European Scrutiny Committee meeting summary: 28 October 2015
28 October 2015
The Committee considered the following documents:
Capital Markets Union
In February the Commission launched a consultation about a proposed Capital Markets Union (CMU). We have now considered a Commission Communication about an action plan for building the CMU. The Commission details a range of about 20 reforms, which are a combination of legislative and non-legislative actions across a range of policy areas related to EU capital markets. They aim at making it easier for all businesses, including small and medium sized businesses, to get access to funding, and creating more investment opportunities for savers and investors.
We consider two proposed Regulations presented by the Commission which partly implement the CMU action plan. The first would update the legal framework for securitisations and develop a proposed simple, transparent and standardised (STS) securitisation market. The second would amend the Capital Requirements Regulation to recalibrate the prudential requirements for credit institutions and investment firms either issuing or purchasing securitisations, in the light of the STS regime. The Government has told us of its support, albeit with some reservations, for the proposals in the three documents. In order to allow further examination of these reservations we recommend the documents for debate in European Committee B. Additionally we draw the attention of the Treasury Committee to the documents and the debate recommendation.
EU Military operation in the Southern Central Mediterranean
In June the EU decided to establish and launch an EU military Common Security and Defence Policy operation in the Mediterranean, to be called EUNAVFOR Med (since renamed Operation Sophia). The Minister for Europe (Mr David Lidington) described its objective as “to capture and destroy smugglers' vessels before they can be used for human trafficking in response to the recent dramatic loss of life that has occurred in the Mediterranean off the coast of Libya.”
We recommended this for debate on the floor of the House on 21 July, as part a wider debate on the EU migration crisis. We now report on the decision to move to the second phase — from intelligence-gathering and rescue to interdiction on the high seas.
In June, the Council said that the second stage of the operation would provide for “the search and, if necessary, seizure of suspicious vessels”; that a third phase “would allow the disposal of vessels and related assets, preferably before use, and to apprehend traffickers and smugglers”; and that the Council would assess when to move beyond this first step, taking into account a UN mandate and the consent of the coastal states concerned, and subsequent phases will be conducted accordingly. It would seem that the Council has now determined that a key element of the third phase — apprehension of traffickers and smugglers — shall be brought forward into the second phase. In the meantime, despite the best endeavours of the UN Secretary General's Special Representative, Bernardino Leon, of the EU High Representative for Foreign Affairs and Security Policy and of the Government, the political rivalries in the key coastal state — Libya — mean that it lacks the unified government required for full implementation.
Given that it is now nearly three months since our original recommendation, since when the crisis has significantly worsened, it is imperative that this debate is arranged in the very near future.
European Agenda on Migration
Also considered at the Committee's meeting on 21 July and recommended for debate on the floor of the House, these Commission Communications propose a European Agenda on Migration to address the immediate humanitarian crisis in the Mediterranean and to lay the foundations for a “fair, robust and realistic” EU migration policy, and an EU Action Plan against migrant smuggling. The Committee considered that the Explanatory Memorandum provided by the Immigration Minister (James Brokenshire) was thin on substance, given the scale of the challenge facing the EU and the detail contained in both Communications, and invited him to respond to a number of questions ahead of the debate. He has now done so in a comprehensive manner, albeit after a delay of nearly three months. The Committee makes clear that here should be no further delay in bringing this matter to the floor of the House.
Our Report chapter on Europol returns again to the proposed arrangements for scrutiny of its activities by the European Parliament, together with national Parliaments. In January 2014, the Home Affairs Committee formally responded to a request for an Opinion on this issue, and the European Scrutiny Committee published its own Legal Opinion setting out its view that the EU Treaties and legislation made under them cannot impose binding obligations on national parliaments, or prescribe the nature of their contribution to the functioning of the EU. In his latest letter, the Immigration Minister confirms that the arrangements for Parliamentary scrutiny of Europol remain the most significant outstanding issue in trilogue negotiations.
The Committee makes clear that the outcome of the negotiation on this aspect of the proposed Regulation will be a key factor in considering any recommendation by the Government to opt into the Regulation once it has been adopted, adding that “any attempt to prescribe in EU legislation how this House should exercise its oversight of an EU Agency would raise profound constitutional questions and contradict Article 4 of the Treaty on European Union which requires the Union to respect Member States' ‘national identities, inherent in their fundamental structures, political and constitutional'.” The Committee also calls on Member State Governments to defend the interests of national parliaments (who are absent from the negotiating table) and ensure that they are not diluted or traded away in order to secure a deal with the European Parliament. The proposal remains under scrutiny.
The proposed Data Protection package
This package consists of the proposed General Data Protection Regulation and Police and Criminal Justice Directive. Its purpose is to update the EU's 1995 data protection rules in line with technological progress, to strengthen online privacy rights and to address divergent national implementation. General Approaches have now been agreed on both proposals: both supported by the Government and resulting in scrutiny overrides.
Following a recent change in departmental responsibility from the MOJ to DCMS, the Government responds to outstanding questions from our recent July and October Reports. In particular, it provides a full explanation of its continuing reservations about the General Approach text for the Regulation, focussing on the “Right to be Forgotten”, the One-Stop-Shop mechanism, joint and several liability of data controllers/processors and sanctions. It also addresses whether the General Approach text on the proposed Directive meets the concerns highlighted in the 2012 opinion of the Justice Committee. Finally, it provides its initial view on the recent Schrems judgment in which the CJEU invalidated the Commission “Safe Harbour” Decision authorising EU-US data transfers. We keep all documents under scrutiny and ask to be kept informed of progress in the trilogues. We draw the documents and chapter to the attention of the Justice Committee, the Culture, Media and Sport Committee, the Business, Innovation and Skills Committee and the Joint Committee on Human Rights.
The proposed Equal Treatment Directive
This proposal, published by the Commission in 2008, aims to extend protection against unfair discrimination on grounds of religion and belief, disability, age or sexual orientation beyond the labour market to housing, health care, social services, social security, education and the supply of goods and services. The proposal is intended to build on existing EU equality legislation.
After seven years of slow negotiations, a new Council text has now emerged. The Government provides a significantly delayed Explanatory Memorandum, but does not explain adequately the differences between the new text and the original proposal. We therefore seek further information on that and also on the scope of the new text and how it respects the division of competences in the Treaties in the policy areas affected. In particular, we ask the Government whether healthcare provision and eligibility remain excluded from the text, how the text might limit the UK's ability to set benefit entitlement rules and rates, and for further details of its impact on domestic law.
Although the text is unlikely to progress during the current Presidency, we ask that future updates continue to address the evident interests of the devolved administrations and exactly how they are engaged. We retain both the original proposal and the new text under scrutiny, drawing them and the chapter to the attention of the Women and Equalities Committee, the Justice Committee, the Joint Committee on Human Rights and the Northern Ireland, Welsh and Scottish Affairs Committees.
Other legally and/or politically important documents
We are also reporting on documents relating to:
(‘NC' indicates document is ‘not cleared'; ‘C' indicates document is ‘cleared')
- Defence: Ukraine: cooperation with the European Defence Agency [Administration Agreement] (C);
- Environment, Food and Rural Affairs: EU – Mauritania Fisheries Partnership Agreement [Proposed Decisions & Regulation] (C);
- Food Standards Agency: Food law: official controls [Proposed Regulation] (C);
- Foreign and Commonwealth Office: Restrictive measures against the regime in Myanmar/Burma [Council Decision] (C); Fight against torture and the abolition of the death penalty [Court of Auditors Special Report] (NC); EU Special Representative for the South Caucasus and the crisis in Georgia [Council Decision] (NC);
- Home Office: Fingerprinting of migrants [Commission Staff Working Document] (NC); A uniform format for visas [Proposed Regulation] (NC);
- HM Treasury: Taxation [Proposed Directive & Commission Communication] (C); EU General Budget 2015: Draft Amending Budget [Draft amending budget] (C); Financial management [Commission Communication] (C);