Documents considered by the Committee on 21 January 2015
House of Commons European Scrutiny Committee Thirtieth Report of Session 2014–15 Documents considered by the Committee on 21 January 2015, including the following recommendations for debate: Subsidiarity and Proportionality and the Commission’s Relations with national parliaments Report, together with formal minutes Ordered by the House of Commons to be printed 21 January 2015 HC 219-xxix Published on 30 January 2015 by authority of the House of Commons London: The Stationery Office Limited £13.50 Notes Numbering of documents Three separate numbering systems are used in this Report for European Union documents: Numbers in brackets are the Committee’s own reference numbers. Numbers in the form “5467/05” are Council of Ministers reference numbers. This system is also used by UK Government Departments, by the House of Commons Vote Office and for proceedings in the House. Numbers preceded by the letters COM or SEC or JOIN are Commission reference numbers. Where only a Committee number is given, this usually indicates that no official text is available and the Government has submitted an “unnumbered Explanatory Memorandum” discussing what is likely to be included in the document or covering an unofficial text. Abbreviations used in the headnotes and footnotes EC (in “Legal base”) Treaty establishing the European Community EM Explanatory Memorandum (submitted by the Government to the Committee)* EP European Parliament EU (in “Legal base”) Treaty on European Union GAERC General Affairs and External Relations Council JHA Justice and Home Affairs OJ Official Journal of the European Communities QMV Qualified majority voting RIA Regulatory Impact Assessment SEM Supplementary Explanatory Memorandum TEU Treaty on European Union TFEU Treaty on the Functioning of the European Union Euros Where figures in euros have been converted to pounds sterling, this is normally at the market rate for the last working day of the previous month. Further information Documents recommended by the Committee for debate, together with the times of forthcoming debates (where known), are listed in the European Union Documents list, which is published in the House of Commons Vote Bundle each Monday, and is also available on the parliamentary website. Documents awaiting consideration by the Committee are listed in “Remaining Business”: www.parliament.uk/escom. The website also contains the Committee’s Reports. *Explanatory Memoranda (EMs) can be downloaded from the Cabinet Office website: http://europeanmemoranda.cabinetoffice.gov.uk/. Letters sent by Ministers to the Committee relating to European documents are available for the public to inspect; anyone wishing to do so should contact the staff of the Committee (“Contacts” below). Staff The staff of the Committee are Sarah Davies (Clerk), David Griffiths (Clerk Adviser), Terry Byrne (Clerk Adviser), Leigh Gibson (Clerk Adviser), Peter Harborne (Clerk Adviser), Arnold Ridout (Legal Adviser) (Counsel for European Legislation), Joanne Dee (Assistant Legal Adviser) (Assistant Counsel for European Legislation), Joanna Welham (Second Clerk), Julie Evans (Senior Committee Assistant), Jane Bliss and Beatrice Woods (Committee Assistants), Paula Saunderson and Ravi Abhayaratne (Office Support Assistants). Contacts All correspondence should be addressed to the Clerk of the European Scrutiny Committee, House of Commons, Telford House, 14 Tothill Street, London SW1H 9NB. The telephone number for general enquiries is (020) 7219 3292/5465. The Committee’s email address is [email protected] European Scrutiny Committee, Thirtieth Report, Session 2014–15 1 Contents Report Page Meeting Summary 3 Documents for debate 1 FCO (36283) (36269) Subsidiarity and Proportionality and the Commission’s Relations with national parliaments 5 Documents not cleared 2 BIS (35957) Shareholder rights 7 3 DCMS (35305) (35304) The Telecommunications Single Market 9 4 FCO (36568) Restrictive measures against Iran: nuclear issues 17 5 HMT (36540) Investment plan for Europe 20 6 MOJ (32123) EU accession to the European Convention on Human Rights 23 Documents cleared 7 DFID (36578) EU Development Assistance: blending grants and loans 28 8 DFT (36216) Working time: inland waterway transport 34 9 DFT (36243) Road safety 36 10 DFT (36580) Rail research and innovation 39 11 FCO (36520) (36521) EU restrictive measures against Tunisia 42 12 FCO (36596) (36597) EU restrictive measures against Côte d’Ivoire 46 13 FCO (36603) (36604) Restrictive measures against Syria 51 14 FCO (36606) International Code of Conduct on Outer Space Activities 53 Annex 61 Documents not raising questions of sufficient legal or political importance to warrant a substantive report to the House 15 List of documents 62 Formal minutes 64 Standing Order and membership 65 2 European Scrutiny Committee, Thirtieth Report, Session 2014–15 European Scrutiny Committee, Thirtieth Report, Session 2014–15 3 Meeting Summary The Committee considered the following documents: Subsidiarity and Proportionality and the Commission’s relations with national parliaments Last October, we recommended the Commission’s Reports on Subsidiarity and Proportionality and on its relations with national parliaments for debate on the floor of the House, in view of the fundamental importance of the role of national parliaments in scrutinising EU legislation and in providing democratic legitimacy for the EU. The Government now informs us that this debate will take place in European Committee B. We find this extremely disappointing, and consider that it breaches the Government’s commitment, as set out in the Minister for Europe’s Written Ministerial Statement of 20 January 2011, to “strengthening its engagement with Parliament on all European Union Business as part of our wider work to reduce the democratic deficit in the EU”. Restrictive measures against Syria We also consider proposals which would re-impose travel restrictions and asset freezes against three individuals associated with the Assad Regime in Syria, and one entity. The original restrictions were annulled by the General Court, and this new listing is based on a new statement of reasons. We support the principle that restrictive measures should be both targeted and legally robust, but it is not evident that this is the case with these proposals, particularly given the background, which includes the Council being unable to provide sufficient supporting evidence for the original restrictions using open sources when invited to do so in court hearings last June. The Minister for Europe only indicates that these proposals are based on new grounds supported by information taken from open sources, and that they comply with fundamental rights. We clear these proposals so that they can be adopted but ask the Minister to confirm that he considers the reasons now given for the restrictive measures, and the underlying evidence, to be sufficiently robust to deter or withstand further legal challenge. Some similar issues are raised by the restrictive measures against Iran which we are also reporting on this week. Investment plan for Europe In November 2014 the Commission published a Communication which sets out a plan for promoting investment within the EU economy. The plan has three strands: a European Fund for Strategic Investments, to mobilise €315 billion (£245 billion) for investment; a pipeline of investment projects and an investment advisory “Hub”; and a wider package of reforms to improve the investment climate. The Government is fairly positive about the plan, and the Minister now provides an update on the December European Council meeting, where the ideas contained in the plan were discussed. However he does not provide us with some specific information that we requested when we last considered this Communication in December, including on what financial consequences there might be for the UK arising from EU budgetary involvement in the plan. We may well wish to recommend that this document be debated, but we postpone this decision until we have 4 European Scrutiny Committee, Thirtieth Report, Session 2014–15 seen a copy of the related draft Regulation on the proposed European Funds for Strategic Investments. Scrutiny of the UK’s 2014 block opt-out decision Following an evidence session, on 12 January 2015, with the Home and Justice Secretaries on the Government’s overall handling of the 2014 block opt-out process, and the failure to meet its Parliamentary scrutiny obligations in relation to the 35 EU police and criminal justice measures which the UK has re-joined, we now clear from scrutiny the Government’s Explanatory Memoranda on the measures subject to the block opt-out. These were submitted to Parliament in July 2013 and were reproduced in Command Paper 8671, published in the same month. The Explanatory Memoranda provided the basis for the Committee’s detailed analysis of each measure subject to the block opt-out in its November 2013 Report, The UK’s block opt-out of pre-Lisbon criminal law and policing measures. The Committee published a follow-up Report in November 2014 and has reported on the three Council Decisions and a Commission Decision, adopted on, or shortly before, 1 December 2014 which were required to authorise the UK to opt back into 35 measures. The Government overrode the Committee’s scrutiny reserve on two of these measures. The evidence session represented the culmination of a lengthy and highly unsatisfactory process of scrutiny, and the Home and Justice Secretaries were left in no doubt as to the dissatisfaction of this Committee, the Home Affairs and Justice Select Committees, and the EU Committee in the House of Lords, with the Government’s handling of the process. European Scrutiny Committee, Thirtieth Report, Session 2014–15 5 1 Subsidiarity and Proportionality and the Commission’s Relations with National Parliaments Committee’s assessment Committee’s decision Document details Legal base Department Document numbers (a) Legally and politically important (b) Politically important (a) and (b) Not cleared from scrutiny; recommended for debate on the floor of the House (decision reported 15 October 2014) (a) 2013 Annual Report from the Commission on Subsidiarity and Proportionality (b) 2013 Annual Report from the Commission on relations between the Commission and National Parliaments — Foreign and Commonwealth Office (a) (36283), 12424/14, COM(14) 506 (b) (36269), 12425/14, COM(14) 507 Summary and Committee’s conclusions 1.1 The Commission Report on subsidiarity and proportionality provides a factual overview of how the principles of subsidiarity and proportionality have been applied in 2013 and how the practice in applying this principle has evolved. It summarises the activities of various EU bodies and national parliaments and examines the application of the principle of subsidiarity in respect of three controversial proposals. 1.2 The Commission Report on relations with national parliaments also provides an factual overview of the Commission’s relations with national parliaments in 2013. By focussing on the informal “political dialogue” between the Commission and national parliaments it complements the report on subsidiarity and proportionality which focusses on the formal subsidiarity reasoned opinion mechanism. 1.3 In its Report of 15 October 2014 the Committee recommended these matters for debate on the floor of the House in view of the fundamental importance of the role of national parliaments, not only in scrutinising EU legislation for compliance with the principles of subsidiarity and proportionality but also more generally, in providing democratic legitimacy for the EU. In particular such a debate would provide an opportunity for the House to debate not only the specifics of the reports but also the wider context (including specific and concrete proposals originating from various sources aimed at addressing the “democratic deficit”) and pertinent recommendations in the Committee’s Report on Reforming the Scrutiny System in the House of Commons.1 1.4 The Minister for Europe (Mr David Lidington) now informs the Committee that he considers debate in Committee would provide the most appropriate means of scrutinising 1 See Twenty-fourth Report HC 109-I (2013–4), (20 November 2013). 6 European Scrutiny Committee, Thirtieth Report, Session 2014–15 these documents and that he has asked his officials to work with business Managers to arrange a debate in European Committee at the earliest opportunity. 1.5 We reject the Government’s decision, and consider this a breach of the Government’s commitment to “strengthening its engagement with Parliament on all European Union business as part of our wider work to reduce the democratic deficit over EU matters”.2 1.6 We do not accept the reasons given by the Minister, that “a debate in Committee would provide the most appropriate means of scrutinising these documents, as was the case with the debate on the 2012 reports”. We recall that the decision to hold the debates on the 2012 reports was taken in the face of the recommendation from this this Committee for debate on the floor of the House. Developments since then make it even more important to debate the current reports on the floor of the House. Full details of the documents: (a) Commission Report: Annual Report 2013 on Subsidiarity and Proportionality: (36283), 12424/14, COM(14) 506; (b) Commission Report: Annual Report 2013 on relations between the European Commission and National Parliaments: (36269), 12425/14, COM(14) 507. The Minister’s letter of 14 January 2015 1.7 The Minister indicates that he has carefully considered the arguments for the debate on these reports to take place on the floor of the House and continues: “I still believe that a debate in Committee would provide the most appropriate means of scrutinising these documents, as was the case with the debate on the 2012 reports, allowing for a longer and more structured debate. I have asked my officials to work with Business Managers to arrange a date for a debate in Committee at the earliest possible opportunity.” Previous Committee Reports Thirteenth Report HC 219-xiii, chapter 2 and chapter 3 (15 October 2014); and see, in respect of the 2012 Report (35242), —: Twenty-ninth Report HC 83-xxvi (2013–14), chapter 2, (8 January 2014); Twenty-eighth Report HC 83-xxv (2013–14), chapter 2, (18 December 2013); Twenty-Second Report HC 83-xx (2013–14), chapter 5, (6 November 2013). 2 Written Ministerial Statement of the Minister for Europe (Mr David Lidington) of 20 January 2011, Hansard col. 52 WS. European Scrutiny Committee, Thirtieth Report, Session 2014–15 7 2 Shareholder rights Committee’s assessment Committee’s decision Legally important Not cleared from scrutiny; further information requested; drawn to the attention of the Business, Innovation and Skills Committee Document details Department Directive amending Directive 2007/36 as regards the encouragement of long-term shareholder engagement and Directive 2013/34 as regards certain elements of the corporate governance statement Articles 50 and 114 TFEU; ordinary legislative procedure; QMV Business, Innovation and Skills Document numbers (35957), 8847/14 + ADDs 1–3, COM(14) 213 Legal base Summary and Committee’s conclusions 2.1 This proposal amends the existing Shareholders’ Rights Directive (2007/36) by introducing new provisions intended to facilitate the exercise of shareholders’ rights, give them a greater say over directors’ remuneration and increase transparency in respect of: the strategies of institutional investors and asset managers; the activities of proxy advisors; directors’ remuneration; and related party transactions. Further details are set out in our Report of 4 June 2014. 2.2 When we previously considered this proposal last summer we noted that the Government was broadly supportive of the proposal; shared its concerns that the proposal regulated matters currently covered by the voluntary stewardship code and the code of conduct for proxy advisors; and looked forward to the Government’s further consideration in relation to charging by intermediaries, related party transactions and the Commission’s power to adopt subordinate legislation. 2.3 The Minister for Employment Relations and Consumer Affairs and Minister for Women and Equalities (Jo Swinson) now updates the Committee. 2.4 We are grateful for the update from the Minister which indicates that all the concerns raised by the Government on the original draft have been addressed save for that concerning the Commission’s power to adopt subordinate legislation. This proposal now reflects the UK’s approach to Corporate Governance. 2.5 As the proposal is still under discussion at working group level, we should be grateful for a further update on this last mentioned issue and any further amendments to the text in good time before any prospective general approach. 2.6 In the meantime we hold this matter under scrutiny and draw it to the attention of the Business, Innovation and Skills Committee. 8 European Scrutiny Committee, Thirtieth Report, Session 2014–15 Full details of the documents: Proposal for a Directive amending Directive 2007/36/EC as regards the encouragement of long-term shareholder engagement and Directive 2013/34/EU as regards certain elements of the corporate governance statement (35957), 8847/14 + ADDs 1–3, COM(14) 213. The Minister’s letter of 18 December 2014 2.7 The Minister updates the Committee on the matters of concern: “The measures around transparency of institutional investors and asset managers, which in the UK are mainly subject to the Stewardship Code, are far less prescriptive now that a ‘comply or explain’ approach applies throughout. Requirements on proxy advisers have also been mitigated to take into account the Code of Principles, developed by the sector, following an analysis and report by the European Securities and Markets Authority (ESMA). “Measures on the transparency of fees charged by intermediaries have been amended, so that the UK regime, where these are not allowed, will not be impacted. “With regards to related party transactions, the presidency has proposed a text focused more on principles than details, to ensure agreement from member states. The latest draft has introduced greater flexibility, therefore limited impact on the UK Listing Rules. “We have clarified that the final compromise text will need to address any relevant requirements. Any remaining aspects will be left to member states’ authority and addressed, as appropriate, during implementation.” 2.8 She assesses the progress of the negotiation: “Overall, I am satisfied that the proposal strikes the right balance between legislative requirements and best practice, a confirmation that the UK approach to Corporate Governance is a model of excellence.” Previous Reports First Report HC 219-i (2014–15), chapter 4, (4 June 2014). European Scrutiny Committee, Thirtieth Report, Session 2014–15 9 3 The Telecommunications Single Market Committee’s assessment Committee’s decision Legally and politically important Not cleared from scrutiny; further information requested; drawn to the attention of the Culture, Media and Sport Committee Document details (a) Commission Communication on the Telecommunications Single Market (b) Draft Council Regulation laying down measures concerning the European single market for electronic communications and to achieve a Connected Continent (a) —; (b) Article 114 TFEU; ordinary legislative procedure; QMV Culture, Media and Sport Legal base Department Document numbers (a) (35305), 13562/13, COM(13) 634 (b) (35304), 13555/13 + ADDs 1–2, COM(13) 627 Summary and Committee’s conclusions 3.1 The Commission Communication sets out measures that the Commission believes are needed to change the existing regulatory framework (last revised in 2009); the subsequent legislative package, A Connected Continent: Building a Telecoms Single Market, was published on 11 September 2013. 3.2 Over the past 18 months, the focus has now boiled down to two issues: mobile roaming charges and net neutrality.3 3.3 In the latest of a series of open and very helpful updates, the Minister for Culture and the Digital Economy (Mr Edward Vaizey) says that, contrary to earlier expectation, the Latvian Presidency has decided to prioritise this dossier and published a “road map” proposing that work over the upcoming three-month period should have a dual focus on roaming and net neutrality; but also making it clear that should the Council fail to agree the content of the proposed Regulation to the extent that trilogues (the Presidency, the Commission and the European Parliament) can begin within three months, they will cease all work on the proposal. 3.4 The proposal on mobile roaming is the more developed of the two: — action is proposed at both the retail and wholesale levels; the Commission would be charged with reviewing wholesale prices and coming forward with any necessary 3 Net neutrality is the principle that Internet service providers and governments should treat all data on the Internet equally, not discriminating or charging differentially by user, content, site, platform, application, type of attached equipment, and modes of communication. Proponents often see net neutrality as an important component of an open internet, where policies such as equal treatment of data and open web standards allow those on the internet to easily communicate and conduct business without interference from a third party. 10 European Scrutiny Committee, Thirtieth Report, Session 2014–15 proposals no later than 24 months after the adoption of the proposed Regulation, which would in turn then be adopted no later than 18 months after they are proposed, i.e., no later than 42 months after the proposed Regulation is adopted; — during the interim period, there would be action on retail pricing taken whereby consumers were able to “Roam Like At Home” within an allowance — at a level as yet underdetermined; once this allowance was exceeded, consumers would be charged for roaming services. 3.5 With regard to the latter, where the Presidency puts forward two pricing models, the Minister says that the second option is somewhat less complex and that consumers would be charged at what are “currently the wholesale caps within Roaming 3 i.e. €0.05/minute for voice calls, €0.02 per SMS and €0.05/MB for data”. Whilst this would, the Minister says, ensure that consumers have clarity with regard to expected charges once they have exceeded their allowance, he is still considering whether this proposal overall fully meets the Government’s negotiating objectives, as well as what changes would be necessary to it in order to do so; is giving consideration as to whether this model “fully addresses the identified risk of arbitrage, along with whether it negates the identified risks of not addressing wholesale prices for, at least, in 3 years”; and says that “progress on developing such a view is somewhat stymied without sight of the level of allowance and the specific text itself”. 3.6 On net neutrality, the Minister says that the Presidency road-map is “even more succinct i.e. there is a commitment to continue with a principles-based approach without detailing what these principles would be” — an approach that he could possibly support but upon which he is unable to comment further as to whether it would fully meet his overall negotiating objectives without sight of the detail. 3.7 In summary, the Presidency road-map offers “potential to drive an overall agreement within the next 3 months but it lacks the specific detail in order for me to have a fullyformed opinion on the chances of success, as well whether it fully addresses UK’s specific concerns and identified risks in each of these areas”. The Minister envisages the necessary detail becoming known once the Presidency publishes the specific legal text — “expected within the next two or three weeks” — and proposes to provide an analysis once they have done so. 3.8 We are, as ever, grateful to the Minister for his timely update, and look forward to receiving his next one, as outlined immediately above. 3.9 Bearing in mind how this dossier has moved forward, then marked time, then moved forward in a more limited way over the past 18 months, when he does so, we should be grateful if he would summarise what his negotiating brief now is (c.f. paragraph below). 3.10 We would also like him to explain: what the concept of arbitrage is in this context, and what “the identified risk” thereof is; what “the identified risks of not addressing wholesale prices for, at least, in 3 years” are; and what the inter-relationship is between retail and wholesale prices. European Scrutiny Committee, Thirtieth Report, Session 2014–15 11 3.11 We would also like to know what is proposed regarding the issue of spectrum management. 3.12 We also draw his attention to recent media comment on this dossier.4 In essence, it notes that: — in April 2014, the European Parliament voted to eliminate roaming fees by midDecember 2015, but Member States have not yet set a date for doing this; — fees from telecom providers have fallen significantly in recent years (since 2007, final prices for calling and texting in other EU countries decreased 80% for consumers, while data roaming prices fell 91%) but 28% of Europeans still turn off their mobile phones when they enter another EU country to avoid roaming fees; — some high-tech associations and experts argue that, without roaming fees, prices for domestic phone calls and mobile internet use would have to increase and that those who do not travel much and currently profit most from low fees for domestic calls ones who will suffer; — the European Consumer Organisation (BEUC), on the other hand, considers operators’ concerns to be unfounded, and sees potential economic advantages in an elimination of roaming fees; — while the European Parliament favours the principle of net neutrality, the German Chancellor has advocated a more nuanced position. 3.13 We also remind the Minister that any proposal to enter into trilogue discussions will need clearing with the Committee beforehand; likewise “any overall agreement”. In this regard, we would also like his thoughts on how best to handle scrutiny of the other uncertainties he mentions concerning the possibility that, though having been presently dropped, “other [unspecified] elements of the proposal… may become the subject of future discussion and consideration under the trilogue process”. 3.14 In the meantime, we shall retain the documents under scrutiny. 3.15 We are also again drawing this chapter of our Report to the attention of the Culture, Media and Sport Committee. Full details of the documents: (a) Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions on the Telecommunications Single Market: (35305), 13562/13, COM(13) 634; (b) Draft Regulation of the European Parliament and of the Council laying down measures concerning the European single market for electronic communications and to achieve a Connected Continent, and amending Directives 2002/20/EC, 2002/21/EC and 2002/22/EC and Regulations (EC) No. 1211/2009 and (EU) No. 531/2012: (35304), 13555/13 + ADDs 1–2, COM(13) 627. 4 See European Voice: 20 January 2015. 12 European Scrutiny Committee, Thirtieth Report, Session 2014–15 Background 3.16 The Commission argues that, as the world moves rapidly towards an Internet-based economy, Europe lacks a genuine single market for electronic communications, and is consequently losing out on a major source of potential growth. It also states that decisive further action is needed to prevent any further decline in Europe’s global position in this sector; considers what remaining barriers exist; and sets out measures that the Commission believes are needed to change the existing regulatory framework (last revised in 2009) in order to remedy the situation. 3.17 Recalling the conclusions of the 2013 Spring European Council, calling for measures to create a Single Telecoms Market as early as possible, the Commission published on 11 September 2013 a legislative package for a Connected Continent: Building a Telecoms Single Market, which it says is aimed at building a connected, competitive continent and enabling sustainable digital jobs and industries; with proposed legislative changes to several regulations that (the Commission says) would “make a reality of two key EU Treaty Principles: the freedom to provide and to consume (digital) services wherever one is in the EU”. 3.18 The full background to the Commission Communication and this draft Regulation is set out in the first of our previous Reports; likewise the very detailed and helpful analysis of both documents by the Minister (in his Explanatory Memorandum of 10 October 2013.5 3.19 Our subsequent Reports embody a number of series of full and very helpful updates ever since this package was first deposited.6 They include, in September, the Opinion of the Culture, Media and Sport Committee (CMS), along with Ofcom’s submission to that Committee. The CMS Committee deemed it clear from Ofcom’s submission that at least some of the proposals lack sufficient grounding in terms of evidence, analysis and consultation, and that much work remained to be done to achieve outcomes that were proportionate and struck an appropriate balance between national and wider European interests.7 3.20 Since then, this dossier has moved forward intermittently, prior to and since the 27 November 2014 Telecoms Council. At that point, on the key outstanding issues, the Minister that: — there was “a general political commitment towards abolishing mobile roaming charges within the EU, although questions remained over the mechanism to achieve this and the timing for its introduction”; the Minister remained “committed to achieving a ‘Roam Like At Home’ outcome, effective as soon as was possible”, and continued “to strive to achieve that outcome”; 5 See Eighteenth Report HC 83-xvii (2013–14), chapter 2 (16 October 2013). 6 See Twenty-seventh Report HC 219-xxvi (2014–15), chapter 3 (17 December 2014), Twentieth Report HC 219-xix (2014–15), chapter 1 (19 November 2014), Thirteenth Report HC 219-xiii (2014–15), chapter 11 (15 October 2014), Ninth Report HC 219-ix (2014–15), chapter 9 (3 September 2014), Eighth Report HC 219-viii (2014–15), chapter 5 (16 July 2014), First Report HC 219-i (2014–15), chapter 5 (4 June 2014), Thirty-fourth Report HC 83-xxxi (2013–14), chapter 2 (5 February 2014), Twenty-eighth Report HC 83-xxv (2013–14), chapter 4 (18 December 2013). 7 See “Background” in Twenty-seventh Report HC 219-xxvi (2014–15), chapter 3 (17 December 2014) for summary and Ninth Report HC 219-ix (2014–15), chapter 9 (3 September 2014) for full information. European Scrutiny Committee, Thirtieth Report, Session 2014–15 13 — there was “also a general consensus on the introduction of a regulation on net neutrality although, like roaming, there was currently a lack of consensus on approach”; and — there remained “some areas of disagreement between Council and the Commission on how to approach future spectrum management”: no detailed discussion had yet taken place on how to resolve this lack of agreement; the Minister’s position remained one where he did not wish “to see an oversight role for the Commission in such matters” but instead “to evolve the role of the existing Radio Spectrum Policy Group”,8 which he said remained the approach favoured by the Council. 3.21 He summarised the overall position thus: “some progress has been made and the general direction of travel is one that favours a simplified approach as long-championed by the UK and has the potential to realise a demand-side and consumer-centric solution that would help drive the digital single market and be of real benefit to UK businesses and consumers.” 3.22 In order to ensure that the UK was able to take part in the discussion of, and agree to any General Approach, the Minister requested a scrutiny reserve waiver, thus “allowing UK to support a General Approach that fits our existing negotiating position”; and based on the understanding that “should the proposed General Approach fall outside the UK’s current negotiating mandate, I will not be willing to agree same”. 3.23 We agreed on the basis of the understanding set out above and also provided that: — he continued to supply regular updates on the trilogue negotiations, in the same detail as hitherto; and — he deposited the final text of the draft Regulation that emerges from the trilogue process, without caveat and with a fresh Explanatory Memorandum, in good time for a debate prior to formal adoption by the Council, should the Committee then so decide.9 3.24 Most recently, the Minister explained that: — shortly before Council, the agenda item was changed to a “State of Play”; whilst “not a recognised category of document”, it could be “conceptually considered to lie between a Progress Report and a General Approach”, and reflected the Presidency’s ambition of achieving the same outcome, i.e. that informal trialogue with the European Parliament began at the earliest opportunity; — whilst the UK and a number of Member States supported this approach in order to achieve a simplified agreement including action on mobile roaming charges, a sufficiently large number cited concerns about the lack of a common position it was clear that there was not sufficient agreement on roaming and net neutrality to move forward as proposed; 8 The high-level advisory group assisting the Commission in developing radio spectrum policy for the EU, which has hitherto played a pivotal role in driving harmonisation of the technical aspects of spectrum management in EU. 9 See Twentieth Report HC 219-xix (2014–15), chapter 1 (19 November 2014). 14 European Scrutiny Committee, Thirtieth Report, Session 2014–15 — there was also serious concern among some Ministers that the Presidency was mismanaging the process by attempting to circumvent the will of Council in order to enter trialogue discussions with the Parliament at a stage when no common Council position had been adopted; — the Council decided to refer the proposal back to Working Group level for further development, with the two remaining Working Groups under the Italians focussing on net neutrality and mobile roaming; — early indications from the incoming Latvian Presidency were that they did not regard it as a priority, though the Minister anticipated pressure from the Commission towards reaching an early agreement on the package; — it “very much” remained the Minister’s ambition that an agreement around a simplified Regulation on mobile roaming was reached as soon as possible, and his officials were looking to work with both Presidencies to ascertain if a compromise around these issues, and more widely, was achievable; — given the current status of the proposal and lack of clarity regarding plans for progress in the short term, he proposed to write again early in 2015, once the incoming Presidency had made clear its plans and intentions. 3.25 We again expressed our appreciation to the Minister for these insights, and looked forward to hearing from him, as suggested, early in the New Year. 3.26 In the meantime, we noted that the scrutiny waiver applied only to the 27 November 2014 Telecoms Council and that, should the Minister again find himself in that position, he would need to seek a fresh prior agreement from the Committee. 3.27 We also: — again draw this chapter of our Report to the attention of the Culture, Media and Sport Committee; and — continue to retain both documents under scrutiny.10 The Minister's letter of 15 January 2015 3.28 The Minister says that the Latvian Presidency have changed their position, indicated that this dossier will now be “the joint-first priority in the telecoms policy space” and published a “road-map” proposing that work over the upcoming three-month period should have a dual focus on roaming and net neutrality; but also making it clear that should the Council fail to agree the content of the proposed Regulation to the extent that trilogues can begin within three months, they will cease all work on the proposal. 3.29 The Minister continues thus: 10 Twentieth Report HC 219-xix (2014–15), chapter 1 (19 November 2014). European Scrutiny Committee, Thirtieth Report, Session 2014–15 15 “Whilst I cover the specific detail of content of the ‘road-map’ below, it is worth noting at this juncture that this should not be taken as an indication that the other elements of the proposal are to be dropped and there remains scope that they may become the subject of future discussion and consideration under the trilogue process. As such, I am particularly keen that the any overall agreement retains the consumer protection element (which you may recall is largely at a stage that it could be easily adopted), along with a commitment to review the current market of wholesale access broadband products for enterprises. Therefore, UK will continue to push for inclusion of same in an overall agreement and this is in-line with the position that my Cabinet colleagues cleared at the end of last year.” 3.30 The Minister then turns to each of the “road map” elements as follows: Mobile Roaming “The Presidency have noted the previous proposals on dealing with this issue and that there was no overall agreement within Council on any one position. As such, they have put forward a proposal that takes action at both the retail and wholesale levels. “On the wholesale level, the Commission would be charged with instigating a review of wholesale prices and coming forward with any necessary proposals for action no later than 24 months after the adoption of the proposed Regulation. Any such actions would then be adopted no later than 18 months after they are proposed (in effect, no later than 42 months after the proposed Regulation is adopted). “During the interim period, there would be action on retail pricing taken whereby consumers were able to ‘roam like at home’ within an allowance — at a level as yet underdetermined. Once this allowance was exceeded, consumers would be charged for roaming services. “With regard to the level of charges, the Presidency paper sets out two options. The first is a varying level of charge that reflects and takes into account the relative wholesale and retail prices of the ‘home’ Member States and the Member State in which the consumer is roaming. In effect, a UK-based consumer would face a differing level of charge for roaming in Spain when compared to Greece, for example. Further, a German consumer may be charged differing levels when roaming in the same Member States used in this example. The second option is somewhat less complex and consumer would be charged at what are currently the wholesale caps within Roaming 3 i.e., €0.05/minute for voice calls, €0.02 per SMS and €0.05/MB for data. “Whilst it is clear that the second option is less complex and would ensure that consumers have clarity with regard to expected charges once they have exceeded their allowance, I am still considering whether this proposal overall fully meets our negotiating objectives, as well as what changes would be necessary in order to it to do so. My initial concern is a clear indication from the Presidency that any allowance would not replicate domestic consumption patterns but would be sufficient to ‘…provide basic mobile phone usage (essential when travelling)…’. 16 European Scrutiny Committee, Thirtieth Report, Session 2014–15 “I am also giving consideration as to whether this model fully addresses the identified risk of arbitrage,11 along with whether it negates the identified risks of not addressing wholesale prices for, at least, in 3 years. However, progress on developing such a view is somewhat stymied without sight of the level of allowance and the specific text itself. Net neutrality “With regard to this element, the Presidency road-map is even more succinct i.e., there is a commitment to continue with a principles-based approach without detailing what these principles would be. This approach is one that UK could possibly support but without sight of the detail, I am unable to comment further on whether it would fully meet our overall negotiating objectives. That said, I can confirm that my officials continue to liaise with key Member State partners in drawing up a principles-based text and we have had an indication from the Presidency that any such text could form the basis of a text moving forward. As such, I am hopeful our objectives would be met overall. “In summary, the Presidency road-map does offer potential to drive an overall agreement within the next 3 months but it lacks the specific detail in order for me to have a fully-formed opinion on the chances of success, as well whether it fully addresses UK’s specific concerns and identified risks in each of these areas. The necessary detail will no doubt become known once the Presidency publishes the specific legal text associated with each — expected within the next two or three weeks — and I propose that I write again with an analysis of same once they have done so. You are, of course, more than welcome to raise any immediate questions or concerns in the interim.” Previous Committee Reports Twenty-seventh Report HC 219-xxvi (2014–15), chapter 3 (17 December 2014), Twentieth Report HC 219-xix (2014–15), chapter 1 (19 November 2014), Thirteenth Report HC 219xiii (2014–15), chapter 11 (15 October 2014), Ninth Report HC 219-ix (2014–15), chapter 9 (3 September 2014), Eighth Report HC 219-viii (2014–15), chapter 5 (16 July 2014), First Report HC 219-i (2014–15), chapter 5 (4 June 2014), Thirty-fourth Report HC 83-xxxi (2013–14), chapter 2 (5 February 2014), Twenty-eighth Report HC 83-xxv (2013–14), chapter 4 (18 December 2013) and Eighteenth Report HC 83-xvii (2013–14), chapter 2 (16 October 2013). 11 Arbitrage is normally regarded as the practice of taking a positive expected return from overvalued or undervalued securities in an inefficient market without any incremental risk and zero additional investments. It consists of trading in two assets — with at least one being mispriced, i.e., if its current price diverges from the price predicted by a mathematical model that, essentially, looks at discounted future cash flows. The theory was first proposed by the economist Stephen Ross in 1976. European Scrutiny Committee, Thirtieth Report, Session 2014–15 17 4 Restrictive measures against Iran: nuclear issues Committee’s assessment Committee’s decision Legally and politically important Not cleared from scrutiny; further information requested Document details Council Decision concerning restrictive measures against Iran Article 29 TEU; unanimity Foreign and Commonwealth Office (36568), — Legal base Department Document number Summary and Committee’s conclusions 4.1 As well as implementing the measures contained in UNSCR 1929 of 9 June 2010, Council Decision 2010/413/CFSP imposed additional EU sanctions in the energy sector, the financial sector, trade, the Iranian transport sector in particular the Islamic Republic of Iran Shipping Line (IRISL) and its subsidiaries and air cargo; and new visa bans and asset freezes, especially on the Islamic Revolutionary Guard Corps. 4.2 Council Decision 2014/829/CFSP of 25 November 2014, amending Decision 2010/413/CFSP concerning restrictive measures against Iran, extended the suspension of restrictive measures specified in the Joint Plan of Action, agreed between the E3+3 and Iran, from 24 November 2014 until 30 June 2015. The full background is set out in our Report of 10 December.12 4.3 This Council Decision extends the expiry date of an existing exemption to the freezing of funds and economic resources from 31 December 2014 until 30 June 2015 and relists one individual, Gholam Hossein Golparvar (Golparvar) and one entity, the National Iranian Tanker Company (NITC). Their original lisitings had been annulled by the General Court.13 4.4 When we considered this proposal at our meeting of 7 January 2015 we held the matter under scrutiny and asked for further information about the timing of the relistings. That same day we received a copy of a lengthy letter from solicitors acting for NITC to Lord Tugendhat, the Chairman of Sub-Committee C of the House of Lords European Select Committee setting out objections to the relisting of that company. In summary they are: The Council had given insufficient time to consider the information provided in advance of the proposed relisting; The proposal to relist was based on “the same facts and the same or very similar consequential allegations” as had been rejected in the earlier litigation by the General Court. In particular, NITC asserted that transport of crude oil was a 12 See (36529), —: Twenty-fifth Report HC 219-xxiv (2014–15), chapter 15 (10 December 2014). 13 Cases T-58/12, judgment of the 12 December 2013 and T-565/12, judgment of 3 July 2014. 18 European Scrutiny Committee, Thirtieth Report, Session 2014–15 legitimate activity under the Joint Action Plan without explanation as to why NTIC has been “singled out”; and the evidence that NTIC provided financial support for the Iranian regime had already been rejected by the Court; The Explanatory Memorandum from the Minister for Europe (Mr David Lidington) incorrectly asserted that no fundamental rights issues apply and indicating that it is not possible to disclose the evidential basis for the relisting that was provided to NITC, who in turn have provided it to the Committee; and The Foreign and Commonwealth Office has refused to engage with NITC’s efforts to seek more detailed justification for the re-imposition of restrictive measures, or consultation with it on the proposals. 4.5 After the meeting the Committee also received a letter from solicitors acting for Golparvar asserting that there are no new factual allegations and no new evidence to support his relisting, and specifically denying that he acts for, or has links with, other entities as alleged by the Council in its statement of reasons forming part of the proposal to relist him. These are IRISL and associated companies. The enclosures point to his having fully retired from any positions he may have had and disposing of any relevant shareholdings. 4.6 The Minister now explains that the Council did not prioritise these relistings as it had to prioritise the Ukraine crisis during July and after that the summer break intervened; and that “on balance it was judged that it was more important to ensure that these relistings were done in accordance with EU priorities and an assessment of the wider Iran negotiations context”. He does not say whether the consequent break in continuity of restrictive measures has, in fact, led to the dissipation of assets because “It is not possible for the EU implementing authorities to divulge information about what, if any, assets an individual/entity holds within the EU”. 4.7 He further explains that any information provided by the Council in advance to an individual or entity likely to become the subject of restrictive measures is “not for public consumption”. 4.8 The approach of the Council to re-imposing restrictive measures against both Golparvar and the NITC lacks urgency. The original measures against NTIC expired in September 2014 and those against Golparvar in February 2014. The Minister does not disclose whether the clear risk of asset flight materialised. 4.9 There is a discrepancy between NITC’s perception that information provided to it in advance of the imposition of restrictive measures was non-confidential, and the Minister’s assertion that “it is not for public consumption”. However it appears to us that the Council seeks to limit information it uses as a basis of restrictive measures to that which is “open source”; an example is the restrictive measures concerning Syria considered at Chapter 13 of this Report. We therefore ask the Minister why he could not provide to this Committee open source information which has also been provided to the individual or entity concerned. 4.10 This Committee is not in a position to judge whether or not the reasons and detailed evidence to support them are sufficient to justify the relisting of Golparvar European Scrutiny Committee, Thirtieth Report, Session 2014–15 19 and NTIC. That, ultimately, is for adjudication by a court. We are however concerned that the Government should ensure that restrictive measures should be legally robust. This is particularly important in this case, not least because of the adverse Court judgments on the first attempts — notwithstanding that in neither case did the judgment of the General Court preclude the possibility of relisting. We ask the Minister to confirm that he considers the reasons for the restrictive measures, and the underlying evidence to be sufficiently robust to deter or withstand further legal challenge. 4.11 We retain the Decision under scrutiny. Full details of the documents: Council Decision amending Council Decision 2010/413/CFSP concerning restrictive measures against Iran: (36568), —. The Minister’s letter of 14 January 2015 4.12 In response to the Committee’s inquiry concerning the timing of the proposal and the risk of asset flight, the Minister indicates: “The Committee is correct that the period after the General Court judgment (2 months and 10 days) had expired before the relistings were agreed. Given events in Ukraine, and the multiple rounds of restrictive measures that the EU Council imposed in response to the Ukraine crisis, the relisting of Gholam Golparvar was not considered by the EU Council in the early months of 2014. When the EU Council did have the capacity to consider this relisting, we had already reached the EU summer break and so the relisting was not considered further until September 2014. “In the case of NITC, the listing was annulled on 03 July 2014, which was almost immediately before the EU summer break. Again, the EU Council necessarily needed to prioritise work on Ukraine restrictive measures during July (you will recall we adopted a package of restrictive measures on 31 July 2014), prior to the EU summer recess. “In September, after the EU summer break, a decision was taken not to pursue the relistings until after the end of E3+3 negotiations with Iran, in November 2014 (when the Joint Plan of Action (JPoA) was extended until 30 June 2015). This has meant that the relistings were fully considered in mid-December 2014. “Whilst there may have been a risk of asset flight for both Golparvar and NITC during the period that they are not subject to restrictive measures, on balance it was judged that it was more important to ensure that these re-listings were done in accordance with EU priorities and an assessment of the wider Iran negotiations context. It is not possible for EU implementing authorities to divulge information about what, if any, assets an individual/entity holds within the EU.” 4.13 And with regard to the information provided in advance to those whose relisting is likely: “In addition to the question posed in the report, I wanted to take the opportunity to explain to the Committee that when an individual/entity is relisted, they are notified 20 European Scrutiny Committee, Thirtieth Report, Session 2014–15 in advance by the EU Council and are given an opportunity to seek further detail on why they are being relisted. The EU Council can then share information it holds on its file which has informed its decision-making process. Whilst the EU Council is permitted to share this information with the individual/entity concerned, this information is not for public consumption. This is why the underlying evidence for these relistings cannot be shared with either the ESC or the House of Lords Select Committee.” Previous Committee Reports Twenty-eighth Report HC 219-xxvii (2014–15), chapter 6 (7 January 2015); but see Twenty-fifth Report HC 219-xxiv (2014–15), chapter 15 (10 December 2014); Ninth Report HC 219-ix (2014–15), chapter 41 (3 September 2014); also see (35964) — and (35965) —: Forty-seventh Report HC 86-xlii (2012–13), chapter 11 (30 April 2014) and (35712) 18163/13: Thirty-first Report HC 83-xxviii (2013–14), chapter 15 (22 January 2014), and the earlier Reports referred to therein. 5 Investment plan for Europe Committee’s assessment Committee’s decision Politically important Not cleared from scrutiny; further developments awaited Document details Commission Communication about promoting investment in the EU — HM Treasury (36540), 16115/14, COM(14) 903 Legal base Department Document numbers Summary and Committee’s conclusions 5.1 In November 2014 the Commission published this Communication suggesting a plan to promote investment in the EU economy. When in December 2014 we considered this document we had before us the Government’s relatively positive, albeit nuanced, initial comments about the plan. However, we postponed further consideration of the document pending an account from the Government of the outcome of the forthcoming European Council discussion of the Commission’s ideas and the Government’s assessment of a number points. 5.2 We are grateful for the information, such as it is, we are now given. Although we recognise that some points cannot be fully clarified until the Commission brings forward its implementing proposals, we are disappointed that the Government rather carelessly fails to address, even cursorily, some of the points we raised previously. European Scrutiny Committee, Thirtieth Report, Session 2014–15 21 5.3 As for the debate recommendation we have foreshadowed previously we are postponing consideration of that until we have the draft Regulation on the proposed European Fund for Strategic Investments for scrutiny. But in that connection we should like an answer soon to our question as to the Government’s assessment of what the Commission’s suggestion of fast-tracking that draft Regulation might mean for national parliamentary scrutiny. 5.4 Meanwhile the document remains under scrutiny. Full details of the documents: Commission Communication: An investment plan for Europe: (36540), 16115/14, COM(14) 903. Background 5.5 In November 2014 the Commission published this Communication suggesting a plan to promote investment in the EU economy. The plan would have three strands: a European Fund for Strategic Investments (EFSI), to mobilise €315 billion (£245 billion) for investment; a pipeline of investment projects and investment advisory “Hub”; and a wider package of reforms to improve the investment climate, including action to remove barriers in the single market and improve regulation. 5.6 When in December 2014 we considered this document we had before us the Government’s relatively positive, albeit nuanced, initial comments about the plan. We noted that we might well want to recommend that Members be given an opportunity to debate this proposed plan. However, we said that we would not decide on that until we had an account from the Government of the outcome of the forthcoming European Council discussion of the Commission’s ideas. In addition to that account, we asked to have also the Government’s assessment as to: the likelihood of a leverage ratio of 1:15 from use of the EFSI; whether drawdowns from the EU Budget for the Fund would be a reasonable use of the programmes concerned; whether the European Investment Bank (EIB)’s involvement in the plan poses any risk to its credit standing; what additional risk the plan might pose for the EU’s Guarantee Fund; what the suggested fast-tracking of the draft Regulation on the EFSI might mean for national parliamentary scrutiny; and what financial consequences there might be for the UK. 5.7 Meanwhile the document remained under scrutiny. 22 European Scrutiny Committee, Thirtieth Report, Session 2014–15 The Minister’s letter of 12 January 2015 5.8 The Financial Secretary to the Treasury (Mr David Gauke) first comments that: as the Prime Minister made clear at the December 2014 European Council, at a time of low growth in the EU, the Government supports a focus on ways to encourage investment; it is important that the approach is comprehensive; while use of EIB lending backed by a guarantee will feature as part of that, more important is structural reform to improve the environment for investment and deliver the necessary focus on drawing in private investment; the Government is clear that this will not be delivered if greater investment is not supported by, among other factors, urgent structural reform; and many details of the investment plan remain unclear and the Government expects more clarification when the Commission publishes an implementing proposal shortly. 5.9 The Minister then addresses a number, but not all, of the questions we asked and one we did not ask. First, in relation to the likelihood of a leverage ratio of 1:15 from use of the EFSI, he says that: the Government cannot at this stage speculate on the likelihood on delivering this suggested ratio; it can be noted, however that the EIB’s 2012 capital increase targeted €180 billion (£140 billion) total investment, leveraging 1:18 capital to total investment; and the EIB expects to reach this target during the course of 2015. 5.10 Turning to the use of drawdowns from the EU Budget for the EFSI the Minister says that the Commission has yet to set out the proposed composition and profile of the EU Budget contributions to be made, so it is not possible to provide further detail at this stage. As for any risk for the EIB’s credit standing the Minister says that: the Government is clear that it is important that the EIB maintains its AAA rating and it will expect any new lending opportunities to be constantly reviewed so as to optimise the EIB’s volume-risk trade-off and value-added to the markets, whilst remaining attentive to the maintenance of the AAA rating; and the financial robustness of the EIB is a high priority for the UK, as it is at the very core of the EIB’s business model and is the fundamental basis of its ability to lend at favourable conditions. 5.11 The Minister says “You ask about the pipeline of investment projects to make use of the Fund. Delivery of the proposed overall investment target of €315bn will be highly dependent on the ready availability of robust, investment-worthy projects which can make use of the Fund-backed EIB lending and attract other sources of investment”. Notwithstanding that we did not ask about this we note that the Minister tells us that: European Scrutiny Committee, Thirtieth Report, Session 2014–15 23 the Government has submitted a strong list of pipeline projects, linked to the National Infrastructure Plan (NIP) it publishes annually, which sets out plans for delivery of UK infrastructure, with a clear pipeline of planned investment; the UK’s NIP enabled the Government to be on the front foot in proposing over £60 billion of investment that could be eligible for support from the proposed EFSI; and the EIB and Commission Task Force Report highlights the UK’s NIP and approach of producing a clear, rigorous pipeline across all infrastructure sectors as an exemplar. 5.12 The Minister does not address our questions about what additional risk the investment plan might pose for the EU’s Guarantee Fund, what financial consequences there might be for the UK from EU budgetary involvement in the plan and, immediately and importantly, what the suggested fast-tracking of the draft Regulation on the EFSI might mean for national parliamentary scrutiny. Previous Committee Reports Twenty-seventh Report HC 219-xxvi (2014–15), chapter 7 (17 December 2014). 6 EU accession to the European Convention on Human Rights Committee’s assessment Committee’s decision Legally and politically important Not cleared from scrutiny; further information requested Document details Council Decision authorising the Commission to negotiate the Accession Agreement of the EU to the ECHR Article 6(2) TEU and Protocol (No 8); Article 218(8) TFEU, unanimity; consent Ministry of Justice (32123), 10817/10, — Legal base Department Document numbers Summary and Committee’s conclusions 6.1 Following the provisional agreement by the Council of Europe “47+1” group of a draft accession agreement in early April 2013, the Commission referred the agreement to the Court of Justice (CJEU) in July of that year for an opinion on whether it was compatible with the EU Treaties pursuant to Article 218(11) TFEU. That Article further provides: “Where the opinion of the Court is adverse, the agreement envisaged may not enter into force unless it is amended or the Treaties are revised”. 24 European Scrutiny Committee, Thirtieth Report, Session 2014–15 6.2 The Government lodged its written observations with the Court on 15 October 2013 and, together with other Member States, presented its oral submissions at the hearing of 5– 6 May 2014. Advocate General Kokott’s opinion was delivered on 13 June 2014 and this found the agreement to be compatible with the EU Treaties subject to a number of significant provisos. 6.3 The Court delivered its opinion on 18 December 2014, in which it found aspects of the agreement to be incompatible with the EU Treaties. The Lord Chancellor and Secretary of State for Justice (Chris Grayling) now writes to update us on the reasoning that supported the ruling (see paragraph 6.15 below) and its implications for the accession process. 6.4 We thank the Justice Secretary for his letter and the evidence he gave to us on Monday 12 January. 6.5 We recognise that the Government is still considering its position in the wake of the CJEU’s opinion and waiting for indications on 18 February of the Commission’s position on a renegotiation of the accession agreement. We look forward to hearing again from the Minister once there are further developments to report. 6.6 In the meantime, we retain the document under scrutiny. Full details of the document: Council Decision authorising the Commission to negotiate the Accession Agreement of the European Union to the European Convention for the Protection of Human Rights and Fundamental Freedoms (ECHR): (32123), 10817/10, —. Background and previous scrutiny 6.7 An outline of the legal and procedural steps involved in the process of EU accession to the ECHR, as well as an account of developments to date in that process and the Government’s view, are set out in our previous Reports. 6.8 Since the date of our last Report (8 January 2014), the Minister has written twice to update us on developments relating to the Article 218(11) TFEU proceedings and the anticipated publication of EU internal rules. Those rules would be needed to regulate, in detail, from an EU perspective how the EU and Member States would participate in the Council of Europe and the Strasbourg Court, covering matters such as the proposed corespondent and prior involvement mechanisms14. 6.9 In his letter of 1 May 2014, the Minister told us that: 14 there would be a hearing before the CJEU on 5–6 May in the proceedings requesting the CJEU’s opinion on the compatibility of the provisional accession agreement with the EU treaties (pursuant to Article 218(11) TFEU); The “co-respondent mechanism” as set out in Article 3 of the proposed accession agreement gives the EU the right to join proceedings against an EU member state before the ECtHR in a case where the compatibility of EU law is called into question. It also allows Member States to be joined to proceedings against the EU in certain circumstances. It is aimed at preventing the ECtHR from examining issues related to the division of competences between the EU and the Member States. The “prior involvement” mechanism, set out in Article 3(6) of the same agreement, affords the CJEU the opportunity to assess the compatibility of the relevant provision of EU law where an application to the ECtHR alleges that a provision of EU law is incompatible with the ECHR. European Scrutiny Committee, Thirtieth Report, Session 2014–15 25 at this hearing, Member States intervening in the proceedings would be making their oral submissions; there would be no official written record of the public proceedings and, in any event, he would not be able to provide any detail of the UK’s submission or other aspects of the litigation since this would breach CJEU confidentiality; and publication of the internal rules was not expected until after the delivery of the CJEU’s opinion and their legal basis would only then be clarified. 6.10 In our letter of response of 7 May 2014, we asked to hear from the Minister, after the 5–6 May hearing, what arguments were submitted to the CJEU by various Member States, given that the hearing was public. 6.11 The Minister replied by a letter of 17 June 2014. He said that at the 5–6 May hearing: submissions were heard by the full court from all three EU institutions and 21 Member States; all oral submissions supported the compatibility of the draft accession agreement with the EU Treaties; the UK asked the CJEU to “robustly test the Accession Agreement and its implications whilst steering clear of making any findings that may prejudge the content of the EU internal rules”; and the judges were very engaged, suggesting that they would “give careful consideration to the post-accession constitutional relationship between the legal order of the EU and the Council of Europe”. 6.12 In our letter of 25 June 2014, we told the Minister that we were “disappointed that the information provided on the submissions made to the Court during a public hearing” was so limited. The Minister’s oral evidence taken on 12 January 2015 6.13 The Justice Secretary gave evidence to us on a number of matters on 12 January, including the following question: “What is the Government’s understanding of the ruling of the Court of Justice on 18 December that the draft agreement for EU accession to the ECHR is incompatible with the EU treaties, and what are the implications of the Court’s opinion for the accession process?”15 6.14 The Minister responded as follows, referring in the first instance to the CJEU’s reaction to the impact of the proposed agreement on its position relative to the Strasbourg Court (ECtHR): 15 Oral evidence taken on 12 January 2015, HC 919 (2014–15), Q 45 [Geraint Davies]. 26 European Scrutiny Committee, Thirtieth Report, Session 2014–15 “If you cut through all of the judgment, you come down to a simple proposition, which is that the ECJ is unimpressed by the idea that it will become a junior court. The truth is that that is precisely what the accession to the ECHR does. Ironically, from a very different route, the ECJ have reached the same conclusion that I have about the ECHR. Now, the ECJ have reached it on the basis that they want all the power themselves; I do not agree with that bit but, at the end of the day, the current situation means that in many respects the European Court of Human Rights has become our supreme constitutional court. “Because it has an unlimited jurisprudence, and because it can interpret different aspects of our daily life as being affected by human rights laws, it has a legal blank cheque to decide different things in different areas in the way that it chooses. That Court has been very clear—indeed, its President said so recently—that it sees itself as the ultimate arbiter. It believes that Parliaments and other courts should follow its rulings, and fundamentally what has happened is that the ECJ has said they do not like that very much, because of a very clear situation where two member states end up in a case in the European Court of Human Rights, on a legal matter related to European law, and it is there that the decision is taken, rather than the ECJ. “The whole process of the European Union acceding to the ECHR convention has been put into some degree of chaos by this judgment. We are waiting to see how the Commission responds. It is worth putting on record one thing, though: I am clear that any arrangement—either a modification of the current proposals, or a revised version of the current proposals, for the EU to accede to the ECHR—cannot, and should not, affect our relationship with the Council of Europe and with the Court, and particularly should not preclude this Parliament from taking decisions about its relationship with the European Court of Human Rights. That is immensely important, and that is something that we would regard as being absolutely sacrosanct in giving our consent to it. The Lisbon Treaty accepts that the European institutions should be subject to the rules of the ECHR, but if it changes our national relationship, that is a very different question. It would be unacceptable for me to see our relationship with that Court fundamentally changed as a result. But at the moment, the process of the European Union acceding to the ECHR has been set back some considerable way.”16 The Minister’s letter of 15 January 2015 6.15 The Minister, enclosing the CJEU’s opinion (and accompanying Press Release), provides us with a summary of the reasons why the court found the accession agreement to be incompatible with the EU Treaties. He says that: “1. the draft Agreement does not take into account the specific characteristics and the autonomy of EU law (for example, it does not prevent Protocol 16 to the ECHR being used to circumvent the preliminary reference procedure); 16 Q 45 [Chris Grayling]. European Scrutiny Committee, Thirtieth Report, Session 2014–15 27 2. it does not prevent the possibility of disputes between EU Member States, or between Member States and the EU, concerning the application of the ECHR to matters within the scope of EU law being brought before the European Court of Human Rights (ECtHR); 3. the co-respondent mechanism and prior involvement procedure have not been drafted in a way which preserves the specific characteristics of the EU and EU law; and 4. it does not exclude from the jurisdiction of the ECtHR matters relating to the Common Foreign and Security Policy (CFSP) which cannot be reviewed by the CJEU.” 6.16 The Minister then addresses consideration of the implications of the opinion, both by the Government and by the Commission. Whilst the Government is “currently analysing” the opinion and its implications, he says that discussions in Brussels will resume on 18 February. At that point, the Minister says the Government will obtain some indication of the approach the Commission “will seek to take in further negotiations”. He adds: “It is clear that further amendment of the draft Accession Agreement will now be necessary, but we will need further time to analyse the precise terms of the changes required and what will be negotiable.” 6.17 He commits to keeping the Committee up-to-date with further developments. Previous Committee Reports Twenty-ninth Report HC 83-xxvi (2013–14), chapter 13 (8 January 2014); Twenty-third Report HC 83-xxi (2013–14), chapter 13 (20 November 2013); Fourteenth Report HC 83xiv (2013–14), chapter 16 (11 September 2013); Twenty-ninth Report HC 86-xxix (2012– 13), chapter 4 (23 January 2013); Sixteenth Report HC 428-xiv (2010–12), chapter 6 (26 January 2011). 28 European Scrutiny Committee, Thirtieth Report, Session 2014–15 7 EU Development Assistance: blending grants and loans Committee’s assessment Committee’s decision Politically important Cleared from scrutiny; further information requested; relevant to the debate already recommended on European Court of Auditors’ Special Report No. 18/2014; drawn to the attention of the International Development Committee Document details Legal base Department Commission Report: The activities of the EU Platform for Blending in External Cooperation since its establishment until end July 2014 — International Development Document numbers (36578), 17001/14, COM(14) 733 Summary and Committee’s conclusions 7.1 “Blending” — an innovative form of development financing increasingly used by the Commission — uses grant money to leverage additional loan financing in order to achieve development outcomes. Blending is targeted to investment opportunities, usually major infrastructure projects with potential development impact, that are viable but do not attract sufficient funding from market sources. 7.2 In 2012, a new EU Platform for Blending in External Cooperation (EUBEC) was established as a Commission Group of Experts. The Platform is composed of a Policy Group (the Commission, Member States, and the European External Action Service (EEAS)); the European Parliament as an observer and a number of Technical Groups (Commission, Member States, EEAS and non-EU Financial Institutions). This report covers the work of EUBEC since its establishment until end of July 2014 and provides an overview of the Platform’s work. 7.3 Its initial work was to review the existing EU blending facilities. The Commission’s report concludes that, to date, existing EU blending facilities have shown positive signs regarding performance in support of EU external policies, and that EUBEC has clearly demonstrated its value in bringing together a wide range of stakeholders to exchange expertise on aspects of blending in external cooperation. The report also highlights a number of areas for future improvement (see the “Background” paragraphs below for details). 7.4 The Minister (Baroness Northover) considers the EUBEC platform a welcome development, and endorses the Commission’s bringing together of a wide range of stakeholders to exchange expertise on all aspects of blending in order to improve its effectiveness. She also supports the recommendations that the Platform continues its work on mobilising private sector resources; the future governance of EU Blending Facilities; and the involvement of non-European Financial Institutions. Noting that the UK has been European Scrutiny Committee, Thirtieth Report, Session 2014–15 29 closely engaging in all aspects of the EUBEC platform, and has a keen interest in how the areas for further improvement are resolved, she and her officials will continue to scrutinise how these will be structured and governed to ensure the ongoing value-for-money of EU resources, clear timelines, and that the UK’s bilateral contribution to the Infrastructure Trust Fund17 is not negatively affected. The Minister would like to see more competition for funds as a good way of ensuring only the best projects receive funding, and welcomes the conclusion that where non-European Financial Institutions are already acting as lead in specific blending facilities (e.g., the African Development Bank), their role should be preserved. 7.5 However, though supporting the Commission in continuing to explore using innovative finance, such as blending, to achieve development objectives, the Minister says that, in the medium term, the UK will need to see a clear demonstration of “additionality” from blending, i.e., evidence that blending is leveraging additional money towards development objectives. The planned results framework should, she says, provide a basis with which to assess the projects financed by the Commission’s blending facilities, and, during implementation, it will be vital to define clearly success criteria in order to understand whether this is the best use of the Commission’s resources. As part of this, the Minister would like to reach “a common understanding” with the Commission about the circumstances in which finance can correctly be considered to have been leveraged; and also ensure that Commission continues to focus on diversifying the sources of financing unlocked by blended grants — leveraging not only public sector finance, but also unlocking the significant private sector finance that she regards as critical to realising the potential for economic development. 7.6 Two months ago, we reported on the European Court of Auditors’ Special Report No. 16/2014: The effectiveness of blending regional investment facility grants with financial institution loans to support EU external policies. It described blending as “the next big thing in EU development policy funding”, and observed that, with the incoming Commission inevitably being “under huge pressure to stretch the leveraging of EU funds with loans to its limits”, it would be “paramount that blending is only used when the Commission can clearly demonstrate its added value”. 7.7 That ECA Special Report also looked at the Commission’s ROM (Results Orientated Monitoring) process and methodology and its results framework — something that the Commission has yet to set up but which its counterparts, both international and bilateral (e.g. DfID), have long-established — to provide an accountability tool to communicate results to stakeholders and a management tool to provide performance data to inform management decisions, thus ensuring that resources are allocated efficiently. In commenting on this ECA Special Report, the Minister said that she was aware of the need for the Commission to do more “to establish additionality”. And she also noted that she would monitor the Commission’s progress in adapting its ROM process and methodology and its yet-to-be-established “results framework” to the specific characteristics of blending. 17 ITF: EU-Africa Infrastructure Trust Fund AIF: Asian Investment Facility CIF: Caribbean Investment Facility IFCA: Investment Facility for Central Asia LAIF: Latin America Investment Facility NIF: Neighbourhood Investment Facility IFP: Investment Facility for the Pacific WBIF: Western Balkans Investment Framework. 30 European Scrutiny Committee, Thirtieth Report, Session 2014–15 7.8 The Committee recalled the Ministers predecessor’s views18 and suggested that she herself might need to do more than simply monitor the Commission’s progress, if the clearly defined success criteria that she rightly regarded as vital to understanding the effectiveness with which the Commission uses the EU taxpayers’ resources in its development activities around the globe, were ever to be established.19 7.9 Once again, the Minister’s reply strikes the right tone. However, as we observed at our most recent meeting regarding a further, and relevant, European Court of Auditors Special Report,20 in our view the Council needs to grasp this matter, and drive the Commission forward in a sustained fashion, so that a proper, effective evaluation mechanism is introduced across all its development activities. That is why we have recommended that Special Report be debated in European Committee. We consider that this Commission report should be listed as one of the relevant documents to that debate. 7.10 We would also like the Minister to report progress in this area in two years’ time, if she or her successor have not had cause to do so sooner. 7.11 In the meantime, we now clear this Commission report, which we are also drawing to the attention of the International Development Committee. Full details of the documents: Commission Report: The activities of the EU Platform for Blending in External Cooperation since its establishment until end July 2014: (36578), 17001/14, COM(14) 733. Background 7.12 In accordance with the EU guarantee for European Investment Bank (EIB) external lending21, the European Parliament requested that the Commission study, and subsequently report upon, the development of an “EU Platform for External Cooperation and Development” in order to optimise the performance of blending in external cooperation. In the subsequent report, the Commission set up the new EU Platform for Blending in External Cooperation (EUBEC) as a Commission Group of Experts, which was formally launched in December 2012. 7.13 The Platform is composed of a Policy Group and a number of Technical Groups: — Policy Group: EU Member States, European External Action Service (EEAS) and the Commission, with the European Parliament and other participants invited as 18 In April 2014, the then Minister (Lynne Featherstone) declared that better, timelier results data was “vital if we are to secure good value for money in our development programmes and demonstrate this to UK taxpayers”, and was “something the UK has been consistently calling for since DfID’s Multilateral Aid Review…was first published in 2011”; pointed out that the proposal was not something new and that, on the contrary, it would do no more than bring the EU into line with other multilateral and bilateral development actors, including her own Department; and also pointed out that the costs of implementing a results framework would be “more than offset in the long run by increased value for money from Commission aid programmes”. See (35735), 17709/13: Forty-seventh Report HC 83xlii (2013–14), chapter 1 (30 April 2014), Paving the way for an EU Development and Cooperation Results Framework. 19 See (36451) —: Twentieth Report HC 219-xix (2014–15), chapter 14 (19 November 2014). 20 European Court of Auditors’ (ECA) Special Report No. 18/2014 —: EuropeAid’s evaluation and results-oriented monitoring systems: (36569), —: See Twenty-ninth Report HC 219-xxviii (2014–15), chapter 2 (14 January 2015). 21 Decision No 1080/2011/EU. European Scrutiny Committee, Thirtieth Report, Session 2014–15 31 observers; has met five times and discussed the work of the Technical Groups and additional selected topics, such as Future Governance of EU blending facilities and role of non-EU Financial Institutions (FI) in EU Blending Facilities. — Technical Groups (TGs): the Commission, EEAS, FIs and a number of Member States’ representatives; five TGs22 have been established; complemented by a number of workshops.23 7.14 This report provides an overview the work of EUBEC since its establishment until end of July 2014. The Commission report concludes that blending facilities: — had shown positive signs regarding performance in support of EU external policies; — had achieved their goal of mobilising significant public resources; — needed further improvements in monitoring and reporting systems; — benefited from a flexibility that contributed to the relevance and quality of the project portfolio; — incorporate sound processes and standards project design and preparation, but the added value of the grant should be further specified and analysed in the grant application form to allow measurability; — enhanced coordination, exchange of information and cooperation between European aid actors, but less so with non-European aid actors; — involve partner countries/regions, but coordination at the local level between EU Delegations and FIs should be improved. 7.15 The report notes that the Technical Groups had addressed a number of the challenges identified above: an improved and harmonised Grant Application Form, which explicitly introduces the issue of debt sustainability; a new results measurement framework that will provide information on expected results ex-ante, measure the outcome ex-post and allow further enhancement of reporting on the achievements of the facilities; work to ensure harmonization and early provision of contractual information intended to reduce timeline towards project implementation. 7.16 However, the report also concludes that, in order to improve further the quality and efficiency of EU development and external cooperation blending mechanisms, a number of areas need to be further explored. The expanded use of specific financial instruments is needed to employ the limited budget funds as efficiently as possible, and in areas where grants are not always the best instrument to develop types of economic activity. While the Commission endorses the platform’s efforts to promote further use of financial instruments, it says that it is essential that these provide clearly defined additionality, and 22 TG1 “Review of existing blending mechanisms” – TG2 “Enhancement of blending activities” – Results Measurement Framework (RFM) – TG3 “Improvement of Processes” – TG4 “Promotion of Financial Instruments” – TG55 “Contracting, monitoring and reporting”. 23 Workshops have been on the issues of: Climate Change mainstreaming; Debt Sustainability; Blending and ODA; Roundtable with Export Credit Agencies. 32 European Scrutiny Committee, Thirtieth Report, Session 2014–15 there is a successful conclusion to the TG’s work on mobilisation of private sector resources. In terms of the future governance of EU blending facilities, organising the blending frameworks according to the financing instrument is welcomed in so far as it will help streamline, simplify and improve efficiency; however, implementation of recommendations must first be agreed in close coordination with EEAS and EU Member States. Finally, the involvement of non-European Financial Institutions needs to be clarified, as this offers an additional opportunity to add further expertise to the Platform and improve decision making. 7.17 In her Explanatory Memorandum of 12 January 2015, the Parliamentary UnderSecretary of State at the Department for International Development (Baroness Northover) notes the report’s overall finding: that the EU blending facilities have performed positively in support of EU external engagement, and EUBEC has demonstrated its value in terms of bringing together stakeholders to exchange expertise on aspects of blending in external cooperation. 7.18 She also recalls a recent European Court of Auditors report looked into the effectiveness of blending24, and says: “The Commission accepted virtually all of the recommendations of the Court, and has already implemented a significant number of these, for example including a results framework in its project application, and introducing an improved and harmonised Grant Application. The existing changes, and implementation of the rest of the recommendations, should continue to make blending a more effective development tool.” 7.19 Since 2007, the Commission have set up eight regional investment facilities — essentially a pool of grant money available specifically to leverage additional loans — in eight different regions.25 These cover the entire sphere of external action outside of the EU. In the period 2007–13, over €2.1 billion was allocated to these facilities. The Minister notes that: “The UK is a bilateral contributor to the Infrastructure Trust Fund, which will be governed under the EDF financing instrument.26 Going forward, the UK is clear that UK bilateral funds must continue to be used only for regional infrastructure (as originally intended) and the UK’s voting rights should continue to reflect this bilateral contribution.” The Government’s view 7.20 The Minister comments as follows: 24 Special Report No. 16/2014: The effectiveness of blending regional investment facility grants with financial institution loans to support EU external policies. See our Report at (36451), —: Twentieth Report HC 219-xix (201415), chapter 14 (19 November 2014) for the Committee’s consideration thereof. 25 ITF: EU-Africa Infrastructure Trust Fund AIF: Asian Investment Facility CIF: Caribbean Investment Facility IFCA: Investment Facility for Central Asia LAIF: Latin America Investment Facility NIF: Neighbourhood Investment Facility IFP: Investment Facility for the Pacific WBIF: Western Balkans Investment Framework. 26 So far the Department for International Development (DfID) has contributed £67million. European Scrutiny Committee, Thirtieth Report, Session 2014–15 33 “The UK considers that the EUBEC platform has been a welcome development. It is positive that the Commission is bringing together a wide range of stakeholders to exchange expertise on all aspects of blending in order to improve its effectiveness. The UK also supports the recommendations of the report that the Platform continues its work on issues of mobilising private sector resources; the future governance of EU Blending Facilities; and the involvement of non-European Financial Institutions. “The UK has been closely engaging in all aspects of the EUBEC platform, and has a keen interest in how the areas for further improvement are resolved. On the governance of blending facilities, the UK will continue to scrutinise how these will be structured and governed to ensure the ongoing value-for-money of EU resources, clear timelines, and that the UK’s bilateral contribution to the ITF is not negatively affected. On the inclusion of non-EU Finance Institutions in the facilities, the UK see more competition for funds as a good way of ensuring only the best projects receive funding. The UK welcomes the conclusion that where non-European Financial Institutions are already acting as lead in specific blending facilities, that their role should be preserved, for example the African Development Bank. “Overall, the UK supports the Commission in continuing to explore using innovative finance, such as blending, to achieve development objectives. However, in the medium term, the UK will need to see a clear demonstration of additionality from blending — evidence that blending is leveraging additional money towards development objectives. The results framework should provide a basis with which to assess the projects financed by the Commission’s blending facilities, and, during implementation, it will be vital to define clearly success criteria in order to understand whether this is the best use of the Commission’s resources. As part of this, the UK would like to come to a common understanding with the Commission about the circumstances in which finance can correctly be considered to have been leveraged. “The UK would also like to ensure that Commission continues to focus on diversifying the sources of financing unlocked by blended grants. To be successful, it must leverage not only public sector finance, but also contribute to unlocking the significant private sector finance which is critical to realising the potential for economic development.” Previous Committee Reports None, but see (36451), —: Twentieth Report HC 219-xix (2014–15), chapter 14 (19 November 2014) and (34964 ), 10272/13: Thirty-first Report HC 83-xxviii (2013–14), chapter 12 (22 January 2014). 34 European Scrutiny Committee, Thirtieth Report, Session 2014–15 8 Working time: inland waterway transport Committee’s assessment Committee’s decision Politically important Cleared from scrutiny Document details Legal base Department Draft Council Directive about a social partners agreement on working time in inland waterway transport Article 155(2) TFEU; —; QMV Transport Document numbers (36216), 11688/14 + ADDs 1–3, COM(14) 452 Summary and Committee’s conclusions 8.1 The Commission has proposed this draft Directive, in the context of the Working Time Directive, to implement a European Social Partners’ Agreement between the European Barge Union, the European Skippers Organisation and the European Transport Workers Federation on specific working time rules for mobile workers in inland waterway transport. 8.2 Although we have recognised the need for adequate working time rules for mobile workers in inland waterway transport, we have shared the Government’s view of the inappropriateness of this proposal for the UK. However, we heard in December 2014 that the proposal was likely to be adopted that month in a form still unsuited to the UK’s circumstances. 8.3 We commented that it was very disappointing that the UK’s reasonable needs were not likely to be met and endorsed the Government’s expected vote against the proposal. We kept the document under scrutiny, pending a report on the final outcome. 8.4 The Government tells us now that, as expected and despite the dissatisfaction of a number of other Member States, the proposal was adopted, with only the UK and Hungary voting against. 8.5 Given these disappointing circumstances, our further consideration of the proposal is redundant and we clear now the document from scrutiny. Full details of the documents: Draft Council Directive implementing the European Agreement concluded by the European Barge Union (EBU), the European Skippers Organisation (ESO) and the European Transport Workers’ Federation (ETF) concerning certain aspects of the organisation of working time in inland waterway transport: (36216), 11688/14 + ADDs 1–3, COM(14) 452. Background 8.6 The Working Time Directive lays down common minimum standards, but allows for more specific rules to be made for particular sectors. The Commission has proposed this draft Directive to implement a European Social Partners’ Agreement between the European Scrutiny Committee, Thirtieth Report, Session 2014–15 35 European Barge Union, the European Skippers Organisation and the European Transport Workers’ Federation on specific working time rules for mobile workers in inland waterway transport. 8.7 We have considered this proposal three times previously. We have recognised the need for adequate working time rules for mobile workers in inland waterway transport. But we have shared the Government’s view of the inappropriateness of this proposal for the UK and have been concerned about a seemingly precipitate push to agree the proposal. When we last considered the matter the Government told us that it was likely that the Presidency would achieve a political agreement on the proposal at a Council on 11 December 2014, that the UK’s concerns had not been met and that the Government expected to vote against the draft Directive. 8.8 We said that it was very disappointing that the UK’s reasonable needs were not likely to be met. So we endorsed the Government’s expected vote against the proposal. We kept the document under scrutiny, pending a report on the outcome of the Council meeting. The Minister’s letter of 15 January 2015 8.9 The Minister of State, Department for Transport (Mr John Hayes) writes now to report the final outcome on this proposal, following the meeting of the Employment, Social Policy, Health and Consumer Affairs Council on 11 December. He says that: as expected, the Council adopted a political agreement on the draft Directive; the UK, however, together with Cyprus, the Czech Republic, Estonia, Greece, Hungary, Ireland and Malta, tabled a joint statement highlighting the inadequacy of the Commission’s impact assessment and the lack of adherence to better regulation principles; the UK, together with Hungary and Malta, also tabled a second statement, which raised concerns about the lack of representation during the Social Partner negotiations on the proposal; and the Directive was adopted on 19 December 2014 through written procedure by QMV — only the UK and Hungary opposed, although five other Member States abstained. 8.10 Noting that the Directive must be transposed by 31 December 2016, the Minister also tells us that the Government intends to continue to work closely with the UK industry affected to ensure that implementation achieves the objective, which is supported by the main trade associations, of tightening regulations of working time on commercial inland waterway vessels in the interests of safety, but minimising administrative burdens and any unintended impacts. Previous Committee Reports Ninth Report HC 219-ix (2014–15), chapter 11 (3 September 2014), Fifteenth Report HC 219-xv (2014–15), chapter 5 (22 October 2014) and Twenty-fifth Report HC 219-xxiv (2014–15), chapter 4 (10 December 2014). 36 European Scrutiny Committee, Thirtieth Report, Session 2014–15 9 Road safety Committee’s assessment Committee’s decision Legally and politically important Cleared from scrutiny Document details Legal base Department Draft Directive facilitating cross-border exchange of information on road safety related traffic offences Article 91 TFEU; co-decision; QMV Transport Document numbers (36243), 12107/14 + ADD 1, COM(14) 476 Summary and Committee’s conclusions 9.1 In May 2014 the Court of Justice annulled Directive 2011/82/EU, which was intended to facilitate cross border enforcement in the field of road safety. The objection to the Directive was that it had a JHA legal base, which incidentally allowed the UK and Ireland to choose not to participate and meant that it could not apply to Denmark. However, the Court maintained the Directive’s effects until the entry into force within a reasonable period of time of a new Directive based on a transport legal base. 9.2 The Commission therefore issued this new proposal for a Directive to replace the one annulled. The content is the same as Directive 2011/82/EU, with the exception of the change of legal base, deletion of text about the non-application of the Directive to those Member States (including the UK) that had not been party to the original measure and associated amendments in the recitals. 9.3 We recognised, given that many Member States will have already gone far in transposing the annulled Directive, that there would be little appetite for changing the substance of the new proposal. Nevertheless, we noted the concerns the Government had expressed to us and urged it to press for amelioration of those concerns. We noted particularly that a two-year deadline, say from April 2015, for transposition by the UK (and Denmark and Ireland) would allow time for amendments to the Directive helpful to the UK, following the Commission’s review of the Directive, due by November 2016. We kept the proposal under scrutiny pending a report from the Government on any success it had in achieving amendments to the draft Directive. 9.4 In October 2014 the Government told us that a two-year period for transposition, that is, until May 2017, and the protection of personal data it was seeking had been secured. We recognised the very limited timetable set for adoption of this legislation by the Court of Justice and the value, in the circumstances, of the amendments achieved for the UK (and Ireland and Denmark). However we said that we would keep the document under scrutiny until we had confirmation that the amendments had been secured in discussion with the European Parliament. 9.5 The Government tells us now that discussion with the European Parliament has left the transposition and data protection positions unchanged, that no further changes of substance will be made and that the final text will probably be adopted at the General Affairs Council on 20 April. European Scrutiny Committee, Thirtieth Report, Session 2014–15 37 9.6 We are grateful for this confirmation that the amendments previously reported to us have been secured and now clear the document from scrutiny. Full details of the documents: Draft Directive facilitating cross-border exchange of information on road safety related traffic offences: (36243) 12107/14 + ADD 1, COM(14) 476. Background 9.7 In May 2014 the Court of Justice annulled Directive 2011/82/EU, which was intended to facilitate cross border enforcement in the field of road safety, by supporting Member States in the investigation of eight offences committed by drivers in other Member States. The objection to the Directive was that it had a JHA legal base — Article 87(2) TFEU, which incidentally allowed the UK and Ireland to choose not to participate and meant that it could not apply to Denmark. However, the Court maintained the Directive’s effects until the entry into force within a reasonable period of time of a new Directive based on Article 91(1)(c) TFEU, a transport legal base. 9.8 The Commission therefore issued this new proposal for a Directive to replace the one annulled. The content is the same as Directive 2011/82/EU, with the exception of the change of legal base, deletion of text about the non-application of the Directive to those Member States (including the UK) that had not been party to the original measure and associated amendments in the recitals. 9.9 We recognised, given that many Member States will have already gone far in transposing the annulled Directive, that there would be little appetite for changing the substance of the new proposal. Nevertheless, we noted the concerns the Government had expressed to us and urged it to press for amelioration of those concerns, even though this might necessitate the Presidency slowing the push for Council agreement. We noted also that a two-year deadline, say from April 2015, for transposition by the UK (and Denmark and Ireland) would allow time for amendments to the Directive helpful to the UK, following the Commission’s review of the Directive, due by November 2016. We kept the proposal under scrutiny pending a report from the Government on any success it had on slowing the Council consideration of the draft Directive and in achieving amendments to it. 9.10 In October 2014 the Government told us that it had been unable to achieve postponement of the Council decision on a general approach but that a two-year period for transposition, that is, until May 2017, and the protection of personal data it was seeking had been secured. We recognised the very limited timetable set for adoption of this legislation by the Court of Justice and the value, in the circumstances, of the amendments achieved for the UK (and Ireland and Denmark). However we said that we would keep the document under scrutiny until we had confirmation that the amendments had been secured in discussion with the European Parliament. The Minister’s letter of 14 January 2015 9.11 The Parliamentary Under-Secretary of State, Department for Transport (Mr Robert Goodwill), reminding us that we had been told previously that the Government planned to 38 European Scrutiny Committee, Thirtieth Report, Session 2014–15 engage proactively with MEPs during their consideration of this proposal, and in particular that it was important to ensure that the two year transposition period was retained, says that: the two year transposition period came under question during MEP discussions and an amendment was put forward which would have reduced the period to one year; this would have been very unwelcome and it is unlikely that the Government could meet such a transposition deadline; it engaged closely, however with the Rapporteur and other key MEPs, to explain the reasons for the two year period, and MEPs were sympathetic to the UK position; and one trilogue meeting has taken place and this has confirmed that the UK, Denmark and Ireland should have the additional two year transposition period that was proposed by the Council. 9.12 The Minister continues that: this is a good result for the UK and the Government is very pleased that the final text allows the UK the same amount of transposition time as was granted to other Member States; a subsequent Council Working Group meeting was held in December 2014, which discussed and confirmed this position and looked at other, relatively minor, amendments; no further changes of substance will be made and the text will now be sent to the Jurist-Linguist meeting early in 2015; and he understands that the new Latvian Presidency will seek to adopt the final text at the General Affairs Council on 20 April. Previous Committee Reports Twelfth Report HC 219-xii (2014–15), chapter 7 (10 September 2014); Fifteenth Report HC 219-xv (2014–15), chapter 6 (22 October 2014). European Scrutiny Committee, Thirtieth Report, Session 2014–15 39 10 Rail research and innovation Committee’s assessment Committee’s decision Politically important Cleared from scrutiny Document details Draft Council Decision to endorse a plan for managing public-private rail research and innovation Articles 187 and 188 TFEU; —; QMV Transport (36580), 17013/14, COM(14) 739 Legal base Department Document numbers Summary and Committee’s conclusions 10.1 Shift2Rail is a new Joint Undertaking between the rail industry in the EU and the EU. It is a broad-scale research and innovation initiative. The aim is to create a step change in rail technology that will help promote the competitiveness of the EU rail industry and meet changing EU transportation needs. The purpose is to carry out research and innovation that will identify how certain targets can be met and carry out projects to demonstrate feasibility of innovations. 10.2 The Shift2Rail Regulation requires the Joint Undertaking to establish and develop a strategic Master Plan. The Commission presents this draft Council Decision to endorse the proposed Shift2Rail Master Plan, which is based to a significant extent on the UK Rail Technical Strategy. 10.3 The Government welcomes the plan, telling us that it presents innovative UK rail supply companies, research organisations and universities with enhanced business opportunities and that it is expected to lead (in the long term) to improvements in the affordability, capacity and reliability of rail transport in the UK. 10.4 Whilst clearing this proposal from scrutiny, we draw it to the attention of the House for the information it gives about possible business and rail transport benefits for the UK. Full details of the documents: Draft Council Decision endorsing the Shift2Rail Master Plan: (36580), 17013/14, COM(14) 739. Background 10.5 Shift2Rail is a new Joint Undertaking (JU — public private partnership) between the rail industry in the EU and the EU (represented by the Commission) established by Council Regulation (EU) No. 642/2014, which came into force in July 2014. The JU is a broad-scale research and innovation initiative. The aim is to create a step change in rail technology that will help promote the competitiveness of the EU rail industry and meet changing EU transportation needs. The purpose is to carry out research and innovation that will identify how the following targets could be met, and also to carry out projects to demonstrate feasibility of the innovations: 40 European Scrutiny Committee, Thirtieth Report, Session 2014–15 an overall reduction in costs of 50%, through a reduction of the costs of developing, maintaining, operating and renewing infrastructure and rolling stock, as well as through increased energy efficiency; an increase in capacity of 100%; and an increase in reliability of 50%. 10.6 Shift2Rail will conduct research and demonstration projects in the following five technical thematic areas or “Innovation Programmes”: cost-efficient and reliable trains, including high capacity trains and high speed trains; advanced traffic management and control systems; cost efficient and reliable high capacity infrastructure; IT solutions for attractive railway services; and technologies for sustainable and attractive European freight. 10.7 The Shift2Rail Regulation requires the JU to establish and develop a strategic Master Plan. The document 10.8 The Commission presents this draft Council Decision to endorse the Shift2Rail Master Plan. The document contains the Commission’s explanatory memorandum, the results of consultations, a summary of the legal elements of the document and the text of the proposed Council Decision. 10.9 An initial version of the Shift2Rail Master Plan27 has been developed by the JU in a process led by the Commission and in consultation with the European Railway Agency and the European Rail Research Advisory Council Technology Platform. This proposed Master Plan defines the priority research and innovation activities to drive innovation in the rail sector across the EU in the long term. In accordance with Annex I to the Shift2Rail Regulation, the Master Plan is structured around the five Innovation Programmes and provides details of the proposed work. 10.10 The Master Plan is based, to a significant extent, on the UK Rail Technical Strategy. Network Rail was closely involved with the development of the Master Plan as a founder member of Shift2Rail. The Commission led a consultation on the draft plan, which included a public consultation meeting held in June 2014 attended by close to 200 stakeholders. On 24 September 2014 the Shift2Rail Governing Board (which includes Network Rail) approved a version of the Master Plan including major contributions from relevant stakeholders. 27 http://ec.europa.eu/transport/modes/rail/doc/2014-09-24-draft-shift2rail-master-plan.pdf. European Scrutiny Committee, Thirtieth Report, Session 2014–15 41 The Government’s view 10.11 In her Explanatory Memorandum of 14 January the Minister of State, Department for Transport (Baroness Kramer) says that the Government welcomes the Master Plan, which, in conjunction with the JU, is expected to lead (in the long term) to improvements in the affordability, capacity and reliability of rail transport in the UK, which will benefit UK citizens and UK rail freight customers, with the UK rail sector (particularly Network Rail) also standing to gain from the investment in rail research and innovation. 10.12 The Minister tells us that: there are no specific policy implications arising directly from the plan, as it is largely based on the UK Rail Technical Strategy; UK companies may wish, however, to respond to future open calls which will be based on the Master Plan; and they can approach FutureRailway (a cross-industry body supported by Government that both funds research and innovation and provides independent advice on rail research and innovation) for assistance in preparing proposals that seek to deliver aspects of the Master Plan. 10.13 The Minister comments further that: Shift2Rail will provide innovative UK rail supply companies, research organisations and universities with enhanced business opportunities to develop and exploit new technologies and solutions; it will do this by co-funding collaborative research and innovation activities at a size and scale that cannot be provided through national programmes; and it will also help UK players gain access to EU partners with skills or resources they cannot readily find in the UK. 10.14 Finally, the Minister tells us that the draft Council Decision to endorse the Master Plan has no direct financial implications. But she reminds us that: the size of the JU programme itself is expected to be between €800 million and €1 billion (£623 million and £779 million), with the Commission contributing up to €450 million (£350 million) between 2014 and 2020 and the rail industry contributing the remainder; a quarter of the research funds would be designated for SMEs, research organisations and universities through open calls; and the proposed Commission contribution falls within existing budgets. Previous Committee Reports None. 42 European Scrutiny Committee, Thirtieth Report, Session 2014–15 11 EU restrictive measures against Tunisia Committee’s assessment Committee’s decision Politically important Cleared from scrutiny Document details Department Council Decision and Council Implementing Regulation concerning restrictive measures directed against certain persons and entities in view of the situation in Tunisia (a) Article 29 TEU; unanimity (b) Article 215 TFEU; QMV Foreign and Commonwealth Office Document numbers (a) (36520), — (b) (36521), — Legal base Summary and Committee’s conclusions 11.1 On 4 February 2011 the EU imposed an asset freeze against 48 members of the former regime in Tunisia who are held responsible by the new Tunisian authorities for the misappropriation of Tunisian State funds.28 11.2 These measures consist of a freezing of funds and economic resources of those persons listed in the annex to the CFSP Decision, and were imposed following the 2011 resignation of former President Ben Ali. There are no travel restrictions imposed through these measures. 11.3 The draft Decision and Implementing Regulation seek to amend Council Decision 2011/72/CFSP by extending the current sanctions for another year, until 31 January 2016. They accordingly provide for the extension of restrictive measures against “persons responsible for misappropriation of Tunisian State funds, and who are thus depriving the Tunisian people of the benefits of the sustainable development of their economy and society and undermining the development of democracy in the country”. They also make a small change to the identifiers of three individuals, who are deceased, but against whom judicial proceedings are continuing in Tunisia, and who would accordingly remain on the list of persons subject to the EU measures. 11.4 The Minister for Europe (Mr David Lidington) notes that Tunisia successfully completed its transition to democracy in 2014 by holding its first full-term legislative elections in October 2014 and first ever democratic Presidential election in November and December 2014. He recalls that addressing the corruption of the previous regime has been a priority, though progress has been slow in respect of international asset recovery. He also notes that the asset freeze itself does not enable Member States to seize assets deemed to have been corruptly obtained, or return them to the Tunisian State, and that “further action through the criminal justice system in the requesting state is required”; and declares 28 The full background to the measures in question is set out in our previous Report — (35736),—; (35737),—: Thirtythird Report HC 83-xxx (2013–14), chapter 19 (29 January 2014) — and the earlier Reports referred to therein. European Scrutiny Committee, Thirtieth Report, Session 2014–15 43 that: “Supporting the aspiration to extend the current restrictive measures will allow investigations into the alleged corruption of listed individuals to be completed”. 11.5 In its Conclusions of 19 January 2015, the Foreign Affairs Council: — congratulated Tunisia in the wake of the legislative and presidential elections, which “marked an historic step in the country's democratic transition”; — welcomed the democratic commitment and the sense of responsibility of the Tunisian people and of all the political leaders and civil society; — congratulated Mr Béji Caïd Essebsi on his election as President of Tunisia, as well as the newly-elected representatives of the Tunisian people; — professed its steadfast commitment to cooperating with the new President of Tunisia, the next government, and the whole of Tunisian society, in order to “deepen the Privileged Partnership between the EU and Tunisia”; and — reiterated its willingness to continue to back the efforts of the new authorities with political and financial support commensurate with both the progress already achieved and the challenges faced. 11.6 As was the case a year ago (see “Background” below), although no questions arise from the proposals themselves, we are nonetheless reporting the renewal of these measures because of the widespread interest in developments in Tunisia — where the “Arab Spring” began, and which in many ways continues to carry a torch that has been dimmed in those other Arab countries that followed in its wake. 11.7 We now clear the Council Decision and Council Implementing Regulation. Full details of the documents: (a) Council Decision amending Council Decision 2011/72/CFSP concerning restrictive measures directed against certain persons and entities in view of the situation in Tunisia: (36520), —; (b) Council Implementing Regulation implementing Council Regulation (EC) No. 101/2011 concerning restrictive measures directed against certain persons, entities and bodies in view of the situation in Tunisia: (36521), —. Background 11.8 The Council Decision and Council Implementing Regulation that the Committee cleared from scrutiny a year ago enable a further 12 months “roll-over”, to 31 January 2015. The Decision and Implementing Regulation thus provided for the extension of restrictive measures against persons adjudged by the post-revolutionary authorities to have been “persons responsible for misappropriation of Tunisian State funds, and who are thus depriving the Tunisian people of the benefits of the sustainable development of their economy and society and undermining the development of democracy in the country”. They also made amendments to the grounds for listing of 45 of the 48 listed individuals. The measures consist of a freezing of funds and economic resources of those persons listed in the annex to the Decision. 44 European Scrutiny Committee, Thirtieth Report, Session 2014–15 11.9 As the Minister for Europe noted, the 48 individuals listed are former President Ben Ali, his wife Leila Trabelsi and other members and close associates of their families. With regard to the amendments to the grounds for listing 45 of the 48, the Minister recalled that three of the listed individuals (Fahed Al Matri, Mohamed Trabelsi, and Slim Chiboub) successfully challenged their listing in the General Court in May 2013. The General Court ruled that their statement of reason for listing (which referred to money laundering) did not meet the criterion for designation (responsibility for misappropriation of State funds) in the relevant Decision and Regulation. The Foreign Affairs Council then adopted a new Decision and Implementing Regulation on 31 July 2013, which amended these statements so that they referred back to the designation criteria, and ensured that Matri, Trabelsi and Chiboub remain listed (the Committee cleared these at its meeting on 4 September 2013). The 2014 Decision and Implementing Regulation accordingly made the same amendments to the remaining 45 listings, and reduced the risk of any further legal challenges being made. As of now, the Minister said, legal proceedings against all the listed individuals were continuing in Tunisia. Although some individuals had challenged their listings, either on hardship grounds or by providing more detailed legal evidence, EU partners were satisfied that the existence of national legal proceedings provided sufficient justification to maintain all the listings. 11.10 More generally, the Minister said that Tunisia had made impressive progress in its transition to democracy. Addressing the corruption of the previous regime continued to be a priority for the government, though progress had been slow in a post revolution environment. The asset freeze did not itself enable Member States to seize any assets deemed to have been corruptly obtained, or return them to the Tunisian State; further action through the criminal justice system was required before such measures could be taken. He therefore supported the aspiration to extend the current restrictive measures to allow investigations into the alleged corruption of listed individuals to be completed and ensure that the structures and processes in Tunisia were in place to return misappropriated assets to their rightful owners. 11.11 Although no questions arise, the Committee concluded that a Report to the House was warranted because of the level of interest in developments in “the new Tunisia”, and because it illustrated how the EU continued to endeavour to help a new regime that was itself endeavouring, in what were no doubt difficult circumstances, to develop a law-based approach that, if it could be developed in this sensitive area, could have much wider positive repercussions.29 The draft Council Decision and Council Implementing Regulation 11.12 In his Explanatory Memorandum of 14 January 2015, the Minister for Europe says that: — the Tunisian government has confirmed that national legal proceedings against all 48 listed individuals are continuing in Tunisia; 29 See (35736), — and (35737), —: Thirty-third Report HC 83-xxx (2013–14), chapter 19 (29 January 2014). European Scrutiny Committee, Thirtieth Report, Session 2014–15 45 — since the last review in 2014, the Tunisian government have provided further information on three of the listed individuals who have been deceased since 2011: Mr. Moncef Ben Mohamed Ben Rhouma TRABELSI Mr. Mohamed Adel Ben Mohamed Ben Rehouma TRABELSI Mr. Faouzi Ben Haj Hamda Ben Haj Hassen BEN ALI — judicial proceedings against the deceased are continuing in Tunisia, so they should remain on the list of persons subject to the EU measures; and — the revised measures will amend the identifying information for the deceased persons. The Government’s view 11.13 The Minister comments as follows: “Tunisia successfully completed its transition to democracy in 2014 by holding its first full-term legislative elections in October 2014 and first ever democratic Presidential election in November and December 2014. Addressing the corruption of the previous regime has been a priority but progress has been slow in respect of international asset recovery. The asset freeze itself does not enable Member States to seize assets deemed to have been corruptly obtained, or return them to the Tunisian State. Further action through the criminal justice system in the requesting state is required. Supporting the aspiration to extend the current restrictive measures will allow investigations into the alleged corruption of listed individuals to be completed.” 11.14 On 19 January 2015, the Foreign Affairs Council adopted the following Conclusions on Tunisia: “1. The European Union congratulates Tunisia in the wake of the legislative and presidential elections which mark an historic step in the country's democratic transition. “2. It welcomes the democratic commitment and the sense of responsibility of the Tunisian people and of all the political leaders and civil society who have managed to preserve a spirit of dialogue conducive to ensuring the success of this process. The EU pays tribute to the Independent High Authority for the Elections (ISIE) which has excellently organised several free, transparent and democratic elections within a short period of time. Tunisia's democratic transition is a source of hope and inspiration for other peoples of the region. “3. The EU congratulates Mr Béji Caïd Essebsi on his election as President of Tunisia, as well as the newly-elected representatives of the Tunisian people. It wishes the new authorities every success with the inclusive preparation and the implementation of the reforms which are key to consolidating the rule of law and the democratic achievements of the new Constitution, guaranteeing the 46 European Scrutiny Committee, Thirtieth Report, Session 2014–15 security of all Tunisians and meeting the economic and social aspirations that were behind the 2011 revolution. “4. The EU remains steadfastly committed to cooperating with the new President of Tunisia, the next government, and the whole of Tunisian society, in order to deepen the Privileged Partnership between the EU and Tunisia. With this in mind, the EU will continue to back the efforts of the new authorities with political and financial support commensurate with both the progress already achieved and the challenges faced.”30 Previous Committee Reports None, but see (35736), — and (35737), —: Thirty-third Report HC 83-xxx (2013–14), chapter 19 (29 January 2014) and the earlier Reports referred to therein. 12 EU restrictive measures against Côte d’Ivoire Committee’s assessment Committee’s decision Politically important Cleared from scrutiny Document details Council Decision and Council Regulation amending restrictive measures against, and restrictions on the supply of assistance related to military activities to, Côte d'Ivoire Legal base (a) Article 29 TEU; unanimity; (b) Article 215 TFEU; QMV Foreign and Commonwealth Office (36596), — and (36597), — Department Document numbers Summary and Committee’s conclusions 12.1 Côte d’Ivoire (CDI) has been a troubled country over recent years.31 UN sanctions were first imposed in 2004. The EU imposed an arms embargo, a travel ban and asset freeze on three people and a ban on direct or indirect import of all rough diamonds. 12.2 Following the disputed election results in November 2010, further EU measures targeted individuals and entities supporting the incumbent, Laurent Gbagbo, and obstructing the process of peace and national reconciliation, and in particular jeopardising the proper outcome of the electoral process. After prolonged resistance and a violent dénouement, former President Gbagbo was arrested in April 2011 and President Ouattara 30 Available at http://www.consilium.europa.eu/en/press/press-releases/2015/01/fac-150119-council-conclusions-ontunisia/. 31 See (34023), — and (33898), 10281/12: Sixth Report HC 86-vi (2012–13), chapter 9 (27 June 2012) and all the Reports referred to therein for the full background to the EU’s dealings with Côte d’Ivoire in recent years. European Scrutiny Committee, Thirtieth Report, Session 2014–15 47 was able to take office. UN, and thus EU, restrictive measures have been gradually eased thereafter in order to acknowledge and encourage continued progress towards stable, democratic, law-based governance. 12.3 The attached Council Decision and Council Regulation seek to add a derogation to the prohibition on the sale, supply, transfer or export of certain items, solely for use in civilian mining and infrastructure. 12.4 The Minister for Europe (Mr David Lidington) explains that: — in late 2013, the Federation for European Explosives Manufacturers (FEEM) approached the European Commission with concerns over the inclusion of certain civil explosives and related equipment (e.g. detonators) in the EU “internal repression” list that is annexed to EU sanctions; — FEEM’s concerns were that these items are essential in mining construction and other civil infrastructure projects and could not be used easily and conventionally as weapons of internal repression; — the matter was referred to the Conventional Arms Exports Group (COARM) which in turn set up a virtual “experts group” to discuss the issue; and — the COARM report is a classified document, but in essence “proposed a solution to allow Member States to authorise on a case-by-case basis the supply of certain explosives and related equipment where they are satisfied that they are for use in the type of projects described above”. 12.5 The Minister says that: — CDI continues to show encouraging progress, particularly over the past 12 months, with the presiding government continuing to take steps to ease political tensions and to improve the security and stability of the country; — following the lifting last year of the embargo on diamonds, the CDI authorities have continued to strengthen the governance framework required to meet the minimum requirements as set out by the Kimberly Process; — the proposal now being put forward shows that the international community views the positive developments in CDI favourably; and — the Government shares this optimism and believes that that the derogation will further support measures to bring peace, stability and prosperity to the country. 12.6 We shall no doubt hear more about progress towards the creation of an environment conducive to proper elections, and especially a credible, apolitical, and comprehensive voters list prior to the Presidential elections; in the implementation of its SSR strategy; and, more generally, on the “clear post embargo strategy” set out before the UN on 12 December 2014 (see paragraphs 12.14–12.15 and 12.21 below) when the overall EU package of restrictive measures is submitted for scrutiny in the Spring. 48 European Scrutiny Committee, Thirtieth Report, Session 2014–15 12.7 In the meantime, we now clear this Council Decision and Council Regulation. Full details of the documents: (a) Council Decision amending Decision 2010/656/CFSP renewing the restrictive measures against Côte d'Ivoire: (36596),—;(b) Joint Proposal for a Council Regulation amending Council Regulation (EC) No. 174/2005 imposing restrictions on the supply of assistance related to military activities to Côte d'Ivoire: (36597),—. Background 12.8 As earlier Committee Reports have noted, Côte d’Ivoire (CDI) has beden a troubled country over recent years.32 UN sanctions were first imposed in 2004. These are implemented in by the EU by a “policy-setting” Council Decision and implementing Regulations. EU restrictive measures prior to the 2010 election were thus an arms embargo, a travel ban and asset freeze on three people and a ban on direct or indirect import of all rough diamonds. 12.9 Following the disputed election results in November 2010, further EU measures targeted individuals and entities identified as supporters of the incumbent, Laurent Gbagbo, and who were obstructing the process of peace and national reconciliation, and in particular jeopardising the proper outcome of the electoral process. After prolonged resistance and a violent dénouement, former President Gbagbo was arrested in April 2011 and President Ouattara was able to take office. The EU immediately responded by delisting certain entities and individuals that no longer met the listing criteria set by the measures (which the Committee reported to the House). 12.10 Then a further 78 individuals were judged no longer to constitute a threat to the process of peace and national reconciliation, and were de-listed in line with a policy of supporting that process and the other main priorities of the new Ivorian administration — re-starting the economy and security sector reform (having produced several Reports to the House in 2010 and 2011, the Committee concluded these measures were not, in and of themselves, ones that warranted a further substantive Report). 12.11 On 23 April, the UNSC unanimously passed Resolution 2045 (2012). The EU accordingly modified arms sanctions set to expire in May 2012 until 30 April 2013, to include exemptions, including for arms and related equipment intended to enable the Ivorian security forces to use appropriate and proportionate force while maintaining public order, and arms and other equipment for support of the security sector reform process. 12.12 At that time, the Minister explained that, via the adoption of UNSCR 2045 (2012), the UNSC welcomed the steady progress and achievements Côte d’Ivoire had made since the disputed Presidential elections in returning to stabilisation, notably by holding parliamentary elections, addressing immediate security challenges, advancing economic recovery and strengthening international and regional cooperation; acknowledged the efforts by all Ivoirians to promote national reconciliation and consolidation of peace through dialogue and consultation; encouraged the Dialogue, Truth and Reconciliation 32 See (34023), — and (33898), 10281/12: Sixth Report HC 86-vi (2012–13), chapter 9 (27 June 2012) and all the Reports referred to therein for the full background to the EU’s dealings with Côte d’Ivoire in recent years. European Scrutiny Committee, Thirtieth Report, Session 2014–15 49 Commission to make further progress in this direction; and welcomed the assistance of the African Union and the Economic Community of West African States in this regard. This notwithstanding, the UNSC remained concerned about the unresolved challenge of security sector reform (SSR) and disarmament, demobilisation and reintegration (DDR), as well as the circulation of weapons, which continued to be significant risks to stability. However, the Minister said, in taking note of the difficulties faced, the UNSC also acknowledged the urgent need for the Ivoirian Government to equip and train its security forces, especially the police and gendarmerie, with standard policing weapons and ammunition, and the importance of the Ivoirian Government being able to respond proportionately to threats to the security of all its citizens. So necessary amendments were needed to the arms embargo that would allow the international community to respond more quickly to the needs of the Ivoirian Government while still retaining the necessary controls on the export of arms and related material. 12.13 Although no questions arose, on that occasion we concluded that these developments, in a part of the world of continuing political importance to UK and EU interests, warranted a substantive Report to the House.33 12.14 Most recently, in June 2014, the Minister reported that the CDI continued to make encouraging progress. There were, though, still pockets of insecurity; the government had accordingly prioritised implementation of its SSR national strategy; but challenges remained with regard to accelerating the pace of reform, restoring public confidence in the national security forces and strengthening capacity, particularly concerning the police and gendarmerie, and disarming all former combatants by the mid-2015 target. 12.15 Politically, the 2015 Presidential elections would be a key milestone; the immediate challenge was to create an environment conducive to proper elections, and especially a credible, apolitical, voters list that would enfranchise the estimated five million voters (i.e., c. 50%) not on the electoral register. 12.16 With regards to the renewal of the UN restrictive measures, the Minister said that some Member States had argued that the fact that progress had been made by the Ivorian authorities on SSR and DDR reform justified a fairly substantive lifting of the arms embargo; other Member States felt that this was premature, and that more evidence was needed of the military being under the control of a democratically elected civilian government over a more substantial amount of time; and the UK Government agreed that, while the upcoming elections were a key point against which to measure progress, some easing to the embargo was warranted to allow the Ivorians to better equip their army, police and gendarmerie, so as to marginalise the Zone Commanders and mark the progress in SSR reform thus far. Hence the compromise of the lifting of “non-lethal” items from the embargo and replacing the requirement for the Ivorian authorities to obtain advanced approval from the UN CDI Sanctions Committee for exports of “small arms” with a requirement to notify the committee when they received such exports. UNSCR 2153 (2014) also allowed for the transfer of lethal arms to the Ivorian security forces, providing the UN CDI Sanctions Committee was notified in advance and that they were subsequently satisfied that any such exports were likely to contribute positively to SSR objectives; 33 See (34023), — and (33898), 10281/12: Sixth Report HC 86-vi (2012–13), chapter 9 (27 June 2012). 50 European Scrutiny Committee, Thirtieth Report, Session 2014–15 supplies of lethal arms under this exemption are to be logged and recorded by the Ivorian authorities, with weapons requiring physical markings to help monitor and account for their circulation in CDI. 12.17 Regarding the diamonds industry, the Minister said that had also been significant progress: CDI now met the minimum Kimberly Process requirements. The Ivorian authorities had a strategy in place to ensure that the diamonds industry continued to transition in a structured and accountable fashion; the Ivorian authorities had provided the UN with information on their plans to facilitate appropriate Government rough-diamond valuation, anti-fraud measures and the establishment of ‘buying houses’, to regulate the valuation and sale of diamonds; various bodies, such as the UN Group of Experts, the Kimberly Process Working Group on Monitoring, INTERPOL and “Friends of Côte d’Ivoire”, had also been invited to remain involved and consulted on progress. Thus it was agreed at the UN that the diamonds embargo could be lifted. 12.18 The Minister also noted that, whilst the EU was permitted to adopt further measures to that of the UN, there was consensus that the situation in CDI was progressing in such a way, and would continue so to do, that there was no need for any additional autonomous EU measures to be included in the Council Decision or the supporting Council Regulation.34 The draft Council Decision and Council Regulation 12.19 The attached Council Decision and Council Regulation seek to add a derogation to the prohibition on the sale, supply, transfer or export of certain items solely for use in civilian mining and infrastructure, in relation to Council Decision (2010/656/CFSP) and Council Regulation (174/2005) concerning restrictive measures against Cote d’Ivoire. 12.20 In his Explanatory Memorandum of 15 January 2014, the Minister for Europe explains the origin and nature of the proposal, as outlined above. The Government’s view 12.21 The Minister comments as follows: “CDI continues to show encouraging progress in its recovery from the civil crisis that followed the 2010 Presidential elections. The underlying security situation has continued to improve, particularly over the past 12 months, with the presiding government continuing to take steps to ease political tensions and to improve the security and stability of the country. The next Presidential vote will take place in October 2015 which will provide the CDI authorities with the chance to demonstrate its support for the democratic process through the holding of free and fair elections. “In April 2014 the UN Security Council eased the arms embargo on CDI in recognition of its progress and development, facilitating greater access to the CDI authorities for arms and equipment needed to further its Security Sector Reform (SSR) objectives. The embargo on diamonds has also been lifted through the country 34 For full background, see (36144), —: Fourth Report HC 219-iv (2014–15), chapter 10 (25 June 2014). European Scrutiny Committee, Thirtieth Report, Session 2014–15 51 meeting the minimum requirements as set out by the Kimberly Process. These requirements include measures to ensure diamonds from CDI are mined and sold via legal means, reducing the possibility of illicit diamonds trading funding rebel groups in the country. On 12 December 2014 CDI set out a clear post embargo strategy before the UN which included steps to strengthen the governance framework of the Kimberly Process and valuation capacities, developing and implementing anti-fraud measures and establishing legally constituted buying houses. The lifting of these sanctions measures shows the international community views the positive developments in CDI favourably. The UK shares this optimism and believes that that the derogation as set out in the Council Decision and Regulation will further support measures to bring peace, stability and prosperity to the country.” Previous Committee Reports None, but see (36144), —: Fourth Report HC 219-iv (2014–15), chapter 10 (25 June 2014) and (34023), — and (33898), 10281/12: Sixth Report HC 86-vi (2012–13), chapter 9 (27 June 2012). 13 Restrictive measures against Syria Committee’s assessment Committee’s decision Legally and politically important Cleared from scrutiny; further information requested Document details (a) Council Implementing Decision implementing Decision 2013/255/CFSP concerning restrictive measures against Syria (b) Council Implementing Regulation implementing Regulation (EU) No. 36/2012 concerning restrictive measures in view of the situation in Syria (a) Article 29 TEU; unanimity (b) Article 215 TFEU; qmv Foreign and Commonwealth Office (a) (36603),— (b) (36604),— Legal base Department Document numbers Summary and Committee’s conclusions 13.1 These proposals will re-impose travel restrictions and asset freezes against three individuals associated with the Assad regime in Syria, Ayman Jabir, Khalid Qaddur and Mohamed Hamcho, and one entity, Hamcho International. The original restrictions were annulled by the General Court. The re-listing is based on new statements of reason. 52 European Scrutiny Committee, Thirtieth Report, Session 2014–15 13.2 We support the principle that restrictive measures should be both targeted and legally robust. However it is not evident that this is the case with these proposals, particularly given the background, which includes the Council being unable to provide sufficient backing evidence using open sources when invited to do so in court hearings on 11 June 2014. The Minister (Mr David Lidington) only indicates that these proposals are based on new grounds supported by information taken from open sources which can be shared with the Court; and also that they comply with fundamental rights. The reasons given in respect of Qaddur appear especially vague in that they state that he “is associated with a person benefitting and supporting the regime” without identifying that person. 13.3 We clear these proposals so that they can be adopted before the existing restrictive measures end. However, in doing so we ask the Minister to confirm that he considers the reasons given for the restrictive measures, and the underlying evidence, to be sufficiently robust to either deter or withstand further legal challenge. We also ask him to provide this evidence given that it is open source. Full details of the documents: (a) Council Implementing Decision implementing Decision 2013/255/CFSP concerning restrictive measures against Syria: (36603), —; (b) Council Implementing Regulation implementing Regulation (EU) No. 36/2012 concerning restrictive measures in view of the situation in Syria: (36604), —. Background 13.4 On 13 November 2014, the General Court of the European Union annulled the designations of Khalid Qaddur, Ayman Jabir, Mohamed Hamcho and Hamcho International under the EU Syria sanctions regime in Cases T-653/11 Ayman Jabir v Council, T-654/11 Khalid Qaddur vs. Council and T-43/12 Mohamed Hamcho and Hamcho International vs Council. The Court’s main reason for annulment in each case was that the EU Council was unable to provide the Court with sufficient evidence to back up the assertions made in the statement of reasons. The Court suspended the effects of the annulment until 28 January 2015. The Explanatory Memorandum of 15 January 2015 13.5 The Minister sets out the Government’s general policy: “Targeted, legally robust sanctions are one of the tools the EU can use to pressure the regime into reassessing its position and reengaging constructively with peace talks with the moderate opposition. It is necessary to designate those providing practical and financial support to the Syrian regime and its war effort in order to put pressure on the Syrian regime to enter into a political settlement to the conflict, and also to curtail the Syrian regime's ability to wage a brutal war against its own people. The UK remains firm in its belief that a negotiated political settlement is the only solution to conflict and Syria's worsening humanitarian crisis.” 13.6 In respect of these specific individuals and entity he indicates: European Scrutiny Committee, Thirtieth Report, Session 2014–15 53 “The Syria policy imperative for re-listing Ayman Jabir, Khalid Qaddur, Mohamed Hamcho and Hamcho International has remained strong following the court judgements annulling these listings. The Syrian regime relies on the support of individuals and entities such as these to continue its brutal war on the Syrian people. There was a high risk that their funds, once unfrozen, would be at the disposal of the regime for use in their repression of the civilian population. Therefore new grounds for re-listing were prepared, supported by evidence from open sources that the Council will be able to share with the Court.” 13.7 He indicates that new grounds for re-listing the four cases have been prepared during the period of the suspension of the annulment of the original restrictive measures. They are supported by information taken from open sources that the Council will be able to share with the Court. He also confirms that these proposals are in accordance with fundamental rights. Previous Committee Reports None. 14 International Code of Conduct on Outer Space Activities Committee’s assessment Committee’s decision Politically important Cleared from scrutiny; further information requested Document details Legal base Department Council Decision on an International Code of Conduct for outer-space activities Article 28 TEU; unanimity Foreign and Commonwealth Office Document number (36606), — Summary and Committee’s conclusions 14.1 In 2007, the EU launched its proposal for a voluntary, non-legally-binding International Code of Conduct for Outer Space Activities (“Code of Conduct”). The aim is to establish a normative framework and agreed best practices for all uses of outer space, promote the transparent and responsible use of outer space and complement existing legal instruments. Given the slow progress and difficulties in developing a treaty-based approach, and the rapidly increasing dependence on space-derived services, the EU proposed the Code of Conduct initiative as a more flexible framework that would be easier to agree by the international community. 54 European Scrutiny Committee, Thirtieth Report, Session 2014–15 14.2 Working closely with the UK and other EU Member States, the EU produced a preliminary draft Code of Conduct in 2008.35 On the basis of a revised draft in September 2010, the Council invited the EU High Representative for Foreign Affairs and Security Policy to pursue consultations with third countries with the aim of establishing a text that was acceptable to the greatest number of countries, and of subsequently adopting the Code at an ad hoc diplomatic conference. 14.3 Council Decision 2012/281/CFSP, which was extended in January 2014 by 2014/42/CFSP, authorised the EEAS to conduct a series of activities to build further support (four multilateral experts meetings were held, and experts from a total of 95 countries consulted, on the proposed substance). 14.4 The Minister for Europe (Mr David Lidington) now explains that, following the successful conclusion of the consultative process in Luxembourg in May 2014, many States are calling for formal multilateral negotiations on the Code of Conduct. The draft Council Decision 14.5 The Minister then explains that this Council Decision would: — authorise the EEAS to continue their facilitating role, moving the initiative to a multilateral negotiating process; — provide for continued outreach with third parties to build a broad base of support for the Code of Conduct, as an example of a Transparency and Confidence Building Measure (TCBM) identified in the 2013 UN Group of Governmental Experts’ (UN GGE) report on TCBMs in Outer Space, of which the UK was a member; — also provide for outreach activities to raise wider awareness of other TCBMs, in line with the Council Decision of 29 May 2012. 14.6 The Minister goes on to say that, in order to maximise the skills and exposure to different states and stakeholders, the EEAS propose to engage both the United Nations Institute for Disarmament Research (UNIDIR) and the United Nations Office for Disarmament Affairs (UNODA) — given their previous experience of holding similar multilateral events, particular expertise in space security and their past collaboration with the UN GGE; given that engaging both UN agencies also demonstrates the cross-cutting nature of the Code of Conduct, as it seeks to bridge both military and civilian uses of Outer Space; and given that both agencies have a broader mandate to promote and support TCBMs and to collaborate with other UN institutions to enhance space security following the acceptance of the UN GGE report. 14.7 With regard to the future timeline, the Minister says that the EU’s present aim is for the negotiation process to start in mid-2015, with a view to opening the Code of Conduct for signature once the negotiations have concluded. 14.8 He also reiterates the Government’s position on the competence question: 35 See the relevant Council Conclusions. European Scrutiny Committee, Thirtieth Report, Session 2014–15 55 “The Government has previously made clear that the EU does not have the competence to negotiate the Code of Conduct on EU Member States’ behalf. The EU has the authority currently: to speak or make decisions about the Code of Conduct on the basis of unanimity among all EU Member States; to consult with third parties; and, following the adoption of the 2012 and 2014 Council Decisions, to convene multilateral experts meetings. This Council Decision would authorise the EEAS to facilitate a multilateral negotiation process. The EEAS understands that any further activity would require further explicit authorisation from the Council and that EU Member States would still participate in this process in their own right.” 14.9 No questions arise. However, given the subject matter and the way the process is being handled — the EU and Member States driving it forward in a way that properly respects their respective competences, and building support from third countries, but towards a UN-based outcome — a further Report to the House is appropriate. 14.10 The draft Council Decision notes that assistance for the implementation of the Code of Conduct and “its point of contact” could be provided through a future Council Decision. That would appear to be some time away. Before then, in a year’s time, we should be grateful for an update from the Minister on what has happened by virtue of the present proposal, and how the way ahead then looks. 14.11 In the meantime, we now clear the Council Decision. Full details of the document: Council Decision in support of the Union proposal for an International Code of Conduct for outer-space activities as a contribution to transparency and confidence-building measures in outer space-activities: (36606), —. Background 14.12 17 December 2008 Council Conclusions supported the first draft of an international Code of Conduct for outer space activities, in which States would participate on a voluntary basis, and which would include transparency and confidence-building measures, as a basis for consultations with key third countries that have activities in outer space or interests in outer space activities, with the aim of reaching a text that is acceptable to the greatest number of countries.36 In the light of consultations with major “space-faring” nations, the High Representative (HR)/European External Action Service (EEAS), working with Member States, produced a revised version, on the basis of which the Council mandated the HR, on 27 September 2010, to carry out further and wider consultations.37 14.13 The Council Decisions that the Committee cleared in 2012 and 2014 provided funding for and authorized the EEAS, with administrative support from the United Nations Institute for Disarmament Research (UNIDIR), to hold a series of meetings involving all 71 members of the UN Committee on the Peaceful Uses of Outer Space, with a view to developing a voluntary Conduct for Outer Space Activities. 36 See the relevant Council Conclusions. 37 (33884), —: Third Report HC 86-iii (2012-13), chapter 14 (23 May 2012). Also see Code of Conduct for Outer Space Activities for full background. 56 European Scrutiny Committee, Thirtieth Report, Session 2014–15 14.14 In the most recent update, the Minister for Europe emphasised the UK’s dependency on space-based technologies for a wide range of services that affect our daily lives. Despite the ongoing delay, the Minister continued to believe that the EU-led Code of Conduct, although not legally binding, would play a key role in delivering international co-operation for a safe, secure and sustainable space environment — a political commitment to agreed norms of responsible behaviour in outer space that would serve as a basis for future space management initiatives; a series of transparency and confidence building measures; and — with a space sector currently worth over £9bn annually to the British economy and ambitions to raise this further to £40bn by 2030 — the well-managed level playing field in outer space that is increasingly important to UK industry. 14.15 But there was still work to be done: the Minister reported that the latest round of multilateral consultations on the draft Code, hosted by the EU in Luxembourg, continued the trend of increasingly constructive discussions, leaving noticeably fewer unresolved substantive issues. Whilst not the preferred route for all, a large number of states were calling for formal multilateral negotiations on the draft Code, which the Minister believed would most likely attract wider support for the initiative and where, given the role it had played in developing the Code, the EU was the best candidate to host the negotiations. However, mindful that some states wished to see the UN playing a key role, the EU was currently considering a number of UN institutions as possible partners for delivery of the negotiating conference, with a view to their then hosting the Secretariat for the Code when it was opened for subscription. The Government was currently considering the detail of this proposal, but believed that an EU-hosted negotiating conference with UN involvement should allow the EU and its Member States to retain sufficient control to ensure that the Code was finalised in a timely manner whilst generating support from those states uncomfortable with a process taking place outside of the UN framework. 14.16 With regard to the way forward, the Minister noted that the EU had the authority under CFSP to speak or make decisions about the Code on the basis of consensus amongst its Member States; to consult with third parties; and to convene multilateral consultative events. But he also noted that, although the EEAS was facilitating the process and providing a forum for discussion, the text itself was being developed by EU Member States, under the principle of unanimity, and EU Member States were participating in all consultation meetings in their own right: “the EEAS is not presenting a position on behalf of either the EU or its Member States at these meetings. The EU does not have the authority to negotiate a final text on Member States’ behalf. As things stand, EEAS’ mandate will have been fulfilled once the next revised draft of the Code has been published.” 14.17 The Minister confirmed that another Council Decision would be needed in order to take the Code to the next phase of negotiation; he did not envisage the EU seeking to increase its role beyond facilitation, but his officials were alert to any move to do so. 14.18 The Minister saw value in the EU having a role in the Code, once it was open for subscription (as its main architect, and given its own space interests), and given that the European Scrutiny Committee, Thirtieth Report, Session 2014–15 57 current provisions within the text of the Code were in line with the General Arrangements:38 “It would not preclude the UK from subscribing independently, nor from taking an active role in the management of the Code if we wished to do so. I do not believe that there are currently any issues concerning EU competence or external representation.” Our assessment 14.19 Our major concern since this proposal first emerged — by then, over two years ago —had been to ensure that, in this process whereby Member States were essentially subcontracting the process to the EEAS, the latter did not over-reach themselves and that, instead, Member States remained in control; in that regard, all seemed to continue to be in good order thus far. 14.20 We looked forward to the next Council Decision, when we asked that the Minister explain clearly and fully the roles of the EU and the UN in negotiating the Code; what role the UN would have in administering the Code; and what the EU’s and the Member States’ position would be once the Code was open for subscription. The draft Council Decision 14.21 In his Explanatory Memorandum of 16 January 2015, the Minister for Europe explains that this Council Decision would: — authorise the EEAS to continue their facilitating role, moving the initiative to a multilateral negotiating process; — provide for continued outreach with third parties to build a broad base of support for the Code of Conduct, as an example of a Transparency and Confidence Building Measure (TCBM) identified in the 2013 UN Group of Governmental Experts’ (UN GGE) report on TCBMs in Outer Space, of which the UK was a member; — provide for outreach activities to raise wider awareness of other TCBMs, in line with the Council Decision of 29 May 2012; and — authorise the EEAS to enter into an agreement with external implementing agencies to provide administrative support, in the same way as previous Council Decisions on this subject. 14.22 The Minister recalls that Council Decision 2012/281/CFSP of 29 May 2012, which was extended in January 2014 by Council Decision 2014/42/CFSP, authorised the EEAS to conduct a series of engagement activities to consult on, and build further support for, the Code of Conduct. He continues thus: 38 General Arrangements for EU Statements in multilateral organisations. For the Committee’s consideration of the General Arrangements, see Fifty-fourth Report HC 428-xlix (2010-12), chapter 18 (1 February 2012). 58 European Scrutiny Committee, Thirtieth Report, Session 2014–15 “These activities included four multilateral experts meetings, which promoted the initiative and consulted experts from a total of 95 countries on the proposed substance of the Code of Conduct. These meetings have been valuable in building awareness and support for the draft Code and in seeking to establish a text that meets the expectations of all interested states. “Following the successful conclusion of the consultative process in Luxembourg in May 2014, many states are calling for formal multilateral negotiations on the Code of Conduct. This Council Decision would authorise the EEAS to continue their facilitating role, moving the initiative to a multilateral negotiating process. The Decision would also provide for continued outreach with third parties to build a broad base of support for the Code of Conduct, as an example of a Transparency and Confidence Building Measure (TCBM) identified in the 2013 UN Group of Governmental Experts’ (UN GGE) report on TCBMs in Outer Space, of which the UK was a member. The Council Decision also provides for outreach activities to raise wider awareness of other TCBMs, in line with the Council Decision of 29 May 2012. “The Council Decision would authorise the EEAS to enter into an agreement with external implementing agencies to provide administrative support, in the same way as previous Council Decisions on this subject. In order to maximise the skills and exposure to different states and stakeholders, the EEAS propose to engage both the United Nations Institute for Disarmament Research (UNIDIR) and the United Nations Office for Disarmament Affairs (UNODA) given their previous experience of holding similar multilateral events, particular expertise in space security and their past collaboration with the UN GGE. Engaging both UN agencies also demonstrates the cross-cutting nature of the Code of Conduct, as it seeks to bridge both military and civilian uses of Outer Space. Both agencies have a broader mandate to promote and support TCBMs and to collaborate with other UN institutions to enhance space security following the acceptance of the UN GGE report. “The EU’s present aim is for the negotiation process on the Code of Conduct to start in mid-2015, with a view to opening the Code of Conduct for signature once the negotiations have concluded. The EEAS are considering different ways in which to achieve this, in consultation with EU Member States and other supporters of the initiative. Potential approaches include the EEAS’ original proposal to hold an ad hoc diplomatic conference, and reference to the UN General Assembly.” 14.23 On the matter of EU and Member States competence, the Minister says: “The Government has previously made clear that the EU does not have the competence to negotiate the Code of Conduct on EU Member States’ behalf. The EU has the authority currently: to speak or make decisions about the Code of Conduct on the basis of unanimity among all EU Member States; to consult with third parties; and, following the adoption of the 2012 and 2014 Council Decisions, to convene multilateral experts meetings. This Council Decision would authorise the EEAS to facilitate a multilateral negotiation process. The EEAS understands that any further activity would require further explicit authorisation from the Council and that EU Member States would still participate in this process in their own right.” European Scrutiny Committee, Thirtieth Report, Session 2014–15 59 14.24 The Minister also says: “Since its inception, the Code of Conduct has been an EU-led initiative. Given the expertise and international contacts the EEAS has developed to date, we believe it is appropriate for them to continue to take forward the initiative and we judge that this does not pose any subsidiarity issues, not least as the UK will continue to participate in the process in its own right.” The Government’s view 14.25 The Minister continues his comments as follows: “The UK has been a consistent supporter of the proposed International Code of Conduct of Outer Space Activities. The Government is supportive of the EEAS’ continued leadership of this phase of the process, and therefore supports the proposed Council Decision. “An International Code of Conduct for Outer Space Activities is one of the deliverables set out in the UK’s first National Space Security Policy, published in April 2014.39 The Government regards the Code of Conduct as a valuable means of building trust, transparency and predictability in the uses of outer space, and enhancing safety, sustainability and security in an increasingly congested and competitive environment. It will provide a mechanism for coordinating responses to space debris, including risk mitigation and avoidance. With little chance of progress on a legally-binding agreement in the short-medium term, and with the UK and other states’ increasing dependence on space-derived services for communications, observation data and navigation, the UK considers the Code of Conduct as currently the only viable international instrument to regulate outer space activities, and a necessary first-step towards a longer-term goal of verifiable and equitable arms control in space. “It is important that the Code gains broad support from around the world from States at different stages of their space-faring development. It is the Government’s opinion that moving to a phase of negotiations would most likely attract that broad basis of support for the initiative, as well as maintain the support the Code of Conduct has already attracted to date. The UK, along with other EU Member States and the UN Secretary General, feels that this process would allow for the greatest number of states to engage with the initiative and the Government judges that, despite being negotiated outside of the UN framework, the process would be consistent with the conclusions and recommendations of the UN GGE. “The UK has worked hard to support the EEAS in building momentum behind the initiative and bringing third parties on board. The United States, in particular, continues to value the UK Government’s role as a key interlocutor to drive forward 39 According to the Government, the National Space Security Policy “sets out a coherent approach to the UK’s space security interests and outlines measures to make the United Kingdom more resilient to the risk of disruption to space services and capabilities, enhance our national security interests through space, promote a safe and more secure space environment and enable industry and academia to exploit science and grasp commercial opportunities”. 60 European Scrutiny Committee, Thirtieth Report, Session 2014–15 progress among EU Member States and build support from third countries. A number of other like-minded states including Japan and Australia have publicly announced their support and have engaged actively in the last two years to complement the EU and UK’s efforts to maximise support.” 14.26 With regard to the Financial Implications, the Minister says: “The budget approved in the May 2012 Council Decision was €1,490,000. The breakdown of spend is attached at Annex A. Due to savings made during the course of the activities undertaken, it was possible to conduct a further multilateral consultation meeting within the existing budget as provided for by Council Decision 2012/281/CFSP.” 14.27 The breakdown of the forecast spend for the projects to be carried out under this Council Decision are, the Minister says, as follows: — Regional or sub-regional seminars: Promotion of political commitments to encourage responsible actions in, and the peaceful use of, Outer Space: €296,151; — Small outreach events: Promotion of political commitments to encourage responsible actions in and the peaceful use of, Outer Space: €51,688; — Organisation of open-ended multilateral negotiation meetings: €568,910; — Project management and staff costs: €252,424; — Contingencies and Indirect Costs: €105,226 Total: €1,274,399 14.28 The budget has been calculated “using a combination of UN budgeting tools (for estimating administrative costs, daily subsistence allowance, hospitality costs), previous experience of hosting multilateral meetings, and estimates taken from EU Commission Guidelines for flights and per diems. The locations for events will be chosen to capture the widest possible audience to ensure extensive international reach; some external experts provide their services free of charge, and the budget covers only travel and subsistence for them where this is required”. 14.29 The Minister also notes that there is no additional financial burden on the UK as a result of this decision, which will be taken from the 2014 CFSP budget. 14.30 Finally, with regard to the Timetable, the Minister says that, in order for the EEAS to sign contracts with the implementing agents within the current budget and begin outreach leading up to negotiations, the Council Decision would need to be adopted by early February 2015. Previous Committee Reports None, but see (33884), — and (35714), —: Ninth Report HC 219-ix (2014–15), chapter 37 (3 September 2014), Thirty-first Report HC 83-xxviii (2013–14), chapter 14 (22 January 2014) and (33884), —: Third Report HC 86-iii (2012–13), chapter 14 (23 May 2012). European Scrutiny Committee, Thirtieth Report, Session 2014–15 61 Annex Provisional spend figures for Council Decision 2012/281/CFSP, as amended by Decision 2014/42/CFSP. The final spend figures are currently undergoing UN auditing procedures. TOTAL BUDGET Heading Project Amount (€) 1 Outreach activities including three regional seminars 265,000 2 Background Support to the High Representative 3 Organisation of Multilateral ‘Kick-off’ Meeting (May 2012) and three Multilateral Experts Meetings (May and November 2013 and May 2014) 440,000 4 Co-ordination of non-governmental experts and visibility actions 120,000 5 Programme management, administration and staff costs 505,000 8,000 Total expenditure 1,338,000 Total budget provided for by 2012 Council Decision 1,490,000 62 European Scrutiny Committee, Thirtieth Report, Session 2014–15 15 Documents not raising questions of sufficient legal or political importance to warrant a substantive report to the House Department for Business, Innovation and Skills (36594) 17119/14 COM(14) 744 Draft Council Decision on the position to be taken within the Committee on Trade in Goods set up by the Free Trade Agreement between the European Union and its Member States, and the Republic of Korea, as regards the adoption of the rules on TRQ administration. Department for Environment, Food and Rural Affairs (36581) 17022/14 + ADD 1 COM(14) 738 Commission Seventh Annual Report on the Implementation of the European Fisheries Fund. (36586) 17088/14 COM(14) 746 Draft Council Decision establishing the position to be adopted with regard to proposals for amendments of Annex III to the Rotterdam Convention. Department for International Development (36575) 16855/14 + ADD 1 COM(14) 712 Commission First Biennial Report — Implementing EU food and nutrition security policy commitments. Department for Transport (36576) — — European Court of Auditors’ Special Report No. 21/2014 — EU-funded airport infrastructures: Poor value for money (pursuant to Article 287(4), second subparagraph, TFEU). Foreign and Commonwealth Office (35160) — — Article 10(4) of Protocol 36 to the Treaty on European Union (TEU) and the Treaty on the Functioning of the European Union (TFEU) — The ‘2014 Decision’ Measures that are the responsibility of HM Treasury, HMRC, Department for Transport and Foreign and Commonwealth Office. European Scrutiny Committee, Thirtieth Report, Session 2014–15 63 HM Revenue and Customs (36588) 17111/14 COM(14) 745 Commission Report — Final evaluation of the Fiscalis 2013 programme. Home Office (35156) — — Explanatory Memorandum (EM) on Article 10(4) of Protocol 36 to the Treaty on European Union (TEU) and the Treaty on the Functioning of the European Union (TFEU) — The ‘2014 Decision’ Schengen Measures. (35157) — — Article 10(4) of Protocol 36 to the Treaty on European Union (TEU) and the Treaty on the Functioning of the European Union (TFEU) — The ‘2014 Decision’ EU agencies, mutual legal assistance, drugs and proceeds of crime. (35158) — — Article 10(4) of Protocol 36 to the Treaty on European Union (TEU) and the Treaty on the Functioning of the European Union (TFEU) — The ‘2014 Decision’ Extradition, crime (including cyber and organised crime), fraud and counterfeiting, databases and automated information exchange, and all others. Ministry of Justice (35159) — — Article 10(4) of Protocol 36 to the Treaty on European Union (TEU) and the Treaty on the Functioning of the European Union (TFEU) — The ‘2014 Decision’ Ministry of Justice measures. 64 European Scrutiny Committee, Thirtieth Report, Session 2014–15 Formal minutes Wednesday 21 January 2015 Members present: Sir William Cash, in the Chair Andrew Bingham Mr James Clappison Michael Connarty Geraint Davies Kelvin Hopkins Jacob Rees-Mogg Henry Smith Mr Jacob Rees-Mogg declared a pecuniary interest in relation to the documents covered in chapter 2 in this Report, in accordance with the Resolution of the House of 13 July 1992. Draft Report, proposed by the Chair, brought up and read. Ordered, That the draft Report be read a second time, paragraph by paragraph. Paragraphs 1.1 to 1.4 read and agreed to. Paragraph 1.5 read, amended and agreed to. Paragraphs 1.6 to 15 read and agreed to. Resolved, That the Report be the Thirtieth Report of the Committee to the House. Ordered, That the Chair make the Report to the House. **** [Adjourned till Wednesday 28 January at 2.00pm. European Scrutiny Committee, Thirtieth Report, Session 2014–15 65 Standing Order and membership The European Scrutiny Committee is appointed under Standing Order No.143 to examine European Union documents and— a) to report its opinion on the legal and political importance of each such document and, where it considers appropriate, to report also on the reasons for its opinion and on any matters of principle, policy or law which may be affected; b) to make recommendations for the further consideration of any such document pursuant to Standing Order No. 119 (European Committees); and c) to consider any issue arising upon any such document or group of documents, or related matters. The expression “European Union document” covers — i) any proposal under the Community Treaties for legislation by the Council or the Council acting jointly with the European Parliament; ii) any document which is published for submission to the European Council, the Council or the European Central Bank; iii) any proposal for a common strategy, a joint action or a common position under Title V of the Treaty on European Union which is prepared for submission to the Council or to the European Council; iv) v) any proposal for a common position, framework decision, decision or a convention under Title VI of the Treaty on European Union which is prepared for submission to the Council; any document (not falling within (ii), (iii) or (iv) above) which is published by one Union institution for or with a view to submission to another Union institution and which does not relate exclusively to consideration of any proposal for legislation; vi) any other document relating to European Union matters deposited in the House by a Minister of the Crown. The Committee’s powers are set out in Standing Order No. 143. The scrutiny reserve resolution, passed by the House, provides that Ministers should not give agreement to EU proposals which have not been cleared by the European Scrutiny Committee, or on which, when they have been recommended by the Committee for debate, the House has not yet agreed a resolution. The scrutiny reserve resolution is printed with the House’s Standing Orders, which are available at www.parliament.uk. Current membership Sir William Cash MP (Conservative, Stone) (Chair) Andrew Bingham MP (Conservative, High Peak) Mr James Clappison MP (Conservative, Hertsmere) Michael Connarty MP (Labour, Linlithgow and East Falkirk) Geraint Davies MP (Labour/Cooperative, Swansea West) Julie Elliott MP (Labour, Sunderland Central) Stephen Gilbert MP (Liberal Democrat, St Austell and Newquay) Nia Griffith MP (Labour, Llanelli) Chris Heaton-Harris MP (Conservative, Daventry) Kelvin Hopkins MP (Labour, Luton North) Chris Kelly MP (Conservative, Dudley South) Stephen Phillips MP (Conservative, Sleaford and North Hykeham) Jacob Rees-Mogg MP (Conservative, North East Somerset) Mrs Linda Riordan MP (Labour/Cooperative, Halifax) Henry Smith MP (Conservative, Crawley) Mr Michael Thornton MP (Liberal Democrat, Eastleigh) The following members were also members of the committee during the parliament: Mr Joe Benton MP (Labour, Bootle) Jim Dobbin MP (Labour/Co-op, Heywood and Middleton) Tim Farron MP (Liberal Democrat, Westmorland and Lonsdale) 66 European Scrutiny Committee, Thirtieth Report, Session 2014–15 Penny Mordaunt MP (Conservative, Portsmouth North) Sandra Osborne MP (Labour, Ayr, Carrick and Cumnock) Ian Swales MP (Liberal Democrat, Redcar)
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