CELEX: 51990PC0686(01)
Language: en
Date: 1991-02-20
Title: PROPOSAL FOR A COUNCIL REGULATION ( EEC ) ON THE APPLICATION OF THE PROVISIONS OF COMMUNITY LAW TO THE CANARY ISLANDS

No C 67/8                              Official Journal of the European Communities                                 15. 3. 91
                                                              II
                                                      (Preparatory Acts)
                                                 COMMISSION
              Proposal for a Council Regulation (EEC) on the application of the provisions of Community
                                                  law to the Canary Islands
                                                        (91/C 67/13)
                                                     COM(90) 686 final
                                    (Submitted by the Commission on 20 December 1990)
THE COUNCIL OF THE EUROPEAN COMMUNITIES,                          after obtaining the opinion of the European Parliament,
                                                                  may decide unanimously to include the Canary Islands in
                                                                  the customs territory of the Community and to define
Having regard to the Treaty establishing the European             the appropriate measures aimed at extending to the
Economic Community,                                               Canary Islands the provisions of Community law in
                                                                  force; whereas Spain made such a request on 7 March
Having regard to the Act of Accession of Spain and                1990 pursuant to the aforementioned Article;
Portugal, and in particular the first subparagraph of
Article 25 (4) thereof,
                                                                  Whereas integration of the Canary Islands into all
                                                                  Community policies requires a gradual process over an
Having regard to the proposal from the Commission,                appropriate transitional period, without prejudice to any
                                                                  special measures designed to take account of the specific
                                                                  contraints deriving from the remoteness of the Canary
Having regard      to   the   opinion   of   the   European
                                                                  Islands, their island location and their historical
Parliament,                                                       economic and tax arrangements; whereas such measures
                                                                  will have to be the subject of a special programme of
Having regard to the opinion of the Economic and                  options specific to the remote and insular nature of the
Social Committee,                                                 Canary Islands, to be adopted under this Regulation;
Whereas by virtue of Article 25    of the Act of Accession,       Whereas application of the common agricultural policy
the Treaties and the acts of       the institutions of the        to the Canary Islands will make possible the free
European Communities apply         to the Canary Islands          movement of products on the conditions applicable to
subject to the derogations set     out in that Article, in        mainland Spain (end of the transitional period: 31
Article 155 and in Protocol 2      annexed to the Act of          December 1995) with the exception of the supplementary
Accession;                                                        trade mechanisms as regards the supplying of the Canary
                                                                  Islands; whereas, in this framework, the free movement
Whereas these arrangements exclude the Canary Islands             of products between the Canary Islands and the rest of
from the Community's customs territory and from                   Spain will be ensured; whereas full application of the
application of the common commercial policy, the                  common agricultural policy is subject to the entry into
common agricultural policy and the common fisheries               force of specific supply arrangements; whereas the
policy; whereas experience has, however, shown that the           application of this policy will have to be accompanied in
development of the Canary Islands would be better                 addition by specific measures relating to the agricultural
served by their full integration into the common policies         production of the Canary Islands; whereas it is therefore
and the process of completing the internal market;                necessary to maintain the provisions of the Act of
whereas the arrangements laid down in the Act of                  Accession relating to the application of the common
Accession should now be amended and the Canary                    agricultural policy to the Canary Islands until the entry
Islands integrated into the Community's customs                   into force of such supply arrangements with the
territory;                                                        exception of those governing the access of agricultural
                                                                  products originating in the Canary Islands to the other
                                                                  parts of the Community; whereas the provisions of
Whereas, pursuant to the first subparagraph of Article 25         Protocol 2 relating to bananas must remain in force;
(4) of the Act of Accession, the Council, at Spain's              whereas they will have to be adjusted later, once the
request, acting on a proposal from the Commission and             Council has adopted common measures for bananas;
 ---pagebreak---  15. 3. 91                            Official Journal of the European Communities                              No C 67/9
Whereas it is necessary to apply the common fisheries           Whereas the dismantling of this charge will have to be
 policy to the Canary Islands on the entry into force of         accompanied by the gradual adoption of the common
 the present Regulation on the conditions applicable to          customs tariff as from the entry into force of the present
 mainland Spain (end of the transitional period: 31              Regulation and for the same transitional period, so as to
 December 1995), subject to specific measures to be              ensure the complete integration of the Canary Islands
 determined under existing legislation;                          into the customs union by 31 December 2000; whereas,
                                                                 however, as regards products coming under the common
                                                                 agricultural policy, application of the common customs
                                                                 tariff and other import duties is dependent on the entry
 Whereas historical recognition of the Canaries' island          into force of the specific measures to supply the Canary
 status has been reflected in successive special economic        Islands with essential agricultural products; whereas at
 and tax arrangements designed to compensate for the             all events the gradual application of the common
 disadvantages     deriving from       the     archipelago's     customs tariff to the Canary Islands may be accom-
 geographical isolation;                                        panied, where appropriate, by specific tariff measures or
                                                                 derogations from the common commercial policy for
                                                                 certain sensitive products; whereas such measures may
                                                                 also be taken in respect of the arrangements applicable to
Whereas in this context the strengthening of the Canary         free zones;
 Islands' integration into the Community is not incom-
 patible with the maintenance of indirect taxation specific
 to these islands, especially the exclusion of the Canary
 Islands from the territorial field of application of the
 common VAT system pursuant to Article 26 in                    Whereas the charge known as the 'arbitrio insular —
 conjunction with Annex I.V.2 of the Act of Accession,          tarifa especial' applicable to products supplied by other
 amending Article 3 (2) of the Sixth VAT Directive,             parts of the Community on the terms set out in Article 6
 Council Directive 77/388/EEC (') and the continuing             (3) of Protocol 2 shall not be extended beyond
 exclusion of the Canary Islands from the territorial field      31 December 1992; whereas the levying of this charge
 of application of the Directives concerning manufactured       on products imported into the Canary Islands from
 tobacco pursuant to Article 26 in conjunction with             non-Communky countries will have to be phased out
Annex I.V.3 and 4 to the Act of Accession;                      from 1 January 1996 so that it is completely eliminated
                                                                by 31 December 2000, without prejudice to obligations
                                                                under existing arrangements,
Whereas the Community takes favourable note of the
aims of the reform initiated by Spain in respect of the tax
aspects of the economic and tax arrangements for the
 Canary Islands; whereas this reform provides for the
gradual introduction of up-to-date indirect taxation as         HAS ADOPTED THIS REGULATION:
an instrument of economic and social development and
the financing of local budgets, creating the conditions
for total integration into the Community at the end of a
transitional period not exceeding 10 years;                                               Article 1
                                                                The provisions of the Treaties and the acts of the
                                                                institutions of the European Communities in respect of
Whereas, until 31 December 2000 at the latest, in two           which the Act of Accession provided for derogations
five-year stages as part of a phased process in                 shall apply to the Canary Islands on the terms set out in
conjunction with the gradual entry of the Canary Islands        this Regulation.
into the customs union, it is desirable to authorize a
number of total or partial exemptions for local products
from application of the new tax on production and
imports (APIM), provided that these exemptions
contribute to promotion of local activities; whereas,                                     Article 2
however, application of this charge should be suspended
for products coming under the common agricultural               1. On the entry into force of the specific
policy until the application of that policy, it being           arrangements referred to in paragraph 2, the common
understood that, when these products are imported from          agricultural policy shall apply to the Canary Islands on
non-member countries, the provisions in force in the            the terms laid down for mainland Spain in the Act of
Canary Islands in respect of trade with such countries          Accession. However:
shall be maintained until the same date;
                                                                     the supplementary trade mechanisms provided for in
                                                                     the Act of Accession shall not apply to the entry into
(') OJ No L 145, 13. 6. 1977, p. 1.                                  the Canary Islands of the products in question,
 ---pagebreak--- No C 67/10                           Official Journal of the European Communities                                  15. 3. 91
— the rules in force for mainland Spain shall apply to         3. The rates applicable may vary depending on the
    products originating in the Canary Islands and sent        category of product between 0,1 and 5 %; they may
    to other parts of the Community upon entry into            under no circumstances be increased by more than 15 °/o
    force of this Regulation.                                  of the initial rate. This variation in rates must in no case
                                                               be such as to give rise to discrimination against products
                                                               of Community origin.
2. Application of the common agricultural policy shall
be accompanied by specific supply arrangements.
3. Application of the common agricultural policy shall         4. During the transitional period referred to in
                                                               paragraph 1, in view of the specific situation of the
take account of the special features of Canary Islands
                                                               Canary Islands and the prospect of their full integration
production.
                                                               into the customs union, exemptions from the tax, partial
                                                               or total depending on economic requirements, may be
                                                               authorized for local products up to 31 December 1995.
                          Article 3                            Such exemptions must form part of the strategy for the
The common fisheries policy shall apply to the Canary          economic and social development of the Canary Islands,
Islands on the terms laid down for mainland Spain.             taking account of the Community support framework,
Application of the common fisheries policy shall be            and help to promote local activities, though they must
accompanied by specific measures designed to take              not be such as to change trading conditions to an extent
account, where necessary, of the special features of           contrary to the common interest.
Canary Islands production.
                          Article 4                            5. The arrangements for exemptions adopted by the
                                                               competent authorities pursuant to paragraphs shall be
 1. Pursuant to Article 26 in conjunction with Annex           notified to the Commission, which shall have three
I.V.2 to the Act of Accession amending Article 3 (2) of        months to assess their conformity with the aims defined
the Sixth VAT Directive, the territory of the Canary           in that paragraph. If the Commission has made no
Islands shall remain outside the field of application of       comment within that period, the arrangement shall be
the common VAT system.                                         deemed to have been approved.
2. Pursuant to Article 26 in conjunction with Annex
I.V.3 and 4 to the Act of Accession, Spain may refrain
from applying the provisions of Council Directives             6. During 1995, the Commission, after consulting the
72/464/EEC (*) and 79/32/EEC (2) to the Canary                 Spanish authorities, shall examine the impact of the
Islands.                                                       measures taken on the economy of the Canary Islands
                                                               and the prospects for their integration into the
                                                               Community's customs territory. On the basis of this
                          Article 5                            examination the Spanish authorities may be authorized,
                                                               in accordance with the criteria in paragraph 4 and the
 1. For a transitional period which shall not extend           procedure in paragraph 5, to maintain some of the
beyond 31 December 2000, the Spanish authorities are           exemptions in force, in whole or in part until
hereby authorized to impose a tax on production and            31 December 2000 at the latest.
imports (APIM) on all products entering or produced in
the Canary Islands. However, application of this tax
shall be suspended in respect of products coming under
the common agricultural policy until the entry into force
of the specific supply arrangements referred to in Article                                Article 6
2(2).
                                                                1. For a transitional period, which shall not extend
                                                               beyond 31 December 2000, the common customs tariff
2. By 31 December 1995 the rates for the tax shall be          shall be progressively introduced in accordance with the
set in conformity with paragraph 3. As from 1 January          following timetable:
 1996, these rates shall be reduced by 20 % each year so
that the tax will disappear by the end of the period laid
down in paragraph 1.
                                                               — up to 31 December 1992, the rates of duty applicable
                                                                   shall be equal to 30 % of the CCT rates; from
                                                                   1 January 1993 these rates shall be equal to 35 % of
O OJ No L 303, 31. 12. 1972, p. 1.                                 the CCT rates, and shall rise to 40 % from 1 January
(*) OJ No L 10, 16. 1. 1979, p. 8.                                 1994 and to 50 % from 1 January 1995,
 ---pagebreak---  15. 3. 91                            Official Journal of the European Communities                            No C 67/11
— from 1 January 1996 onwards, these rates shall be             resulting from the amendment of the trade arrangements
     increased by 10% per year so that the CCT shall            applicable to the Canary Islands.
     apply in full to the Canary Islands at the end of the
     transitional period.
2. However, application of the common customs tariff                                      Article 9
and other import duties applicable under the common             The Council, on a proposal from the Commission and
agricultural policy shall be suspended until the entry into     after consulting the European Parliament and the
force of the specific supply arrangements referred to in        Economic and Social Committee, shall adopt a
Article 2 (2).                                                  programme of options specific to the remote and insular
                                                                nature of the Canary Islands. This programme shall
3. Application of the CCT to the Canary Islands shall           include the specific measures referred to in Articles 2 (2)
be without prejudice to any specific tariff measures or         and (3), 3 (1) and 6 (3). This multi-sector programme of
derogations from the common commercial policy in                operations comprising legislative measures and financial
respect of certain sensitive products. Customs measures         commitments relating to the application of the common
may also be taken in respect of the arrangements                policies to reflect constraints specific to the Canary
applicable to free zones.                                       Islands, shall be given effect before 31 December 1992
                                                                by the adoption by the Council or the Commission, as
4. The charge known as the 'arbitrio insular — tarifa           the case may be, of the necessary legal acts, in
especial' of the Canary Islands shall be applied to             accordance with the provisions of the Treaty.
products supplied by other parts of the Community on
the terms laid down in Article 6 (3) of Protocol 2,
though it may not be extended beyond 31 December
1992. Without prejudice to obligations arising out of                                    Article 10
existing agreements, the levying of this charge on
                                                                1.    This Regulation shall enter into force on . . . 1991.
imported products originating in non-Community
countries shall be phased out from 1 January 1996 so as
to be completely eliminated by 31 December 2000.
                                                                2. The provisions of the Act of Accession relating to
5. Where it is found that application of the first              the application of the common agricultural policy to the
paragraph leads to a deflection of trade, the Commission        Canary Islands and the relevant Community regulations
may decide that the difference in import duties shall be        shall remain applicable until the entry into force of the
levied on goods in free circulation in the Canary Islands       measures referred to in Article 2 (2), or until 31
when these are introduced into the other parts of the           December 1991, whichever is the earlier, with the
Community's customs territory.                                  exception of the provisions governing access of products
                                                                originating in the Canary Islands to other parts of the
                                                                Community.
                          Article 7
The common commercial policy shall apply to the
Canary Islands on the terms laid down for Spain in the          3. The provisions of Protocol 2 relating to bananas
Act of Accession without prejudice to the specific              shall continue to apply. They shall be adjusted if the
measures referred to in Articles 2 (2), 6 (3) and 10 (3) of     Council, before the date specified in Article 4 (2) (b) of
this Regulation.                                                Protocol 2, adopts common measures for bananas.
                          Article 8
The Commission shall adopt appropriate measures to              This Regulation shall be binding in its entirety and
prevent any speculative movement or deflection of trade         directly applicable in all Member States.