4 Legal framework for setting up European
Research Infrastructure Consortia
| (29896) 12259/08 COM(08) 467
+ ADDs 1-2
| Draft Council Regulation on the Community legal framework for a European Research Infrastructure (ERI)
Commission staff working documents: impact assessment and summary of assessment
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| Legal base | Articles 171 and 172 EC; consultation; QMV
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| Department | Business, Innovation and Skills
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| Basis of consideration | Ministers' letters of 19 May and 17 June 2009
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| Previous Committee Report | HC 19-ii (2008-09), chapter 5 (17 December 2008)
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| Discussed in Council | 29 May 2009
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| Committee's assessment | Politically important
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| Committee's decision | Cleared
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Previous scrutiny of the document
4.1 When we considered this draft Regulation last October,[20]
we noted that "clean rooms" for nano-electronics research
and powerful irradiation facilities to enable scientists to do
advanced R&D on materials are examples of European Research
Infrastructures (ERIs). We also noted that, in some cases, Member
States may wish to get together in European Research Infrastructure
Consortia (ERICs) to provide such facilities. But, in the Commission's
view, neither international nor Community law provides a satisfactory
legal framework for ERICs and nor does the domestic law of the
Member States.
4.2 So the Commission proposed this Regulation last
July. It sets out, for example, an approval process for applications
to become an ERIC and says what ERICs should include in their
statutes about the work they will do and how they will be run.
The Commission also proposed that Member States should give ERICs
exemption from VAT and excise duties.
4.3 The Government told us that it welcomed the draft
Regulation. It was opposed only to the proposed requirement for
Member States to give ERICs tax exemption.
4.4 We agreed with the Government that establishing
a legal framework along the lines proposed in the draft Regulation
would probably be useful. We also shared the Government's view
about the provisions on VAT and excise duty.
4.5 In his letters of 30 November and 12 December
2008, the Minister of State at the then Department for Innovation,
Universities and Skills (Lord Drayson) provided us with progress
reports on the negotiations. Because of the importance of the
provisions on tax exemption, we decided to keep the draft Regulation
under scrutiny until the position was clearer.[21]
The Minister's letter of 19 May
4.6 In his letter of 19 May, the Minister told us
that, at the UK's insistence, the Council's VAT Committee
had examined the question and had concluded unanimously that Consortia
which met the criteria for ERIC status would qualify as "international
bodies" for VAT purposes and for tax exemption. Subsequently,
the Research Working Group had agreed with the UK's proposal that
it should be for the tax authorities of the host country to decide
whether to grant tax exemption. At COREPER on 13 May, the UK obtained
agreement to an amendment which would reflect this position. Accordingly,
the Government intended to support a political agreement to the
amended Regulation at the Competitiveness Council on 29 May.
The Minister's letter of 17 June 2009
4.7 In his letter of 17 June, the Minister for Science
and Innovation at the Department for Business, Innovation and
Skills (Lord Drayson) confirms that the Government took part in
the agreement on 29 May. He explains that:
"all parties concerned had made considerable
efforts to craft a text which would be acceptable to the UK and
meet the concerns voiced, not least by the Scrutiny Committees.
It was clear at Council that the tax elements of this revised
text commanded unanimous support … . Against this background,
and given that the substance of the text was acceptable to us,
the Government felt that a failure to support the final proposal
would not have been easily understood by our partners, would have
endangered overall agreement and could have led to further discussions
on the tax issue with potentially unacceptable language for the
UK. We therefore decided to agree to the text at Council; I apologise
for the fact that, due to time constraints this meant that we
had to do so before it had fully cleared scrutiny."
Conclusion
4.8 If it had not been for the Whitsun Recess,
we should have met on 27 May and cleared the amended text of the
draft Regulation at that meeting. In the light of the Minister's
explanation, we can understand why the Government decided to take
part in the Council's agreement of the amended text on 29 May
even though we had not been able to clear it by then. In the circumstances,
we are now content formally to clear the document from scrutiny.
20 See HC 16-xxxiii (2007-08), chapter 3 (29 October
2008). Back
21
See HC 19-ii (2008-09), chapter 5 (17 December 2008) Back
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