Select Committee on European Scrutiny Eighth Report


COM(00) 868

Draft Council Regulation on the use of inward processing arrangements in the management of certain agricultural markets.

Legal base: Article 37 EC; consultation; qualified majority voting
Document originated: 22 December 2000
Forwarded to the Council: 22 December 2000
Deposited in Parliament: 24 January 2001
Department: Agriculture, Fisheries and Food
Basis of consideration: EM of 19 February 2001
Previous Committee Report: None
To be discussed in Council: Following receipt of European Parliament opinion
Committee's assessment: Politically important
Committee's decision: Cleared


  23.1  In order to put Community manufacturers of agricultural products on the same footing as their counterparts in third countries, the Inward Processing Relief (IPR) Scheme enables them to import raw materials free of duty, so long as the imported product, in its processed form, is re-exported out of the Community.

The current proposal

  23.2  Under the existing Regulations covering the main agricultural commodities, the Council may decide to suspend IPR when it is considered a threat to the effective operation of the market, though, where a decision is urgent, the Commission may act straightaway, and notify the Council subsequently. The Commission is now proposing that it should be able to suspend IPR under its Management Committee procedure. However, its justification for such a step appears to be based on no more than a plea for greater flexibility, visibility, and security of supply to operators.

The Government's view

  23.3  In her Explanatory Memorandum of 19 February 2001, the Minister of State (Commons) at the Ministry of Agriculture, Fisheries and Food (the Rt. Hon. Joyce Quin) says that the Commission has produced "no convincing argument" why it needs this power, and she points out that allowing individual Management Committees to suspend IPR would make such suspension more likely and hence increase the uncertainty for traders. She adds that the Commission appears to believe that IPR might displace Community production, but that the Government considers this concern is misplaced. She also points out that the present IPR arrangements were reviewed recently, and that, if the Commission or Member States had felt the essential interests of Community producers were not being met, this should have emerged at that time.


  23.4  Whether the Council or the Commission should have responsibility for suspending the Inward Processing Relief scheme in certain circumstances is a matter on which it is no doubt possible to have different views, and, had the Commission provided a convincing rationale for this proposal, it would not have been one on which we would have felt any particular need to comment. However, although we are clearing the document, we are concerned that the Commission should have based its proposal on such a flimsy justification, and, for that reason, we are drawing it to the attention of the House.

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