Proposal to amend Decision No 189/2014/EU authorising France to apply a reduced rate of certain indirect taxes on ‘traditional’ rum produced in Guadeloupe, French Guiana, Martinique and Réunion

Traditional rum from France’s outermost regions has been subject to special excise duty arrangements on the French mainland market since 1923. This reflects a long-term fiscal state aid strategy based on (i) the observation that, occasional years of particularly strong growth notwithstanding, the global rum market is expanding steadily, and (ii) aligning the eligible quantities with this growth rate to ensure the long-term competitiveness of the cane-sugar-rum sector in France’s outermost regions. Since the creation of the internal market and the harmonisation of excise duty in Europe, these special excise duty arrangements have been extended with EU approval.

The current system permitting this extension was introduced by Council Decision No 2002/166/EC of 18 February 2002 authorising France to extend the application of a reduced rate of excise duty on ‘traditional’ rum produced in its overseas departments to take into account the sugar common market organisation review in 2001 and the dismantling in 2003 of the customs protection for spirits. Decision No 2002/166/EC limited the reduced rate of excise duty to an annual quota of 90,000 hectolitres of pure alcohol. Decision No 2002/166/EC was subsequently amended by Decision No 2007/659/EC of 9 October 2007 and Decision No 896/2011/EU of 19 December 2011.

Decision No 189/2014/EU of 20 February 2014 repeals and replaces Decision No 896/2011/EU, capping the annual quota at 120,000 hl of pure alcohol (hap) for the period from 1 January 2010 until 31 December 2020. The quota set by Decision No 189/2014/EU does not fully reflect the growth rates referred to in Decision No 896/2011/EU. Moreover, setting the quota at an annual level of 120,000 hap for a lengthy period of ten years increased the discrepancy between the growth rates projected by the Council in 2011 and the quotas available.

On 22 September 2016, the French authorities asked the Commission to present a draft technical adaptation to Council Decision No 189/2014/EU, increasing the annual quota from 120,000 to 144,000 hap. The request was accompanied by a report justifying the adaptation requested.

• Primary Source

EUR-Lex: COM(2017)297: Follow the progress of this proposal through the decision-making procedure http://eur-lex.europa.eu/legal-content/EN/HIS/?uri=COM:2017:297:FIN

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