ministerial correspondence, house of commons … · web viewthis should include early sight of key...

Ministerial Correspondence, House of Commons European Scrutiny Committee

This document contains all the correspondence between Ministers and the European Scrutiny Committee. The correspondence is saved under the Government department that it relates to. Within each department, the correspondence is saved in reverse date order, so that the most recent letter is at the top. To go to the section relating to a particular department, press and hold the Control button and click on the relevant heading from the list below.

Government departments, ministries and offices

Department for Business, Innovation and Skills

Cabinet Office

Department for Education

Department for Culture, Media and Sport

Department for Communities and Local Government

Ministry of Defence

Department of Energy and Climate Change

Department for Environment, Food and Rural Affairs

Food Standards Agency

Foreign and Commonwealth Office

Government Equalities Office

Department of Health

Home Office

Inland Revenue

Department for International Development

Ministry of Justice

Office of National Statistics

HM Revenue and Customs

Department for Transport

HM Treasury

Department for Work and Pensions

Department for Business, Innovation and SkillsLetter from the Chair to Baroness Neville-Rolfe

Proposal for a Directive on single-member private limited companies — (35953) 8842/14

Thank you for your letter of 27 April.

The Committee was grateful for the update on progress on this proposal and looks forward to the next, when the European Parliament has established a mandate for trilogue discussions. At which point we should be grateful if you would highlight and assess the points at issue between the Council and the European Parliament.

11 May 2016

Letter from Baroness Neville-Rolfe to the Chair

I am writing this letter in response to the European Scrutiny Committee’s post-meeting report on the 20th April 2016, in response to the Explanatory Memorandum 6651/16, which I submitted on the 12th April, on the European Commission’s Communication on ‘Transatlantic Data Flows: Restoring Trust through Strong Safeguards’ (COM(2016) 117).

The report states that the Committee hold this Commission Communication under scrutiny. I would therefore like to start by clarifying that the EU-US Privacy Shield itself is not subject to scrutiny, because it is a Commission implementing decision as opposed to a Council decision.

I understand that the Committee has requested an Explanatory Memorandum (EM) on the Privacy Shield, as well as an indication of the Government’s position on the need for compliance with fundamental rights of all EU proposed instruments implementing the Privacy Shield.

The Privacy Shield has not yet been finalised and, as noted, is neither subject to parliamentary scrutiny, nor is it a matter the UK can directly influence, due to it being a private negotiation between the European Commission and the US. You will be aware that the Opinion of the Article 29 Working Party raised issues with the Privacy Shield, namely that the principle of purpose limitation was unclear, and that there is no guarantee that the Ombudsperson (set up to deal with national security complaints) will be wholly independent.

However, the Opinion did clearly and forthrightly acknowledge that this agreement goes significantly further in protecting EU citizens’ data than the Safe Harbor agreement (which had remained extant for 15 years). The Commission has stated that they will consider making amendments and clarifications to the draft text in light of the Opinion from the Article 29

Working Party, following further discussions with the US authorities. The UK Government will review these with interest, and keenly awaits the final Privacy Shield agreement.

You will be aware that the UK’s Data Retention and Investigatory Powers Act (DRIPA) is currently under examination by the Court of Justice of the EU, via the preliminary reference procedure. Although this Act concerns the compatibility of communications data retention obligations, there are links with rules on data transfers. As legal proceedings on DRIPA are ongoing, it would be inappropriate for me to comment on the UK’s view on the respect of fundamental rights in the Privacy Shield at this time. The Shield is, in effect, an assessment of adequacy for the Commission to carry out (since it holds exclusive competence in this area) following appropriate liaison with the US authorities.

The Committee also ask whether or not the Opinions of the Article 29 Working Party and the European Data Protection Supervisor (EDPS) influence government policy. Neither body issues opinions which are legally binding, and whilst we monitor such statements, in the same way as we would those of other respected commentators in this field, UK Government policy is not developed solely in accordance with their views. I do not therefore intend to comment in detail on any future opinions of the EDPS in relation to the Privacy Shield, other than to note its existence in relation to the adequacy decision which will be taken by the European Commission.

As you know, I have proved to be very willing to provide the Committee with information on this topic. Indeed, since I’ve taken responsibility for data protection, I have provided the Committee with regular and comprehensive updates on developments in this area. Although, for the reasons above, I am not able to provide the Explanatory Memorandum and human rights analysis requested on this occasion, I will continue to update the Committee as fully as possible on important issues in the data protection area.

3 May 2016


8842/14 — AN UPDATE ON THE EUROPEAN COMMISSION’S PROPOSAL FOR A DIRECTIVE ON SINGLE-MEMBER PRIVATE LIMITED LIABILITY COMPANIES (‘SUP’)

In my letter to you of 28 July 2015 I agreed to provide you with an update on this proposal.

Discussions between co-legislators are ongoing. The Council agreed its general approach on the proposal on 28 May 2015, which the UK supported.

It was hoped that by now discussions between the Council, Presidency and Parliament would be underway. However, the European Parliament has yet to agree a position.

The rapporteur held a number of exchanges of views and drafted a second working document in January 2016 that attempted to address specific issues and propose solutions in the form of an amended text. This was presented for consideration at a meeting of the Committee Legal Affairs on 28 January 2016.

The working document differs from the general approach agreed by the Council in various respects: in particular, it would limit SUP’s to being micro and small enterprises.

While some MEPs welcomed the rapporteur’s new approach it was not possible to reach agreement.

We expect the rapporteur to table a formal report in the coming weeks, which will be based on his working document. MEPs on the Committee on Legal Affairs will have an opportunity to table amendments formally before the final report is adopted.

My officials continue to engage with relevant stakeholders on this file. I shall ensure the committee is updated as discussions move forward.

27 April 2016

Letter from the Chair to Baroness Neville-Rolfe

Draft Agreement on a Unified Patent Court and Draft Statute — (33058) 11533/11

Thank you for your letter of 15 March 2016.

We are, once again, grateful for the informative update you have provided and support the progress made to date in getting the Unified Patent Court up and running.

We would be grateful to be kept informed of further substantive developments.

In view of the importance of the unified patent regime and the potential impact for business of these developments I am coping this correspondence to Mr Ian Wright, Chair of the Business, Innovation and Skills Committee.

23 March 2016


DOC 11533/11 (33058) DRAFT AGREEMENT ON A UNIFIED PATENT COURT AND DRAFT STATUTE

I am writing to provide you with an update on progress on the implementation of the Unified Patent Court Agreement since my last letter to you on 28 October 2015. You asked to be kept informed of developments, specifically on the issue of fees. I am pleased to say that there has been a significant step forward for the Unified Patent Court and Unitary Patent package since

I last wrote. This is part of the Government’s push for a deepened and more competitive Single Market.

The preliminary decision on the level of renewal fees for the Unitary Patent has been formally adopted by the Select Committee of the European Patent Organisation. This gives businesses the ability to plan their patenting strategy based on actual costs. At its meeting of 15 December the EPO Select Committee also adopted financial and legal provisions that will enable the EPO to administer the Unitary Patent. These include arrangements for distributing renewal fees between participating states and rules relating to administration of the Unitary Patent Protection. This is an important and significant step towards the introduction of Unitary Patent Protection. We have discussed fee levels informally with representative groups including the Chartered Institute of Patent Attorneys (CIPA) and the IP Federation. UK interests have also been represented by the Institute of Professional Representatives before the European Patent Office (EPI) and Business Europe, which both have observer status at the EPO Select Committee.

As I reported in my previous letter, the annual renewal fee for the Unitary Patent corresponds to the sum of the renewal fees currently paid for four countries (Germany, France, UK and The Netherlands). This fee level has been welcomed by UK interests and also representatives from European user groups. The recent decision to approve Italy’s request to join the Unitary Patent system means that there are now 26 EU member states participating. Italy is a significant market and its participation will make the Unitary Patent an attractive option for many more businesses.

Negotiations on the Court fees and recoverable costs package are now complete, with agreement at the Preparatory Committee on 25 February. We believe that the package agreed reflects reasonably the two key principles of enabling access to justice whilst ensuring a sustainable court.

The fees are a mix of fixed fees for set actions, and value-based fees which increase according to the value of a case. Although the fees are higher than in many states that are participating in the UPC, they reflect the much larger jurisdiction covered and are still lower than those charged in in Germany, where over 50% of European Patent litigation is heard.

To ensure access to justice, a 40% reduction on all fees will be available to Small and Micro-Entities and there are unlimited reductions where the payment of fees may affect the economic existence of that party. There is also recognition that where a case is withdrawn or settled early, or is only heard by a single judge part of the fee should be reimbursed. The level of these reimbursements depend on the stage at which a case is withdrawn or settled and reflect that an early conclusion incurs less work for the court.

Levels of recoverable costs were also agreed. These are important as they allow the winning party to claim some of their legal costs from the opponent. UK stakeholders have informed us that recoverable costs serve to deter frivolous litigation, so may limit the role of Non-Practising Entities at the UPC; which are considered to have a negative impact on other court systems, such as the US.

We consulted heavily with UK stakeholders throughout the 2 years of negotiations on this package and were successful in achieving their priority requirements. We were able to exceed these requirements on their primary concern - the fee for opting-out of the UPC - as this fee was removed altogether.

It is important that the ‘UK voice’ will be heard as fully as possible in the UPC, particularly during the early years of the Court as it establishes itself. The quality of the UPC judiciary will underpin the court’s likely success. My officials have been working closely with officials from the Ministry of Justice to negotiate on behalf of the UK with the aim of ensuring that all UPC judges are of an appropriately high stature and quality. They are seeking to ensure that the eligibility criteria are appropriate, the selection process robust, and that remuneration and terms of service are sufficiently attractive for candidates of the highest calibre. Throughout negotiations the UK has used the England and Wales High court judiciary as an appropriate comparator for candidates of an appropriate calibre. We welcome therefore the agreement reached on the position advocated by the UK for net judicial salaries at the Preparatory Committee.

Officials will also contribute to the design of the training programme for potential UPC judges, and are liaising with Judicial College as part of that process.

Of course whilst we continue to advocate on behalf of the UK in this process, decisions regarding the appointment of judges at the court are ultimately a matter for the UPC itself and, as the UPC Agreement and Statute provide, there is no scope for direct domestic interference in that process.

You may also wish to note that secondary legislation implementing the UPC Agreement has now been agreed by both Houses. This legislation, which is a necessary step in the UK ratification process, amends the UK Patents Act 1977 in order to ensure UK law is compliant with the UPC Agreement.

As I hope this update shows, the Government has been working hard to mitigate the concerns of the Committee especially around the matter of fees for businesses in its work to implement the UPC Agreement.

15 March 2016


Single Market Strategy — (37237) 13370/15

Thank you for your letter of 17 March, updating the Committee on the Single Market Strategy Conclusions adopted at the Competitiveness Council of 29 February 2016.

We welcome your efforts to secure ambitious commitments in this area and note the Council’s agreement to focus on the three ‘priority areas’ of: ‘SMEs, start-ups and innovative businesses’; ‘Services’; and ‘Implementation, compliance and enforcement’. We also note that while you are content with the language agreed on ‘Services’ overall, compromise text

on the development of a ‘services passport’, which removed the reference to mutual recognition, was less ambitious than hoped for.

With Council Conclusions on the overarching Strategy now agreed, the Committee looks forward to receiving timely and comprehensive progress updates on all aspects of its implementation. This should include early sight of key proposals, ahead of their ‘formal’ publication by the Commission and is particularly important in the case of: the ‘services passport’ initiative, considered a key component in making the internal market for services a reality, but where the Commission’s vision for the proposal remains relatively unclear and securing Member States’ buy-in for an ambitious initiative appears challenging; and b) the wider better ‘implementation, compliance and enforcement’ strand.

23 March 2016


Re: 13370/15: Upgrading the Single Market: more opportunities for people and business. Communication from the European Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions

Thank you for your report of 24 February and for clearing my Explanatory Memorandum on the Commission’s Single Market Strategy from scrutiny.

Further to my written ministerial statement sent to you on 9 March I am writing to you to provide you with an update on the Single Market Conclusions adopted at the Competitiveness Council on 29 February. I represented the UK at this meeting.

The conclusions highlight the importance of speedy and ambitious implementation of the actions set out in the Strategy focusing on three key areas which are particularly crucial for creating growth and jobs:

1. Support for SMEs, start-ups and innovative businesses2. Improvement of services markets3. Efficient implementation, compliance and enforcement of existing

As noted in my letter of 11 February the Government strongly supports these conclusions and we have been working closely with the Commission, the Dutch Presidency and other Member States to ensure a high level of ambition. In particular, we have pushed hard for agreeing ambitious language on the services markets section, including on the introduction of a services passport.

The debate on the text of the conclusions prepared by the Dutch Presidency concentrated on paragraph 12 of the conclusions which focused specifically on the proposed services passport initiative. Commissioner Bieńkowska opened the debate by setting out that there still remained many barriers to trade in this area whilst the economic evidence suggested that deepening the single market in services would bring significant benefits. She would therefore

propose a services passport by the end of the year, after a public consultation and an impact assessment have been carried out.

In my intervention I noted that the UK considered enforcement of existing Single Market legislation important and thus welcomed the Commission’s commitment on this. I also emphasised our strong support for an ambitious services passport which should tackle regulatory barriers by using mutual recognition to allow a company already operating in one Member State to operate elsewhere without re-complying with parallel sets of rules.

The great majority of Member States supported high ambition in the area of services, including on the proposal to introduce a services passport. This is reflected in the language of paragraph 11 which clearly stresses the importance of making the EU services markets more competitive; underlying their function as a key pillar for creating growth and jobs and their strong knock-on effects for the competitiveness and productivity of manufacturing industries. However, some Member States remained concerned in the absence of a clear proposal on the services passport from the Commission. The Presidency therefore proposed a compromise text for paragraph 12, removing reference to mutual recognition as part of the services passport (although retaining reference to its use in general) and qualifying how regulatory barriers should be tackled as part of the passport. Council conclusions are reached on a consensus basis, we therefore agreed with the compromise text; noting the overall ambitious language on services (paragraph 11) and the clear connection between making the EU services sector more competitive and introducing a services sectors, as made clear by the words ‘in this context’ at the beginning of paragraph 12.

On support for SMEs, start-ups, scale-ups and innovative businesses, the conclusions underline the difficulties SMEs face when trying to scale up across the Single Market and, in this context, stress the importance of improving their access to finance. The conclusions also emphasise the opportunities the collaborative economy presents for both consumers and businesses, and the importance of fostering innovation across the EU.

On implementation, compliance and enforcement, the conclusions call on Member States to put more effort into the effective implementation and enforcement of Single Market rules and on the Commission to prioritise smart but firm enforcement actions, including targeting the most economically significant cases of unjustified or disproportionate barriers.

Furthermore, the conclusions emphasise the need to ensure practical delivery in other key areas of the Single Market Strategy, such as the commitments to modernise the European Standardisation System through the Joint initiative on Standardisation and to present an ambitious EU-wide Action Plan to improve mutual recognition in the field of goods. The full text is attached at Annex.

As promised in my previous letter, I will provide you with regular updates on how the individual proposals set out in the Strategy are progressing. In this context, I note your particular interest in the ‘better implementation and enforcement’ strand and in assessing whether proposals are evidence based, necessary and proportionate, and the extent to which they reflect the Government’s priorities. I also note your request to be sighted early on

individual legislative proposals and to be informed about the wider context of these proposals. I will ensure that my progress updates reflect these requirements.

17 March 2016

Letter from the Chair to Lord Maude of Horsham

Commission Report on the evaluation of Directive 2008/122/EC of 14 January 2009 on the protection of consumers in respect of certain aspects of timeshare, long-term holiday product, resale and exchange contracts — (37456) 5252/16

Thank you for your letter of 17 February responding to our request for further information in relation to this report, which we released from scrutiny at our meeting of 3 February.

Your letter helpfully addressed our queries. We require no further information.

24 February 2016

Letter from Lord Maude of Horsham to the Chair

EM 5252-16: REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL Report on the evaluation of Directive 2008/122/EC of the European Parliament and of the Council of 14 January 2009 on the protection of consumers in respect of certain aspects of timeshare, long-term holiday product, resale and exchange contracts COM(15) 644

I am writing in response to the Committee’s request for further information having cleared this document from scrutiny.

The Committee asked for information on further steps planned by the UK to raise awareness among UK consumers of the issues raised. We mentioned in the Explanatory Memorandum that a working group managed by a member of the Chartered Trading Standards Institute has been considering options which might improve matters for consumers in this sector. We understand that the group is in the process of reporting to the Consumer Protection Partnership to advise whether collective enforcement or consumer awareness action from the Partnership is appropriate.

However, the latest figures of cross-border complaints recorded by the UK’s European Consumer Centre indicate a significant drop in complaints about current sales activities where the problems identified relate mostly to other Long-Term Holiday Products rather than timeshare. Complaints about long-term holiday products fell from 260 in 2014 to just 87 last year. Complaints about timeshare showed less decrease (from 269 to 187), but these complaints relate mostly to problems with existing, and often long-standing, contracts. Against this background, and in the light of recommendations from the working group, the

Consumer Protection Partnership is considering whether, at the moment, further campaigns in this area should take priority over other consumer education and information initiatives.

Observing that most consumer complaints were registered against traders based in Spain, the Committee asked what mechanisms are in place for UK authorities to work with enforcement authorities elsewhere, particularly Spanish authorities, with a view to improving enforcement, including criminal law co-operation.

There are several mechanisms by which Member State authorities can take forward investigations and action across borders in respect of activities in this sector. These fall into two main areas: that of enforcing consumer protection legislation, and, that of enforcing the wider criminal law.

The Competition and Markets Authority (CMA) is the UK’s competent enforcement authority under the Consumer Protection Cooperation Regulation (EC) No. 2006/2004. Under the Regulation each competent authority is obliged to undertake a range of investigatory and enforcement activity when requested to do so by the competent authority in another Member State where that competent authority has a reasonable suspicion of intra-community infringements of EU consumer law that harm or are likely to harm the collective interests of consumers. This mechanism is therefore generally used where there is evidence of significant harm to a significant number of consumers.

In respect of the wider criminal law, there is a range of cross border cooperation mechanisms in place that UK authorities can use to investigate and prosecute criminality related to these activities. Cooperation in criminal matters can include informal police cooperation, mutual legal assistance, joint investigation teams (JITs) and extradition (in relation to Spain, and other Member States, this includes the European Arrest Warrant).

In this context, the Committee might care to note the work of the Resort Development Organisation (the pan-European trade association for the timeshare sector) which funds an enforcement task force to assist in identifying and gathering evidence against perpetrators of fraud and scams that prey on timeshare owners, particularly in the area of timeshare resale. Evidence gathered is passed to national authorities, mostly in Spain and also to the UK’s National Fraud Intelligence Bureau.

17 February 2016

Letter from the Chair to Lord Maude of Horsham

Proposed Regulation against the extraterritorial effects of legislation from third countries — (36669) 6237/15 + ADD 1

Thank you for your letter of 18 January providing an update on this proposal.

We look forward to receiving further updates in due course when the institutional report is produced and there is more clarity on the choice of the Article 352 TFEU legal base and the position of Member States on the proposed change to authorisation by delegated acts. You will be aware that given the Government’s claim (notified late to us over the summer) to have opted into the proposal in the absence of a Title V legal basis, this is another reason why the Committee retains its interest in the proposal.

10 February 2016


EM 6237/15: Update on a proposed Regulation of the European Parliament and of the Council protecting against the effects of the extra-territorial application of legislation adopted by a third country and actions based thereon or resulting therefrom (recast)

I am writing to update you on progress with the proposal from the European Commission for a Regulation protecting against the effects of the extra-territorial application of legislation adopted by a third country.

There has been no progress on this proposal since I last wrote. The reason for this is that in March 2015 the Council, Commission and European Parliament were asked to consider two aspects of this proposal, namely the use of Article 352 of the TFEU as its legal base, and establishing authorisation criteria by delegated acts rather than by implementing acts. The report from these combined institutions has not yet been issued.

In my previous letter I informed you that this proposal was scheduled to be presented at the 19 November meeting of the European Parliament’s International Trade Committee, with a vote on amendments planned for 10 December. We understand that this presentation was re-scheduled instead for 30 November but it appears that it did not take place, and we have been unable to confirm when it may now take place.

I will write again with a further update when we have confirmation on these points.

18 January 2016


Proposed Directive to improve the gender balance of corporate boards — (34423) 16433/12

Thank you for your letter of 16 December informing us that the Luxembourg Presidency was unable to secure a General Approach at the Employment, Social Policy, Health and Consumer Affairs (EPSCO) Council in December.

As you will recall, the House agreed to issue a Reasoned Opinion on the proposal in January 2013 and we maintain a keen interest in the progress of negotiations. We note that the Dutch Government opposes the proposed Directive. We would welcome a further update once you have a clearer sense of how the incoming Dutch Presidency intends to take forward negotiations. Meanwhile, the proposal remains under scrutiny.

6 January 2016


16433/12: DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL ON IMPROVING THE GENDER BALANCE AMONG NON-EXECUTIVE DIRECTORS OF COMPANIES LISTED ON STOCK EXCHANGES AND RELATED MEASURES (“the proposed Directive” or “the Directive”)

Thank you for informing me on the conclusions of your Committee’s meeting of 2 December. I would like to provide you with a brief further update on this file.

The proposed Directive was the first item on the agenda at the Employment, Social Policy, Health and Consumer Affairs (EPSCO) meeting, on 7 December. As anticipated, the Luxembourgish Presidency urged the Council to agree the revised text.

Vera Jourova, DG Justice Commissioner, argued that the directive was necessary not only to promote gender equality, but also as an economic tool to ensure that companies made the best use of all the talent available. The latest text was welcomed by several Member States who noted its flexibility. Other Ministers, despite supporting the Directive, were nevertheless obliged to maintain a scrutiny reservation, due to political disagreement within their governments. The UK led interventions from the blocking minority group, setting out the significant success which had been achieved through our domestic business led, voluntary approach. I explained how the UK continued to believe that, particularly in this area, Member States should be able to choose the approach appropriate to them. Our subsidiarity concerns were shared by the members of the blocking minority.

The Luxembourgish Presidency concluded that there was insufficient support for the proposal and expressed hope that the next Dutch Presidency would resolve the deadlock surrounding the dossier. However, Minister Lydia Mutsch also stated that she was realistic, given the Netherlands had opposed the proposal since its original publication.

The Dutch have not yet given any indication on how they plan to handle this dossier in the next six months. For the time being, the file remains blocked and it is clear that further work on the proposal would be necessary before possible options on a way forward are explored.

16 December 2015


Draft Agreement on a Unified Patent Court and Draft Statute — (33058) 11533/11

Thank you for your letter of 28 October.

We are grateful for the informative update you have provided and support the progress made to date.

We would be grateful for a further update when there has been further substantive progress on establishing the Unified Patent and its Court.

18 November 2015


Proposal for a Council Directive on the protection of undisclosed know-how and business information (trade secrets) against their unlawful acquisition, use and disclosure — (35623) 17392/13


We found the update you provided on trilogue negotiations very helpful and urge continued support for the Council’s General Approach in the key points of difference identified in your letter.

4 November 2015

Letter from Joseph Johnson to the Chair

EM 5058/12; COM (2011) 931 Final – Proposal for a Council Decision on the adoption of a Supplementary Research Programme for the ITER project (2014 – 2018)

I am writing to inform you that the above proposal has been formally withdrawn by the European Commission.

Please find attached link to the official communication confirming the removal. http://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=OJ:C:2015:080:FULL&from=EN

The proposal has been replaced by COM (2013) 607 Final – “Proposal for a Council Decision amending Decision 2007/198/Euratom establishing the European Joint Undertaking

for ITER and the Development of Fusion Energy and conferring advantages upon it (EM 13253/13)”.

The purpose of the latest Proposal is to align the ITER funding with the Multiannual Financial Framework (the MFF), i.e. the EU’s budget. According to the Proposal it will secure ITER’s funding until 2020 and came into force on 1 January 2014.

30 October 2015


DOC 11533/11 (33058) DRAFT AGREEMENT ON A UNIFIED PATENT COURT AND DRAFT STATUTE

I last wrote to you with an update on the implementation of the Unified Patent Court Agreement on 10 February 2015. In response, you asked in your report of 4 March to be kept informed of progress particularly when there had been substantive progress on the issue of fees. I am pleased to say that there has been much positive progress since I last wrote and I now wish to take the opportunity to provide a further update.

The unitary patent was the subject of the final agenda item at the Competitiveness Council on 1 October where the Commission formally announced that Italy has joined the enhanced cooperation on the unitary patent.

The Council was followed by a signing ceremony on the Protocol on Provisional Application of the UPC Agreement. I signed for the UK along with six other Member States; an eighth, Hungary, has since signed. The signing of the protocol is an important step in bringing the court in to being. It will allow some provisions of the Agreement to come into effect early so that the administrative bodies of the Court can be established and take the final operational decisions, such as recruitment of judges, in time for the court opening.

Also on 1 October, the Preparatory Committee announced the timetable for completing its work and the opening of the Court. According to the timetable, the Preparatory Committee should complete its work in June 2016 with the view of the Court opening in early 2017.

Working level discussions on the Rules of Procedure for the UPC have concluded and the rules were adopted by the Preparatory Committee on 19 October. I am very pleased to say that we have secured changes to the rules which UK stakeholders wanted. In addition to the change which I mentioned in my previous letter to mitigate the effects of bifurcation, the UK has also made sure that the rules make provision for an appeals route on procedural decisions of the Court. We also obtained some clarification on how the opt-out will work. These are both important issues for UK businesses.

Adoption of the Rules of Procedure means that the major work on the rules has been completed. However, further amendments will be needed once the fees for the Court have been agreed. The court fees were the subject of a consultation by the Preparatory Committee over the summer and the UK is playing a leading role in the working party responsible for the consultation and for finalising the fees. The team has made great progress in analysing the consultation responses and has prepared a factual summary which was adopted by the Preparatory Committee on 19 October.

Negotiations to amend the fee schedule in light of the consultation responses continue and I expect a first discussion of a revised fee schedule at the Preparatory Committee in December and adoption of the fees early next year.

The Preparatory Committee also adopted rules on the qualifications that European patent attorneys will need in order to represent clients before the UPC. The original rules excluded highly experienced UK patent attorneys who already litigate before the UK courts. I am pleased to say that the Government was able to negotiate a more inclusive set of rules which ensure that the UK patent attorney profession will be able to act for their clients before the UPC. As well as being a key issue for the UK profession, this change will also provide businesses with a wider choice of experienced representatives.

Progress has also been made on the financial aspects of the unitary patent with the Select Committee of the European Patent Office reaching a preliminary decision on the level of annual renewal fees in June 2015. This agreement is subject to agreement on the overall package of renewal fees and the distribution of the income amongst the Member States. Discussions on the latter part of the package are ongoing.

The Select Committee preliminary decision supports a fee level equivalent to the fees charged today for protection in four Member States (Germany, France, UK and the Netherlands). This fee level is considered to be attractive for businesses, in particular SMEs, and it would also allow the EPO to balance the budget and ensure the sustainability of the unitary patent for the EPO. UK businesses have been largely supportive of the proposal.

When I last wrote to you I also said that my officials were in the process of finding a London location for the UPC. I am delighted to say that the IPO has now signed a lease for space in Aldgate Tower. Located on the edge of the City, Aldgate Tower is close to the legal and business heart of London offering modern facilities and it represents an affordable and good value for money option within Central London. This will strengthen UK’s legal and professional services sector, and further highlight London’s status as a world leader for dispute resolution. The news has been warmly welcomed by potential future users of the Court and the legal profession who were consulted throughout the process.

I hope this further information is helpful in explaining how the Government continues seek to mitigate the concerns of the Committee throughout the work to implement the UPC Agreement.

28 October 2015


Proposed Directive to improve the gender balance of corporate boards — (34423) 16433/12


We note that no progress appears to have been made since we last considered this proposal at our meeting on 9 September, although you indicate that there is some fluidity in the current blocking minority and that the Presidency may seek to secure agreement to a general approach at the December Employment, Social Policy, Health and Consumer Affairs (EPSCO) Council.

As you will recall, the House agreed to issue a Reasoned Opinion on the proposal in January 2013 and we maintain a keen interest in the progress of negotiations. We ask you to provide a further update ahead of the December EPSCO Council and reiterate the request we made in September that the Committee should be given early warning and, if possible, sight, of any compromise proposal on which the Presidency might seek to secure a general approach, accompanied by a detailed assessment of its content and policy implications for the UK, as well its impact on all UK publicly listed companies, not just the FTSE-100 companies.

21 October 2015

Letter from the Chair to Lord Maude

Proposal for a Council Decision in relation to the WTO waiver on services for less developed countries — (37014), 11206/15

Thank you for your letter of 13 October and for responding promptly to the Committee’s Report of 16 September.

The Committee notes the approach taken in Council of the “double decisions” reflecting separate agreement, both by the EU and the Member States. However, we consider that while, on a procedural level, this approach respects the division of competences between the EU and the Member States, it does not provide the necessary transparency in the EU text itself as to where that division specifically lies.

21 October 2015

Letter from the Chair to Lord Maude

Proposed Regulation against the extraterritorial effects of legislation from third countries — (36669) 6237/15

Thank you for your letter of 8 October providing an update on this proposal.

We look forward to receiving further updates in due course when there is more clarity on the choice of the Article 352 TFEU legal base and the position of Member States on the proposed change to authorisation by delegated acts.

14 October 2015


16433/12: DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL ON IMPROVING THE GENDER BALANCE AMONG NON-EXECUTIVE DIRECTORS OF COMPANIES LISTED ON STOCK EXCHANGES AND RELATED MEASURES

I would like to take this opportunity to provide you with further update on this dossier and address the queries highlighted in the report and conclusions from your Committee meeting of 9 September.

Despite optimistic expectations from the Commission for significant progress in the second half of the year, the Luxembourg Presidency has still not yet arranged any working groups on this draft Directive nor circulated any potential text changes. I have recently spoken to the Dutch Government, who will hold the next Presidency and they are very interested in the voluntary approach we have undertaken in the UK.

The Minister for Employment, Priti Patel, wrote to you setting out handling of the dossiers at the Employment, Social Policy, Health and Consumer Affairs (EPSCO) meeting on Monday 5 October. This draft Directive was on the agenda. However it has been eventually withdrawn. A few member states expressed disappointment and sought further progress in time for December’s Council.

Whilst I am not in a position to make public the list of member states in the blocking minority, I can reassure you that, for the time being, this is still standing. Some movement, in both directions, may occur in the coming months, as we are aware that some countries are considering their positions. We will, of course, inform you of any other relevant developments.

With regards to the “Flexibility Clause”, this aims to introduce the opportunity for member states to potentially make use of existing national measures, instead of all the proposed means, to attain the gender balance objectives. The “Flexibility Clause” does not exempt countries from suspending all aspects of the Directive. According to the draft text, the UK

would not currently be eligible for exemption as the scope of the Directive goes further than the UK approach. However, given the success of our voluntary, business-led approach (as recommended by Lord Davies’s Women on Boards 2011 Report), the UK may become eligible in future.

As currently drafted, the Directive would apply to all large listed companies. The number of large listed companies fluctuates but we believe this could affect between 450-550 companies registered in the UK.

The targets set by Lord Davies instead, focused on the top listed: a target of 25% for FTSE 100 companies to be achieved by 2015 and FTSE 100 companies have now exceeded this target, with current representation at 26.1%. There are now no all-male boards in the FTSE 100 (there were 21 in 2011). Representation has also improved on FTSE 250 companies and there is 19.6% representation of women (up from 7.8% in 2011). There are now only 15 all-male in the FTSE 250 (there were 131 in 2011).

To provide further clarity, I attach the latest compromise text, which is being provided to the Committee under the Government’s authority and arrangements agreed between the Government and the Committee for the sharing of EU documents carrying a “limite” marking. It cannot be published, nor can it be reported on in any way which would bring detail contained in the document into the public domain.

It is also worth noting that the current text of the proposal is still in a draft stage subject to further amendments. Taking also into account the current state of play of the dossier, it is difficult to anticipate its final shape.

As anticipated, Lord Davies and his Steering Group will be publishing their final report on 29 October 2015. It is expected that their recommendations will help to shape future policy on representation of women on the Boards of UK companies.

13 October 2015

Letter from Lord Maude to the Chair

(37014), 11206/15, COM(15) 356. Proposal for a COUNCIL DECISION establishing the position to be taken on behalf of the European Union within the Council for Trade in Services of the World Trade Organization on the acceptance of preferences notified by WTO Members as regards services and service suppliers of Least Developed Countries other than those described in Article XVI of the GATS

I am writing in response to the Committee’s request for further information on the above Council Decision. The Committee cleared the Council Decision but asked for more information on the outcome of the Council meeting in terms of voting procedure and on any

favourable amendment to the text regarding the mixed nature of the agreement and the extent to which the EU is exercising competence.

This Council Decision sought to establish the EU position on a proposal in the WTO Council for Trade in Services to amend the LDC Services Waiver to allow offers to include preferences other than those described in the General Agreement on Trade in Services (which defines preferences purely in terms of market access). The proposed Council Decision was to support the proposal.

This Council Decision therefore agrees an external EU position in the WTO, while the actual preferences under the LDC Services Waiver offered by the EU will be agreed in a separate Council Decision, due in the coming weeks. It agrees that the LDC Services Waiver may go beyond market access, but as such does not commit the UK to any preferences. Rather, it is an agreement to enable other WTO members to offer greater preferences and increase the scope of the Waiver.

However, the decision has implications for transport services, on which competence is shared. As a result, the decision proceeded as a ‘double decision’, with the second “Decision of the Representatives of the Member States” annexed. This ensured that Member States gave their agreement in their own right, and that the EU was not extending its competence in this area. As with other cases where this approach has been used, it has not been necessary to delineate between the areas of EU and Member State competence subject to the respective decisions. The Council Decision proceeded formally by QMV and the Member States’ Decision required consensus amongst the Member States.

This Decision will be a positive step for the Least Developed Countries in helping them access markets for their service sectors. Whilst trade in services is currently very low for LDCs, it is rapidly growing in importance. The LDC Services Waiver will open up increased access in many of the world’s major markets.

13 October 2015


Proposal for a Council Decision on the conclusion, on behalf of the European Union, of the Marrakesh Treaty to Facilitate Access to Published Works for Persons who are Blind, Visually Impaired or Otherwise Print Disabled — (36437) 14617/14

Thank you for your letter of 8 September.

The Committee would be grateful for further updates when the Government has formulated its position with regard to the proceedings initiated by the Commission, and when the Commission has responded to the call for internal EU legislation to accommodate the Marrakesh Treaty.

14 October 2015


EM 6237/15: Update on a proposed Regulation of the European Parliament and of the Council protecting against the effects of the extra-territorial application of legislation adopted by a third country and actions based thereon or resulting therefrom (recast)

I am writing to update you on progress with the proposal from the European Commission for a Regulation protecting against the effects of the extra-territorial application of legislation adopted by a third country.

You will recall that the proposed Regulation raised a significant issue for the UK, namely the use of Article 352 of the TFEU as its legal basis. This could require primary legislation to confirm the UK position.

Discussion is continuing within the institutions on whether Art 352 is an appropriate legal base. There is an argument that Article 352 should only be used when no other specific legal base is available, but this appears not to be the case here. If this view is confirmed, I believe that this proposed regulation will not be able to go forward.

Regarding your Committee’s question about the Commission’s proposal to establish authorisation criteria by delegated acts rather than by implementing acts, the UK and other Member States have expressed concerns about this in the Council’s Working Party on Trade Questions. However, there has so far been no formal vote on this issue in Council.

A draft report is scheduled to be presented at the 19 November meeting of the European Parliament’s International Trade Committee, with a vote on amendments planned for 10 December. Given current views on this proposal, we believe this will not be presented. We are seeking confirmation.

I will write again with a further update when we have confirmation on these points.

8 October 2015

Letter from the Chair to Nick Boles

Pregnant Workers Directive (Council document 13983/08) (30022)

Thank you for your letter of 7 September informing us of the Commission’s decision to withdraw the proposal it put forward in 2008 to amend the 1992 Pregnant Workers Directive. At our meeting today, we agreed to clear the proposal from scrutiny.

We are grateful to you for enclosing a copy of the Commission Roadmap setting out a range of possible legislative and policy options which are intended to address the work/life balance for parents and carers and on which the Commission will be consulting stakeholders. We intend to draw the Roadmap to the attention of the BIS Committee so that it has an opportunity to consider whether it wishes to respond to the Commission consultation.

16 September 2015

Letter from the Chair to Anna Soubry

Business Failure and Insolvency: Commission Recommendation (35900), 7859/14 + ADDs 1–2 and Proposal to amend Regulation 1346/2000 (36248), 10284/14 + ADD 1

The Committee would like me to thank you for your letter of 14 July.

We note the formal adoption of the Regulation. We also ask you to inform us of the outcome of the Commission’s review of the Recommendation and, in particular, of any moves towards legally-binding EU legislation covering the same ground.

9 September 2015


14617/14 - Proposal for a Council Decision on the conclusion, on behalf of the European Union, of the Marrakesh Treaty to Facilitate Access to Published Works for Persons who are Blind, Visually Impaired or Otherwise Print Disabled

I am writing to provide you with further information on matters concerning the Marrakesh Treaty to Facilitate Access to Published Works for Persons who are Blind Visually Impaired or Otherwise Print Disabled.

The European Commission’s proposal for a Council decision on the conclusion, on behalf of the European Union, of the Marrakesh Treaty, was discussed in the European Council’s Working Party on Copyright on 24 November 2014, 29 January 2015, and 17 February 2015. On 25 March 2015, the Permanent Representatives Committee (COREPER) considered the matter, but only found agreement to call on the Commission, in accordance with Article 241 TFEU, to submit without delay a legislative proposal setting out the amendments to the EU legal framework necessary to accommodate the Marrakesh Treaty.

On 13 August 2015 we received formal notification from the Court of Justice of the European Union (CJEU) that the Commission has requested an opinion as to whether the European Union has exclusive competence to conclude the Marrakesh Treaty. The Government is carefully considering its position in relation to the request for an opinion.

On the basis of the current EU legal framework, the Government does not consider an EU exclusive competence approach to conclusion of the Treaty to be appropriate. The Government believes that Member States remain competent to ratify the Treaty in their national capacities. Furthermore, the Government does not consider the Commission’s proposed joint Article 114 (TFEU), Article 207 (TFEU) legal base to be appropriate for conclusion of the Treaty. As the Marrakesh Treaty is primarily humanitarian and not about trade, Article 19 (TFEU) would appear to be a more appropriate legal base.

The Government remains a strong supporter of the Marrakesh Treaty and is committed to the principle of access to copyright works for visually impaired people. In seeking to ensure that the Treaty enters into force at the earliest possible date, we are committed to ensuring that the aforementioned legal difficulties reach a satisfactory conclusion. We will also seek to ensure that the respective competences of the EU and Member States are clearly set out in the text of any decision.

8 September 2015

Letter from Nick Boles to the Chair

EM 13983/08: PROPOSAL FOR A DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL AMENDING COUNCIL DIRECTIVE 92/85/EEC ON THE INTRODUCTION OF MEASURES TO ENCOURAGE IMPROVEMENTS IN THE SAFETY AND HEALTH AT WORK OF PREGNANT WORKERS AND WORKERS WHO HAVE RECENTLY GIVEN BIRTH OR ARE BREASTFEEDING

I am writing to provide you with an update on the above proposal.

As you will be aware, in 2008 the European Commission proposed a revision to the 1992 Pregnant Workers Directive. At its first reading in October 2010, the European Parliament (EP) as co-legislators, substantially amended the Commission’s draft text to include, among other things, 20 weeks’ maternity leave on full pay and 2 weeks paternity leave on full pay. Since December 2010, the Council position has been firm that no further negotiations could take place as the EP text was unacceptable to the Council. The UK has been part of the group of Member States to whom the text of the Directive was unacceptable since December 2010.

In December 2014, the European Commission’s Work Programme set out the proposal that the dossier would be withdrawn and replaced by a new initiative as part of its Regulatory Fitness agenda if no substantial progress was achieved within six months.

In August 2015, the Commission withdrew the 2008 proposal and published a roadmap for a replacement initiative. The title of the new initiative is: “New start to address the challenges of work-life balance faced by working families”. Roadmaps set out early proposals for planned Commission initiatives. They describe the problem that the initiative aims to address

and possible policy options. It outlines a wide-ranging set of possible legislative and non-legislative proposals. Please see Annex A.

The Commission will now consult on the options in the roadmap with European Social Partners and prepare an impact assessment before the initiative is finalised. The new initiative is expected be included in the 2016 Commission Work Programme which comes out in autumn.

I will provide the Committee with a new Explanatory Memorandum when the Commission officially submits their proposal to the Council.

7 September 2015


UPDATE ON THE EUROPEAN COMMISSION’S PROPOSAL FOR A DIRECTIVE ON SINGLE-MEMBER PRIVATE LIMITED LIABILITY COMPANIES (‘SUP’) — (35953) 8842/14 + ADDs 1–5

The Committee was grateful for your letter of 22 June 2015. It noted that the General Approach achieved in the May Competitiveness Council did not achieve the Government’s objective of removing the provision enabling the Commission to adopt delegated legislation to update Annex 1 of the proposed Directive, albeit that this provision was not considered to represent a significant risk to subsidiarity.

We should be grateful if you would keep us informed of progress on this matter as and when trilogue negotiations with the European Parliament start.

In the meantime the matter remains under scrutiny.

21 July 2015

Letter from Anna Soubry to the Chair

7859/14: Commission Recommendation on a new approach to business failure and insolvency and 10284/14: Proposal for a Regulation on Insolvency Proceedings

As you know, the last Government undertook a call for evidence on the above Recommendation, with the intention of using the evidence gathered to inform the Government’s response to the Commission’s review of the Recommendation. As part of the review, the Commission circulated a questionnaire to Member States.

The UK has completed and returned the questionnaire, and I enclose a copy of the response for your information. Additionally, I would also like to take this opportunity to inform the

Committee that the above Regulation has also now been formally adopted by both the European Parliament and European Council.

14 July 2015


8842/14 – AN UPDATE ON THE EUROPEAN COMMISSION’S PROPOSAL FOR A DIRECTIVE ON SINGLE-MEMBER PRIVATE LIMITED LIABILITY COMPANIES (‘SUP’)

Following your meeting in March a waiver was granted for the above proposal to enable a General Approach to be agreed at Competitiveness Council on 28th May 2015.

I am now able to inform you that a General Approach was agreed (which is attached). You also asked for an update on the proposal and details of issues which may arise in the trilogues.

You will see that the General Approach no longer contains Implementing Act powers. These have been removed as it was agreed that a single template to be used in all Member States for registration or for the articles of association would not be possible due to the very different approaches in each Member State.

There is one Delegated Act power which enables the Commission to update Annex 1 to the Directive. Annex 1 lists types of companies in each Member State to which Part 1 of the Directive applies. (Part 1 replaces, and largely replicates, Directive 2009/102/EC which deals with deals with single-member private limited liability companies.) Also, Annex 1 companies have to be allowed to convert into an SUP (subject to national law conditions and procedures). In the UK the Annex 1 companies are private companies limited by shares or by guarantee. If a Member State informs the Commission of a change to the types of private limited companies provided for in its national law, the Commission can update Annex 1 to reflect that change.

The Delegated act power is limited to five years, but will be extended for further five year periods unless the European Parliament or Council opposes the extension.

We will continue to work closely with the Presidency and try to influence MEPs over the coming months. The General Approach supports the digital single market agenda and this should remain the focus of the proposal. We will continue to try to ensure that electronic registration remains quick and easy in all Member States, that the low minimum capital provision is maintained and that additional rules on the internal management of the company are not inserted.

We will also need to ensure that issues such as the separation of the location of the registered office and the Head Office and verification of company founders and officials are not dealt with in this proposal, as these are cross-cutting issues which would have implications for company law in the Member States generally, not just single-member companies in the form of SUPs.

I will ensure the committee is updated once we know more about the position of the European Parliament.

22 June 2015

Cabinet Office

Letter from the Chair to John Penrose

Proposed Council Decision and EP Resolution on reform of EU electoral law —(37431) and (37395)

Thank you for your letter of 14 April 2016, responding to our Report of 16 March.

We note the Government’s reluctance to provide Parliament with a detailed financial impact assessment at the early stage of this dossier. We can only infer that we may be similarly hampered in assessing subsidiarity compliance on future unanimity dossiers. In those instances, we would be prevented from playing a full part on the new red card mechanism which the Government has negotiated.

We ask you to continue to keep us informed of all developments on this proposal, particularly in relation to the proposed amendments to Article 11 and 14 of the 1976 Electoral Act.

20 April 2016

Letter from John Penrose to the Chair

Twenty-sixth Report of Session 2015-16 (HC 342-xxv): The European Parliament’s proposal to reform EU electoral law

Thank you for your report concerning the European Parliament’s proposals for the reform of the electoral law of the EU. In your report, you requested further information on certain points.

You have asked how the proposed amendments to Articles 11 and 14 of the 1976 Act would interact with Article 223 of the Treaty on the Functioning of the European Union (TFEU). The intention of the European Parliament in Articles 11 and 14 is unclear. If the intention is to provide for a QMV process for adopting general measures which concern the matters covered by Article 223, the Government considers the only way that this could be provided for would be to follow the proper process under the Treaties to amend Article 223 itself. This would trigger the requirement for a referendum under the European Union Act 2011.

I have noted the points raised in the report about the provision of subsidiarity and financial assessments of these proposals. The European Parliament has set out a raft of proposals that are wide ranging and touch upon various aspects of the process for electing MEPs. In order to progress, the proposals will require the agreement of all Member States, and as you are aware the Government has concerns with aspects of many of the proposals as they currently stand. In light of this, we have considered that for these particular proposals, it would not be productive at this early stage to invest time and resource in assessing the potential financial

impacts of the various proposals that have been put forward, which would be a significant exercise, given the uncertainty over what proposals may eventually emerge following their consideration by Member States and the Council. Should more suitable proposals emerge in due course then we would of course wish to fully assess their financial impact. I hope this is helpful.

14 April 2016

Letter from the Chair to Rob Wilson

Statistics legislation — (35070) 11177/13, (35303) 13517/13,(35415) 14224/13, (36570) 16612/14 + ADD 1 and (36804) 6651/15

The Committee has asked me to thank you for your informative letter of 19 January about the Dutch Presidency intentions with regard to statistics legislation.

27 January 2016

Letter from Rob Wilson to the Chair

UPDATING THE EUROPEAN SCRUTINY COMMITTEE ON DUTCH PRESIDENCY PLANS FOR STATISTICAL MATTERS

I am writing to inform your Committee of the priorities on statistics for the Presidency of the Netherlands; in particular those matters that have been retained under scrutiny by your Committee and any new business foreseen by the Presidency. I have written in similar terms to Lord Boswell, Chair of the European Union Committee

The new Presidency has stated that there will be a particular focus on strengthening confidence in European statistics, harmonisation, and the reduction of production costs and response burden. The Presidency will continue to work on – and, where possible, conclude - current statistics dossiers.

Existing business currently retained under scrutiny

Document No. 11177/13: Proposal for a Regulation on the provision and quality of statistics for the macroeconomic imbalances procedure.

Document No. 13517/13: Opinion of the European Central Bank of 10 October 2013 on a proposal for a regulation on the provision and quality of statistics for the macroeconomic imbalances procedure (CONS/2013/72)

Your Committee considered the Explanatory Memorandum (EM) of 5 July 2013 concerning Document 11177/13 in its 12th and 22nd reports, 13-14 and have retained the matter under

scrutiny. Your Committee also considered the EM of 30 October 2013 concerning Document 14224/13 and in its 22nd report, 13-14 together with document 11177/13 and retained the matter under scrutiny.

I wrote to you on 16 July 2015 to provide details of the Luxembourg Presidency`s plans when I informed your Committee that there were no proposals to discuss this matter. This remains the case under the Dutch Presidency.

Document No. 13517/13: Proposal for a Regulation amending Regulation (EC) No. 471/2009 on Community statistics relating to external trade with non-member countries as regards conferring of delegated and implementing powers upon the Commission for the adoption of certain measures.

Your Committee has considered this proposal on three occasions, most recently in its 29 th

report 14-15, and has retained the matter under scrutiny.

In my letter of 16 July 2015 on the plans of the Luxembourg Presidency I informed your Committee that there had been no further significant developments on this matter. This remains the case and the new Presidency has stated its intention to continue working on the file. Progress on this dossier may be expected in the next few months following the conclusion of negotiations between the Council, European Commission and European Parliament on a revised Interinstitutional Agreement. I shall write to you again to inform your committee of any significant progress on this matter.

Document Nos.16612/14 and 16612/14 ADD 1: Proposal for a Regulation on harmonised indices of consumer prices and repealing Regulation (EC) No 2494/95

Your Committee considered the EM of 7 January 2015 and in its 29 th report, 14-15 of 15 January 2015 retained the matter under scrutiny.

I wrote to you recently on 12 January 2016 to provide an update on the proposal when I informed your Committee that the Luxembourg Presidency had referred the proposal to Coreper for agreement on a compromise text, which was adopted on 18 December.

New business

The Presidency anticipates a number of new proposals from the Commission for regulations concerning European statistics:

A framework regulation on Integrated European Social Statistics that is intended to provide a unified legal base for existing data collections as well as bringing into law two currently voluntary surveys. This is the first of three proposed framework regulations on social statistics and encompasses current statistics relating to persons and households at an individual level.

A proposal for a revision of the existing regulation on Gross National Income (GNI) which lays down the statistical basis under which GNI statistics are calculated and verified. An update of existing legislation is required to take account of a number of factors such as the European System of Accounts 2010 and the recommendations of the European Court of Auditors.

A proposal for a regulation to extend the European Statistical Programme (ESP) 2013-17 to 2018-20. The primary objective of the proposal will be to synchronise the ESP with the EU Multiannual Financial Framework 2014-20 as recommended by the European Court of Auditors and the European Parliament.

The Government will deposit an Explanatory Memorandum on each of the above proposals in due course, as required, and within the usual timeframe.

I hope you find this update helpful. I shall write to you further in the event of any significant developments on these matters.

19 January 2016

Department for EducationNo correspondence sent or received.

Department for Culture, Media and SportLetter from …… to the Chair

…… 2015

Department for Communities and Local GovernmentNo correspondence sent or received.

Ministry of DefenceNo correspondence sent or received.

Department of Energy and Climate ChangeLetter from the Chair to Andrea Leadsom

EU Emissions Trading System — (37003) 11065/15 + ADDs 1–3

Thank you for your letter of 23 November, suggesting that it might be more productive if the debate which we have recommended on this document were to be held in around six to twelve months’ time.

This letter does of course illustrate a dilemma which arises on many documents, namely whether to give the House an early opportunity for debate before matters have become crystallised, or to wait until a number of uncertainties have been clarified. In the end, this has to be a matter of judgement in each individual case, and, as the timing of debates is at the end of the day essentially a matter for the Government rather than for us, we are content to leave this question in your hands, so long as the timing enables a meaningful debate to be held.

2 December 2015

Letter from Andrea Leadsom to the Chair

11065/15: European Scrutiny Committee A Debate EU ETS 2021 2030 & European Union Document No. 11065/15 and Addenda 1-3, a proposal for a Council Directive amending Directive 2003/87/EC to enhance cost-effective emission reductions and low-carbon investments.

Thank you for considering the Explanatory Memorandum (EM) my department produced on this proposal. I am writing with reference to the Committee referring it for debate.

I note the Committee’s opinion on the significance of the European Commission’s proposal for amending the Directive with respect to changes to UK and EU climate and energy policy after 2020. The EU Emissions Trading System (EU ETS) is Europe’s flagship climate policy and demonstrates Europe’s ambition to act as a global leader in tackling climate change cost-effectively through a functional and effective carbon market. The continued success of the EU ETS is vital in helping the EU and the UK to meet its carbon targets at least cost and to lay the foundations for a global carbon market. With this in mind, I would be very willing to debate the issue to ensure the proposed changes to the EU ETS are significant, appropriate and beneficial. However, I feel that a debate would be more helpful and productive in around 6-12 months’ time for the following reasons.

Firstly, the negotiations on this proposal have only just begun. Discussion within the European Council and European Parliament is at an early stage as the majority of Member States and European Parliament Committees are still in the process of formulating initial

positions. The negotiations are likely to last for a further 18-24 months before agreement is reached on an amended directive. I expect there to be substantive progress on negotiations as we proceed into the middle or latter half of 2016.

Secondly, further analysis of the proposal is ongoing. An initial UK Government position and set of objectives has been agreed; however my department is continuing to assess various aspects of the proposal in more detail. Our analysis is currently based on some assumptions about the specifics of scheme design. Due to the complexity of the proposals, as discussion progress and details become clearer it will be possible to refine our analysis further. This will give stronger results to inform the rating of risks associated with the proposals and help identify actual threats to UK objectives.

In light of these reasons and the limited subject matter available at present, I suggest that we postpone any debate and engage at a more suitable date in 2016. In the meantime I will of course keep the Committee informed of significant updates as negotiations progress.

23 November 2015

Letter from the Chair to Lord Bourne

Energy efficient labelling — (36995) 11012/15

We considered at our meeting today, your supplementary Explanatory Memorandum of 30 September enclosing an impact assessment check list on the proposal to replace Directive 2010/30/EU and to make a number of changes to the existing energy labelling requirements for household electrical appliances.

However, whilst the check list provides a comprehensive qualitative analysis of the proposal, we had expected also to see some quantification of the costs and benefits to the UK, analogous to the figures produced by the Commission for the EU as a whole (and which you have quoted both in the check list and in your SEM). Since we would have thought such an appraisal was necessary in order for the UK to take an informed view of the proposal, we find it difficult to understand why the information in question has not been provided, particularly as it has a significant bearing on how we eventually report the proposal to the House. We would therefore be grateful if you could take a further look at this material.

4 November 2015

Letter from the Chair to Lord Bourne

Renewable energy progress report — (36935) 9964/15 + ADDs 1- 2


In our Report of 21 July, we specifically asked whether the Government agreed with the Commission’s observation that, as things stand, the UK needed to do more to meet its 2020 targets. We infer from your statement that “there is still more to do between now and 2020” that you do in fact accept what the Commission has said, but it would be helpful to have explicit confirmation that this is indeed the case.

16 September 2015

Letter from Lord Bourne to the Chair

9964/15 - Report from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions Renewable energy progress report.

DECC provided an Explanatory Memorandum (EM) on the European Commission’s progress report on the 2020 Renewable Energy Target on 2 July 2015, and I am happy to provide a more detailed response on the specific points you raised in your Committee meeting on 21 July 2015.

As was set out in the original EM, the Government is committed to meeting the 2020 renewable target of 15% of final energy consumption from renewable sources.

As set out in the EU Treaties, it is down to each Member State, rather than the Commission, to decide how it will meet this target.

The UK has a National Renewable Energy Action Plan (NREAP) in place which sets out how we plan to meet our target in a way which keeps bills as low as possible for households and businesses, whilst reducing our emissions in the most cost-effective way. As such the Government has recently taken action to avoid a projected over-allocation of renewable energy subsidies, the costs of which would have been borne by consumers. These measures will help to keep the UK on track to deliver our ambition for at least 30% of electricity demand to be met from renewable sources at an affordable cost.

The UK is making progress towards the overall target, with the share of energy from renewable sources almost doubling, from 3.8% in 2010 to 7% in 2014.

Whilst this is clearly welcome, there is still more to do between now and 2020. The target set for the UK was in part based on GDP and so we have one of the toughest renewable growth rates of any Member State, requiring 16% average annual growth in final energy consumption from renewables between 2011 and 2020.

Across electricity, heat and transport we are continuing to see increasing deployment:

In 2014 almost a fifth of electricity was generated from renewable sources and in the first quarter of 2015, 22.3% of electricity came from renewable sources.

Renewable heat is already contributing 4.9% of total heat demand in 2014; this is significantly above the forecast trajectory in the plan of 2%. But some uncertainties remain, not least because the policy is operating in a new market.

The directive also sets a sub target of 10% of fuels used in transport to come from renewable sources. The Department for Transport and the Low Carbon Vehicle Partnership established a Transport Energy Task Force to examine and formulate options for policy regarding transport energy, including how the EU 2020 greenhouse gas emissions reduction and renewable transport fuel targets should be reflected in UK policy. The report was published earlier this year. The Department will be consulting on legislation next year, for implementation in 2017.

In addition to increasing renewables deployment in the UK, the Renewables Directive offers a number of cooperation mechanisms to all Member States as a means of meeting their targets. These include the physical trading of renewable energy and the statistical trading of credits from those Member States who have exceeded their targets.

This Government is committed to keeping bills as low as possible for hard working families and businesses while decarbonising the economy and ensuring secure energy supplies. Therefore it is sensible that we remain open to all the options available to us to meeting the target at this stage, to make sure we are able to do so as cost effectively as possible.

1 September 2015

Department for Environment, Food and Rural AffairsLetter from the Chair to Rory Stewart

Stockholm Convention 7225/16 (37609)


We have noted from this that the draft Council Decision relating to the listing of octamethylcyclotetrasiloxane (D4) under the Convention did not receive the necessary level of support from Member States, and will thus not proceed, and also that a revised version of the proposal did in fact give Article 192(1) as the legal base. From what you said earlier in your Explanatory Memorandum, this would appear to be a satisfactory outcome, and, having already cleared the document, we have no further comment.

27 April 2016

Letter from the Chair to George Eustice

Fisheries: Multiannual conservation plansDocuments: 17494/11 (33445) and 13745/12 (34230)

Thank you for your letters of 13 April, providing an update on the latest state of play on the multiannual recovery plans for cod and herring.

We have noted the current position, and look forward to receiving further information in due course.

20 April 2016

Letter from Rory Stewart to the Chair

EM 7225/16: PROPOSAL FOR A COUNCIL DECISION ON THE SUBMISSION, ON BEHALF OF THE EUROPEAN UNION, OF A PROPOSAL FOR THE LISTING OF ADDITIONAL CHEMICALS IN ANNEX A, B AND/OR C TO THE STOCKHOLM CONVENTION ON PERSISTENT ORGANIC POLLUTANTS

Further to the Explanatory Memorandum I submitted on 4 April, I am pleased to inform you that it became clear on 13 April that the proposed Decision does not command the necessary level of support amongst Member States and will therefore not proceed. This outcome is in line with the Government’s view expressed in the Explanatory Memorandum.

I gather that, when it cleared this item from scrutiny at its meeting on 13 April, your Committee noted that a question had arisen as to whether Article 192(1) or Article 191(1)

TFEU was the correct legal base. A revised version of the proposal was issued by the Council of the European Union on 4 April in which Article 192(1) was given as the legal base.

18 April 2016

Letter from George Eustice to the Chair

17494/11 Proposal for a Regulation of the European Parliament and the Council amending Council Regulation (EC) No. 1300/2008 of 18 December 2008 establishing a multi-annual plan for the stock of herring distributed to the west of Scotland and the fisheries exploiting that stock

Following my letter of 30 July 2014, I am writing to provide you with a short update.

Management of this herring stock will be incorporated in a mixed fisheries management plan covering West of Scotland waters. Our current expectation is that this wider plan would not be published until 2017 at the earliest. If this position changes I will write further.

13 April 2016


6041-12 Proposal for a regulation of the European Parliament and of the council amending council regulation (ec) no 1342/2008 of 18 December 2008 establishing a long-term plan for cod stocks and the fisheries exploiting those stocks

13745/12 Proposal for a Regulation of the European Parliament and of the Council amending Council Regulation (EC) No 1342/2008 of 18 December 2008 establishing a long-term plan for cod stocks and the fisheries exploiting those stocks

Following my letter of 11 July 2014, I am writing to provide you with a short update about the cod recovery plan.

Council Regulation 1243/2012 of 19 December 2012 delivered a freeze in effort allocations in the Cod Recovery Zone by amending the Cod Recovery Plan. The European Parliament (EP) and the Commission challenged the unilateral action taken by the Council to deliver this freeze. As anticipated, the European Court accepted their arguments and has annulled the Council Regulation. However, the Court has ordered a 12 month period of grace until 1 January 2017 for measures to be agreed by co-decision. This aspect of the judgment is welcome as it allows the effort freeze to continue for 2016. I want to use the rest of this year to agree with the EP and the Commission the repeal or amendment of the cod plan so that fishermen will not be subject to measures that are incompatible with the landing obligation and delivering stock recovery, until regional mixed fisheries plans can be developed and implemented.

13 April 2016


Measures against illegal, unreported and unregulated fishing —(37172) 12584/15

Thank you for your letter of 16 March, responding to the point in my letter of 28 October about the possible cost to industry of a new electronic catch certification system.

We were interested to see that this will be based on an existing system, which has for many years been used for trade control, is well established, and thus familiar to — and likely to be welcomed by — the industry. However, we also note that the Commission will shortly be discussing the planned approach with Member States, following which your officials plan to brief the industry and identify any continuing points of concern, and we think it would useful to know the outcome of that process before taking a final view of this document.

20 April 2016


EM: 12584-15 COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL On the application of Council Regulation (EC) No. 1005/2008 establishing a Community system to prevent, deter and eliminate illegal, unreported and unregulated fishing

Thank you for your letter of 28 October 2015 on the above communication.

The proposal is still in development, and the Commission has not yet released a prototype electronic catch document to enable widespread testing. While it is not therefore possible to give an absolute assurance on costs to business, the system is proposed to be based on the well-established Trade Control and Experts System (TRACES). I have asked officials to press the Commission to consult industry at a suitable stage in the process, and this may best be done when a prototype product has been developed. This system has been used for many years to assist in the monitoring and control of the trade in products of animal origin, and many food importers will already be familiar with TRACES. I should also point out that a secure, online system will offer benefits to industry, when compared to the current paper-based system, including that certificates may be transmitted in real time, ensuring that inspectors have access to accurate and timely information as soon as consignments arrive in the EU. Where electronic certificates require investigation and verification, this process will be aided and speeded up by the use of a single, secure electronic system.

The proposed system may be expected to reduce delays in clearing fisheries products to enter the EU market, and I believe that this will be welcomed across the supply chain, being more efficient than a paper–based system. The system will also offer greater security, as there have been instances detected in other member states of catch certificates being duplicated and re-used.The Commission will be discussing the planned approach with the UK and other Member States this month. To date, the Commission has been unable to put forward any detailed timetable for this work, though they have recognised the need for a phased introduction of the new system. The move to an electronic system is viewed as a technical change that does not require new or amended legislation. I have asked officials here to ensure that they take the opportunity to brief the UK import trade on the details of the proposed electronic catch certificates following these discussions. This will provide a good opportunity for the UK to provide more detailed suggestions and highlight any areas of concern.

16 March 2016


Marketing of food from animal clones — (35689) 18153/13

Thank you for your letter of 4 December 2015, informing us that there was no discussion of this proposal during the Latvian presidency, and that it seems unlikely to be a priority for the incoming Dutch Presidency.

In the meantime, we have noted that the Commission has produced a report on the feasibility of an EU-wide labelling scheme and tracing mechanism, and that the European Parliament has suggested a number of amendments, notably an extension of controls to the progeny and descendants of clones, to which the Commission and a majority of Member States, including the UK, are opposed. As before, we were grateful for your offer to continue to keep us informed of progress, and we are content to await further developments.

9 December 2015


Driftnet fishing — (36020) 9934/14 + ADDs 1–2

Thank you for your letter of 2 December 2015.

We have noted that the Commissioner has said that he does not intend to pursue the current proposal, but would like instead to incorporate it within the future framework for technical conservation measures. We have also noted that this change of tack is in line with the Government’s own thinking, and that you believe that it will be to the advantage of small-scale driftnet fishermen in the UK.

We will await further developments with interest, but, in the meantime, we would like to register two thoughts. First, if the Commission does not intend to pursue the current proposal, there would be merit in persuading it to formally withdraw it. Secondly, we assume that any attempt to incorporate it into wider measures on technical conservation will necessitate a formal proposal to that effect, and hence be the subject of an Explanatory Memorandum in due course.

9 December 2015

Letter from the Chair to Rory Stewart

Zero waste programme for Europe — (36203) 11592/14 + ADDs 1–3EU legislation on waste — (36209) 11598/14 + ADDs 1–14

Thank you for your letter of 11 November 2015, providing an update on the current state of play on these two documents, together with the Government’s response to the Commission’s two public consultations on a circular economy and to its technical consultation with Member States.

Although I believe that the Commission has not in fact formally withdrawn the earlier Communication, we have noted that it intends to produce shortly both a new Action Plan on the Circular Economy and a new proposal to amend EU waste legislation. At the same time, I should also record that, although our predecessors rescinded their debate recommendation on document 11598/14 after it had been withdrawn by the Commission, the corresponding recommendation for document 11592/14 remains on the table. However, we have indicated to the Leader of the House that we would be willing, as part of a wider package, to consider rescinding that recommendation as well, and we currently await his response.

9 December 2015


EM: 18152-13 PROPOSAL FOR A DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL ON THE CLONING OF ANIMALS OF THE BOVINE, PORCINE, OVINE, CAPRINE AND EQUINE SPECIES KEPT AND REPRODUCED FOR FARMING PURPOSES

EM: 18153-13 PROPOSAL FOR A COUNCIL DIRECTIVE ON THE PLACING ON THE MARKET OF FOOD FROM ANIMAL CLONES

I would like to provide an update on progress with this dossier since my letter of 3 February.

There were no discussions at official or ministerial level during the Latvian Presidency.

However, on 17 June, the joint AGRI and ENVI Committee of the European Parliament, agreed to propose a number of changes to the Commission proposals, including most notably, extensions of the controls both to the progeny and to descendants of clones as well as all farmed animal species. This decision was subsequently endorsed by the EP Plenary on 8 September.

Since then, there has been no significant response from the Commission and only two short Attaché discussions. We are also still waiting for the report prepared for the Commission on the feasibility of an EU-wide labelling scheme for cloned products and a traceability mechanism to be published. The expected completion date was October.

It is, however, clear that the Commission and the majority of Member States, including the UK, are opposed to the European Parliament’s proposed revisions and, as a result, a First Reading deal will not be possible. This is because there are no specific animal welfare issues with the progeny and descendants of clones justifying their inclusion; they will be raised under more traditional farming conditions.

Furthermore there is no evidence to suggest that there is any current interest in the farming of clones of other species anywhere in the EU; their addition would be premature at best. In practice the proposals will do nothing to raise animal welfare standards within the EU.

The likelihood of any significant future progress on this dossier remains uncertain. The Presidency has now passed the dossier on to the incoming Dutch who have not suggested this will be a priority for them. I will continue to keep the Committee informed of any further important developments as they arise.

4 December 2015


EM 9934-14: PROPOSAL FOR A REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL LAYING DOWN A PROHIBITION ON DRIFTNET FISHERIES, AMENDING COUNCIL REGULATIONS (EC) NO. 850/98, (EC) NO. 812/2004, (EC) NO. 2187/2005 AND (EC) NO. 1967/2006 AND REPEALING COUNCIL REGULATION (EC) NO. 894/97

9934/14 ADD 1 PROPOSAL FOR A REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL LAYING DOWN A PROHIBITION ON DRIFTNET FISHERIES, AMENDING COUNCIL REGULATIONS (EC) NO. 850/98, (EC) NO. 812/2004, (EC) NO. 2187/2005 AND (EC) NO. 1967/2006 AND REPEALING COUNCIL REGULATION (EC) NO. 894/97 — COMMISSION STAFF WORKING DOCUMENT

9934/14 ADD 2 PROPOSAL FOR A REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL LAYING DOWN A PROHIBITION ON DRIFTNET FISHERIES, AMENDING COUNCIL REGULATIONS (EC) NO. 850/98, (EC) NO. 812/2004, (EC) NO. 2187/2005 AND (EC) NO. 1967/2006 AND REPEALING COUNCIL REGULATION (EC) NO. 894/97 — COMMISSION STAFF WORKING DOCUMENT

Following your letter of 11 March 2015, I am writing to update you about this proposal to prohibit the use of driftnets across the EU. Until quite recently very little had changed and the UK has continued to oppose a blanket ban on the use of driftnets across the EU.

A letter sent on 9 November from the Commissioner for Maritime Affairs and Fisheries (Karmenu Vella) to the President of the European Parliament’s Committee on Fisheries (Alain Cadec) confirms that the Commission will not be pursuing the current driftnet proposal. Instead, the Commission want the scope and objectives of the proposal to be incorporated into the future framework for technical measures (“TechCon Overhaul”) including the scope for a regionalised approach. The future framework will be discussed early next year.

This change of tack reflects the UK Government’s view that fisheries management measures must be tailored to regional solutions in line with the reformed Common Fisheries Policy (CFP). Properly targeted measures that control the use of driftnets need to be enforced in regions where they have an adverse impact on the marine environment, such as in the Mediterranean, while small-scale driftnet fisheries that have a negligible environmental impact are protected. I am reassured by Commissioner Vella’s new approach to driftnet fisheries and, while I will be taking a close interest in seeing how the Commission’s new proposals develop, I believe this is good news for small-scale driftnet fishermen in the UK who fish sustainably and with a minimum impact on the environment.

2 December 2015


Tariff quotas for fishery products — (37002) 11010/15 + ADD 1

Thank you for your letter of 23 November.

We note that the Devolved Administrations are content with what has been proposed for haddock, and that as a significant number of other Member States share the UK’s concerns over the removal of the safeguard clause, you are reasonably confident that this will be reinstated in the next Presidency compromise.

Whilst all this is encouraging so far as it goes, we feel it would be premature to clear the document until we are certain there has been a satisfactory outcome on the second of these

two points, but, in order to avoid constraining your negotiating freedom, we are happy to provide a scrutiny waiver. We would, however, be grateful if you could confirm the outcome of these discussions in due course.

2 December 2015


Tariff quotas for fishery products – (37002) 11010/15 + ADD 1 PROPOSAL FOR A COUNCIL REGULATION OPENING AND PROVIDING FOR THE MANAGEMENT OF AUTONOMOUS UNION TARIFF QUOTAS FOR CERTAIN FISHERY PRODUCTS FOR THE PERIOD 2016 TO 2018

ANNEX TO THE PROPOSAL FOR A COUNCIL REGULATION OPENING AND PROVIDING TOR THE MANAGEMENT OF AUTONOMOUS UNION TARIFF QUOTAS FOR CERTAIN FISHERY PRODUCTS FOR THE PERIOD 2016 TO 2018

Thank you for your letter of 9 September to Rory Stewart regarding the above Explanatory Memorandum (EM). I am responding as Minister with responsibility for fisheries.

With regard to your first question concerning agreement with the Devolved Administrations on the new quota for haddock, I can confirm that we do have an agreed UK position, which recognises the importance of that species to the Scottish catching sector as well as the opportunity for growth for this product in the processing sector. Scotland has a specific interest in the haddock tariff quota but is content that the products involved did not affect those landed at market and first sale. The UK therefore supports the introduction of this tariff quota, albeit on the condition that the quota is no higher, and the import duty no lower, than the levels proposed (5,000 tonnes and 2.6%). The UK is also content for the quota to be reviewed and amended if utilisation is significantly less than 5,000 tonnes.

Turning to the safeguard clause, this is of significant concern to the UK and we, with considerable support from a number of other Member States (Germany, Denmark, Finland, Latvia, the Netherlands, Poland, Portugal and Sweden) are currently strongly urging both the Commission and Presidency for its continuation. The Commission (supported by Ireland), prefer abolishing the safeguard clause as they believed it a temporary mechanism, and hold the view it is easier build a buffer through increases in the levels of quota.

Last week I wrote to Commissioner Vella to present the UK’s position highlighting that the safeguard clause was never intended to be a temporary measure, and the importance of preserving the flexibility to encourage market growth and increased employment opportunities. The safeguard clause also provides processors with a guarantee that there would be sufficient supplies of key products which are either not produced in the EU or for which there is a structural deficit.

I am reasonably confident that given the level of support the UK has on this issue that the safeguard clause will be reinstated when the Presidency issues their next compromise proposal. We expect this within the next week.

I trust that this information will enable you and the Committee to clear this EM from scrutiny.

23 November 2015


EM 11592/14 Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions Towards a circular economy: A zero waste programme for Europe

EM 11598/14 Proposal for a Directive of the European Parliament and of the Council amending Directives 2008/98/EC on waste, 94/62/EC on packaging and packaging waste, 1999/31/EC on the landfill of waste, 2000/53/EC on end-of-life vehicles, 2006/66/EC on batteries and accumulators and waste batteries and accumulators, and 2012/19/EU on waste electrical and electronic equipment.

I am writing to provide you with an update on the European Commission’s work on the Circular Economy following their withdrawal of the above proposals in March.

The Commission has announced its intention to introduce an ambitious package of proposals which will include a five year Action Plan on the Circular Economy and a proposal to amend EU waste legislation. The Commission are expected to publish their new proposal on the 2 December.

As part of the process of producing that new package, the Commission opened two public consultations over the summer asking for ideas and opinions on potential actions to take on the Circular Economy, addressing the manufacture and use of products, and barriers to the functioning of waste markets. The UK Government submitted a single combined response to those consultations, a copy is at Annex A. The Commission also produced a technical consultation aimed at Member States which the UK Government also replied to, this is at Annex B. We have engaged with Commission officials and other Member States in line with the content of these consultation responses, and will continue to do so over the coming weeks before publication of the new proposals.

Over 1,200 responses were submitted to the Commission’s first public consultation alone, from a range of Member States and sectors. We expect that the Commission will publish a detailed analysis of consultation responses alongside their proposals. Once those new proposals are published, we will submit a new explanatory memorandum for scrutiny by the Committees.

11 November 2015


Temporary exceptional aid for livestock farmers — (37187) 13147/15

We considered at our meeting today the proposed Commission Delegated Regulation providing temporary exceptional aid totalling €420 million to EU livestock producers, and, as a result, we are minded to draw the document to the attention of the House. However, before we do so, there is one point on which we would welcome clarification.

As we read the proposal, it is also open to Member States to provide matching support from their own funds, but there does not appear to be any reference to this in your Explanatory Memorandum. It would be helpful, therefore, to know whether our supposition is correct — and, if so, whether the UK intends to avail itself of this opportunity.

4 November 2015


Measures against illegal, unreported and unregulated fishing —(37172) 12584/15

We considered today your Explanatory Memorandum of 19 October on the Commission Communication outlining the way in which the relevant EU Regulation addressing illegal, unreported and unregulated fishing has been applied.

Whilst this is an interesting document, it does not appear to contain any great surprises. However, in highlighting the plan to replace a paper-based arrangement with a new IT system for catch certification, you made the point that this will reduce the administrative burden for Member States’ customs services, but you did not state whether (and, if so, to what extent) this might increase the industry’s costs. Nor did you say whether they had been consulted and were content with what is proposed. We would therefore find it helpful to have information on these points.

28 October 2015


Fishing for deep sea stocks — (34133), 12801/12 + ADDs 1–2

Thank you for your letter of 27 September, providing a further update on this proposal.

Whilst we note a new depth criterion of 800 metres would be acceptable in conjunction with the established fishing footprint, it would be helpful if you could elaborate on other elements of the compromise put forward by the Luxembourg Presidency so that we can gain a clearer overall impression of what is now on the table. In particular, it would be helpful to know what criterion will now be used to define those vessels targeting deep sea species, and we will also need to have an up-to-date assessment of how the proposal will affect the UK fishing fleet before we could consider clearing it.

21 October 2015


Atmospheric emissions — (35693), 18167/13 + ADDs 1–7

Thank you for your letter of 5 October, providing a further update on the proposed Directive on national emissions ceilings.

Whilst this is helpful so far as it goes, many of the references are very general, simply talking in terms of changes proposed by the Commission, without specifying precisely what these are. Also, although we infer from the final two sentences of your penultimate paragraph that the Commission has yet to make the changes referred to in its 2015 Work Programme, it would also be helpful if you could confirm this, and indicate when those changes might be put forward.

In the meantime, in order for us to understand what is currently on the table, we need a clear statement — analogous to that in Annex II of the original proposal, and reproduced in paragraph 4.3 of our predecessors’ Report of 29 January 2014 — of the effect both on the EU as a whole and on the UK of the proposals now on the table as regards the various product groups (sulphur dioxide, nitrogen oxides, non-methane volatile organic compounds, ammonia, particulates, and methane). It would also be helpful you could clarify whether and how the economically optimal ceilings referred to in the fourth paragraph of your letter relate to those in our Report.

Finally, I would like, yet again, to draw your attention to the points raised by our predecessors in the conclusions to their Report on 18 March 2015. Although we note your latest cost estimates, we look forward to receiving the refined analysis which you are preparing.

21 October 2015


Conservation of sea bass — (36636) 5687/15 and (36884) 8845/15


We were grateful to receive this summary of the various steps taken since the beginning of this year to address the state of the sea bass stock, and we were glad to see that a satisfactory package of measures has been agreed. We also note the further action which you expect to take place in the months to come.

14 October 2015


EM 18167/13 Proposal for a Directive of the European Parliament and of the Council on the reduction of national emissions of certain atmospheric pollutants and amending Directive 2003/35/EC

I am writing to update you on the progress of the negotiations of the National Emission Ceilings (NEC) Directive.

Negotiations on the proposal are expected to move quickly over the autumn. There will be a vote in the plenary of the European Parliament in the week commencing 26 October and the Luxembourg Presidency is working towards reaching an agreement in the Council by the end of the year.

Since my last letter, Defra officials have been further developing our analysis of the Commission proposal and the possible impacts for the UK. Our clear position from the outset of the negotiations has been that the ceilings need to be set at a level which is realistic, deliverable and evidence based. As you will be aware the Commission proposed some changes to the ceilings in January 2015. Whilst this resolved the initial concerns that we had with the ceiling for non-methane volatile organic compounds, we continued to have concerns with the other ceilings. Our analysis shows that the ceilings proposed by the Commission will be extremely challenging to meet and the costs would be extremely high (£1.2-1.9bn per annum - based on Defra analysis using indicative measures). The Government will be pushing for changes to the ceilings proposed for the UK to reduce costs and to ensure that we can be confident in our ability to meet the ceilings whilst still ensuring the Directive delivers significant benefits for human health and the environment. Whilst I am content that the ceiling proposed for non-methane volatile organic compounds could be accepted, some changes are needed to the ceilings for ammonia (NH3), nitrogen oxides (NOx), particulate matter (PM2.5) and sulphur dioxide (SO2). Our analysis indicates that the economically optimal ceilings would be 70% for NOx, 49% for PM2.5 and 84% for SO2, all of which are a reduction from 2005 emissions. For ammonia, the ceiling would be 11%. This takes into account the potentially significant growth in the dairy sector following the abolition of milk quotas which could increase ammonia emissions further. Without taking into account further growth this figure would be 17%. Our analysis indicates that ceilings at

these levels would still lead to significant action to tackle air pollution, but would ensure that they are achievable and can be met in the most cost-effective way that does not damage business or undermine economic growth. As I have previously written, we do not support the inclusion of methane in the proposal. This duplicates climate legislation and does not deliver real air quality benefits. Defra officials will continue to refine the analysis as the negotiations develop and I will keep the committee updated.

The Commission is currently considering a flexibility which would enable some changes whilst still ensuring that the proposal delivers a 50% reduction in the number of premature deaths due to air pollution. The Government will be working closely with the Commission to ensure that this flexibility gets us as close as possible to the economically optimal ceilings.

Defra officials are also working with the ENVI committee rapporteur, influential MEPs and other stakeholders ahead of the plenary vote in the European Parliament to try to ensure that the outcome is more closely aligned to the Council position and takes the UK’s concerns into account. If the outcome of the plenary vote is closer to the Council position then the rapporteur could be expected to seek a negotiating mandate with a view to trilogues taking place in early 2016. The Commission has previously indicated in its 2015 work programme that it might revise the proposal to align further with climate proposals. We expect the Commission to take a view on this after the plenary vote.

5 October 2015


EM 12801/12: Proposal for a Regulation of the European Parliament and of the Council establishing specific conditions for deep-sea stocks in the North-East Atlantic and provisions for fishing in international waters of the North-East Atlantic and repealing Regulation (EC) No 2347/2002

I would like to provide an update on this dossier, following my letter of 12 March this year.At that time, I was hopeful that a Council General Approach would be achievable in the lifetime of the Latvian Presidency. My aim was to prepare the ground in case a vote became necessary during the purdah, election and post-election period. I was grateful for the prompt responses from the Committees of both Houses to allow for this.

The dossier did not progress to a vote during this interval which was disappointing. By contrast, in a more promising turn of events, the incoming Luxembourg Presidency not only promptly submitted an updated compromise but also committed Council working group time to develop it.

The Luxembourg compromise proposal simplified the previously proposed regulation by removing elements that were either outdated or duplicated provisions found in other EU fisheries legislation. This included data collection, effort management and enforcement and

was widely welcomed. Furthermore, the capacity management arrangements – where we previously faced a shortfall of allowable capacity limiting the number of vessels we could authorise to fish for deep sea species – were adjusted under the new compromise, to apply only to vessels that target deep sea species rather than including those involved in by-catch activity.

We were very concerned that this new compromise eliminated the use of an established fishing footprint, and with it the presumption against further expansion of deep sea bottom fishing outside such areas. We considered such an omission would be to the detriment of vulnerable marine ecosystems (VMEs) and would undermine the objectives of the proposal. Both the previous Presidency compromise and the European Parliament 1st reading position contained provisions to keep bottom fishing within the existing footprint, and we strongly supported that approach.

The new compromise instead featured a depth criterion at 800m. From the outset organisations in the Deep Sea Conservation Coalition have been keen advocates of a depth based criterion in addition to spatial management of established fishing areas, as they believe that by prohibiting bottom fishing methods below a specified depth this would serve to protect VMEs there. Our earlier analysis supported an alternative view that this was more likely to have the effect of displacing fishing activity from very focused fishing areas in water deeper than 600m (the depth originally discussed) which had been intensively fished for years, suggesting no intact VMEs would be protected. This would mean a higher chance of displaced vessels encountering vulnerable habitats not yet damaged by bottom fishing in shallower waters.

The Defra deep sea scientific advisor’s latest analysis of UK fleet activity, however, showed fishing patterns in graduated depth ranges which revealed more sporadic and less intense bottom fishing activity in waters deeper than 800m than we had previously thought. This suggested the likelihood of more VME protection to be achieved there, with significantly less activity to displace than would be the case if a criterion was set at 600m.

The Luxembourg compromise therefore looks like an acceptable approach in this respect and we have indicated support for this at 800m. This is on the proviso that it is established in combination with an established fishing footprint – the spatial management approach – and that the depth criterion would only apply within that fishing footprint. While pressing for its reintroduction we have offered advice on the technical aspects of establishing such an approach in legislation, working with the Commission and Presidency and seeking support from other Member States.

As a result of these efforts, the Luxembourg Presidency now seem minded to reinstate the “established fishing footprint”. On the depth ban, the Commission agree with the UK position that there should be an 800m ban on bottom gear fishing inside the footprint, with a presumption that if any proposals get through a very tough impact assessment regime and result in an extension to the footprint, then the 800m criterion would apply there too.

We also agree on the need for the regulation to give all necessary protection to vulnerable species such as deep sea sharks, and on the need for it to include a detailed annex of VME indicators to assist the protection of those inside the footprint – making it very clear what needs to happen when a vessel encounters such indicators. The VME protection arrangements within the fishing footprint enabling areas with VMEs to be closed to bottom fishing activity remain as previously proposed.

With a fishing footprint reintroduced and the compromise on the depth criterion, this begins to look like a negotiable package, although several prominent Member States remain opposed to the targeted depth ban. Defra policy officials have been in close and regular contact with fishing industry representatives working on this dossier and key representatives of the Deep Sea Conservation Coalition.

I am pleased to report that in a Council working party meeting on 3 September 2015, a read-through of the whole of the Presidency’s July compromise was achieved. The Presidency will shortly issue a new text for discussion in the group at the end of this month. Good support from key Member States with an interest was evident for the UK proposal to reinsert provisions into the Regulation confining deep sea fishing within the existing fishing footprint. The UK also led strong support for pressing ahead with agreeing a Council General Approach on a Regulation which was first proposed in 2012. We would like this to happen at November Council. I believe this is achievable, though failing this the next opportunity will be for the Dutch Presidency to agree a position by February 2016. My view is that if a final agreement could be reached with the European Parliament on the basis of the model outlined above, this would provide important new protections for deep sea species and vulnerable marine environments.

27 September 2015


EM 8845/15: PROPOSAL FOR A COUNCIL REGULATION AMENDING REGULATION (EU) NO 2015/104 AS REGARDS CERTAIN FISHING OPPORTUNITIES

EM: 5687/15: PROPOSAL FOR A COUNCIL REGULATION AMENDING REGULATION (EU) 2015/104 AS REGARDS CERTAIN FISHING OPPORTUNITIES

5687/15 ADD 1 ANNEX TO THE PROPOSAL FOR A COUNCIL REGULATION AMENDING REGULATION (EU) 2015/104 AS REGARDS CERTAIN FISHING OPPORTUNITIES

UPDATE ON AGREEMENT OF FIRST AND SECOND IN YEAR AMENDMENTS TO THE FISHING OPPORTUNITIES REGULATION FOR 2015: BASS MANAGEMENT MEASURES

I would like to provide an update on the agreement and implementation of the interim package of bass management measures that the UK has pressed for at EU level this year. This process included utilising Commission implementing powers for ‘immediate action’ to introduce related technical measures. The following legislative measures have featured in the related EMs listed above, and in further correspondence from earlier this year. Commission Implementing Regulation 2015/111 dated 26 January 2015 established emergency measures which closed the mid-water trawl spring fishery on spawning aggregations until 30 April 2015.

EM 5687-15: The first in-year amendment (Council Regulation 2015/523, dated 25 March 2015) to the fishing opportunities Regulation for 2015, which from a bass management perspective introduced a three fish daily bag limit per person for recreational anglers. This amendment, including unrelated fishing opportunities adjustments described in my letter of 12 March 2015, was agreed by written procedure on 25 March 2015, achieving a qualified majority, with the UK voting in favour.

EM 8845-15: The second in-year amendment (Council Regulation 2015/960 dated 19 June 2015) to the fishing opportunities Regulation for 2015, which for bass management purposes included introducing a monthly vessel bass catch limit by fishing gear groups and a ban on commercial fishing by EU vessels in Irish waters, excluding the 12 mile zone around the UK coast (see Annex 1 table below). This amendment, including unrelated amendments for other fish stocks that featured in the proposal as described in my EM of 9 June, was agreed as an ‘A point’ item on the agenda of the Economic and Financial Affairs (ECOFIN) Council meeting on 19 June 2015. The UK confirmed a position in favour in accordance with the voting intentions outlined in my letter of 9 June 2015 that accompanied the EM.

Commission Implementing Regulation 2015/1316 dated 30 July 2015, which utilised Commission powers for immediate action to conserve stocks by introducing an amendment to the EU Technical Conservation Regulation (EU 850/98) to increase the bass minimum conservation reference size (MCRS) to 42cm for both recreational and commercial sectors from 1 September 2015. This was agreed on 3 July 2015 in accordance with voting arrangements following the ‘examination procedure’, with the UK voting in favour.

Implementation

Although no additional legislative requirements for making mesh size adjustments have been applied at EU level, it is expected that the industry will be adjusting fishing gear when targeting bass against the new MCRS standard for bass at 42cm.

Monitoring will provide a picture of how the industry adapt to the new bass standard, and the related discard rates. Mesh size specifications could be applied at regional or national level if necessary if this approach proves unsuccessful, but for now industry have the opportunity to adapt their fishing practices to respond to the new MCRS standard in a way that best suits their fishing patterns. A combination of appropriate mesh size adjustments and, where the option is available, moving fishing activities away from those areas where undersized bass predominate, in accordance with local knowledge, may serve to achieve acceptable levels of selectivity.

There will be a significant continuing impact from the range of measures agreed for bass this year for fishermen while we work to improve the fortunes of the bass stock. The management measures applied will not be short term and further steps will be required for 2016 and beyond. While Defra cannot offer direct financial assistance, under the European Maritime and Fisheries Fund (EMFF) we will be looking to fund a number of fisheries initiatives in England which may be of help while fishermen adapt to these measures. Examples include:

Funding for marketing and processing sectors with an aim to encourage greater sale and consumption of under-exploited species.

Support for the inshore and small-scale fleets will include training and networking to facilitate knowledge exchange; and advisory services to assist businesses with their strategies.

Innovation and technical developments into commercially viable new areas and opportunities.

Investment in coastal communities and promotion of social cohesion i.e. through Fisheries Local Action Groups (FLAG).

The above options will enable local fishermen to come to us via their local Marine Management Organisation office to identify what may be useful to them – including help with gear purchase – when the EMFF scheme becomes operational in the coming months.

Next steps

I believe this initial package achieves a balanced approach, addressing the contribution of both commercial fisheries and recreational anglers to declining bass numbers. Determining the actual impact on landings and fishing mortality will need to be the subject of evaluation of monthly data from Member States for this year to help assess the overall effect of this interim package. We must build on this progress in negotiating action for next year, informed by the latest scientific advice, and in the development of regional multi-annual plans.

Aligned with this work at EU and regional level I have initiated a high-level review of our current domestic management measures, particularly for protection of bass nursery areas.

The latest scientific advice from the International Council for the Exploration of the Sea (ICES) is for catches in the Irish, Celtic and North Seas and the English Channel, for both commercial and recreational fisheries, for 2016 to be no more than 541 tonnes. This would mean a cut of 90% from landings at EU level in 2013, assuming a direct step to achieving the maximum sustainable yield (MSY) in 2016. In developing measures to be agreed for 2016 at Council this December, it will be necessary for the Commission and Member States to reach a view on how quickly to reach that objective. I believe that improving the sustainability prospects of bass will best serve the long term interests of the inshore fleet and other key sectors dependent on bass. We have made some important initial steps towards that aim at EU level this year.

27 September 2015

Annex: Table 1

EM 8845-15: The second in-year amendment (Council Regulation 2015/960 dated 19 June 2015) features the following in relation to bass:

Vessel monthly catch limits for bass for each gear group

Gear category and code Maximum catch of sea bass permitted per vessel per calendar month (in kg)

Mid water or pelagic trawls 1,500

All types of demersal trawls including Danish / Scottish seines

1,800

All gillnet, all drift net and fixed (trammel) net fisheries

1,000

All long lines or pole and line or rod and line fisheries

1,300

Purse seines 3,000

The limits apply to all vessel lengths and apply to the combined catches from any of the relevant areas during a calendar month. For vessels which use multiple gear types during a calendar month the lowest catch limit for any of those gears used will apply.

Prohibition on commercial fishing in the Celtic and Irish Seas

The measures also prohibit vessels to retain on board, tranship, relocate or land sea bass caught in waters to the west of Ireland, and the Celtic and Irish Seas (therefore applied in International Council for the Exploration of the Sea (ICES) divisions VIIb, VIIc, VIIj and VIIk, as well as in the waters of ICES divisions VIIa and VIIg that are outside 12 nautical miles of the United Kingdom).


Atmospheric emissions — (35693) 18167/13 + ADDs 1-7 (35694) 18170/13 + ADDs 1-7

Thank you for your letter of 31 July, providing an update on these two proposals.

We have noted that the trilogue discussions on the medium combustion plants proposal have resulted in agreement on a text which meets all the UK’s outstanding concerns, and that the measure is due to come into effect shortly. Given this, and that the proposal was cleared by our predecessors in November 2014, we are content to leave matters on that basis without reporting further to the House.

On the other hand, it is clear from what you say that more work needs to be done on the proposal setting emissions ceilings, and we think it sensible to await developments before reporting further to the House. When we do so, we would like to be able to address the points which our predecessors raised in the conclusions to their Report on 18 March 2015, which do not appear to have been dealt with in your latest letter.

16 September 2015


EU zootechnical legislation — 6444/14 (35809) 6445/14 (35810)

Thank you for your letter of 15 August, providing an update on the current state of play on the new Regulation.

We have noted that useful progress has been made since you wrote on 5 January, and that discussions are continuing in a Council Working Group. In view of this, we think it would be premature to make a further Report to the House at this stage, but we assume you will provide another update when those discussions have been completed, and we will consider matters further then.

16 September 2015


School milk and fruit schemes — 5958/14 (35785)

Thank you for your letter of 16 July, reporting that the Commission still sees these proposals as an important way to encourage the consumption of fresh fruit and vegetables and milk, and that, at the Council on 13 July, most Member States were in favour it resuming its evaluation of them.

We have noted this, and the concerns which the UK has about both the legal basis of the proposals and that the new requirement for educational measures on school milk could be very costly to administer and be too interventionist. Since you have undertaken to write again once the timetable is clearer and the Commission has published its evaluation report, we are content at this stage to await these further developments — though this might be a timely opportunity to remind you that we have yet to see the Government’s own evaluation.

16 September 2015

Letter from the Chair to Lord Gardiner

Protective measures against plant pestsDocument (34934) 9574/13 + ADDs 1-2

Thank you for your letter of 7 July confirming that a Council position on this proposal was agreed in June, and that trilogue discussions with the European Parliament and Commission would commence in the autumn, and were expected to be straightforward.

We note that the proposal meets all the UK’s main objectives, in that it will secure the introduction of risk-based import measures, but that you will be pursuing with the Commission the arrangements for small quantities of material in passenger baggage. Against this background, and the clearance which the previous Committee gave on 4 March 2015, we see no need for a further Report to the House.

9 September 2015


Medicated animal feed — (36338), 13196/14 + ADDs 1–3

Thank you for your letter of 7 July, setting out the latest position on this proposal. We note that it is still under consideration in the Council, that you are currently studying the numerous amendments put forward by the relevant European Parliament committees, and that you will provide further updates, probably towards the end of the current Presidency. We are content to leave matters on that basis.

9 September 2015


Veterinary medicinal products — (36344), 13289/14

Thank you for your letter of 7 July, setting out the latest position on this proposal. We note that it is still under consideration in the Council, that you are currently studying the numerous amendments put forward by the relevant European Parliament committees, and that you will provide further updates, probably towards the end of the current Presidency. We are content to leave matters on that basis.

9 September 2015


Animal health law — 9468/13 (34913) + ADDs 1–2

Thank you for your letter of 7 July.

We have noted that, although a vote in the Council has been deferred and much of the previous text remains unchanged, the list of diseases will now be set out in an Annex rather than in the Regulation itself, and that, as a consequence, the European Parliament is likely to have a greater locus over the content of the list (and any amendments to it) than originally envisaged. We have also noted that, although the Government is opposed to this change, it has not received support from a sufficient number of other Member States to secure a blocking minority, and that the proposal is thus likely to be formally agreed when a vote is taken.

Given that there is clearly very little the Government can now do to prevent this, and that it supports the text in other respects as representing a significant improvement on the present EU legislative framework for animal health, we do not think this development need affect the clearance given by our predecessors.

9 September 2015


Discards and technical conservation — 18021/13 (35675) + ADD 1

Thank you for your letter of 30 June, confirming that, although the European Parliament had raised a number of difficult issues on the text produced by the Council, this document has now been agreed, albeit after the 1 January 2015 deadline. Whilst the delay strikes us as having been eminently avoidable, the eventual adoption of the measure is clearly to be welcomed, and, since the proposal was cleared by the previous Committee some considerable time ago, we are content simply to note the current position.

9 September 2015


Organic food production: (35919), 8194/14 and (35917), 7956/14 + ADDs 1–5

Thank you for your letters of 21 May and 23 June, providing us with an update on these two documents.

We have noted that the Council was able on 16 June to reach a general agreement on the proposed Regulation which met earlier UK concerns, and that, although the European Parliament had yet to reach a decision at that stage, the Commission had said that, in view of the significant progress made, it no longer intended to withdraw the proposal.

Since this document has already been cleared by virtue of the debate held on European Committee on 6 January, we are content to note the latest position, and do not think it necessary to provide a further Report to the House.

9 September 2015


EM: 6444/14 PROPOSAL FOR A DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL AS REGARDS REFERENCES TO ZOOTECHNICAL LEGISLATION

6445/14 PROPOSAL FOR A REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL ON THE ZOOTECHNICAL AND GENEALOGICAL CONDITIONS FOR TRADE IN AND IMPORTS INTO THE UNION OF BREEDING ANIMALS AND THEIR GERMINAL PRODUCTS

I am writing to provide a further update on this proposal as promised in my letter of 5 January 2015.

Discussions have continued in Council Working Group meetings under the Latvian and Luxembourg Presidencies and revised texts have been developed. The European Parliament’s AGRI Committee has produced a draft report which will be subject to a vote in the Parliament’s Plenary session in mid September. The dossier is expected to go to attaches and COREPER in the autumn, and then to Council, possibly in very late 2015 or early 2016.

I am pleased to say that the latest texts are much more acceptable to the UK. The vast majority of delegated acts have been removed and we are content that the very few remaining are acceptable to the UK on legal and policy grounds. Essential issues are now dealt with in the basic act which gives greater clarity to industry and regulators. The proposed application of the official controls framework, which we and most other Member States thought very prescriptive and disproportionate, has been replaced by lighter touch arrangements. These are more acceptable and we can apply them in a sensible and flexible way in the UK.

We have continued to press our concerns about the extension of current provisions for bovine animals to other species. Under the proposal, the Commission would be able to set common rules on performance testing, genetic evaluation, and the designation of EU reference centres. We have received very limited support in pressing for these broader provisions to be removed. The Commission’s powers would need to be activated through implementing acts which would need the support of Member States. The Commission has said that there are no plans in the foreseeable future to activate these provisions beyond their current application.

The proposal provides an option for individual Member States to introduce national legislation that separates horse identification for animal health and food safety purposes. We had hoped for a mandatory approach that would better reflect the Commission’s five point Action Plan to address the recent horsemeat fraud but there is no support for this in the Working Group.

Amendments put forward by the European Parliament aim to highlight the importance of conserving and using animal genetic resources sustainably. This is in line with UK objectives.

We will continue to press for flexibility and proportionality in the remaining discussions in the Working Group. Overall, we consider that the dossier is in a much better position from the UK point of view compared with the original proposal.

15 August 2015


EM 18170/13 Proposal for a Directive of the European Parliament and of the Council on the limitation of emissions of certain pollutants into the air from medium combustion plants

EM 18167/13 Proposal for a Directive of the European Parliament and of the Council on the reduction of national emissions of certain atmospheric pollutants and amending Directive 2003/35/EC

I am writing to update you on the progress of the negotiations of the Medium Combustion Plants (MCP) Directive and the National Emission Ceilings (NEC) Directive.

On 6 May, the Environment, Public Health and Food Safety (ENVI) Committee in the European Parliament adopted its report on the MCP Directive and the rapporteur was granted a mandate to initiate trilogue. The report contained some welcome flexibilities, without materially reducing the air quality benefits expected by the MCP Directive. Such flexibility include an exemption for plants located on offshore oil and gas platforms and removal of mandatory, very strict emission limits in zones not compliant with air quality limits. These

very strict limits would have prevented local decisions being made on how best to reduce emissions based on contributions from all sources. However, the report also proposed earlier dates for application of emission limits to existing plant, retaining the overly stringent emission limits proposed by the Commission and exempting from the Directive plant operating a limited number of hours only in emergencies, which would lead to a disproportionate increase in costs to operators compared with the additional emission reductions achieved.

The trilogue process started on 21 May and a compromise was reached on 23 June which addressed the key UK concerns, ensuring that it will deliver an improvement to air quality without a disproportionate impact for businesses, energy security or low carbon technologies. In particular, the compromise provides the flexibility needed for plant located on offshore oil and gas platforms, backup generators supplying power in Scottish islands and plant driving gas compressors on the national grid and backup plant. It also allows Member States to consider the case for applying stricter emission limits in zones not compliant with air quality limits and retains the timescale proposed by the Commission for existing plant. Lastly, the emission limits were adjusted to ensure they are cost-effective for smaller plant and do not discourage uptake of sustainable technologies such as biomass or biogas.

A preliminary assessment indicated that the benefits from the final package will significantly outweigh its costs. It also includes all the key flexibilities which the UK had sought in the negotiations while materially retaining the air quality benefits from this Directive, therefore the UK supported it at COREPER on 30 June, as did a large majority of Member States. The European Parliament ENVI Committee also voted in favour of the compromise by a vast majority on 15 July. The compromise proposal will now be translated into the EU languages before a European Parliament vote in plenary, expected in October, followed by a vote in Council. Given the support in ENVI and COREPER, we expect the compromise proposal to be approved with no further amendments, and come into force in October or November 2015.

My officials have started preparations for transposition, which must be completed within two years of the Directive coming into force, and will be engaging with stakeholders throughout this process to ensure that national legislation is proportionate and effective in realising the air quality benefits of the Directive.

As regards the proposed National Emission Ceilings Directive, a revised Council text has been developed by the Latvian Presidency which seeks to streamline and reduce the administrative burden of the proposal. This addresses many of the UK concerns about the non-ceiling elements of the proposal such as the inclusion of methane and frequent updating of National Air Pollution Control Programmes. A further discussion on the text is due to take place on 29 September 2015. Ministers debated the proposed emissions ceilings at the Environment Council on 15 June 2015. The majority of Member States recognised the importance of the Directive to reduce the impacts of air pollution and stressed the need to ensure the level of the ceilings is realistic and deliverable. Some ministers called for the ceilings to be purely indicative. The Luxembourg Presidency has organised bilateral meetings

to discuss Member States concerns at the end of September with the aim of exploring a possible agreement at the Environment Council on 16 December 2015. My officials are continuing the analysis of the proposed ceilings, based on UK evidence, with a view to developing more detailed negotiating lines to feed into these discussions. I will keep the committee updated as this progresses.

The European Parliament has also been developing its position. On 23 March 2015, the Industry Research and Energy (ITRE) committee adopted an opinion on the proposal. The committee voted to add mercury to the scope of the Directive and set binding ceilings for 2025 as well as to delete methane. On 28 May 2015, the Agriculture and Rural Development (AGRI) committee adopted its opinion which proposes to delete methane from the scope of the Directive and provides for the level of ammonia ceilings to be reconsidered. The ENVI Committee, the lead committee on the proposal, adopted its report on 15 July 2015. They have adopted a very ambitious position which proposes stricter ceilings for all pollutants than those proposed by the Commission, binding ceilings in 2025, and additional regulation of mercury. There was however, strong support for deleting the shipping flexibility and for pushing the Commission to ensure EU legislation delivers (in particular by revising the test procedure for vehicle emissions to ensure emission standards are met in real driving conditions).

There will be a vote in the plenary of the European Parliament in the week commencing 26 October. Defra officials are working with MEPs and stakeholders ahead of the vote to try to ensure that the outcome is more closely aligned to the Council position and takes the UK’s concerns into account. If the outcome of the vote is closer to the Council position then the rapporteur could be expected to seek a negotiating mandate with a view to trilogues taking place in early 2016.

31 July 2015


5958/14: PROPOSAL FOR A REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL AMENDING REGULATION (EU) NO 1308/2013 AND REGULATION (EU) NO 1306/2013 AS REGARDS THE AID SCHEME FOR THE SUPPLY OF FRUIT AND VEGETABLES, BANANAS AND MILK IN THE EDUCATIONAL ESTABLISHMENTS

Our last exchange of letters on the school fruit and milk schemes was in March 2015. I promised I would provide a further update on the status of these proposals following the Commission’s formal evaluation exercise.

The Commission is due to publish its final assessment report in the next few days. However, we received a detailed briefing from Commissioner Hogan in Council on 13 July 2015. In summary, the report will confirm that school schemes are an important way to provide better

food to children and encourage consumption of fresh fruit and vegetables and dairy. Changes to the current schemes are needed to generate efficiencies and ensure that they are cost effective. In line with this evaluation, the Commission has asked the Council to resume its examination of the proposals.

During the discussion in Council, most Member States were in favour of resuming the negotiations. However, I emphasised my concerns about the unresolved question of the legal basis of the proposals. In November 2014, the Council sent a letter to the Commission asking for the legal basis of the proposal to be changed as provisions fixing the level of aid should be based on Article 43(3) TFEU (Council competence). The Commission has yet to respond to this letter.

In addition, I am concerned about the new requirement for educational measures for school milk set out in the Commission’s proposals. Whilst there is a role for these measures in terms of influencing healthy eating habits, they are potentially very costly to administer. Also, similar work is already being done by the dairy industry through its own campaigns and educational activities. The Commission’s proposals would allow it to set minimum thresholds and maximum ceilings for expenditure on educational measures. I believe that these elements of the proposal are disproportionate and too interventionist. I will continue to argue for greater flexibility at individual country level and the removal of requirements for a minimum level of spending.

The European Parliament adopted its position on these proposals on 27 May 2015 and has endorsed the start of inter-institutional negotiations. The Parliament largely supports the Commission’s approach and its key elements, namely bringing together the separate fruit and milk schemes and extending the requirements for accompanying educational measures to cover school milk. The Parliament has proposed that funding for school milk should rise by €20 million a year.

The Presidency has indicated that it will prioritise work on this dossier during the autumn. I will write to you again once the timetable is clearer and the Commission has published the final version of its evaluation report. I will also inform you of our analysis of the European Parliament’s position.

16 July 2015


13196/14 Proposal for a Regulation of the European Parliament and of the Council on the manufacture, placing on the market and use of medicated feed and repealing Council Directive 90/167/EEC

13196/14 ADD 1 Annexes to the Proposal for a Regulation of the European Parliament and of the Council on the manufacture, placing on the market and use of medicated feed and repealing Council Directive 90/167/EEC

13196/14 ADD 2 Commission Staff Working Document Impact Assessment Accompanying the document Regulation of the European Parliament and of the Council on the manufacture, placing on the market and use of medicated feed and repealing Council Directive 90/167/EEC

13196/14 ADD 3 Commission Staff Working Document Executive Summary of the Impact Assessment Accompanying the document Proposal for a Regulation of the European Parliament and of the Council on the manufacture, placing on the market and use of medicated feed and repealing Council Directive 90/167/EEC

Further to my letter of 4 March I am writing to provide an update on the above proposal.

Following publication of the proposal in September, there have been five council working parties, two held under the Italian Presidency and three under the Latvian presidency. The purpose of these meetings was to informally read through the text and provide the opportunity to ask the Commission for clarification of the draft. The first read through of the medicated feed proposal was completed at the February Council working party. In June an annotated text was received and the second read through began on 12 July. We expect further dates to be announced by the Luxembourg Presidency.

In your letter of 11 March 2015 you asked for clarification on the Commission’s intention with the term “examined” in Article 15 (5). The Commission has explained that the intention is that animals will require a physical examination before a vet can prescribe medicines. This remains a concern for the UK, however there appears to be a great deal of support for this addition from other Member States. Therefore the focus will be to include an exemption where remote prescribing can be acceptable in emergency circumstances where unnecessary suffering would otherwise take place.

The proposal is being considered in the Agriculture and Rural Development Committee (AGRI) and the Environment, Public Health and Safety Committee (ENVI) of the European Parliament. The AGRI committee has been allocated responsibility for this proposal and has nominated Clara Eugenia Aguilera García as the rapporteur. The rapporteur draft report was published on the 20th May 2015 and included 40 proposed amendments to the text. The ENVI committee has prepared a draft opinion and published it on 28 April 2015 and included 251 proposed amendments to the text. The AGRI report was discussed at a committee meeting on 16 June 2015. We are reviewing these proposed amendments to fully understand their impact and brief MEPs with our views.

I will provide a further progress update at the end of the read through process, which is expected towards the end of Luxembourg’s presidency.

7 July 2015


13289/14 Proposal for a Regulation of the European Parliament and of the Council on Veterinary Medicinal Products

13289/14 ADD1 Annexes to the proposal for a Regulation of the European Parliament and of the Council on veterinary medicinal products

13289/14 ADD 2 Commission Staff Working Document Impact Assessment Accompanying the document Proposal for a Regulation of the European Parliament and of the Council on veterinary medicinal products

13289/14 ADD 3 Commission Staff Working Document Executive Summary Of The Impact Assessment Accompanying the document Proposal for a Regulation of the European Parliament and of the Council on veterinary medicinal products

13240/14 Proposal for a Regulation of the European Parliament and of the Council amending Regulation (EC) No 726/2004 laying down Community procedures for the authorisation and supervision of medicinal products for human and veterinary use and establishing a European Medicines Agency

Further to my letter of 4 March I am writing to provide an update on the above proposal.

Since the proposal was published in September there have been eight council working parties, two held under the Italian Presidency and six under the Latvian Presidency. These meetings have continued the informal read through of the text whereby Member States have been given the opportunity to ask the Commission for clarification of the draft texts. Progress on the 150 Articles of the Veterinary Medicinal Products proposal has completed up to Article 97. Therefore the first read through is likely to continue until the end of the Presidency in December.

In the European Parliament the proposal has been considered by both the Committee on Agriculture and Rural Development (AGRI) and the Committee on Environment, Public Health and Food Safety (ENVI). The ENVI committee has been allocated responsibility for this proposal and has nominated Francoise Grosstête as the rapporteur. The rapporteur draft report was published on the 14 April 2015 and included 106 proposed amendments to the text. The AGRI committee has prepared a draft opinion and published it on 25 March 2015 and included 460 proposed amendments to the text. The AGRI report was discussed at a committee meeting on 16 June 2015. We are reviewing these proposed amendments to fully understand their impact and whether we support them.

I will provide a further progress update at the end of the read through process, which is expected towards the end of Luxembourg’s presidency.

7 July 2015

Letter from Lord Gardiner to the Chair

EM 9574/13 Proposal for a Regulation of the European Parliament and of the Council on protective measures against pests of plants

Further to Lord de Mauley’s letter of 23 February, I am writing to update you on the progress of the above proposal which is part of the “Smarter Rules for Safer Food” package. At the time of the last letter, negotiations on the proposal were proceeding rapidly and we felt it was possible that there could be an agreed Council text in June. My predecessor sought to clear the proposal from scrutiny before the dissolution of Parliament and the General Election based on the negotiating position outlined in his letter. I am grateful to your Committee for agreeing to this request.

Although the proposal did not reach the stage expected, there have been extensive discussions in the Council Working Party since February and, during these, we maintained our original negotiating position.. The discussions in the Council Working Party concluded in early June and the proposal has passed through attachés. On 30 June, COREPER agreed the Council position allowing the proposal to proceed to ‘trilogue’ discussions between the Commission, Council and the European Parliament.

We have been informally advised by the Luxembourg Presidency, that these discussions will commence in September. Upon the conclusion of those discussions which we believe are likely to be straight forward, it is likely that the Regulation will be published in mid-2016. This will be followed by a three year implementation period during which the Regulation’s tertiary legislation will be negotiated leading to its application in 2019/2020.

I am very pleased to report that overall the proposal meets all of the UK’s main objectives. In particular, it avoids an over restrictive import regime whilst securing the introduction of risk based measures which will ensure improved bio-security. The Devolved Administrations have been fully involved in the negotiations and are in agreement with the UK position.

With regards to the import strategy, as you know we were keen to see a strengthening of the existing measures in respect of new trades in order to address an important gap in the current regime. Although we are concerned that any measures must be proportionate to the risk and not in conflict with World Trade Organisation/Sanitary and Phytosanitary Agreement principles. Discussions on this issue have been challenging with opposing views from Member States, including lobbying for a very restrictive regime. This would have had serious trade implications and divert Member States’ resource away from higher risk pathways in the absence of a justifiable evidence base. We therefore could not support this position.

However, the UK and like-minded Member States were successful in negotiating a compromise which would see a subset of plant related imports subject to temporary prohibition pending a full risk assessment. In practice, this will apply to all ‘plants for planting’ which we judge to be high risk together with a limited set of plant produce deemed high risk against strict criteria (which the UK helped to develop to ensure a proportionate and evidence based approach). Full risk assessments would then follow, to be completed during the regulation’s implementation period (three years). We believe this is in line with our risk-based approach and objective for any restrictions to be focussed on high risk material.

Linked to this compromise is a measure to extend the requirement for a phytosanitary certificates when entering the EU beyond the current scope which covers plants for planting and some other risk plant produce, to all plants and plant products. Specifics such as an exemption list are to be determined through negotiation of tertiary legislation and we judged that this could divert resource from higher risk checks at the border (or require a significant increase in resource). This could also increase the burden on trades and government services in third countries, to inspect and issue phytosanitary certificates for a much wider range of plant commodities. However, this measure would provide valuable information on trade flows which we don’t currently hold and provide additional security on the health of plant material entering the EU. We therefore secured an agreement that a risk based approach would be taken to the level of border checks required for the additional material and that this could be decided by each Member State. We were therefore able to support the introduction of this measure on the basis that it was again in line with our risk based approach to strengthening plant protection.

Finally, one area in which we continue to press for our objectives to be met is in the passenger baggage concession. We have previously highlighted the complexity of the proposal relating to this concession and our concern that it will lead to confusion for both travellers and officials at the point of entry. Despite our representations on this issue, insufficient Member States shared our concerns to result in a significant redraft of the proposed text. However, the Commission has agreed the benefit of simplification and to take this into account when drafting the Implementing Act for this measure. We will therefore continue to press for a simplified concession during the negotiations on this legislation.

I hope this provides a useful update for the Committee and I will continue to keep you informed of developments.

7 July 2015


EM: 9468/13 Regulation of the European Parliament and of the Council on Animal Health

In March this year the Committee granted scrutiny clearance for the EU Animal Health Regulation and I agreed to keep the Committee updated on significant developments on the dossier.

The aim of the Regulation is to set a legal basis for a common EU animal health policy and a single, simplified, transparent, flexible and clear regulatory framework for animal health. It places emphasis on disease prevention in line with the vision set out in the EU Animal Health Strategy. The Regulation forms part of the EU Smarter Rules for Safer Food package, which also includes live proposals on Official Controls and Plant Health, on which you’ll be receiving separate updates.

When I last wrote to you, the trilogue between the Council, Commission and European Parliament had just begun. I was broadly satisfied with the agreed Council text and expected to vote in support of the Regulation at the Council of Ministers in April provided that no significant changes were made during the trilogue process. Trilogue took longer than the Latvian Presidency originally anticipated and finally concluded on 10 June with a provisional political agreement reached. A vote at Council of Ministers has not yet taken place and is now not expected until the autumn. Shortly after this vote, we expect the Regulation to be published in the Official Journal but it will only come into force after a period of five years. This will give the Commission three years to make the tertiary legislation which will provide much of the technical detail required once large numbers of EU instruments are repealed in 2020. Then the UK and all other Member States will have the remaining two years to review and revise their existing domestic legislation in all these areas.

Much of the agreed Council text remains unchanged and contains a number of welcome outcomes, which we have worked hard to secure:

The Regulation will still deliver greater regulatory simplicity by focusing on outcomes rather than process and it contains flexibility to manage disease threats appropriately according to risk, evidence and science.

It should, along with the Official Controls Regulation, also provide opportunities for earned recognition.

An appropriate transition period has been retained, including a period of three years to negotiate tertiary legislation and a further two years for Member States’ domestic implementation.

In spite of pressure from the European Parliament to widen the scope, a tight focus on animal health remains, with issues such as anti-microbial resistance and animal welfare, covered by separate legislative initiatives; the requirement to consider impacts on biodiversity before imposing disease control measures has also been strengthened.

A few unexpected policy issues emerged late in the trilogue discussions. Two of these issues, on pets and equine identification, did not cross red lines as agreed with the Committee and there is potential to solve them later when the detailed tertiary legislation is negotiated.

The third issue did, however, cross a red line. This entails a change to the way in which the disease listing is handled. I was satisfied with the original Council position on this, as it would allow flexibility by listing only five key diseases in the Regulation itself and the rest in an Implementing Act, with details to be determined by the European Commission with input from Member States’ experts. Scrutiny Committee granted clearance based on this approach.

The European Parliament, having conceded on a large number of other points, was unable to agree to this solution. The compromise which emerged was to contain the list of diseases in an Annex to the Regulation, amended or supplemented by Delegated Act. The consequences of this are primarily procedural but mean the European Parliament will now have some influence over the content of the disease list and any subsequent changes to it. This fundamentally goes against the government position that technical matters should be determined by experts. The approach won’t however impact our ability to react quickly to new or emerging diseases, for which there are separate provisions and the list will still be reviewed during the transition phase (and whenever new scientific evidence comes to light).

When the Latvian Presidency sought a mandate from Coreper at the end of April to agree to this approach, the UK therefore voted against. Four other Member States (Slovenia, Germany, Sweden and Austria) also voted against. Despite this, a blocking minority was not secured, the revised mandate was issued and agreement was subsequently reached with the Commission and the European Parliament. The UK maintained its position in a final Coreper vote on 10 June, but again was in the minority (with only Austria joined us in voting against this time, Slovenia abstained and all other Member States supported); the content of the Regulation was therefore agreed.

Although there was no vote at Council of Ministers on 16 June, I made a statement when the Regulation came up under ‘Any Other Business’ clarifying the UK position and expressing disappointment around the changes to disease listing. A final vote for approval is expected in the autumn at which I will maintain the UK position by voting against.

We continue to plan for the implementation of the Regulation following this vote, including how we will ensure that our negotiating principles are adhered to when the detailed tertiary legislation is developed and will keep the Committee updated as the implementation phase progresses.

7 July 2015


EM 18021/13 – Proposal for a Regulation of the European Parliament and of the Council amending Council Regulations (EC) No 850/98, (EC) No 2187/2005, (EC) No 1967/2006, (EC) No 1098/2007, No 254/2002, (EC) No 2347/2002 and (EC) No 1224/2009 and repealing (EC) No 1434/98 as regards the landing obligation

I am pleased to report that the above proposal, following political agreement, has completed the adoption process and has now been published (Regulation (EU) 2015/812 of the European Parliament and of the Council of 20 May 20151).

As you will recall the intention of this regulation is to remove or adapt provisions in the current EU technical and control fisheries legislation that are inconsistent with the principle and application of the landing obligation. This is a holding strategy – a ‘quick fix’ – to enable attention to be given to a complete overhaul of the relevant fisheries legislation, beginning with the technical conservation measures.

I attach an analysis table* which begins with an overview of the salient features of this amending regulation, before moving on to more detailed analysis by amended Regulation and article.

We need the overhaul, to move to a new management model which focuses on the ‘outputs’ – the actual catches at sea – rather than the current ‘inputs’ model of technical specifications. This will enable fishermen to determine how best to operate in accordance with their available catch limits.

The European Commission completed its public consultation for this overhaul last year, and has been carrying out some additional preparatory work on regionalised structure and principles at EU fisheries director and official level. We anticipate a proposal being brought forward probably early next year, which may be likely to take two years to develop and reach agreement.

30 June 2015*(not published here but available from DEFRA)


EM 7956/14 PROPOSAL FOR A REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL ON ORGANIC PRODUCTION AND LABELLING OF ORGANIC PRODUCTS, AMENDING REGULATION (EU) NO XXX/XXX OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL [OFFICIAL CONTROLS REGULATION] AND REPEALING COUNCIL REGULATION (EC) NO 834/2007

8194/14 COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL

1 http://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32015R0812&from=EN

http://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32015R0812&from=EN

COMMITTEE AND THE COMMITTEE OF THE REGIONS ACTION PLAN FOR THE FUTURE OF ORGANIC PRODUCTION IN THE EUROPEAN UNION

I am writing to update you following the EU Agriculture Council meeting on 16 June at which agreement was reached on a General Approach on the above dossier.

In my letter of 21 May, I said that two key issues had prevented a vote taking place at the EU Agriculture Council on 11 May. Those issues were the frequency of physical inspections and the approach to be taken on the presence of non-authorised substances.

A final compromise text was distributed on 9 June which allowed for risk-based inspections with a minimum frequency of every three years for low risk operators. It also removed specific thresholds in respect of the approach to be taken on the presence of non-authorised substances. Instead, it required an investigation to be carried out when residues are found to determine the source and cause. Products would only be prevented from being marketed as organic if contamination was the result of deliberate use or was avoidable in the production process. As a compromise, and for a transitional period until the end of 2021, those countries currently using thresholds could continue to do so provided that they do not prohibit, restrict or impede the placing on the market of organic products in other Member States.

This text formed the basis for negotiations at EU Agriculture Council on 16 June. In the initial table round I made clear that the UK was not prepared to accept any significant changes at this late stage. On physical inspections, the maximum frequency between inspections was changed to 30 months. The transitional period for those Member States operating thresholds was reduced to an end date of 31 December 2020 and applies only to those Member States that have them in operation this year. The UK was able to support these compromises and agreement was reached on a General Approach via a Qualified Majority Vote.

As you know, we had major concerns with this proposal from the outset because of the potential it had to stymie growth and increase regulatory burdens. The General Approach that was agreed has moved substantially away from that position and should now have a net positive impact for UK organic operators.

23 June 2015


EM 7956/14 Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on organic production and labelling of organic products, amending Regulation (EU) No XXX/XXX of the European Parliament and of the Council [Official controls Regulation] and repealing Council Regulation (EC) No 834/2007

8194/14 COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS Action Plan for the future of Organic Production in the European Union

l am writing to update you on the progress of negotiations after the 11 May EU Agriculture Council meeting, further to your letter of 11 March on the above proposal.

The Latvian Presidency produced a number of compromise texts which aimed to reach agreement on a General Approach at EU Agriculture Council on 11 May. Despite the progress made, Member States (MS) remained divided on two key issues and a vote was not taken. Those issues were i) the frequency of physical inspections and ii) the approach taken on the presence of non-authorised substances.

In an attempt to reach some level of consensus, the Presidency proposed two options: Option 1 introduces a requirement to carry out an investigation when non-authorised substances are found as well as a ban on marketing products as organic if the presence of those substances is intentional or if the precautionary measures taken were inadequate. Option 2 is presents a more complex (and burdensome) approach requiring different actions to be taken depending upon the level of non-authorised substances discovered against prescribed thresholds. Products containing substances above a certain threshold would lose their organic status.

The UK opposed an automatic decertification threshold and therefore signalled support for Option 1. This Option was supported by a majority of MS and the Presidency. However, a number of other MS and the Commission opposed it during the discussions, resulting in a deadlock.

The other issue that MS could not agree on was the requirement for an annual physical inspection as part of the organic control regime. We have previously supported the removal of a requirement in the existing Regulation for an annual physical inspection in favour of a risk based approach but a number of other MS were not in favour of this. The Presidency compromise text introduced a minimum inspection frequency of 2 years and this was changed to 3 years in a subsequent text tabled during the Council meeting. Whilst we would prefer a maximum frequency of 3 years in order to reduce burdens, both limits are an improvement compared to the current Regulation so we can agree to either.

I have previously highlighted the trade regime as a key outstanding issue. The Commission has now recognised MS concerns about a strict compliance regime and has proposed an acceptable approach which addresses our concerns.

Before the EU Agriculture Council on 11 May, further progress had also been made on the exemption for low risk retailers. This had been returned to the existing status quo allowing such operators to be exempt from the Control Regime. However, during EU Agriculture

Council the Presidency presented a text that refined this by limiting the exemption to micro-enterprises and those selling pre-packaged products i.e. meaning that all other retailers would come within scope of organic controls. Whilst this is still an improvement by comparison to the original text, there seems little support for it, so the UK will continue to push for greater flexibility in this issue.

In terms of next steps we await further details about how the Presidency proposes to handle negotiations at the 16 June Agriculture and Fisheries Council meeting.

21 May 2015

Food Standards AgencyNo correspondence sent or received.

Foreign and Commonwealth OfficeLetter from the Chair to David Lidington

European Climate Diplomacy


Whilst we do not think adoption by the Council is a pre-requisite for depositing a document, we note that the Climate Diplomacy Action Plan is a work in progress, with the High Representative and the Commission having been asked to develop an elaborated Plan, and to report back this summer. In view of this, we will not press our request for it to be deposited at this stage, and are content to await the finalisation of the Plan, when we would expect it to be deposited in accordance with our Standing Orders.

27 April 2016

Letter from the Chair to David Lidington

Commission/EEAS and scrutiny procedures: dilatoriness and over-use of privacy markings

The Committee has asked me to thank you for your letters of 4 and 9 March, and to respond on its behalf.

We note the action that you and your officials have taken with the Commission and EEAS/Council secretariat, as well as within the FCO, and are naturally pleased that you and they plan to carry on in the same vein. In the first instance, we look forward to receiving a copy of the EU High Representative/Vice-President’s response to your letter of 4 March to her.

So far as the use of privacy markings are concerned, i.e., limité and restreint, we hope that you and your officials will not only continue to, as you put it, challenge any inappropriate use by the EU institutions (as with the draft Council Decision on the most recent mandate of the EUSR to the Sahel) but also press them to lift these markings at the earliest opportunity.

For example, the Committee recently reported on the outcome of the EEAS’s Strategic Review of CSDP engagement in Somalia. The review itself still being restreint, this was on the basis of a letter from you. Grateful as the Committee was for the information that you provided, it nonetheless felt compelled to express its frustration at the seeming unwillingness of the EEAS, once the need for private discussion has passed, to lift privacy markings. As the Committee said, it has made clear on many previous occasions that it does not seek to challenge the need for such privacy during the discussion stage: but, by the same token, can see no good reason, once the Council has agreed such a Review, why it should not, as a matter of course, be put into the public domain. The Committee very much hopes that you

and your officials will likewise make the same points in your ongoing discussion with the Commission, EEAS and Council secretariat.

23 March 2016


Interinstitutional Agreement on Better Law-Making (36888 & 37471)

Thank you for your letter of 3 March on the Interinstitutional Agreement on Better Regulation – now an agreement on “Better Law-Making”.

As it indicated in its Report of 3 February the Committee is disappointed with the delay in depositing provisional final text, compounded by the fact that the Government’s view on the policy implications has only been provided to the Committee some weeks after the debate in European Committee C which cleared these documents. We do not find the handling of this matter acceptable.

We are however grateful for the belated information provided.

We remain concerned about transparency of the EU legislative process but are taking this issue up by other means. We have provided a response to the European Ombudsman’s consultation on trilogues and have decided to launch our own inquiry into the transparency of Council decision making.

23 March 2016


Proposed Council Regulation determining the emoluments of EU high-level public office holders (37507) 5406/16

Thank you for your letter of 26 February 2016, explaining why earlier versions of this text could not be deposited. The Committee welcomes the efforts of your officials to lift the Limité classifications sooner, given that the question of how and what top EU public office holders are paid is, of course, of interest to the public.

9 March 2016

Letter from David Lidington to the Chair

As mentioned in my letter to you of 4 March, I have written to HRVP Mogherini on the subject of scrutiny. I attach a copy of the letter that was despatched on 4 March.

4 March 2016


Commission/EEAS (European External Action Service) Dilatoriness and Scrutiny Procedures — (37144) and (37145); EEAS (European External Action Service) overuse of the Limité marking (37201)

Thank you for letters of 3 February regarding the EEAS’s engagement with UK parliamentary scrutiny procedures and use of the limité marking. I apologise for the delay in my response.

I welcome the Committee’s recognition of the work that UK officials have been doing to raise awareness and understanding among the EU institutions of the requirements and timescales of the UK parliamentary scrutiny process. I was also grateful for your recognition of the efforts of officials to challenge any inappropriate use by the EU institutions of the limité marking. As you know, the Government agreed stronger internal guidance in early 2015 to ensure that Departments know when and how to challenge.

I am pleased to report a marked improvement in the second half of last year in the EEAS providing documents within the timescales required for our parliamentary scrutiny. This has contributed to the Government reducing scrutiny overrides (in the period from July to December 2015 there were 54 overrides, compared to 89 from January to June 2015). As you know, the majority of these overrides related to restrictive measures, which are often adopted at short notice.

There is still room for improvement. You referred in your letter to the documents issued in September 2015 on the restrictive measures relating to the situation in Ukraine. I can assure you that my officials raised the late circulation of these documents with the EEAS. Since then, documents on this subject were provided in adequate time for parliamentary scrutiny to take place.

It is important, of course, to maintain, and where possible improve, the Government’s scrutiny performance and the understanding in Brussels of our scrutiny processes. I will be writing shortly to HRVP Mogherini to thank her for the steps that the EEAS has taken to improve performance in this area and to emphasise the importance of maintaining this improved level. I will share a copy of my letter with the Committee and will keep them informed on the correspondence with HRVP Mogherini.

UK officials will also visit their counterparts in the EEAS and other EU institutions again this year to reinforce that message and to provide further briefing on UK scrutiny processes. We will also continue to build capability within Government, including through new scrutiny training materials which will be released through the FCO’s Diplomatic Academy.

4 March 2016


INTERINSTITUTIONAL AGREEMENT ON BETTER REGULATION

Further to the scrutiny debate and clearance by the House of the Government’s Explanatory Memorandum on the Interinstitutional Agreement on Better Regulation, the Government has now adopted a position on the compromise IIA text, and I am now able to set this out in further detail. We expect the IIA to be adopted in the General Affairs Council on 15 March 2016. The text of the IIA has not changed.

The Government welcomes the measures in the IIA to strengthen the institutional balance, provide for a more transparent and effective legislative process and minimise the regulatory burden on EU businesses. These are important steps in the right direction. In terms of the IIA’s specific provisions, I highlight the following:

On Better Regulation, the IIA now includes the first explicit, formal commitment, binding all institutions to take action to reduce regulatory burdens. Specifically it commits the Commission to exploring the introduction of objectives for burden reduction in specific sectors. This is a major step forward and a direct result of UK Government’s lobbying of all three institutions. The IIA provides for a strengthened definition of Impact Assessments (IA) which now includes “potential short and long-term costs”, the impact on competitiveness of a proposal, and subsidiarity and proportionality tests. IAs will, in future, also include “particular regard for Small and Medium Enterprises (SMEs)” through “Think Small First” principles. An IA can now be scrutinised and criticised if it does not live up to this commitment. On consultation, as part of its own impact assessment process the Commission will commit to consulting as widely as possible, particularly encouraging the direct participation of SMEs. Agreement has also been reached on the role of co-legislators in carrying out impact assessments on substantial amendments made to a proposal. This is an important statement of principle, following successful UK lobbying, and it will be important to follow this up to ensure the Council – historically the weakest of the institutions in this area – lives up to its commitments.

On legislative programming, the IIA reflects the UK Government’s call for a more systematic and timely consultation of co-legislators in agreeing the Commission’s annual work programme. It also preserves the interinstitutional balance among co-legislators, agreeing clear provisions to hold the Commission to account to deliver their annual work programmes in line with the promised improvements to the process. This includes timely and consistent exchange of information between the institutions; a joint declaration on institutional programming for the coming year; and regular monitoring of the implementation of the work programme throughout the year. On multiannual programming, the IIA now commits the institutions to an exchange of views on policy objectives and priorities for the new term; joint conclusions, as appropriate, endorsed by the Presidents of the three institutions; and their subsequent regular review. Importantly, the IIA does not impinge on the operation of the

European Council and its role in setting the EU’s strategic agenda. The IIA negotiators recognised that the status of the European Council sits above and outside the level of agreement in such an IIA.

On transparency, the parity among institutional powers has also been reflected in the provisions around transparency of the legislative process. The IIA commits the institutions to further improving legislative processes in line with the principles of cooperation, transparency, accountability and efficiency. Enhanced transparency will also be reflected through the closer cooperation among institutions during the legislative process; improved communication to the public; and a dedicated joint database on the state of play of legislative files.

On Delegated and Implementing Acts, the Government specifically welcomes the agreement on the Common Understanding on Delegated Acts. The Commission is now committed to the systematic consultation of national experts and providing greater transparency when agreeing Delegated Acts. This includes carrying out Impact Assessments on Delegated and Implementing Acts and a joint functional register of delegated acts to be established by end 2017. The IIA also protects the current flexibility around the choice between Delegated or Implementing acts. Further work will be taken forward by the Institutions outside of the IIA to see if agreement can be reached on possible criteria for determining when to use Delegated or Implementing acts.

The Government would have liked the IIA to be more ambitious in a number of areas. These include:

Role of National Parliaments. The IIA text acknowledges the need for national parliaments to be able to exercise fully their prerogatives under the Treaties and commits the EU Institutions, in respect of their legislative work, to be fully compliant with subsidiarity and proportionality principles. The Commission and a clear majority of Member States felt that this was a matter for debate between the Commission and national parliaments directly and that the IIA was not the appropriate instrument through which to deal with the question. The influence of the European Parliament during negotiations also risked undermining the chances of success on this objective. As you know, the International Law Decision agreed by HOSGs at the February European Council, included measures which will strengthen the role of National Parliaments.

Burden reduction target. The commitment in the IIA to objectives for reducing the burden of legislation is a significant step forward and has been further consolidated in the text of the Commission’s Declaration on a subsidiarity implementation mechanism and a burden reduction implementation mechanism (Annex VI, European

Council Conclusions, 18-19 February 2016, EUCO 1/16). This is a major step forward and a direct result of the UK Government’s lobbying of all three institutions. However, the extent to which this ultimately translates into reduced regulatory burdens for EU businesses will depend on implementation. The Government will continue to work with the European Commission on which sectors should be prioritised and encourage them to start consideration of sectors as soon as possible after the formal adoption of the IIA.

Independent Impact Assessment Board. The proposal for the creation of a new board did not gain traction, either among Member States or other Institutions. However, through the UK Government’s and other Member State’s lobbying the IIA prevented the inclusion of text referring to a quality assurance panel, which might have severely limited our chances of making further progress on independent validation of Impact Assessments. The IIA also embeds the role of the Commission’s existing Regulatory Scrutiny Board, which was established last year by First Vice-President Timmermans. The inclusion for the first time of a number of independent members represents a step towards the Government’s objective of achieving a fully independent board in the future.

The final IIA text also includes a number of new provisions, which were not part of the initial proposal. These include:

Annual Burden Survey. The provision commits the Commission to present annually an overview of the results of the Union’s efforts to simplify legislation. The Government is yet to receive further detail on how this would work in practice. Nevertheless, the Government welcomes the signal from the other institutions that they are serious about reducing the burden of EU legislation and will engage actively with this process.

Withdrawals. A new obligation on the Commission to ‘provide reasons, and if applicable, an indication of intended subsequent steps.... and take account of and respond to the co-legislators’ positions’. The Commission already largely adopts this practice so this should not markedly affect the pace of withdrawals of legislative proposals.

Own-initiative requests. An obligation on the Commission to respond to requests for proposals from the co-legislators, and to give reasons for its decision whether or not to take forward such proposals. This provision is likely to benefit the European Parliament given the numerous own-initiative reports it produces annually. However, the IIA effectively reiterates what is said in articles 225 and 241 TFEU and further stipulates how the Commission’s duty to respond is to be exercised. Article 225

TFEU relates to requests by the European Parliament for the Commission to bring forward proposals. Article 241 TFEU relates to requests from the Council for the Commission to undertake studies and then submit any appropriate proposals.

Review clauses commit all institutions to consider systematically the use of review clauses in legislation. This is a positive step towards embedding evaluations of legislation, providing opportunities for legislation to be updated, repealed or otherwise amended.

International Agreements. The IIA contains an agreement for the three Institutions to negotiate improved practical arrangements for co-operation and information sharing regarding international agreements, while acknowledging the formal roles of the three institutions.

Overall, the Government welcomes the set of provisions set out in the final text of the IIA. The IIA represents an advance over the existing 2003 IIA in key areas and maintains the institutional balance between the Council, European Parliament and Commission. It also strengthens the better regulation provisions in a number of areas where the UK Government has continually pressed for progress. Implementation of the IIA will be the key to maximising the potential benefits of the agreement.

This should be read in conjunction with the renegotiation deal which together represents significant progress on the Government’s priorities.

3 March 2016


I am writing to inform you of the EU’s ‘Climate Diplomacy Action Plan’: a working document produced by the European External Action Service (EEAS) and European Commission for consideration by EU Member States.The plan proposes continued EU foreign policy measures and actions to encourage implementation of the global agreement on climate change reached in Paris in December 2015. The Foreign Secretary reaffirmed the importance of continuing this diplomacy at the EU Foreign Affairs Council on 15 February, at which conclusions setting out the parameters of the action plan were adopted.

The UK supported EU climate diplomacy plans ahead of COP21 to help deliver our objectives for an agreement that kept us within reach of limiting global temperature rises to 2 degrees. That reduces the risk of dangerous climate impacts affecting the UK and our international partners. It also signals the transition to a low carbon economy from which the

UK is well placed to take advantage. The Paris Agreement at COP21 was a good outcome for the UK.

The plan will increase EU credibility when pressing for the implementation of the Paris Agreement with other countries. There is much in the plan that could help to improve the co-ordination of foreign policy resource in support of HMG climate goals. While supporting further cooperation in areas that will add value, the UK will continue to work to ensure that developments in this area do not change the balance of competence between Member States and the EU on climate change. We will also stress the importance of making the most effective use of existing EU foreign policy resources.Whilst officials are working with the EEAS to develop an elaborated action plan, I wanted to outline our approach and assure you we will remain alive to any potential future scrutiny implications.

26 February 2016


Proposal for a Council Regulation determining the emoluments of EU high-level public office holders (37507), 5406/16

Thank you for your letter of 24 February 2016, confirming that your Committee has considered the above document and decided to clear it from scrutiny. In granting clearance, you asked why the initial texts examined on 3, 11, and 17 December 2015 were not deposited, or why the earlier revised text was not deposited as soon as it became available in January.

When the initial texts were examined on 3, 11, and 17 December, negotiations on the content were still ongoing and all the documents were marked Limité. Therefore at that point we were unable to deposit them. Despite repeated requests, the Luxembourg Presidency did not agree to publish these documents without the Limité marking.

Negotiations on the Regulation continued under the Dutch Presidency. Whilst you note in your letter that a revised and entirely reformatted version of the text was presented on 12 January 2016, this version of the text remained Limité, subject to change and legal and linguistic checking.

On 3 February 2016, UKRep officials advised that there would only be small legal linguistic changes in the final version; therefore the near final text was able to be deposited. I would like to emphasise that my officials have pushed throughout to get a non-Limité version of the Regulation that was as close as possible to being a finalised version of the text, in order that the text could be deposited.

26 February 2016


Proposed Council Decision on the budget for the EUSR for Human Rights — 1 March 2016 to 28 February 2017 — (37453)

Thank you for your letter of 18 February 2016 informing us of the adoption of the proposed Council Decision. The Committee was grateful for your prompt response.

24 February 2016


OTNYR Council Decision on the European Union Special Representative for Human Rights

The FCO’s Explanatory Memorandum of 14 January about the proposed budget for the EU Special Representative for Human Rights was cleared from scrutiny last month. However, the Committee asked to be informed of the final outcome of the negotiation on the amended Council Decision to provide the EUR 825,000 budget of the EUSR for the period from 1 March 2016 to 28 February 2017. I am now able to inform the Committee that the Foreign Affairs Council adopted the Council Decision on 15 February 2016; no further changes were made to the proposal.

18 February 2016


Commission/EEAS (European External Action Service) Dilatoriness and Scrutiny Procedures — (37144) and (37145)

You will recall that, though the restrictive measures relating to the situation in Ukraine were cleared without a substantive Report,2 I wrote to you on 21 October as you described yourself as “frustrated” that this scrutiny override “arose due to the late circulation of documents by the EEAS”. You said that you would be writing to HR/VP Mogherini to express your disappointment and re-iterate the importance of national scrutiny processes; and that your officials would be seeking to “meet the EEAS in order to explore these issues and emphasise our concerns”.

The Committee noted that this sort of EEAS dilatoriness was not altogether unprecedented, and that you had written on previous occasions both to Ms Mogherini and her predecessor,

2 Restrictions imposed on persons identified as responsible for the misappropriation of Ukrainian state funds (37144-5).

Baroness Ashton; and asked you to report back on the HR’s and EEAS’s response. We also asked to see the full “paper trail” of this past and prospective correspondence.

It would seem that you have yet to send that letter, which you say you will “share” with the Committee. But you go on to say that any response will be regarded as “private correspondence”. We are puzzled by this: you have not regarded previous such responses in this way, and we can see no reason why they should be in future. What you and the HR say to each other about the way in which the organisations she leads handle the scrutiny of parliamentary business should be a matter of public record, and we hope that you will now acknowledge this.

In the meantime, we have read with interest what UK officials have been doing with their counterparts to sharpen up Commission/EEAS performance, and note that you now believe that there is now a greater understanding of our scrutiny requirements within the EEAS and Commission. We are grateful for FCO efforts on this, but improved understanding is one thing; it is improved performance that counts.

As you know, we, too, accept that there will be some exceptions that will require a short turnaround. But we also agree that this should not “replace the need for the EEAS to provide documents in a reasonable timeframe in all possible cases”. The Committee accordingly notes that you will “continue to raise the problem of late circulation at Council working groups and through engagement at all levels within the EEAS to ensure the UK Parliamentary scrutiny procedures are understood”.

We also note and are grateful for, your assurances that officials continue to push back when the limité marking has been used incorrectly. This is a matter we will keep under review.

3 February 2016


EEAS (European External Action Service) overuse of the Limité marking (37201)

You responded in your letter of 17 December last to the Committee’s observations when it finally cleared the draft Council Decision on the European Union Special Representative (EUSR) mandate and the appointment of the new EUSR. You will recall that the Committee did so with reservations, saying that:

there appeared to be no good reason for this; on the contrary, it seemed to be a practice adopted by the EEAS without consultation that served only to undermine proper, prior parliamentary scrutiny;

the implication in your letter about the new EUSR that, in agreeing to postpone the adoption of the Council Decision until 8 December, the EEAS was doing the Committee some sort of service, was misplaced;

this “extraordinary measure” had been taken in recognition that this appointment had “come so late”, thus prolonging legal uncertainty over the status of the EUSR Sahel’s office, which had been without a legal mandate since 31 October, was a situation entirely of the EEAS’ and RELEX’s making; and

the answer was simple: put forward draft Council Decisions without unnecessary privacy markings and that contain all the relevant information in the first instance.

That last bullet point should remain the yardstick. The Committee is accordingly grateful for your assurances that your officials push back when they feel the marking has been used incorrectly and, in those instances, “proactively seek permission to share the document by removing the marking”. The Committee acknowledges that the marking properly protects some sensitive files, and is glad that, in such cases, “every effort” is made to give as much detail as possible in EMs and to provide the final public document quickly after adoption. The Committee also notes that your officials “regularly raise” the “challenge around the use of the Limité marking” when “engaging with the EU Institutions on scrutiny requirements”, and will “press this” when they visit them shortly, to continue to raise awareness of our parliamentary scrutiny system.

The Committee will do likewise when it visits Brussels later this year, and in the meantime will continue to monitor closely the extent to which the EEAS continues to use the Limité marking.

3 February 2016


Action Plan on Human Rights and Democracy 2015-19 (36999)

The Committee has asked me to respond to your letter of 20 January, providing a more detailed account of the Action Plan than was provided to us in your EM of 23 July. As you are aware, the debate on this document in European Committee B took place on Monday 25 January.

When we requested this information on 16 September, we asked for it to be provided in advance of the recommended debate. Unfortunately, the letter could not be considered at the Committee’s last meeting (20 January) before the debate as it was only received after the meeting. It was therefore not included in the debate pack. We would ask your officials to note that the Committee meets on Wednesdays, usually at 1.45 pm, and the deadline for submissions is noon on the Thursday before the meeting.

We look forward to receiving, in due course, the update that you have offered on the mid-term review of the Action Plan in 2017.

27 January 2016


European Security Strategy (37347) and European Defence Action Plan (37388)

The Committee has asked me to thank you for your letter of 14 January 2016 and to reply on its behalf. It would be helpful to recall the context.

As you know, the Committee has been seeking, over several years, to have such policy-making documents scrutinised prior to their adoption, by legislation or otherwise, not on doctrinal grounds, but precisely because, as the documents in question will define core activities, identify gaps and establish priorities, the questions that inevitably arise can be dealt with appropriately by the Committee, before the House is then presented with various faits accomplis via Council Decisions authorising and launching new activity about which it can then do very little.

You will also recall that the latest such endeavours were begun by the previous Committee in the run-up to the December 2013 “Defence” European Council — “DEC 13”, which was the first such European Council since 2007 — and continued during the follow-up. The picture then was of the then Government systematically frustrating the then Committee’s endeavours by a combination of challenging the depositing of a key document and/or delaying debate recommendations and/or shifting debates from the floor of the House to the European Committee.

The Committee has already pointed out that major issues about the EU’s involvement in defence, security and the “security-development” nexus are in play and the House must be enabled to play its proper role in the prior scrutiny of such matters. These documents will be politically important, since they will provide the framework for a great deal of subsequent CSDP- and ESDP-related activity (and, thus, expenditure).

You now again say that:

“It is as yet unclear how or if these documents will be adopted by the Council;

“although the UK will seek to influence these documents throughout their development, …they will not be formally negotiated by Member States;

“Where restrictive markings prevent us from being able to deposit these documents formally, we will aim to share them with the Committees in confidence.”

The Committee has already pointed out that whether or not a document is adopted via a Council Decision, or Council Conclusions, or otherwise is immaterial to the question of

whether it should be subject to deposit. So, too, whether or not Member States have been involved in their drafting.

This Committee (unlike its Lords’ counterparts) can only scrutinise documents that can be referred to openly, and those marked limité or restreint cannot. As the Cabinet Office would confirm, there are many Ministers in other departments who, bound by the same constraints, readily not only share the documents in confidence but provide full written insights in their Explanatory Memoranda without compromising either the privacy marking or the Government’s position if the “dossier” is still a work in progress.

The Committee takes your letter as confirmation that unless they are limité both the European Defence Action Plan and the HR’s European Security Strategy will be deposited for scrutiny, in good time, before they are adopted by the Council in Conclusions or otherwise — whatever format they are in, and by whoever they have been drafted. If they are so limité, we expect Explanatory Memoranda to deal with them.

27 January 2016


EU Action Plan on Human Rights and Democracy

I am writing in response to a request that the European Scrutiny Committee made in its report on the EU Action Plan on Human Rights and Democracy (document number 36999) for a fuller account of the Action Plan than that provided in the Department’s Explanatory Memorandum dated 23 July 2015. I apologise for the length of time that it has taken to respond to the Committee’s request, which was due to an oversight on the part of officials. But I hope that the information contained in this letter will be of assistance to the Committee, including in relation to the House’s forthcoming Committee debate on the Action Plan.

First, I wish to highlight that the new Action Plan represents considerable continuity in the EU’s external human rights and democracy policy. The EU remains committed to implementing the entire human rights and democracy agenda as reflected in the 2012 Strategic Framework for Human Rights and Democracy, which remains the overarching statement of commitment that guides the EU’s actions in this area. As stated in the Explanatory Memorandum, the new Action Plan for the period from 2015 until 2019 is designed to build on a previous Action Plan which ran from 2012 to 2014. An internal assessment by the European External Action Service (EEAS) and the European Commission concluded that the first Action Plan had helped to mainstream human rights considerations into the full range of EU external policies; it had encouraged EU institutions and partners collectively to address human rights challenges in a more systematic way; and it had contributed to enhancing EU visibility and accountability. The Action Plan acknowledges how the EU, as an important global trading bloc, can use its collective leverage in support of the promotion and protection of universal rights.

Chapter I of the new Action Plan (‘Boosting ownership of local actors’) is about delivering comprehensive support to public institutions that help to uphold human rights and democratic values, as well as on supporting the role of civil society. Specific actions include supporting the capacity of national human rights institutions, the integrity of electoral processes and the capacity of parliamentary institutions. An example of EU work in this field is a new mechanism to assist Human Rights Defenders at high risk, which was launched on 9 December. The new mechanism will provide physical protection, legal and medical support and trial and prison monitoring, funded by EUR 15 million until 2018 through the European Instrument for Democracy and Human Rights. It shows how the EU, through the Action Plan, can harness the combined resources of the Member States to tackle human rights abuses and violations in situations of concern. It aligns well with the UK’s commitment to challenge threats to civil society. At the same time, this approach allows individual Member States to exert their influence behind the scenes, where a nuanced approach is likely to be more effective. In Chapter II, the Action Plan addresses a range of specific thematic challenges including freedom of expression online and offline, freedom of religion or belief, combating torture and the death penalty, and women’s rights and gender equality. I welcome concentration of EU influence on these issues. Taking freedom of religion or belief as an example, the EU has systematically raised this issue with many partners at different levels of political dialogue, including in human rights dialogues and consultations. In 2014, the EU was particularly active in the case of Meriam Ibrahim, a Christian who had been sentenced to death in Sudan for adultery and apostasy. A joint statement was issued by the Presidents of the Commission, European Parliament and Council together with 20 religious leaders, including Muslims. The EU was at the forefront of the international efforts that ultimately helped in her acquittal and release. We continue to encourage the EU to play to its strengths in this area, which include leadership on resolutions about Freedom of Religion or Belief at successive sessions of the UN Human Rights Council.

EU visibility on such issues is enhanced by the engagement and statements of the EU High Representative and the EU Special Representative for Human Rights. High Representative Mogherini’s statement of 2 January, following 47 executions in Saudi Arabia that day, made clear the EU’s strong opposition to the use of the death penalty in all circumstances and called on the Saudi authorities to promote reconciliation between the different communities in the Kingdom, and on all actors to show restraint and responsibility.

The themes covered in Chapter II are reflected in the strategic objectives of the European Instrument for Democracy and Human Rights (EIDHR), which provides funding for many of the EU’s human rights projects. As the Committee may recall, last year the FCO submitted for scrutiny a European Court of Auditors’ report on EU support for the fight against torture and the abolition of the death penalty. The Court of Auditors’ overall assessment was broadly positive. Projects funded under the EIDHR were generally implemented by motivated civil society organisations with appropriate expertise and achieved sustainable results. However,

the report also made some recommendations, the first of which was the need to target resources better. In EU discussions on the Court of Auditors’ report, the UK stressed the importance of the recommendations. We ensured that the Foreign Affairs Council’s Conclusions on the report underlined the recommendation to target resources better. The Government will remain engaged with the EU funding process across all themes covered by the Action Plan, to ensure that spending is effective and aligned with UK objectives. The Action Plan is endorsed by all 28 Member States, though there are of course differences of approach and emphasis among the Member States in some areas of human rights policy. In relation to action 17 on economic, social and cultural rights, for example, when the Action Plan was adopted by the EU Foreign Affairs Council the UK made a minute statement to make clear that while we supported the appropriate promotion of these rights internationally, we had not ratified the Optional Protocol to the Covenant on Economic, Social and Cultural Rights and had no plans to do so. We will be firm in defending UK positions on human rights within the EU wherever necessary.

In Chapter III, the Action Plan addresses the need for a comprehensive human rights approach to conflicts and crises. Early warning of potential outbreaks of conflict or widespread human rights abuses is essential if we are to develop timely preventative interventions or rapid responses to developing crises. This includes the EU Conflict Early Warning System (EWS), of which the UK has been a strong and vocal supporter since its inception. We have cooperated closely with EEAS colleagues in the design of the system. In 2014, the EWS was gradually rolled out. EU Delegations in countries considered to be at risk of violent conflict in the medium to long term were asked to provide assessments and propose options for preventive action. The tools and methodology developed for the EWS include many human rights-related indicators, such as respect for the international human rights framework, gender equality, press freedom and respect for civil and political freedoms. More widespread use of the early warning system’s reporting across the EU institutions, including more use in decision making on Human Rights Policy Instruments and Development Instruments, is therefore something we would support.

The EU’s actions on international humanitarian law (IHL) are another example of complementary work by the UK and the EU. The UK has a strong history of upholding IHL. The EU Guidelines on promoting Compliance with IHL complement UK policy. An example of this in action is the training in IHL provided to the Malian Armed Forces as part of the EU’s training mission (EUTM). The UK is currently funding the deployment of two national experts, who are delivering the IHL training via EUTM. The EU’s human rights and democracy objectives in relation to Israel have focused notably on respect for the laws of armed conflict and international human rights law, including Israel’s responsibilities as an occupying power. The EU also supports policing and justice sector reform through the EU policing mission (EUPOLCOPPS) to advance policing standards in the Palestinian National Police, improving rule of law and accountability of the security forces.

The fourth chapter of the Action Plan is designed to foster better coherence and consistency across various areas of the EU’s external policies, including migration, trade and investment and development. The fifth and final chapter is about making more effective use of the various tools that the EU has developed, such as the EU’s Human Rights Guidelines, the Human Rights Country Strategies, the Election Observation Mission and the EU engagement with the UN and with regional organisations, such as the African Union and the Council of Europe. As with the other chapters, the proposed activities will help to amplify the UK’s own work and influence. The UN is a strong example of how working through the EU can help to deliver the UK’s human rights objectives. At the UN, members of the EU’s observer delegation coordinate closely on a wide range of country and thematic human rights issues. This coherent approach helps to amplify the UK’s messages; helps to increase our network of influence and the impact of our lobbying; and enables us to achieve goals that would be more difficult unilaterally. An example of this in action was the UN General Assembly Resolution adopted in December 2014 which reaffirmed the call for a moratorium on the use of the death penalty. The EU was at the forefront of a cross-regional alliance that promoted the resolution and its lobbying helped to obtain an unprecedented number of 117 votes in favour. At the same time, although a common position is desirable, the UK and every EU Member State is able to decide, speak on and vote in line with their national policy, as required.

The UK supports a comprehensive solution to the current migration crisis. We are playing a leading role, working to address the root causes and not just the consequences of migrant flows. We are at the forefront of the humanitarian response in Syria and the region. UK ships have saved thousands of lives in the Mediterranean and we are going after the people traffickers. The EU Action Plan reflects and complements the UK’s approach.

Since the General Election, the FCO has re-focussed its support for human rights, democracy and the rule of law on three mutually reinforcing themes: Democratic Values and the Rule of Law; Strengthening the Rules-Based International Order; and Human Rights for a Stable World.

I am satisfied that the UK can work successfully through the EU Action Plan in all of these areas in order to help secure our objectives and promote British interests. In order to achieve this, we will continue to work closely with our EU partners in all areas of the Action Plan and we will ensure that there is a rigorous review of progress when the mid-term evaluation is carried out in 2017. As stated in the Explanatory Memorandum, we will inform the Committee of the findings of the mid-term review in due course.

20 January 2016


2014 Commission Communication on Rule of Law Framework(35878), 7632/14

Following the Commission’s announcement on 13 January that it intends to active the Rule of Law Framework in relation to Poland, the Committee requests that the Government will now proceed to schedule the Floor debate on this document.

It is clearly an opportune time to hold the debate now, given that there is likely to be interest on all sides of the House, both in the developments in Poland and the competence of the Commission to be acting on the basis of the Framework. We note the Council Legal Service Advice published last year which clearly questioned that competence.

This debate was originally recommended by the predecessor Committee in May 2014 and confirmed by this Committee in July last year. It has therefore been outstanding for some 20 months. This, as we have pointed out in previous correspondence both to yourselves and the current Leader of the House, is unacceptable.

In the meantime, we would be grateful for your views on the Commission’s intention to operate the Framework in relation to Poland and other relevant developments, such as the 2015 Resolutions of the European Parliament urging the Commission to act in relation to Hungarian developments.

20 January 2016


UPDATE ON THE EUROPEAN DEFENCE ACTION PLAN AND THE EUROPEAN SECURITY STRATEGY

I am writing in response to your Committee’s report of 6 January on the European Defence Agency 2016 budget and annual report, and wider CFSP/CSDP issues. I welcome the fact that these important topics will shortly be debated in Committee. In your report, you requested that I confirm that both the European Commission’s ‘European Defence Action Plan’ and the ‘European Security Strategy’ of 2016 will be deposited for scrutiny, in good time, before they are adopted at Council.

Both the European Defence Action Plan and European Global Strategy on Foreign and Security Policy (EGS), which will replace the European Security Strategy, are currently being drafted. Although it is not yet clear when these documents will be finalised, our current estimate is that we can expect the EGS to be published towards the end of the Netherlands Presidency in summer 2016 (HR/VP Mogherini is mandated to produce a draft by June 2016), and the European Defence Action Plan to appear towards the end of the current calendar year. It is as yet unclear how or if these documents will be adopted by the Council.

We will, of course, make every effort to share these documents with the Committees in good time before any endorsement by the Council, subject to security classifications. Where

restrictive markings prevent us from being able to deposit these documents formally, we will aim to share them with the Committees in confidence. Although the UK will seek to influence these documents throughout their development, it is also worth noting that they will not be formally negotiated by Member States and will be drafted by and issued by the Commission and High Representative respectively.

As previously set out in my letter to you of 3 December 2015 on the outcome of the November Foreign Affairs Council on Defence, I would like to reassure the Committee that I will continue to engage with them on all matters of political importance, including those relating to European defence and security policy.

14 January 2016

Letter from Philip Hammond to the Chair

I am glad to have had the opportunity to provide evidence to the European Scrutiny Committee on 17 November. I also noted with interest the publication of the Committee’s report on 15 December. The Government fully recognises the close interest from Members on all sides of the House in our EU renegotiation. I am writing to you to follow up on the requests made by the Committee on the question of welfare reform in particular.

The Government’s position remains as set out in the Prime Minister’s letter to President Tusk on 10 November and as I outlined to you on 17 November. We aim to reduce the flow of intra-EU migration by reducing the draw that our welfare system can exert across Europe. We have therefore proposed that people corning from the EU must live in the UK and contribute for four years before they qualify for in-work benefits or social housing. The Government also wants to stop the exportation of child benefit.

As the Prime Minister made clear, and as I commented in my evidence, we understand that other Member States will find this a difficult element of our proposals, but the Government is determined to address the issue. I explained at the evidence session that it was not possible to provide a running commentary on these sensitive negotiations though I continue to be clear that we are seeking an outcome which is irreversible and legally binding.

In. addition, I committed to asking the Home Office whether there was data on the number of removals completed for EU national jobseekers that had failed to either find work or prove a genuine prospect of work, after 6 months in UK. I did this, and although we have holistic figures encompassing all categories of removals, there is unfortunately no specific breakdown for failed jobseekers.

Finally, we discussed the Committee’s request for a debate on EU migration. As you know, two debates on EU migration took place on the Floor of the House on 14 December. I was pleased to see that you and other members of your Committee were able to participate in this debate. We continue to seek opportunities to schedule the remaining debates referred by your

Committee, but as the Minister for Europe has said previously, this must be balanced against other business and the strength of interest in the House.

21 December 2015


Council Decision (CFSP) 2015/1781 of 5 October 2015 amending Decision 2014/119/CFSP concerning restrictive measures directed against certain persons, entities and bodies in view of the situation in Ukraine

Council Implementing Regulation (EU) 2015/1777 of 5 October 2015 implementing Regulation (EU) No.208/2014 concerning restrictive measures directed against certain persons, entities and bodies in view of the situation in Ukraine

Thank you for your letter of 21 October about the EEAS’ appreciation of UK Parliamentary Scrutiny of draft EU legal documents and UK representations to the EEAS on this matter.

You requested the following six items on this issue:

1. A copy of my letter and the EU High Representative’s response. 2. A copy of all such previous representations and responses.3. Details of other action already taken by my officials. 4. Details of additional action they have now been able to take, following our

correspondence. 5. My analysis of what other such lapses have taken place this year, notwithstanding my

earlier representations. 6. Whether in the light of my further representations and the response of the High

Representative and the EEAS, I am satisfied that they will act upon my request to allow for more notice and time so as to ensure that wherever possible the House’s scrutiny role is supported not undermined.

I will address these items in my response below. I will also address the concerns the Committee raised in your report of 2 December 2015 on the EU Special Representative (EUSR) for the Sahel, regarding the use of the Limité marking on certain documents.

I intend to write a letter to the EU High Representative, Ms Mogherini in the New Year, outlining my outstanding concerns regarding the EEAS’ support for the UK’s Parliamentary scrutiny requirements. I will share my letter with the Committees. The contents of Ms Mogherini’s responses will be treated in confidence as private correspondence. However, on the previous occasions I have made representations to the HR/VP on this issue in summer 2013, and on three occasions in 2014, I was encouraged by her response. As I set out below, there is still room for improvement in the way the EEAS prioritises our Parliamentary

scrutiny process but its performance has improved in response to consistent representations by UK Ministers and officials.

Officials at the UK Representation in Brussels (UKRep) actively raise scrutiny requirements with the EEAS, both bilaterally and through the Council working groups on an almost daily basis. For example, both the UK Permanent Representative and the Political and Security Committee (PSC) Ambassador make clear the need for timely circulation of documents to permit national scrutiny procedures. During the recent EUSR renewals when the EEAS circulated proposals with less than three weeks before expiration of existing mandates, the PSC Ambassador raised concerns and pushed back on lobbying to ‘speed up’ UK scrutiny to adopt the mandates quickly. Our concerns over the insufficient time for consideration of the EUSR mandates were shared by several Member States and the EU Commission. UKRep officials have asserted that we will not be hurried into adoption of files because of unnecessary EEAS delays in the circulation of documents. Regrettably, it has not always been possible to delay adoption on the very sensitive cases, such as certain sanctions files. This was apparent for the EU Council Decision in October regarding the extension to the listing of Mr Kliuiev under the Ukraine misappropriation regime. However, the understanding of our scrutiny requirements within the EEAS and Commission has improved as a result of UK briefings, informal discussions and interventions at committees and working groups. Following my letter last year the EEAS sanctions division now have a clear internal process which takes into account UK scrutiny requirements when it comes to sanctions renewals and annual reviews.

Regarding civilian CSDP missions, the EEAS and Commission now provide greater detail from missions to accompany proposed changes to budgets or mandates. This is partly driven by the consistent level of scrutiny the UK applies to mission budgets and value for money. This cooperation has reduced the time taken for the FCO to submit the required detail to Parliament in some cases, such as the recent adoption of the Council Decision setting the budget for the EU Monitoring Mission in Georgia.

While this cooperation has been appreciated, it does not replace the need for the EEAS to provide documents in a reasonable timeframe in all possible cases. There will of course remain some exceptions which will require a short turnaround, but we make it clear at every opportunity that this must only be in exceptional cases. The UK will continue to raise the problem of late circulation at Council working groups and through engagement at all levels within the EEAS to ensure the UK Parliamentary scrutiny procedures are understood.

Regarding the Committee’s concerns around the use of the Limité marking, raised on 2 December 2015 in relation to the EUSR for the Sahel, I would like to reassure the Committee that, in line with the strengthened Limité handling guidance agreed with the Committee, officials continue to push back when they feel the marking has been used incorrectly and in these instances, they proactively seek permission to share the document by removing the marking. The marking does remain a useful protection of some sensitive files, including on

certain sanctions files. However, in these cases we make every effort to give as much detail as possible in the Explanatory Memorandums and to provide the final public document quickly after adoption. The challenge around the use of the Limité marking is an issue officials regularly raise when engaging with the EU Institutions on scrutiny requirements. My officials will press this when they visit the EU Institutions shortly to continue to raise awareness of our parliamentary scrutiny system.

17 December 2015


Draft Action Plan stepping up EU-Turkey cooperation on support of refugees and migration management in view of the situation in Syria and Iraq

I submitted an Explanatory Memorandum on this draft action plan on 13 October. I am writing now with the updated version of the action plan, which I am sure you will have already seen. I have also sought to update you on some of the related and ongoing developments since the Explanatory Memorandum was deposited.

To summarise the main changes in the revised plan, which reflect more detailed discussions between the European Commission and the Government of Turkey: there is now a reference to addressing the root causes of the crisis; the reference to funding no longer specifies €1bn but talks of mobilising substantial/appropriate funds. In terms of better integration of refugees in Turkey, the revised plan talks about ‘participation in the economy’ (rather than access to labour as previously), but references to accessing public services including health and education remain. Overall, the plan remains a significant step in the right direction and covers a number of priority areas for the UK. For this reason the Prime Minister joined other leaders in welcoming the action plan at the October European Council.

On 29 November, the Prime Minister attended a summit between Turkey and the EU in Brussels, where the EU and Turkey agreed to step up cooperation on the many common issues that we face. It was good that we were able to send a clear message of the importance the EU attaches to its wide-ranging partnership with Turkey.

One of these shared issues is migration. As you well know, Turkey is a key partner in the EU’s response to the crisis and we should commend its generosity in ably hosting over 2.2m refugees from the crisis in Syria and Iraq. At the summit, Turkey and the EU agreed to activate the Migration Action Plan. The EU also agreed an initial €3bn of additional support to Turkey to help ease its refugee burden and prevent further migration to the EU.

The Europe-Africa Summit in Valletta on 11-12 November secured agreement to an action plan to tackle the causes and consequences of irregular migration in Africa. At Valletta, the Prime Minister also announced the UK’s offer to contribute an additional £275m/€400m to help Turkey address the consequences of the Syria conflict. This bilateral support forms part

of the wider European effort of €3 billion package for Turkey agreed at the summit. Specific details of the funding remain under discussion between the Commission and Member States in Brussels.

Finally it is also worth noting that, prior to the summit, on 10 November the EU Commission released its Annual Enlargement Strategy, which included an individual progress report on Turkey. We welcome this report, which commends Turkey’s considerable efforts on refugees and recognises the progress Turkey has made in recent years, while also highlighting areas of concern. The report rightly underlines the importance of Turkey as both a strategic partner to the EU and candidate for EU accession, both of which will contribute to our shared security and prosperity. The Government continues to support Turkey’s EU accession process, which recognises that Turkey needs to do more to meet EU standards through continuing reform, particularly in the areas of fundamental rights and rule of law. Active and credible accession negotiations remain the best way for Turkey to make further progress.

My officials continue to be in close touch with the Commission as the work covered by the Action Plan and wider cooperation with Turkey is taken forward. I would be happy to keep the Committee informed of progress.

10 December 2015


Commission Report: The working of Committees in 2014(37079) 11807/15 + ADD 1

Thank you for your letter of 28 October 2015. The Committee was grateful for your prompt response and looks forward to the debate on the Better Regulation package which it hopes the Government will schedule shortly.

4 November 2015


I am writing in response to your letter of 21 October regarding the Luxembourg Compromise, in which you asked for my assessment of why UK Governments have chosen not to invoke the compromise.

It is, of course, not for me to comment on or make any assessment of previous UK Governments’ decisions and so I cannot do so here.

As I set out in my previous response to you, the Government’s position on the Luxembourg Compromise is that it remains in place following the entry into force of the Lisbon treaty. This position is also confirmed by the EU legislative database.

The Compromise, which is rarely invoked, is an informal agreement that the Council will not force through an act by qualified majority vote against the will of a Member State which believes its vital national interests to be at stake. Government takes a view on the approach and negotiating stance to be taken on EU matters on a case by case basis and the protection of the UK national interest forms a part of those considerations.

2 November 2015


COMITOLOGY: THE WORKING OF COMMITTEES IN 2014

Thank you for your report of 14 October 2015 about the Explanatory Memorandum 11807/15 on the working of comitology committees in 2014. I am writing to provide you with the further information you requested.

You asked whether the reduction in the use of implementing acts in 2014 resulted in an increase in the use of delegated acts. The statistics show that since the entry into force of the Lisbon Treaty, the volume of secondary legislation in general has followed an upward trend. So the number of both delegated acts and implementing acts adopted during this period has increased. 2014 was the exception, where there was a modest reduction in the number of implementing acts, while the number of delegated acts increased. The Commission’s annual report for 2014 also coincided with the end of the previous Commission’s term which contributed to the reduction in legislative activity during the period covered by the report. However, we are conscious of the general upward trend and UK officials continue to challenge the Commission to use appropriate types of secondary legislation, giving preference to implementing acts, wherever possible. In addition, we are seeking to enhance the role of Member States experts during adoption of delegated acts, through the negotiations on the Interinstitutional Agreement on Better Regulation.

You also asked what impact the Common Understanding for Delegated Acts, currently under negotiation, might have on the future trend of the use of implementing acts. I can assure you that the Government remains committed to protecting the inter-institutional balance through effective interventions of Member States around the working of the comitology committees. We continue to make this point during Council discussions and throughout the ongoing negotiations on the Common Understanding. I anticipate the Common Understanding will provide for better involvement of Member States’ experts when agreeing delegated acts. This should not have an adverse effect on the use of implementing acts, where the Government’s position remains clear that Member States must continue to have a role in scrutinising the legislative process. Given that the negotiation is ongoing, I do not want to predict how it might impact on the volume of secondary legislation in the future. But we continue to urge the Commission to remain on a path of Better Regulation, including challenging draft proposals containing inappropriate or unnecessary secondary legislation acts.

Finally, UK officials on the comitology committees report that there has been a notable improvement in the working of these committees since the appointment of the new Commission. This was particularly noted within policy areas led by the Home Office, BIS and Defra. While this is welcome, there is certainly more that can be done to improve the operation of these committees across the board and my officials will continue to engage with relevant contacts in Brussels to take this forward.

28 October 2015


RESTRICTIONS IMPOSED ON PERSONS IDENTIFIED AS RESPONSIBLE FOR THE MISAPPROPRIATION OF UKRAINIAN STATE FUNDS 2014 — (37144–5)Thank you for your letter of 16 October in which you explained that:

on 26 June the EU received sufficient evidence from the Ukrainian authorities and wrote to Mr Kliuiev’s lawyers inviting them to make representations in respect of the evidence;

designated individuals or entities are notified of the Council’s intention to relist them, and granted the opportunity to present their observations;

the legal texts providing for their relisting are not prepared until the time window for receiving these observations has passed;

Mr Kliuiev’s legal representations were received by the EEAS on 31 August; but draft legal texts were only circulated to Member States on 23 September,

providing insufficient time for the scrutiny process to be completed before the sanctions against Mr Kliuiev would have lapsed on 6 October.

You then said:

“I am frustrated that this situation, which necessitated a Ministerial override of scrutiny, arose due to the late circulation of documents by the EEAS. I am writing to HR/VP Mogherini to express my disappointment over this episode, and to re-iterate the importance of national scrutiny processes. Furthermore, my officials are seeking to meet the EEAS in order to explore these issues and emphasise our concerns.”

You will know as well as I that this sort of EEAS dilatoriness is not altogether unprecedented, and that you have written on previous occasions both to Ms Mogherini and her predecessor, Baroness Ashton. Yet it continues. The Committee is accordingly glad that you are therefore continuing to press the issue. It would also be grateful if, before the Christmas recess, you would provide us with:

a copy of your letter and the EU High Representative’s response; a copy of all such previous representations and responses; details of other action already taken by your officials;

details of what additional action they have now been able to take; your analysis of what other such lapses have taken place this year, notwithstanding

your earlier representations;

whether in the light of your further representations and the HR’s and the EEAS’s response, you are satisfied that they have finally got the message and will act upon it, so as to ensure that, wherever possible, the House’s scrutiny role is supported, not undermined.

21 October 2015


Council Decision (CFSP) 2015/1781 of 5 October 2015 amending Decision 2014/119/CFSP concerning restrictive measures directed against certain persons, entities and bodies in view of the situation in Ukraine

Council Implementing Regulation (EU) 2015/1777 of 5 October 2015 implementing Regulation (EU) No.208/2014 concerning restrictive measures directed against certain persons, entities and bodies in view of the situation in Ukraine

I am writing with regard to the above EU Council Decision and Council Implementing Regulation concerning restrictive measures directed against certain persons, entities and bodies in view of the situation in Ukraine.

As detailed in the attached Explanatory Memorandum (not attached here), the EU Council agreed to extend the restrictive measures against Mr Serhii P. Kliuiev, to the annual review date of the overall sanctions regime; 6 March 2016.

On 6 March 2015, the Council agreed to renew the asset freeze regime targeting 14 individuals linked to the misappropriation of Ukrainian state assets for 12 months. At the time, Mr Kliuiev and 3 other individuals had their listings extended only until June 2015, to allow more time for the Ukrainian authorities to provide satisfactory evidence that supported their continued listing. In June Mr Kliuiev’s listing was extended briefly again, to 6 October. You will have seen the correspondence between the Chair of the House of Lords Select Committee on the European Union and me on this matter. I hope you have found my responses informative.

On 26 June the EU received sufficient evidence from the Ukrainian authorities and wrote to Mr Kliuiev’s lawyers inviting them to make representations in respect of the evidence.

On 23 September the EEAS circulated draft the legal texts which extend Mr Kliuiev’s listing until 6 March 2016, in line with the annual review date of the overall sanctions regime.

Designated individuals or entities are notified of the Council’s intention to relist them, and granted the opportunity to present their observations. The legal texts providing for their

relisting are not prepared until the time window for receiving these observations has passed. Mr Kliuiev’s legal representations were received by the EEAS on 31 August. Unfortunately draft legal texts were only circulated to Member States on 23 September, providing insufficient time for the UK Parliamentary scrutiny process to be completed before the sanctions against Mr Kliuiev would have lapsed on 6 October.

I am frustrated that this situation, which necessitated a Ministerial override of scrutiny, arose due to the late circulation of documents by the EEAS. I am writing to HR/VP Mogherini to express my disappointment over this episode, and to re-iterate the importance of national scrutiny processes. Furthermore, my officials are seeking to meet the EEAS in order to explore these issues and emphasise our concerns.

16 October 2015


EU-IRAN: NUCLEAR-RELATED RESTRICTIVE MEASURES(36960) — and (36961) —

You wrote to the Committee on 3 August in response to the requests in the Committee’s letter of 21 July concerning the delay in submitting the relevant texts for scrutiny.

We had asked for a detailed explanation of: the timeline over which these changes were considered; of when representations were made; and by whom and to whom they were made. We also asked what more you thought needed to be done to get the EEAS to commit to sustained improvement.

The Committee is grateful for your response. As is clear, given the nature of the beast, it is an ongoing challenge. But I am sure that you will agree that it is one that must be maintained with vigour and determination, in order to give the House the best possible chance of effective scrutiny, not just in the area of legal texts pertaining to restrictive measures but also with regard to the timely submission of CSDP and ESDP legislative and other proposals more generally.Our assumption is that the FCO and/or UKREP keeps some sort of record of its activities in this area and of the Commission/EEAS’ response; in which case, we would be grateful to receive, before the Christmas recess, an assessment of the effectiveness, across the piece (timely submission of restrictive measures and CSDP and ESDP legislative and other proposals), of your and their endeavours, subsequent to the HR’s (as you put it) “encouraging” letter to you in March.

14 October 2015


Proposal for a Regulation Governing the European Parliament’s Exercise of its Right of Inquiry (34388), —

Thank you for your letter of 31 July 2015. The Committee was grateful for the full update.

It did however note that the previous Committee requested an update for its meeting of September 2013, and even after this an update could have been expected shortly after the European Parliament passed its formal legislative resolution in April 2014.

We sympathise with the objections raised against the European Parliament’s text by the Council, the Commission and the other Member States as listed in the Annex to the Presidency letter and we would be grateful for a further update, before the end of the current session at the latest, which should include any progress in resolving the listed objections.

Like our predecessors this Committee will remain vigilant that this proposal does not encroach upon Parliamentary privilege.

9 September 2015


EU Advisory Mission for Civilian Security Sector Reform in Ukraine (EUAM Ukraine) — (36207)

In your letter of 21 July you updated the Committee on the mission’s first six months. The Committee has asked me to respond on its behalf.

You will no doubt recall that, when the mission was set up in July 2014, the expectation was that it would:

“mentor and advise relevant Ukrainian bodies in the design and implementation of comprehensive and coherent civilian security sector reform strategies, in a manner which enhances legitimacy; increases public confidence; in full respect for human rights and consistency with the constitutional reform process.”

At that time, you noted that co-ordination with other actors in Ukraine — particularly the OSCE, but also NATO, Council of Europe and bilateral donors — would be a priority, to ensure complementarity and avoid duplication of efforts. You also highlighted the importance in this regard of the European Commission’s “state building contract”: which you subsequently explained was a major part of an €11 billion international support package to Ukraine, which would provide short-term budgetary assistance and support for improved governance, anti-corruption, and reforms of the judiciary and public administration — all of which were, you said, an integral part of the EU-Ukraine Association Agreement/Deep and Comprehensive Free Trade Area.

The Committee agrees with you that, as with all such CSDP missions, EUAM Ukraine needs to be “well-managed, effective and able to deliver its mandate”. Given what has been going on in eastern Ukraine in the past 12 months, and what one reads about the lack of progress in the overall reform process, of which this mission is supposedly an important part, one can only guess as to precisely what “the issues affecting EUAM Ukraine’s effectiveness” thus far are. Although you list some of what it has done in its first six months, the fact that the Strategic Review has been brought forward suggests, however, that it has failed to live up to expectations. This impression is further reinforced by your description of the Strategic Review as “critical to ensuring EUAM Ukraine can adapt and improve, having learnt the lessons from the past six months; and that future decision-making is underpinned by robust analysis”.

You note that the Review is due to be published in September, at which time you will to provide the Committee with a further update on developments. The Committee’s assumption is that the Review, too, will be a document that cannot be deposited because of its EU privacy or security classification. In any event, the Committee would be grateful if you would provide the fullest possible summary of its analysis, conclusions and recommendations, not only with respect to the mission but regarding the overall process (including the Commission’s “state building contract”), and your views on the implications for the remainder of the mission’s mandate.

9 September 2015


EU RESTRICTIVE MEASURES AGAINST IRAN – HUMAN RIGHTS AND NON-PROLIFERATION

I am writing in response to both your letter of 21 July in reference to the annual review of the EU’s restrictive measures regime against Iran (non-proliferation) and ESC Report 36771-2 relating to human rights in Iran.

Your letter of 21 July asks me to explain the timeline of the changes made to the Iran non-proliferation annual review documents and detail the representations made by my officials to the EEAS.

Political agreement on the annual review of the Iran non-proliferation sanctions regime was reached towards the end of 2014. However it was necessary to notify individuals and entities whose designations were to be maintained, allow time for them to present their observations to the Council, and take these observations into consideration. Following the receipt of observations it was necessary to check the validity of certain assertions, conduct further open source research and amend Statements of Reason as necessary. This is an extremely time consuming process which takes place around other important business in the RELEX

working group. It is very important this is done with due care and diligence, in accordance with procedures designed to protect the fundamental rights of those concerned. Letters notifying individuals and entities of their continued listing were circulated to Member States between 12 and 17 June. Amendments were made to these letters, and the legal texts, up until 24 June 2015. The legal texts were adopted by written procedure the following day.In both the letter and the report on the Iran human rights regime, you requested that I detail the steps I have taken, and intend to take, to ensure the EEAS commits to sustained improvement regarding the timely production of legislative proposals, including representations made to the EEAS on this subject.

As you reference, I wrote to High Representative Federica Mogherini concerning Parliamentary scrutiny on 9 December 2014. I was encouraged by her reply, about which I wrote to the Committees on 4 March this year, which said that her officials would work to provide legal acts at an earlier stage and, for annual renewals of sanctions measures, that she would instruct her services to begin the review and renewal process at an earlier stage to allow parliamentary scrutiny to take place.

Since March, FCO and UKREP officials have provided guidance for the EU institutions including the EEAS, setting out the UK Parliament’s scrutiny process and emphasising the need for timely circulation of documents requiring scrutiny. My officials are in regular contact with EEAS officials to ensure that they are aware of scrutiny timelines in Parliament and circulate draft legislative proposals as early as possible. UKREP officials also make clear our scrutiny requirements in their work and negotiations with the EEAS.

While these are moves in the right direction, it will require continued pressure to raise standards across the board and even then I cannot promise there won’t be continuing frustrations. The particularly fast-paced and sensitive nature of sanctions negotiations can make it genuinely difficult to build in sufficient time for scrutiny – including taking into account Parliamentary recess periods. As I said when giving evidence to the European Union Committee in the Lords on 2 March 2015, there would be merit in considering a process for fast-track scrutiny arrangements, particularly during Parliamentary recesses, when the Brussels machine continues to operate. That said, I can assure you that we will continue to press the EEAS hard to make sustained improvements on its side. The FCO’s EU Parliamentary Team will have dedicated meetings with the EEAS in the autumn to reinforce this message and identify practical ways forward.

3 August 2015


PROPOSALS FOR A REGULATION GOVERNING THE EUROPEAN PARLIAMENT’S EXERCISE OF ITS RIGHT OF INQUIRY

I am writing to update you on developments with respect to a proposal for a Regulation to change the rules governing the European Parliament’s Right of Inquiry, on which I submitted an Explanatory Memorandum on 3 December 2012.

The European Parliament’s investigative powers are currently governed by Decision 95/167/EC. On 23 May 2012, the European Parliament adopted a proposal for a new Regulation to govern the exercise of its right of inquiry, which if adopted would greatly extend these powers. The European Parliament claims that this Regulation would more closely align its investigative powers with those of national parliaments. Under Article 226 of the Treaty on the Functioning of the European Union, the European Parliament has the right to initiate legislation in this area, but must gain the consent of the Commission and the Council.

The proposed Regulation contained a number of draft Articles which are of concern to the Government, to other Member States, and to the Commission. These included:

- The power to summon any legal person to act as a witness- Obligations on institutions and individuals to provide the European Parliament with

documents- The power to conduct on the spot inspections- Sanctions for failure to comply with the European Parliament’s requests

Some of the powers sought by the European Parliament go significantly beyond those that are necessary for it to perform its political role, and stray into quasi-judicial territory. I, together with the rest of the Council and with the Commission, have been clear with the European Parliament that such powers would not be appropriate, and that their current proposal is not acceptable. By means of a joint letter in April 2014, the Council and the Commission set out these concerns, and invited the European Parliament, in exercising its right of initiative in this matter, to “consider more balanced solutions”.

In January 2015, the European Parliament appointed a new rapporteur, Mr Jáuregui Atondo, to this dossier. He has produced a working document that suggests that the European Parliament should be “open to flexibility”. However, despite this, and despite informal discussions between the European Parliament and the Latvian Presidency, the European Parliament has not yet addressed the Council and Commission’s fundamental concerns through significant revision of the original proposal. Under the Luxembourg Presidency, the Council has chosen to deal with this issue through a firm letter to the European Parliament. I have attached this letter, which the UK fully supports. It will now be for the European Parliament to address these concerns before seeking further discussions.

It is disappointing that the European Parliament has not addressed the serious concerns set out very clearly in the joint letter of the Council and Commission. The Council is unanimous in considering the current set of proposals from the European Parliament to be inappropriate and unacceptable, a position shared by the Commission, and I therefore expect the proposals to change considerably before they stand a chance of being adopted. I will, of course, keep Parliament updated on any significant developments in this area.

31 July 2015


UKRAINE / CSDP - UPDATE ON EU ADVISORY MISSION ON CIVILIAN SECURITY SECTOR REFORM (EUAM UKRAINE)

Following my letter of 26 November 2014, I wanted to update you on the status of the EU Advisory Mission for civilian security sector reform in Ukraine (EUAM Ukraine).

EUAM Ukraine was given an initial mandate of two years, with a Strategic Review to be conducted after 12 months. EUAM Ukraine is now entering the second six months of its mandate. Since its launch, EUAM Ukraine has mapped out the sectors that need reform, identified interlocutors to help advance reform and achieved co-location arrangements with a number of Ukrainian security institutions.

A Six-Monthly Report on EUAM Ukraine has issued. As the document is classified EU Restricted, I am unable to enclose a copy. However, the key points of the report are as follows: EUAM Ukraine has supported the set up of new institutions aimed at domestic reform such as the National AntiCorruption Bureau of Ukraine (NABU) and the State Bureau of Investigation (SBI); has given advice on institutional reform of the Border Guard Service (BGS); and has made recommendations on vetting requirements to the Ministry of Justice and the General Prosecutor’s Office. EUAM Ukraine has attempted to improve Ukrainian inter-agency cooperation as well as establishing coordination mechanisms with EU Member States, the EU Delegation, the EU Support Group for Ukraine and the EU Border Assistance Mission to Moldova & Ukraine (EUBAM). EUAM Ukraine has also provided a focus for coordination with other partners including the NATO Liaison Office, OSCE Special Monitoring Mission and bilateral donors. Following a Ukrainian request for a greater EU presence in the regions, the Six-Monthly Report proposes to enhance regional outreach.

We want EUAM Ukraine to be well-managed, effective and able to deliver its mandate. For this reason we have supported a decision to bring forward the Strategic Review and work is now underway. The Strategic Review will provide an opportunity to tackle some of the issues affecting EUAM Ukraine’s effectiveness and see it deliver its mandate. The Strategic Review is critical to ensuring EUAM Ukraine can adapt and improve, having learnt the lessons from the past six months; and that future decision-making is underpinned by robust analysis. The report is due to be published in September, at which time I will provide your Committee with a further update on developments.

21 July 2015


EU-IRAN: NUCLEAR-RELATED RESTRICTIVE MEASURE (36960-1)

Along with your Explanatory Memorandum of 7 July you wrote to the Committee about the delay in submitting these measures for scrutiny. The Committee has asked me to respond on its behalf.

You recall the Committee’s particular interest in the EU’s sanctions regime against Iran, and rightly observe that the annual review (of which the changes in the Council Decision and Council Implementing Regulation are the outcome) should be “a process undertaken in good

time, making allowances for EU Member State Parliamentary scrutiny”. But you then go on to note that the political decisions relating to this part of annual review were taken in the relevant EU geographical working group meeting towards the end of 2014, but the resulting legal texts were not made available to Member States until 12 June 2015, for discussion on 15 June 2015 in the RELEX working group. You explain why a ministerial override of scrutiny was thus made necessary.

But you also say that it was “extremely frustrating that this situation has arisen, given how long ago these changes were agreed in the EU geographical working group”; and that your officials have “expressed the strength of my feeling on this matter directly to the European External Action Service in Brussels and at the nuclear negotiations in Vienna”.

You will, of course, need no reminding that this is far from the first such example of apparent dilatoriness by the European External Action Service (EEAS); nor of the representations on this matter that you have already made both to the EU High Representative for Foreign Affairs and Security Policy (HR; Federica Mogherini) and to her predecessor, Baroness Ashton. All, it would seem, to little avail.

In the first instance, the Committee would be grateful for a detailed explanation of: the timeline over which these changes were considered; of when representations were made; and by whom and to whom they were made.

The Committee would also like to know what more you think needs to be done to get the EEAS to commit to sustained improvement, not just in the area of legal texts pertaining to restrictive measures but also with regard to the timely submission of CSDP and ESDP legislative and other proposals more generally.

21 July 2015


COUNCIL DECISION (CFSP) 2015/1008 OF 25 JUNE 2015 AMENDING COUNCIL DECISION 2010/413/CFSP CONCERNING RESTRICTIVE MEASURES AGAINST IRAN

COUNCIL IMPLEMENTING REGULATION (EU) 2015/1001 OF 25 JUNE 2015 IMPLEMENTING REGULATION (EU) No 267/2012 CONCERNING RESTRICTIVE MEASURES AGAINST IRAN

The Council Decision and Council Implementing Regulation specified above provide for the delisting of one individual and eight entities from the restrictive measures regime against Iran. Furthermore, the Statement of Reasons for six entities are amended.

These documents form one of the final pieces of the Iran sanctions regime annual review process. The changes implemented in these documents are not made in response to legal challenges by any of the individuals or entities concerned. They are pro-active revisions undertaken as part of the Council’s due process updates with respect to this restrictive measures regime.

I am aware that documents relating to the EU’s sanctions regime against Iran are of particular interest to your Committee. The annual review should be a process undertaken in good time, making allowances for EU Member State Parliamentary scrutiny. The political decisions relating to this part of the Iran sanctions regime annual review were taken in an EU geographical working group meeting towards the end of 2014. Unfortunately, the resulting legal texts were not made available to Member States until 12 June 2015, for discussion on 15 June 2015 in the RELEX working group.

It was important that these texts were adopted before the conclusion of the E3+3 Iran nuclear negotiations and the agreement of any new Joint Comprehensive Plan of Action. These negotiations had been expected to conclude by 30 June 2015 – hence the need for these legal acts to be adopted before that date. In these extraordinary circumstances, a ministerial override of scrutiny was necessary. It is, however, extremely frustrating that this situation has arisen, given how long ago these changes were agreed in the EU geographical working group. My officials have expressed the strength of my feeling on this matter directly to the European External Action Service in Brussels and at the nuclear negotiations in Vienna.

7 July 2015

Government Equalities OfficeLetter from the Chair to

4 March 2015

Department of HealthLetter from the Chair to Jane Ellison

Commission Report regarding trans fats in foods and in the overall diet of the Union population — (37369) 14867/15 + ADD 1

Thank you for your letter of 29 February confirming that those retail and manufacturing businesses which have committed to removing or not using artificial trans fats represent 70% of the volume of sales of products containing artificial trans fats.

Your letter helpfully addressed our queries. We released the report from scrutiny at our meeting of 10 February3 and require no further information.

We have drawn your letter to the information of the Health Select Committee.

9 March 2016

Letter from Jane Ellison to the Chair

14867/15 and 14867/15 ADD 1: Report from the Commission to the European Parliament and the Council regarding trans fats in foods and in the overall diet of the Union population

Thank you for your Committee’s further report following your meeting on 10 February, which clears this document from scrutiny.

As you note in your report, after I last wrote to you on 3 February, officials supplied additional clarification about the figure stating that the Responsibility Deal signatories who committed to removing or not using artificial trans fats represented 70% of the UK’s retail and manufacturing market. You have asked for written confirmation of this.

I am happy to confirm that this means that in the retail and manufacturing sector, these signatories represent 70% of the volume of sales of products containing artificial trans fats.

This figure indicates the reach of the voluntary action on trans fats as a result of the Responsibility Deal. It does not indicate the extent of the reduction in dietary intakes of trans fats in the UK. This is found from the National Diet and Nutrition Survey (NDNS) which indicates that mean intakes of trans fats are currently below the WHO recommended maximum of 1% of energy intake.

I hope this information is helpful.

3 Twenty-Third Report HC 342-xxii (2015-16), chapter 12 (10 February 2016)

http://www.publications.parliament.uk/pa/cm201516/cmselect/cmeuleg/342-xxii/34216.htm

29 February 2016

Letter from the Chair to Jane Ellison

Food law: official controls: (34922), 9464/13 + ADDs 1–2


Whilst this is helpful so far as it goes, it is difficult in the absence of a text to get a clear impression of exactly what is now on offer, and hence to provide the scrutiny clearance which you request. For example, you say that the compromise put forward by the Luxembourg Presidency includes a balance of mandatory and voluntary fees comparable to the current rules, and contain a significant degree of flexibility, but you do not indicate in concrete terms what this means in practice. Similarly, you suggest that, as regards the use of official veterinarians, the compromise is based on a more flexible interpretation of the current rules, which should receive sufficient support to be approved, but you then go on to say that this will not secure the increased flexibility which the UK wanted to see. Again, we would like to see this spelt out more clearly.

21 October 2015


9464/13: Proposal for a Regulation of the European Parliament and of the Council on official controls and other official activities performed to ensure the application of food and feed law, rules on animal health and welfare, plant health, plant reproductive material and plant protection products

Since my last letter of 21 July 2015, there has been rapid progress through attachés towards compromises on the proposed Official Controls Regulation, which forms part of the EU’s Smarter Rules for Safer Food package. The package also includes live proposals on Animal Health and Plant Health, on which you have been receiving separate updates.

At the time of my last letter, we believed that informal trilogues would begin in autumn and this now appears likely. I am writing to ask the committee to lift scrutiny in order that we can continue to play a constructive and influential role in negotiations in advance of a potential Council item on 22 October 2015.

The Luxemburg Presidency inherited two contentious and divisive issues on charging and the use of official veterinarians. Overcoming the deadlock at attachés has been very difficult and the direction of travel for potential compromises has been towards maintenance of the current rules as this is most likely to secure enough support from member states to achieve a qualified majority.

Agreement to the UK negotiating objectives by the European Affairs Committee was obtained in June.

1. ChargingThe compromise put forward by the Luxemburg Presidency includes a balance of mandatory and voluntary fees which are comparable in nature to the current rules. Whilst our negotiating position is to secure full subsidiarity, the current rules do contain a significant degree of flexibility and have strong support around the table from other member states.

Our fall-back position is to maintain a similar level of burden from any mandatory fees set in EU legislation, opposing any increase in scope or competence for EU determined charges. Our support for the Council text will ultimately be guided by this.

The latest compromise text does not include the mandatory exemption for micro-businesses, which was included in the original Commission proposal. Given the overwhelming opposition to the exemption from other member states, and lack of Commission support, we were unlikely to secure its retention. The current text does, however, contain within it some scope to reduce burdens on smaller businesses. We continue to press for an exemption for smaller businesses and The Minister will be tabling a minutes statement in Council registering our concern at the inconsistent approach of the Commission towards the application of better regulation principles.

We will continue to push for any opportunities to increase subsidiarity on the charging issue, including for micro-businesses, through trilogues by building on the supportive first reading position adopted by the European Parliament.

2. Use of Official VeterinariansA compromise based on a more flexible interpretation of the current rules has been tabled and we are confident it will now receive enough support to be approved. Though this will not secure the increased flexibility we wanted, it is a positive outcome from the negotiations and will permit the deployment of more effective and efficient control systems to help maintain our high standards of public protection.

We will need to defend this position against the first reading position of the European Parliament, which sought a more restrictive set of rules, during trilogues. A stakeholder plan that includes prompting positive engagement with members of the European Parliament is underway to support an outcome from trilogues that favours increased flexibility.

3. Other key areasTo confirm positions we have already secured and I have updated the committee on in previous letters;

The UK has assessed each proposed piece of tertiary legislation on a case by case basis against the backdrop of simplification and consumer safety. To that end, the UK has acted to

retain several empowerments that will ultimately reduce administrative burden, whilst succeeding in removing some of the more trivial empowerments.

The UK has secured several important concessions in the drafting of delegated powers for readopting the provisions of Regulation 1/2005 on welfare in transport under the framework of official controls. Important points of principle have been retained and a 3 year period to re-adopt the provisions has been secured

The scope of the official controls proposal has been amended by Council to remove Plant Reproductive Material, mirroring the position of the European Parliament. This will not preclude its inclusion at a later date, on the adoption of new proposals, which the Commission is in the process of preparing.

The inclusion of marketing standards[1][1] within the scope of the official controls Regulation has been resisted in Council but will be pushed by both the Commission and European Parliament during trilogues. Whilst I agree with the basis for this position in Council, informal impact assessment work in the UK has shown little, if any, negative impact from its inclusion and so we are prepared should trilogues move against the Council position.

4. Next StepsThe Luxembourg Presidency has scheduled two COREPER meetings in October in advance of a potential Council item on 22 October. We are likely to achieve a compromise text consistent with UK negotiating objectives in which case we would look to signal UK support ahead of the Council meeting. Were this not to be the outcome we would not signal that support. In light of these developments and the need to stay engaged it would be helpful if your committee could release the proposal from scrutiny so that we can continue to play an active part in negotiations.

13 October 2015

Letter from the Chair to Jane Ellison

Food law: official controls: 9464/13 (34922) + ADDs 1–2

Thank you for your letter of 21 July, providing a further update on the state of play on this proposal.

We have noted that substantive discussions are still continuing, not least on the issue of fees and the role of official veterinarians, but, as the previous Committee reported to the House as recently as 24 March, we do not think there is any need for us to do so at this stage. However,

[1][1] Marketing standards laid down in Section I of Chapter I of Title II of part II of Regulation (EC) No 1308/2013 applied to the products referred to in Annex I thereof

we will no doubt wish to return to the matter in due course in the light of further developments, on which we assume you will provide updates as necessary.

16 September 2015


9464/13: Proposal for a Regulation of the European Parliament and of the Council on official controls and other official activities performed to ensure the application of food and feed law, rules on animal health and welfare, plant health, plant reproductive material and plant protection products

Since my last letter of 17 March 2015, there has been significant progress on the proposed Official Controls Regulation, which forms part of the EU’s Smarter Rules for Safer Food package. The package also includes live proposals on Animal Health and Plant Health, on which you’ll be receiving separate updates. I thought that it would be helpful to provide an update on negotiations at this point and how we foresee the proposal developing under the new Luxembourg Presidency.

The Working Party of Veterinary and Phytosanitary Experts (Official Controls) concluded its technical negotiation on the proposal in May without resolution to the key issues of proposed mandatory charging and the use of official veterinarians.

The Latvian Presidency arranged several attaché meetings during June in order to secure a compromise but was ultimately unsuccessful. The dossier has now been passed onto the new Luxembourg Presidency, which is confident it can build on the work of Latvia to broker compromises in advance of the summer recess.

Agreement to the UK negotiating objectives by the European Affairs Committee was obtained in June.

1. ChargingNegotiations on the extent to which charges for official controls should be set in European legislation have developed positively for the UK under the Latvian Presidency, with proposed drafting changes showing much more flexibility than previous versions.

The UK remains active in its opposition to mandatory full cost recovery for all official controls on the basis that the controls should be mandatory, not the fees, and that member states are best placed to determine how to fund those controls in order to protect the public and allow their industries to grow. This position is a better regulation priority for the UK and the UK has developed a strong and vocal group of member states in Council, which is achieving positive change.

Despite a broad spectrum of national positions being at play, the Luxembourg Presidency is confident that it can achieve a successful compromise based on the latest revisions. The latest revisions include a balance of mandatory and voluntary fees which would represent a small increase in flexibility on the current rules.

The Commission is opposed to the direction the negotiations have taken in Council and is said to prefer full subsidiarity to the current text. We will continue to push for any opportunities to increase subsidiarity on the charging issue, including for member states to be able to exempt micro-businesses from any charging regime.

2. Use of Official VeterinariansThe original proposal published by the Commission included a more flexible approach to the use of Official Veterinarians in slaughterhouses and at import checks than permitted by the current legislation. This is a position supported by the UK as controls should be carried out by suitably trained and experienced staff, which can include, but not be restricted to official veterinarians.

Negotiations have become increasingly difficult in Council with Eastern Member States pushing for greater restriction than is currently laid down in legislation. The UK is leading a small blocking minority opposing greater restriction with a handful of Northern European States.

As with charging (above) consensus has not been possible despite potentially acceptable compromise positions being put forward by the Latvian Presidency. We expect the Luxembourg Presidency to continue to push the same compromise, which is based on the current rules.

A compromise based on the current rules would allow for a strong position in Council to oppose the first reading position of the European Parliament, which adopts a more restrictive set of rules – something that is not supported by convincing public health arguments, and would lead to additional burdens on industry.

3. Tertiary legislationThe proposed Official Controls Regulation is intended as a framework to set down fundamental principles, leaving detailed technical rules for delegated and implementing acts. While this allows flexibility, it makes the impacts of the Regulation difficult to assess in advance of the adoption of these detailed rules. I am keen to ensure that we protect consumer safety whilst achieving real and tangible simplification.The UK continues to assess each proposed piece of tertiary legislation on a case by case basis against the backdrop of simplification and consumer safety. To that end, the UK has acted to retain several empowerments that will ultimately reduce administrative burden, whilst succeeding in removing some of the more trivial empowerments.

4. Repeal of Regulation (EC) 1/2005 on welfare in transport

The Committee has previously indicated that there must be no regulatory vacuum or lessening of controls as a result of the proposed repeal of live animal transport controls, something with which I completely agree.

The UK has secured several important concessions in the drafting of delegated powers for readopting the provisions of Regulation 1/2005 under the framework of official controls. Important points of principle have been retained and a 3 year period to re-adopt the provisions has been secured (an increase from 1 year), however, we will continue to push for a provision that only permits the repeal of Regulation 1/2005 on the adoption of its replacement.

5. Scope of the official controls RegulationFollowing the withdrawal of the proposed Regulation on Plant Reproductive Material from its Work Plan for 2015 by the Commission, the Council is proposing to remove Plant Reproductive Material from the scope of the official controls proposal, mirroring the positon of the European Parliament. This will not preclude its inclusion at a later date, on the adoption of new proposals, which the Commission is in the process of preparing.

A bilateral between the UK and the Commission has helped allay some of the UK’s concerns at the scope of the official controls Regulation and its application to plant protection products (pesticides). The principle of risk-based controls is clear and these must be aimed at finished formulated products, where EU rules currently apply. The UK’s remaining concerns are linked to the future interpretation of the requirements by the Commission and others.

The inclusion of marketing standards4 within the scope of the official controls Regulation has resulted in a lot of opposition in Council from member states who view the inclusion as a late addition not properly assessed for its impacts by the Commission. Whilst I agree with the basis for this opposition in Council, informal impact assessment work in the UK has shown little, if any, negative impact from the inclusion, with positive assurances from the Commission that they do not intend to expand their position on mandatory fees to include marketing standards controls. The UK is adopting a neutral position in order to achieve concessions on other elements in the proposal.

6. European ParliamentThe European Parliament has begun to return to its deliberations on the dossier, however, as Council negotiations have taken longer than expected its engagement has been limited. The UK has continued to push its positions with the rapporteur and shadow rapporteurs and is preparing to increase its engagement to coincide with the end of the recess.

7. Forward Look

4 Marketing standards laid down in Section I of Chapter I of Title II of part II of Regulation (EC) No 1308/2013 applied to the products referred to in Annex I thereof

The new Luxembourg Presidency has signalled its intention to broker a compromise on the two most contentious issues, charging and use of official veterinarians, at COREPER on 22 July. If successful, their ambition is to begin a series of informal trilogues with the European Parliament following the summer recess with a view to preparing a text for Council in October or November. 21 July 2015

Home OfficeLetter from the Chair to James Brokenshire

Internal border controls within the Schengen free movement area Document (37258) 13464/15

Thank you for your letter of 10 March providing further information on the agreement the Government is seeking to conclude with EU partners on access to Schengen immigration data.

We note that the Government is not seeking to extend its participation in Schengen, but to establish “limited cooperation” allowing the UK to access certain information held in the Schengen Information System (SIS II) and the Visa Information System (VIS) in exchange for providing similar UK immigration data to Schengen States.

The form of cooperation envisaged by the Government appears to be framed by the recent ruling given by the Court of Justice in case C-44/14 concerning Spain’s challenge to a provision in the Eurosur Regulation (a Schengen measure in which the UK was not entitled to participate) authorising limited cooperation with the UK on the exchange of information relating to external border surveillance. The cooperation in that case was limited by subject matter and by geographical proximity.

It follows that the nature and degree of cooperation envisaged will be critical in establishing whether it can be achieved by means of a bilateral agreement between the UK and the EU or the UK and Schengen States. We note your cautious optimism that the UK will be able to secure such an agreement. We ask you to write to us again once you are in a position to confirm that there is a willingness to enter into negotiations with the UK, and to provide details of the parties to the agreement, its likely content and an assessment of its compatibility with the principles set out by the Court of Justice in its Eurosur judgment.

We note your comments on the jurisdiction of the Court of Justice. We would welcome some indication of the number and type of agreements relating to JHA matters which have been concluded by the EU or its Member States with another Member State. We ask you to explain whether or not these agreements confer jurisdiction on the Court of Justice and (if they do) to describe the extent of the jurisdiction conferred on the Court, in respect of their validity, interpretation and enforcement.

23 March 2016

Letter from James Brokenshire to the Chair

Internal Border Controls within the Schengen Free Movement Area (13464/15)

Thank you for your report of 24 February, in which you asked for further information, following my letter of 10 February, about our request for an agreement with the Schengen States allowing us greater access to Schengen immigration data.

You refer to the JHA measures that we rejoined (or, in the case of Prüm, are seeking to rejoin) following the 2014 block opt-out, and note that the Government has argued that participation in those measures by way of an international agreement would not be feasible.

Our objective then was to regain full participation in those measures, and I remain of the view, for the reasons the Committee has quoted, that it would not have been possible to do so by way of an international agreement. The ability of the UK to rejoin those measures was subject to the specific mechanism and legal tests set out in Article 10(5) of Protocol 36 to the Treaties.

The position here is different. There is no specific legal mechanism or test to be applied, and we are not seeking to participate in the SIS or VIS Regulations, or any other part of the Schengen acquis that we are not already bound by. We are simply seeking an agreement, providing for limited cooperation, that would allow us to receive certain information from SIS II and VIS in exchange for providing similar information to the Schengen Member States. As we are not seeking to participate, the arguments against our being able to do so by international agreement do not, in my view, apply, and nor do the provisions in the Schengen Protocol that set out how we could join additional parts of the Schengen acquis.

Turning to your other questions, it is possible that the agreement would be concluded between the UK and the EU, rather than as a mixed agreement or an agreement solely between the UK and other Member States. Whether the EU is to be a party to the agreement will depend on the mechanism for accessing the data – something which is subject to negotiation. In the event of an EU agreement, the EU negotiating mandate, and Council Decisions to sign and conclude the agreement, would build on those parts of the acquis that we do not take part in, so we would be excluded from these measures and would conduct our negotiation with the EU.

You ask whether any such agreement would fall within the EU’s exclusive competence. The Union shares competence with Member States in this area so is competent to enter into an agreement. The existence of exclusive competence as a matter of EU law will depend on the precise details of the agreement. However, as the UK would be entering into the agreement in its own right rather than a part of the EU, any exclusive Union competence deriving from this agreement would not be engaged in respect of the UK.

Although the Commission and Schengen states have not yet expressed a willingness to enter into an agreement, we are continuing to discuss the matter with them. While I cannot guarantee the outcome, I believe, for the reasons I set out in my letter of 10 February, that we have a reasonable chance of securing a positive outcome.

Any agreement the EU enters into is liable to be subject to Court of Justice jurisdiction in respect of for example its validity. As the UK would be entering this type of agreement in its own right and not through the European Union, it would not be subject to Court of Justice jurisdiction in respect of its implementation of the agreement, unless the manner of that implementation was itself incompatible with other EU law, or unless the agreement provided otherwise.

Finally, we consider that the arrangements in the Frontex and Eurosur Regulations for those bodies to facilitate cooperation between the UK and other Member States in certain matters are relevant because they demonstrate the willingness of the Commission, Schengen Member States and European Parliament to agree to measures short of participation that will allow us to cooperate through Schengen-building bodies where that is to our mutual benefit. The exact form of the measure allowing that cooperation (legislation or an international agreement) is, in our view, less relevant than their willingness to agree to it.

10 March 2016

Letter from the Chair to John Hayes

Directive on the use of Passenger Name Record (PNR) data(32492), 6007/11 + ADDs 1–2

Thank you for your letter of 8 February.

We note that you expect the Court of Justice to issue its opinion on the compatibility of the EU/Canada PNR Agreement with the EU Treaties this summer. As the Court’s opinion may have implications for the implementation of the EU PNR Directive, we ask you to provide us with your preliminary analysis at the earliest opportunity.

24 February 2016

Letter from John Hayes to the Chair

Directive on the use of Passenger Name Records (PNR) data

Thank you for your letter of 6 January, requesting further information about the Directive on the use of Passenger Name Records data.

You asked how many Member States are expected to apply the Directive to intra-EU flights. The Justice and Home Affairs Council on 4 December agreed a declaration that all Member States would take the opportunity to apply the Directive to intra EU flights. I can confirm the Government’s intention is to apply the Directive to all intra- EU flights. This is necessary to effectively identify and target serious criminals, terrorists and foreign fighters and vulnerable individuals being exploited by traffickers or intent on travelling to conflict areas. Processing data for selected flights only would create identifiable gaps in our border security capability.

As you noted, the Directive permits Member States to require PNR data from tour operators and travel agents. The Government has no plans to do so at this time, however will keep this policy decision under review in consultation with the travel industry.

Finally, you asked about the referral to the Court of Justice for the EU, by the European Parliament, of the EU-Canada PNR Agreement. The Government has submitted written observations to the Court in support of the Agreement. No hearing date has been set, but I anticipate the Court giving its opinion on the legality of the Agreement this summer.

8 February 2016

Letter from the Chair to John Hayes

Directive on the use of Passenger Name Record (PNR) data

Thank you for your letter of 11 December informing us that the Council and European Parliament have reached agreement on a compromise text to establish an EU framework for the collection, processing and use of Passenger Name Record (PNR) data. We note that the negotiations were given renewed impetus by the recent terrorist attacks in Europe and an increasing recognition of the value of PNR data as a tool for tackling terrorism and serious crime.

We would be grateful if you could indicate how many Member States are expected to apply the Directive to intra-EU flights. For those choosing to do so, we note that they have the option of applying the Directive to all intra-EU flights or to selected flights only. Which option does the Government intend to implement? We also note that the Directive expressly contemplates that Member States may introduce domestic legislation to require travel agents and tour operators to transfer the PNR data they collect for further processing and analysis. Does the Government intend to do so?

When your predecessor wrote to us in December 2014, he explained that the European Parliament had decided to refer the PNR Agreement between the EU and Canada to the Court of Justice for an opinion on its compatibility with the EU Treaties. We would welcome further information on the timing of the Court’s opinion and, once it has been issued, an analysis of its implications for the PNR Directive.

6 January 2016


UK POSITION ON THE PROPOSALS FOR A EUROPEAN DIRECTIVE ON THE USE OF PASSENGER NAME RECORDS (PNR) DATA FOR THE PREVENTION, DETECTION, INVESTIGATION AND PROSECUTION OF TERRORIST OFFENCES AND SERIOUS CRIME

I am pleased to inform you that since the last update to your committee about the proposed European Union Directive on the use of Passenger Name Records (PNR), there has been considerable recent progress. Regrettably that progress was prompted

by the terrorist attacks in Paris in January and November. Trilogue has concluded and a compromise text was put to the Justice and Home Affairs Council, and agreed, on 4 December. The European Parliament’s Civil Liberties, Justice and Home Affairs Committee (LIBE) voted in favour of that text on 10 December, which will now be put formally to a European Parliament plenary vote and then to the Council in January.

The UK has the legal, technical and operational capability to acquire and process PNR but has supported a Directive to provide a European legal framework for its acquisition from carriers operating between EU Member States. The Prime Minister publicly stated his support for a strong EU Directive, most recently when he met with President Hollande on 23 November.

PNR is information necessary to enable reservations to be processed by the carrier and may include among other things, how travel was reserved, details of other passengers on the same booking, method of payment, contact details, seat numbers and travel itinerary. This data can prove invaluable when analysed by those charged with law enforcement and it has already led to the detection of suspicious behaviour and patterns of travel by those involved in serious crime and terrorism as well as assisting in the identification and protection of vulnerable individuals such as victims of trafficking.

Your committee will be aware from previous updates that this legislation has been under consideration for a considerable time and the UK has played an important role in getting the dossier to its current stage. An Explanatory Memorandum (no 6007) on the proposed Directive was deposited in Parliament on 16 February 2011. It cleared scrutiny in the House of Commons on 18 April 2012 and the House of Lords on 25 April 2012. The most significant subsequent developments were reported to Parliament: in a statement following the JHA Council in April 2011 at which the Presidency announced that a majority of Member States wished the Directive to make provision for processing of PNR on flights within the EU and in letters to the Parliamentary Scrutiny Committees in April 2012 that the Presidency would seek political agreement to a text at the Justice and Home Affairs Council on 26 April 2012. The proposal was then stalled in the European Parliament until its Civil Liberties, Justice and Home Affairs Committee voted in favour of opening negotiation of the proposed Directive with the Council in July this year.

The Home Secretary has overall responsibility for national security in the United Kingdom which is a reserved matter under the UK’s devolution settlement. I am not aware of any direct impact on the areas of responsibility of the Devolved Administrations. The government is clear and certain that national security is a matter for national government, accountable to the people through parliament.

The compromise text agreed at trilogue is positive and better on a number of points than we could have expected. I have provided a summary of the key points from this most recent text below:

Intra-EU PNR: The trilogue text specifically permits but does not oblige Member States to process intra-EU PNR. The UK has consistently made the case for the inclusion of intra-EU PNR. The processing of PNR on European routes has never been more important. As recent reported examples demonstrate, serious criminals, terrorists and foreign fighters are all known to break up their journeys within Europe in an attempt to circumvent detection.

Transnational Serious Crime: The Commission and Parliament sought to restrict use of PNR to countering transnational serious crime. The Council sought to ensure processing of PNR not be limited to tackling serious crime with an international element. The compromise text does not restrict use of PNR to transnational offences.

Retention Periods: The overall retention period remains 5 years. The Council has compromised on the initial period after which higher authorisation will be required to use full PNR. This is now 6 months, significantly less than the 2 years proposed by the Council but more than the 30 days proposed by the Commission and the Parliament. I know the European Parliament attaches significant importance to this compromise. I believe this is an acceptable compromise if it means a final text that permits processing of intra-EU PNR and does not restrict use of PNR to investigation of ‘transnational’ serious crimes.

Non-Carrier Economic Operators (NCEOs) such as tour operators and travel agents are referred to in the Directive at the European Parliament’s request, however, rather than making the processing of NCEO PNR mandatory, it recognises Member States may provide for such processing in domestic legislation. There is good reason to extend the scope of the Directive in this way. NCEOs generally do not provide full PNR to carriers for commercial reasons leaving gaps in PNR, and charter packages have been exploited by extremists travelling to conflict areas. However there are significant practical implications and impacts on business of extending PNR requirements to hundreds of tour operators and thousands of travel agents. Initial conversations with the travel industry indicate that an enabling provision (as proposed) that permits Member States to legislate domestically for processing of NCEO PNR would be acceptable.

I hope you find this update useful, however, please do not hesitate to contact me if you require additional information. I have asked my officials to ensure an unclassified version of the draft directive is submitted to your committee as soon as one is available.

11 December 2015

Letter from the Chair to James Brokenshire

Follow-up to evidence session on migration: international protection (scrutiny of the Government’s opt-in decision) — (36901) 9355/15 and (37010) 11132/15

Thank you for your letter of 5 November.

We note your assertion that the Government “takes the views of Parliament very seriously”. We consider that it would have much greater weight if the Government finally scheduled the opt-in debates requested by the Committee, in line with the commitments made by the Minister for Europe to Parliament in January 2011. It is symptomatic of the Government’s approach to scrutiny of these important matters that you are still unable to provide any indication of when we might expect the debates to take place.

We look forward to receiving shortly the information you have promised on the arrangements for funding relocation and, specifically, how you intend to ensure that there are no unforeseen financial implications for the UK.

18 November 2015


Relocation of migrants in need of international protection 9355/15 and 11132/15

Thank you for inviting me to give evidence to the Committee on 14 October, which allowed me to update you and to provide clarification on events over the summer. I have obviously noted the publication of your report following that session and have read the report with interest. You have asked that I respond on a number of points regarding the Commission’s proposals to relocate migrants from Italy and Greece.

You state in your report that the failure to schedule an opt-in debate during the September sitting of Parliament demonstrates that the Government attaches little importance to the views of Parliament. I want to reassure your Committee that the Government takes the views of Parliament very seriously and as I stated during the evidence session I strongly support the scrutiny of Government by Parliament. The exceptional circumstances over the summer required an immediate response to unfolding events and did not allow for as full a consultation with Parliament as I would have wished. Whilst I accept no formal scrutiny debate has taken place, as I made clear to the Committee Parliament has had several opportunities to express its views; including following the Prime Minister’s statement on 7 September, a Commons debate on the refugee crisis on 8 September and an opposition day debate on the humanitarian crisis in the Mediterranean and Europe on 9 September.

With regards to the failure to schedule an opt-in debate as requested by the Committee, careful consideration is currently being given to meeting the list of outstanding debates. I would also reiterate the point that since the start of this new Parliament there has been limited time to schedule any debate. However, as I made clear in my evidence before you, I will communicate the Committee’s clear views on this matter to the Leader of the House.

In response to the questioning on the scope of the term refugee, a refugee is defined as a person who, owing to a well founded fear of persecution for reasons of race, religion, nationality, membership of a particular social group or political opinion, is outside their

country of nationality, or if they do not have a nationality being outside of their country of habitual residence, and is unable or, owing to such fear, is unwilling to avail themselves of the protection of that country. Those who do not have a fear of persecution for one of the above reasons may still be granted humanitarian protection if there is a real risk of serious harm. Their claim for asylum will have been considered and the host country will have granted them protection. Humanitarian protection exists for those who do not have a fear of persecution for one of the above reasons but who may still be at real risk of serious harm. An asylum seeker is someone who has lodged a claim for international protection and is awaiting a decision on their claim from the host state. There is no legal definition of an economic migrant. But in our view this is someone who has made the choice to leave their country of origin in order to improve their economic situation and may be prepared to bypass legitimate immigration controls in pursuit of real or perceived economic advantage, not because they fear persecution or are at real risk of serious harm.

You also asked about funding arrangements for the resettlement and relocation activities. I will clarify the position on this matter when I provide a response regarding document 11844/15 (Establishing a crisis relocation mechanism for individuals in need on international protection). This has been delayed slightly due to the fast pace of this dossier. I will provide a response as soon as possible to ensure you have the most up to date position on this.

5 November 2015


Functioning of the Schengen area — (36925) 9483/15

Thank you for your letter of 12 October. We welcome the Court’s ruling in Case C-44/14 which confirms that the UK is able to enter into bilateral cooperation agreements with neighbouring EU countries to exchange information on external border controls.

We are grateful for the information you have provided on the Swiss referendum, held in February 2014, which called for the introduction of immigration quotas for all foreign nationals. We note that the outcome has to be implemented within three years of the referendum date. Your letter sets out the EU’s position — that it does not intend to agree a Swiss request to renegotiate the EU-Switzerland Agreement on the Free Movement of Persons — but does not explain the Government’s position. We ask you to do so. We also ask you to provide a further update once the new Swiss Government has indicated how it intends to give effect to the referendum result.

28 October 2015


Repeal of obsolete police and criminal justice measures: Document (36562) 16334/14


I can only apologise for the delay in notifying your Committee of the possibility of an opt-in decision being needed. The delay was caused primarily by the extreme complexity of the issues raised by these decisions. I also apologise for the delay in notifying both you and Parliament of the decision itself, which was the result of an administrative oversight. I accept that we should have provided information to the committee earlier than we did.

Turning to your other questions, we were informed by the Council Secretariat that the opt-in deadline was 8 April. We do not think that was correct as, for the reasons given in Karen Bradley’s letter of 29 January, we do not consider that the initial proposal triggered the opt-in.

The amended proposal that did in our view trigger the opt-in was produced on 25 February, meaning that on our interpretation the deadline would have fallen on 24 May. However, we decided to opt in by the Council Secretariat’s deadline in order to ensure that our participation was unambiguously accepted by all other Member States and the Commission.

We expect the proposal to be adopted later this year.

21 October 2015


The functioning of the Schengen area, 9483/15 — Additional information on Eurosur, the Swiss Referendum and the Schengen Evaluation and Monitoring Mechanism

Thank you for your Report 36925 on the functioning of the Schengen area. You asked for information on two outstanding issues; Eurosur and the Swiss Referendum on immigration quotas, and raised the implementation of aspects of the Schengen Evaluation and Monitoring Mechanism (SEMM) Regulation.

I would like to update you on the outcome of CJEU Case C-44/14, brought by Spain and challenging the UK’s arrangements to cooperate and exchange information with Eurosur, the EU’s new border surveillance system. On 8 September, the CJEU dismissed Spain’s attempt to challenge Article 19 of the Eurosur Regulation. The judgment upholds the principle that the UK (and Ireland) can enter into limited co-operation agreements with Member States participating in parts of the Schengen acquis in which the UK does not participate and gives guidance on when such cooperation would be permissible. This is a good result for the UK. The Government will now resume the process of seeking a cooperation agreement of the type envisaged by Article 19 with Belgium and the Netherlands with the objective of

strengthening the UK’s border security and that of our European partners. We welcome the recognition by the Court of variable geometry in relation to JHA matters.

I would also like to update you on the February 2014 Swiss Referendum calling for immigration quotas and its impacts on Switzerland’s association with the Free Movement Directive. Since my letter of 11 March, a draft legal framework implementing the result of the referendum (published for consultation on 11 February 2015) was subject to a three month public and cantonal consultation, followed by a month of Government evaluation and modification. Initially the revised text was due to be submitted to the Swiss Parliament for its 7-28 September Autumn session. As you are aware, earlier this year the Swiss Federal Council signed a mandate to renegotiate the Free Movement of Persons Agreement with the EU. The EU has previously signalled that it does not intend to agree to a renegotiation and this remains the case. As a result, the draft legal framework was not tabled in the Swiss Parliament. As expected there has been little activity in the run up to the October parliamentary elections. We do not expect any significant change this year. The Swiss are continuing to reserve the right to explore other avenues in order to preserve the Swiss-EU bilateral agreement.

On the implementation of the SEMM Regulation, I can assure you that the UK is engaged on this issue and continues to press the European Commission for clarity. Current discussions centre on how information will be extracted and redacted so that there is a consistent approach by the Commission. We must ensure that national internal security information of use to criminals does not go into the public domain, while still providing insightful declassified information to national Parliaments.

12 October 2015


Proposed Council Decision on the relocation of individuals in need of international protection — (36901) 9355/15 and (37010) 11132/15

As you and your officials will be aware, your letter of 15 September arrived on the eve of our meeting on 16 September, too late for us to prepare a considered Report to the House on the progress of negotiations on a Commission proposal to relocate 40,000 individuals in need of international protection from Greece and Italy to other Member States. The Committee nevertheless considered your letter and expressed deep dissatisfaction at the eight-week delay in providing the information requested in July on a matter of such profound political and public concern.

The Committee was particularly troubled by your comment that it was "unfortunate that on this occasion greater scrutiny has not been possible" (our emphasis). It is surely at such times of crisis, when the EU is struggling to agree a coherent and workable response to an unprecedented humanitarian challenge, that proper scrutiny, transparency, and effective

accountability to Parliament is most needed. Despite this your letter falls short of the comprehensive response requested by the Committee in its Second and Third Reports, agreed on 21 July and 9 September; nor does it provide any convincing explanation for the Government’s failure to schedule an opt-in debate on the Commission’s relocation proposal.

Given your unsatisfactory engagement so far with the process of scrutiny, we invite you to give oral evidence to the Committee at its first meeting after the party conference recess on 14 October at 2.45pm.

17 September 2015


Repeal of obsolete EU police and criminal justice measuresDocument (36562) 16334/14

Thank you for your letter of 16 July informing us of the Government’s decision to opt into a Regulation proposing the repeal of a number of EU police and criminal justice measures now considered to be obsolete.

You will recall that the previous Committee questioned the Government’s view that the UK’s Title V opt-in Protocol did not apply to the Commission proposal, noting that the proposal cited legal bases in Title V of Part Three of the Treaty on the Functioning of the European Union and that the Protocol does not include any express exceptions limiting its application only to those Title V proposals in which the UK participates. The Committee suggested that the Government should assert that the UK’s Title V opt-in Protocol was engaged, but exercise its right not to opt into the proposal.

Your letter now informs us that the Government has opted into a revised version of the proposed Regulation which was published (bearing a limité marking) on 25 February. You express regret that “due to prorogation, on this occasion it was not possible to clarify application of the opt-in when the opt-in decision was notified to the Presidency” on 7 April. You will recall that Parliament was prorogued on 26 March, a full month after the publication of the revised proposal.

Whilst we understand the reasons for asserting the UK’s opt-in, in light of the changes introduced in the revised text, and raise no objections to the Government’s opt-in decision, we wish to express our concern and disappointment with the way in which the opt-in process has been handled. It appears that no effort was made to alert the Scrutiny Committees to the possibility that an opt-in decision would be required ahead of prorogation — all the more surprising, given that our predecessors had questioned the Government’s view that no opt-in decision was required. Nor, it seems, was any effort made to notify Parliament expeditiously of the decision taken by the Government, despite the Government’s own Code of Practice on

scrutiny of opt-in decisions making clear that a Minister should write to inform the Committees “as soon as the Presidency has been notified”.

Given this unfortunate chronology of events, we ask you to explain:

when the three-month period for asserting the UK’s Title V opt-in started to run;

why the Scrutiny Committees were not notified of the possibility that an opt-in decision might be required once the revised version of the proposed Regulation was published on 25 February, a month before Parliament was prorogued;

why it took the Government so long to notify this Committee, and Parliament, of the Government’s opt-in decision; and

when the revised proposal is expected to be adopted.

9 September 2015


Council Decision to authorise the opening of negotiations for an agreement between the EU and Mexico for the transfer and use of Passenger Name Record (PNR) data to prevent and combat terrorisms and other serious transnational crime (COM (2015) 210 final)

I am writing to advise you of the UK’s decision to participate in a Council Decision authorising the European Commission to commence negotiations on behalf of the EU for an agreement between Mexico and the European Union (“the agreement”).

The Decision cites Articles 82(1) (d) and 87(2) (a) in Title V of the Treaty of the Functioning of the European Union (TFEU) as the legal base; the UK’s opt-in therefore applies. The document is marked ‘EU Restricted’ and is therefore not deposited for parliamentary scrutiny.

The agreement would allow the processing of PNR by the Mexican Competent Authority. PNR is a record of each passenger’s travel requirements comprising information necessary to enable reservations to be processed and controlled by air carriers. Analysis of this data assists law enforcement agencies to identify individuals of interest, whether as suspects or victims, who were previously unknown. The Government therefore supports the EU undertaking negotiations with Mexico with the aim of concluding the agreement.

The EU has third country agreements on PNR with the US and Australia and is in the process of entering into an agreement with Canada. The UK opted in to negotiating mandates with

all three countries in December 2010. The UK subsequently opted in to the EU-Australia Agreement on 23 August 2011 and to the EU-US Agreement on 8 February 2012.

This is the first PNR agreement the EU has proposed with Mexico. The opening of negotiations is particularly important as Mexico has recently approached UK and other European carriers to require their PNR. This puts any EU carrier in a conflicted position; if it provides a passenger’s PNR, it potentially breaches European Data Protection legislation by transferring the data outside the EU without there being adequate safeguards in place; however failure to transfer the data could result in significant financial penalties under Mexican law. The purpose of the agreement is to ensure appropriate safeguards are in place for processing of the data for the law enforcement purposes outlined above.

20 August 2015


Opt-in to Regulation (COM (2014) 715 final)

I am writing to inform you of the UK’s decision to participate in a Regulation of the European Parliament and of the Council repealing certain acts in the field of police co-operation and judicial co-operation in criminal matters (COM (2014) 715 final), to the extent that it applies to the European Evidence Warrant.

This Regulation was one of three proposals from the European Commission to repeal obsolete legislation from the EU acquis as part of its better regulation agenda, REFIT. It originally repealed eight police and criminal justice measures which came into force before the Treaty of Lisbon. In our Explanatory Memorandum to your Committee on this Regulation (16334/14) we said that these measures had no practical impact on the UK as we had opted out of them on 1 December 2014 as part of the 2014 opt-out decision, and the then Minister for Modern Slavery and Organised Crime subsequently confirmed that it was not necessary to take an opt-in decision.

However, at the end of February, a revised draft of Regulation (COM (2014) 715 final) was proposed which included the European Evidence Warrant (EEW), a measure that has been partially repealed in EU law by the European Investigation Order (EIO) yet still remains partially in force between some Member States. The UK’s position is that we do not participate in the EEW, but a recital was included that would have created uncertainty on this point. The Commission believes that Member States, including the UK, remain obliged to transpose the measure in their domestic law.

The inclusion of the EEW here raised questions and could have created legal uncertainty at EU level as to whether the EEW applied to the UK. The UK therefore decided to opt-in to the part of the Regulation that repeals the EEW, under Protocol 21, in order to put beyond doubt

the position that we do not participate in it. This gives greater legal certainty around the UK’s non-participation in the EEW given the revised terms of the proposal.

The Government communicated the opt-in decision to the Presidency on 7 April. I regret that due to prorogation, on this occasion it was not possible to clarify application of the opt-in when the opt-in decision was notified to the Presidency.

16 July 2015

Inland RevenueNo correspondence sent or received.

Department for International DevelopmentLetter from the Chair to

Date

Ministry of JusticeLetter from the Chair to Dominic Raab

Proposal for a Directive on provisional legal aid for suspects or accused persons deprived of liberty and legal aid in European Arrest Warrant proceedings (35652) 17635/13 + ADDs 1–3

The Committee was grateful for the update on this matter in your letter of 30 January 2016.

We would be grateful for a further update when there has been substantive progress.

24 February 2016

Letter from Dominic Raab to the Chair

17635/13 DIRECTIVE ON PROVISIONAL LEGAL AID FOR SUSPECTS OR ACCUSED PERSONS DEPRIVED OF LIBERTY AND LEGAL AID IN EUROPEAN ARREST WARRANT PROCEEDINGS

I am writing to update you on the negotiations on the above Directive. We regret that we have not been in a position to write to you at an earlier date.

Shailesh Vara wrote to you on 18 March 2015 to inform you that a General Approach text had been agreed at the Justice and Home Affairs Council on 13 March 2015. Subsequently, in May 2015, the Civil Liberties, Justice and Home Affairs (LIBE) Committee of the European Parliament adopted its proposed amendments, which sought to widen the scope of the Directive significantly. They proposed expanding the scope to ‘ordinary’ legal aid, removing the qualifying circumstance of the person being deprived of liberty; adding criteria for means and merits testing; and extending the Commission’s original proposal on the European Arrest Warrant to include requirements for “third” Member States where further evidence would be gathered.

The Luxembourg Presidency focused their efforts on successfully completing negotiations on the Child Defendant and Presumption of Innocence Directives, but they did hold three trilogue meetings with the European Parliament and a number of expert-level working group meetings on the Legal Aid Directive under their Presidency. Progress has been slow and discussions have largely remained on the scope of the Directive, with some Member States supportive of the European Parliament’s position.

As you are aware, the previous Government did not opt in to the original proposal on the principled basis that rules on legal aid are more appropriately left to Member States to decide. I can confirm that this Government agrees with the previous Government’s principled position on this Directive and does not intend to reconsider UK participation post-adoption. UK officials will continue to attend the negotiations to observe and to protect the UK’s interests in other measures.

We will continue to monitor progress and update you as appropriate.

30 January 2016

Letter from the Chair to Michael Gove

2014 Commission Communication on Rule of Law Framework(35878), 7632/14

Following the Commission’s announcement on 13 January that it intends to active the Rule of Law Framework in relation to Poland, the Committee requests that the Government will now proceed to schedule the Floor debate on this document.

It is clearly an opportune time to hold the debate now, given that there is likely to be interest on all sides of the House, both in the developments in Poland and the competence of the Commission to be acting on the basis of the Framework. We note the Council Legal Service Advice published last year which clearly questioned that competence.

This debate was originally recommended by the predecessor Committee in May 2014 and confirmed by this Committee in July last year. It has therefore been outstanding for some 20 months. This, as we have pointed out in previous correspondence both to yourselves and the current Leader of the House, is unacceptable.

In the meantime, we would be grateful for your views on the Commission’s intention to operate the Framework in relation to Poland and other relevant developments, such as the 2015 Resolutions of the European Parliament urging the Commission to act in relation to Hungarian developments.

20 January 2016

Letter from the Chair to Dominic Raab

Proposal for a Regulation creating a European Account Preservation Order to facilitate cross-border debt recovery in civil and commercial matters — (33051) 13260/11 + ADDs 1–2

Thank you for your letter of 23 November 2015.

The Committee has noted the Government’s decision not to opt into Regulation 655/2014 for the reasons outlined in your letter. It was disappointed that you did not accede to its earlier request that it should be notified of this decision on the back of deposit of the final text and an Explanatory Memorandum.

2 December 2015


Document 13260/11 (COM(2011) 445): Proposal for a Regulation creating a European Account Preservation Order to facilitate cross-border debt recovery in civil and commercial matters

As your Committee is aware, this proposal was adopted as Regulation 655/2014 on 15 May 2014. Since then the Government has considered whether it is in the UK’s interests to seek to opt in to the Regulation.

As part of this consideration, views were received from the Lord Chancellor’s Advisory Committee on Private International Law (chaired by Lord Mance and composed of senior judges, lawyers and academics representing all UK jurisdictions), 64 members of the legal profession at a meeting hosted by a City of London law firm and via correspondence.

Those who provided their views on the Regulation were almost unanimous that such a procedure had the potential to be of value to creditors but, despite the substantial improvements to the text that the UK helped to obtain during the negotiations, such benefits were not thought sufficient to outweigh concerns previously expressed by the majority of those who responded to the 2011 public consultation on the Commission’s proposal, that the Regulation is imbalanced in favour of creditors, to the detriment of debtors, and will be cumbersome to operate.

In particular concerns were raised that courts still will not have enough discretion about whether to issue an order and whether or not to hear the debtor’s side of the dispute before it is issued; there will still be a danger that an order could be issued because a debtor is in financial difficulty rather than because he/she is deliberately trying to dissipate assets to evade payment, something likely to be detrimental to business rescue; and the provisions on security and liability are not strong enough.

The procedures for varying or challenging an order were also thought to be inadequate. First because there will be no guarantee that a debtor will be able to exempt from seizure sums to enable him to finance a legal challenge. Second, because of a lack of opportunity to apply to the court to vary an order on the grounds that the substantive proceedings on the debt are delayed, this could lead to a situation where a debtor’s account is frozen for months or years while he awaits a court decision on whether he is liable for a debt. The uncertain effects on third parties, including the beneficiaries of a trustee account, were also highlighted.

The overwhelming view was that the UK should not seek to opt in now but should rather wait to see how the Regulation is applied and, in the light of that experience, should consider the arguments for opting in at a later stage.

On that basis, having fully considered the matter, the Government accepts the serious concerns expressed about this Regulation and has therefore decided not to seek to opt in to the Regulation at this time.

23 November 2015

Letter from the Chair to Dominic Raab

Proposal for a Directive on the right of access to a lawyer in criminal proceedings and on the right to communicate upon arrest — (32865) 11497/11 + ADDs 1–2

The Committee has asked me to thank you for your letter of 15 October indicating that the Government does not intend to opt into this Directive.

28 October 2015


DIRECTIVE 2013/28/EU ON THE RIGHT OF ACCESS TO A LAWYER IN CRIMINAL PROCEEDINGS AND IN EUROPEAN ARREST WARRANT PROCEEDINGS, AND ON THE RIGHT TO HAVE A THIRD PARTY INFORMED UPON DEPRIVATION OF LIBERTY AND TO COMMUNICATE WITH THIRD PERSONS AND WITH CONSULAR AUTHORITIES WHILE DEPRIVED OF LIBERTY

In his letter of letter of 18 March 2015, Shailesh Vara updated the Committee on the Government’s position in relation to this Directive. I am now responsible for EU business at the Ministry of Justice.

As you will be aware, the Directive is the third measure on the Council’s Criminal Procedural Rights Roadmap, which was agreed in 2009. The Roadmap lists measures intended to facilitate mutual recognition instruments such as the European Arrest Warrant and exchange of criminal records, by ensuring that where action needs to be taken by competent authorities on the basis of decisions made in other Member States, they can be confident that decisions have been taken against the background of robust minimum standards of rights for defendants. The Directives on the Roadmap are intended to build upon the fair trial rights in the European Convention on Human Rights, fleshing out what they mean in practice.

Having now reviewed the final version of the Directive, we have decided to continue the previous Government’s position, and remain outside this measure.

Britain has a proud and distinctive tradition of liberty, and in particular of protecting civil liberties and rights. Across Europe and worldwide, our common law traditions are held up as a model for the protection of individual rights and liberties.

It is my view that the UK should only participate in EU measures in the field of criminal justice where this is in the national interest. Although I am supportive of efforts by other Member States to improve standards in this area, the UK already offers robust rights for defendants and I do not consider there to be a compelling case for opting in to this Directive.

This assessment is compounded by the fact that the Directive as adopted may require changes to current UK legislation or practice in a number of areas. For example, the Directive might interfere with the operation of the UK’s “drink-drive” regime, as the police would no longer be able to conduct breathalyser tests at the police station in the absence of a lawyer, if questions must be asked to ensure the validity of the test and the evidence. Furthermore, the Police and Criminal Evidence Act 1984 codes of practice would require amendment, to remove, for example, the power to delay access to a lawyer to prevent serious damage to or loss of property in certain circumstances.

15 October 2015

Letter from the Chair to Michael Gove

EU accession to the ECHR — (32123) 10817/10

The Committee thanks you for your letter of 16 June 2015 on the question of the impact of the Court of Justice’s Opinion 2/13 on EU accession to the ECHR.

We note the contents of the letter. You will be aware of the Committee’s interest in EU fundamental rights. We look forward to receiving a more detailed update on the next steps in the accession process, addressing the questions we raised in our Report of 21 July on the Commission’s 2014 annual report on the EU Charter of Fundamental Rights.

9 September 2015

Letter from Michael Gove to the Chair

EU ACCESSION TO THE EUROPEAN CONVENTION ON HUMAN RIGHTS

Thank you for the European Scrutiny Committee’s report sent to my predecessor on21 January concerning the accession of the European Union to the European Convention on Human Rights.

Opinion 2/13 of the Court of Justice of the European Union (CJEU) raised complex questions about accession. These questions are still being considered by the European Union and the UK is playing an active role in those deliberations.

The Government recognises that accession is a Treaty commitment, but it must occur in a way which is workable and which respects our approach to existing human rights law and avoids creating additional legal uncertainty. Some of the issues raised by the CJEU touch on these imperatives — such as its comments on the Common Foreign and Security Policy and the principle of mutual trust between Member States. It is Important that the time is taken for these issues to be resolved in a manner which respects the UK’s key objectives in respect of accession.

The UK will remain involved in the EU discussions on the next steps on this issue, and·I look forward to updating the Committee on outcomes of those discussions in due course.

16 June 2015

Letter from Chris Grayling to the Chair

THE DRAFT COUNCIL DECISION AUTHORISING AUSTRIA AND MALTA TO ACCEDE TO THE HAGUE SERVICE CONVENTION —DOCUMENT 10748/13 COM (13) 338

Your Committee last reported on this draft Decision in September 2013. Your Committee retained this draft Decision under scrutiny, with the request that it be updated on Working Group negotiations.

Since then, until recently, discussion at a Working Group level has been on hold, with no meetings at all, pending an Opinion from the Court of Justice on the extent of the scope of the “exclusive competence” of the EU to negotiate the accession of Member States to international instruments. That Opinion was sought in the context of the accession of 8 countries to the Hague 1980 Convention on child abduction, about which I have written

separately to you (Documents 5218/12 and 5306/12 to 5312/12), but has clear implications for the present matter.

Now that the Opinion is available (Opinion 1/13), discussions have restarted. I thought it right to let you know what the position currently is, and the prospects for agreement.

The UK opted in to this draft Decision. As I explained during our exchanges in 2013, as a matter of policy, the Government considers this to be an uncontroversial proposal which could deliver some modest benefits and which the UK should support. That remains the position.

The question of external competence is, however, more tricky. Opinion 1/13 raises concerns regarding how the test for exclusive competence will in fact be applied by it in future. Despite recognising that exclusive external competence must be determined following a comprehensive and detailed analysis of the relationship between the international agreement and EU rules in question, the analysis as to the “risk that common rules will be affected” is very superficial and in its actual application of the test to the facts of that case, the Court seems to have been far more interested in the “extent to which the areas concerned coincide” element of the test.

Unsurprisingly, the Commission argue that Opinion 1/13 supports their case that there is exclusive external competence regarding the accession of Austria and Malta to the Service Convention. We disagree, arguing that the relationship between the Service Convention and the EU Service Regulation is even more tenuous. That argument continues within the Working Group — where, as matters stand, a number of Member States share our concerns.

The Commission will also argue that it follows from the existence of exclusive external competence that the UK’s opt-in has no validity. We disagree with this too, but here we are unlikely to have any support.

Notwithstanding these disputes, there is a realistic prospect that the question might appear on the agenda of the June 2015 JHA Council meeting for a general approach.

It is unfortunate that what should be a simple and uncontroversial matter has become coloured by these difficult procedural and political concerns. Nonetheless, I can assure the Committee that the Government will continue to press its case on the issues of competence and the opt-in. I will update the Committee if there are any developments before prorogation.

24 March 2015

Office of National StatisticsNo correspondence sent or received.

HM Revenue and CustomsNo correspondence sent or received.

Department for TransportLetter from the Chair to Claire Perry

Fourth Railway Package

(34651) 5855/13, (34666) 5960/13 + ADDs 1–5 and (34672) 5985/13 + ADDs 1–7

The Committee has asked me to thank you for the comprehensive update you gave in your letter of 3 May about the latest developments on the Political/Market Pillar of the Fourth Railway Package.

11 May 2016

Letter from Claire Perry to the Chair

5855/13: Communication from the Commission on the “Fourth Railway Package” — completing the Single European Railway Area to foster European competitiveness and growth; and Amendments to Directive (EU) 2012/34 and Regulation (EC) 1370/2007 — 5960/13 and 5985/13

Further to my letter of 15 March 2016, I am writing to update you on progress in trilogue negotiations of the political/market pillar of the Fourth Railway Package and to inform you that formal agreement by the Council and the European Parliament will be reached on both files shortly.

My previous letter outlined several matters which remained to be resolved in trilogue negotiations. Since then, negotiations with the European Parliament have progressed considerably at two further trilogues, and we have been successful in preserving key aspects of the General Approach in the final proposed deal. Below, I set out the results of negotiations on the key outstanding issues, and a broader assessment of the pillar as a whole.

On the PSO Regulation – 1370/2007 (5985/13):Power to make a direct award of rail franchisesLike the General Approach, the final proposed deal contains two main powers to make direct awards of contracts. These powers will replace the existing, broad power to make direct awards under Article 5(6) of Regulation 1370/2007.

The first power permits the temporary use of direct award where there are exceptional circumstances to justify this. In the proposed deal, these contracts are limited to five years in length and this power cannot be used for successive direct awards for the same services. When using this power, the competent authority must publish its reasons for doing so and notify the European Commission to prevent abuse. This power will provide helpful flexibility to use direct awards in circumstances where a competitive tender is not practical.

The second power allows direct award subject to two criteria. Firstly, that the characteristics of the network concerned justify the use of a direct award – in the proposed deal small Member States and, in the UK, Northern Ireland are deemed to meet this criterion. Secondly, that the use of this direct award would result in improvements in quality of services and/or cost efficiency compared to the previous contract. These contracts can be up to ten years in length. When using this power, the competent authority must publish its reasons and notify the European Commission. The final text differs from the General Approach in requiring each Member State to designate an independent body which could on request assess the franchising authority’s decision. This is a proportionate and practical additional safeguard against abuse of this power. It is envisaged that in the UK such an application to assess the authority’s reasoning would be by way of an application for judicial review to the Court.

Like the General Approach, the proposed deal makes no changes in respect of the ownership of train-operating companies (TOCs). Therefore, competent authorities, such as the Department for Transport or Transport Scotland, will, subject to domestic legislation, be able to continue to award contracts to publicly or privately owned TOCs.

Employment conditions in the railway sectorThe European Parliament proposed a number of additional requirements related to the employment conditions of workers in the railway sector. These included the introduction of a mandatory scheme for the certification of on-board train staff which could have resulted in additional costs.

These areas did not form part of the Commission’s original proposal and no assessment of the costs or benefits of these requirements had been made. The proposed requirements could also have resulted in different requirements for the railway sector compared to other modes, with implications for its competitiveness. For these reasons I did not support these proposals and they have not been included in the proposed deal. Instead, the proposed deal states that competent authorities and operators of public service contracts must comply with relevant existing national and Union law and collective agreements. It also requires competent authorities to include details in tender documents of any requirements related to the transfer of employees under Directive 2001/23/EC (implemented through the Transfer of Undertakings (Protection of Employment) Regulations). It does not introduce new employment requirements specific to the railway sector.

Public transport plansThe final compromise text moves away from the European Parliament’s potentially burdensome demand for the creation and maintenance of new multimodal public passenger transport plans. Instead, it requires competent authorities to define specifications for public service obligations in line with the principle of proportionality. The specifications must also be consistent with the objectives of transport policy as developed according to national law. This requirement is unlikely to result in any requirements additional to existing UK legislation.

Rolling stockThe General Approach contained a requirement for competent authorities to assess whether they need to take action to ensure that bidders for public service contracts have fair access to rolling stock. The proposed deal includes an additional requirement for competent authorities to consider the relevant leasing market for rolling stock when carrying out their assessment. The final text also includes a range of optional measures which competent authorities may take to improve access to rolling stock. If the competent authority intends to specify the type of rolling stock required for a contract it must provide details of that rolling stock in the tender documentation.

Transition periodsThe new Regulation would be likely to enter into force in late 2017. Not all provisions would apply immediately: the existing, broad power to make direct awards under Article 5(6) of Regulation 1370/2007 would remain in place until 2023.

On the Governance Directive – 2012/34 (5960/13):Further safeguards to prevent “vertically integrated undertakings” abusing their position in the marketA vertically integrated undertaking is a company or group of companies which are active in both rail infrastructure management and train operations. A potential risk with these types of structure is that the infrastructure manager might be incentivised to discriminate against other train companies competing against the group.

The General Approach already included safeguards designed to prevent discrimination of this sort. The proposed deal includes additional requirements to ensure that other companies within the group do not have a decisive influence on the infrastructure manager which could result in discrimination. It will also prevent the infrastructure manager from passing sensitive information to other companies in the group. These measures will reduce the risk that vertically-integrated structures engage in anti-competitive practices. I believe that these measures are proportionate and practical, and that their overall benefits outweigh the limited impact they may have on vertically-integrated structures in the UK.

Provisions to ensure the impartiality of the infrastructure manager, including in respect of conflict of interestIn addition to the requirements dealing with infrastructure managers in vertically integrated undertakings, the provisions relating to all types of infrastructure manager have been strengthened in the proposed deal. These include a requirement to ensure that the impartiality of board members and senior management of the infrastructure manager is not affected by conflicts of interest. Similarly, decisions on traffic management and maintenance planning must not be affected by conflicts of interest. These changes are unlikely to have an effect in practice in the UK where these are already long established principles, but they may result in a reduced risk of discrimination in other EU Member States.

Rules for access on high speed linesThe General Approach did not contain specific provisions on high speed rail services. The European Parliament proposed the creation of a different access regime for high speed rail services, which envisaged that there would be no role for the regulator - in the UK the Office of Rail and Road (ORR) - in assessing the impact of new open access high speed services on existing franchises. This was on the basis that more competition “in the market” (between different train operators on the same route) would, in the Parliament’s view, have beneficial effects on the development of high speed rail services. However, it would have resulted in the creation of a different regulatory regime for high speed and other rail services, which could have been difficult to manage in practice, because trains can run on high speed infrastructure for part of their journey and conventional infrastructure for the rest.The proposed deal contains a specific article about high speed rail services. Affected services would need to run non-stop between two stations separated by at least 200km, on specialised infrastructure and at an average speed of over 250km/h. In the UK no existing rail services are in scope of the definition of “high speed service”. Under the proposed deal, if an operator applies to run a new high speed service, as defined above, the regulator would be required to assess its impact on existing rail franchises using the same criteria as will be used for other non-high speed rail services. While there are minor differences in wording in the respective provisions relating to high speed and non-high speed rail, these do not result in any differences in substance and the European Commission will also issue a statement to this effect. I therefore do not expect the provisions relating to high speed to have any effect in practice.

SummaryIn its totality, the pillar is a significant single market measure which will benefit the UK in a number of ways. Firstly, UK train companies will now have right to operate domestic passenger services across the entirety of the EU.

The proposed deal moreover recognises the important social and economic benefits that franchise contracts can bring in providing services which would not be provided by the market alone. It includes safeguards to ensure that franchising authorities can continue to deliver those benefits.

As a result of the pillar, competitive tendering will become the default for the awarding of ‘Public Service Obligation’ contracts across the EU, as it already is in the UK. Franchising authorities nevertheless retain the flexibility to award a contract directly, provided the direct award can be justified against the criteria set out in the Regulation. This flexibility in how franchises can be procured is important in ensuring that the consequences of unexpected events, such as the cancellation of a franchise procurement, can be managed without any disruption to services. It will also allow train services in Northern Ireland to continue to be directly awarded on similar lines as they are currently.

Finally, as set out above, the proposed deal includes additional rules designed to prevent anti-competitive practices, for example in vertically-integrated structures and in the rules

governing the impartiality of the infrastructure manager. These are likely to reduce the risk of discrimination against UK train operators active in other EU Member States.

No further changes to the texts are anticipated and a final vote on the political/market pillar of the Fourth Railway Package is expected during June or July. The pillar represents a further, positive opening of the single EU market for passenger rail services and I would wish to support it. I am, of course, happy to provide any further detail that the Committee may wish to have on the final texts.

On the wider Package, we expect final adoption of the technical pillar proposals (6012/13, 6013/13 and 6014/13) to take place shortly. The Package also included non-legislative documents 5855/13 (the accompanying Communication), 6017/13 (a report on progress made towards achieving interoperability of the rail system), and 6020/13 (a report on opening of the market of international rail passenger transport).

The Fourth Railway Package has been a significant package of proposals which will go some way towards removing technical and regulatory barriers in the railway sector. Overall, the proposed deals across the whole Package represent a good outcome for the UK in further opening the EU railway market, and I am grateful to the Committee for the interest they have taken in the development and negotiation of these important proposals.

3 May 2016

Letter from the Chair to Claire Perry


(34651) 5855/13, (34666) 5960/13 + ADDs 1–5 and (34672) 5985/13 + ADDs 1–7

The Committee has asked me to thank you for the update you gave it in your letter of 15 March about the latest developments on the Political/Market Pillar of this package.

23 March 2016


5855/13: Communication from the Commission on the “Fourth Railway Package” – completing the Single European Railway Area to foster European competitiveness and growth; and Amendments to Directive (EU) 2012/34 and Regulation (EC) 1370/2007 – 5960/13 and 5985/13

Further to my letter of 23 November 2015, I am writing to update you on progress in trilogue negotiations of the political/market pillar of the Fourth Railway Package. As you will recall, the political/market pillar comprises amendments to Regulation (EC) 1370/2007 (award of

public service contracts – 5985/13) and Directive (EU) 2012/34 (access to and management of the railway network – 5960/13).

Following an agreement on the Council’s General Approach text at Transport Council in October, “trilogue” negotiations have begun between the European Parliament, Council and European Commission. These aim to reach agreement on amendments to the proposals.

Progress in trilogue negotiations on the market pillar has been slow. Two meetings took place under the Luxembourg Presidency and two under the Dutch Presidency. The earliest point at which an agreement could be reached is April.

The first two trilogues focused on the parties explaining their respective positions. Only in the latter two have possible compromises been developed. Progress has been made in reaching provisional agreement in less controversial areas where there is some common ground between the legislators.

On the PSO Regulation, for the use of Direct Award powers the provisional compromises remain close to the Council’s General Approach text. Provisional compromise text looks likely to reduce the European Parliament’s potentially burdensome demand for the creation and maintenance of multimodal public passenger transport plans to a more proportionate requirement for the specification of public service obligations to be consistent with wider public transport policy. On the Governance Directive, provisional agreement has been reached on the independence of the infrastructure manager in respect of the essential functions, traffic management and maintenance planning.

In these areas, the compromises proposed by the Presidency are acceptable.

There remain a number of areas of importance to be resolved. These are as follows:

On the PSO Regulation – 1370/2007:

Power to make a direct award of a rail franchise in exceptional circumstances

The General Approach contains a specific power to remap or reschedule franchises and to deal with the consequences of train operator default or the failure of a franchise competition. The European Parliament has raised concerns that this power could be open to abuse by other Member States who wish to keep their railway markets closed.

We have therefore worked with the Presidency to develop potential compromises which address the Parliament’s fears about abuse, while ensuring adequate flexibility for the rail franchising programme.

Rules on the terms and conditions of employment for workers in the railway sector

The European Parliament currently argues that additional EU rules are needed on the terms and conditions of employment for railway workers. The Council position, which we support, is that it is not appropriate to introduce any new requirements which go beyond existing EU and national law.

On the Governance Directive – 2012/34

Further safeguards to prevent “vertically integrated undertakings” abusing their position in the market

A vertically integrated undertaking is a company or group of companies which are active in both rail infrastructure management and train operations. The European Parliament has proposed additional safeguards to prevent anticompetitive practices. In the UK, Eurotunnel and Northern Ireland Railways are vertically integrated undertakings. We agree with the EP on the importance of avoiding anticompetitive practices and are working to ensure that proposals remain proportionate and practical.

Different rules for open access on high speed lines

The European Parliament’s position is that there should be no restrictions on open access operators who wish to operate high speed services competing with franchised services. The Council’s position, which we support, is that high speed services should be treated consistently with other rail services, as is set out in the General Approach. Any conflicts between open access and franchised services should be decided objectively by the regulator.

Transitional periods for the implementation of both files have yet to be agreed and it is likely that these will not be settled until the very end of the negotiations.

I will update you on any significant further developments in negotiations as they progress.

15 March 2016

Letter from the Chair to Robert Goodwill

Transport agenda of the Dutch Presidency

The Committee has asked me to thank you for your informative letter of 1 February about the Dutch Presidency’s intentions for the transport sector.

10 February 2016

Letter from Robert Goodwill to the Chair

DUTCH PRESIDENCY FORWARD LOOK - TRANSPORT

I am writing to inform you of our expectations for the transport agenda during the Dutch Presidency of the EU Council of Ministers.

The Dutch have an ambitious transport programme. Their priorities are to complete trilogues on the market pillar of the Fourth Railway Package and take forward the Aviation Strategy, but they also have a substantial agenda on maritime and shipping.

The Presidency have scheduled one formal Transport Council on 7 June (Luxembourg) with an innovative joint transport and environment informal Council on 14-15 April (Amsterdam) as well as a range of modal events.

In more detail:

Aviation

The Commission’s Aviation Strategy (EM 14992/15), launched in December 2015, is a clear priority for the Presidency. The Communication on the Strategy was discussed at an Aviation Summit which I attended at Schiphol Airport on 20/21 January, entitled “boosting the competitiveness of European aviation”. The main discussion was on the Aviation Strategy with panel sessions and a roundtable debate. The proposed new EASA Basic Regulation (EM 14991/15) will be the Presidency’s legislative focus. Working group discussions have opened and the Presidency may seek a general approach at the June Transport Council.The Presidency will also begin discussions on mandates for comprehensive aviation agreements with third countries.

The Commission expects to table a proposal to revise Regulation 868/2004 on unfair pricing practices in the spring. The Presidency stand ready to begin discussions on the proposal as soon as it is published, with a possible progress report at the June Transport Council.

Maritime and Shipping

A wealth of forthcoming maritime proposals in early 2016 means that the Shipping Working Party will be starting discussions on several new legislative files under the Dutch Presidency. This includes the proposal to widen the mandate of the European Maritime Safety Agency (EM 15390/15), published as part of the wider package of measures to improve the EU’s external border security and develop a European Borders and Coastguard Agency.

The Presidency are taking forward discussions on a Multi-annual Framework Decision for the Paris MOU on Port State Control (EM 15518/15). They will also be keen to push forward with the Commission’s proposals to simplify European Passenger Ship Safety regulations, which will be released in March and which fit well with the Dutch and UK Better Regulation Agendas. The Presidency may seek general approaches at the June Transport Council on this proposal and an expected proposal for a new Directive on Harmonisation of Professional Qualifications for Inland Waterways which will be published in February. The Shipping Working Party will also continue its usual IMO coordination discussions.

The Dutch plan to take forward trilogue discussions on the proposal Ports Services Regulation (EM 10154/13 and EM 13764/14) and are hoping to reach agreement by June. I will write to you separately with details of the latest developments in the European Parliament. The Presidency will also work to take forward trilogues on the proposed Technical Standards for Inland Waterway Vessels Directive (EM 13717/13), where discussions with the European Parliament will focus on the role of delegated acts.

The Dutch are supporting their maritime programme with a High Level Conference on Short Sea Shipping in Amsterdam on 15 February which will focus on how best to promote

short sea shipping, the challenges facing it, and the opportunities that exist. During their Presidency they will want to prioritise dossiers that promote competitiveness and reduce administrative burdens. In the longer term, preparations will continue on the development of the Commission’s planned 2017 Maritime Package, which is likely to coincide with the UK’s Presidency.

Land

The Presidency’s main focus is on completing the remaining trilogue process on the market pillar of the Fourth Railway Package (EM 5960/13 & 5985/13) with a strong desire to reach an agreement by Easter.

There will be no live road dossiers under the Dutch Presidency. However, we are still expecting the Commission to adopt its Roads Initiatives towards the end of this year. The planned package will have three pillars: road charging, social dimension, and the internal market. The Commission plans to launch a public consultation on each of the three policy areas imminently, and carry out impact assessments in early 2016. We are continuing to engage to encourage development of a package that supports the UK’s objectives on competitiveness, jobs and growth. The package is not expected to feature in the Presidency’s programme, although the Dutch have noted that they stand ready to discuss it if necessary.

Motor Vehicle Technical Harmonisation

There is likely to be an early agreement in trilogue discussions on Non-Road Mobile Machinery (EM 13690/14), with a positive outcome on the cards for the UK’s priority exemption for replacement engines.

We will continue to encourage the search for a position that Member States can support on Transfer of Motor Vehicle Registrations (8794/12). This should produce useful benefits by harmonising and simplifying procedures across the EU for those wishing to re-register their vehicle when they change their country of residence; and reducing the current costs to consumers of driving rented vehicles one way across a border within the EU.

A new Commission proposal for revising the Framework Directive for Motor Vehicles was published on 27 January. In the wake of the VW emissions scandal, this is intended to present a step-change in how the EU approaches market surveillance and enforcement of motor vehicle legislation.

Transport and Environment

On real driving emissions (RDE – EM 14506/15), the European Parliament will vote in plenary on 3 February on whether to object to the proposal agreed by Member States in technical committee, which will significantly reduce real world NOx emissions from new diesel cars from 2017, thereby contributing to the EU’s air quality goals. Any objection to

the RDE Regulation is likely to result in a significant delay to implementation, which in turn will delay benefits to air quality. HMG strongly support the introduction of RDE testing as a vital way to reduce vehicle emissions as soon as possible and we have been lobbying MEPs to try to avert a negative outcome. We will also continue to proactively engage in developing the future RDE packages 3 and 4.

Two of the cross-cutting themes of the Dutch Presidency are innovation and sustainability and in this context the Presidency is preparing a draft declaration on Connected and Autonomous Vehicles (CAVs), which will set out a roadmap for future work in this area. This will be the key transport focus of the joint Transport and Environment Informal Council on 14-15 April. The Council will include a joint session for Transport and Environment Ministers focussing on smart and green solutions for sustainable mobility and the future of transport in Europe. There will also be a separate session on the morning of 15 April on transport decarbonisation, which the Presidency hopes will feed into the Commission’s Communication on decarbonisation of the transport sector, expected to be adopted before the summer.

I hope that this general summary of our expectations is useful. Further information will, of course, be provided to you in the future on each of these dossiers, in line with the usual procedures for Parliamentary scrutiny.

1 February 2016

Letter from the Chair to Andrew Jones

Exhaust emissions from passenger cars and light vehicles — (37286) 14506/15Thank you for your letter of 19 January, setting out the latest position within the European Parliament and the Council, which we have noted.I should also confirm that the motion for the debate on this document, which is currently scheduled for 8 February, has been amended to include a reference to the Addendum, which has just been belatedly deposited.

20 January 2016

Letter from Andrew Jones to the Chair

14506/15 REAL DRIVING EMISSIONS

On the 18 November I sent your Committee an Explanatory Memorandum regarding the Commission’s proposal for a comitology measure on a new procedure for assessing the tail-pipe emissions from light duty vehicles (passenger cars and light vans) to amend Regulation (EC) No 692/2008 as regards emissions from light passenger and commercial vehicles (Euro 6). This was considered on 25 November and the proposal was recommended for a debate in

European Committee. I am writing ahead of that debate to update you on the progress of the proposal in the European Parliament.

As noted in the EM, following the approval of the proposal in the comitology technical Committee, the draft Regulation is subject to scrutiny by the Council and the European Parliament. This must be concluded by 23 February at the latest. Either body could reject the proposal but it cannot be amended.

The European Parliament is considering the proposal first, and some MEPs are frustrated that it is less ambitious than they hoped. Following a vote (by simple majority) to object to the proposal in the Parliament’s ENVI Committee, the European Parliament will now consider the proposal in plenary. An absolute majority of 376 MEPs would be required for the ENVI Committee’s objection to be either supported or overturned.

I understand that MEPs’ main concern relates to the Step 2 conformity factor (the amount by which emissions exceed the Euro 6 limit) for nitrogen dioxide which is set to 1.0 (the Euro 6 limit) plus a 0.5 margin for measurement uncertainty. They are concerned that this effectively weakens Euro 6 standards. However the Government believes it makes type approval requirements for diesel vehicles significantly more stringent as manufacturers will continue to have to meet the Euro 6 limits in laboratory tests but will also have to improve real-world emissions. The current proposal does already place an obligation on the Commission to review this margin annually and the clear aim is to reduce it in the light of corresponding technological progress. I believe that an objection to the proposal would delay the introduction of Real Driving Emissions, possibly by several years, and seriously put at risk Member States’ ability to achieve EU air quality targets.

The EP plenary vote has been delayed from the week of the 18 January to the week of the 1 February, to allow for further discussions to address MEPs’ concerns. We are working with other Member States to engage with MEPs to secure a helpful outcome and ensure this proposal can be adopted.

The Council of Ministers is expected to reach its own decision after the EP plenary has taken place, and is not expected to oppose adoption.

I look forward to debating this important proposal.

19 January 2016



(34651) 5855/13, (34666) 5960/13 + ADDs 1–5, (34667) 6012/13 + ADDs 1–2, (34668) 6013/13 + ADDs 1–2, (34669) 6014/13 + ADDs 1–2, (34672) 5985/13 + ADDs 1–7, (34673) 6017/13 and (34675) 6020/13

The Committee has asked me to thank you for the update you gave it in your letter of 23 November about the latest developments on this package.

25 November 2015


5855/13: Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions on “The Fourth Railway Package” - completing the Single European Railway Area to foster European competitiveness and growth and 5960/13, 5985/13

Further to my letter to you of 15 July, I am writing to update you on progress with the political/market pillar of the Fourth Railway Package, including the outcome of the 8 October Transport Council.

As you will recall, the political/market pillar of the Package comprises amendments to Regulation 1370/2007/EU (award of public service contracts – 5985/13) and Directive 2012/34/EU (access to and management of the railway network – 5960/13).

During negotiations, we argued in favour of the principle of the single European railway market and the removal of obstructions to it, whilst seeking to minimise administrative, regulatory and cost burden for the industry.

Working Group discussions made little progress for a very long time owing to considerable differences in position among Member States across all elements of the proposals. However, the Luxembourg Presidency made completion of the Market Pillar one of its key priorities and scheduled a number of working group meetings with an aspiration to reach General Approaches at the 8 October Transport Council. Discussions intensified during September, and it became clear that any potential General Approaches would represent a significant change from the Commission’s original proposals, and would not go as far as we would like.

Following these negotiations, on 8 October the Council unanimously agreed General Approaches on both proposals. The General Approach texts mandate competitive tendering for public service contracts as a rule, but with several derogations to allow for direct awards in certain circumstances. I welcome the provision allowing directly awarded contracts in exceptional circumstances, including where the competent authority demonstrates that a new directly awarded contract will result in improvements to either cost efficiency or quality compared to an existing contact. However, direct awards of up to ten years will remain possible in a range of circumstances. This is a broad derogation and I am disappointed that

the development of the single market in this area will be more limited than was envisaged by the Commission’s original proposal.

Overall, although negotiations on the Political/Market Pillar have been disappointing in terms of opening the market elsewhere in the EU, the outcome is compatible with the UK’s objectives in relation to the domestic structures. The General Approach texts represent a positive, if limited, move towards establishing a single market in passenger rail services and at the Council the UK, along with all other Member States, therefore recognised the positive steps towards liberalisation that had been made and in the spirit of compromise supported the General Approach.

Trilogue discussions with the European Parliament have now opened with a view to concluding negotiations on the Package in early 2016. I will keep the Committee in touch with progress as the negotiations develop.

23 November 2015



(34651) 5855/13, (34666) 5960/13 + ADDs 1–5, (34667) 6012/13 + ADDs 1–2, (34668) 6013/13 + ADDs 1–2, (34669) 6014/13 + ADDs 1–2, (34672) 5985/13 + ADDs 1–7, (34673) 6017/13 and (34675) 6020/13

The Committee was grateful for the update you gave it in your letter of 15 July about where matters stand in relation to this package. However, it asked me to make plain how very disappointed it is that the “reverse hybrid” model could not be secured for Common Safety Methods (CSMs) and Common Safety Targets (CSTs).

9 September 2015


5855/13: Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions on “The Fourth Railway Package” - completing the Single European Railway Area to foster European competitiveness and growth and 5960/13, 5985/13, 6020/13, 6012/19, 6012/13, 6013/13, 6014/13, 6017/13

Further to Baroness Kramer’s letter to you of 18 March, I am writing to update you about progress with the Fourth Railway Package (“the Package”). As you will recall, the two legislative ‘pillars’ of the package have been taken forward separately in working group and Council negotiations.

The Technical Pillar (6012/13, 6013/13, 6014/13)

The “Technical” pillar of the Package comprises recasts of the Railway Interoperability (6013/13) and Safety (6014/13) Directives and a revise of the Regulation which established the European Railway Agency (“ERA” – 6012/13). This was the first pillar to be taken forward with general approach and political agreement texts were achieved across all three dossiers in 2013 and 2014 respectively. The Latvian Presidency’s focus on this area was beneficial and, following a large number of working groups and trilogue meetings during its tenure, a proposed agreement on final texts has now been reached. This maintains the “choice model” originally proposed by the UK whereby applicants for a safety certificate or rolling stock interoperability authorisation retain the option of applying to their local national safety authority or ERA where operations are restricted to one Member State with the latter being the de facto issuing authority for all cross-border applications.

In exchange for accepting the choice model, as well as other amendments made by the Council, the European Parliament sought a number of concessions across all three texts. While we are able to support the majority of these as they did not materially alter the text, the European Parliament pushed strongly for the use of delegated acts rather than implementing acts in respect of the adoption of Technical Specifications for Interoperability (“TSIs”), Common Safety Methods (“CSMs”) and Common Safety Targets (“CSTs”). Following a number of working group and trilogue discussions on this issue, a compromise (known as a ‘reverse hybrid’ model) was finally agreed a whereby mandates for TSIs would be approved by delegated act with adoption by implementing act but mandates and adoption of CSMs and CSTs would progress by delegated act only.

In respect of TSIs, although the initial mandate would be by delegated act, it was a priority for the UK that adoption remained by implementing act with development being undertaken by working groups of Member State experts since these are highly technical documents which specify the standards to which all new rolling stock and infrastructure must be built. Regrettably, the Presidency was not able to secure this ‘reverse hybrid’ approach for CSMs and CSTs and instead agreed a mandate by implementing act with adoption by delegated act, an unwelcome precedent which the UK opposed. Consequently, the compromise on CSMs and CSTs means that we will need to vote against the recast Railway Safety Directive (which contains the provisions for both CSMs and CSTs) although we intend to make it clear that we support the rest of the text. We are able to support both the recast Railway Interoperability Directive and the Regulation establishing ERA since both texts maintain the UK’s red lines in all respects.

No formal vote on the proposed compromise has occurred. It is unclear at present when the compromise will be put to the Council of Ministers but we anticipate that the Luxembourg Presidency will ensure that the process can be completed as soon as possible. Once this

happens, the European Parliament will also vote and the texts will be adopted. However, although the Department for Transport is preparing for transposition of this legislation into UK law, the timing of this process will depend on progress on negotiations for agreement of the Political or Market Pillar.

The Political/Market Pillar (5960/13, 5985/13)

The “Political” or “Market” pillar of the Package comprises amendments to Regulation 1370/2007/EU (award of public service contracts, franchises in UK terms – 5985/13) and Directive 2012/34/EU (access to and management of the railway network – 5960/13). These proposals would largely move towards the existing GB model though there are a number of key areas where changes are needed to prevent additional regulatory burden in GB and to retain existing domestic flexibility.

Baroness Kramer’s letter to you of 18 March explained the UK’s objectives for the Market Pillar and noted that there remain considerable differences in position among Member States across all elements of the proposals. These differences largely remained during subsequent working group discussions and the Latvian Presidency therefore accepted that they would not be able to achieve general approaches at the 11 June Transport Council, which instead featured a progress report.

The Luxembourg Presidency has indicated that completion of the Market Pillar will be one of its key priorities. The Presidency has already scheduled a number of working group meetings with an aspiration to reach general approaches at the 8 October Transport Council and, if possible, complete negotiations with the European Parliament by the end of this year.

I will keep the Committee in touch with progress as the negotiations develop.

15 July 2015

Letter from Andrew Jones to the Chair

15189/12 (34342) Draft Directive amending Directive 98/70/EC relating to the quality of petrol and diesel fuels and amending Directive 2009/28/EC on the promotion of the use of energy from renewable sources: Indirect Land Use Change (ILUC) impacts of biofuels

I am writing to update you on developments on the above dossier ahead of an imminent final vote in Council.

The previous administration last wrote to you on 11 March 2015 to provide an update on the progress on the ILUC dossier ahead of trialogue negotiations. I am pleased to inform you that a final compromise between the institutions appear to have been found, and is likely to be put to the Council of Ministers shortly.

The anticipated agreement will provide greater flexibility in the mix of fuels used to meet the 2020 targets included in the Renewable Energy and Fuel Quality Directives, which require 10% of renewable energy in transport and a 6% reduction in the carbon intensity of road fuels, respectively. In particular, it will enable us to limit support for less sustainable food crop-based biofuels and allow us discretion in setting minimum consumption levels for ‘advanced’ biofuels from waste and residues. It also increases the transparency of the greenhouse gas performance of biofuels by including estimations for the impact of indirect land use change (‘ILUC factors’) associated with food crop based biofuels in reports by fuel suppliers. These measures do not impose additional costs.

The agreement is widely regarded as the only possible compromise between environmental and industrial interests after five years of intense negotiations. In this context, it is expected to be widely supported in Council, particularly as most stakeholders prefer a compromise to continued policy uncertainty. For all these reasons, the UK Government intends to vote in favour of the compromise.

2 July 2015

HM TreasuryLetter from the Chair to Harriett Baldwin

Capital Markets Union and related financial services legislation (37128) 12601/15 and (37143) 12603/15

Thank you for your letter of 27 January about developments on these two proposed Regulations.

The Committee has asked me to remind you of its view that there is no opt-in option available if proposed legislation lacks a legal base from Title V of Part Three TFEU and that, therefore, Article 19(2) of the proposed securitisation Regulation will apply to the UK, in whatever form it takes.

3 February 2016

Letter from the Chair to David Gauke

Flexibility in the Stability and Growth Pact: (36608) 5375/15

The Committee has asked me to thank you for your informative letter of 26 January about the Council’s commonly agreed position on flexibility in the Stability and Growth Pact.

3 February 2016

Letter from Harriett Baldwin to the Chair

EM 12601/15 & 12603/15: PROPOSAL FOR A REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL LAYING DOWN COMMON RULES ON SECURITISATION AND CREATING A EUROPEAN FRAMEWORK FOR SIMPLE, TRANSPARENT AND STANDARDISED SECURITISATION AND AMENDING DIRECTIVES 2009/65/EC, 2009/138/EC, 2011/61/EU AND REGULATIONS (EC) NO 1060/2009 AND (EU) NO 648/2012; PROPOSAL FOR A REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL AMENDING REGULATION (EU) NO 575/2013 ON PRUDENTIAL REQUIREMENTS FOR CREDIT INSTITUTIONS AND INVESTMENT FIRMS

Thank you for your report of the 6 January.

I am writing to update you on the Government’s decision not to opt in to the specific provision in Article 19(2) of the Securitisation Regulation, which we believe triggers the UK’s JHA opt-in as per the reasoning set out in our previous correspondence. This decision has been communicated to the EU institutions.

As negotiations continue through to final adoption, hopefully later this year, we will seek amendments to Article 19(2) so that the provision will no longer trigger the opt-in.

I would also like to let you know that Rapporteurs were appointed in the European Parliament last week. As indicated previously, the decision had been made to appoint a Rapporteur for each proposal. Paul Tang (S&D, Netherlands) will take charge of the Securitisation proposal, while Pablo Zalba Bidegain (EPP, Spain) will take forward the amendment to the Capital Requirements Regulation.

27 January 2016


Regulation on the establishment of the Structural Reform Support Programme — (37351), 14790/15 + ADDs 1–2

Thank you for your letter of 19 January responding to our queries about the above proposal’s impact on existing budget lines for technical assistance under the structural funds and the European Agricultural Fund for Rural Development.

Your response was helpful. We note that discussions are at an early stage and that you intend to update us as negotiations progress. We look forward to receipt of that information in due course, and in the meantime hold the proposal under scrutiny.

27 January 2016

Letter from David Gauke to the Chair

COMMON POSITION ON FLEXIBILITY IN THE STABILITY AND GROWTH PACT

On 30 January 2015 I wrote an Explanatory Memorandum (EM 5375/15) on the Communication from the Commission on making the best use of the flexibility within the existing rules of the Stability and Growth Pact (SGP). This document was cleared from Scrunity by your Committee on 4 February 2015, though it was assessed as ‘politically important.’

In light of this assessment, as part of our follow up to EM 5375/15, I am now writing to inform you that a commonly agreed position of the Council on flexibility in the SGP has been published on the Council of the European Union website (document number 14345/15). The document develops the detailed guidance in the Commission’s communication on the possible use of the flexibility that is built into the existing rules of the SGP. The document notes that the commonly agreed position should preferably be reflected in an updated SGP

Code of Conduct. The Government notes that these clarifications apply in principle to the assessment of all Member States under the SGP, including the UK. It recalls, however, the UK’s unique status under the SGP as a result of Protocol 15 of the Treaty on the Functioning of the European Union, whereby the UK can face no financial sanctions under this process.

As I outlined in EM 5375/15, the Government welcomes the extra transparency that this clarification provides regarding the Commission’s approach to the existing rules. I would also like to restate the Government’s position that it is important that the flexibility allowed under the SGP is not used in a manner or to a degree that undermines the SGP’s credibility as a tool of responsible fiscal policy.

26 January 2016


EM 14790/15: Proposal for a Regulation of the European Parliament and of the Council on the establishment of the Structural Reform Support Programme for the period 2017 to 2020 and amending Regulations (EU) No 1303/2013 and (EU) 1305/2013 (COM(15) 701).

I am writing in response to the points raised by the Committee in relation to the Commission’s proposal to establish a new Structural Reform Support Programme (SRSP). As the Minister responsible for Structural and Cohesion Funds policy, to which this proposal is closely linked, the Minister of State for Small Business, Industry and Enterprise submitted the above-mentioned Explanatory Memorandum on 15 December. Given the Dutch Presidency has decided that this dossier will go through ECOFIN, and given many of the points raised by the Committee relate to the financing implications of the proposal, I am replying as the Minister responsible for the EU budget.

The Committee questioned whether the Government agrees with the Commission’s assessment that support is more effectively delivered through the diversion of existing funds towards a new programme rather than through better use of existing funds under current arrangements. The Committee will be aware that as part of the agreement on the Multiannual Financial Framework reached in 2013, 0.35% of the total budget for Structural and Cohesion Funds was set aside for use by the Commission for technical assistance. The European Agricultural Fund for Rural Development (EAFRD) provides for a similar level of resources to be available for technical assistance. Existing technical assistance is characterised by a specific thematic focus centred on the objectives of relevant programmes. The SRSP would provide support to Member States on cross-cutting structural reforms via a single platform. By taking a more comprehensive approach, the establishment of the SRSP would enhance the efficiency of, and add value to, existing EU support for technical assistance.

The Committee also asked for clarification of the residual funding under depleted budget lines, and for an analysis of the potential impact on the EU agricultural sector of directing

funds away from the budget for technical assistance in rural development. While it is true that the Commission’s proposal would direct funds away from existing technical assistance for the EAFRD, this would not have a negative impact on the agricultural sector. The central purpose of the new programme will be to strengthen the capacity of Member States to implement the structural and administrative reforms necessary to enhance growth across all sectors, complementing existing technical assistance. We therefore share the Commission’s assessment that diverting funds from technical assistance budget lines to finance the SRSP would not have a significant impact on residual funding. Lastly, the Committee asked whether the establishment of a new programme would have any direct impact on UK Structural Funds and EAFRD receipts. The reprioritisation of 2017-2020 technical assistance funds does not affect allocations to Member States. UK Structural Funds and EAFRD receipts will therefore remain unchanged.

We expect the Commission proposal to be discussed at working-group level over the coming weeks. I stand ready to answer any further questions, and I will update the Committee as negotiations progress.

19 January 2016


Value Added Taxation — (35419) 15337/13 + ADDs 1–3

The Committee has asked me to thank you for your informative letter of 28 October about the draft Directive concerning a standard VAT return and about possible future developments on VAT issues.

4 November 2015


EM 15337/13: PROPOSAL FOR A COUNCIL DIRECTIVE AMENDING 2006/112/EC ON THE COMMON SYSTEM OF VALUE ADDED TAX AS REGARDS A STANDARD VAT RETURN

In my letter of 17 June, I explained that negotiations under the Latvian Presidency had effectively stalled, and the way forward under the Luxembourg Presidency was unclear. The House of Lords Committee raised further questions and asked for updates on any developments. We have taken this opportunity also to update you. As anticipated, there have been no discussions on the dossier under the Luxembourg Presidency.

The Commission has now confirmed its intentions to the Member States in the context of its 2016 Commission Work Programme. In a letter from Mr Juncker and Mr Timmermans to the European Parliament and to Council, the Commission has set out its top ten priority areas.

Priority 4 of the Programme (‘A Deeper and Fairer Internal Market’) includes reference to “an Action Plan presenting the main principles and features for an efficient and fraud-proof definitive regime of VAT”, which includes the withdrawal of the VAT return proposal. We have yet to see any detail, although any initiative arising out of this Action Plan would be subject to scrutiny in the normal way.

We considered the question about whether the compromise text would have complied with the subsidiarity principle. The proposal would have allowed Member States the option of implementing a standard VAT return, but would have essentially set a direction of travel. In this sense we believe that it would have complied. However, as I highlighted in my previous letter, both we and the Commission agree that it was very unlikely that the compromise proposal would have achieved the objectives of reducing unnecessary burdens on business, especially small businesses.

We are therefore urging the Commission to pursue alternative approaches to simplify compliance and to significantly reduce administrative burdens in this area.

As a matter of priority this should include further development of the EU VAT Web Portal, which would provide more and better information to businesses on the VAT return and the underlying requirements. We believe this initiative would drive incentives towards reducing national differences.

There are other avenues that could reduce burdens for companies needing to submit VAT returns. This should include discussions in forums such as the EU VAT Forum, which includes business representatives, around business and operational experiences to identify key irritants and to work together to establish best practices. We believe that many Member States see the value in sharing best practice.

We will also press the Commission and other Member States to keep the issue under review in the light of any further developments arising from the ongoing work on the VAT destination system and on the VAT aspects of the Digital Single Market strategy. More generally, the UK will continue to promote the UK’s simple approach at every opportunity, and will help drive forward and establish best practice.

28 October 2015


Proposed Decision establishing a European Platform to enhance cooperation in the prevention and deterrence of undeclared work — Document number (35967) 9008/14

Thank you for your letter of 23 September providing an update on the progress of trilogue negotiations. As we made clear in our Third Report, agreed on 9 September, we support the

Government’s efforts to ensure that participation in the activities proposed by the Platform should be voluntary for Member States and to resist any expansion of the scope and tasks of the Platform. The proposal remains under scrutiny and we look forward to receiving further updates on the progress of trilogue negotiations and the prospects of securing an acceptable First Reading agreement with the European Parliament.

14 October 2015


EM 9008/14: PROPOSAL FOR A DECISION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL: PROPOSAL ON ESTABLISHING A EUROPEAN PLATFORM TO ENHANCE COOPERATION IN THE PREVENTION AND DETERRENCE OF UNDECLARED WORK

Thank you for sharing the draft results of your meeting on 9 September to discuss the abovementioned proposal.

I do not expect there to be further developments towards a compromise until the next round of trilogues. However, I wanted to take this opportunity to update you on comments I received from Lord Boswell, Chair of the House of Lords European Scrutiny Committee, and my response to them. We share Lord Boswell’s concerns regarding the European Parliament’s amendments, which are contrary to the Government’s position. As outlined in my previous letter to you both, our key objective remains to ensure that participation in the initiatives approved by the Platform is voluntary for Member States.

Whilst we cannot predict the outcome of the trilogue process with any certainty, there are a large number of Member States who share our concerns. We will work closely with these Member States to reach a final text that gives us discretion regarding participation in the Platform’s initiatives.

The Committee enquired about the views on the Council Legal Service as regards the legal basis of the Platform. The Council Legal Service have not issued a formal opinion on the European Parliament’s proposed amendments. However, there have been several Working Groups to discuss the amendments. The Council Legal Service have been present, and have participated, in those discussions to help inform the Council’s position.

Although our current focus is on the trilogue negotiations, thought has been given to the practical operation of the Platform, on which the Lords Committee requested further detail. We envisage an HMRC representative to be the UK’s senior representative who attends the meetings of the Platform. The representative would share information and best practice as appropriate. They would feed back any insights, proposals and progress to relevant departments and other bodies in the UK as appropriate, and liaise with representatives of other interested UK agencies to decide whether to participate in activities.

We agree with Lord Boswell that the platform requires a rigorous mechanism to evaluate its impact. So far, our discussions have been focussed on ensuring that participation in the Platform does not place an unnecessary burden on Member States, and the remit of its activity is properly defined and delimited in legislation. Once the Platform is in place, we will work with the other members to ensure a credible process is in place for evaluating its performance.

The Committee further requested to have sight of the Government’s impact assessment. The Government has not conducted an impact assessment of the Platform itself, as it presents no significant cost to Government or businesses. Participation in the Platform’s activities may have an impact – the Government will look to assess impact here on a case by case basis once the exact nature of the Platform is agreed. An estimate of the cost to the European Commission for administration and carrying out the Platform’s activities is given in the Commission’s own impact assessment, which is attached.

A further trilogue session has taken place since my last letter to both Committees, but no significant progress has been made on areas of disagreement between the Council and the European Parliament. I will write to both of you again once progress towards a compromise has been made. As negotiations continue, we will have a sense of how achievable a first reading agreement will be.

23 September 2015

Letter from the Chair to Damian Hinds

Proposed Council Decisions on FYRM accession to customs Conventions (36798) 8021/15 + ADD 1 and (36799) 8022/15 + ADD 1

The Committee has noted your apology in your letter of 31 July for the very late submission of the Explanatory Memoranda on these Commission proposals. It has asked me to urge you to ensure that this sort of administrative error is avoided for the future.

9 September 2015

Letter from the Chair to Harriett Baldwin

Proposed Directive on insurance mediation (recast)(34089) 12407/12 + ADDs 1–2

The Committee has asked me to thank you for your informative letter of 21 July about the final outcome on this legislative proposal.

9 September 2015


Proposed Directive on payment services in the single market and proposed Regulation on interchange fees for debit and credit cards(35250) 12990/13 + ADDs 1, 3–4 and (35251) 12991/1/13 + ADDs 1–3

The Committee has asked me to thank you for your informative letter of 19 July about the final outcome on these legislative proposals.

9 September 2015


European Semester: Broad Economic Policy Guidelines and Country-Specific Recommendations

(36712) 6813/15 + ADD 1; (36843) 8886/15; (36844) 8888/15; (36845) 8890/15; (36846) 8891/15; (36848) 8893/15; (36849) 8894/15; (36850) 8895/15; (36851) 8896/15; (36852) 8898/15; (36853) 8899/15; (36854) 8900/15; (36855) 8901/15; (36856) 8902/15; (36857) 8903/15; (36860) 8920/15; (36861) 8923/15; (36862) 8924/15; (36863) 8926/15; (36864) 8927/15; (36865) 8929/15; (36866) 8931/15; (36867) 8932/15; (36868) 8934/15; (36869) 8936/15; (36870) 8938/15; (36871) 8940/15; (36872) 8941/15; (36873) 8943/15

The Committee has asked me to thank you for your letter of 14 July about the outcome on these European Semester documents.

9 September 2015

Letter from Damian Hinds to the Chair

EM 8021/15 on the position to be taken by the European Union concerning the adoption of a Decision by the EU-EFTA Joint Committee on common transit and a Decision by the EU-EFTA Joint Committee on simplification of formalities in trade in goods as regards invitations to the former Yugoslav Republic of Macedonia to accede to those Conventions.

EM 8022/15 on the position to be taken by the European Union in the EU-EFTA Joint Committee on common transit as regards the adoption of a Decision amending the Convention on a common transit procedure.

The above memoranda were received from the European Commission after the dissolution of Parliament, in the lead up to this year’s General Election. Dissolution Explanatory Memoranda were submitted for information but the Committee was not able to scrutinise the proposals before the votes took place in the Council of Representatives on 11 May.

To avoid overriding the scrutiny process the UK’s representative was instructed to abstain from the votes, which passed without discussion. The former Yugoslav Republic of Macedonia therefore joined the Conventions on 1 June.

Full Explanatory Memoranda on these decisions are now attached.

I apologise that full Explanatory Memoranda were not presented to the Committee sooner following the State Opening of Parliament. I would like to assure you that the Government remains committed to the scrutiny process.

31 July 2015

Letter from Hariett Baldwin to the Chair

EM 12407/12: DRAFT DIRECTIVE ON INSURANCE MEDIATION (RECAST)

My predecessor last wrote to you regarding the recast Insurance Mediation Directive (to be renamed the Insurance Distribution Directive) in October 2014 to update you on the progress of the dossier in reaching General Approach. This letter provides an additional update now that further progress has been made in negotiations.

Trilogues initially got off to a slow start, but gained momentum to reach a rapid conclusion, with political agreement reached between the Presidency and the European Parliament at the end of June. I am pleased to report that the outcome is a good one for the UK. The Luxembourg Presidency plans to bring the file to an upcoming COREPER meeting, ahead of final adoption by the Council and European Parliament.

The explanatory memorandum and subsequent correspondence highlighted a number of policy issues for negotiation. There has been positive progress and the UK has made significant gains.

We were concerned that the Commission’s proposal included provisions on Alternative Dispute Resolution which would change the nature of the existing UK Financial Ombudsman Service with out-of-court disputes and would reduce consumer protection. These concerns have been alleviated as our successful negotiations have resulted in the unhelpful provisions being removed.

The Commission’s proposal prohibited tying insurance products with ancillary services whereas we were of the view that there was no strong evidence suggesting this was needed. This prohibition has now been removed in favour of firms informing customers whether the components of a package are available to be bought separately.

Also, the UK government view has been that sanctions provisions in the directive should be minimum harmonising and we have achieved this in the final compromise.

Finally, the UK was previously concerned that full mandatory disclosure of commission for all insurance sales would not benefit customers as this would serve to overload them with information. I am pleased to report that these unhelpful elements have been removed.

We have also secured a good outcome on the scope of the Directive. In the UK there is currently an exemption from scope for insurance sold ancillary to goods such as insurance sold alongside a mobile phone contract. During negotiations we argued that the exemption should not be too large so as to reduce consumer protection, but should also be proportionate to the risk. The final compromise struck an appropriate balance, exempting policies with annual premiums less than €600 and short term policies, like travel insurance, below €200.

21 July 2015


Proposed Regulation on securities financing transactions(35780) 6020/14

The Committee has asked me to thank you for your informative letter of 6 July about the final outcome on this proposed Regulation.

21 July 2015


Deposit Guarantee Schemes Directive(31816) 12386/10

The Committee has asked me to thank you for your informative letter of 3 July helpfully explaining the present situation on implementation of the Deposit Guarantee Schemes Directive in the UK.

21 July 2015


Taxation: (33374), 16907/11 + ADDs 1–2

The Committee has asked me to thank you for your informative letter of 23 June about the draft Directive to amend the Interest and Royalties Directive.

21 July 2015


Value Added Taxation: (35419) 15337/13 + ADDs 1–3

The Committee has asked me to thank you for your informative letter of 17 June about the draft Directive concerning a standard VAT return.

21 July 2015


12990/13: Proposal for a DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on payment services in the internal market and amending Directives 2002/65/EC, 2013/36/EU and 2009/110/EC and repealing Directive 2007/64/EC

12991/13: Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on Interchange Fees for Card-Based Payment Transactions.

I am writing to provide you with an update on these files ahead of summer recess.

The revised Payments Services Directive (PSDII) concluded trilogue negotiations in May. The Lawyer Linguists’ process is due to start in the next few months, where the file will be scrutinised for technical errors. Once the Lawyer Linguists’ process has concluded, PSDII will go to the European Parliament’s Economic and Monetary Affairs Committee for final political agreement. We expect this to happen by the end of the year, and for PSDII to come into effect in 2017.

This file was cleared from scrutiny by your Committee on 3 December 2014 and by the House of Lords’ European Union Select Committee on 17 March 2015.

I am pleased to say that the European Parliament and the UK shared the same key priorities during the trilogue process, and this is reflected in the final version of the text.

Turning to the Interchange Fee Regulation, this file was published in the Official Journal of the European Union on 19 May. The key provisions will come into effect on 9 December and are directly applicable in the UK. We are launching a consultation later this month on the design of the regulatory regime. We will also consult on the national discretions afforded to Member States. These are as following:

credit card caps. Member States can decide to implement lower interchange fee caps for domestic card transactions than the caps set out in the Regulation;

debit card caps. Member States can decide to implement lower caps on interchange fees for domestic card transactions than the caps set-out in the Regulation. There are also other flexibilities in the way Member States can apply interchange fee caps, such as being able to applying a weighted average for a period of up to of 5 years; and

Member States can, based on an assessment of market shares, exempt three-party card systems that operate with licensee issuers and/or acquirers from interchange fee caps fees for a period of up to three years.

19 July 2015


EM 8929/15, 8890/15, 8891/15, 8901/15, 8893/15, 8894/15, 8896/15, 8895/15, 8900/15, 8940/15, 8924/15, 8898/15 8902/15, 8903/15, 8920/15, 8923/15, 8926/15, 8927/15, 8931/15, 8932/15, 8934/15, 8938/15, 8936/15, 8899/15, 8941/15, 8888/15, 8943/15 and 8886/15 – Country-Specific Recommendations 2015; EM 6813/15 + ADD 1 - Broad Economic Policy Guidelines

I am writing to update you on the 2015 Country-Specific Recommendations (CSRs) and the Broad Economic Policy Guidelines (BEPGs) following the EMs listed above.

Your report of 11 March on EM 6632/15 regarding the 2015 Country Reports recommended that the documents be debated in European Committee B together with, once available, the 2015 CSRs. You also recommended debate for the BEPGs on 18 March. Both reports suggested the debates should take place before the documents were considered at June European Council.

The recommendations to the UK stress the importance of tackling the deficit, and of pursuing reforms in the housing sector, apprenticeships, skills and childcare. They support the Government’s strategy to create a more resilient economy, including its commitment to deficit reduction, and are in line with this Government’s priorities.

The Broad Economic Policy Guidelines provide a high-level reference point for the formulation of policy and are: boosting investment; enhancing growth by the Member States implementation of structural reform; removing key barriers to growth and jobs at the Union level; and improving the sustainability and growth-friendliness of public finances. After changes to the original Commission proposal we can support the BEPGs text that will be approved by ECOFIN.

The CSRs and the BEPGs were endorsed in the June European Council’s conclusions, published on 26 June, thereby marking political agreement. The CSRs and the BEPGs are now expected to return to the ECOFIN Council for formal adoption, without debate, on 14 July.

Given that the European Council has given political endorsement to the CSRs and the BEPGs, I have taken the view that on balance the UK should vote in favour of other Member States’ CSRs and of the BEPGs at ECOFIN.

With respect to the CSRs, this is in recognition of the streamlining of the Semester by the Commission, making more focussed recommendations on jobs and growth, and to encourage the recommended reforms in other Member State. As you know, the UK does not hold a vote on its own CSRs. I hope you will agree that abstention at this point would not prevent an override, but could serve to undermine the positive improvements secured in the CSRs by the UK. The Government has always met the Committee’s recommendations for debate since they were introduced as part of the European Semester in 2011, not least in recognition of the fact that the Committee has always reported the CSRs to the House as ‘Politically Important’.

With respect to the BEPGs, the text to be approved by ECOFIN, in constrast with the Commission’s original recommendation, contains no specific references to actions on migration, less prescriptive language on taxation, and only a very general factual reference to continuing to explore the consolidated corporate tax base. As is also the case for the CSRs, I hope you will agree that abstention at this point would not prevent an override, and could be poorly received given the positive changes we achieved to the text.

14 July 2015


EM 6020/14: PROPOSAL FOR A REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL ON REPORTING AND TRANSPARENCY OF SECURITIES FINANCING TRANSACTIONS

I am writing to update you on the Regulation on Securities Financing Transactions (SFT) as negotiations draw to a conclusion. Last week the text was finalised at working level by the three institutions and we are awaiting final Council adoption and a final plenary vote.

As outlined in previous correspondence, the Regulation seeks to implement in the EU a number of recommendations of the Financial Stability Board (FSB), particularly with regard transparency of SFT activity to regulators and some additional disclosure to investors.

The Government supports the finalised text, which is aligned to the FSB proposals, and provides a proportionate and positive outcome for financial stability.

The Government engaged with the European Parliament, throughout its consideration of the file, which concluded in late April. The European Parliament’s first reading position agreed with the Council text on a significant number of points, including on key issues previously highlighted to Parliament, such as limiting the ability of the Commission to alter the scope of the Regulation and aligning definitions to the FSB.

During trilogues we cooperated closely with other Member States, the Presidency, the European Parliament and the Commission in order to secure an outcome that increases transparency of these activities, prevents overlap with other legislation, provides certainty, has a proportionate impact to the market and ultimately meets the objectives of the international regulatory effort.

The negotiations have generally been focused on detail rather than overarching policy objectives, which reflects the largely technical nature of the file. Issues discussed include specifics around reporting requirements, clarity around rules on re-use, the operability of the third country regime and detail relating to a workable implementation timeline.

Discussions also reflected the fact the FSB work has moved on since the original Commission proposal and there are a number of workstreams that are due to conclude in the coming months and years. We support the proposed approach that, in order for the EU to keep pace with this work, the Commission and/or ESMA will be required to develop a number of reports on issues such as haircuts, economic equivalence and public disclosure. These reports would reflect international developments and would be followed up by legislation where appropriate.

In terms of financial stability, the outcome looks set to deliver a positive and proportionate result; building a valuable data set and establishing effective mechanisms for regulators and competent authorities to work together as we collectively consider future action.

Formal adoption is expected over the coming weeks, to be followed by the publication of the Regulation in the official journal.

6 July 2015


EM 12386/10 DEPOSIT GUARANTEE SCHEMES DIRECTIVE (DGSD)

The Financial Secretary to the Treasury wrote to you on 28 January 2014 to inform members of the outcome of negotiations on the Deposit Guarantee Scheme Directive (DGSD).

As stated in that letter, the coverage level remains at €100,000. Member states may convert the coverage limit into their national currency, using the exchange rate on 3 July 2015. We were successful in increasing the flexibility in the conversion rate to €5,000 from the €2,500 previously agreed in the General Approach. Efforts to further increase the flexibility were unsuccessful.

Given the current strength of sterling in relation to the euro, it was necessary for the Prudential Regulation Authority (PRA) to make rules on 3 July that will reduce the FSCS

coverage level, to reflect the euro/sterling exchange rate on that date. The new FSCS coverage level will be £75,000.

The Government recognises the negative impact that a sudden change of this kind could have on UK depositors, and particularly in their confidence in deposit protection in the UK. Therefore, the Government has made legislation maintaining the current coverage level of £85,000 until the end of the year, for those depositors who were entitled to that level of protection before 3 July, and who will continue to be entitled to protection after that date.

This will mean that individuals and small businesses will continue to be entitled to FSCS protection of up to £85,000 until 31 December 2015. From 1 January, the maximum protection provided by the FSCS will be £75,000.

This reduction in the coverage level will affect a very small number of UK retail depositors. Around 95% of individuals and small businesses are unaffected by the change. In addition, the revised Directive means that from 3 July, the FSCS will provide additional deposit protection coverage of up to £1m for depositors who temporarily have high balances due to events such as house sales or receiving pension lump sums.

The transitional period will mean that the small number of depositors who are affected will have time to consider what action they may wish to take, before the changes come into effect. Depositors may, for example, choose to move some of their money to a different bank account. FSCS coverage works on a per depositor, per authorised firm basis. As a result, depositors can secure additional protection by moving their funds. The PRA is consulting on measures that will enable affected depositors to take steps to ensure that their deposits remain protected, by allowing those depositors to withdraw amounts that have become unprotected as a result of this change, without incurring penalties.

The Directive requires that the PRA reviews the coverage level at least every 5 years, and sooner in the light of unforeseen events such as currency fluctuations. If this results in any need to adjust the coverage level again in the future, then the PRA will manage any future changes in a way that seeks to minimise disruption for depositors.

Harmonisation of the deposit protection level across the EEA enhances the single market for financial services by limiting competitive distortions that can occur where different member states offer different levels of protection. This will assist UK banks in competing for business across the EEA. By creating a transitional period for those affected, we aim to minimise any negative impacts on depositors that would have been caused by a sudden change in the coverage level.

3 July 2015


EM 16907-11: EU COMMISSION PROPOSAL FOR A COUNCIL DIRECTIVE 2003/49 ON A COMMON SYSTEM OF TAXATION APPLICABLE TO INTEREST AND ROYALTY PAYMENTS BETWEEN ASSOCIATED COMPANIES OF DIFFERENT MEMBER STATES

I am writing to update you on EU negotiations concerning the European Commission proposal to recast the Interest and Royalties Directive (IRD) which your Committee cleared from scrutiny on 14 December 2011.

As you are aware, the main purpose of the IRD is to facilitate the smooth functioning of the internal market by eliminating juridical double taxation, burdensome administrative formalities and cash-flow problems for the companies concerned. It achieves this by exempting cross-border interest and royalty payments between EU associated companies from paying withholding tax.

The Commission proposal extends the list of companies to which the Directive applies and reduces shareholding requirements to be met for companies to qualify as associated, aligning it more closely with the Parent Subsidiary Directive). It also adds a new ‘subject to tax’ requirement for the tax exemption, whereby the recipient has to be subject to corporate tax in the Member State of its establishment on the income derived from the interest or royalty payment. Finally, it includes a technical amendment to avoid situations where exemptions are denied when payments do not constitute a tax-deductible expense.

Discussion among Member States on the scope of the proposal has stalled progress on this file. During the Working Party meeting of March 2012, some Member States expressed the desire for text that would address a wider political point on tax competition, while others considered that the text was too broad and not within scope of the original objectives of the Directive. Little further progress has been made since this meeting.

As agreement neared on a minimum standard anti-abuse rule for the Parent-Subsidiary Directive (PSD) in September 2014, the Italian Presidency proposed to re-open discussions and insert a similar provision into the IRD. Member States agreed and the proposal was stayed pending final agreement on the PSD anti-abuse rule. The PSD provision was formally adopted by the ECOFIN Council on 27 January 2015, and was cleared by the House of Commons European Scrutiny Committee on 27 November 2014 and on 25 February 2014 by the House of Lords European Union Select Committee.

All Member States have expressed support for inserting the PSD anti-abuse rule into the IRD. As you are aware, this would involve the withdrawal of benefits in respect of tax arrangements that have been put in place for the essential purpose of obtaining an improper tax advantage. As a minimum standard, the rule would not prevent Member States from applying domestic or agreement-based anti-abuse measures. Member States also agree on the need to extend the list of companies to which the Directive applies.

However, there is still some disagreement on the remaining parts of the proposal as some Member States wish to extend the scope of the IRD to address tax competition through a minimum effective taxation proposal. At June ECOFIN, the Latvian Presidency proposed to split the file and postpone discussions on effective taxation in order to avoid delaying the adoption of the anti-abuse rule, but agreement was not reached.

I hope the Committee finds this information useful. I will keep you updated on further developments.

23 June 2015


EM 15337/13 : PROPOSAL FOR A COUNCIL DIRECTIVE AMENDING 2006/112/EC ON THE COMMON SYSTEM OF VALUE ADDED TAX AS REGARDS A STANDARD VAT RETURN DECISION

In my letter of 9 March I explained that at the last technical meeting the Member States had signalled broad support for an optional standard VAT return, which the UK could support. The Committee has cleared the dossier from scrutiny. This letter is to update the Committee on the negotiations and on work for a wider application of the EU web portal in due course.

As expected, the Latvian Presidency has held further technical working group meetings with the aim of working on the detail and reducing the number of information boxes. However, this has proved to be a very difficult task for the Presidency. Member States as yet have not been able to reach agreement on the content, not least as some remain very reluctant to reduce the number of information boxes. In addition, some Member States have suggested there should be a sunset clause to make the standard VAT return mandatory for all at some point in the future.

The result is the current legal text is unacceptable to the majority of Member States. The Commission has now expressed concern that the compromise legal text no longer achieves the reduction in business burdens as envisaged in the original proposal (we would agree). The Commission has also indicated that it is therefore considering withdrawing the proposal.

At the last technical working group discussion, the Presidency concluded that as views are so diverse, unanimity is highly unlikely. Although the Presidency had been hoping to agree the dossier at ECOFIN in June, it has now been taken off the ECOFIN agenda. Given the overall position as it currently stands, it is unclear whether the forthcoming Luxembourg Presidency will take up this dossier.

Officials have continued to make the case at these technical working group meetings and elsewhere for the Commission to work on a wider application of the EU web portal. This could provide businesses with more and better information about the returns and return

requirements in each of the Member States. UK businesses are clear that this alone could make a real difference.

A number of Member States have also now expressed open support for work on the EU web portal. Officials will continue to seek further opportunities to encourage the Commission to move this further forward. I will update you in due course.

17 June 2015

Department for Work and PensionsNo correspondence sent or received.