ARUBA AND THE NETHERLANDS ANTILLES ARE NOT MEMBERS OF THE EUROPEAN UNION
Should their OCT status change to OMR?
The Netherlands Antilles and Aruba are subject to the special European Union arrangement regarding the Association of the Overseas Countries and Territories (OCT status). In its coalition agreement of the summer of 2003 the Dutch government has committed itself to make an effort to acknowledge the Netherlands Antilles and Aruba as Outermost Region (OMR status) in the meaning of the EU Treaty. There is a debate going on about the future status of the Netherlands Antilles and Aruba.
At present the Netherlands Antilles and Aruba, being both separate countries in the Caribbean sea but being part of the Dutch Kingdom, have both within the European Union the status of OCT. The OCT regime is laid down in an OCT Decision of the European Council for a period of ten years. The purpose of this association, according to article 182 EU Treaty, is to promote the economic and social development of the countries and territories and to establish close economic relations between them and the European Community as a whole.
The OCT Decision, agreed in 2001, replaces the previous, ten year OCT Decision of 1991. The current OCT Decision came into effect on 1st December 2001. The process of disbursing development funds, has been streamlined. The Commission will support, but no longer directly manage, projects thus giving more devolved responsibility to the OCTs themselves. The principle of transhipment remains (the transhipment provision allows 3rd country goods to enter the EU duty-free if they arrive via an OCT which has already charged duty at a rate equivalent to the Community rate), and contains some clarifications which should make transhipment more stable and more workable from the position of the OCTs. The OCTs are allowed to raise import tariffs on products that are imported from the European Union.
The European Union has seven outermost regions (OMRs; ultra peripheral regions), areas that are geographically remote from the European Continent but close in terms of exercise of Community rights and obligations. Their handicaps are multiple and permanent: remoteness, insularity, small size, economic dependence on a few products, isolation, small local markets and high unemployment rates. In contrast to the OCTs, these regions are an integral part of the European Union. These regions also have potential assets that can aid their own development as well as the development of their surrounding areas. The OMRs have benefited from specific measures, a.o. support measures for traditional agricultural and fishery products. In principle, the European Community law is applicable to the OMRs.
Whether the status of the Netherlands Antilles and Aruba should be changed from OCT to OMR is subject to debate. However, Aruba has already made up its mind and is not interested in any status change. There are strong arguments not to adopt the OMR status.
On 22 June 2005, the European Commission revealed the nature of its new sugar regime, without giving the countries involved (especially in the Caribbean) any serious opportunity to express their views. It is an example of how the European Union works: rather careless about the implications for countries it is associated with. The OMR status will make things even worse in this respect.
If the Netherlands Antilles holds the current OCT status, there is no need to introduce the Euro and it can continue deciding its economic and monetary policy by itself. Especially since most trade is done with countries that use the US dollar, or are pegged to this dollar, it is important that the Euro not be introduced.
Karel Frielink
Attorney (Lawyer) / Partner
