Explanatory Memorandum to COM(2018)461 - Association of the Overseas Countries and Territories with the EU including relations between the EU and Greenland and Denmark ('Overseas Association Decision') - Main contents
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This page contains a limited version of this dossier in the EU Monitor.
dossier | COM(2018)461 - Association of the Overseas Countries and Territories with the EU including relations between the EU and Greenland and ... |
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source | COM(2018)461 ![]() |
date | 14-06-2018 |
1. CONTEXTOFTHEPROPOSAL
• Reasons for and objectives of the proposal
This proposal comes in the context of the 2021-2027 Multiannual Financial Framework outlined in the Communications from the Commission to the European Parliament, the European Council and the Council, the European Economic and Social Committee and the Committee of the Regions on a Modern Budget for a Union that Protects, Empowers and Defends1. The Communications set the main priorities and overall budgetary framework for EU external action programmes under the heading ‘Neighbourhood and the World’. One such priority is a Council Decision on the Association of the Overseas Countries and Territories with the European Union, including relations between the European Union on the one hand, and Greenland and the Kingdom of Denmark on the other.
Overseas Countries and Territories (OCTs) have been associated with the European Union (EU) since the entry into force of the Treaty of Rome. These 25 islands located in the Atlantic, Antarctic, Arctic, Caribbean, Indian Ocean and Pacific regions2 are not sovereign countries, but depend on four EU Member States: Denmark, France, the United Kingdom and the Netherlands.
This proposal provides for a date of application as of 1 January 2021 and is presented for a Union of 27 Member States, in line with the notification by the United Kingdom of its intention to withdraw from the European Union and Euratom based on Article 50 of the Treaty on European Union received by the European Council on 29 March 2017. It therefore does not apply to the 12 OCTs linked to the United Kingdom. The association of the 13 remaining OCTs with the Union flows from the constitutional relations that these countries and territories have with the three Member States: Denmark, France, and the Netherlands.
In general, OCTs have wide-ranging autonomy, covering areas such as economic affairs, employment market, public health, home affairs and customs. Defence and foreign affairs usually remain within the remit of the Member States. The OCTs are not part of the Union’s customs territory and are outside the internal market. Union legislation therefore does not apply. As nationals of European Union Member States to which their countries and territories are constitutionally linked, OCTs inhabitants hold EU citizenship.
Council Decision EU/2013/7553 - the Overseas Association Decision - covers relations between the OCTs (including Greenland), the Member States to which they are linked and the European Union. It outlines the special relationship that OCTs have with the EU as part of the ‘EU family’ and the specific legal framework which applies to them. The main financial source of the current Overseas Association Decision is the 11th European Development Fund (EDF), covering the programming and funding of territorial and regional programmes for OCTs other than Greenland, for which there is a specific decision funded from the EU budget.
Prior to 1982 Greenland was considered part of the EU through Denmark, meaning that EU vessels could fish in Greenlandic waters. Subsequently, Greenland withdrew from the EU and
COM (2018) 98 final, 14.2.2018; COM (2018) 321 final, 2.5.2018.
Annex II Treaty on the Functioning of the European Union.
OCT through the Greenland Treaty4. The Treaty
became associated as an OCT through the Greenland Treaty . The Treaty emphasised the need to maintain the close relationship between the EU and Greenland, notably in terms of Greenland’s development needs and EU fishing rights.
A fisheries agreement5 was signed on 13 March 1984. Following the mid-term review of the fourth fisheries protocol, in 2003 the European Council concluded that an arrangement should take into account the importance of fisheries and the structural development problems in Greenland. The 2006 Joint Declaration6 between the Union, Greenland and Denmark set out the common objectives of a new partnership. It formed the political basis for Council Decision 2006/526/EC7, which defined the framework for cooperation for 2007-2013. The Council Decision 2014/137/EU8 now covers the period 2014 to 2020 and is in line with the subsequent 2015 Joint Declaration between the EU, Greenland and Denmark, which reaffirms the close relations between the parties.
The current Greenland Decision complements the Overseas Association Decision but outlines some features specific to relations with Greenland.
The mid-term review report (December 2017)9 on 10 external financing instruments, including the Greenland Decision10 and the 11th EDF, which includes the programming for the other OCTs, concluded that the external financing instruments were ‘fit for purpose’. However, both the report and the consultations conducted highlighted the need for increased flexibility, simplification, coherence and performance. This has led to a proposal for a future Neighbourhood, Development and International Cooperation Instrument, which will draw on lessons learned to help streamline the Union’s external action architecture.
The Overseas Association Decision and the Greenland Decision cannot be included in the new Neighbourhood, Development and International Cooperation Instrument or in any other legal act subject to the ordinary legislative procedure. This is because they both have a specific adoption procedure: a Council Decision by unanimity, following consultation of the European Parliament11. However, to streamline the number of programmes it is proposed that both Decisions be merged into a single Decision regrouping all OCTs, including Greenland.
Moreover, Article 203 in the Treaty on the Functioning of the European Union (TFEU) is the legal basis for the Overseas Association Decision and for the Greenland Decision. Following the proposal to budgetise the EDF, the financing both for Greenland and for the other
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Treaty amending, with regard to Greenland, the Treaties establishing the European Communities, OJ L
29, 1.2.1985, p. 1.
Government of Denmark and the local Government of Greenland, on the other, OJ L 29, 1.1.1985, p. 9.
Greenland and the Government of Denmark, on the other, on partnership between the European
Community and Greenland, OJ L 208, 29.7.2006, p. 32.
hand, and Greenland and the Kingdom of Denmark on the other, OJ L 208, 29.7.2006, p.28.
Decision (EU) 2014/137 of 14 March 2014 on relations between the European Union on the one hand,
and Greenland and the Kingdom of Denmark on the other ('Greenland Decision'), OJ L 76, p. 1,
15.3.2014.
The mid-term review report was based on 10 staff working documents, one per instrument (list in link
below), which in turn were based on 10 independent evaluations. All the documents can be found at:
https://ec.europa.eu/europeaid/public-consultation-external-financing-instruments-european-union_en.
OJ L 76, 15.3.2014, p. 1.
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Overseas Countries and Territories should come from the new budget heading 6 Neighbourhood and the World.
A new legislative act for all OC Ts that covers the political and legal framework and with how cooperation is implemented will deliver:
• unity of management ----- having all the OC Ts under the same source of
financing (the EU budget) will create synergies in programming and implementation;
• consolidation of shared objectives;
• simplification and coherence in the legal framework;
• higher profile for the OCTs as a group.
As both decisions have been deemed ‘fit for purpose’, the guiding principle is to preserve what works well, while improving what hinders the partners’ ability to deliver effectively on
their policies and priorities. On the other hand, the Member States concerned have firmly insisted on retai ning the structure and acquis of the current Overseas Association Decision.
• Consistency with existing policy provisions in the policy area
The current rules and procedures of the EU-OCT association are laid down in Decision 2013/755/EU of 25 November 201312 on the association of the OCTs with the European Union. Those concerning the relations with Greenland are laid down in Decision 2014/137/EU of 14 March 201413 on relations between the European Union on the one hand, and Greenland and the Kingdom of Denmark on the other.
Consistency with other Union policies
energy efficiency and its contribution to energy security and to the 2030 Framework for climate and energy policy. Coherence with the Paris Agreement on Climate Change will also be ensured.
The integrated European Union poli cy for the Arctic15 reflects the Union’s strategic interest in
playing a key role in the Arctic region. Building on previous initiatives, it sets out the case for a Union policy that focuses on advancing international cooperation in responding to the
impacts of the climate change on the Arctic’s fragile environment, and on promoting and
contributing to sustainable development, particularly in the European part of the Arctic. Greenland plays an important part in the vision of this policy as part of the Kingdom of Denmark.
Actions funded under this proposal should be coherent with those carried out under the Common Foreign and Security Policy and the newly proposed European Peace Facility.
OJ L 344, 19.12.2013, p. 1.
OJ L 76, 15.3.2014, p. 1.
Communication from the Commission to the European Parliament and the Council on energy efficiency
and its contribution to energy security and the 2030 Framework for climate and energy policy, COM
520 final.
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Humanitarian actions should not be funded under this proposal as they will continue to be funded through the Humanitarian Aid instrument16.
The Commission proposal for the 2021-2027 Multiannual Financial Framework set a more ambitious goal for climate mainstreaming across all EU programmes, with an overall target of 25% of EU expenditure contributing to climate objectives. Actions under this Programme are expected to contribute 20 % of the overall financial envelope of the Programme to climate objectives. The contribution of this Programme to the achievement of this overall target will be tracked through an EU climate marker system at an appropriate level of disaggregation, including the use of more precise methodologies where these are available. The Commission will continue to present the information annually in terms of commitment appropriations in the context of the annual draft budget.
To support the full utilisation of the potential of the programme to contribute to climate objectives, the Commission will seek to identify relevant actions throughout the programme preparation, implementation, review and evaluation processes.
2. LEGALBASIS, SUBSIDIARITYAND PROPORTIONALITY
• Legal basis
The Overseas Association Decision is based on Part Four of the TFEU. The detailed rules and procedures of the association are laid down in Council decisions based on Article 203 of the TFEU, under which such acts are adopted through a special legislative procedure.
Articles 198-204 of the TFEU apply to Greenland, subject to the specific provisions set out in the Protocol No 34 on special arrangements for Greenland annexed to the TFEU.
• Subsidiarity (for non-exclusive competence)
The detailed arrangements of the provisions in Part Four of the TFEU have to be made at Union level, as the purpose of the association — social and economic development and close economic ties between the OCTs and the Union as a whole — cannot be achieved via action at Member State level. Moreover, Member States would not be able to take action with regard to the OCT trade regime, as the EU alone is responsible for common commercial policy (Part Five, Title II of the TFEU).
The approach towards cooperation with the OCTs contained in the Commission’s legislative proposal respects the principles of partnership, complementarity and subsidiarity. It proposes that the EU financial assistance to OCTs be based on programming documents, for which the competent OCT authorities and the Commission would be jointly responsible and which would define the cooperation strategies between the Union and the OCTs. These cooperation strategies would be based on the development objectives, strategies and priorities adopted by the competent OCT authorities. The Commission, the OCTs and their Member States would work closely together to decide on activities, with full respect for each partner’s institutional, legal and financial powers.
Without prejudice to the Commission’s prerogatives, the OCT authorities would have primary responsibility for implementing the operations agreed on under the cooperation strategy. The Commission would be responsible for establishing the general rules and conditions for these programmes and projects.
The partnership between the European Union, Greenland and Denmark will facilitate consultations and policy dialogue on the objectives and areas of cooperation established
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through this Decision. In particular, it will define the framework providing the basis for broad cooperation and dialogue in areas of mutual interest.
• Proportionality
Under Articles 198 and 199 of the TFEU, the association will continue to provide a comprehensive partnership comprising an institutional framework and trade arrangements and covering many areas of cooperation, as well as the basic principles governing Union financial assistance to OCTs.
Considering the specificities of the OCTs and their special relationship with the EU, a new legislative act for all OCTs that covers the political and legal framework and how cooperation should be implemented will ensure effectiveness, consolidation of shared objectives and coherence, as well as more visibility for the OCTs as a group. This proposal puts forward an approach that is flexible and tailored to the situation of each OCT.
For the sake of consistency and effectiveness, and unless otherwise specified, the proposed Decision will apply the implementation, evaluation and monitoring provisions of the Neighbourhood, Development and International Cooperation Instrument (NDICI).17
3. RESULTS OF EX-POST EVALUATIONS, STAKEHOLDER
Contents
- consultations
- Prior to 1982 Greenland was considered part of the EU through Denmark, meaning that EU vessels could fish in Greenlandic waters. Subsequently, Greenland withdrew from the EU and
- Decision (EU) No 2013/755 of 25 November 2013 on the association of the overseas countries and
- Treaty amending, with regard to Greenland, the Treaties establishing the European Communities, OJ L
- Agreement on fisheries between the European Economic Community, on one hand, and the
- Joint declaration by the European Community, on the one hand, and the Home Rule Government of
- Decision (EC) 2006/526 of 17 July 2006 on relations between the European Community on the one
- The mid-term review report was based on 10 staff working documents, one per instrument (list in link
- Europe 2030 provides a benchmark for consistency across all policy areas as regards
- playing a key role in the Arctic region. Building on previous initiatives, it sets out the case for a Union policy that focuses on advancing international cooperation in responding to the
- 12 13 14
- Communication from the Commission to the European Parliament and the Council on energy efficiency
- The partnership between the European Union, Greenland and Denmark will facilitate consultations and policy dialogue on the objectives and areas of cooperation established
- 17 18
- Regulation (EU) No 236/2014 of the European Parliament and of the Council of 11 March 2014, OJ L
- The mid-term review report was based on 10 staff working documents, one per instrument (list in link
- They will be eligible for the thematic programmes and rapid response actions of the Neighbourhood, Development and International
ANDIMPACTASSESSMENTS
• Retrospective evaluations/fitness checks of existing legislation
Article 7 of the Greenland Decision on implementation requires a mid-term evaluation report at the latest by June 2018 to inform future work on the Decision and its actions. The 11th EDF, which includes the programming of the other OCTs, refers to the need for a performance review by the end of 2018. Therefore, the Greenland Decision (2014/137/EU) and the 11th EDF were included in an evaluation with eight other external financing instruments, all of which, based on Article 17 of the Common Implementing Regulation18, required a mid-term review report by the end of 2017.
The report, adopted by the Commission in December 201719, assessed whether these 10 instruments remained fit for purpose, with a view to ensuring the effective implementation of EU assistance. It consisted of an overall analysis and 10 individual Staff Working Documents, which assessed each financing instrument based on evaluations conducted by external consultants during 2016-2017.
The Staff Working Document on the Greenland Decision20concluded that its main objective — preserving the close and lasting links between the parties, while supporting sustainable development in Greenland — has been and is being achieved. The strong partnership and cooperation with the European Union has enabled Greenland to increase capacity-building, to develop stronger governance and financial systems, and to strengthen its education system — and, as a result, its workforce.
[NDICI Regulation]
Regulation (EU) No 236/2014 of the European Parliament and of the Council of 11 March 2014, OJ L
77, 14.3.2014, p. 95.
The mid-term review report was based on 10 staff working documents, one per instrument (list in link
below), which in turn were based on 10 independent evaluations. All the documents can be found at:
https://ec.europa.eu/europeaid/public-consultation-external-financing-instruments-european-union_en.
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The Greenland Decision was designed in such a way as to cover and better deliver on the wider political aims of the partnership with the European Union. As such, it can continue to deliver on its objectives towards 2020.
The Staff Working Document on the 11th EDF21 concluded that it was relevant. It was an efficient mechanism overall, with proven added value and satisfactory internal coherence. Some inefficiencies in implementation procedures for the OCTs were found to have consequences on the effectiveness of cooperation.
Overall, the mid-term review report concluded that the external financing instruments were fit for purpose, relevant, largely in line with EU objectives and partner countries’ needs and flexible enough to support and enable implementation of an evolving policy framework. However, the multiplicity of instruments and processes was found to be undermining the overall coherence and visibility of EU external action, with synergies and complementarities not fully exploited.
To respond to the policy and operational challenges set out in the evaluations, the EU budget’s external action heading will need to increase its focus on four key cross-cutting issues: flexibility, simplification, coherence and performance.
The Greenland Decision is integrated into the Overseas Association Decision, which also covers Greenland, and the financial resources for both Greenland and the other OCTs will now come from the same EU budget heading. Merging the two decisions will therefore make for simplification, flexibility and coherence, as the political relations with all OCTs and the financial resources will be brought together under a single instrument. This will underline and strengthen the OCTs’ special status and further sharpen the focus on the specificities of the OCTs as opposed to other development partners and highlight that the focus in the cooperation with OCTs is their sustainable development.
Stakeholder
consultations
Relations with the OCTs, including Greenland, were discussed at a thematic session on post-2020 during the 16th EU-OCT Forum in Brussels on 23 February 2018 and in a background paper on the post-2020 debate and its implications for OCTs22, commissioned by the OCTs Association (OCTA).
Furthermore, during the external evaluation of the external financing instruments, including the Greenland Decision and the 11th EDF, an open public consultation took place over 12 weeks, closing on 3 May 201723. The consultation also gathered preliminary inputs for future external financing instruments. The consultation took the shape of (i) an online survey, which included some guiding questions to facilitate feedback, and (ii) face-to-face meetings with key stakeholders.
The following issues were highlighted during this consultation:
The background paper commissioned by OCTA outlined how, in general, the OCTs consider the current Overseas Association Decision to have brought them much progress and to be a good legal tool in no need of significant modification. Future OCT-EU cooperation would gain from focusing on achieving the Sustainable Development Goals. Future relations could operate through a stand-alone, in-budget OCT instrument, with appropriate rules, allowing for
21 https://ec.europa.eu/europeaid/mid-term-review-report-external-financing-instruments_en
22 The report is not yet public but is approved by the Commission.
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simple, flexible and fluid programming. Incorporating the EDF into the EU budget would be welcomed, if certain EDF flexibility features could be maintained. Some OCTs called for increased financial support in recognition of their specific geographical features and of their belonging to the EU family.
This view was supported by the Member States, which consider that the Overseas Association Decision provided the right basis for OCT-EU cooperation, even though significant changes in implementation were expected. The background paper also found that the Member States were open to a specific in-budget instrument as long as the attached provisions remained appropriate, and more specifically that the budget support modality and the multiannual principle are preserved.
During the public consultation on the evaluation of the Greenland Decision there was overall agreement that the Decision had proven relevant and effective in pursuing and fulfilling its general and specific objectives and in reflecting its general principles as regards facilitating policy dialogue on global and Arctic issues. When considering financial assistance post-2020, the procedures for programming and implementing financial assistance for Greenland could usefully be compared with the EDF procedures available to other OCTs. The Greenland Decision was seen as a valuable instrument for maintaining and strengthening the strong ties between Greenland and the Union. The political aspects of the relationship had very much evolved over the years.
• External expertise
The external evaluation of the Greenland Decision and of the 11th EDF was used as the basis for the mid-term review report and its accompanying Staff Working Documents. In addition, a background paper on the post-2020 debate and its implications for OCTs was commissioned by the OCTs and conducted externally.
Impact
assessment
In 2018 the Commission carried out an impact assessment covering all instruments under the ‘Global Europe’ heading of the 2014-2020 Multiannual Financial Framework (MFF). The impact assessment focused on the major changes proposed for external action in the 2021-2027 MFF. These changes included the streamlining of several instruments into one broad instrument and the integration of the EDF into the EU budget.
The analysis concluded that the advantages of integrating the EDF in the budget would outweigh the disadvantages as long as certain pre-conditions could be met. For instance, the amount allocated to external action should not be less than the sum of the EDF and the other external instruments combined; the flexibilities of the EDF should be transferred to the extent possible; and the military operations financed under the EDF’s African Peace Facility should continue through another off-budget mechanism.
The impact assessment also concluded that most instruments, aside from those with a very specific legal basis or objectives, could be merged. The instruments that could be merged included the Development Cooperation Instrument, the European Development Fund, the European Neighbourhood Instrument, the European Instrument for Democracy and Human Rights, the Instrument contributing to Stability and Peace and the Partnership Instrument. Those that should remain separate include: Humanitarian Aid; the common foreign and security policy budget; part of the Instrument for Nuclear Safety Cooperation; Overseas Countries and Territories, including Greenland; Union Civil Protection Mechanism;
Instrument for Pre-accession Assistance; the EU aid volunteers scheme; support to the Turkish Cypriot community; the Emergency Aid Reserve and the European Peace Facility.
As noted by the Commission24 and supported by feedback from partners during the public consultation, the current architecture of the external financing instruments is too complex. Streamlining a number of instruments into a broad instrument would provide an opportunity to rationalise their management and oversight systems, thereby reducing the administrative burden on EU institutions and Member States. Having a simplified oversight system would allow the relevant institutions to have a better, more comprehensive view of EU external expenditure.
On 25 April 2018 the impact assessment was examined by the Regulatory Scrutiny Board and received a positive opinion with comments.
• Simplification
In terms of simplification, the streamlining of the legal architecture aims to reduce the administrative burden compared to the current instruments. Currently, the relations with OCTs and their financial resources (including programming and implementing rules) are covered by four instruments: (i) the Overseas Association Decision, (ii) the 11th EDF regulation, (iii) the Greenland Decision and (iv) the Common Implementing Regulation.
The proposed Decision offers a single instrument which covers both the political aspects and the specific relations between the Union and the OCTs. It includes specific provisions where required guiding the relationship with Greenland, the financial resources consolidated under one heading of the EU budget and implementing rules, which will largely follow the Neighbourhood, Development and International Cooperation Instrument ensuring coherence and simplification. Where necessary, the proposed Decision will provide for the specific, simplified rules for OCTs, as in matter of programming.
Furthermore, the transfer (to the extent possible) of EDF features such as the multiannual principle will provide for even simpler and more flexible procedures that were previously unavailable to Greenland. Thus, the proposed Decision will simplify the management and oversight architecture of the current set of instruments.
4. BUDGETARYIMPLICATIONS
The financial resources for Greenland will come from budget heading 6 of the EU budget: ‘Neighbourhood and the World’. Given the intention to transfer some features of the EDF such as the multiannual principle to the EU budget, this will simplify the current procedures for allocating funds to Greenland.
Concerning the other OCTs, their financial allocations will be moved from the EDF to the ‘Neighbourhood and the World’ budget heading.
With the Commission Communications on a modern budget for a Union that protects, empowers and defends25, under the ‘Neighbourhood and the World’ heading EUR 500 million is earmarked for cooperation with the OCTs.
In particular the reflection paper on the future of EU finances (June 2017) and the Communication from the Commission to the European Parliament and the Council; COM (2018) 98 final 14.2.2018.
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This Decision provides for a total amount of EUR 500 000 000 (in current prices) to be allocated to the association with the OCTs. Of this amount, EUR 225 000 000 is to be allocated to Greenland, EUR 225 000 000 for other OCTs, which comprise EUR 159 000 000 for territorial programmes and for EUR 66 000 000 to regional programmes. In addition an intra-regi onal financial envelope of EUR 15 000 000 is open to all the OCTs, including Greenland. Moreover an amount of EUR 22 000 000 for technical assistance is foreseen in accordance with the new Decision as well as a non-allocated amount of EUR 13 000 000.
5. OTHERELEMENTS
• Implementation plans and monitoring, evaluation and reporting arrangements
The implementation, the monitoring, evaluation and reporting arrangements will follow the rules set out in the Neighbourhood, Development and International Cooperation Instrument, unless otherwise specified in the Decision.
• Detailed explanation of the specific provisions in the draft Decision
As the Overseas Association Decision and the Greenland Decision will be merged, all areas which are similar or have synergies are merged. The structure of the current Overseas Association Decision and most provisions in it will be maintained, where needed, the
specificities of the Union’s relations and cooperation with Greenland will be highlighted, such
as the aim of preserving the close and lasting links between the Union, Greenland and Denmark; the acknowledgement of the geostrategic position of Greenland; policy dialogue and potential cooperation on Arctic issues; and food security. As a result, the positive achievements of the Greenland Decision will be maintained.
The new Overseas Association Decision should consist of the same structure with the same political, trade and cooperation pillars as the current Decision. The main changes include:
• The proposed Decision will take into account the consequences of the withdrawal of the United Kingdom of Great Bri ta in and Northern Ireland from the European Union and the fact that the special regime set out in Part Four of the TFEU would no longer apply to the 12 British OCTs.
• From a formal point of view, a general updating of the text and its annexes is underta ken, notably to take into account the latest changes in taxation and trade legislation.
• With the EDF being integrated into the EU budget, Annexes IV and V of the current Decision will be repealed. Moreover, Annex I on isolated OCT has been integrated in the Decision. Annex III on EIB own resources management will be repealed.
• Addition and updating of provisions reflecting the state of play of relations with Greenland under Article 3 (objectives, principles and values), Article 5 (mutual interests, complementarity and priorities), Article 13 (guiding principles for dialogue), Article 23 (new article on raw materials), Article 31 (cooperation in research and innovation), and Article 35 (public health and food security).
Part IV on Financing Cooperation includes a dedicated financial envelope under the budget heading 6 Neighbourhood and the World" for the OCTs. It provi des also:
• A general referral clause to the Neighbourhood, Development and International Cooperation Instrument for implementing the financial cooperation of the proposed Decision. Nevertheless, the proposed Decision will continue to provide for a specific and simplified programming exercise for the OCTs;
• The OCTs will also remain eligible under the next Multiannual Financial Framework to participate in Union programmes as a matter of principle.
They will be eligible for the thematic programmes and rapid response actions of the Neighbourhood, Development and International
Cooperation Instrument.
• A specific provision/facility allows the Commission to promote in an active way intra- region al projects between OC Ts, ACP and non ACP
States or territories, and the Union’s outermost regions.