REPORT FROM THE COMMISSION TO THE COUNCIL concerning the 'dock dues' tax arrangements applied in the French outermost regions (presented by the Commission under Article 3 of Council Decision 940/2014/EU of 17 December 2014)
Date: 2018-12-13
Institutions: Directorate-General for Taxation and Customs Union, European Commission
Subjects: French overseas department and region, derogation from EU law, economic development, import tax, local tax, originating product, peripheral region, regional development, tax exemption, tax relief

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 13.12.2018  COM(2018) 824 final  REPORT FROM THE COMMISSION TO THE COUNCIL concerning the 'dock dues' tax arrangements applied in the French outermost regions   (presented by the Commission under Article 3 of Council Decision 940/2014/EU of 17 December 2014)                                 
 
 
REPORT OF THE COMMISSION TO THE COUNCIL 
concerning the ‘dock dues’ tax arrangements applied in the French outermost 
regions 

1.  BACKGROUND 

The provisions of the Treaty on the Functioning of the European Union (TFEU) that apply to the 
outermost  regions  of  the  EU,  including  Réunion  and  Guadeloupe  (each  of  which  is  a  French 
region and département), the two territorial collectivities of Martinique and French Guiana, and 
the  département  of  Mayotte  (French  outermost  regions)  do  not,  in  principle,  authorise  any 
difference  in  taxation  in  the  outermost  regions  between  local  products  and  those  from 
metropolitan  France  or  the  other  Member  States.  However,  Article  349 TFEU  envisages  the 
possibility of introducing specific measures for the outermost regions because of the existence of 
permanent handicaps affecting their economic and social situation. 

Dock dues ('octroi de mer') are one of the oldest forms of French taxation, and the very oldest in 
the  French  outermost  regions.  In  force  in  these  regions  only,  they  are  applicable  to  imported 
goods  of  whatever  origin  and  to  goods  delivered  for  consideration  by  persons  engaged  in 
production activities1. 

Dock dues consist of two separate taxes: dock dues per se and regional dock dues2. 

The rates of dock dues are established by the regional councils (in Guadeloupe and Réunion), the 
single territorial collectivities (in French Guiana and Martinique) and the Departmental Council 
(in Mayotte). They are established independently for each French outermost region. 

Revenue  from  dock  dues  is  allocated,  on  the  one  hand,  to  the  budgets  of  the  territorial 
collectivities (communes, département, region) and, on the other (and under certain conditions), 
to a regional fund for development and employment. 

Council  Decision  No  940/2014/EU  of  17 December 2014  authorises  France,  until 
31 December 2020,  to  apply  exemptions  or  reductions  to  dock  dues  for  a  number  of  locally 
manufactured products. The Annex to the Decision contains the list of products to which the tax 
exemptions or reductions may be applied. Depending on the product, the difference between the 
taxation  of  products  manufactured  locally  and  that  of  other  products  may  not exceed  10,  20 or 
30 percentage points. 

The  Council  Decision  of  17 December 2014  sets  out  the  reasons  for  adopting  the  specific 
measures:  remoteness,  raw-material  and  energy  dependence,  the  obligation  to  build  up  larger 
stocks, the small size of the local market combined with a low level of export activity, etc. The 
combination of these handicaps increases production costs and, therefore, the cost price of goods 
produced  locally,  so  that  without  specific  measures  they  would  be  less  competitive  than  those 
produced  elsewhere,  even  taking  into  account  the  cost  of  transporting  such  goods  to  the 
French outermost regions. That would make it harder to maintain local production. The specific 
measures contained in the Council Decision of 17 December 2014 have therefore been designed 
for the purpose of strengthening local industry. 

1  By  ‘production  activities’  is  meant  the  manufacture,  alteration  or  renovation  of  movable  tangible 

property. Services, therefore, are outside the scope of this tax.   

2 Tax additional to dock dues and whose rate cannot at present be higher than 5 %. 

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Article 3 of the Council Decision of 17 December 2014 provides that the French authorities must 
submit  to  the  Commission,  by  31  December  2017,  a  report  on  the  application  of  the  tax 
arrangements referred to in the Decision in order to assess the impact of the measures taken and 
their contribution to the maintenance and promotion of local economic activities, in the light of 
the handicaps affecting the outermost regions. On the basis of that report, the Commission must 
submit  a  report  to  the  Council,  giving  a  full  economic  and  social  analysis  and,  if  necessary,  a 
proposal for adapting the provisions of the Decision of 17 December 2014. 

On  12 February 2018  the  French  authorities  accordingly  submitted  their  report  to  the 
Commission. Specific evaluation reports for each of the French outermost regions, accompanied 
by requests to adapt the list of products to which differentiated taxation may apply, were sent on 
15 March 2018 for French Guiana, Martinique and Guadeloupe, on 4 June 2018 for Réunion and, 
without  requesting  an  update  of  the  list,  on  28 August 2018  for  Mayotte.  The  requests  for  list 
updates relate to almost 90 products. These requests are aimed mainly at including new products 
on the lists and at reclassifying existing products on a list, allowing for a greater tax differential. 

2.  THE  MAIN  FEATURES  OF  THE  REPORTS  FROM  THE  FRENCH 

AUTHORITIES 

2.1.  The report of 12 February 2018 

Based on data aggregated on a sector-by-sector basis, the report of 12 February 2018 is an overall 
macro-economic statistical analysis for the French outermost regions as a whole. It contains no 
information on product categories benefiting from a tax differential. 

The  report  describes  the  dock  dues  arrangements,  examines  a  number  of  features  of  the 
macro-economic  framework  of  the  French  outermost  regions  and  maps  the  beneficiaries  of  the 
dock  dues  differentials.  It  states,  in  particular,  that  the  goods  produced  by  the  665  businesses 
subject to dock dues are worth EUR 5.6 billion. 

The report also analyses the effects of lowering the dock dues threshold for local businesses. This 
was reduced from EUR 550 000 to EUR 300 000 in 2014. According to the report, this measure 
has  mainly  harmful  consequences,  given  the  administrative  charges  to  which  it  gives  rise,  the 
very small increase in tax receipts and its counterproductive effect. 

Main findings of the report: 

a. With regard to the economic impact of the dock dues arrangements on the economic 
development of the French outermost regions, the report considers that the arrangements 
have  more  of  an  impact  on  maintaining  employment  rather  than  creating  it,  and  on 
developing local production pathways and making them sustainable. 
The report emphasises that the tax advantages granted under the dock dues arrangements 
are  a  substantial  contribution  to  the  French  outermost  regions’  GDP.  According  to 
estimates, dock dues account in total for 3.3 % of the GDP of the five French outermost 
regions combined. At this aggregate level, the differences between the territories are not 
significant  enough  to  enable  conclusions  to  be  drawn  concerning  real  geographical 
disparities. 
b. With regard to the handicaps of the French outermost regions that are the cause of the 
additional  costs  borne  by  businesses  established  in  the  French  outermost  regions,  the 
report points out that these additional costs stem as much from the natural characteristics 
of  these  regions  –  their  size,  relative  inaccessibility  and  weather  conditions  –  as  from 
their low level of integration into their regional environment. The ratio of staff costs to 

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turnover,  and  purchases  of  raw  materials  and  other  purchases  and  external  costs,  are 
identified  in  the  report  as  the  two  main  sources  of  the  additional  costs  affecting  local 
businesses. 
The additional costs borne in the French outermost regions have been estimated, on the 
basis  of financial charges  as  these relate  to  operating  revenue,  at  1.8 million  additional 
euros  of  financial  charges  per  business,  i.e.  a  total  of  EUR 1.2 billion.  This  is  a 
low estimate, as it takes no account of the fact that local businesses are in no position to 
make economies of scale. 
c. With regard, finally, to the impact of dock dues on local businesses, the report regrets 
that there is no data available on the dock dues differential over a period of several years, 
making it impossible to analyse the way in which businesses have performed over time. 
Only an analysis of the impact on businesses’ performance in 2015 has been carried out. 
According  to  this analysis,  there  is  no significant  difference in turnover  or  profitability 
between local businesses benefiting from dock dues differentials and those not benefiting 
from them. It follows that dock dues fulfil their objectives by enabling local businesses in 
the targeted sectors to achieve a performance similar to that of businesses not benefiting 
from the arrangements, despite ostensibly higher exposure to the additional costs caused 
by remoteness. The fact that businesses benefiting from the arrangements do not perform 
any better also indicates that there is no over-compensation. 

2.2.  Specific reports for the French outermost regions 

Given  the  limitations  of  the  report  of  12 February,  this  has  been  supplemented  by 
specific reports for each French outermost region. In these reports, the territorial collectivities of 
Martinique, Guadeloupe, French Guiana, Réunion and Mayotte each carry out an assessment of 
the  dock  dues  arrangements.  These  supplementary  reports  provide  an  overview  of  socio-
economic  developments  in  these  regions  over  the  period  2014-2016,  denoting  large  disparities 
between  the  French  outermost  regions.  Réunion  is  the  collectivity  with  the  most  successful 
economy – one that has been recovering steadily (at a rate of more than 3 % per year) since 2014, 
with unemployment in sharp decline and prices rising only slowly. In contrast, the economies of 
Guadeloupe  and  French  Guiana  remain  stagnant,  with  consistently  high,  or  indeed  increasing, 
rates  of  unemployment.  In  Martinique,  the  trend  is  positive  overall,  with,  in  particular,  an 
improvement in the labour market. In Mayotte, the economy has entered a period of wait and see, 
marked  by  a  level  of  unemployment  that  has  risen  to  27.1 %.  This  is  due,  in  particular,  to  the 
institutional  changes  that  have  taken  place  in  Mayotte  (which  has  acquired  the  status  of  an 
outermost region after having being made into a département). 

The overview indicates a similar situation with regard to foreign trade and price trends. Although 
prices rose little in the French outermost regions over the period 2014-2016, they are markedly 
higher  (by  between  7 %  and  12 %,  according  to  the  Fisher  index3)  than  those  in  metropolitan 
France.  In  each  of 
is,  however,  narrower 
(by between 12 % and 14 %) than it was in 2010.  

the  French  outermost  regions, 

this  gap 

Where  foreign  trade  is  concerned,  the  reports  show  that  the  French  outermost  regions  are  still 
very dependent on imports, which represent more than 30 % of their GDP and  are responsible 
for  their  large  trade  deficit.  Imports  (other  than  of  petroleum  products)  rose  slightly  over  the 
period 2014-2016 throughout the French outermost regions. 

3  The  Fisher  index  corresponds  here  to  the  geometric  mean  of  A  (discrepancies  between  French 
outermost-region  prices  and  prices  in  metropolitan  France)  and  the  inverse  of  B  (metropolitan 
France/French outermost-region discrepancies), i.e. the square root of the A/B ratio. 

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Analysis of trends in the local manufacture of the products on the list for the period 2014-2016 
reveals  a  mixed  picture  because,  although  local  production  increased  overall  in  the  French 
outermost  regions  (except  in  the  case  of  Guadeloupe,  which  recorded  a  decrease  of  6.9 %),  its 
share  of  the  market  in  relation  to  overall  consumption  in  the  French  outermost  regions  fell 
(except in the case of Martinique, which recorded an increase of 9.8 %). 

These  reports  also  provide  sector-by-sector  analyses  of  rates  and  differentials.  The  analyses 
show, in particular, that the weighted average differential applied varies between 14 % (Réunion) 
and  18 %  (Martinique  and  Guadeloupe),  depending  on  which  French  outermost  region  one  is 
discussing.  

These  reports  go  on  to  supply  a  sector-by-sector  analysis  of  economic  trends  in  the  French 
outermost  regions  in  the  light  of  the  differential  policies  conducted  and,  in  the  cases  of  the 
territorial collectivities of Guadeloupe and Martinique, an up-to-date breakdown of the additional 
costs sustained by local businesses. 

Finally, the reports on the territorial collectivities of Martinique, Guadeloupe, French Guiana and 
Réunion contain justifications of the requests to adapt the list of products to which differentiated 
taxation may be applied. 

Moreover,  the  French  outermost  regions  are  unhappy  about  the  ever  more  finely  graduated 
nomenclature  for  the  products  on  the  list  (moving  on  to  level  NC8  or  even  NC10),  making  it 
more  difficult  for  businesses  to  identify  correctly  what  it  is  they  are  producing.  They  are  also 
unhappy about the reduction in the tax threshold to EUR 300 000 which, for the collectivities, has 
not been reflected in a substantial increase in revenue. These two measures have led to a heavier 
administrative  burden  for  businesses.  The  French  outermost  regions  would  like  to  see  a 
mechanism set up for regularly updating the tax differentials, in that way meeting investors’ need 
for clarity and enabling adjustments to be made in response to developments in the market and in 
the  economic  fabric  of  the  locality  concerned.  These  requests  should  be  analysed  when  the 
request for renewal of the arrangements is examined. 

With a view to assessing the actual effects of the tax differentials on the economic activity of the 
French  outermost  regions,  several  requests  for  documents  in  proof  and  for  additional 
explanations  were  forwarded  by  e-mail  to  the  French  authorities  on  27 March,  14 April, 
16 May and  4 July 2018.  The  French  authorities  were  also  asked  to  supply  –  for  each  French 
outermost region and for each category of product subject to a dock dues tax differential in that 
region – an assessment of the extent to which the dock dues arrangements had helped maintain or 
promote local business activities and trading conditions. 

The  French  authorities  have  provided  the  Commission  with  a  breakdown  of  imports  and  local 
production  for  each  product  benefiting  from  a  tax  differential,  as  well  as  with  various 
clarifications. 

3.  COMMISSION ANALYSIS OF THE DOCK DUES ARRANGEMENTS 

In  view  of  the  date  of  presentation  of  the  report  by  the  French  authorities  (February  to 
March 2018),  it  is  difficult  to  examine,  over  a  long  period,  the  impact  of  the  differentiated 
taxation applied in accordance with the Council Decision of 17 December 2014, especially since 
the new arrangements did not enter into force until July 2015. 

Moreover,  where  Mayotte  is  concerned,  the  fact  that  the  arrangements  came  into  effect  only 
recently,  combined  with  the  island’s  belligerent  climate,  has  meant  that  the  French  authorities 
have not had data that is stable and reliable enough for carrying out the same work as elsewhere. 

4 

 
In so far as the Commission is broadly dependent on information supplied by France and does not 
have any other means of collecting further information, the Commission’s analysis is based on 
the information received from the French authorities. The following conclusions may be drawn 
from the information provided. 

3.1.  The handicaps of the French outermost regions remain. 

In their initial report, the French authorities underline once again the handicap-related causes of 
the  additional  costs  borne  by  businesses  established  in  the  French  outermost  regions.  Indeed, 
these  territories  have  to  cope  with  major  handicaps  inherent  in  their  small  size,  relative 
inaccessibility and prevailing weather conditions. These handicaps, which are structural in nature, 
fall into two categories: 

-  Exogenous  handicaps  such  as  remoteness,  small  surface  area,  complex  topography, 
difficult climate, high levels of risk related to the natural environment, and isolation from 
the outside world and, in some cases, also from activities and services located in the main 
islands of an archipelago; 

-  Endogenous handicaps: limited production facilities, limited human capital development, 
economic dependence on a small number of activities, restricted internal markets, lack of 
integration into the regional environment, and barriers to market entry. 

Thus,  local  production  is  faced  with  large  additional  costs,  which  have  been  identified  and 
measured  at  the  macro-economic  level.  These  include  additional  costs  relating  to  pay  gaps, 
supplies,  logistics,  over-sizing  of  equipment,  the  use  and  maintenance  of  such  equipment,  and 
local markets not large enough to permit economies of scale. These additional costs also relate to 
product marketing and distribution, agricultural land and construction and financing. 

They are reflected in the large trade deficit common to all the French outermost regions. 

Therefore, the handicaps that justified maintaining the dock dues arrangements in 2014 are still a 
factor,  with  all  the  consequences  they  have  in  terms  of  possible  additional  costs  for  local 
production. 

3.2.  The consequences of applying differentiated dock dues taxation  

3.2.1.  The  impact  of  dock  dues  on  the  prices  of  products  benefiting  from  a  tax 

differential 

The information provided does not enable a judgment to be made on the impact of dock dues on 
the general level of prices of the products that are the subject of differentiated taxation.  

It  nonetheless  shows  the  general  impact  of  dock  dues  on  the  level  of  prices,  as  those  French 
outermost  regions  that  apply  the  lowest  rates  (Réunion)  and  where  the  number  of  products 
targeted is lowest (Mayotte) have prices that differ least from those of metropolitan France.  

to 

regard 

the  adjustments  brought  about 

With 
the  Council  Decision  of 
17 December 2014,  the  macro-economic  analysis  of  prices,  based  as  it  is  on  the  consumer 
price index,  shows  that  prices  increased  very  little  between  2014  and  2016  in  the  French 
outermost regions. The analysis even shows that the gap between prices in metropolitan France 
and those in each of the French outermost regions was narrower than in 2010.  This development 
is  testimony  to  the  concern  of  the  local  authorities  to  use  tax  differentials  in  a  way  that  is 
proportionate so as not to affect the purchasing power of the local populations. 

through 

5 

 
These factors show, therefore, that the recent adaptations to the list of products benefiting from a 
tax differential have had a negligible impact on prices in the French outermost regions. 

3.2.2.  The impact of dock dues on economic development in the French outermost 

regions 

It  has  been  possible  to  obtain  only  fragmentary  information  about  the  impact  of  differentiated 
taxation on growth and employment in each sector considered and during the period concerned 
(2014-2017). In many cases, such information is not yet available.  

It is difficult to compare the data on growth, employment and businesses with that for products 
benefiting from a tax differential, as most businesses in the sectors concerned sell both products 
that benefit from a tax differential and products that do not. 

That being said, dock dues have a recognised effect on economic development. They have more 
relevance  to  maintaining,  rather  than  creating,  employment,  and  developing  local  production 
pathways  and  making  them  sustainable.  Dock  dues  have  thus  enabled  employment  to  be 
maintained  in  sectors  affected  by  the  crisis  such  as  the  construction  and  public  works  sector. 
Because  their  markets  are small,  the  French  outermost  regions  are  anything  but  robust  and  are 
vulnerable to one-off imports at prices much lower than market prices. In view of the additional 
costs to which they are subject, local businesses also have very limited opportunities of recourse 
to export markets. 

Dock  dues  have  also  enabled  production  to  be  diversified,  mainly  in  the  agri-food  sector 
(condiments,  coffee,  jams,  etc.  in  Guadeloupe),  and  promising  niche  products  to  be  developed 
(fruit  juice,  chicken  croquettes,  spectacle  lenses,  etc.  in  Réunion).  They  have  also  been  key  in 
supporting  local  production  in  these  regions  by  enabling  growth-generating  investment  to  be 
made. 

Finally,  dock  dues  have  positive  effects  on  economic  activity  in  the  French  outermost  regions. 
The  overall  effect  of  dock  dues  (revenue  +  tax  reductions  benefiting  local  production)  is 
estimated,  for  2016,  at  3.3 %  of  GDP  in  the  French  outermost  regions  (ranging  from  2.6 %  in 
Réunion to 5 % in Mayotte). Moreover, dock dues revenue represents between 40 % and 50 % of 
the  revenue  of  the  territorial  collectivities  of  the  French  outermost  regions.  A  portion  of  this 
revenue  is  allocated  to  the  Regional  Fund  for  Development  and  Employment  (RFDE),  the 
purposes  of  which  are  to  help  businesses  become  established,  create jobs  in  the  manufacturing 
sector  and  help  bring  about  the  infrastructure  necessary  for  businesses  to  develop.  This  is 
reflected in the fact that local production of goods benefiting from a tax differential has, overall, 
increased  in  the  majority  of  the  French  outermost  regions  (with  the  exception  of  Guadeloupe). 
Such  production  manages,  across  the  board,  to  achieve  the  same  performance  levels  as  other 
forms of production, despite  higher exposure to additional costs. 

As a result, dock dues have a significant economic impact on the economic development of the 
French outermost regions. 

3.2.3.  The impact of dock dues on the balance of trade   

Although  the  trade deficit went  down  by  3 % in  the French outermost  regions, it remains  very 
high.  Even  if  local  production  and  exports  have  made  more  progress,  imports  (other  than  of 
hydrocarbons)  have  nonetheless  increased  throughout  the  French  outermost  regions.  These 
imports still come mainly from France and other Member States of the European Union (75 % in 
Réunion, 85 % in Martinique, 74 % in Guadeloupe and 71 % in French Guiana in 2016). Imports 
of  products  from  the  African,  Caribbean  and  Pacific  (ACP)  countries  are  only  marginally 

6 

 
affected. The number of products from these countries – petroleum products, in the main – is in 
any case limited. 

As regards, in particular, products benefiting from a tax differential, imports have continued to 
increase. 

This demonstrates that the dock dues arrangements do not disrupt the foreign trade conducted by 
the territories concerned and prevent a potential deterioration in the balance of trade. 

3.3.  Arrangements that are still necessary and proportionate 

The dock dues arrangements are still necessary in so far as the conditions that justified the option 
of differentiated taxation for certain products still apply and in so far as there are still additional 
production costs.  

The Commission ascertained that these conditions were still being met. To that end, it analysed 
the development of those market shares representing local products benefiting from a dock dues 
tax differential compared to products imported into the French outermost regions. It also analysed 
the additional costs that increase the cost price of local production.  

It emerged that additional costs had increased overall. Thus, the average rate of additional costs 
had  increased  in  Guadeloupe  from  26.7 %  in  2012  to  30.5 %  in  2015,  and  in  Martinique  from 
29.7% in 2012 to 32.3% in 2016.  

Moreover,  the  French  outermost  regions  had  not  overcompensated  for  the  additional  costs  on 
local  businesses  by  applying  tax  differentials.  Indeed,  the  differentials  applied  compensate,  on 
average,  for only  half  of these additional  costs,  in particular  in  Martinique (54 %  in  2016)  and 
Guadeloupe (40 % in 2015)4.  

Thus, the additional costs borne by local businesses remain and are offset only partially by the 
tax differentials granted to certain products.  

Analysis  of  the  development  of  market shares,  conducted  on  the  basis  of the  data submitted in 
March 2018,  showed  that,  although  local  production  had  increased  overall  in  the  French 
outermost regions, imports had increased more, and, as a consequence, the market share of local 
production in relation to overall consumption in the French outermost regions had fallen between 
2014 and 2016. 

This  macro-economic  analysis  conceals  the  existence  of  very  different  situations.  Some  local 
products  still  hold  only  a  small  or  very  small  share  of  the  market  despite  benefiting  from  a 
tax differential for dock dues. In other cases, the tax differential for dock dues has allowed local 
products to take a share of the market equivalent to that taken by external products. These are the 
two most frequent scenarios. 

Lastly,  in  the  case  of  some  other  products,  the  information  supplied  shows  that  local  products 
benefiting from differentiated taxation occupy almost all of the market, meaning that the share of 
‘imported’  products  is  very  small.  In  this  case,  local  products  appear,  at  first  sight,  to  be 
competitive in relation to products from outside the French outermost regions. This impression 
may in some cases hide a fall in the market share by volume5. In other cases, the differentiated 
taxation  of  local  products  may,  however,  be  justified  in  terms  of  the  high  additional  costs 
associated  with  such  products  –  costs  that  make  them  much  more  expensive  than  imported 

4 The continued existence of additional production costs for each of the products on the list was the subject 

of a spot check. 

5 This is particularly the case with regard to types of yoghurt in Martinique and Guadeloupe. 

7 

 
                                                      
products  and  that  are  likely  to  put  the  industries  concerned  at  risk6.  In  any  case,  it  appears 
difficult, at this stage, to resolve this issue definitively for all the products concerned, given that 
the data available for the report relate to a period of less than three years. It is an issue that will 
have  to  be  examined in  detail  if  and  when the  French  authorities  ask  to  continue  to  be  able to 
apply differentiated taxation after December 2020. 

4.  THE  ADJUSTMENTS  TO  BE  MADE  TO  THE  COUNCIL  DECISION  OF 

17 DECEMBER 2014 

The last paragraph of Article 3 of the Council Decision of 17 December 2014 provides that the 
report to be submitted to the Council by the Commission may, if necessary, be accompanied by a 
proposal for adapting the provisions of this Decision. This is what has happened.  

In their letter dated 15 March 2018, the French authorities asked that, with regard to four of the 
French outermost regions (French Guiana, Réunion, Martinique and Guadeloupe), adaptations be 
made  to  the  list  of  products  to  which  differentiated  taxation  may  be  applied.  .  An  additional 
request for a new product to be included was made on 26 October 2018. 

Of the above-mentioned requests, as many as 50 are for new products to be included on the lists. 
There are also requests (28 of them) for products on a list to be reclassified to enable a greater 
taxation  differential,  requests  for  a  category  of  products  to  be  expanded  (7),  and  a  number  of 
requests for codes to be updated (9 products in French Guiana). All these represent almost 10 % 
of  the  products  on  the  list.  They  are  designed  to  re-establish  businesses’  competitiveness  by 
compensating for a portion of the additional production costs that affect local production.  

According  to  the  information  provided  by  the  French  authorities,  the  products  thus  targeted 
represent  declared  local  production  amounting  to  EUR 225 million  for  2016,  and  imports 
amounting  to  almost  EUR 212 million.  Imports  of  the  products  concerned  increased  by  almost 
5 % over the period 2014-2016,  and the products fall into a very broad range of categories. 

The  requests  were  motivated  mainly  by  the  appearance  of  new  products  and  by  increases  in 
imports and in additional costs – increases that had led to a decrease in market share. 

The  Commission’s  proposal  envisages  amending  the  list  of  products  to  which  differentiated 
taxation may be applied by accepting those changes requested by the French authorities for which 
due justification had been provided. 

In the case of products that the French authorities had asked be included in, or reclassified on, the 
lists, the Commission checked whether local production existed and whether significant imports 
occurred  which  could  jeopardise  the  maintenance  of  local  production  and  whether  there  were 
additional  costs  which  increased  the  cost  price  of  local  production  compared  with  goods 
produced elsewhere, thereby making locally produced products less competitive.  

With  regard  to  local  products  occupying  almost  all  the  market,  meaning  that  the  portion  of 
‘imported’ products is very small, the Commission ascertained that there was an imminent and 
serious risk to local production.  

In  the  case  of  agricultural  products,  the  requests  for  inclusion  or  reclassification  on  lists  are 
motivated by the need for local producers to diversify their production in order to deal better with 
the vagaries of the climate. 

The various proposed adjustments to the Council Decision of 17 December 2014 are detailed in 
the draft Council Decision accompanying this report. 

6 This is particularly the case with regard to cement and sugar cane. 

8 

 
                                                      
5.  GENERAL CONCLUSION 

The  information  provided  by  the  French  authorities  does  not  give  a  complete  picture  of  the 
economic  and  social  impact  on  local  production  in  the  French  outermost  regions  of  the 
application of differentiated dock-dues taxation to local products as compared with products from 
elsewhere.  

What  can,  however,  be  emphasised  are  the  very  clear  improvements  to  the  quality  of  the 
information  provided  and to  the  way  in  which  implementation  of  the  arrangements  is  followed 
up. 

The  information  provided  shows  that  the  differentiated  dock-dues  taxation  arrangements  have 
made it possible, for the majority of the products concerned, to maintain local production capable 
of  occupying  a  greater  or  lesser  share  of  the  local  market.  In  view  of  the  constraints  to  which 
local businesses are subject, it is certain that, in many cases, local production could not have been 
maintained  without  this  tax  differential,  and  that  would  have  had  a  detrimental  economic  and 
social effect.  

Moreover, analysis of the information provided shows that the arrangements have a very limited 
effect on competition, trade and prices. 

The arrangements are still, therefore, necessary and proportionate and are crucial to maintaining 
local  production  in  the  French  outermost  regions,  where  unemployment,  particularly  among 
young people, is the highest in Europe. 

Because, moreover, a number of sectors are anything but robust and are vulnerable to economic 
changes7, it is clearly necessary, before the end of the period covered by the Council Decision of 
2014, to adapt the list of products to which a tax differential may be applied. 

7 Collapse in prices, downturn in the market, one-off imports of goods at prices very much lower than those 

of the market, etc. 

9 

 
 
 
                                                      
Contents 

REPORT  OF  THE  COMMISSION  TO  THE  COUNCIL  CONCERNING  THE  ‘DOCK 
DUES’ TAX ARRANGEMENTS APPLIED IN THE FRENCH OUTERMOST REGIONS............... 1 
BACKGROUND ............................................................................................................................... 1 
1. 
2. 
THE  MAIN  FEATURES  OF  THE  REPORTS  FROM  THE  FRENCH 
AUTHORITIES ................................................................................................................................ 2 
The report of 12 February 2018 .......................................................................................................... 2 
Specific reports for the French outermost regions .............................................................................. 3 
COMMISSION ANALYSIS OF THE DOCK DUES ARRANGEMENTS ................................. 4 
The handicaps of the French outermost regions remain. .................................................................... 5 
The consequences of applying differentiated dock dues taxation ....................................................... 5 
3.2.1.  The impact of dock dues on the prices of products benefiting from a tax differential ............ 5 
3.2.2.  The  impact  of  dock  dues  on  economic  development  in  the  French  outermost 

2.1. 
2.2. 
3. 
3.1. 
3.2. 

regions ..................................................................................................................................... 6 
3.2.3.  The impact of dock dues on the balance of trade .................................................................... 6 
3.3.  Arrangements that are still necessary and proportionate .................................................................... 7 
4. 
THE  ADJUSTMENTS  TO  BE  MADE  TO  THE  COUNCIL  DECISION  OF 
17 DECEMBER 2014 ....................................................................................................................... 8 
GENERAL CONCLUSION ............................................................................................................. 9 

5. 

10