Explanatory Memorandum to COM(2021)392 - Temporary suspension of autonomous Common Customs Tariff duties on imports of certain industrial products into the Canary Islands - Main contents
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This page contains a limited version of this dossier in the EU Monitor.
| dossier | COM(2021)392 - Temporary suspension of autonomous Common Customs Tariff duties on imports of certain industrial products into the Canary ... |
|---|---|
| source | COM(2021)392  |
| date | 14-07-2021 |
1. CONTEXT OF THE PROPOSAL
• Reasons for and objectives of the proposal
Council Regulation (EU) No 1386/2011 1 provided for the temporary suspension of the autonomous Common Customs Tariff duties on imports of certain industrial products into the Canary Islands. 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 (TFEU), in order to overcome the economic disadvantages these regions suffer due to their geographical situation.
The measures provided for in Council Regulation (EU) No 1386/2011, which were aimed at strengthening the competitiveness of the local economic operators and thus securing more stable employment on these islands, are due to expire on 31 December 2021. In April 2021, the government of Spain requested the prolongation of the suspension of the autonomous Common Customs Tariff duties for a number of products. According to the request the constraints faced by the region, being structural and permanent, continue to be related to isolation, the small size of the market and its fragmentation. The Canary Islands, because of those limitations, have a higher cost of production and transport, and higher environmental costs. They are also unable to benefit from globalisation to the same extent as other European regions. The requested suspension scheme is intended to reduce these constraints on the Canary Islands market.
In addition, in the same context, the Spanish authorities requested the suspension of the Common Customs Tariff duties for seven new product categories falling under CN codes 3903 19, 5603 94, 5604 10, 7326 90, 7607 20, 8441 40 and 8479 90.
• Consistency with existing policy provisions in the policy area
The 2017 Communication “A stronger and renewed strategic partnership with the EU's outermost regions” 2 notes that the outermost regions continue to face serious challenges, many of which are permanent. This Communication presents the Commission’s approach in terms of supporting these regions in building on their unique assets and identifying new sectors to enable growth and job creation.
In this context, the aim of this proposal is supporting Spain’s outermost region in building on its assets in order to enable growth and job creation in the local sector. This proposal supplements the Programme of Options Specifically Relating to Remoteness and Insularity (POSEI), which targets support for the primary sector and the production of raw materials, the European Maritime and Fisheries Fund (EMFF) and the funding of the European Regional Development Fund (ERDF) Specific Additional Allocation.
The Canary Islands benefit from other similar measures (autonomous tariff reductions), for instance, Council Regulation (EU) 2020/1785 of 16 November 2020 3 provides for the opening of autonomous tariff quotas for imports of certain fishery products into the Canary Islands. Moreover, this outermost region benefits from exemptions or partial reductions in the AIEM tax 4 that are provided for by Council Decision (EU) 2020/1792 of 16 November 2020 5 .
• Consistency with other Union policies
This proposal is in line with Union policies, particularly as regards overall policy for the outermost regions and policies in the field of international trade, competition, environment, enterprise, development and external relations.
2. LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY
• Legal basis
The legal basis of this proposal is Article 349 TFEU. This provision enables the Council, taking into account the structural social and economic constraints of the Union outermost regions (including their remoteness, insularity, small size, difficult topography and climate and economic dependence on a few products) to adopt specific measures adjusting the application of the Treaties to those regions. Those measures concern specific areas, including, among others, customs and trade policies.
• Subsidiarity (for non-exclusive competence)
The proposal falls under the exclusive competence of the Union. The subsidiarity principle therefore does not apply.
• Proportionality
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 Union 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 the instrument
The proposal is for a Regulation.
3. RESULTS OF EX-POST EVALUATIONS, STAKEHOLDER CONSULTATIONS AND IMPACT ASSESSMENTS
• •Stakeholder consultations
The expert group “Economic Tariff Questions Group” (ETQG) which assists the Commission in preparing its Council proposals in the area of autonomous tariff measures, was consulted on this proposal.
• Collection and use of expertise
To examine the impacts of the measures, the Commission requested the necessary information from the Spanish authorities. The Spanish authorities provided data on the products concerned that had been imported to the Canary Islands and included an analysis of these products.
Information was also gathered for specific topics, such as employment (from the Canary Islands Statistical Institute), tourism (official statistics on tourism in the Canary Islands) and consumption (Eurobarometer).
• Impact assessment
No impact assessment has been performed. The proposal is aimed at prolonging the current measures that expire at the end of 2021. An impact assessment is not warranted, given the very limited scope of the measures and the fact that there are no significant changes as to their expected effects
• Fundamental rights
The proposal has no consequences on fundamental rights.
4. BUDGETARY IMPLICATIONS
This proposal has no financial impact on expenditure, but has a financial impact on revenue. Uncollected customs duties total approximately EUR 3,3 million per year. The effect on the budget’s traditional own resources is EUR 2,5 million per year (i.e. 75 % of the total). The legislative financial statement sets out the budgetary implications of the proposal in greater detail.
The loss of revenue in traditional own resources shall be compensated by Member States Gross National Income (GNI) based on resource contributions.