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JOINT COMMITTEE ON EUROPEAN AFFAIRS (Sub-Committee on European Scrutiny) debate -
Thursday, 20 Nov 2003

Vol. 1 No. 52

Scrutiny of EU Proposals.

I refer to COM (2003) 464 on the production of annual Community statistics on steel. This proposal would allow for some technical amendments to proposal COM (2002) 584. The sub-committee decided at its meeting on 12 December 2002 that the proposal did not warrant further scrutiny. It is proposed that it should be forwarded to the Oireachtas Joint Committee on Enterprise and Small Business. Is that agreed? Agreed.

COM (2003) 552 relates to aid rates in the seeds sector for 2004-05. The proposal seeks to put in place aid rates for production in the seed sector for 2004-05. The Department of Agriculture and Food has indicated that this is not a significant area in Ireland and that, consequently, the amounts drawn down in Ireland are quite small. It is proposed that this does not warrant further scrutiny but should be forwarded to the Oireachtas Joint Committee on Agriculture and Food. Is that agreed? Agreed.

COM (2003) 561 lays down general rules for the granting of Community financial aid in the field of trans-European networks. This is an amended proposal to one considered by the sub-committee in April this year. At that time it was considered that the proposal did not warrant further scrutiny, but that the sub-committee should be kept informed of related developments. This revised proposal is being advanced in the context of the Italian Presidency's Action for Growth initiative, which has suggested that a number of transport projects relating to Ireland should be grant-aided by the EU, for example, a "motorway of the sea" between Spain and Ireland. The proposal under consideration proposes that the level of European grant-aid for trans-European transport networks, TENS, should increase from 10% to between 20% and 30%. The earlier proposal had suggested an upper limit of 20%.

The Department has indicated the TENS proposals have not advanced in working groups due to the opposition of a number of net contributing member states. Should the funds available for TENS remain at current levels and the percentage level of aid increases, the number of projects that can be funded will reduce substantially. This could have negative consequences for proposed projects. It is likely this proposal will be amended to take account of the outcome to the ongoing debate. It is, therefore, proposed that the proposal does not warrant further scrutiny at this time but should be forwarded to the Oireachtas Joint Committee on Transport and the Department should be requested to keep the sub-committee informed about major developments on this matter. Is that agreed? Agreed.

COM (2003) 562 refers to the common organisation of the market in hops. This proposes that these measures to provide fixed levels of aid on a per hectare basis for hops should be extended to include the 2004 harvest. The Department of Agriculture and Food has indicated that the number of hectares dedicated to hops in the state has declined in recent years and, currently, no growers are claiming under this scheme. A claim had been received last year for two hectares of hops. It is proposed the measure does not warrant further scrutiny. Is that agreed? Agreed.

COM (2003) 563 refers to special temporary measures for hops. The Commission is required to submit by 31 December 2003 an evaluation report on the hops sector and proposals for reform of the sector from 2005. Temporary measures have been in place in this sector since 1998 and this proposal proposes that these should be extended until 2005 when these new measures should come into force. The 1998 regulation, EC No. 1098/98, provides assistance for temporary resting and grubbing up in the hops sector. The total amount available for this budget heading is €13 million. It is proposed that this proposal does not warrant further scrutiny. Is that agreed? Agreed.

Commission document 580 corrects the remuneration and pensions of officials and other servants of the European Community. This proposal takes account of the situation and adjusts upwards the salaries of EU officials by 1% with effect from 1 July. The original figures provided by France had resulted in the calculation of a 0.7% increase. The revised figure is 1.7% and is set out in a table, which I understand has been circulated. The proposal indicates that the net impact on the EU budget will be €30.3 million. This is an adjustment for inflation because of bonus payments to French civil servants.

It is proposed to note this document. Is that agreed? Agreed.

The next document is Commission document 583 on food additives other than colours and sweeteners. This proposal is an amended text of COM (2002) 662, which was scrutinised by the sub-committee on 16 January, and it was considered that the proposal did not warrant further scrutiny. The amended proposal would allow, inter alia, for the Commission to report on an evaluation of relevant additives within two years after the adoption of the measure to the Council and European Parliament. It would also mean that an additive in flavouring would be considered as an additive to the food to which the flavouring had been added. The Department has indicated that the proposal will benefit the consumer through the uniform application of legislation on food additives in all member states.

It is proposed that this proposal does not warrant further scrutiny. Is that agreed? Agreed.

The next document is COM (2003) 589. This proposal arises, as the Commission's memorandum points out, in the context of the poor state of several Mediterranean fish stocks. It proposes new restrictive technical measures regarding fishing gear sizes, the closure of certain areas, and the introduction of special restrictive measures. The Department has indicated that the proposal has no implications for Ireland, but that it is likely that it will be advanced during Ireland's forthcoming Presidency.

It is proposed that the proposal does not warrant further scrutiny. Is that agreed? Agreed.

COM (2003) 593 concerns fisheries agreements between the EU and the Republic of Guinea-Bissau. This proposal follows from a review of the fisheries agreement between the EU and Guinea-Bissau (2001-2006) that took place in Bissau in May this year. It allows for a reduction in the fishing for certain species of fish and for the refocusing of some of Europe's financial assistance, which it is providing in return for fishing opportunities for vessels from Europe. Currently vessels from Spain, Portugal, Italy, France and Greece are accessing these opportunities.

The financial assistance is being refocused on a scientific and technical programme, support for investments in the small-scale fishing sector, fisheries surveillance, and institutional support for the ministry of fisheries in Guinea-Bissau, which I understand is one of the poorest countries in the world.

It is proposed that this proposal does not warrant further scrutiny. Is that agreed? Agreed.

Commission document 659 concerns the establishment of new financial services committee organisational structures. This proposal concerns the reconfiguration of the committee architecture relating to financial services. It seeks, inter alia, to establish separate committees for each of the tasks outlined. This should allow, for example, each of the dedicated committees to focus on their particular area of responsibility. The Department’s note makes clear that the proposal is composed of technical adjustments and does not extend the regulatory powers of the Commission.

It is proposed that the proposal does not warrant further scrutiny but that it should be forwarded to the Oireachtas Joint Committee on Finance and the Public Sector for information. Is that agreed? Agreed.

COM (2003) 662 concerns anti-dumping measures applicable to imports of fluorspar originating in China. I understand fluorspar is a soft mineral, calcium fluoride, which is fluorescent in ultra violet light and a chief source of fluorine. In September 2000 the Commission put in place measures that meant that the importation of fluorspar from the People's Republic of China would be the subject of a minimum import price. This means that there is a lower limit set for the importation price of that product into the EU.

Since this form of control is open to price manipulation between related companies, the Commission initiated a review of this measure in June 2002. Following consultation with interested parties, including industry in Europe, the Commission has determined that more direct measures are not required.

It is proposed that this proposal does not warrant further scrutiny. Is that agreed? Agreed.

COM (2002) 803 is a Council regulation. This proposal follows from Council Regulation (EC) 58/2003 laying down the statute for executive agencies to be entrusted with certain tasks in the management of Community programmes. The Commission outlined its vision for executive agencies in COM (2000) 788 as a means of achieving excellence through "specialised management bodies, sufficiently distinct from the Commission to enjoy maximum autonomy and flexibility in day-to-day management, but with the Commission retaining enough control to ensure that its strategic objectives are met. I understand there are currently no executive agencies operational.

Regulation (EC) 58/2003 allowed for the Commission to propose standard budgetary guidelines for the operation of such agencies' budgets. This proposal outlines the fundamental budgetary principles that would govern executive agencies for example, that no expenditure may be committed or authorised in excess of the appropriations authorised by the budget. The Department has indicated that the proposal is purely technical and has no implications for Ireland.

It is proposed that the proposal does not warrant further scrutiny. Is that agreed? Agreed.

COM (2003) 634 concerns the application of generalised tariff preferences for certain developing countries. The implementing Regulation, No. 2501/2001 and the related guidelines on the application of generalised tariff preferences for certain developing countries will expire on 31 December 2004. These tariff preferences allow products from these countries to enter the Single Market at very low rates of tariff duties or even without the addition of any duties. Since the WTO's so-called Doha development agenda will not be completed in time for the tabling of new tariff preferences, this proposal proposes the extension of the existing tariff regime for an additional year, 2004-05.

The proposal also contains an amendment to the current regulation that would allow for special incentives for countries that engage in "significant ongoing efforts to incorporate and apply" ILO conventions on freedom of association, non-discrimination in respect of employment, child labour and on forced labour. Special arrangements are also already applied in relation to the environment, least developed countries, and to combat drug production.

It is proposed that this proposal does not warrant further scrutiny. Is that agreed? Agreed.

Commission document 617 relates to the special rules governing the milk super levy to the Azores. Producers in the Azores currently benefit from a margin of error in calculating their levy, whereby the producer is not fined for technically breaching the quota up to a ratio of 73,000 over 450,000. This proposal proposes that the current system continue for the marketing year 2004-05 and that it be progressively reduced in subsequent years. The Department has indicated that the proposal has no implications for Ireland and it is likely to be adopted at the Agriculture Council on 17 November.

It is proposed that this proposal does not warrant further scrutiny. Is that agreed? Agreed.

A few farmers down my way would not mind a little margin for error when it comes to milk quotas. Is there any possibility of getting an extension from the Azores to west Cork?

Margins of error are inherent in the process.

To sum up, items 1.1 to 1.1.4, inclusive, do not warrant further scrutiny. The next set of proposals are contained in a document which it is proposed to refer to a sectoral committee for further scrutiny - items 2.1 to 2.3. No. 2.1 - Document 441/2003 concerning the establishment of a European centre for disease prevention and control. This proposal suggests that the particular experiences of the spread of the SARS virus demonstrated the need to build on the existing system for the ad hoc exchange of relevant information. It had been acknowledged that the WHO played a valuable role during this period, but the proposal suggests that a dedicated European centre is required to focus on the particular needs of the member states of the EU.

The Department has indicated it believes that the proposed centre would be of particular benefit to the medium and smaller sized member states, as it should enable them to draw from a larger pool of expertise than at present. The location of the centre for disease prevention and control is yet to be determined. The centre would build on the existing network and draw on the expertise in the individual member states. It would issue guidelines and outline best practice for the prevention and control of diseases, but would not have the power to compel member states to comply with the guidelines. It is suggested that guidelines themselves would carry sufficient weight for relevant authorities to comply. The centre would initially have a relatively small annual budget of €12 million, but would grow incrementally to €48 million over the subsequent five years. It is proposed that this significant proposal be forwarded to the Oireachtas Joint Committee on Health and Children for further scrutiny.

This is a very welcome proposal for a regulation. In view of the amount of money involved, it is regrettable the centre will not have power to compel member states. It seems unwise to set up such a system, which would be very welcome in all member states, but not to compel them to comply. Is there anything we can do at this stage?

If the Joint Committee on Health and Children found that to be the case, it could ask the Minister to make that case at the Council of Ministers. It certainly needs to be scrutinised in detail.

Since this new body is to be established at a location yet to be determined, is it worthwhile for Ireland to make a case while the proposal is in its early stages?

Kimmage Manor has already been recommended.

I would have some other proposed locations in mind, at quite a distance from Kimmage Manor.

There is already a very good disease surveillance unit in UCD. Apart from other considerations, such a centre would benefit from being located in a research environment.

I suspect that some of the applicant states which have not got any EU centres will be seeking this facility.

Yes, but if there is an opportunity, all jokes aside, I have no doubt west Cork would be the most suitable location. However, we should be alert to such possibilities. The Joint Committee on Health and Children should be asked to consider whether a case might be made to have the centre located in Ireland, without specifying a particular location at this stage.

I believe this sub-committee would be exceeding its remit if we did that. Since the Minister for Health and Children is from Cork, the centre has a better chance of going there. We should refer the matter to the Joint Committee on Health and Children. Is that agreed?Agreed.

Commission Document 661/2003 establishes additional customs duties on imports of certain products originating in the USA. This proposal follows from the authorisation by the World Trade Organisation for EU counter measures to the so-called foreign sales corporations (FSC) scheme operated by the United States. The WTO has ruled that this scheme, which has been amended on a number of occasions, constitutes a prohibited export subsidy under WTO rules. The FSC scheme permitted export sales to be taxed to circa 85% of the total foreign sales, if these sales are registered through a foreign sales corporation established outside of the United States. It is understood that a large percentage of these FSCs are established on the US Virgin Islands.

Article 2 of the proposal sets out the timescale for the introduction of the proposed duties. These would progressively increase, over the year March 2004 to March 2005, from 5% to 17% on an ad valorem basis. The stated objective of the published proposal is, in the first instance, the withdrawal of the offending measures. The Department’s note makes it clear that Ireland remains hopeful the dispute will be settled without recourse to trade sanctions. The Minister of State, Deputy Roche, expressed similar views when I raised the matter at a meeting of the joint committee prior to the General Affairs and External Relations Council meeting. Members will be aware that separate counter measuresarising from US duties on steel may take effectin December 2003. It is proposed that thissignificant proposal be forwarded to the Joint Committee on Enterprise and Small Business for further scrutiny and to the Joint Committee on Finance and the Public Service for its information.

This is the kind of EU-US trade situation the eurosceptics have been predicting for many years and will latch on to. This committee should be kept as well briefed as possible on the ongoing situation.

We can ask the Department to keep us informed.

Is there any indicationas to the impact of the proposal in Ireland?The broad picture is obviously very serious, interms of a trade war between the EU and the US.Have we any information on the impact onIreland?

The Department's note indicates that products of significance to Ireland have been withdrawn from the list.

Does that mean we are not directly in the firing line?

The document states that, with regard to the sanction list, in addition to the EU Commission's 60 day consultation process, Ireland implements its own substantial national consultation process, driven by agencies under the Department's aegis - Forfás, Enterprise Ireland and the IDA, as well as the business community - IBEC, chambers of commerce etc. This emphasises the need for Irish companies to assess carefully the potential impact of any sanctions and the importance of formally requesting the removal of any products of concern from the EU Commission's original sanctions list. It resulted in a substantial number of products being removed, including all of those for which Irish companies applied. For this reason, the Department of Enterprise, Trade and Employment is confident that products of particular interest to Ireland are not on the finally agreed product list incorporated in the currently proposed regulations.

I am pleased with that. I compliment the Department on that preliminary work. We are often critical of the Department, but this situation demonstrates the benefit of the groundwork being done in advance.

We will note those compliments. We will refer this matter to the Joint Committee on Enterprise and Small Business and ask the Department to keep this committee informed.

No. 2.3 is Commission document No. 227 - a proposal for a Council framework decision to strengthen the criminal law framework for the enforcement of the law against ship-source pollution. I understand this third pillar proposal for a framework decision is advancing slowly, due to its being linked to a proposed first pillar directive, COM 2003/92, outlining offences arising from ship-source pollution emissions - that includes bulk hydro-carbons and harmful liquid substances - in all waters within the jurisdictions of the member states. I also understand that a number of member states have proposed fundamental amendments to the proposal and they are unlikely to be concluded in the near future.

This proposal provides for criminal penalties, including imprisonment, with regard to natural persons and penalties, including fines, for natural or legal persons. Under one proposed amendment, member states would determine the precise penalties to impose. Another would list a range of penalties listed for legal persons. It is proposed that this significant matter be forwarded to the Joint Committee on Justice, Equality, Defence and Women's Rights for further scrutiny and to the Joint Committee on Communications, Marine and Natural Resources for information. Members should also note the additional information provided by the lead Department which was circulated to them. Is that agreed? Agreed.

It is proposed that items 2.1 to 2.3, inclusive, warrant further scrutiny and should be referred as appropriate to the sectoral committees.

That concludes the scrutiny of proposals for this meeting.

The minutes of the meeting of 6 November last have been circulated. Are they agreed?Agreed.

The draft 22nd report was circulated to members in advance of the meeting. It is proposed that this report should be laid before the Houses of the Oireachtas. The list of members has been omitted from the draft report circulated, but this will be amended before the report is laid before the Houses. Is that agreed? Agreed.

The sub-committee adjourned at 10 a.m. until 9.30 a.m. on Thursday, 4 December 2003.
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