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JOINT COMMITTEE ON EUROPEAN AFFAIRS (Sub-Committee on European Scrutiny) debate -
Thursday, 5 Feb 2004

Scrutiny of EU Proposals.

The first item is Commission Document (2003) 556 regarding proposed regulation of civil aviation security. The introduction of regulation No. 2320 of 16 December 2002 following the terrorist attacks of 11 September 2001 laid down the security measures that would be applied at airports across the EU in relation to, inter alia, the handing of baggage and mail. I understand that inadvertent drafting errors in the 2002 regulation have necessitated a number of amendments. The amendments confirm the measures that apply in small airports with a yearly average of no more than two commercial flights per day. The proposed amendments to the regulation also confirm that member state authorities may determine the rules applying to VIPs’ baggage and that, in general, the same security measures should apply to both baggage and mail carried by aircraft.

The current regulation sets out in Article 4 that the member states may adopt national measures in regard to the small airports based on a local risk assessment. This is on the ground that investment in expensive equipment would be inappropriate. The proposed amendment to the article of the regulation would extend this provision to designated areas of larger airports that effectively operate as autonomous airports.

I understand the Department has indicated that the regulation as worded is causing particular difficulties for airport authorities in Scotland and Scandinavia. It is proposed that the proposal does not warrant further scrutiny but that it be forwarded to the Committee on Transport for information. Is that agreed? Agreed.

Commission Document (2003) 658 concerns proposed regulation on structural assistance in the fisheries sector, particularly in regard to aquaculture. As this proposal seeks to extend the scope of the Financial Instrument for Fisheries Guidance, FIFG, to encompass the aquaculture sector, the Commission's memorandum notes that an excess of aquaculture production should not be encouraged and indeed in certain cases the rate of existing public intervention should be reduced. It develops this view by outlining that fish farming can be associated with conservation and that in these circumstances an increase in public support would be justified.

The proposal would, inter alia, permit member states to grant financial compensation to shellfish farmers where algae contamination necessitates the suspension of production. It would also allow for financial assistance for applied research initiatives in the field of aquaculture. The openings for financial assistance for the aquaculture sector outlined in the proposal are in the framework of the existing financial resources of the FIFG.

The Department's information note outlines the importance of the aquaculture sector to the Irish economy, with more than 7,000 people directly employed in the sector which contributes €85 million to the economy. The note also suggests that the sector has considerable potential in Ireland.

It is proposed that the proposal does not warrant further scrutiny, but that it be forward to the Committee on Communications, Marine and Natural Resources for information. Is that agreed? Agreed.

Commission Document (2003) 801 concerns the proposed regulation on imports of flat rolled products of iron or non-alloy steel, originating in India, Taiwan, and Montenegro; and Commission Document (2003) 804 concerns the proposed regulation on imports of flat rolled products of iron or non-alloy steel originating in Bulgaria and South Africa.

The Commission in its explanatory memorandum argues that in accordance with the fundamental principle of Community law of non-discrimination the review under way in relation to the same iron and steel products originating in these countries should be terminated. This proposal, therefore, seeks to terminate that review. It is proposed that this does not require further scrutiny. Is that agreed? Agreed.

Commission Document (2003) 805 concerns proposed regulation concerning autonomous Community tariff quotas for certain agricultural and industrial products. This proposal is similar to the measure considered by the sub-committee at its previous meeting - Commission Document (2003) 774 regarding the suspension of customs tariffs on the importation of certain essential items used in the production of other products. It is therefore recommended that it does not warrant further scrutiny. Is that agreed? Agreed.

The next document is Commission Document (2003) 806 regarding proposed regulation on support for rural development for the European Agricultural Guidance and Guarantee Fund. According to the Commission's memorandum to this proposal, the EU has set the meeting of Community standards in the field of the environment and health as priorities. I understand the Act of Accession provided that support in reaching such standards should be drawn from the guarantee section of the European Agricultural Guidance and Guarantee Fund. The memorandum highlights that the new member states have already allocated substantial amounts for meeting standards from their guidance allocations. This proposal therefore seeks to permit for a two-year period for these allocations to take place. The Department has indicated that the measure would have no negative financial implications for Ireland. It is proposed that this proposal does not warrant further scrutiny. Is that agreed? Agreed.

The next document is Commission Document (2003) 813 regarding the proposed decision concerning internal rules of procedure for the EC-Canada Joint Customs Co-operation Committee. It is proposed that this proposal does not warrant further scrutiny. Is that agreed? Agreed.

Commission Document (2003) 793 concerns proposed regulation to allow stabilisation and association process countries to tender for Community assistance programmes. The June 2003 European Council in Thessaloniki invited the Commission to consider taking appropriate measures to allow the stabilisation and association process countries to participate in, inter alia, tenders and contracts under the pre-accession Community assistance programmes such as Phare, which among other things, assists states in developing their public administration and institutions to function effectively. This proposal facilitates that and does not warrant further scrutiny. Is that agreed? Agreed.

The next document is Commission Document (2003) 48 regarding proposed regulation concerning restrictive measures in respect of Liberia that remove certain restrictions for humanitarian purposes. It is proposed that it does not require further scrutiny. Is that agreed? Agreed.

It is proposed that items 1.1 to 1.9, inclusive, do not warrant further scrutiny and should be forwarded for information to sectoral committees as agreed.

The following proposals are the documents which it is proposed to refer to sectoral committees for further scrutiny, items Nos. 2.1 to 2.6. Commission document No. 155 of 2003 is the proposed directive on intermodal loading units. In its September 2001 White Paper on European Transport Policy for 2010, the European Commission underlined that there was a need to curb the growth in heavy goods vehicle traffic. The Commission has therefore sought to facilitate the creation of "motorways of the sea" as one alternative route for such traffic growth.

This proposal on intermodal loading units, ILUs, aims to facilitate the transfer of freight from one transport mode to another and to enable greater security for new ILUs. Through the proposed directive, the European Committee on Standardisation would be mandated over a three year period to work out details on the standards necessary for the ILUs. A regulatory committee would then adopt the mandatory standards. The Commission proposal would also introduce periodic inspections for all ILUs.

In the absence of standardisation, it is argued in the Commission's memorandum that each ILU must be examined to determine handling technique and-or modify the handling equipment. The optimal ILU would be a European intermodal loading unit, EILU, usable for transport by road, rail, sea and inland waterway, and I understand that Commissioner Loyola de Palacio, after the Commission's adoption of the proposal, expressed the view that the measure would "make intermodality a concrete reality".

The Department of Transport, which is taking the lead on the proposal following an interdepartmental review, has indicated that the proposal has received a qualified welcome at the working group from the member states, as there is concern about the potential cost implications if the ideal standards become essential for all ILUs via the safety check requirements of the proposal. It has also been argued at the working group that the aims of the proposal could broadly be achieved through relatively minor amendments to existing measures.

While this is to some extent a technical proposal, it could have particular implications for member states largely dependent on sea transport whereby transportation costs would rise substantially from mid-2007 as a result of the adoption of this proposal. It is therefore proposed that it be sent for detailed scrutiny to the Joint Committee on Transport.

The committee is in possession of an accompanying letter from the road haulage division of the Department of Transport explaining why there was a delay in regard to this matter. It makes the point that it is not clear whether this matter was for the Department of Enterprise, Trade and Employment, which deals with standards, the Department Communications, Marine and Natural Resources, which deals with short sea shipping, or the Department of Transport. This issue was recently subject to an interdepartmental review and the Department of Transport has accepted responsibility for this proposal. It seems extraordinary that there is no clarity as to what body is responsible for each of these matters and I do not know why it requires an interdepartmental review to establish that.

With regard to the issue of bringing citizens closer to the Union or vice versa, the briefing note states that the proposed directive provides for essential requirements in terms of security, safety, inter-operability, handling, securing, strength coding and the identification of units on the basis of which the Commission will ask European standardisation bodies to define and harmonise standards in order to develop relevant parameters for conformity with the essential requirements. It further states that member states and the Commission will establish the specific requirements for inter-operability covering the characteristics of intermodal loading units necessary to ensure that they can be used in several modes of transport. Could somebody translate that for me? Why cannot simple language be used? To be fair to our secretariat, they have tried to translate the translation. While I thought at first that this might have come from the mind of somebody in the Department of Transport, it did not and some of the words in the note are directly taken from the Commission proposal. It is strange that we talk about putting the Irish language into the workings of the European Union when those in the Union cannot even write English.

Given that we may refer this to a committee, as we should, what is the need for a regulation covering intermodal loading units? Is the need for regulation ever considered? Is this something with which the European Union should be involved at all?

The answer is that, as legislators, they do whatever they wish and it is up to committee members to scrutinise and raise these issues. We will report shortly to both Houses of the Oireachtas on how the review process has worked. It is clearly a matter for members of the relevant committees to pick up on these issues. We can only present them with the opportunity to do that.

The question remains whether a new regulation is needed in this regard or whether existing regulations could be modified. Taking the points made by members, the best I can do is to refer the matter to the Oireachtas Joint Committee on Transport for detailed consideration. Given that we depend on sea transport more than other states as we have no land connections, this has clear implications for Ireland which deserve detailed examination. Is it agreed that we send it for detailed examination? Agreed.

Commission document No. 740 of 2003 is a proposed directive on measures to safeguard security of electricity supply and infrastructure investment. The Commission argues in its memorandum to this proposal that additional measures beyond a reliance on the market are required if electricity blackouts are to be avoided and the internal market in electricity is to be completed. The measures it seeks to introduce here include the setting and publication of performance standards for system operators; the promotion of demand management; the submission on a regular basis by system operators of their investment intentions for the provision of adequate interconnection capacity and, in addition, that the regulatory authority would take account of such investment strategies when approving network access tariffs; and the imposition by the regulatory authorities of the network of financial penalties on transmission system operators whose projects fall behind schedule.

Following the circulation of information and advice to members, I understand the Department has indicated that, at a working party meeting on Monday last, a number of member states expressed reservations about the proposal. These reservations relate to the extent of the powers to be given to regulatory authorities in the member states. In Ireland, this would be the Commission for Energy Regulation. They fear that the ultimate aim is the creation of an EU wide energy regulator. These reservations may result in a longer negotiating period than that indicated in the Department's note, which was 12 to 18 months.

That note, however, indicates that the Department does not believe the directive would pose any significant implications for Ireland as the existing regulatory regime in Ireland is closer to that envisaged in the proposal than is the case in a number of other member states. The sub-committee at its previous meeting considered two somewhat related proposals on energy end use efficiency, Commission Document No. 739 , and on access to gas transmission networks, Commission Document No. 741, both of which were referred to the Joint Committee on Communications, Marine and Natural Resources for further scrutiny. It is proposed to send this proposal to the same committee for further scrutiny. Is that agreed?

The author of the memorandum states that the directive does not have any significant implications for Ireland, yet a figure of €4 billion is set aside by the ESB for the interconnection aspects of electricity generation and supply in the years 2002-07, which is not small money. I accept that there is a danger of over-regulation and know that it is not for us to comment on that aspect of the matter. Nonetheless, I wonder whether those writing such memoranda grasp the enormity of sums such as €4 billion, which for some of us is a lot of money.

I understand that is earmarked more for upgrading the system rather than for the interconnector but I will send it on, with the other proposals, for examination.

The €4 million might be the basis on which it is suggested that action has already been taken and that there is no need to worry about the implications of this proposal.

Is that agreed? Agreed.

COM (2003) 797 is the proposed regulation and directive on mutual assistance in the field of direct taxation and certain excise duties. The Commission in its memorandum on the proposal argues that the present legal instruments do not meet the needs of the internal market on the exchange of information with respect to excise duties and direct taxation, with "too few automatic or spontaneous exchanges of information" taking place. A report in 1998 by an ad hoc working group within the Commission for customs and taxation recommended a number of changes to the existing regime governing the exchange of information. One of the main recommendations of that report was to computerise the exchange system and to offer electronic information the same legal value as that given to the present system of exchange by post or in paper form. The proposed regulation therefore includes a number of new definitions relating to electronic exchange.

Directive 77/799/EEC sets out procedures that should be followed in the exchange of information. If these are not followed the information cannot be used in legal proceedings, it is pointed out in the Commission memorandum. A number of amendments are therefore proposed. These would introduce, inter alia, a single central liaison office in each member state that may designate competent officials to directly exchange information.

Article 18, of the regulation would require member states to exchange information in cases such as the discovery of fraud that could have ramifications in another member state. Article 23 of the regulation requires member states to maintain an electronic database that would, inter alia, contain a register of authorised warehouse-keepers or registered traders for excise purposes. Ireland has questioned the legal basis on which the proposal is being made and is seeking that any adoption of the proposal be by unanimity, rather than by QMV. It is proposed that the proposal be referred to the Oireachtas Joint Committee on Finance and the Public Service for further scrutiny. Is that agreed? Agreed.

COM (2003) 799 is a proposed regulation on protection against dumping and/or subsidised imports from third countries. This proposal is an amended text of COM 380, which was referred for further scrutiny to the Oireachtas Joint Committee on Enterprise and Small Business. The proposal seeks to amend the current voting procedure for anti-dumping proposals and would result in abstentions no longer being counted against a proposal. The Department's information note indicates that it supports the proposal and that it believes that its adoption would lead to a more efficient and transparent operation of the trade defence mechanism. It is proposed to refer this proposal to the Oireachtas Joint Committee on Enterprise and Small Business for further scrutiny. Is that agreed? Agreed.

COM (2003) 822 is a proposed directive on the place of supply of services regarding taxation. This proposal is categorised as being of "major significance" by the Department of Finance and would move the place of taxation, in most cases, from where the supplier is established or has a fixed place of business to the place where the business customer is established. An exception to this principle would be taxation on the hiring of forms of transportation. The Commission's memorandum on the proposal notes that transport can easily cross frontiers making it difficult, if not impossible, to determine the place of use. In the case of forms of transportation, the proposal therefore maintains that the taxation on forms of transport should occur at the place where the supplier has established his or her business. Other exemptions to the general principle include immovable property and cultural or sporting activities.

The adoption of this measure would result in significant changes to the operations of Irish business with a cross-frontier dimension and the Department has suggested it should reduce the amount of complicated and time-consuming procedures involved in such economic activities. It is proposed to refer the proposal to the Oireachtas Joint Committee on Finance and Public Service for further scrutiny and to the Oireachtas Joint Committee on Enterprise and Small Business for information. Is that agreed? Agreed.

That committee's attention should be drawn to the fact that this matter is a priority for the Irish Presidency and should be disposed of expeditiously.

We will do that. COM (2003) 832 is the proposed regulation on the management of autonomous quotas for certain fishery products in the period 2004 to 2006. The Department has indicated that extensive consultation with industry interests has been undertaken on this proposal. In its information note on the proposal the Department also highlights that it is important the quantities and tariffs do not materially affect Irish producers or fishermen. It is proposed that the proposal be referred to the Oireachtas Joint Committee on Communications, Marine and Natural Resources for further scrutiny. Is that agreed? Agreed. This was sent to that committee last night. I requested this as this measure is due to be implemented tomorrow.

I move on to five proposals that were adopted prior to scrutiny. In each case we have received an explanation. When proposals reach this committee after adoption we raise them with the relevant Department. We are not prepared to accept any tardiness. These matters are required by law to come before this committee for scrutiny and we make an issue of their failure to do so if necessary.

COM (2003) 746 is a proposal for a Council regulation fixing for 2004 fishing rules for certain fishing stocks. A note from the Department of Communications, Marine and Natural Resources outlining the circumstances surrounding the adoption of the proposal outlines that the pre-adoption negotiations took place over a three-day period and that the process of the adoption of this type of measure "does not therefore lend itself to advance scrutiny". While I presume Members accept this explanation, we should forward this measure to the Oireachtas Joint Committee on Communications, Marine and Natural Resources for information.

This particular Department has a record of ending up with such proposals. It may be that it is the nature of fisheries debates and it is not possible to have it otherwise. There should be a way of flagging the issues that might emerge as contentious so we can at least be aware they are likely to emerge post-adoption.

There has been a particular difficulty with the Department of Enterprise, Trade and Employment, which it is trying to resolve and the staff of the committee will meet the Secretary General shortly. We might have a similar meeting with the Department of Communications, Marine and Natural Resources or any other Department where there are difficulties to stress the need to keep us informed. Can we agree to note the proposal? Agreed.

COM (2003) 794 is a proposal for a Council regulation imposing a definitive countervailing duty in imports of cotton-type bed linen originating in India. This measure follows an investigation by the Commission with regard to imports into the Community of bed linen of cotton fibres, pure or mixed with man-made fibres or flax, bleached, dyed or printed originating in India. The proceedings followed complaints by the representatives of the cotton industry within the European Union. The investigation found that Indian producers had benefited from subsidies and that such imports had resulted in injury to the Community industry. The duties imposed by the measure, which was adopted on 13 January 2004, range from 4.4% to 10.4%.

The Department regrets the delay in presenting the proposal and COM (2003) 795 and has indicated that this was due in large measure to the heavy workload at the start of the Irish Presidency. That is a new excuse.

Should we forward a copy of this proposal to Mr. O'Leary?

It is proposed to note the measure. Is that agreed? Agreed.

The same circumstances apply to COM (2003) 795, which is the proposed regulation imposing a definitive anti-dumping duty and collecting definitively the provisional duty imposed on imports of silicon originating in Russia. The proposal was sent to the Council on 16 December 2003 and adopted on 22 December 2003. The measure therefore imposed duties on an ad valorem basis of between 22.7% and 23.6% on imports of silicon from Russia. It is proposed to note the measure. Is that agreed? Agreed.

It could be used in the Chairm an's quiz book.

Commission document COM (2004) 37 is also related to CFSP measure 4.1 which we will deal with shortly. COM (2004) 37 is a proposed regulation concerning certain restrictive measures in respect of Sudan. The measure was adopted by Council on 26 January 2004, less than one week after its presentation by the Commission to respond to the request to make certain equipment available at an early opportunity. CFSP 4.1 is a similar measure which varied the common position in respect of Sudan on humanitarian grounds. It is proposed to note both measures, 3.4 and 4.1. Is that agreed? Agreed.

Commission Document 3.5 of 2003 (815) is a proposed Council decision regarding the definition of the concept of originating product from Mexico. The European Communities and Mexico concluded an economic and co-operation agreement that entered into force on 1 October 2000. This agreement sets out in detail the rules and procedures governing trade matters. One of these areas is the rule governing the designated origin of a product including the amount of processing that must first take place on a product or raw material before it is designated as originating in that country. Some chemical products have been designated as coming from Mexico even though the input in Mexico is below a level that would normally allow it to be assigned as being made in Mexico. This measure which was adopted at the GAERC on 26 January 2004 mandates the Council to draw up a common position on the extension of this temporary rule of the origin for the period 30 June 2003 to 30 June 2006, for presentation to the EU-Mexico joint committee. The Department information note indicates that the implications of the measure for Ireland are minimal as the value of the products imported amount to approximately €40,000. The Department has forwarded a note expressing its sincere regrets for the post-adoption presentation of the measure. It is proposed to note this measure. Is that agreed? Agreed.

CFSP 4.2 is CFSP (2004) 87, is a joint action on the European Union police mission in the former Yugoslav Republic of Macedonia. Operation Proxima, as it is known, is an EU policing operation in the former Yugoslav Republic of Macedonia, FYROM. The operation assists in the reform of the FYROM police service. The joint actions set out are a per diem rate of €100 for 2004 for those participating in the operation. This is the same rate as set for 2003 under the previous regulation No. 681. It is proposed to note the measure. Is that agreed? Agreed.

Documents to be referred to the next meeting are Commission Document COM (2003) 814, a proposed directive with regard to plant protection productions containing micro-organisms. It is proposed to postpone consideration of this proposal pending the clarification of a number of points relating to this proposal that have been requested from the Department of Agriculture and Food. Is that agreed? Agreed.

That concludes the scrutiny process. The minutes of the previous meeting of 27 January have been sent to members and are to be noted. Is that agreed? Agreed. The draft 26th report of the sub-committee was circulated to members. It is proposed that this be circulated and laid before both Houses of the Oireachtas. Is that agreed? Agreed.

Because of the COSAC meeting on 19 February, it is proposed that the next meeting take place on 26 February 2004. Agreed.

The sub-committee adjourned at 10.15 a.m. until 9.30 a.m. on 26 February 2004.
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