L 27012 Official Journal of the European Union 13.10.2007 COUNCIL DECISION of 9 October 2007 authorising France to apply a reduced rate of excise duty on ‘traditional’ rum produced in its overseas departments and repealing Decision 2002/166/EC (2007/659/EC) THE COUNCIL OF THE EUROPEAN UNION, Having regard to the Treaty establishing the European Community, and in particular Article 299(2) thereof, Having regard to the proposal from the Commission, Having regard to the Opinion of the European Parliament (%), Whereas: Pursuant to Article 299(2) of the Treaty, the Treaty applies to the French overseas departments, the Azores, Madeira and the Canary Islands. However, taking account of the structural social and economic situation of the French overseas departments, the Azores, Madeira and the Canary Islands, which is compounded by their re- moteness, insularity, small size, difficult topography and climate, economic dependence on a few products, the permanence and combination of which severely restrain their development, the Council, acting by a qualified majority on a proposal from the Commission and after consulting the European Parliament, shall adopt specific measures aimed, in particular, at laying down the conditions of application of the Treaty to those regions, including common policies. The Council is required, when adopting such measures, to take into account areas such as fiscal policy. When adopting these measures, it has to take into account the special characteristics and constraints of the outermost regions without undermining the integrity and the coherence of the Community legal order, including the internal market and common policies. On the basis of these provisions of the Treaty, the Council adopted, in respect of the French overseas departments, Decision 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 (?). Compared with the rates of taxation applied to similar products not originating in (') Opinion of 25 September 2007. Not yet published in the Official Journal. () O] L 55, 26.2.2002, p. 33. the French overseas departments, the reduced rate may be lower than the minimum rate of excise duty on alcohol set by Council Directive 92/84/EEC of 19 October 1992 on the approximation of the rates of excise duty on alcohol and alcoholic beverages (?), but may not be more than 50 % lower than the standard national excise duty on alcohol. The Council Decision was to apply until 31 December 2009, with a mid- term report to be drawn up by June 2006 at the latest. On 27 December 2005 the French Government presented a mid-term report indicating that it was vital that the tax arrangements for traditional rum marketed in mainland France be maintained. Furthermore, in view of developments on the Community market for rum, which are mainly Dbenefiting products originating in third countries, and given the economic and social importance of the sector and the structural nature of the production conditions that diminish the sector’s productivity in the overseas departments and make it difficult to maintain its production on the Community market, France has asked that the volume and duration of the tax arrangements for traditional rum on the mainland market be extended. Maintaining the cane-sugar-rum sector in the overseas departments is vital to their economic and social balance. In the three departments most affected, Réunion, Guadeloupe and Martinique, the sector produces an annual turnover of over EUR 250000 000 and provides some 40 000 jobs, including 22 000 direct jobs. It is also advisable to note the positive impact which the cultivation of cane has for the safeguarding of the environment in the overseas departments. Together with the banana sector, this sector is the only significant exporting activity in areas whose exports represent not more than 7 % of the imports. It is therefore necessary and justified for France to maintain, by way of derogation from Article 90 of the Treaty, a reduced rate of excise duty on ‘tra- ditional’ rum produced in its overseas departments in order to avoid endangering their development. The overhaul of the common organisation of the markets in the sugar sector in February 2006 goes some way towards securing the sector’s future. Thus, there are plans to introduce support measures under the Posei () O] L 316, 31.10.1992, p. 29.