14 EU law and the Sovereign Base Areas
| (31586)
9284/10
COM(10) 155
| Commission Report: implementation of the provisions of Protocol No.3 to the 2003 Act of Accession on the Sovereign Base Areas of the United Kingdom of Great Britain and Northern Ireland in Cyprus
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| Legal base | —
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| Department | Foreign and Commonwealth Office
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| Basis of consideration | Minister's letter 1 October 2010
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| Previous Committee Report | HC 428-ii (2010-11), chapter 8 (15 September 2010)
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| To be discussed in Council | To be determined
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| Committee's assessment | Politically important
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| Committee's decision | Cleared
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Background
14.1 The Sovereign Base Areas (SBA) — the Akrotiri Base
(Western SBA) and the Dhekelia Base (Eastern SBA) — cover
approximately 98 square miles in the south coast of Cyprus. WSBA
abuts the Republic of Cyprus, whereas ESBA additionally abuts
the Turkish Controlled area and the United Nations buffer zone.
Republic of Cyprus territory separates the two divisions. SBA
residents total approximately 15,700: 7,700 Cypriots, 3,900 Service
and UKBC personnel, of whom 3,600 live in the SBAs, and nearly
5,000 dependants, of whom over 4,400 live in the SBAs. There are
also nearly 2,700 locally employed civilians.[54]
The Commission Report
14.2 This is the Commission's first report on the implementation
of Protocol 3 to the 2003 Act of Accession on the SBAs. The Protocol
determines which provisions of the Treaty establishing the European
Community and related European Union law apply to the SBAs. It
came into force on 1 May 2004, on the same day that the Republic
of Cyprus acceded to the EU. The report covers the period from
then to 30 April 2009.
14.3 The SBAs have the status of a British Overseas
Territory, having been retained by the UK when the Republic of
Cyprus became independent in 1960. They do not form part of EU
territory, as stipulated in the UK's 1972 Treaty of Accession.
However, Protocol 3 puts in place special arrangements for the
SBAs regarding certain provisions of the treaties and related
EU law. The purpose is to ensure that Cypriots within the SBAs
enjoy the same EU benefits as those resident in the Republic.
14.4 In his Explanatory Memorandum of 20 May 2010,
the Minister for Europe (David Lidington) described the Commission's
assessment of the implementation of Protocol 3 as broadly positive.
He noted that:
— the
report had not identified any irregularities or complaints on
phytosanitary and veterinary issues, social security or Justice
and Home Affairs;
— in relation to Common Agricultural Policy,
the report identified minor problems in handling applications
and executing on-the-spot controls, which were reported by the
Republic of Cyprus;
— the report did note, however, risks in
relation to reliefs and exemptions from duties and taxes on supplies
to UK forces and associated personnel, and in the extension of
these exemptions to their dependants;
— the SBA Administration was committed
to working with the Commission and the Republic of Cyprus to address
these issues.
14.5 The Minister considered that the SBA Administration
was implementing the provisions of Protocol 3 satisfactorily,
and said that the Government "remains committed to ensuring
that these provisions continue to be applied and the Commission's
concerns addressed, so that Cypriots within the SBAs enjoy the
same EU benefits as those resident in the Republic." He continued
his comments as follows:
"The SBA Administration believes that there
are effective control systems in place in relation to the Commission's
comments on taxation that do not extend the exemptions wider than
necessary, and there are local procedures in place which control
the quantity and frequency of the availability of goods.
"Some confusion regarding the tax-free purchase
of goods for personal rather than official use has been brought
to the attention of private companies and the practice has been
revoked. In relation to the implementation of the Common Agricultural
Policy, the SBA Administration intends to consider its position
on leases for agricultural areas in light of the Commission's
comments."
Our assessment
14.6 We noted that there are no plans for the Council
to respond to the Commission report, and that the Minister appeared
to regard addressing the issues raised by the Commission as unlikely
to cause any future difficulties.
14.7 Nonetheless, we asked the Minister to confirm
that, regarding the Government's and the SBA Administration's
commitments referred to above, Cypriots within the SBAs do indeed
enjoy the same EU benefits as those resident in the Republic and
that addressing the issues raised by the Commission will not affect
this in any way.
The Minister's letter of 1 October 2010
14.8 The Minister begins his letter by referring
to the Commission's overriding conclusion: that Protocol 3 provided
an effective way of applying certain provisions of European Union
law to the SBAs, and that the implementation of all aspects of
the Protocol was satisfactory.
14.9 He continues as follows:
"In relation to Common Agricultural Policy,
the report identified minor problems in handling applications,
such as measuring areas of land and the fact that the SBA Administration
had traditionally only provided short leases to tenants where
EU guidelines suggest terms of five years should be awarded. The
SBA Administration has not experienced problems over the measurement
of land, but in light of the Commission's report they have now
fallen into line with the tenure of leases.
"The report also highlighted risks in relation
to reliefs and exemptions from duties and taxes on supplies to
UK forces and associated personnel. As noted in my explanatory
memorandum, the SBA Administration has investigated this and believes
that the scope of exemptions received by UK personnel and their
dependants is not extended too broadly. Confusion was caused in
part due to the European Commission's interpretation of conditions
applying to the SBAs, which did not take into account the duty
free concessions allowed to the dependants of Forces personnel
by the 1960 Treaty of Establishment. I am satisfied that the Commission's
concerns have been fully investigated and addressed.
"The Commission monitors the implementation
of Protocol 3 precisely in order to ensure that Cypriots living
in both the SBAs and the Republic of Cyprus do enjoy the same
EU benefits. The UK fully supports this goal and welcomes the
Commission's conclusion that implementation of the Protocol is
satisfactory. I am confident that addressing the issues raised
by the Commission will cause no detriment to Cypriots."
Conclusion
14.10 We thank the Minister for his response,
and now clear the document.
54 See http://www.sba.mod.uk/ for further information
on the SBA. Back
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