12 Tax and customs administration
| (a)
(27514)
9500/06
+ ADD1
COM(06) 202
(b)
(27516)
9609/06
+ ADD1
COM(06) 201
|
Draft Decision establishing a Community programme to improve the operation of taxation systems in the internal market (Fiscalis 2013)
Draft Decision establishing an action programme for customs in the Community (Customs 2013)
|
| Legal base | Article 95 EC; co-decision; QMV
|
| Department | (a) HM Treasury
(b) Revenue and Customs
|
| Basis of consideration | Minister's letter of 1 July 2006
|
| Previous Committee Report | HC 34-xxxii (2005-06), para 7 (21 June 2006)
|
| To be discussed in Council | Not known
|
| Committee's assessment | Politically important
|
| Committee's decision | Not cleared; further information requested
|
Background
12.1 The Community's Customs programme (currently Customs 2007,
for the period 2003-07) is intended to improve co-operation between
Community customs authorities so as to guarantee effective functioning
of the internal market in the matter of customs. The Fiscalis
programme (currently Fiscalis 2007, for the period 2003-07) is
intended to improve co-operation between Community tax authorities[38]
so as improve the operation of taxation systems in the internal
market. In April 2005 the Commission published a Communication
outlining its proposals for successor programmes for the period
until 2013 (Customs 2013 and Fiscalis 2013).[39]
12.2 The draft Decision in document (a) would establish
a new Fiscalis Programme, Fiscalis 2013. In its impact assessment
of the proposal the Commission refers to the positive evaluation
of Fiscalis 2007[40]
and the conclusion that there should be a successor programme.
The budget proposed for Fiscalis 2013 is €156.9 million (£107.4
million), significantly more than the €67.2 million (£45.8
million) for Fiscalis 2007. The draft Decision in document (b)
would establish a new Customs Programme, Customs 2013. In its
impact assessment of the proposal the Commission refers to the
positive evaluation of Customs 2007[41]
and the conclusion that there should be a successor programme.
The budget proposed for Customs 2013 is €323.8 million (£222.1
million), significantly more than the €157.4 million (£107.8
million) for Customs 2007.
12.3 When we considered these documents last month
we said that, whilst we recognised the utility of the Fiscalis
and Customs programmes, we were pleased that the Government was
to examine carefully the legal bases for these proposals, the
scope in relation to direct taxation, the timing of the Customs
2013 projects and the justification for significant budgetary
increases. And we asked to kept to be kept informed of developments
on these issues. But we noted that the Government had made no
mention of the need to ensure respect for the line between First
and Third Pillar issues and asked to know, before considering
the documents further, whether any matter in relation to this
arose from these proposals. Meanwhile we did not clear the documents.
The Minister's letter
12.4 The Paymaster General (Dawn Primarolo) first
notes that Decision No 253/2003/EC defines Customs 2007 as being
concerned with functioning of the internal market in the customs
field ["… to support and complement action undertaken
by Member States to guarantee the effective functioning of the
internal market in the customs field."] — so restricting
the programme to matters purely based within customs legislation
and therefore by definition first pillar issues. She then tells
us that the proposal for Customs 2013 contains a similarly worded,
but slightly refined, provision that the new programme is to "support
and complement the action undertaken by Member States in the customs
field" and that "it is generally accepted that the 2013
programme will continue to focus on the first pillar area".
12.5 The Minister also says that day-to-day operational
issues rarely fall neatly under a single pillar objective and
often overlap into other areas of competence. She cites for example
a customs audit of risk-based controls in a customs warehouse
also authorised to hold duty-suspended excise goods where the
local audit team would often look at controls relating to both.
But the Minister continues that as a matter of customs policy
the Government restricts programme activity in the UK to customs
matters and expects other Member States to do the same.
12.6 The Minister goes on to note that the Commission
funds a third-pillar programme called AGIS to help legal practitioners,
law enforcement officials and representatives of victim assistance
services from the Member States and candidate countries to set
up Europe-wide networks, and exchange information and best practices
in relation to criminal matters and the fight against crime.[42]
She says that the Government can refer any requests for third
pillar co-operation towards this programme, if it is VAT or excise
based but not proper to the Fiscalis programme.
12.7 Finally, the Minister reminds us that in the
Commission's April 2005 Communication on the Customs 2013 and
Fiscalis 2013 programmes there was a suggestion that the Customs
2013 programme should allow co-financing from the first and third
pillar programmes. She notes that there is no direct mention of
this in the present proposal and comments that this could be taken
as an indication of the direction future Commission policy may
take. She adds that the current position is that the proposal
will continue to focus on customs matters and the Government will
continue to resist creep into areas of national competence.
Conclusion
12.8 We are grateful to the Minister for this
response. However we are not convinced that a spill-over into
third-pillar activity in the proposed Customs 2013 programme is
prevented by the present drafting of the proposed Decision in
document (b). The revised definition of the purpose of the renewed
programme, together with the addition of "strengthening the
security and safety of citizens" to the objectives of the
programme, clearly broadens the scope of the programme into third-pillar
matters.
12.9 We understand the point the Minister makes
about how operational matters rarely fall neatly under one pillar.
But in our view the legal base of the draft Decision is inadequate
to deal with this and we should be grateful for the Minister's
further comments before we consider the matter further.
12.10 Meanwhile we do not clear the documents.
38 The UK's participation is limited to indirect taxation
matters. Back
39
(26504) 8189/05: See HC 34-i (2005-06), para 61 (4 July 2005). Back
40
(26883) 11842/05: See HC 34-vii (2005-06), para 20 (26 October
2005). Back
41
(26883) 11842/05: See HC 34-vii (2005-06), para 20 (26 October
2005). Back
42
AGIS is defined as a framework programme to help police, the judiciary
and professionals from the EU member states and candidate countries
co-operate in criminal matters and in the fight against crime.
Back
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