Select Committee on European Scrutiny Eighth Report



COM (00) 732

Draft Council Decision extending Decision 91/482/EEC on
the Association of the Overseas Countries and Territories
with the European Community.

Draft Council Decision on the Association of the Overseas
Countries and Territories with the European Community

Legal base: Article 187 EC; consultation, unanimity
Document originated: (a) —
(b) 15 November 2000
Forwarded to the Council: 21 November 2000
Deposited in Parliament: 17 January 2001
Department: Foreign and Commonwealth Office
Basis of consideration: EMs of 22 and 27 February 2001
Previous Committee Report: None
To be discussed in Council: No date set
Committee's assessment: Politically important
Committee's decision: (Both) Cleared; but request to be kept informed


  27.1  The Overseas Countries and Territories (OCT) Decision sets out the framework for the EC's co-operation over seven years with the OCTs. 24 OCTs are listed, at Annex IA. They include eleven of the UK's Overseas Territories: Anguilla, the Cayman Islands, the Falkland Islands, South Georgia and the Sandwich Islands, Monserrat, Pitcairn, St Helena and Dependencies, British Antarctic Territory, British Indian Ocean Territory, Turks and Caicos Islands, and the British Virgin Islands.

  27.2  The previous OCT Decision[62] applied from July 1991. It was amended in 1997[63] and rolled over for a year in February 2000.[64]

Document (a)

  27.3  The current Decision expires on 28 February 2001. The new Decision is still under discussion, so the Commission has proposed a further extension of the existing arrangements to 1 December 2001. This is necessary to provide a legal base for continued development support and trading preferences for the OCTs and it is supported by the Government.

Document (b)

  27.4  The Commission started preparatory work on a new Council Decision early in 1999, but it did not publish this proposal for the new Decision until mid-November 2000.

  27.5  The broad principles of the new Decision were outlined in Declaration 36 on the overseas countries and territories annexed to the Final Act of the Treaty of Amsterdam. In this, the Conference noted that most OCTs lag far behind in structural terms and the special arrangements for association with the OCTs, which have changed little since 1957, "can no longer deal effectively with the challenges of OCT development." The Conference invited the Council to review the association arrangements by February 2000 with the four-fold objective of:

    —  promoting the economic and social development of the OCTs more effectively;

    —  developing economic relations between the OCTs and the European Union;

    —  taking greater account of the diversity and specific characteristics of the individual OCTs, including aspects relating to freedom of establishment; and

    —  ensuring that the effectiveness of the financial instrument is improved.

  27.6  In his Explanatory Memorandum of 27 February, the Minister of State at the Foreign and Commonwealth Office (Mr Keith Vaz) summarises the provisions of the draft Decision:

    "For development, the new Decision offers five types of resources: an allocation from the 9th EDF[65]; an investment facility; additional support in the event of unexpected events (e.g. natural disasters) or to reward efficient use of earlier allocations; European Investment Bank loans; and eligibility for other general budget lines open to developing countries. The process of disbursing development funds has been streamlined along ERDF[66] lines: the Commission will support, but will no longer directly manage projects. Allocations for each OCT are calculated using ERDF-inspired, poverty-focused criteria, with funds concentrated on the least developed OCTs.

    "In terms of rights of the individual, certain Community programmes which are open to nationals of Member States are now also open to inhabitants of OCTs. The principle of non-reciprocity of rights of establishment is maintained: nationals of Member States will not have the right to move to an OCT, whatever the rights of the inhabitants of that particular OCT. Consultation procedures, based on the principle of trilateral partnership between the Commission, the Member State and the OCTs, are also strengthened".

  27.7  Allocation between the OCTs of Community financial assistance from the 9th EDF is to be made according to criteria laid down in Article 3 of Annex IIA to the Decision. The least developed are defined as those with a per capita Gross National Product (GNP) not exceeding 75% of the Community per capita sum. These are listed at Annex IB. They do not include any of the Dutch OCTs, though these benefit under other criteria.

  27.8  Under Article 3.5, the allocation to Greenland is to be examined in the light of the review provided for in Article 14 of the Protocol on the fishing conditions for the period 2001-2006.

  27.9  We understand that the Dutch have some difficulties with the current text. A reserve of 35 million euros is provided for non-allocated EDF funds. The Dutch may secure part of this reserve for their OCTs. Annex III sets out definitions for rules of origin. We understand that the Dutch OCTs will no longer be permitted, if this draft is agreed, to claim that the process of turning sugar into lumps fulfils the processing criteria.

The Government's view

  27.10  The Minister says that the proposal represents an improved deal for UK OCTs. Negotiations continue, with the aim of the draft Decision being put to the Council in July.


  27.11  This is an important legislative proposal for the Overseas Countries and Territories affected, which do not include some of the more developed, such as Bermuda. We note that the Government believes that the proposal as it stands represents a good outcome for the United Kingdom Overseas Countries and Territories, and we now clear the document. However, we ask the Minister to inform us before the proposal is put to the Council if, in the meantime, it is amended to the detriment of the interests of the United Kingdom Overseas Countries and Territories.

62  Council Decision 91/482/EEC. Back

63  Council Decision 2000/169/EC. Back

64  Council Decision 2000/160/EC; see (20986) 6337/00; HC 23-x (1999-2000), paragraph 11 (1 March 2000). Back

65  European Development Fund. Back

66  European Regional Development Fund. Back

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