7. EXCISE DUTY
(24177)
5093/03
COM(02) 757
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Amended draft Decision on computerising the movement and monitoring of excisable products.
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| Legal base: | Article 95 EC; co-decision; qualified majority voting
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| Document originated: | 20 December 2002
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| Deposited in Parliament: | 15 January 2003
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| Department: | HM Customs and Excise
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| Basis of consideration: | EM and Minister's letter of 16 January 2003
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| Previous Committee Report: | None; but see (22989) 14372/01: HC 152-xv (2001-02), paragraph 14 (30 January 2002)
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| To be discussed in Council: | Not known
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| Committee's assessment: | Legally and politically important
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| Committee's decision: | Cleared
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Background
7.1 Under existing legislation the system for controlling
the movements of excisable products (oil, alcohol and tobacco)
between tax warehouses in the EU, under arrangements for the suspension
of duty until the products reach the Member State where they are
to be consumed, is paper based. In order to reduce the risk of
fraud it is proposed to computerise this system. In November 2001
the Commission proposed a draft Decision to impose a legal and
financial obligation on the Commission and Member States to develop
such a computerised system, known as the Excise Movement and Control
System (EMCS), within five years of adoption of the Decision.
EMCS would involve a Commission-supervised web-based electronic
messaging system. It was envisaged that Member States would each
develop a national system compatible with the central one operated
by the Commission. Excise businesses would access the system through
their own Member State's national component. In the UK this would
probably be through a Customs and Excise web-site. We cleared
the draft Decision in January 2002.[22]
The document
7.2 The amended draft Decision incorporates amendments
to the original draft made in Working Party discussions and includes
some recommendations from the European Parliament first reading.
The key changes in the new document are:
- the period for development of the system to be six, not five,
years;
- the Commission to ensure that EMCS is compatible with and,
if technically possible, integrated with the New Computerised
Transit System (NCTS) for the cross border movement of goods within
the EU;
- Member States to make available free of charge to businesses
the standard application for connection to the system;
- clarification of the Commission's role in co-ordinating the
development and deployment of the new system;
- provision for the Commission to be assisted by the Excise
Committee[23] operating
under comitology procedures.
The Government's view
7.3 In her Explanatory Memorandum the Paymaster General
(Dawn Primarolo) says:
"The Government supports the principles of the proposed Excise
Movement and Control System and believes it could have an important
role to play in tackling fraud in the oils, alcohol and tobacco
sectors, as well as facilitating legitimate movements of excise
products. It is entirely consonant with the Government's shift
towards doing business electronically.
"UK excise businesses would benefit from the computerisation
of the current paper-based system which has been widely criticised
by them as difficult to operate. In particular, electronic messages
confirming dispatch and receipt of excise goods would help businesses
to discharge more quickly and effectively the financial guarantees
they are required to lodge to cover the potential duty liability
on movements of excise products."
7.4 The Minister also says:
"However the Government opposes Article 95 (Qualified Majority
Voting and Co-decision) as the Treaty base for this proposal.
It firmly believes that it should properly have been presented
under Article 93 which provides a specific legal base for the
harmonisation of legislation relating to excise duties and other
indirect taxes and which requires unanimous agreement."
7.5 In her letter the Minister tells us it is not clear
how this document will be handled. She says that the Presidency
has decided not to consider it. Instead it intends to proceed
with the text of a Council Common Position which reflects only
some of the European Parliament's minor textual changes.
7.6 But more importantly, the Minister says in her letter
that the proposed Common Position, despite strong opposition from
the Government and several other Member States, still has the
draft Decision based on Article 95 EC, requiring qualified majority
voting, rather than on Article 93 EC, requiring unanimity. For
this reason, despite its support for the substance of the proposal,
the Government intended to vote against the Common Position.
Conclusion
7.7 We note that the intention and substance of the
amended draft Decision remain the same as the draft we cleared
previously. We note also that the document appears redundant and
are content to clear it without further consideration.
7.8 However we are concerned by what the Minister
tells us about the proposed Common Position and the legal base
for the proposed Decision. We note with approval the Government's
intention to vote against the Common Position.
22
See headnote to this paragraph. Back
23
The Excise Committee is composed of high-level representatives
of the customs authorities of Member States. Back
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