evidence: Foreign relations and defence [edit]As an autonomous but integral region of Portugal, foreign affairs and defence are the responsibility of the national government. As is all of Portugal, the Azores are in the European Union and Schengen Area. They are also in the European Union Customs Union and VAT area[73] but levy a lower rate of VAT than applies on the mainland. The Azores, like Madeira and the Canary Islands, are among the European Union's state territories with special status, and are one of its designated "Outermost Regions".