Proposal for a Council Regulation temporarily suspending autonomous Common Customs Tariff duties on imports of certain industrial products into the autonomous regions of Madeira and the Azores
Date: 2009-09-07
Institutions: European Commission
Subjects: Azores, CCT duties, Madeira, industrial product, suspension of customs duties

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COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 7.9.2009 
COM(2009) 370 final 

2009/0125 (CNS) 

Proposal for a 

COUNCIL REGULATION 

temporarily suspending autonomous Common Customs Tariff duties on imports of 
certain industrial products into the autonomous regions of Madeira and the Azores 

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EXPLANATORY MEMORANDUM 

Context of the proposal 

Grounds for and objectives of the proposal  

The  regional  authorities  of  Madeira  and  Azores  have  requested  with  the  support  of  the 
Portuguese Government to introduce autonomous tariff suspensions in order to strengthen the 
competitiveness of the local economic operators and thus securing a more stable employment 
on these islands. 

General context 

Madeira  and  Azores  belong  to  the  outer  most  regions  of  the  Community  for  which  special 
measures may be foreseen in accordance with Article 299 (2) of the Treaty establishing the 
European  Community  in  order  to  overcome  the  economic  disadvantages  these  areas  suffer 
due to their geographical situation. 

Existing provisions in the area of the proposal 

Similar provisions have been introduced with Council Regulation (EC) No 704/2002 for the 
Canary Islands. 

Consistency with the other policies and objectives of the Union 

Not applicable. 

Consultation of interested parties and impact assessment 

Consultation of interested parties 

The  members  of  the  Commission's  expert  working  group  "Economic  Tariff  Questions"  had 
been consulted and didn't raise any economic objections against the suspensions proposed. 

Collection and use of expertise 

There was no need for external expertise. 

Impact assessment 

An individual impact assessment of the measure as such is not possible given the fact that the 
suspension  of  duties  is  only  one  measure  in  a  whole  row  measures  enacted  for  the 
improvement  of  the  social  and  economic  situation  on  these  islands.  To  this  effect  the 
Commission  publishes  frequently  communications  setting  out  the  effects  of  these  measures 
for the different outer most regions. The last communication was forwarded to the Council on 
17.10.2008 (COM/2008/0642 final) 

Legal elements of the proposal 

Summary of the proposed action 

The  proposed  suspension  of  the  Common  Customs  Tariff  duties  allows  the  local  economic 
operators  in  Madeira  and  Azores  to  import  a  certain  number  of  raw  materials,  parts, 
components  and  finished  products  duty  free.  In  order  to  avoid  any  misuse  or  change  in 
traditional  trade  flows  of  these  goods  it  is  foreseen  that  goods  benefitting  from  duty 
suspension are subject to end use controls. 

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Therefore, finished goods will have to be used by local companies on the islands for a period 
of at least two years before they could be sold freely to other companies located in the other 
part of the customs territory of the European Community. 
Raw  materials,  parts  and  components  will  have  to  be  used  for  agricultural  purposes,  and 
industrial transformation and maintenance in the autonomous regions in order to benefit from 
the duty suspension. 

Legal basis 

Article 299 (2) of the Treaty establishing the European Community 

Subsidiarity principle 

The  proposal  falls  under  the  exclusive  competence  of  the  Community.  The  subsidiarity 
principle therefore does not apply. 

Proportionality principle 

The proposal complies with the proportionality principle for the following reasons: 
The  form  of  action  is  regularly  used  as  instrument  to  strengthen  the  competitiveness  of  the 
economic operators. The imposition of end use controls in accordance with the provisions of 
the Community Customs Code and its implementing provisions is an established procedure in 
this  context  and  does  not  create  significant  supplementary  administrative  burdens  to  the 
regional and local authorities and economic operators. 

Choice of instruments 

Proposed instruments: Regulation. 

The treaty does no allow any other means for the implementation of such measures 

Budgetary implication 

The proposal has implications for the Community budget. The application of the suspension 
will lead to loss in revenue of Community's own resources. 

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2009/0125 (CNS) 

Proposal for a 

COUNCIL REGULATION 

temporarily suspending autonomous Common Customs Tariff duties on imports of 
certain industrial products into the autonomous regions of Madeira and the Azores 

THE COUNCIL OF THE EUROPEAN UNION, 

Having regard to the Treaty establishing the European Community, and in particular Article 
299 (2) thereof, 
Having regard to the proposal from the Commission1, 
Having regard to the opinion of the European Parliament2, 
Having regard to the opinion of the European Economic and Social Committee3, 
Having regard to the opinion of the Committee of the Regions4, 

Whereas: 

1. 

2. 

3. 

1 
2 
3 
4 
5 

In  August  and  December  2007  the  regional  authorities  of  Madeira  and  Azores 
requested with the support of the Portuguese Government an autonomous suspension 
of  the  common  customs  tariff  duties  for  a  number  of  products  in  accordance  with 
Article  299  (2)  of  the  Treaty  establishing  the  European  Community.  They  justified 
their requests that in view of the remoteness of those islands the economic operators 
suffer severe commercial disadvantages which have negative effects on demographic 
trends, employment and social and economic developments. 

The  local  economies  of  Madeira  and  the  Azores  are  to  a  large  extent  dependant  on 
national and international tourism, a fairly volatile economic resource. It is determined 
by factors on which the local authorities and the Portuguese government have hardly 
any  influence.  As  a  result  the  economic  development  of  Madeira  and  the  Azores  is 
severely  restrained.  In  these  circumstances  it  is  necessary  to  support  those  economic 
sectors which are less dependent on the tourist industries in order to compensate the 
fluctuations of the touristic sector and thus to stabilise local employment. 

Council  Regulation  (EEC)  No  1657/93  of  24  June  1993  temporarily  suspending  the 
autonomous Common Customs Tariff duties on certain industrial products intended to 
equip the free zones of the Azores and Madeira5) did not have the wished effect in the 
last years before its expiry on 31.12.2008. This is very likely due to the fact that these 
suspensions  laid  down  in  that  Regulation  have  been  limited  to  the  free  zones  of  the 
Azores  and  Madeira  and  have  therefore  no  longer  been  used  in  the  last  years  before 
their expiry. It is therefore appropriate to provide for new suspensions which are not 

OJ C , , p. . 
OJ C , , p. . 
OJ C , , p. . 
OJ C , , p. . 
OJ L 158, 30.6.1993, p. 1  

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restricted  to  industries  located  in  free  zones  but  can  benefit  to all types of economic 
operators  located  on  the  territory  of  those  regions.  The  scope  of  commercial  sectors 
benefitting  from  the  suspensions  should  therefore  cover  the  fishery,  agricultural, 
industrial and service sectors. 

In order to ensure economic effect of the suspensions laid down in this Regulation it is 
appropriate to extend the range of products to finished goods for industrial use, to raw 
and  other  materials  and  to  parts  and  components  used  for  agricultural  purposes, 
industrial transformation, maintenance and other services.  

In order to give a long term perspective to investors and enable economic operators to 
reach a level of industrial and commercial activities which stabilises the economic and 
social  environment  in  the  regions  concerned,  it  is  appropriate  to  suspend  in  full  the 
Common Customs Tariff duties for certain goods for a period of 10 years starting on 1 
January 2010. 

In order to ensure that only economic operators located on the territory of Madeira and 
the  Azores  benefit  from  these  tariff  measures,  the  suspensions  should  be  made 
conditional  on  the  end  use  of  the  products  in  accordance  with  Council  Regulation 
(EEC) 2913/92 of 12 October 1992 establishing the Community Customs Code6 and 
Commission Regulation (EC) No 2454/93 of 2 July 1993 laying down provisions for 
the  implementation  of  Council  Regulation  (EEC)  No  2913/93  establishing  the 
Community Customs Code7. 

In order to allow efficient operation of the suspension the authorities of Madeira and 
the  Azores  should  take  the  necessary  implementing  measures  and  inform  the 
Commission thereof. 

The  Commission  should  be  permitted  to  adopt,  if  necessary,  temporary  measures 
designed to prevent any speculative movement of deflection of trade until a definitive 
solution for that movement will be adopted by the Community institutions. 

Amendments  to  the  Combined  Nomenclature  may  not  give  rise  to  any  substantive 
changes  to  the  nature  of  the  suspension  of  duties.  The  Commission  should  therefore 
make  the  necessary  amendments  and  technical  adaptations  of  the  list  of  goods  for 
which a suspension applies. 

4. 

5. 

6. 

7. 

8. 

9. 

HAS ADOPTED THIS REGULATION: 

Article 1 

From 1 January 2010 to 31 December 2019 the Common Customs Tariff duties applicable to 
imports  into  the  autonomous  regions  of  Madeira  and  the  Azores  of  finished  goods  for 
agricultural, commercial or industrial use listed in Annex I shall be suspended in full. 

These  goods  shall  be  used  in  accordance  with  the  provisions  of  Council  Regulation  (EEC) 
2913/92  of  12  October  1992  establishing  the  Community  Customs  Code  and  Commission 
Regulation (EC) No 2454/93 of 2 July 1993 laying down provisions for the implementation of 
Council  Regulation  (EEC)  No  2913/93  establishing  the  Community  Customs  Code  for  a 
period  of  at  least  24  months  after  the  release  into  free  circulation  by  economic  operators 
located in the autonomous regions of Madeira and the Azores. 

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OJ L 302, 19/10/1992, p.1 
OJ L 253 11.10.1993, p.1 

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Article 2 

From 1 January 2010 to 31 December 2019 the Common Customs Tariff duties applicable to 
imports into the autonomous regions of Madeira and the Azores of raw materials, parts and 
components  listed  in  Annex  II,  and  used  for  agricultural  purposes,  and  industrial 
transformation or maintenance in the autonomous regions of Madeira and the Azores, shall be 
suspended in full. 

Article 3 

The  competent  authorities  of  Madeira  and  the  Azores  shall  take  the  measures  necessary  to 
ensure compliance with Article 1 and 2. 

Those authorities shall inform the Commission of those measures before 1 July 2010. 

The  suspension  of  duties  referred  to  in  Articles  1  and  2  shall  be  subject  to  end-use  in 
accordance  with  Articles  21  and  82  of  Council  Regulation  (EEC)  No  2913/92  and  to  the 
controls provided for in Articles 291 to 300 of Regulation (EC) No 2454/93. 

Article 4 

Article 5 

1. 

2. 

3. 

Where the Commission has reasons to believe that the suspensions laid down in this 
Regulation  has  led  to  a  deflection  of  the  trade  for  a  specific  product  it  may,  in 
accordance  with  the  procedure  referred  to  in  Article  7(2),  provisionally  repeal  the 
suspension  by  Commission  Regulation  for  a  period  not  longer  than  12  months. 
Import duties for products for which the suspension has been provisionally repealed 
shall  be  secured  by  a  guarantee,  and  the  release  of  the  products  concerned  for  free 
circulation in the autonomous regions of Madeira and the Azores shall be conditional 
upon the provision of such guarantee. 

When the Council decides on a proposal from the Commission within the 12 months 
period  that  the  suspension  should  definitively  be  repealed  the  amounts  of  duties 
secured by guarantees shall be definitively collected. 

If no definitive decision has been adopted within the 12 month period in accordance 
with paragraph 2, the securities shall be released. 

When necessary the Commission may in accordance with the procedure referred to in Article 
8(2) make such amendments and technical adaptations to Annexes I and II of this Regulation 
as are required as a consequence from amendments of the Combined Nomenclature. 

Article 6 

Article 7 

1. 

2. 

The Commission is assisted by the Customs Code Committee. 

When 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 shall be set at three months. 

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Article 8 

1. 

2. 

The Commission is assisted by the Customs Code Committee. 

When reference is made to this paragraph, Articles 5 and 7 of Decision 1999/468/EC 
shall apply. 

The period laid down in Article 5 (6) of Decision shall be set at three months. 

Article 9 

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

It shall apply from 1 January 2010. 

This Regulation shall be binding in its entirety and directly applicable in all Member States. 

Done at Brussels, 

For the Council 
The President 

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Finished goods for agricultural, commercial or industrial use 

ANNEX I 

CN Code8 

CN Code 

CN Code 

CN Code 

4016  94 

00  8422  30 

00  8501 61 

20  9016 00 

4415  10 

10  8423  89 

00  8501 64 

00  9017 30 

5608 

8424  30 

90  8502 39 

9020 00 

6203  31 

00  8427  20 

11  8504 32 

80  9023 00 

6203  39 

19  8440  10 

90  8504 33 

00  9023 00 

6204  11 

00  8442  50 

23  8504 40 

90  9024 10 

6205  90 

80  8442  50 

29  8510 30 

00  9024 80 

6506  99 

00  8450  11 

90  8515 19 

00  9025 19 

7309  00 

59  8450  12 

00  8515 39 

13  9025 80 

7310  10 

00  8450  20 

00  8515 80 

91  9025 80 

7310  29 

00  8451  21 

90  8516 29 

99  9027 10 

7311  00 

8451  29 

00  8516 80 

80  9030 31 

7321  81 

90  8451  80 

80  8518 30 

95  9032 10 

7323  23 

90  8452  10 

19  8523 21 

00  9032 10 

7326  20 

90  8452  29 

00  8526 91 

80  9032 89 

7612  90 

98  8458  11 

80  8531 10 

95  9107 00 

8405  10 

00  8464  90 

8543 20 

00  9201 90 

8412  29 

89  8465  10 

90  8543 70 

30  9202 90 

8412  80 

80  8465  92 

00  8543 70 

90  9506 91 

8413  81 

00  8465  93 

00  8546 90 

90j  9506 99 

8413  82 

00  8465  99 

90  9008 10 

00  9507 10 

8414  40 

90  8467  11 

10  9011 80 

00  9507 20 

8414  60 

00  8467  19 

00  9014 80 

00  9507 30 

8414  80 

80  8467  22 

30  9015 80 

11  9507 90 

8415  10 

90  8467  22 

90  9015 80 

8415  82 

00  8479  89 

97  9015 80 

8418  30 

20  8501  10 

91  9015 80 

8418  50 

8501  20 

00  9015 80 

19 

91 

93 

99 

10 

10 

00 

10 

80 

20 

40 

80 

10 

00 

20 

81 

00 

00 

00 

30 

90 

90 

00 

90 

00 

00 

8 

CN codes applicable on 1 January 2009, adopted by Commission Regulation (EC) No 1031/2008 of 19 
September 2008  amending  Annex  I  to  Council  Regulation  (EEC)  No  2658/87  on  the  tariff  and 
statistical nomenclature and the Common Customs Tariff (OJ L 291, 31.10.2008, p. 1) 

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ANNEX II 

Raw materials, parts and components used 
 for agricultural purposes, industrial transformation or maintenance 

CN Code9 

CN Code 

CN Code 

CN Code 

3102  40 

10  7318  22 

00  8415 90 

00  8529 10 

3105  20 

10  7320  20 

89  8421 23 

00  8529 10 

4008  29 

00  7323  99 

99  8421 29 

00  8529 10 

4009  42 

00  7324  90 

00  8421 31 

00  8529 90 

4010  12 

00  7326  90 

98  8421 99 

00  8529 90 

4015  90 

00  7412  20 

00  8440 90 

00  8531 90 

4016  93 

00  7415  21 

00  8442 40 

00  8539 31 

4016  99 

97  7415  29 

00  8450 90 

00  8543 70 

5401  10 

90  7415  33 

00  8451 90 

00  8544 20 

5407  42 

00  7419  91 

00  8452 90 

00  8544 42 

5407  72 

00  7606  11 

91  8478 90 

00  8544 49 

5601  21 

90  7606  11 

93  8481 20 

10  9005 90 

5608 

7606  11 

99  8481 30 

99  9011 90 

5806  32 

90  7616  10 

00  8481 40 

9014 90 

5806  32 

90  7907  00 

8481 80 

99  9015 90 

5901  90 

00  8207  90 

99  8482 10 

90  9024 90 

5905  00 

90  8302  42 

00  8482 80 

00  9029 20 

6217  90 

00  8302  49 

00  8483 40 

90  9209 91 

6406  20 

90  8308  90 

00  8483 60 

80  9209 92 

7303  00 

90  8406  90 

90  8484 10 

00  9209 94 

7315  12 

00  8409  91 

00  8503 00 

99  9506 70 

39 

80 

95 

65 

97 

85 

90 

90 

00 

90 

93 

00 

90 

00 

00 

00 

31 

00 

00 

00 

90 

7315  89 

00  8409  99 

00  8509 90 

7318  14 

91  8411  99 

00  8511 80 

7318  15 

69  8412  90 

40  8511 90 

7318  15 

90  8413  30 

80  8513 90 

7318  16 

91  8413  70 

89  8514 90 

7318  19 

00  8414  90 

00  8529 10 

00 

00 

00 

00 

00 

31 

9 

CN codes applicable on 1 January 2009, adopted by Commission Regulation (EC) No 1031/2008 of 19 
September 2008  amending  Annex  I  to  Council  Regulation  (EEC)  No  2658/87  on  the  tariff  and 
statistical nomenclature and the Common Customs Tariff (OJ L 291, 31.10.2008, p. 1) 

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LEGISLATIVE FINANCIAL STATEMENT FOR PROPOSALS HAVING A 
BUDGETARY IMPACT EXCLUSIVELY LIMITED TO THE REVENUE SIDE 

1. 

NAME OF THE PROPOSAL: 

Proposal  for  a  Council  Regulation  temporarily  suspending  autonomous  Common 
Customs Tariff duties on imports of certain industrial products into the autonomous 
regions of Madeira and the Azores 

2. 

BUDGET LINES: 

Chapter and Article: Chap. 12 art. 120 

Amount budgeted for the year 2009: €

 17 655 800 000 

3. 

FINANCIAL IMPACT  

(cid:133) 

Proposal has no financial implications 

Proposal has no financial impact on expenditure but has a financial impact on 

X 
revenue – the effect is as follows: 

(€ million to one decimal place)  

Budget 
line 

Revenue10 

Article 120 

Impact on own resources 

period, starting 
dd/mm/aaaa 

01/01/2010 - 
31/12/2019 

[Year 2010 –2019]

- 0.12/year 

4. 

ANTI-FRAUD MEASURES 

Checks on the end-use of all the products covered by this Council Regulation will be 
carried out in accordance with Articles 291 to 300 of Commission Regulation (EEC) 
No  2454/93  laying  down  provisions  for  the  implementation  of  the  Community 
Customs Code.  

5. 

OTHER REMARKS  

To  enable  the  economic  operators  to  make  long-term  investment  decisions  the 
proposed suspensions should remain in force for 10 years 

It replaces the measures introduced by Council Regulation (EEC) No 1657/93 which 

expired on 31.12.2008 

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Regarding  traditional  own  resources  (agricultural  duties,  sugar  levies,  customs  duties)  the  amounts 
indicated must be net amounts, i.e. gross amounts after deduction of 25% of collection costs. 

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Estimated cost of this operation 

On the basis  of the  information provided by the regional  authorities, the impact  on 
the  loss  of  revenue  resulting  from  this  Regulation  may  therefore  be  estimated  at 
MEUR  0.16  (gross  amount,  expenses  incurred  in  collection  included)  x  0.75  = 
MEUR 0.12/year for the period 01.01.2010 - 31.12.2019. 

The loss of revenue in Traditional Own Resources shall be compensated by Member 
States contributions based on the GNI. 

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