Proposal for a Council Regulation introducing a scheme to compensate for the additional costs incurred in the marketing of certain fishery products from the Azores, Madeira, the Canary Islands, and the French departments of Guiana and Réunion from 2007 to 2013
Date: 2006-11-30
Institutions: European Commission
Subjects: Azores, Canary Islands, French Guiana, Madeira, Réunion, common fisheries policy, fishery product, peripheral region, sales aid

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 30.11.2006 
COM(2006) 740 final 

2006/0247 (CNS) 

Proposal for a 

COUNCIL REGULATION  

introducing a scheme to compensate for the additional costs incurred in the marketing 
of certain fishery products from the Azores, Madeira, the Canary Islands, and the 
French departments of Guiana and Réunion from 2007 to 2013 

(presented by the Commission) 

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EXPLANATORY MEMORANDUM 

1. 

CONTEXT OF THE PROPOSAL 

•  Grounds for and objectives of the proposal 

Article  12  of  Council  Regulation  (EC)  No  2328/2003  introducing  a  scheme  to 
compensate  for  the  additional  costs  incurred  in  the  marketing  of  certain  fishery 
products from the Azores, Madeira, the Canary Islands and the French departments 
of  Guiana  and  Réunion,  as  a  result  of  those  regions'  remoteness  requires  of  the 
Commission  to  report  to  the  European  Parliament,  the  Council  and  the  European 
Economic and Social Committee on the implementation of the measures provided for 
in  this  regulation,  accompanied,  if  necessary,  by  proposals  for  appropriate 
adjustments needed to achieve the objectives laid down in this Regulation. 

•  General context 

Since  1992,  the  European  Union  provides  support  to  the  producers  of  fishery 
products  in  the  outermost  regions  in  order  to  offset  the  extra  costs  of  transporting 
fisheries  products  to  distant  mainland  European  markets  and  thus,  to  integrate  the 
fisheries sector in those regions better into the internal market. It  has  progressively 
been extended from the Azores, Madeira, the Canary Islands to the French territories 
of Guiana (from 1994 on) and Réunion (from 1998 on). 

•  Existing provisions in the area of the proposal 

The  current  basis  for  support,  Regulation  (EC)  No  2328/2003,  covering  an  overall 
financial envelope of 15 million €/year, expires by 31 December 2006. 

The  Commission's  report  and  the  accompanying  Commission  Staff  Working 
Document provide an assessment of the application of the compensation scheme on 
the  basis  of  data  available  in  the  Commission  and  of  an  external  study  on  "the 
structural  aspects  of  the  Common  Fisheries  Policy  in  the  outermost  regions".  The 
report concludes that the continuation of the scheme for the period 2007-2013 should 
be considered in view of the positive impact of the scheme on the fisheries sector in 
the outermost regions and the persisting need for support. 

However,  in  view  of  the  assessment  and  the  study's  findings  it  is  suggested  to 
improve  the  efficiency  of  the  compensation  scheme  by  introducing  the  following 
amendments to the current scheme: 

– 

– 

Determination  and  adjustments  of  lists  of  eligible  fishery  products  and  their 
quantities  and  of  compensation  amounts  by  Member  States  within  a  fixed 
annual  amount  based  on  allocations  in  the  current  scheme  to  increase 
pertinence and flexibility of the scheme. 

Introduction  of  safeguards  to  avoid  unjustified  levels  of  compensation  by 
focusing  on  compensation  of  transport  costs,  limiting  compensation  to  a 
determined  share  in  transport  and  other  related  costs  and  taking  into 

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– 

– 

– 

consideration  other  types  of  public  intervention  for  the  determination  of 
compensation. 

Definition of clearer eligibility conditions for recipients and products in order 
to  guarantee  a  better  achievement  of  the  objectives  of  the  scheme  and 
compliance of assisted products with the Common Fisheries Policy. 

Introduction of annual reporting by the Member States and of the requirement 
to ensure the setting-up of an implementation system that assures the regularity 
of operations. 

Switch of the financial management system from shared management under the 
Guarantee  Section  of  the  European  Agricultural  Guidance  and  Guarantee 
Funds  to  direct  centralised  management  under  the  European  Agricultural 
Guarantee Fund in accordance with Article 3(2) f) of Council Regulation (EC) 
No 1290/2005 on the financing of the common agricultural policy. 

It should be noted in that context that the Guidelines for the examination of state aid 
to  fisheries  and  aquaculture  (2004/C229/03,  OJ  C  229  of  14.9.2004,  p.5)  allow  for 
the assessment of aid to meet the needs of the outermost regions on a case-by-case 
basis  and  in  the  light  of  the  specific  handicaps  recognised  in  Article  299(2)  of  the 
Treaty.  

•  Consistency with the other policies and objectives of the Union 

The continuation of the compensation scheme is in line with Article 299(2) of the EC 
Treaty  providing  for  specific  measures  to  assist  the  outermost  regions.  It  also 
corresponds  to  the  Commission's  commitment  given  in  its  Communication  on  a 
stronger  partnership  for  the  outermost  regions  of  26  May  2004  (COM)  (2004) 
343final) which identifies the reduction of additional costs in the outermost regions 
due  to  their  recognised  handicaps  as  one  of  the  main  priorities  of  the  Union's 
activities  to  help  these  regions  to  overcome  the  problems  resulting  of  their 
remoteness. 

2. 

CONSULTATION OF INTERESTED PARTIES AND IMPACT ASSESSMENT 

•  Consultation of interested parties 

Consultation of stakeholders of the fisheries sector in the outermost regions as well 
as  of  representatives  of  regional  and  national  administrations  took  place  in  the 
framework of fact finding missions for the external study on 'the structural aspects of 
the Common Fisheries Policy in the outermost regions'. In addition, the Commission 
organised two seminars in order to inform and consult them on this study. One event 
took  place  in  November  2005  in  Réunion,  France,  on  'the  outermost  regions  and 
fishing – outlook and particular issues' to explain the objectives and the methodology 
of  the  study,  the  other  one  in  Brussels  in  January  2006  to  present  and  discuss  the 
factual part of the study. 

Responses  resulting  from  interviews  and  the  discussions  in  the  seminar  have  been 
taken on board to a large extent in the study by the external experts. 

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•  Collection and use of expertise 

See above. 

•  Impact assessment 

An  impact  assessment  was  not  considered  as  the  proposal  is  no  major  policy 
initiative but a mere prolongation of an existing support scheme. It appeared also not 
to  be  necessary  in  view  of  the  external  study  which  purpose  was  to  provide 
recommendations amongst others for the future of the compensation scheme. 

3. 

LEGAL ELEMENTS OF THE PROPOSAL 

•  Summary of the proposed action 

It is proposed to continue Community compensation for additional costs incurred in 
the  marketing  of  fishery  products  by  some  outermost  regions  for  the  period  2007-
2013  in  order  to  off-set  the  extra-costs  for  transporting  these  products  to  the 
European mainland. 

•  Legal basis 

Article 37 and 299(2) of the EC Treaty 

•  Subsidiarity principle 

Article  299(2)  of  the  EC  Treaty  requires  of  the  Council  to  adopt  specific  measures 
for the outermost regions on a proposal from the Commission.  

•  Proportionality principle 

The proposal complies with the proportionality principle for the following reason(s). 

The  proposal  for  the  continuation  of  the  compensation  scheme  introduces  a  higher 
degree  of  proportionality  as  it  leaves  the  determination  of  eligible  products, 
quantities and compensation amounts to the Member States within a fixed allocation 
per Member State. 

The administrative burden for both Member States' national and regional authorities 
and  the  Commission  services  is  kept  to  a  minimum  by  providing  for  simple 
submission and acceptance procedures. 

•  Choice of instruments 

Proposed instruments: Regulation. 

Other means would not be adequate for the following reason(s). 

Article 299(2) of the Treaty is the basis for this type of Community action. 

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4. 

BUDGETARY IMPLICATION 

For the period 2007-2013 an annual budget of around 15 m€ is envisaged. It will be 
covered by the European Agricultural Guarantee Fund and be implemented by direct 
centralised management. 

5. 

ADDITIONAL INFORMATION 

•  Simplification 

The  proposal  provides 
administrative procedures for public authorities (EU or national). 

for  simplification  of 

legislation,  simplification  of 

Eligible  fishery  products,  quantities  and  compensation  amounts  are  not  any  more 
determined  at  Council  level  but  will  be  established  by  the  national/regional 
authorities  in  the  framework  of  general  eligibility  rules  established  in  the  Council 
Regulation. 

The  national  authorities  have  to  submit  the  information  on  the  determination  and 
adjustment  of  eligible  products,  quantities  and  compensation  amounts  to  the 
Commission which is deemed to be accepted if the Commission does not react within 
2 months of submission. 

The  proposal  is  included  in  the  Commission's  rolling  programme  for  up-date  and 
simplification of the acquis communautaire. 

•  Review/revision/sunset clause 

The proposal includes a review clause. 

The proposal includes a sunset clause. 

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2006/0247 (CNS) 

Proposal for a 

COUNCIL REGULATION  

introducing a scheme to compensate for the additional costs incurred in the marketing 
of certain fishery products from the Azores, Madeira, the Canary Islands, and the 
French departments of Guiana and Réunion from 2007 to 2013 

THE COUNCIL OF THE EUROPEAN UNION, 

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

Having regard to the proposal from the Commission, 

Having regard to the opinion of the European Parliament1, 

Having regard to the opinion of the European Economic and Social Committee2, 

Whereas: 

(1) 

The fisheries sector in the outermost regions of the Community is facing difficulties, 
and in particular additional costs incurred in the marketing of certain fishery products 
due  to  the  particular  handicaps  recognised  by  Article  299(2)  of  the  Treaty,  and 
resulting mainly from the transport costs to continental Europe.  

(2)  With a view to maintaining the competitiveness of certain fishery products compared 
with  that  of  similar  products  from  other  Community  regions,  the  Community 
introduced measures from 1992 to compensate for such additional costs in the fisheries 
sector. The measures applying for the period 2003-2006 are laid down in Regulation 
(EC) No 2328/20033. It is necessary from 2007 to continue measures for offsetting the 
additional costs for the marketing of certain fishery products on the basis of a report 
by  the  Commission  to  the  European  Council,  the  European  Parliament  and  the 
European Economic and Social Committee. 

(3) 

In view of the different marketing conditions in the outermost regions concerned, the 
fluctuations  in  captures  and  stocks  and  of  market  demands,  it  should  be  left  to  the 
Member States concerned to determine the fishery products eligible for compensation, 
their respective maximum quantities and the compensation amounts within the overall 
allocation per Member States. 

1 
2 
3 

Opinion of …….(OJ…or not yet published in the OJ) 
Opinion of …. (OJ … or not yet publishied in the OJ) 
OJ L 345, 31.12.2003, p.34 

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(4)  Member  States  should  be  authorised  to  differentiate  the  list  and  the  quantities  of 
fishery  products  concerned  and  the  amount  of  compensation  within  the  overall 
allocation  per  Member  State.  They  should  also  be  authorised  to  adjust  their 
compensation plans if justified by changing conditions. 

(5)  Member  States  should  set  the  compensation  amount  at  a  level  which  allows 
appropriate  off-setting  of  additional  costs,  arising  from  the  specific  handicaps  of  the 
outermost regions and in particular from the costs of transporting the products to the 
European mainland. To avoid overcompensation, the amount should be proportional to 
the  additional  costs  the  aid  off-sets  and  in  no  case  exceed  a  determined  share  of  the 
transport and other related costs to the European continent. To this end, it should also 
take into account other types of public intervention having an impact on the level of 
additional costs. 

(6) 

(7) 

(8) 

(9) 

In  order  to  achieve  properly  the  objectives  of  this  Regulation  and  to  guarantee  the 
compliance  with  the  Common  Fisheries  Policy,  support  should  be  limited  to  fishery 
products harvested and processed in accordance with its rules. 

So  that  the  compensation  scheme  operates  effectively  and  correctly,  Member  States 
should also make sure that the recipients of aid are economically viable and that the 
implementing system allows for a regular application of the scheme. 

To  permit  appropriate  monitoring  of  the  compensation  scheme,  the  Member  States 
concerned should submit annual reports on its operation. 

To  enable  a  decision  to  be  taken  on  whether  to  continue  the  compensation  scheme 
after  2013  the  Commission  should  submit  a  report  to  the  European  Parliament,  the 
European  Council  and  the  European  Economic  and  Social  Committee  based  on  an 
independent evaluation in due time before the end of the scheme. 

(10)  The  Community  expenditure  envisaged  for  the  compensation  scheme  should  be 
implemented  under  the  European  Agricultural  Guarantee  Fund  in  direct  centralised 
management according to Article 3(2)(f) of Council Regulation (EC) No 1290/20054. 

(11)  The measures necessary for the implementation of this Regulation should be adopted 
in accordance with Council Decision 1999/468/EC of 28 June 1999 laying down the 
procedures for the exercise of implementing powers conferred on the Commission5. 

(12)  For  the  implementation  of  direct  centralised  financial  management,  Commission 
Regulation  (EC)  xxx/20066  laying  down  detailed  rules  for  the  application  of  the 
common market organisation for fishery and aquaculture products should apply, 

4 
5 

6 

OJ L 209, 11.8.2005, p. 1. 
OJ  L  184,  17.7.1999,  p.23.  Decision  as  last  amended  by  Council  Decision  2006/512/EC  (OJ  L  200, 
22.7.2006, p. 11) 
OJ L …….. 

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HAS ADOPTED THIS REGULATION: 

Article 1 
Subject-matter 

This Regulation introduces a scheme for the period 2007 to 2013 to provide compensation for 
the additional costs incurred by the operators set out in Article 3 in the marketing of certain 
fishery  products  from  the  following  regions  as  a  result  of  those  regions'  specific  handicaps 
(hereinafter referred to as ‘the compensation’): 

–  Azores,  

–  Madeira,  

–  Canary Islands, 

–  French Guiana, 

–  Réunion 

Article 2 
Definitions 

For the purposes of this Regulation the definition of “fishery products” set out in Article 1 of 
Council Regulation (EC) No 104/20007 shall apply.  

Article 3 
Operators  

1. 

The compensation shall be paid to the following operators who incur additional costs 
in the marketing of fishery products:  

(a) 

the producers, 

(b) 

(c) 

the owners or operators of vessels registered in the ports of the regions referred 
to in Article 1 and operating therein or associations of such operators, and 

the  operators  in  the  processing  and  marketing  sector  or  associations  of  such 
operators, who incur additional costs in marketing the products concerned. 

2. 

The  Member  States  concerned  shall  take  steps  to  ensure  the  economic  viability  of 
operators receiving the compensation.  

7 

OJ L 17, 21.1.2000, p. 22 

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Article 4 
Eligible fishery products 

1. 

2. 

3. 

Each Member State concerned shall determine for its regions referred to in Article 1 
the list of fishery products and the quantity of those products which are eligible for 
the  compensation.  The  list  of  fishery  products  and  the  quantities  may  be 
differentiated for each of the regions belonging to one Member State.  

When  establishing  the  list  and  the  quantities  referred  to  in  paragraph  1,  Member 
States shall take into account all the relevant factors, in particular the need to ensure 
that  the  compensation  does  not  result  in  an  increased  pressure  on  biologically 
sensitive stocks, the level of additional costs and qualitative and quantitative aspects 
of production and marketing. 

Fishery  products  for  which  the  compensation  is  granted  must  have  been  harvested 
and processed in accordance with the rules of the Common Fisheries Policy on: 

(a) 

conservation and management, 

(b) 

traceability, 

(c) 

grading standards.  

4. 

The compensation shall not be granted for fishery products: 

(a) 

(b) 

caught  by  third  country  vessels,  with  the  exception  of  fishing  vessels  that  fly 
the flag of Venezuela and operate in Community waters, 

caught by Community fishing vessels that are not registered in a port of one of 
the regions referred to in Article 1, 

(c) 

imported from third countries, 

(d)  derived from illegal, unreported or unregulated (IUU) fishing. 

Article 5 
The compensation  

1. 

Each Member State concerned shall determine for its regions referred to in Article 1 
the level of compensation for each fishery product in the list referred to in Article 4. 
That level may be differentiated for individual regions or between regions belonging 
to one Member State.  

2. 

The compensation shall take into account: 

(a) 

for  each  fishery  product  the  additional  costs  resulting  from  the  specific 
handicaps  of  the  regions  concerned,  in  particular  the  expenditure  for  the 
transport to the European continent,  

(b) 

any other type of public intervention affecting the level of additional costs. 

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3. 

The compensation to the additional costs shall be proportional to the additional costs 
it intends to off-set and shall not exceed 75 % of the transport and other related costs 
to the European continent.  

4. 

The total amount of compensation per year shall not exceed: 

(a)  Azores and Madeira: 

EUR  4 283 992 

(b)  Canary Islands: 

EUR  5 844 076 

(c)  French Guiana and Réunion:  EUR  4 868 700 

Article 6 
Adjustments 

The Member States concerned may adjust the list and quantities of eligible fishery products 
referred  to  in  Article  4(1)  and  the  level  of  compensation  referred  to  in  Article  5(1)  to  take 
account of changing conditions provided that the total amounts referred to in Article 5(4) are 
respected. 

Article 7 
Submission of compensation plans  

Within  four  months  of  the  entry  into  force  of  this  Regulation  the  Member  States 
concerned  shall  submit  to  the  Commission  the  list  and  quantities  referred  to  in 
Article  4(1)  and  the  level  of  compensation  referred  to  in  Article  5(1),  hereinafter 
jointly referred to as “the compensation plan”.  

If the compensation plan does not meet the requirements set out in this Regulation, 
the  Commission,  within  two  months,  shall  ask  the  Member  State  to  adapt  the  plan 
accordingly.  In  that  event  the  Member  State  shall  submit  its  adapted  compensation 
plan to the Commission.  

If the Commission fails to react within the period of two months after receiving the 
compensation plan referred to in paragraph 1 and 2, the compensation plan shall be 
deemed to have been approved. 

If  a  Member  State  makes  amendments  pursuant  to  Article  6,  it  shall  submit  its 
amended  compensation  plan  to  the  Commission  and  the  procedure  laid  down  in 
paragraph 2 and 3 shall apply mutatis mutandis. 

Article 8 
Reporting  

Each Member State concerned shall draw up an annual report on the implementation 
of the compensation and submit it to the Commission by 30 April of each year. 

By  31  December  2011  at  the  latest,  the  Commission  shall  on  the  basis  of  an 
independent  evaluation  report  to  the  European  Parliament,  the  Council  and  the 

1. 

2. 

3. 

4. 

1. 

2. 

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European  Economic  and  Social  Committee  on 
compensation, accompanied where necessary, by legislative proposals. 

the 

implementation  of 

the 

Article 9 
Financial provisions 

1. 

2. 

Expenditure  incurred  by  Member  States in  accordance  with  this  regulation  shall  be 
deemed to be expenditure as referred to in Article 3(2)(f) of Council Regulation (EC) 
No 1290/2005. 

For  the  implementation  of  paragraph  1  Commission  Regulation  (EC)  No  …./2006 
[laying  down  detailed  rules  for  the  application  of  Council  Regulation  (EC)  No 
104/2000  as  regards  the  financing  by  the  European  Agricultural  Guarantee  Fund 
(EAGF) of expenditure relating to the common organisation of the markets in fishery 
and aquaculture products] shall apply. 

Article10 
Control  

Member States shall adopt appropriate provisions to ensure compliance with the requirements 
set out in this Regulation and the regularity of operations. 

Article 11 
Detailed rules  

Detailed rules  for the  application  of this Regulation may be adopted in accordance with the 
procedure laid down in Article 12(2). 

Article 12 
Committee 

1. 

2. 

The  Commission  shall  be  assisted  by  the  Management  Committee  for  Fishery 
Products (hereinafter referred to as ‘the Committee’).  

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

The  period  laid  down  in  Article  4(3)  of  Decision  1999/468/EC  shall  be  set  at  one 
month.  

3. 

The Committee shall adopt its internal Rules of Procedure. 

Article 13 
Transitional measures  

1. 

If  Member  States  have  submitted  to  the  Commission  requests  for  adjustments 
pursuant  to  Article  8  (1)  and  (2)  of  Regulation  (EC)  No  2328/2003  on  which  no 

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decision  has  been  taken  by  31  December  2006,  Article  8  of  that  Regulation  shall 
continue to apply to those requests. 

2. 

The  provisions  of  Article  9  shall  apply  to  expenditure  incurred  by  Member  States 
under  Regulation  (EC)  No  2328/2003  and  declared  to  the  Commission  after  15 
October 2006.  

Article 14 
Entry into force 

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

It shall apply from 1 January 2007 until 31 December 2013 

Done at Brussels, 

For the Council 

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FINANCIAL STATEMENT 

1. 

2. 

3. 

4. 

BUDGET HEADING: 
11 02 03 

APPROPRIATIONS: 
EUR 15 million 

TITLE: 
Proposal for a Council Regulation introducing a scheme to compensate for the additional costs incurred 
for  the  marketing  of  certain  fishery  products  from  the  Azores,  Madeira,  the  Canary  Islands,  and  the 
French departments of Guiana and Réunion from 2007 to 2013. 

LEGAL BASIS: 
Articles 37 and 299(2) of the EC Treaty 

AIMS: 
To  ensure  for  seven  years  (2007-2013),  with  improved  efficiency,  the  continuation  of  the  scheme  to 
compensate  for  the  additional  costs  incurred  in  the  marketing  of  certain  fisheries  products  from  the 
outermost regions. The regulation currently in force (see Observation (1)) expires at the end of 2006.  

5. 

FINANCIAL IMPLICATIONS 

5.0 

CHARGED TO THE EC BUDGET 

EXPENDITURE 
– 
(REFUNDS/INTERVENTIONS) 
– 
– 

NATIONAL AUTHORITIES 
OTHER 

5.1  REVENUE 

OWN RESOURCES OF THE EC  

– 
(LEVIES/CUSTOMS DUTIES) 
– 

NATIONAL 

5.0.1  ESTIMATED EXPENDITURE 
5.1.1  ESTIMATED REVENUE 

5.2  METHOD OF CALCULATION: 

12 MONTH 
PERIOD 

(EUR million) 

CURRENT 
FINANCIAL 
YEAR  2006 
(EUR million) 

FOLLOWING 
FINANCIAL 
YEAR  2007 
(EUR million) 

15 

– 

– 

– 

15 

– 

2008 

15 
– 

2009 

15 
– 

2010 

15 
– 

2011 

15 
– 

The annual financial ceilings provided for by the present scheme are maintained. They are explicitly 
mentioned in Article 5(4) of the proposal.  

6.0  CAN THE PROJECT BE FINANCED FROM APPROPRIATIONS ENTERED IN THE 

RELEVANT CHAPTER OF THE CURRENT BUDGET? 

6.1  CAN THE PROJECT BE FINANCED BY TRANSFER BETWEEN CHAPTERS OF 

THE CURRENT BUDGET? 

6.2  WILL A SUPPLEMENTARY BUDGET BE NECESSARY? 

6.3  WILL APPROPRIATIONS NEED TO BE ENTERED IN FUTURE BUDGETS? 

YES / NO 

YES / NO 

YES / NO 

YES / NO 

OBSERVATIONS: 
(1) 

The  legal  basis  for  the  current  scheme  (2003-2006)  is  Council  Regulation  (EC)  No  2328/2003 
introducing  a  scheme  to  compensate  for  the  additional  costs  incurred  in  the  marketing  of  certain 
fisheries products from the Azores, Madeira, the Canary Islands and the French departments of Guiana 
and Réunion, as a result of those regions' remoteness (OJ L345 of 31.12.2003, p. 34). 
The proposal has no impact on the current budget, i.e. the budget 2006, but only from 2007 onwards. An 
amount of EUR 15 million has been asked for on the reserve line in the PDB 2007 pending the adoption 
of the proposed Regulation. The measures are financed from the European Agricultural Guarantee Fund 
(EAGF) under centralised direct management by the Commission. 

(2) 

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