Opinion of the Economic and Social Committee on the "Proposal for a Council Regulation amending Regulation (EEC) No 1911/91 on the application of the provisions of Community law to the Canary Islands"
Date: 2001-03-01
Institutions: European Economic and Social Committee
Subjects: CCT duties, Canary Islands, application of EU law, common tariff policy, transitional period (EU)

11.5.2001

EN

Official Journal of the European Communities

C 139/93

Opinion of the Economic and Social Committee on the ‘Proposal for a Council Regulation
amending Regulation (EEC) No 1911/91 on the application of the provisions of Community law
to the Canary Islands’

(2001/C 139/17)

On 21 February 2001, the Council decided to consult the Economic and Social Committee, under
Article 262 of the Treaty establishing the European Community, on the above-mentioned proposal.

The Economic and Social Committee decided to appoint Mrs M. Lopez Almendariz as rapporteur-general.

At its 379th plenary session of 28 February and 1 March 2001 (meeting of 1 March 2001), the Economic
and Social Committee adopted the following opinion by 66 votes to one.

1.

Introduction

is satisfactory for Spain and the Canary Islands and takes
account of the objectives of Article 299(2) of the Treaty.

1.1.
The Commission has proposed a new Council Regu-
lation amending Regulation (EEC) No 1911/91 on the appli-
cation of Community law to the Canary Islands (1).

1.2.
In accordance with Articles 5 and 6 of Council
Regulation (EEC) No 1911/91 of 26 June 1991 on the
application of the provisions of Community law to the Canary
Islands, the transitional period for the introduction of the
Common Customs Tariff (CCT) and the transitional period
during which the Spanish authorities are authorised to impose
a tax on production and imports (APIM) on all products
entering or produced in the Canary Islands both expire on
31 December 2000.

In October and November 2000, the Spanish auth-
1.3.
orities requested that
these transitional periods and the
measures introduced be extended in accordance with Council
Regulation (EEC) No 1911/91.

1.4.
The request was supported by documentation showing
that, although the economic situation in the Canary Islands
has improved during the transitional period, the complete
integration of the region would lead to a decline in industrial
and commercial activity and an increase in unemployment in
the various sectors concerned.

1.5.
However, in the limited amount of time available, it
was not possible to determine what impact ending or changing
existing measures would have on the economic and social
situation in the Canary Islands.

As stipulated in Article 25(4) of the Act of Accession
1.7.
of Spain and Portugal, the legal basis of the proposal, this
amendment must be approved unanimously by the Council.

2.

Special provisions applicable to the Canary Islands: a
gradual and tailor-made integration

The Canary Islands became part of the EU with the

2.1.
accession of Spain in 1986.

2.2.
The Act of Accession of Spain and Portugal acknowl-
edged the special and difficult social and economic situation
in the archipelago (2). In recognition of these particular diffi-
culties, the Canary Islands were initially excluded from the
Community customs area, the common commercial policy,
and the common agricultural and fisheries policies.

By virtue of the first paragraph of Article 25(4) of the
2.3.
Act of Accession, at the request of Spain, the Council, acting
unanimously on a proposal from the Commission and after
consulting the European Parliament, may decide to include the
Canary Islands in the customs territory of the Community and
define appropriate measures aimed at extending to these
islands the provisions of Community law in force. On 7 March
1990, Spain submitted such a request in accordance with this
article.

1.6.
To ensure that the economic players concerned enjoy
a degree of continuity in the legal framework in which they
operate, it is therefore necessary to extend the transitional
periods by one year. This also gives the parties involved in the
decision-making process sufficient time to find a solution that

2.4.
The integration of the Canary Islands into all the
common policies must be a gradual process spanning an
appropriate transitional period and must not undermine the
special measures that take account of the remote and insular
nature of the Canaries and historical economic and taxation
arrangements. On 26 June 1991 the Council therefore adopted

(1) OJ L 171, 29.6.1991, p. 1.

(2) Act of Accession, Protocol No 2.

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Regulation (EEC) No 1911/91 on the application of the
provisions of Community law to the Canary Islands.

between 1 January and 30 June 2000 in the case of certain
sensitive products, as this phasing-out could lead to the
practical disappearance of the sectors concerned.

2.5.
In application of Regulation (EEC) No 1911/91, these
special measures were developed via a programme of options
specific to the remote and insular nature of the Canary Islands
(Council Decision establishing a programme of options specific
to the remote and insular nature of
the Canary Islands
(Poseican) [91/314/EEC)].

2.6.
Since then, and prior to the introduction in the Treaty
establishing the European Community of Article 299(2) which
recognises the specific situation of the outermost regions and
the need to adopt specific measures, many Community
provisions have been adopted in response to the specific
problems in the Canaries.

Article 299(2) of the Amsterdam Treaty makes specific
2.7.
provision for the application of the Treaty to the French
Overseas Departments, the Azores, Madeira and the Canary
Islands and provides that the Council, after consulting the
European Parliament, shall adopt specific measures aimed at
laying down the conditions for the application of the Treaty to
those regions taking account of their structural social and
economic situation which is compounded by their remoteness,
insularity, small size, difficult topography and climate, and
economic dependence on a few products. The specific
measures are to take into account areas such as customs and
trade policies, fiscal policy, free zones, agriculture and fisheries
policies, conditions for supply of raw materials and essential
consumer goods, State aids and conditions of access to
structural funds and to horizontal Community programmes.

2.8.
To further refine the scope of Article 299(2) TEC, on
14 March 2000 the Commission adopted a report on measures
aimed at its implementation.

3.

The APIM (Arbitrio sobre la produccio´ n y sobre las
importaciones)

Article 5(1) of Council Regulation (EEC) No 1911/91
3.1.
of 26 June 1991 provides that the tax on production and
imports [‘arbitrio sobre la produccio´ n y sobre las importacion-
es’ (APIM)], which has gradually been reduced since 31 Decem-
ber 1996 in application of Article 5(2) and Council Decision
No 96/34/EC of 20 December 1995 (1), is limited to a period
ending on 31 December 2000.

Council Regulation (EC) No 2674/1999 of 13 Decem-
3.2.
ber 1999(2), amending Regulation (EEC) No 1911/91, stipu-
lated that the phasing-out of the tax should be suspended

3.3.
In addition, the aforementioned Commission report of
14 March 2000 pointed out that, where taxation is concerned,
Article 299(2) authorises specific measures for the outermost
regions, providing requests continue to be justified by the
disadvantages suffered by these regions. The future of tax
measures that are applicable to the outermost regions will also
depend on requests made by the Member States concerned. In
each case, the most appropriate instruments must be found to
meet the objectives of regional development and aid to these
regions, making use of exceptional tax measures which could
even be applied over an extended period of time.

The memorandum submitted by Spain to the Com-
3.4.
mission on 23 November 1999 provides, as an alternative, for
the application of a neutral tax that would take account of the
need to see the production of goods in the Canary Islands rise
to a certain level.

3.5.
By letter of 25 July 2000 Spain provided the Com-
mission with data on the socio-economic conditions in the
Canary Islands and a new tax called the ‘Arbitrio sobre los
Importaciones y Entregas de Mercancias en las islas Canarias
(AIEM)’. This tax would implement Article 299(2) TEC and
replace the APIM, due to expire on 31 December 2000. On
25 October 2000 Spain forwarded further information to the
Commission on the proposed rates of this future tax. The
Commission has begun its discussion and assessment on the
basis of this information. Its evaluation considers the impact
of tax measures on sensitive products in the most vulnerable
sectors and is based on the criteria of necessity, proportionality
and the exact nature of the measures. Its aim is to identify the
most appropriate specific measures which can be taken to
offset the handicaps referred to in Article 299(2).

3.6.
By letter of 31 October 2000, the Spanish authorities
applied for the transitional period provided for in Article 5 of
Regulation (EEC) No 1911/91 to be extended to allow the
Spanish proposal to be examined in greater depth.

Such an extension is necessary to safeguard economic activities
in the Canary Islands and to ensure a smooth transition up to
the introduction of the new tax measures for the Canary
Islands under Article 299(2).

(1) OJ L 10, 13.1.1996, p. 38.
(2) OJ L 326, 18.12.1999, p. 3.

In the aforementioned report of 14 March 2000, the
3.7.
Commission undertook to ensure continuity with existing
measures. This implies that, throughout 2001, the rates and

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exemptions relating to the APIM tax would be maintained at
the level applying at 31 December 2000.

5.2.
Once again, the Committee recognises that the outer-
most regions of the European Union merit special consider-
ation in the application of Community policy.

4.

Tariff suspensions

Council Regulation (EEC) No 3621/92 of 14 December
4.1.
1992 temporarily suspending the autonomous Common
Customs Tariff duties on imports of certain fishery products
into the Canary Islands and Council Regulation (EC) No 527/96
of 25 March 1996 temporarily suspending the autonomous
Common Customs Tariff duties and progressively introducing
the Common Customs Tariff duties on imports of certain
industrial products into the Canary Islands both expire on
31 December 2000. The validity of both regulations is based
on the transitional period established in Article 6(1) of
Regulation (EEC) No 1911/91.

4.2.
In October and November 2000, the Spanish auth-
orities requested that suspensions be maintained in the Canary
Islands beyond 2000. Supporting documents were provided.

4.3.
Because there has not been sufficient time to assess the
documentation submitted and decide whether maintaining the
measures is justified or not, it would seem appropriate to
respond to this request by the Spanish authorities by extending
the application of Council Regulations (EEC) No 3621/92 and
(EEC) No 527/96 until 31 December 2001, so as to ensure
continuity of treatment.

4.4.
Before either of these regulations can be extended, it is
a legal requirement that Article 6(1) of Council Regulation
(EEC) No 1911/91 be amended and the transitional period
extended.

5. Conclusions and recommendations

5.1.
The Economic and Social Committee welcomes this
opportunity to comment on the proposed amendment to
Regulation (EEC) No 1911/91 on the application of the
provisions of Community law to the Canary Islands.

Brussels, 1 March 2001.

5.3.
Developments in recent years show that the economic
situation in the Canary Islands has improved in both absolute
and relative terms. However, it must be remembered that the
disadvantages suffered by the Canaries and the other outermost
regions are structural and permanent. Efforts to consolidate
the specific arrangements for these regions and enable them to
participate on an equal footing in the Community to which
they belong must therefore continue.

5.4.
The ESC therefore welcomes the agreement reached by
the Commission with the Spanish authorities to ensure
continuity with existing measures.

Given that

5.5.
the Commission undertook to ensure
continuity with existing measures in order to safeguard
economic activities in the Canary Islands, the Committee
recommends that in the interests of greater legal certainty, the
Commission specify which rates relating to the APIM tax
would apply during the extended transitional period. It also
recommends maintaining throughout 2001 the rates applying
at 31 December 2000.

5.6.
The Committee points out that the rates for the APIM
tax are currently between 0 and 1,15 %, compared to initial
rates of between 0,1 and 5 %. This level is insignificant and
means the tax fails to meet its intended objective of protecting
the vulnerable sectors of the Canary Islands’ economy. The
Committee therefore stresses the urgency of adopting an
alternative to the phasing-out and total disappearance of the
AIPM.

5.7.
The ESC therefore trusts that negotiations between the
Commission and the Spanish authorities concerning both the
new tax (AIEM) and the maintenance of tariff suspensions in
the Canary Islands beyond 2000 will progress favourably and
lead to the swift adoption of both measures, the legal basis and
justification of which is the new Article 299(2).

The ESC therefore accepts the arguments made for
5.8.
amending Regulation (EEC) No 1911/91 to extend the tran-
sitional period established in this regulation for one year.

The President

of the Economic and Social Committee

Göke FRERICHS