JOINT COMMITTEE ON EUROPEAN AFFAIRS (Sub-Committee on European Scrutiny) debate -
Thursday, 8 May 2003

Vol. 1 No. 24

Scrutiny of EU Proposals.

Chairman

We first have to deal with items not for referral. I propose to take items 1.1 and 1.2 together as they are both concerned with the generalised scheme of preference, GSP. As members may be aware the generalised scheme of preference is a trade mechanism whereby a wide range of agricultural and industrial products originating in certain developing countries are given preferential access to the markets of the European Union. The GSP is limited to a small number of products and is specifically designed to benefit certain countries in their economic development. Preferential treatment is given in the form of reduced or zero rates of custom duties.

A feature of the GSP is sectoral graduation. This is designed to target such preferences on those countries which need them most, by removing preferential treatment from sectors of countries which progress to a point where they are able to face international competition without preferential market access. Ability to face international competition is determined by reference to a number of agreed criteria. With reference to these criteria, Argentina and Uruguay would face higher levels of tariffs in certain sectors of trade.

Item 1.1 refers to COM (2003) 43 which proposes to amend the GSP to take account of sudden changes in the economic and financial situation of a beneficiary country, which occurs after the collection of the data relating to the agreed criteria, for example, market share in the community. Where a beneficiary country faces a decrease of at least 10% of its GDP in the most recent 12-month period it would be exempt from increases in tariffs. The statistical source for this information would be the World Bank and the IMF.

Item 1.2 relates to COM (2003) 45, implementing Article 12 of GSP, and proposes to activate an Article 12 in the original regulation governing the GSP that makes the graduation of tariffs operational. This article had not been made operational with the other articles to allow for, inter alia, the collection of the relevant data. I understand that the lead Department supports the amendment of the generalised scheme of preference to exempt countries in extreme financial difficulties. It is proposed that these measures do not warrant additional scrutiny. Is that agreed? Agreed.

Item 1.3 relates to COM (2003) 115, the Community customs code. Repayment of customs duties occur under the good faith and equity provisions of the Community customs code. These repayments or remissions occur when it can be shown that there were errors in the application of the code by the customs authorities. Currently, member states can decide on refund applications where the amount is less than €50,000. This proposal seeks to increase this threshold to €500,000. The aim is to reduce EU administration costs and to share the workload and responsibilities with the Commission. I understand that in recent years the number of Irish applications for repayment or remission of moneys greater than €50,00 has been very small - in the past five years there was only one. This proposal would see an increase in the threshold limit from €50,000 to €500,000 and should reduce the administrative burden on the Commission. It is anticipated that savings will apply, in an EU context, but this, to date, has not been quantified. It is proposed that this measure does not warrant additional scrutiny. Is that agreed? Agreed.

Item 1.4 relates to COM 2003/109 concerning the organisation of a labour force sample survey. This is a proposal for a technical regulation seeking to amend the characteristics surveyed in the labour force survey to reflect changes in the labour market and associated policies, such as the European employment strategy. The objective of the regulation is to introduce six new variables, the possibility to specify structural variables which need to be surveyed only once a year in order to estimate annual averages and the formal inclusion of variables covering atypical work. This regulation is of a technical nature and will require minor changes to the quarterly national household survey. The changes, provided the regulation is adopted, will be included from January 2005. It is proposed that this measure does not warrant further scrutiny at this stage. Is that agreed? Agreed.

Item 1.5 concerns COM (2003) 145 and is a proposal concerning passenger hand-holds on two-wheel motor vehicles. This proposal is administrative and technical in nature and involves consolidating existing Community law in this area. Its focus is the requirements for passenger hand-holds on motor cycles. The aim of the codification is to make the law clearer and accessible to all users. The proposal does not provide for substantive changes in the existing arrangements. It is proposed that this measure does not warrant additional scrutiny. Is that agreed?

Deputy J. O’Keeffe

As it is a safety measure, we should approve it.

Chairman

Is that agreed? Agreed. To sum up, it is proposed that items 1.1 to 1.5, inclusive, do not warrant further scrutiny. Is that agreed? Agreed.

The next item on today's agenda relates to documents which it is proposed to refer for further scrutiny - items 2.1 to 2.3, inclusive. Item 2.1 concerns COM (2003) 138 and relates to information about issuers whose securities are admitted to trading on a regulated market. The stated aim of this proposal is to address recent developments in the financial markets and to reduce "information asymmetries" in it. The main plank of the proposal is that it would make it a requirement for all securities issuers to make information available, on a quarterly basis, of the relevant net turnover and profit and loss. I understand that, at present, the requirement in Ireland, in conformity with existing EU measures, is for such information to be made available on a half-yearly basis.

Members will note that proposal is framed with the so-called Lamfalussey approach in mind, namely, that the directive would set firm goals to be achieved and that the means to achieve these goals would be updated by the Commission, assisted by an advisory committee on which member states are represented. I understand that this approach is not yet operational and therefore it is not possible to outline how it will function in practice. I also understand that the Department has circulated the proposal to agencies and groups with which it consults on a regular basis, including the stock exchange, and is awaiting a fuller response before it can evaluate them across the sectors consulted.

This proposal has a number of aspects to it that would appear to set out requirements that would improve the level and quality of information available for investors, particularly relatively small investors. It is, however, one of a number of proposals from the Commission which will greatly impact on the financial markets. Accordingly, it is proposed that the proposal be forwarded to the Joint Committee on Enterprise and Small Business for scrutiny and to the Committee on Finance and the Public Service for information. Members may recall that the sub-committee had, in December, forwarded the proposal on investment services for further scrutiny. Is that agreed? Agreed

Item 2.2 concerns COM (2003) 92 and relates to ship-source pollution and the introduction of sanctions for pollution offences. This proposal seeks to introduce the following measures: incorporation of the applicable international discharge rules for ship-source pollution into Community law and the regulation of these rules in detail; inclusion of violations that have taken place on the high seas - sea areas beyond the jurisdiction of any State; to establish that violations of the discharge rules shall be criminal offences and provide guidance on the nature of the penalties to be applied.

The sinking of the Prestige in November 2002 off the coast of Spain highlighted the need to tighten the rules relating to ship source pollution. However, it is considered that action is required also against the ongoing problem of deliberate or "operational" discharges from ships, including tank - cleaning operations and waste oil disposal which is widely practised in coastal waters of member states and beyond. In 2001, aerial surveillance detected 390 oil slicks in the Baltic and 596 in the North Sea. A 1999 Commission study reported 1,638 illicit discharges in the Mediterranean. This proposal seeks to address the question of the universal application of existing rules within the EU and to advance the concept of the inclusion of violations arising from detected discharges on the high seas. It further seeks to introduce the concept that violations are criminal offences.

At meetings held on 9 and 15 April 2003 a number of member states - I understand these were Ireland, the UK, Germany, Netherlands and Sweden - queried the criminal sanctions elements of the directive and questioned whether these elements should be dealt with in the third pillar. The Commission undertook to explore this issue at the Transport Council working group. While the matter is listed for discussion at the Transport Council working group again in May, I understand there is unlikely to be progress on this matter until the legal issues are resolved. It is possible that the criminal sanctions element of the directive will be referred to the third pillar, thus substantially amending this directive. In addition, the Department has sought advice from the Attorney General's office on the inclusion of criminal sanctions in this proposal.

It is recommended that this proposal be referred for detailed examination to the Joint Committee on Communications, Marine and Natural Resources. It is also recommended that the measure be forwarded to the Joint Committee on Justice, Equality, Defence and Women's Rights for information. It may be appropriate to delay such consideration until the Commission and the Department have a clearer legal perspective on the proposal. The Department is to be asked to keep the relevant Oireachtas committees informed of ongoing developments on this matter. Is that agreed? Agreed.

Item 2.3 concerns COM (2003) 63 and relates to a European network and information security agency. In recent years, information technology has increasingly played a central role in facilitating the provision of vital services. The explanatory memorandum to this proposal suggests that this role has become a matter of national security since the terrorist attacks of 11 September 2001. The memorandum also notes that member states are at different stages of developing their work on aspects relating to IT security. This proposal seeks the establishment of a European network and information security agency that would increase the levels of co-operation between member states to enhance their ability, individually and collectively, to respond to major network and information security problems through the creation of a centre of expertise.

I understand member states have broadly welcomed the proposal, but are generally cautious on aspects which might result in the agency evolving into a body embracing all aspects of the operation of information technology in the Union. The wording of the proposal is, therefore, likely to be amended in the working group over the coming months to reduce the possibility of this happening.

If and when agreement is reached on the establishment of the agency, it is considered likely that a number of member states will seek to have the agency located within their borders. I understand any decision on this probably will be made in the context of decisions on a number of agencies. The memorandum accompanying the proposal outlines criteria that should be met in determining the location of the agency. It must be easily accessible in terms of communications, especially electronic communication facilities, and have effective and fast transport connections; enable the agency to work closely and efficiently with those institutional services which deal with network and information security issues; be cost-effective and enable the agency to start its work immediately; and provide for the necessary infrastructure for the personnel of the agency.

The agency, if established, would become operational on 1 January 2004 and function for five years. The continued operations of the agency would be dependent on the outcome of an evaluation performed by the Commission in collaboration with the agency's advisory board.

The establishment of a European network and information security agency will have implications for network and security matters in Ireland and beyond. It is, therefore, proposed that the measure be forwarded to the Joint Committee on Communications, Marine and Natural Resources for further scrutiny and that it be forwarded to the Committee on Enterprise and Small Business for information. Is that agreed? Agreed.

Deputy Mulcahy

Is this the first step towards establishing a CIA for Europe?

Chairman

It concerns security of the network to try to ensure that information is available and secure rather than gathering and monitoring information.

Deputy Mulcahy

Does it entail the pooling of security information?

Chairman

It increases the level of co-operation but the detail of that is not available. The idea is to defend against, for example, viruses, where thousands of e-mails would be sent into the system. This would assist members to collectively pool information to secure their systems against that.

Deputy Mulcahy

Sorry, but was there not talk in the aftermath of various events that there would be a European equivalent to the CIA? Is this the genesis of that or is it setting up another body?

Chairman

I do not think this bears any relationship to that issue. This is purely to do with defending the system against attack from viruses and that type of thing, and it will be agreed by the member states. The idea is very much in its infancy and is not an intelligence gathering operation or anything like that.

Deputy J. O’Keeffe

Would we hope to host the agency?

Chairman

We would have every hope. There is a very good digital hub in Dublin South-Central which would be ideal.

Deputy J. O’Keeffe

There is also a good location in the south-west at Clonakilty technology park.

Chairman

To sum up, it is proposed that items 2.1 to 2.3, inclusive, warrant further action and will be referred to the appropriate sectoral committee. Is that agreed? Agreed.

The next items are anti-dumping measures which were rejected at Council. Item 3.1, COM (2003) 80, relates to the imposition of anti-dumping duties on imports of rubber grade carbon black originating in Egypt and Russia. This proposal from the Commission was presented for approval by Council at its meeting on 18 March. Carbon black consists of various finely divided forms of carbon obtained from the incomplete burning of natural gas or petroleum oil, and used to make ink, pigments and rubber, and as a filtering agent.

At the time of the April meeting of the sub-committee, clarification was sought from the Department on aspects surrounding the proposal. The proposal had failed to achieve a simple majority at the Council meeting on 18 March and the Department has now clarified that "there are effectively no proposals now in place [on this matter] with effect from the date following the Council meeting."

I understand that the Department has indicated that the entire anti-dumping process, as outlined in recent information notes on the subject, would need to be recommenced and that therefore it is unlikely that a similar anti-dumping proposal relating to this product originating in Egypt and Russia would be finalised within the next 18 months. It is proposed that the sub-committee note both the proposal and the outcome of the Council meeting.

Senator Dardis

With regard to the general principle of this, if the Council rejects a proposal, does that mean everybody else is out of the loop? Would it be dead in the water?

Chairman

Yes, I understand it would be killed in that instance. If it is killed, it cannot recommence without going through a recommencement process. Is that agreed? Agreed.

Item 3.2, COM (2003) 84, relates to anti-dumping duty on imports of metal products from a number of countries. This proposal from the Commission relating to anti-dumping duties on certain flat rolled products of iron or non-alloy steel imports originating in a number of countries was, like Commission document 80, presented for approval by Council at its meeting on 18 March. This proposal had also failed to achieve a simple majority at the Council meeting and the Department has now clarified that "there are effectively no proposals now in place [on this matter] with effect from the date following the Council meeting."

I understand that a major contributory factor to the failure to achieve a majority for both proposals was the successful lobbying of member states by the countries on which the proposals would have impacted. It is proposed that the sub-committee note both the proposal and the outcome of the Council meeting. Is that agreed? Agreed.

Item 4 is a Title IV, pillar three, Schengen measure - a draft framework decision - to be noted and forwarded to the Joint Committee on Justice, Equality, Defence and Women's Rights, if the committee agrees.

Item 4.1, Council document 7161/2003, relates to the obligation of carriers to communicate passenger data. This is a proposal relating to Schengen. The three-month period for exercising Ireland's option to participate in it will terminate on 25 June 2003. The proposal is at the initiative of Spain and would oblige carriers to transmit to the relevant national immigration authorities responsible for border checks data on persons from third countries travelling with them. The information provided would be deleted on completion of the journey and would include: nationality; the number of the passport and travel document used; and name and date of birth.

I understand that if Ireland were to opt into this measure it may be required to enact legislation to create the offence of failure to report the non-use of the return ticket of a third country passenger. It is proposed to forward this proposal to the Joint Committee on Justice, Equality, Defence and Women's Rights for information.

Deputy Carey

Is this in some way similar to the regime applying in the United States at present where carriers are obliged to submit information on passengers, their destinations and duration of stay etc., as proposed here?

Chairman

I understand the only obligation is to forward, as the passenger boards, the information to the destination state so that it will have the information as the passenger arrives. I presume it will assist in profiling. However, it also provides that the information will be deleted on completion of the journey.

Deputy J. O’Keeffe

What of a return journey? Is it a question of ensuring that the return part of the ticket is operated?

Chairman

I understand that if the return journey is not used, the carrier is obliged to notify the member state.

Deputy J. O’Keeffe

The key issue is with regard to somebody who has a return ticket but does not return.

Chairman

If the journey is completed the information is deleted; if not, that has to be notified.

Deputy Sexton

On a technicality, this is different from anything else before us in the sense that it is not a proposal from the Commission. How does this differ and where do we fit into it? This is an initiative from one EU member state.

Chairman

It is a Council document, in the first instance, as well as a Schengen document. I understand that the decision in this case is unanimous. In many cases of unanimity, such as this one, a co-decision of the Parliament is not required. In other words, a decision can be made by the Council by means of unanimity without a co-decision of the Parliament. If qualified majority voting, the means by which most decisions are made, applies in the Council, it will usually mean that there will be co-decision by the Parliament. If the council makes a decision by unanimity in certain areas - in other words, one member can block it - there is no co-decision and only the Council decides, although this may change as a result of the convention's proposals. In other words, member states have to act together in cases of unanimity.

Deputy Sexton

I take it that the initiation is done under certain regulations and has to be distributed to member states.

Chairman

Yes.

Deputy J. O’Keeffe

As Ireland is not part of the common Schengen area, it is entitled to opt in if it wishes to do so.

Chairman

Yes, we can opt in.

Deputy J. O’Keeffe

I say that purely for information, in case we decide to opt in.

Chairman

We have to decide within three months whether we want to opt in. We negotiated an opt-in right for Ireland in the Amsterdam treaty because we were not in a position to join Schengen as a consequence of the fact that we share a common travel area with the United Kingdom. We have a three-month period in which to opt in. This is only a draft framework decision at present and there is some way to go. I understand that the proposal is not particularly well worded and, obviously, it will be refined. I think we should forward it to the Joint Committee on Justice, Equality, Defence and Women's Rights. Is that agreed? Agreed.

We will move on to item 4.2, Commission document 2003/49 regarding mutual recognition of decisions on the expulsion of third country nationals. This proposal seeks to establish a mechanism for compensating member states for costs incurred which directly result from the enforcement of the expulsion decisions of another member state. It is presented as a follow-up measure to the mutual recognition of such expulsion orders in Council decision 2001/40/EC. The proposal will mean that reimbursements will be made in relation to transport, administration and accommodation costs incurred.

The proposal outlines how requests for reimbursement would be made through the national contact points of the member states. It would also oblige member states to inform the Commission on an annual basis of the number of actions taken under this measure. This is a Title IV - Schengen - proposal and, if adopted, is one into which Ireland can opt. Ireland has opted into the measure mutually recognising expulsion decisions. As a Title IV measure, it requires the approval of the Oireachtas before Ireland can participate in it. It is, therefore, proposed that the proposal be forwarded to the Joint Committee on Justice, Equality, Defence and Women's Rights for information purposes. Is that agreed?

Deputy J. O’Keeffe

It is one that might suit us.

Deputy Sexton

Yes.

Chairman

Is it agreed? Agreed.

The next item has constitutional implications and requires some consideration. Item 4.3 is Council document 7247/03, a framework decision concerning the prevention and control of trafficking in human organs and tissues. This framework decision proposes to criminalise specific acts relating to the trafficking in human organs and tissues. It proposes to build on an earlier proposal to set standards of quality and safety for the donation, procurement, testing, storage and distribution of certain human tissues and cells. The Department of Health and Children has provided a note for the information of members on this measure, which was circulated this morning. A principle of the earlier proposal is that donations should be voluntary and non-remunerated. The proposal under scrutiny today seeks its legal basis in the Treaty of the European Union and on the basis of international resolutions and protocols.

I understand that the Department of Justice, Equality and Law Reform, which is taking the lead on this, is seeking legal advice on its legal basis. I also understand that initial legal advice to the Department indicates that the exclusion of reproductive organs and tissues and embryonic organs and tissues in Article 1 of the proposal could raise constitutional difficulties relating to Article 40.3.3° of the Constitution, which deals with the right to life. The exclusion of such organs and tissues from the proposal could also be seen as implying that it was within the law to traffic in the human organs and tissues listed in Article 1.3 of the proposal.

In common with other framework decisions, the Minister is required to bring this measure before the Oireachtas for formal approval. Given the importance of the outstanding questions surrounding this proposal, it is proposed that it be forwarded to the Joint Committee on Justice, Equality, Defence and Women's Rights for information in advance of any introduction of the measure to the Houses at a later stage. This is an important matter and I suggest that the committee ensure that the attention of both Houses of the Oireachtas is drawn to it. It requires careful consideration because it has constitutional implications. I understand that the proposal has been brought forward by the Greek Presidency. I propose that we send it to the justice committee, but also that we monitor it and draw it to the attention of all Members of the Oireachtas so that we ensure that it gets the scrutiny it deserves when it comes before the Houses. Is that agreed?

Deputy J. O’Keeffe

Is it the exclusions that we have problems with?

Chairman

Yes. The implication of the exclusion of certain tissues is that if they are not mentioned in the article, it will be legal to trade in them. Such a conclusion could be drawn.

Deputy J. O’Keeffe

We had better keep an eye on it. Will it be referred back to this sub-committee? Can we re-examine it when it comes back from the Joint Committee on Justice, Equality, Defence and Women's Rights?

Chairman

Yes, I think we can. I do not see why not, particularly in areas such as intra vires. We need to be kept informed because it has implications. That is agreed.

The minutes of the meeting of 16 April 2003 have been circulated. Are they agreed? Agreed. The draft 11th report of the sub-committee has been circulated to members. I propose that the report be laid in the Library. Is that agreed? Agreed. I propose to defer consideration of the draft 12th report until the next meeting of this sub-committee.

I would like to raise one more matter. I have received notice of a seminar on the role of national Parliaments in the EU legislative process, which will take place in Ankara on 4 and 5 June. We have been notified of the seminar by the technical assistance information exchange office of the European Commission. It is being organised by the Grand National Assembly of Turkey and its subject matter - the legislative process - seems to have relevance to this committee. As it happens, Ireland will become part of the COSAC troika from 1 June and I hope to attend a meeting of the troika in Rome in early June. If we are to send a member of the joint committee to this seminar, it should be a member of the sub-committee as it should be somebody who is familiar with the legislative process. The committee can decide whether we should send a representative.

Deputy J. O’Keeffe

I note that Lia O'Hegarty attended the meeting in Ljubljana. The committee has received a copy of the paper she presented there.

Chairman

That is right.

Deputy J. O’Keeffe

It is another possibility.

Chairman

The legal adviser has included in our documents a very good paper on the legislative process in Ireland, which she presented on our behalf. The question is whether the committee wants to send a member to Ankara. Are we happy to simply note it?

Senator Dardis

A member of the committee or a member of staff should contribute. We should have an input into the conference.

Chairman

Will the committee leave it to me to decide whether it should be the PLA, a member of staff or a member of the committee? Any member of the committee who is interested should let me know. That concludes the business of the meeting. The next meeting of the sub-committee is scheduled for 9.30 a.m. on Thursday, 22 May.

Senator Dardis

Is one Senator required to make up a quorum of the sub-committee?

Chairman

Yes.

Senator Dardis

Of the members, only one is a Senator.

Chairman

It is a difficulty.

Senator Dardis

I will not be here on 22 May.

Chairman

We should ask the main committee to appoint a second Senator or an alternate.

Senator Dardis

I will liaise with Senator Ormonde or find a substitute, but if I were away for a week, there would be a problem finding someone.

Chairman

It is a difficulty. We should seek the appointment of an extra Senator to the sub-committee to prevent pressure being placed on Senator Dardis all the time. It would be useful if the Senator could arrange a substitute for the next meeting.

Senator Dardis

I will. The chairman might look at the matter.

Chairman

We will make a note to do that.

The Sub-committee adjourned at 10.20 a.m. until 9.30 a.m. on Thursday, 22 May 2003.