I welcome Mr. Tony Joyce and his colleagues from the Department of Enterprise, Trade and Employment who are here today to discuss a new method of handling the scrutiny of trade measures. Proposals adopted prior to scrutiny have been of great concern to the sub-committee and a new approach, which is welcome, will ensure this does not continue. Perhaps Mr. Joyce would give an outline and we can then proceed to the examination of the various draft proposals.
Scrutiny of EU Proposals.
Mr. Tony Joyce
The committee will recall that last year there was correspondence between it and the Secretary General of the Department. The committee had concerns about the late submission of various information notes, particularly in regard to trade defence measures regarding anti-dumping, anti-subsidy and similar proposals from the European Commission. In this regard, the problem was that the European Council works almost instantaneously in dealing with the proposals from the Commission so that, in a number of cases, the regulations had already been adopted before the committee had been informed or had an opportunity to comment on them.
At that stage, following the correspondence between the Chairman and the Secretary General, we undertook to examine the process and to try to come up with a different way of dealing with these proposals so that the committee would have much earlier notification and would have time to deal with the proposals before they were dealt with in the European Council. At present, the trigger mechanism for the submission of Oireachtas scrutiny notes is the submission of a formal proposal by the European Commission and, in the case of trade defence measures, this formal submission normally takes place after a very long period of investigation of particular complaints by the Commission and after provisional measures have been put in place.
The full investigation of a complaint can take anything up to 18 months to carry out. The first stage of that investigation can take from two to nine months and, at the end of that stage, the Commission consults member states on the state of play in terms of how they view the complaint. At that stage, if the complaint is regarded as real and has been substantiated, the Commission will usually propose the imposition of provisional duties, which would be put in force while the remainder of the investigation is carried out. Usually, there is a further period of six months while the investigation in completed.
If the committee agrees, we propose to inform it at the stage when the provisional duties are being proposed. The imposition of these duties is published in the Official Journal and we intend to use that publication date as a trigger for sending an information note to the committee. In that situation, the committee would then be informed of the case at least six months before the Commission concluded its investigation and before it made its proposals for definitive duties.
We have discussed the matter with the secretariat of the committee and have proposed a format for the information note. It is pretty much the same as that which we submit now and takes account of the sort of information available at that provisional stage of the investigation. At the later stage, when the Commission is making its formal proposal for definitive duties, we would intend to submit a follow up note which would indicate that, in most cases, no substantive change has taken place. If the committee agrees, we hope to put this system in place immediately in respect of all new trade measures.
There is also a procedure for the review of cases in which duties are in existence. We can probably use the formal announcement of the beginning of those reviews to again send an information note to the committee as to what is envisaged. If we are to avoid the continuing problems we have with this particular trade defence process, we should put the procedure in place as soon as possible.
There are a number of cases on the committee's agenda today in which the measures have already been adopted by the European Council. The system we are suggesting will prevent that happening in the future.
It needs to be understood that this is a legislative committee and we are bound by law to vet, on behalf of the Oireachtas, all draft regulations, directives and decisions so that we can forewarn the relevant committee or the Houses of the Oireachtas as necessary. It looks likely that the role of the Oireachtas in regard to EU matters not just in the area of directives, but following the new draft treaty, if it is approved, will increase. Therefore, both in the letter and spirit of the law, we expect all Departments to comply with the legislation and the needs of the Oireachtas committees. I understand from the secretariat that the proposals from Mr. Joyce should eliminate the difficulties. There are no further questions so we will proceed.
COM (2003) 780 is the proposed directive on the use of sweeteners in foodstuffs. Directive 94/35/EC lays down guidelines for the use of sweeteners in foodstuffs. I understand that from time to time it is amended to take account of technical and scientific developments. One such amendment, COM (2002) 375, was proposed by the Commission and, as members may recall, was considered by the sub-committee in October 2002. The proposal was referred at that time to the Oireachtas Joint Committee on Health and Children which considered the matter and I also understand that it had no recommendations to make on it. Further amendments were proposed to the measure in COM (2003) 277 and the committee determined at its meeting of 10 July that these did not warrant further scrutiny. A Department information note indicates that it foresees no difficulties with the proposal. It is proposed that this does not warrant further scrutiny. Is that agreed? Agreed.
COM (2004) 121 is a proposed regulation prohibiting imports of Atlantic blue fin tuna originating in Equatorial Guinea and Sierra Leone. The proposed regulation seeks to prohibit imports into the EU of Atlantic blue fin tuna from Sierra Leone and to lift the ban on imports of the same species of fish from Honduras and Belize. It is proposed that this does not warrant further scrutiny. Is that agreed? Agreed.
No. 1.3 is COM (2004) 122, a proposed regulation prohibiting imports of Atlantic big-eye tuna originating in Bolivia, Cambodia, Equatorial Guinea, Georgia and Sierra Leone. The proposed regulation seeks to prohibit imports into the EU of Atlantic big-eye tuna from Sierra Leone, Bolivia and Georgia and to lift the ban on imports of the same species of fish from, among others, Honduras and Belize. The Department classifies this proposal as of minor significance to Ireland. It is proposed that this does not warrant further scrutiny. Is that agreed? Agreed.
COM (2004) 123 is a proposed regulation prohibiting imports of Atlantic swordfish originating in Sierra Leone. This proposal seeks to lift the ban on imports of swordfish from Belize and Honduras following increasing levels of co-operation with the work of International Commission for the Conservation of Atlantic Tunas. The proposal would also put in place a ban on imports of swordfish from Sierra Leone to protect against unregulated fishing in that area. It is proposed that this does not warrant further scrutiny. Is that agreed? Agreed.
No. 1.5 is COM (2004) 125, a proposed decision on the agreement between the European Community and the Swiss Confederation on trade in agricultural products. The proposed amended modalities for administrative and veterinary matters relating to the grazing of animals along the frontier between the Swiss Confederation and adjoining member states are set out in the proposed decision. Members will have seen that the departmental note underlines that the proposed measure would have no implications for Ireland. It is proposed that it does not warrant further scrutiny. Is that agreed? Agreed.
No. 1.6 is COM (2004) 138, a proposed regulation on detergents. This proposal is a further amended text of a proposal that concerns the free movement of detergents in the Internal Market. It focuses on the biodegradability of surfactants, substances designed to reduce the tension of liquid to allow it to better penetrate solids, and on the protection of the environment through new biodegradability tests that aim to ensure a higher level of environmental protection.
Members may recall that earlier drafts of this proposal, in the form of COM (2002) 458 and COM (2003) 306, were considered by the sub-committee in September 2002 and July 2003, when the sub-committee determined that the proposals did not warrant further scrutiny. The revised text follows from amendments of the European Parliament that have been accepted by the Commission and by the Council in principle. It is proposed that it does not warrant further scrutiny. Is that agreed? Agreed.
No. 1.7 is COM (2004) 148, a proposed directive on adapting measures in advance of the accession of the ten new member states. The Department's note underlines that the proposals have no direct implications for Ireland and that the proposed measures would involve purely technical adaptations that were foreseen in the accession treaty. It is proposed to note them. Is that agreed? Agreed.
No. 1.8, COM (2004) 42, is a proposed directive regarding the possibility of certain members states applying, in respect of energy products and electricity, temporary exemptions or reductions in the levels of taxation. The Commission's memorandum to this proposal highlights that the level of excise duties applied by many of the acceding countries is, in some cases, significantly lower than in the current member states of the European Union. The energy tax directive sets minimum rates of tax for energy products, including coal, gas and electricity. The directive allows for derogations for transitional periods to the current member states and I understand that Ireland has full or partial derogations in these areas up to 2008 and 2014.
The openings for derogations take into account in particular the accession states' ongoing economic transition process and their relatively low income levels. The proposal seeks to include the accession states within the framework of the derogations open to member states. It is proposed to note this matter. Is that agreed? Agreed.
No. 1.9, COM (2004) 51, is a proposed decision on the sugar agreement with Mozambique. The ACP-EU sugar protocol is reflected in the ACP-EU partnership agreement - Cotonou agreement - which states:
The Community has undertaken for an indefinite period.. to purchase and import, at guaranteed prices, specific quantities of cane sugar, raw or white, which originates in the ACP states producing and exporting cane sugar and which those states have undertaken to deliver to it.
Through this proposal Mozambique would be permitted to participate in aspects of the EU's sugar-purchasing-supply scheme. The memorandum to the proposal indicates that the ACID countries have already agreed to it. If the proposal was adopted, Mozambique would be allocated a quota of zero tonnes. However, I understand that it would be allocated a portion of quotas that current participants were not in a position to supply to the EU. An examination by the Commission has indicated that Mozambique currently would be in a position to supply 130,000 tonnes of sugar and, therefore, would be in a position to fill a portion of any shortfall. The Department's information note underlines that the adoption of the proposal would have no implications for Ireland. It is proposed to note this matter. Is that agreed? Agreed.
No. 1.10, COM (2004) 98, is a proposed directive relating to restrictions on the marketing and use of certain poly-cyclic aromatic hydrocarbons in extender oils and tyres. This proposal seeks to set limits on the amounts of certain materials in tyres that have been found to be damaging to human health and to the environment. The Department's note indicates that producers are working towards reducing the amounts of the dangerous substances concerned and that no negative implications are foreseen through the adoption of the proposal. The Department has outlined that there are currently no tyre manufacturers in Ireland and that their evaluation of the market has indicated that the introduction of the proposal would have no impact on tyre agents. It is proposed to note this matter. Is that agreed? Agreed.
No. 1.11, COM (2004) 117, is a proposed regulation imposing a definitive anti-dumping duty on imports of large rainbow trout originating in Norway and the Faroe Islands. A Commission investigation, following a complaint from, among others, the Finnish Fish Farmers' Association, found that trout was being dumped on the EU market. This proposal seeks to make definitive the provisional duties that have been applied on imports of trout from Norway and the Faroe Islands since September 2003. It is proposed that the matter does not warrant further scrutiny. Is that agreed? Agreed.
No. 1.12, COM (2004) 119, is a proposed regulation imposing a definitive anti-dumping duty on imports of certain malleable cast iron tube or pipe fittings originating in Brazil, the Czech Republic, Japan, China, Korea and Thailand. The proposal seeks to amend the anti-dumping measures in place on imports of certain malleable cast iron tube or pipe fittings originating in Brazil. This is to take account of a WTO decision on certain administrative errors in the calculation of the anti-dumping duty. The proposal would amend the duty from 34.8% to 32%. It is proposed that it does not warrant further scrutiny. Is that agreed? Agreed.
I propose to take Nos. 1.13 to 1.19, inclusive, together. These proposals concern the position to be taken by the Community in the association council established by the Europe agreement between the European Communities and their member states, on the one hand, and the following countries on the other concerning the improvement of the trade arrangements for processed agricultural products: 1.13, COM (2004) 1, relating to the Czech Republic; 1.14, COM (2004) 23, relating to the Slovak Republic; 1.15, COM (2004) 34, relating to Slovenia; 1.16, COM (2004) 56, relating to Latvia; 1.17, COM (2004) 59, relating to Estonia; 1.18, COM (2004) 63, relating to Lithuania; and 1.19, COM (2004) 84, relating to Malta.
These seven proposals seek to make definitive measures that were adopted in the form of an autonomous and transitional format for implementation on 1 July 2003. The committee considered the earlier format of these proposed measures at meetings during the early part of 2003. These are technical measures that give effect to the trade agreements with the accession countries.
Under the new trade arrangements, the EU will introduce complete liberalisation of trade for certain processed agricultural products and duty free quotas for some others. In an Irish context, as the departmental notes underline, trade in agricultural products between Ireland and these countries is not significant. These agreements vary in detail between the applicant countries and the EU, reflecting national priorities and the level of development of agriculture in the various countries. It is proposed that these measures do not warrant further scrutiny but that they be forwarded to the Committee on Agriculture and Food for its information. Is that agreed? Agreed.
No. 1.20 is COM (2004) 75 regarding the formal negotiations that began between the Commission and Switzerland on the question of the taxation applying to savings income in 2002. This proposal seeks approval from the Council for the conclusion of the agreement that resulted from these negotiations. The agreement would result in the application of measures between Switzerland and the member states similar to those already in place under EU Council Directive 2003/48/EC whereby savings income in the form of interest payments made in one state is subject to effective taxation in the state of residence of the holder of the savings account.
The memorandum of understanding accompanying the agreement commits both parties to enter negotiations on assistance in tax fraud and related matters. The agreement also provides that Switzerland would benefit from measures similar to the royalties and patent-subsidiaries directives, proposals on which were before the sub-committee at earlier meetings. These directives provide that double taxation does not occur for certain categories of companies. The Department's information note emphasises that the current tax treaty between Ireland and Switzerland already provides for these concessions. It also argues that the approval of the agreement should underpin the aim of the savings directive and help address the capital flight to areas not covered by such measures where this might exist. It is proposed that this does not warrant further scrutiny, but that it should be forwarded to the Committee on Finance and the Public Service for its information. Is that agreed? Agreed.
To sum up, it was proposed that Nos. 1.1 to 1.20, inclusive, do not warrant further scrutiny and should be forwarded for information purposes to sectoral committees as agreed. Is that agreed? Agreed. The next set of proposals comprises the documents which it is proposed to refer to sectoral committees for further scrutiny.
COM (2003) 628 is a proposed directive concerning social legislation covering road transport activities. The Commission's memorandum to this proposal highlights that research has indicated that the longer professional drivers spend on the road for a given period, the greater the negative impact on their ability to remain in control of their vehicles. The proposal therefore seeks to introduce measures across the European Union that would see the introduction of manned booths on roads to monitor compliance with social legislation relating to road transport activities, for example, stipulated rest periods for professional drivers. The proposal also seeks greater harmonisation of aspects of the enforcement of serious violations of legislation. The Department's information note underlines that the adoption of the proposal would have resource implications for Ireland and it has indicated that it considers the proposal "too ambitious". It is proposed that the matter be referred to the Joint Committee on Transport for further scrutiny and to the Joint Committee on Justice, Equality, Defence and Women's Rights for its information, particularly in the context of the possible implications of the proposal for Garda resources. Is that agreed? Agreed.
COM (2004) 103 is a proposed regulation concerning investigations conducted by the European anti-fraud office. This proposal follows a report commissioned by the EU Commission on the operations of OLAF, the European anti-fraud office in 2003, which made several recommendations to enhance the operations of OLAF. The Commission's memorandum to the proposal and the Department's information note indicate that the proposals arise from the lessons learned from the EUROSTAT affair, the investigations into which are ongoing. The Commission is in the process of recovering €2 million of the €6 million worth of EUROSTAT contracts with the company Planistat, whose manager is being investigated by the French courts. The 2002-03 OLAF report outlines that it is not yet in a position to report on this matter.
The main areas of proposed reform would encompass the following areas: parallel investigations to those being carried by OLAF would not be permitted; officials or bodies that provide information to OLAF should be informed of any decision concerning the opening of investigations; and naturalised and legal persons should, where possible, be informed that they are being investigated. These proposed measures should improve the flow of information with regard to fraud-related matters concerning EU funds. It is proposed to refer the proposal to the Joint Committee on Finance and the Public Service for further scrutiny, particularly as it is likely that at the conclusion of the EUROSTAT affair there will be further amendments to these measures. Is that agreed? Agreed.
I thank the committee secretariat for the initial briefing because I was not sure what had been done on this issue. The information given this morning was very helpful.
COM (2004)104 is a proposed regulation concerning investigations conducted by the European anti-fraud office. This proposal mirrors COM (2004) 103 concerning OLAF investigations carried out under the Community treaty and relates to the EURATOM Treaty. It covers the same areas as COM (2004) 103 and primarily obliges OLAF to inform the institutions concerned of the main aspects of investigations being carried out. The Commission's memorandum also sets out the proposal to permit the European institutions to exercise their political responsibility in cases involving suspected wrongdoing. It is proposed to refer this document also to the Joint Committee on Finance and the Public Service for further scrutiny. Is that agreed? Agreed.
COM (2004) 177 is a proposed directive on statutory audit of annual accounts and consolidated accounts which seeks to amend significantly several accounting practices across the European Union. It follows recent high profile situations where it is suspected that the accounting and auditing practices carried out were short of standards that would have reduced the possibility of financial malpractice, for example, in the Parmalat case. The Department's information note highlights that many of the envisaged amendments to established European regulations were anticipated in Ireland in the Companies (Auditing and Accounting) Act 2003.
The proposal seeks to broaden the scope of the current directive by clarifying the duties of statutory auditors and it underlines their independence by introducing a requirement for external quality assurance and public oversight. It also seeks to improve co-operation between oversight bodies in the EU. The proposal, inter alia, defines a statutory audit as “an audit of annual accounts or consolidated accounts in so far as [it is] required by Community law”. It also provides for public oversight by non-practitioners who are knowledgeable in the area of statutory audits and for the regulation of auditors by the authorities of the member state in which they are based. Sections of the proposal relating to the approval of statutory auditors mirror similar measures in force in the United States of America. It is proposed that the proposal be referred to the Joint Committee on Enterprise and Small Business for further scrutiny. Is that agreed? Agreed.
COM (2004) 73 is an amended proposal for a regulation of the European Parliament and of the Council amending Council Regulation (EEC) n° 3922/91 on the harmonisation of technical requirements and administrative procedures in the field of civil aviation. The Department suggests in its information note that this proposal will be the subject of "complex and contentious" discussions at working group level. It seeks to amend Council Regulation 3922/91 and would govern, inter alia, the working regulations of cabin crew. The pilots’ association has argued that the proposal requires greater scientific scrutiny and assessment, particularly regarding working times, and has forwarded copies of letters to which it was a party on the matter which have been circulated to members. The Department’s note emphasises that the proposal is very technical and encompasses most aspects of aircraft operations. The Irish Airline Pilots’ Association forwarded the materials after it was contacted about this matter. It is proposed that this complex and potentially contentious matter be referred to the Joint Committee on Transport for further scrutiny. Is that agreed? Agreed.
COM (2004) 76 is a proposed directive of the European Parliament and of the Council on enhancing port security. This proposal seeks to build on the Commission proposal for a regulation - COM (2003) 229 - setting out security measures required at port facilities, which was adopted by the Council on 22 March 2004 and which had earlier been forwarded to the Joint Committee on Communications, Marine and Natural Resources for further scrutiny. In its report of February 2004 on this matter, that committee has determined that following detailed questioning of officials, "the principal concerns are being addressed".
The proposal seeks to establish a monitoring mechanism for the security measures required in the adopted regulation. It requires, inter alia, that there is a port security plan outlining all measures for enhancing port security and that there is a port security authority responsible for all appropriate security requirements. The Department has indicated that the proposal is likely to have cost implications for the operators of the ports and these may have knock-on implications for the companies and passengers using the ports. It is proposed that the matter be referred to the Joint Committee on Communications, Marine and Natural Resources for further scrutiny and to the Joint Committee on Transport for its information. Is that agreed? Agreed.
With regard to COM (2004) 96, the Commission in its memorandum to this proposal suggests that there are areas of information and communication technologies which are of public interest and for which market forces alone are failing to provide adequate support and investment. This proposal seeks to establish a programme, eContentplus, that will build on the existing EU eContent programme and would support the development of, inter alia, e-learning and e-government across the EU, but not e-voting. The stated aim of the programme is to support the dispersal of information and not just content with more emphasis on projects fostering multilingual content.
The proposal seeks to develop projects at the forefront of information technology. The Department's information note outlines that it could offer opportunities for private and public sector organisations in Ireland and Europe. The Department has indicated that a number of Irish organisations and companies, including Ordnance Survey Ireland and the University of Limerick, have benefited from the scheme and that the opportunity to link with partners in the ten new member states will be an additional factor in the new scheme. Given the importance of the technology issues to the economy, it is proposed that the matter be referred to the Joint Committee on Enterprise and Small Business for further scrutiny. Is that agreed? Agreed.
There were eight proposals adopted prior to scrutiny. I propose to take Nos. 3.1 to 3.4, inclusive, together, which relate to proposed decisions on the agreement between the EU and the following states concerning the transitional points system applicable to heavy goods vehicles travelling through Austria. Nos. 3.1 to 3.4, inclusive, deal with Croatia, Slovenia, the Swiss Federation and Macedonia respectively.
The Departments' information notes underline that the measures have no direct implications for Ireland. The outline on the circumstances surrounding the adoption of the proposals sets out that an administrative failure was responsible for the delay in presenting the notes and it assures the sub-committee that every effort will be made to adhere to timetables in the future. It is proposed to note the measures. Is that agreed? Agreed.
COM (2004) 110 is a proposal, as the Department's information note outlines, that was the subject of much activity prior to its adoption on 2 March 2004. It concerns the imposition of an anti-dumping duty on bed linen originating in Pakistan and follows what is euphemistically called "an unusual level of lobbying and unorthodox approaches towards the Commission" that included a life-threatening letter. It is proposed to note the measure. Is that agreed? Agreed.
COM (2004) 128 seeks to maintain the suspension of the implementation of anti-dumping measures on imports of certain malleable cast iron or pipe fittings consigned from Argentina for a further four months. In June 2003, imports were suspended for nine months. The duties were imposed following fears that Brazilian producers of this product were sending exports via Argentina to by-pass duties imposed on imports from Brazil. Argentina's action against Brazilian exports of this product to Argentina has facilitated the suspension. It is proposed to note the measure. Is that agreed? Agreed.
COM (2004) 129 concerns duty on imports of sulphanilic acid used in the manufacture of colorants and dyes. The measure imposes anti-dumping duties on imports of this product from a company in India, Kokan Limited, and follows that company's withdrawal of an undertaking to maintain its sale price at a certain level. The Department has outlined that this proposal was adopted within a short period of time. It is proposed to note the measure. Is that agreed? Agreed.
COM (2004) 97 seeks to maintain the anti-dumping measures in place since 1990 on imports of silicon imported from the People's Republic of China. A recent review of the measures found that there was a likelihood that the dumping on the market would continue. The measure was adopted 2 March 2004. It is proposed to note the measure. Is that agreed? Agreed.
Nos. 4.1 and 4.2 concern Title IV measures. No. 4.1, COM (2004) 116, follows similar post-11 September 2001 events proposals for visas and residence permits issued by member states participating in the Schengen scheme. It seeks to harmonise the technical improvements in the security features of the passports issued by the member states. The Commission's memorandum sets out that the security features would conform to those of the International Civil Aviation Organisation, a United Nations agency, and would meet the new requirements of the visa waiver programme of the United States. After 26 October 2004, passports of those wishing to avail of the waiver programme must be machine readable. Currently, the holders of valid passports of 27 states, including Ireland, can benefit from this visa waiver scheme. The security features that the proposal would harmonise include, inter alia, the specifications for the inclusion of the photograph - for example, it would not be stuck on the passport in future - and provision for the inclusion of a storage medium for biometric data such as fingerprints on the passport. The passport would also be machine readable.
This proposal is being presented in the context of an element of the Schengen scheme in which Ireland does not take part. The Department has, however, indicated that Irish passports issued at the passport office are machine readable and passports issued this year will have the capacity to include a storage mechanism, such as a chip, for biometric data. The technical specifications of the chip itself are yet to be finalised. It is proposed to note the Title IV proposal and to forward it to the Joint Committee on Justice, Equality, Defence and Women' s Rights for its information. Is that agreed? Agreed.
No. 42, COM (2004) 99 refers to a proposal for establishing a visa information system. In 2002, the European Council set out guidelines on the principles that should underpin a visa information system for the Schengen area. These included exchanges of information on visa applications and between visa authorities, with a view to preventing "visa shopping". This proposal seeks a mandate for the Commission to establish the framework for the development of the information system and would authorise the participating authorities of the member states to input and update data in the system. The Department's information note indicates that it is envisaged that the Commission will put forward an additional proposal at a later date that would seek to build on the framework set out in this proposal and to formally establish the system. It is proposed to note this Title IV proposal and to forward it to the Joint Committee on Justice, Equality, Defence and Women's Rights for its information. Is that agreed? Agreed.