COUNCIL REGULATION temporarily suspending autonomous Common Customs Tariff duties on imports of certain industrial products into the Canary Islands Proposal for a COUNCIL REGULATION temporarily suspending autonomous Common Customs Tariff duties on imports of certain industrial products into the Canary Islands
Date: 2011-05-18
Institutions: European Commission
Subjects: CCT duties, Canary Islands, industrial product, suspension of customs duties

EUROPEAN COMMISSION 

Brussels, 18.5.2011 
COM(2011) 259 final 

2011/0111 (CNS) 

Proposal for a 

COUNCIL REGULATION 

temporarily suspending autonomous Common Customs Tariff duties on imports of 
certain industrial products into the Canary Islands 

 
 
 
 
  
 
EXPLANATORY MEMORANDUM 

Context of the proposal 

Grounds for and objectives of the proposal 

The government of the Kingdom of Spain has made a request on behalf of the authorities of 
the Autonomous Community of the Canary Islands for a prolongation of the current regime 
providing for tariff suspensions on imports of certain industrial products. These measures are 
aimed at strengthening the competitiveness of the local economic operators and thus securing 
a more stable employment on these islands. 

General context 

The  Canary  Islands  belong  to  the  Outermost  Regions  of  the  European  Union,  for  which 
special measures may be foreseen, pursuant to Article 349 of the Treaty on the Functioning of 
the  European  Union,  in  order  to  overcome  the  economic  disadvantages  these  regions  suffer 
due to their geographical situation. 

Existing provisions in the area of the proposal 

Similar  provisions  have  been  introduced  by  Council  Regulation  (EU)  No  973/2010  of 
25 October 2010  for  the  autonomous  regions  of  the  Republic  of  Portugal,  Azores  and 
Madeira. 

Consistency with the other policies and objectives of the Union 

This  proposal  is  in  line  with  Union  policies,  particularly  in  the  field  of  international  trade, 
competition, enterprise, development and external relations. 

Consultation of interested parties and impact assessment 

Consultation of interested parties 

The members of the Commission's expert working group "Economic Tariff Questions" have 
been consulted and raised no economic objections against the suspensions proposed. 

Collection and use of expertise 

There was no need for external expertise. 

Impact assessment 

An  impact  assessment  was  not  carried  out  due  to  the  universal  application  of  the  measures 
proposed. 

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  the  Canary  Islands  to  import  a  certain  number  of  raw  materials,  parts, 

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components and capital goods duty free. In order to avoid any misuse or change in traditional 
trade flows it is foreseen that products benefitting from duty suspension are subject to end use 
control. 
Moreover, capital 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 other parts of 
the customs territory of the European Union. 
Raw  materials,  parts  and  components  will  have to be used  for industrial transformation and 
maintenance in the Canary Islands in order to benefit from the duty suspension. 

Legal basis 

Article 349 of the Treaty on the Functioning of the European Union. 

Subsidiarity principle 

The  proposal  falls  under  the  exclusive  competence  of  the  Union.  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  Union  budget  since  the  duty  suspensions  will  lead  to 
loss in revenue of the Union's own resources. 

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2011/0111 (CNS) 

Proposal for a 

COUNCIL REGULATION 

temporarily suspending autonomous Common Customs Tariff duties on imports of 
certain industrial products into the Canary Islands 

THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  on  the  Functioning  of  the  European  Union,  and  in  particular 
Article 349 thereof, 

Having regard to the proposal from the European Commission, 

After transmission of the draft legislative act to the national Parliaments, 

Having regard to the opinion of the European Parliament1,  

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

Having regard to the opinion of the Committee of the Regions3,  

Acting in accordance with a special legislative procedure, 

Whereas: 

(1) 

(2) 

According  to  Council  Regulation  (EC)  No  704/2002  of  25  March  2002  temporarily 
suspending  autonomous  Common  Customs  Tariff  duties  on  imports  of  certain 
industrial  products  and  opening  and  providing  for  the  administration  of  autonomous 
Community  tariff  quotas  on  imports  of  certain  fishery  products  into  the  Canary 
Islands4  the  Common  Customs  Tariff  duty  suspension  for  certain  capital  goods  for 
commercial or industrial use will expire on 31 December 2011. 

In September 2010 the government of Spain requested on behalf of the government of 
the  Canary  Islands,  the  prolongation  of  the  autonomous  suspension  of  the  Common 
Customs Tariff duties for a number of products in accordance with Article 349 of the 
Treaty. The justification of their request was that in view of the remoteness of those 
islands, the economic operators suffer severe economic and commercial disadvantages 
which  have  negative  effects  on  demographic  trends,  employment  and  social  and 
economic developments. 

1 
2 
3 
4 

Opinion of … 2011 (not yet published in the Official Journal). 
OJ C , , p. . 
OJ C , , p. . 
OJ L 111, 26.4.2002, p. 1. 

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(3) 

(4) 

(5) 

(6) 

(7) 

(8) 

(9) 

The  Canary  Islands  industrial  sector,  together  with  construction,  has  been  severely 
affected  by  the  recent  economic  crisis.  The  slump  in  building  depressed  all  the 
auxiliary industry that depends on it. Unfavourable financial conditions had a serious 
impact  on  many  areas  of  business.  In  addition,  the  sharp  rise  in  unemployment  in 
Spain  aggravated  the  slump  in  domestic  demand,  including  demand  for  industrial 
products. 

The unemployment on the Canary Islands has been consistently exceeding the national 
average for Spain for the last ten years and, since 2009, the Autonomous Community 
has  recorded  the  highest  level  throughout  the  country5.  Moreover,  more  than  half  of 
the  industrial  production  in  the  Canaries  is  consumed  on  the  Islands,  which  is 
particularly serious since demand there has been hit harder. 

Therefore,  with  the  aim  of  giving  a  long  term  perspective  to  investors  and  enabling 
economic  operators  to  reach  a  level  of  industrial  and  commercial  activities  which 
stabilises  the  economic  and  social  environment  on  the  islands,  it  is  appropriate  to 
prolong in full the suspension of the Common Customs Tariff duties for certain goods 
as detailed in Annex II and Annex III of Regulation (EC) No 704/2002 for a period of 
10 years. 

In addition, in the same context the Spanish authorities have requested the suspension 
of the common customs tariff duties for four new products with CN codes 3902 10 00, 
3903 11 00,  3906 10 00  and  4805 00 00.  This  request  was  accepted  as  these 
suspensions would strengthen the economy of the Canary Islands. 

In order to ensure that only economic operators located on the territory of the Canary 
Islands 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  (EEC)  No  2454/93  of  2  July  1993  laying  down  provisions  for  the 
implementation of Council Regulation (EEC) No 2913/92 establishing the Community 
Customs Code7. 

In  case  of  a  deflection  of  trade  and  in  order  to  ensure  uniform  conditions  for  the 
implementation  of  this  Regulation,  implementing  powers  should  be  conferred  on  the 
Commission allowing the Commission to temporarily withdraw the suspension. Those 
powers should be exercised in accordance with Regulation (EU) No 182/2011 of the 
European  Parliament  and  of  the  Council  of  16  February  2011  laying  down  the  rules 
and  general  principles  concerning  mechanisms  for  control  by  Member  States  of  the 
Commission's exercise of implementing powers8. 

to 

order 

in 
In 
Regulation (EC) No 704/2002,  it  is  necessary  to  apply  the  measures  provided  in  this 
Regulation from 1 January 2012. 

continuity  with 

the  measures 

ensure 

out 

set 

5 
6 
7 
8 

Eurostat: Regional statistics - Unemployment rate, by NUTS 2 regions, 1999-2009 
OJ L 302, 19.10.1992, p.1 
OJ L 253, 11.10.1993, p.1 
OJ L 55, 28.2.2011, p. 13. 

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HAS ADOPTED THIS REGULATION: 

Article 1 

From 1 January 2012 to 31 December 2021 the Common Customs Tariff duties applicable to 
imports into the Canary Islands of capital goods for commercial or industrial use falling under 
the CN codes listed in Annex I as updated by any amendment to Council Regulation (EEC) 
No 2658/87 9 shall be suspended in full. 

shall  be  used 

Those  goods 
relevant  provisions  of 
Regulation (EEC) 2913/92  and  of  Regulation  (EEC) No 2454/93  for  a  period  of  at  least  24 
months  after  the  release  into  free  circulation  by  economic  operators  located  in  the  Canary 
Islands. 

in  accordance  with 

the 

Article 2 

From 1 January 2012 to 31 December 2021 the Common Customs Tariff duties applicable to 
imports into the Canary Islands of raw materials, parts and components falling under the CN 
codes listed in Annex II as updated by any amendment to Regulation (EEC) No 2658/87, and 
used for industrial transformation or maintenance in the Canary Islands, shall be suspended in 
full. 

Article 3 

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  Regulation  (EEC)  No  2913/92  and  to  the  controls 
provided for in Articles 291 to 300 of Regulation (EEC) No 2454/93. 

Article 4 

1. 

2. 

Where the Commission has reasons to believe that the suspensions laid down in this 
Regulation  have  led  to  a  deflection  of  trade  for  a  specific  product  it  may  adopt 
implementing  acts,  temporarily  withdrawing  the  suspension  for  a  period  not  longer 
than  12  months.  Those  implementing  acts  shall  be  adopted  in  accordance  with  the 
examination procedure referred to in Article 5. 

Import duties for products for which the suspension has been temporarily withdrawn 
shall  be  secured  by  a  guarantee,  and  the  release  of  the  products  concerned  for  free 
circulation  in  the  Community  of  the  Canary  Islands  shall  be  conditional  upon  the 
provision of such guarantee. 

Within the 12 month period referred to in paragraph 1, a definitive decision should 
be  taken  whether  to  maintain  or  to  withdraw  the  suspension.  If  the  suspension  is 
withdrawn  the  amounts  of  duties  secured  by  guarantees  shall  be  collected 
definitively. 

9 

OJ L 256, 7.9.1987, p.1. 

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3. 

1. 

2. 

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

Article 5 

The Commission shall be assisted by the Customs Code Committee, established by 
Article  247a  (1)  of  Regulation  (EEC)  No  2913/92.  That  committee  shall  be  a 
committee within the meaning of Regulation (EU) No 182/201110. 

Where  reference  is  made  to  this  paragraph,  Article  5  of  Regulation  (EU)  No 
182/2011 shall apply. 

Article 6 

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 2012. 

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

Done at Brussels,  

For the Council 
The President 

10 

OJ L 55, 28.2.2011, p.13. 

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Capital goods for commercial or industrial use falling within CN codes11: 

ANNEX I 

9006 53 80 
9006 59 
9007 19 
9007 20 
9008 20 
9008 30 
9008 40 

9010 10 
9010 50 
9011 10 90 
9011 20 90 
9011 80 
9011 90 90 
9012 10 90 
9012 90 90 
9030 10 
9030 20 91 
9030 31 
9030 33 
9106 
9107 
9207 10 
9207 90 
9506 91 90 
9507 10 
9507 20 90 
9507 30 

4011 20 
4011 30 
4011 61 
4011 62 
4011 63 
4011 69 
4011 92 
4011 93 
4011 94 
4011 99 
5608 
6403 40 
6403 51 05 
6403 59 05 
6403 91 05 
6403 99 05 
8415 10 10 
8415 10 90 
8415 20 
8415 81 
8415 82 
8415 83 
8415 90 
8418 30 80 
8418 40 80 
8418 50 
8418 61 
8418 69 
8418 91 
8418 99 
8427 
8431 20 
8443 31 91 
8443 32 10 
8443 32 91 
8443 32 99 
8443 39 10 
8443 39 39 

8450 20 
8450 90 
8469 00 91 
8472 10 
8472 30 
8472 90 10 
8472 90 70 
8473 10 19 
8473 40 18 
8501 10 10 
8501 10 91 
8501 10 93 
8501 10 99 
8501 20 
8501 31 
8501 32 
8501 33 
8501 34 
8501 40 20 
8501 40 80 
8501 51 
8501 52 20 
8501 52 30 
8501 52 90 
8501 53 50 
8501 53 81 
8501 53 94 
8501 53 99 
8501 61 20 
8501 61 80 
8501 62 
8501 63 

8522 90 80 
8523 21 
8523 29 33 
8523 29 39 
8523 29 90 
8523 40 99 
8523 51 99 
8523 59 99 
8523 80 99 
8525 50 
8525 80 11 
8525 80 19 
8526 10 
8526 91 20 
8526 91 80 
8542 31 10 
8542 32 10 
8542 39 10 
8701 10 
8701 20 
8701 90 90 
8702 
8704 21 31 
8704 21 39 
8704 21 91 
8704 21 99 
8704 22 
8704 23 
8704 31 31 
8704 31 39 
8704 31 91 
8704 31 99 

8501 64 

8704 32 

8518 40 30 

8704 90 

8518 90 

8705 

11 

As  defined  in  Commission  Regulation  (EU)  No  861/2010  of  5  October  2010  amending  Annex  I  to 
Council Regulation (EEC) No 2658/87 on the tariff and statistical nomenclature and on the Common 
Customs Tariff (OJ L 284, 29.10.2010, p.1).  

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8443 99 10 
8450 11 90 
8450 12 
8450 19 

8519 20 
8519 81 51 
8521 10 95 
8522 90 49 

9006 10 

9006 30 
9006 52 

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ANNEX II 

Raw materials, parts and components used 
for agricultural purposes, industrial transformation or maintenance falling within CN 
codes12:  

3901 
3902 10 
3903 11 
3904 10 
3906 10 
4407 21 10 
4407 21 91 
4407 22 10 
4407 22 91 
4407 25 10 
4407 25 30 
4407 25 50 
4407 26 10 
4407 26 30 
4407 26 50 
4407 29 15 
4407 29 20 
4407 29 25 
4407 29 45 
4407 29 83 
4407 29 85 
4407 99 40 
4410 
4412  

4803 
4804 
4805 
4810 13 
4810 14 
4810 19 10 

4810 22 10 
4810 22 90 
4810 29 
4810 31 
4810 32 
4810 92 
4810 99 10 
4810 99 90 
5108 
5110 
5111 11 
5111 19 10 
5111 19 90 
5111 20 
5111 30 
5111 90 10 
5111 90 91 
5111 90 93 
5111 90 99 
5112 11 
5112 19 
5112 20 
5112 30 
5112 90 
5205 
5208 
5209 
5210 
5212 
5401 10 12 
5401 10 14 
5401 20 10 
5402 
5403 
5404 11 
5404 90 
5407 
5408 

5501 
5502 
5503 
5504 
5505 10 
5505 20 
5506 
5507 
5508 10 10 
5508 20 10 
5509 
5510 
5512 
5513 
5514 
5515 
5516 
6001 
6002 40 
6002 90 
6217 90 
6305 10 10 
6305 10 90 
6305 20 
6305 32 
6305 33 
6305 39 
6305 90 
6309 
6406 
7601 
8517 70 90 
8529 10 80 
8529 10 95 
8529 90  

8706 
8707 
8708 
8714 11 
8714 19 
8714 91 
8714 92 
8714 93 
8714 94 
8714 95 
8714 96 
8714 99 
9002 90 
9006 91 
9007 91 
9007 92 
9008 90 
9010 90 
9104 
9108 
9109 11 
9109 19 
9109 90 
9110 11 10 
9110 11 90 
9110 12 
9110 19 
9110 90 
9111 
9112 
9114 

12 

As  defined  in  Commission  Regulation  (EU)  No  861/2010  of  5  October  2010  amending  Annex  I  to 
Council Regulation (EEC) No 2658/87 on the tariff and statistical nomenclature and on the Common 
Customs Tariff (OJ L 284, 29.10.2010, 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  Canary 
Islands. 

2. 

BUDGET LINES: 

Chapter and Article: Chap. 12 art. 120 

Amount budgeted for the year 2011: €

 16 653 700 000 

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 

Revenue13 

Article 120 

Impact on own resources 

period, starting 
dd/mm/aaaa 

01/01/2012 - 
31/12/2021 

[Year 2012 –2021]

-2,2/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. 

13 

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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It replaces the measures introduced by Council Regulation (EC) No 704/2002 which 
expires on 31.12.2011. 

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  2,96  (gross  amount,  expenses  incurred  in  collection  included)  x  0.75  = 
MEUR 2,22/year for the period 01.01.2012 - 31.12.2021. 

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

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