years; 
Whereas, in order to ensure full compliance with the 
rules of the Treaty and the necessary coordination with 
the general aims pursued by the Community, the exercise 
of powers by the local authorities in granting exemptions 
from the tax should be subject to prior authorization by 
the Commission, which will take decisions in accordance 
with a procedure which it shall determine, taking into 
account the specific constraints of the OD, with a view 
to attaining the aim stipulated in Article 227 (2) of the 
Treaty that care be taken to make possible the economic 
and social development of the regions concerned; 
tD 2 ^ COfficial]ournal of the European Communities P^oC^BB 
whereas the exemption arrangements should he 
temporary and should normally he terminated tO years 
after the reform of the systems whereas at the end of this 
time the tax arrangements should therefore he fully in 
line ^vith the principles of Article ^ of the Treaty^ it 
bein^ understood that support measures ^vith the same 
aims can stillhe adopted in the context of regional aid 
and in compliance ^vith the provisions of Articles ^2 to 
^ taking into account the arrangements for the 
applicationofVATi^theC^PO^ whereas the Commission 
^villpresentareporttotheCouncilbeforetheexpiryof 
this tOyear periods concerning the implementation of 
the arrangements and their impact on the development 
of theC^ together ^vithappropriateproposals^ 
^hereas^ pending the reform of the dockdues systems 
Prance should he authorised to maintain the system in its 
present form until not later than ^t Mecember 1^^ 
subject to certain conditions ensuring that the system has 
the least possible effect on the common market and is 
used exclusively for the purpose of attaining the aim 
stipulated in Article 2^^ofthefreaty^ 
^A5AOO^r^or^5 0^e^o^ 
ThePrench authorities shall take the necessary measures 
to convert the dock dues system at present in force in the 
C^M^ in accordance ^vith the principles set out in Articles 
2and^ 
B^r^c^2 
1. By ^1 Mecember t^^atthelatest^ thedockdues 
system shallbereplacedby tax arrangements consisting 
of a special tax applicable to all products^ whether 
imported intoor produced in the Cum. 
2. The revenue from the tax shall be put to use in 
sucha^vayas to encoura^eas effectively as possible the 
economic and social development of each CuU. The 
Prench authorities shall inform the Commission of the 
measures adopted in order to attain this abjective. 
^. Therelevant authorities of eachCoPOshallestablish 
abasic rate of tax.This rate may be adjusted for certain 
categories of products^ ^vith necessities in particular 
bein^taxedatareducedrate. 
4. ^here necessary for the promotion or maintenance 
of a^ivenindustrialactivity^ 
— Prance may be authorised to exempt from the tax the 
local production activities concerned^ either totally or 
partially according to economic requirements^ for a 
period of not more than ^0 years from the date of 
introduction of the systems — thePrenchauthoritiesshallpresent proposals for the 
abovementioned exemption to the Commission for its 
approvals the Commission shall take a decision 
within t^vo months in accordance ^vith a procedure 
^vhich it shall determined taking into account the 
specific constraints on the Cue^ ^vith a vie^v to 
attaining the objective stipulated in Article 22^^of 
the Treaty^ without prejudice to supervision by the 
commission pursuant to Articles ^2 and ^ of the 
Treaty 
^ The tax referred to in Article^andVATas applied 
in the (mM shall be considered jointly for the purposes of 
the process of approximating VATrates ^vith a vie^v to 
the abolition of taxfrontiers. 
^lotlaterthanoneyearbeforetheexpiry of theperiod 
provided for in Article 2 C^ the Commission ^vill 
present to the Councilareportontheimplementationof 
the arrangements referred to in Article 2^ in order to 
ascertain the impact of the measures adopted on the 
economy of the CdO. The matters tobe covered in the 
report ^vill include the effect of the arrangements onthe 
economic and social development of the C^ the 
freedom of movement of products within the 
Community^ the trend of VAT rarest and regional 
cooperationbet^veen theCaUand their neighbours. 
In theli^htof thereport^s conclusions^ the Commission 
^vill present to the Councilaproposal for terminating in 
principle the exemptions providedfor in Article^^it 
bein^ understood that support measures ^vith the same 
aims may be taken in the context of regional aid^ in 
conformity ^vith the provisions of Articles ^2 to ^4 of the 
Treaty^ taking into account the detailed arrangements 
forapplyin^VATintheC^M 
Pendin^implementationof thereformof thedockdues 
system in accordance ^vith the guidelines set out in 
Article P Prance shall be authorised to maintain the 
current dockdues arrangements until not later than ^U 
Mecember t^2 on condition that any extension of the 
listof products subjecttodockdues or any increase in 
the rates thereof shall be subject to prior authorisation 
by theCommission.The Commission shallalso examine 
^viththerelevantlocalauthoritiesanychan^es that have 
takenplacesince t ]anuary t^O. 
ThisPOecision isaddressedtothePrenchRepublic.