Decision 2021/991 - Dock dues scheme in the French outermost regions - Main contents

EN

Official Journal of the European Union

L 221/1

The Treaty provisions which apply to the French outermost regions in principle do not authorise any difference between the taxation of local products and the taxation of products from metropolitan France or the other Member States. However, Article 349 of the Treaty provides for the possibility of introducing specific measures for outermost regions because of permanent constraints affecting their economic and social situation.

Specific measures should be adopted, in particular to lay down the conditions for the application of the Treaties to those regions. Such specific measures are to take into account the special characteristics and constraints of those regions, without undermining the integrity and coherence of the Union legal order, including the internal market and common policies. The competitive disadvantages faced by the French outermost regions are referred to in Article 349 of the Treaty: remoteness, insularity, small size, difficult topography and climate, and economic dependence on a few products. Those permanent constraints result in the French outermost regions depending on imports for raw materials and energy, an obligation to build up larger stocks, and a small local market combined with a low level of export activity, etc. The combination of those competitive disadvantages increases production costs and, therefore, the cost price of goods produced locally, without specific measures, would be less competitive than equivalent goods produced elsewhere, even taking into account the cost of transporting such goods to the French outermost regions. This would make it harder to maintain local production. For this reason, specific measures need to be taken in order to strengthen local industry by making it more competitive.

With a view to restoring the competitiveness of goods produced locally, Council Decision No 940/2014/EU (2) authorises France to apply, until 30 June 2021, exemptions or reductions to dock dues in respect of certain products for which local production exists in the outermost regions of Guadeloupe, French Guiana, Martinique, Mayotte and Réunion, given that the significant importation of those products could jeopardise the continuation of local production and that additional costs could increase the cost price of local production in comparison with products produced elsewhere. The Annex to that Decision contains the list of products to which the tax exemptions or reductions may be applied. The difference between the taxation of locally produced products and that of other products may not exceed 10, 20 or 30 percentage points, depending on the product.

France has requested that a system similar to that contained in Decision No 940/2014/EU continue to apply after 1 July 2021. France explained that although the competitive disadvantages referred to above continue to exist, the tax arrangements established by Decision No 940/2014/EU has made it possible to maintain and, in certain cases, develop local production, and that those arrangements have not disrupted external trade and have not resulted in overcompensation for the additional costs borne by the enterprises.

For each of the five outermost regions concerned...