REPORT on the proposal for a Council decision amending Decision 2004/162/EC with regard to its implementation in Mayotte from 1 January 2014

24.2.2014 - (COM(2014)0024 – C7‑0031/2014 – 2014/0010(CNS)) - *

Committee on Regional Development
Rapporteur: Danuta Maria Hübner
(Simplified procedure – Rule 46(1) of the Rules of Procedure)

DRAFT EUROPEAN PARLIAMENT LEGISLATIVE RESOLUTION

on the proposal for a Council decision amending Decision 2004/162/EC with regard to its implementation in Mayotte from 1 January 2014

(COM(2014)0024 – C7‑0031/2014 – 2014/0010(CNS))

(Special legislative procedure – consultation)

The European Parliament,

–       having regard to the Commission proposal to the Council (COM(2014)0024),

–       having regard to Article 349 of the Treaty on the Functioning of the European Union, pursuant to which the Council consulted Parliament (C7‑0031/2014),

–       having regard to Rules 55 and 46(1) of its Rules of Procedure,

–       having regard to the report of the Committee on Regional Development (A7-0144/2014),

1.      Approves the Commission proposal;

2.      Calls on the Council to notify Parliament if it intends to depart from the text approved by Parliament;

3.      Asks the Council to consult Parliament again if it intends to substantially amend the text approved by Parliament;

4.      Instructs its President to forward its position to the Council, the Commission and the national parliaments.

EXPLANATORY STATEMENT

Council Decision 2004/162/EC of 10 February 2004, adopted on the basis of Article 299(2) of the EC Treaty (now Article 349 TFEU), authorises France, until 1 July 2014, to apply exemptions or reductions to the dock dues tax for the products listed in the Annex of that Decision which are produced locally in the French overseas departments of Guadeloupe, Guyana, Martinique and Réunion.

That Decision contains an Annex listing the products to which tax exemptions and reductions may be applied, while stipulating that the application of exemptions or reductions can not result in differentials of more than 10, 20 or 30 percentage points depending on the products.

Decision 2004/162/EC sets out the reasons for adopting the specific measures: remoteness, insularity, small size of the market and the low level of export, difficult topography and climate, economic dependence on a few products, and from time to time even natural phenomena such as cyclones, volcanic eruptions and earthquakes.

The remoteness of these regions and their dependence on air and sea transport, as well the raw material and energy dependence have a knock-on effect on production costs. The combination of all the handicaps leads to an increase of the cost price of goods produced locally, so that without specific measures they could not compete with those produced elsewhere. If local products cannot compete, it will become impossible to sustain local production, with harmful consequences in terms of employment for the inhabitants of those areas.

The specific measures contained in Decision 2004/162/EC were thus designed to strengthen local industry by making it more competitive.

By Decision 2012/419/EU amending the status of Mayotte with regard to the European Union, the European Council decided that Mayotte would have the status of an outermost region within the meaning of Article 349 TFEU from 1 January 2014, rather than that of an overseas country or territory within the meaning of Article 355(2) TFEU.

Mayotte was thus added to the list of outermost regions in Article 349 TFEU and the entire Treaty as well all Union tax legislation will therefore be applicable to Mayotte from the date of this status change.

The French authorities informed the Commission of their intention to introduce the dock dues tax in Mayotte, under similar conditions to those for Guyana, and requested authorisation from the Commission to apply a differentiated tax system according to whether or not products are produced locally. In their request of 24 May 2013, the French authorities sent the Commission a list of around 100 products for which they were seeking authorisation to apply a differentiated tax system according to whether or not the products are produced locally. The French authorities were asked on several occasions to supply additional information and, for each of the products covered by the request, to provide proof of the existence of local production, the market share held by this local production, and the additional costs of this local production in comparison to the same products produced elsewhere.

This proposal for a Council Decision thus amends the above-mentioned Decision by making it applicable to Mayotte, authorising the application of a differentiated tax system for 59 products produced locally in Mayotte, for which the French authorities have provided evidence that additional costs are incurred as required by the Commission, and proposing a maximum differential for each product limited to what is necessary to offset the lower competitiveness and additional costs of the local products.

The proposed Decision is submitted to the Parliament in accordance with Article 349 TFEU, and therefore under a special legislative procedure, whereby the Parliament is merely consulted.

As regards the substance, the proposed modification appears to be justified by objective reasons as it stems necessarily from the Mayotte status change as decided by the above-mentioned Decision of the European Council, and granting therefore an identical treatment to all the French ORs.

The proposed decision has a precise and well-defined scope, given that it applies to a limited number of identified products, and is subject to a short duration, as the authorisation granted to France expires on 1 July 2014.

Moreover, given that this measure will be effective from 1 January 2014, it is all the more important to adopt it swiftly for reasons of legal security, and thus the Chair proposes that this Commission proposal for a Council Decision be adopted without amendment, in accordance with Rule 46 (1) of the Rules of Procedure.

PROCEDURE

Title	Amendment to Decision 2004/162/EC with regard to its implementation in Mayotte from 1 January 2014
References	COM(2014)0024 – C7-0031/2014 – 2014/0010(CNS)
Date of consulting Parliament	6.2.2014
Committee responsible        Date announced in plenary	REGI
Committee(s) asked for opinion(s)        Date announced in plenary	ECON
Not delivering opinions        Date of decision	ECON 4.2.2014
Rapporteur(s)        Date appointed	Danuta Maria Hübner 24.2.2014
Simplified procedure - date of decision	24.2.2014
Date adopted	24.2.2014