COM (2007) 336 is a proposal for the Council to authorise a potato product that has been genetically modified for enhanced content of the amylopectin component of starch for a period of ten years. The latest available information indicates that the proposal was not adopted by the European Council on 16 July 2007, although it was apparently on the agenda. The Department of the Environment, Heritage and Local Government has been asked to clarify the current status of the proposal, but this information has not yet been received. The Department indicates in its information note that there are no implications of specific relevance to Ireland. The notifier does not envisage cultivation in Ireland due to the non-proximity of pulp paper processing facilities to this country.
COM (2007) 336 is a proposal for a Council decision concerning the placing on the market of the maize product MON 810, which was agreed under Directive 90/220/EEC on a Community-wide basis, with formal approval being granted by France on 3 August 1998. In accordance with Article 16 of the directive which concerns safeguard measures, Austria imposed a national ban on the product on 2 June 1999 and is the only member state to have done so. The proposal, which was considered by the Environment Council on 30 October last, was the third attempt by the Commission to have the Austrian national ban overturned. On this occasion, however, it merely sought to overturn the prohibition on the import and processing of MON 810 for use in food and feed, rather than cultivation. Ireland, in line with its position on the two previous votes, voted against the Commission's proposal to revoke the national ban, indicating on this occasion that Austria should be allowed time to complete the study and present its findings for consideration at the Environment Council meeting in December.
The latest available information indicates that the proposal was not adopted by the Council on 30 October 2007 although it was apparently on the agenda. The Department of the Environment, Heritage and Local Government has been asked to clarify the current status of the proposal but this information has not yet been received. The Department indicates in its information note that the proposal has no direct implications for Ireland and relates solely to the national territory of Austria. However, it describes the proposal as of some significance as it is the first time the Commission has not been defeated in its attempts to overturn a decision of a member state in respect of its national territory.
In view of the ongoing concerns at political and public level relating to the use of GMOs and in view of Ireland's position on the Austrian ban, it is recommended that these proposals warrant further scrutiny. Is that agreed? Agreed. Since scrutiny is required, it is proposed to invite the following to attend before the committee: the Department of the Environment, Heritage and Local Government, as lead Department for these proposals; the Department of Agriculture, Fisheries and Food, which also has a role in this area; the Environmental Protection Agency as the Irish competent authority for GMO activities; the Department of Health and Children, which has responsibility for food safety aspects of GMOs; and the Food Safety Authority of Ireland, as the Irish competent authority for GM food labelling and traceability. Is that agreed? Agreed.
COM (2007) 746 is a proposal for a Council directive amending VAT Directive 2006/112/EC of 28 November 2006 on the common system of value added tax as regards the treatment of insurance and financial services. COM (2007) 747 is a proposal for a Council regulation laying down implementing measures for Directive 2006/112/EC on the common system of VAT as regards the treatment of insurance and financial services. The purpose of this proposed directive and the related draft regulation is to modernise and simplify the rules under the EU VAT directive for financial and insurance services. There are two main objectives associated with the proposal: increasing legal certainty for economic operators and national tax administrations, reducing their administrative burden for correctly applying the rules of the VAT exemption of insurance and financial services; and reducing the impact of hidden VAT in the costs of insurance and financial services providers. This draft legislation has been proposed on the back of concerns expressed by insurance operators about the so-called "trapped" VAT. Insurance and financial services are normally exempt from VAT, which means that while VAT is not charged on most of their services, suppliers are not entitled to recover VAT costs incurred in the delivery of these services. Operators are also concerned about the uncertainty regarding the VAT treatment of new services not envisaged under existing VAT rules. In the drive for competitiveness, operators are increasingly adopting cost-reduction strategies such as the outsourcing of services to third parties and the pooling of activities. However, under the Andersen case in March 2005, the European Court of Justice ruled that outsourced "back-office" operations - for example, the management of policies and claims handling - in the insurance sector do not qualify for the general exemption from VAT applying to insurance services under the VAT directive. VAT should therefore be charged on such outsourced services, a cost which operators are generally not entitled to recover. The proposed directive is designed to address this anomaly highlighted by the European Court of Justice's judgment. The proposal aims to achieve this through three measures contained in the proposal.
The proposed related regulation enumerates in a non-exhaustive manner the specific services to be considered as falling within the scope of services as outlined in the draft directive stipulating whether they fall within or without the general VAT exemption applying to insurance and financial services. The Department's note states this is an important proposal given the extent of the financial and insurance sectors in Ireland. The proposal confirms the already broad scope of the VAT exemption for financial and insurance services, which Ireland wishes to maintain. Generally, the draft proposal has had a positive reaction as it should solve the difficulties for outsourcers posed by the European Court of Justice's judgment in the Andersen case and it also appears to exempt from VAT the treatment of rating agency services which are currently taxable.
However, the Department also outlines a number of specific concerns as follows: the narrow definition of funds in respect of the management of investment funds; there could be significant loses of revenue to the Exchequer; the potential risk of aggressive tax planning emerging; and control of the proposed cost-sharing groups where it may be possible for a member of the group to bring in services that could be disseminated VAT-free to other members of the group.
Given the outstanding concerns and in order to fully assess the implications of what is a technical and complex proposal, it is proposed that this proposal warrants further scrutiny. Is that agreed? Agreed. Since further scrutiny is agreed, it is proposed that the committee will undertake this detailed scrutiny by inviting the views and further analysis of the proposal in writing from the main stakeholders, including the Department of Finance and the Revenue Commissioners, and the main representatives of the insurance and financial services industry, including the Irish Insurance Federation, Dublin International Insurance and Management Association and Financial Services Ireland. Is that agreed? Agreed.
We must defer all other proposals until the next meeting because we are on a tight schedule. Is that agreed? Agreed.
