Explanatory Memorandum to COM(2010)749 - Amendment of Decision 2004/162/EC as regards the products that may benefit from exemption from or a reduction in dock dues - Main contents
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This page contains a limited version of this dossier in the EU Monitor.
| dossier | COM(2010)749 - Amendment of Decision 2004/162/EC as regards the products that may benefit from exemption from or a reduction in dock dues. |
|---|---|
| source | COM(2010)749  |
| date | 14-12-2010 |
The Treaty on the Functioning of the European Union (TFEU), which applies to the outermost regions of the EU, which include the four French overseas departments (DOMs), does not in principle allow any difference in the DOMs between the taxation of local products and the taxation of products from metropolitan France or the other Member States. Article 349 of the TFUE (former Article 229 i of the EC Treaty) provides, however, for the possibility of introducing specific measures for those regions because of the permanent handicaps which affect the economic and social conditions of the outermost regions.
Council Decision 2004/162/EC of 10 February 2004, adopted on the basis of Article 299 i of the EC Treaty, authorises France, up to 1 July 2014, to apply exemptions from or reductions in the tax known as 'dock dues' to certain products manufactured in the DOMs. The Annex to that Decision contains a list of products to which tax exemptions and reductions may be applied. The difference between the taxation of locally manufactured products and the taxation of other products may not exceed 10, 20 or 30 percentage points, depending on the product.
Decision 2004/162/EC sets out the reasons for adopting specific measures, which include isolation, raw material and energy dependence, the obligation to build up stocks, the small size of the local market and the low level of export activity. The combination of these handicaps means that production costs, and therefore the cost price of goods produced locally, are increased, so that without specific measures they would be less competitive than goods produced elsewhere, even taking into account the cost of transporting the latter to the DOMs. This would make it harder to maintain local production. The specific measures contained in Decision 2004/162/EC were thus designed to strengthen local industry by making it more competitive.
Article 4 of Decision 2004/162/EC provides that the French authorities must present to the Commission by 31 July 2008 a report on the application of the tax arrangements authorised by the Decision, in order to check the impact of the measures taken and their contribution to promoting or maintaining local economic activities, in the light of the handicaps affecting the outermost regions. On the basis of this report, the Commission must present a report to the Council giving a full economic and social analysis and, where appropriate, a proposal for adapting the provisions of Decision 2004/162/EC.
On 31 July 2008 the French authorities accordingly submitted their report to the Commission. It was later supplemented. The report from the French authorities includes a request for the list of products to which differentiated taxation may be applied to be updated for French Guiana.
The Commission's report has been presented to the Council today i. It is accompanied by this proposal for a Council Decision.
Contents
The French authorities' request concerning French Guiana was a response to requests from the economic sectors concerned. In addition, representatives of the economic sectors most affected by the French authorities' request concerning French Guiana were present in several delegations at working meetings with the French authorities.
The Commission has not used an impact assessment.
Summary of the proposed measures To update, in the light of the findings made, the lists of products in the Annex to Decision 2004/162/EC, to which France is authorised, within certain limits, to apply exemptions from or reductions in the tax known as 'dock dues' for certain products manufactured locally in the French overseas departments.
Legal basis Article 349 TFEU.
Subsidiarity principle Only the Council is authorised, on the basis of Article 349 TFEU, to adopt specific measures in favour of the outermost regions to adjust the application of the Treaties to those regions, including the common policies, because of the permanent handicaps which affect the economic and social conditions of the outermost regions. The proposal therefore complies with the subsidiarity principle.
Proportionality principle The proposal complies with the proportionality principle for the following reasons.
Its purpose is to update Decision 2004/162/EC. It concerns only products for which such an adaptation has proved necessary.
Equally, the maximum differential proposed for each product covered by this proposal is limited to what is necessary in view of the higher costs affecting the local production concerned in each case. In this way, the tax burden on products imported into French overseas departments will not exceed what is necessary to offset the lower competitiveness of products manufactured locally compared with imported products.
Choice of instrument
Proposed instrument: Council Decision.
Other instruments would not have been appropriate for the following reasons. The text to be amended is itself a Council Decision, adopted on the same legal basis (Article 299 i of the then EC Treaty).
BUDGETARY IMPACT
The proposal has no impact on the budget of the European Union.
5. OPTIONAL ELEMENTS
Recitals 4 to 15 of the proposal for a Council Decision set out the amendments which it proposes to make to the lists of products in the Annex to Decision 2004/162/EC and the reasons therefore.
France will need time to adjust its domestic legislation to the removal of products from the lists in Decision 2004/162/EC. It is therefore proposed that the date of application of this amending Decision be deferred until after the date of its notification (see Article 2).