Documents considered by the Committee on 27 April 2011 - European Scrutiny Committee Contents


2   Conditional access services

(a)

(32375)

18124/10

COM(10) 753

+ ADD 1

(b)

(32376)

18126/10

COM(10) 755


Draft Council Decision on the signing of the European Convention on the legal protection of services based on, or consisting of, conditional access

Commission staff working paper: Comparative chart of Directive 98/84/EC and the European Convention on the legal protection of services based on, or consisting of, conditional access

Draft Council Decision on the conclusion of the European Convention on the legal protection of services based on, or consisting of, conditional access

Legal base(a)  Articles 207(4) and 218(5) TFEU; QMV

(b)  Articles 207(4) and 218(6)(a)(v) TFEU; QMV; EP consent

Document originated(Both) 15 December 2010
Deposited in Parliament(Both) 22 December 2010
DepartmentCulture, Media and Sport
Basis of considerationMinisterial letters of 23 February and 24 March 2011
Previous Committee ReportsHC 428-xvi (2010-11), chapter 5 (9 February 2011)
Committee's assessmentLegally important
Committee's decisionNot cleared; further information requested

Background and previous scrutiny

2.1  The purpose of the draft Council Decisions is to enable the EU to sign and formally approve a 2001 Council of Europe Convention on the legal protection of services based on, or consisting of, conditional access. The Convention entered into force in July 2003 and largely reproduces the content of an EU Directive adopted in 1998 which required EU Member States to take measures prohibiting any commercial activity relating to an illicit device (equipment or software) designed or adapted to facilitate unauthorised access to broadcasting or internet services offered against payment. The Directive is an internal market measure which seeks to promote consumer choice and cultural pluralism by establishing a common EU-wide legal framework to ensure the economic viability of broadcasting and information society services based on conditional access.

2.2  The UK is bound by the EU Directive but has not signed or ratified the 2001 Convention. Only nine of the 47 countries belonging to the Council of Europe have done so.

2.3  We considered the draft Council Decisions at our meeting on 9 February 2011 and raised a number of detailed questions which are set out in our Eighteenth Report. These mainly concerned:

  • the practical consequences of EU ratification of the 2001 Council of Europe Convention;
  • the legal base proposed for the draft Council Decisions, its implications for the EU's external competence, and the decision-making procedures; and
  • the application of the UK's Title V opt-in.

The Minister's letter of 23 February 2011

2.4  The Minister for Culture, Communications and the Creative Industries (Mr Edward Vaizey) tells us that a number of Member States have concerns about the legal base proposed for the draft Council Decisions and the implications of ratification of the 2001 Convention by the EU. He says that the Council Legal Services has taken a different view from the Commission and that he is not yet in a position to answer our questions but will endeavour to do so before the next official-level meeting in April. He does not expect the draft Council Decisions to be adopted during the Hungarian Presidency.

The Minister's letter of 24 March 2011

2.5  The Minister deals first of all with the legal base proposed by the Commission:

"The Committee is right to query the proposed legal base of Article 207(4) which relates to the Common Commercial Policy since the purpose of the Convention is not to facilitate trade in conditional access devices. In fact it is to prevent the trade and manufacture of illicit devices in order to protect conditional access services. Nor can the primary objective of the Convention properly be described as facilitating trade in conditional access services between the EU and third countries as it is rather to protect conditional access services within the territory of each party to the Convention.

"The Government originally took the view that it was possible to consider the control of conditional access devices to fall within 'commercial aspects of intellectual property' which is also covered by Article 207(4) TFEU but is subject to a unanimous voting rule. Indeed the Conditional Access Directive is implemented in the UK through the Copyright, Designs and Patents Act 1988. The Government therefore sought clarification as to whether the Commission was envisaging the use of the unanimity procedure, indicating reliance on the 'commercial aspects of intellectual property' legal base.

"On reflection, the Government agrees that Article 114 (internal market) is the most appropriate legal base and is confident this change can be made as it is supported by other Member States. We do not consider that other Articles suggested by the Committee (Articles 58 and 62 TFEU — covering freedom of establishment and free movement of services) are necessary, as the Convention does not contain the same internal market provisions as the Directive and in particular does not include an equivalent of Article 3(2) of [the Directive in] the Convention. Article 114, as the Committee is aware, is subject to a qualified majority voting rule."

2.6  As regards the extent of the EU's external competence in the field of conditional access services, the Minister explains:

"Although measures adopted under Article 114 fall prima facie within shared competence, this is subject to the rule established in Case 22/70 Commission v Council [1971] ECR 263 (the 'AETR principle') which provides that competence will become exclusive if Member State activity would affect the internal rules. Since the content of the Convention is almost identical to the content of the 1998 Directive, the Government considers that the EU has acquired external competence over the vast majority of the contents of the Agreement.

"We consider that the provisions relating to confiscation (Article 6) and mutual legal assistance (Article 8) fall within shared competence and as a result are seeking the addition of the Member States as parties to the Agreement."

2.7  The Minister turns next to the application of the UK's Title V opt-in Protocol. He says:

"The Government agrees with the Committee that Article 5 of the Convention does not require criminal sanctions to be imposed and this was not the reason for considering that the UK's opt-in applies. Article 8, however, provides that the parties must afford each other cooperation in investigations and judicial proceedings relating to criminal or administrative offences. These are matters falling within Title V of Part III of TFEU. The Government is seeking the addition [of] Articles 81 and 82 TFEU to the legal base of the decision but does not consider the application of the opt-in to be conditional upon a Title V legal base being cited. As such, the Government notified the Council on 22 March that it was opting into the proposal.

"The Government is seeking to have reference to the opt-in inserted into one of the recitals of the Council decisions, but we do not consider that application of the opt-in is conditional upon such a recital being agreed. In the absence of a recital being agreed, the UK will submit a declaration upon signature of the Convention.

"The Government does not consider that [the] exercise of the opt-in would put it in breach of the 1998 Directive — the UK is bound by its obligations under that Directive whether or not it is bound through the EU's membership of the Convention, but that is not to say that the EU can bind the UK vis-à-vis third countries in areas covered by the opt-in unless the UK indicates its intention to be bound through use of the opt-in.

"However, in the event that the UK is successful in securing the addition of the Member States as parties to the Agreement, a new or amended Council decision is expected to be required. In this case the UK will not opt in as it will instead enter into the provisions falling within shared competence, including the Title V provisions, in its own right rather than opting to be bound by the EU having signed up to these provisions."

Conclusion

2.8  We thank the Minister for his analysis of the factors determining the choice of legal base for the draft Council Decisions and for clarifying the basis on which the EU has acquired external competence, as well as the extent of that competence.

2.9  We note the Government's view that Articles 6 and 8 of the Convention, which require the parties to adopt confiscation measures and to provide mutual legal assistance, are areas of shared competence and that, as a result, the draft Council Decisions should be amended to include the Member States as parties to the Convention.

2.10  We are familiar with the Government's view that the application of the UK's Title V opt-in does not depend on the citation of a Title V legal base in the draft Council Decisions authorising the signature and conclusion of an international agreement; nor does it depend, according to the Minister, on the inclusion of a recital, the purpose of which is to make clear which provisions of the agreement falling within the scope of Title V of Part Three of the TFEU are binding on the UK in its own right, because the UK decides not to opt in, rather than as part of the European Union. As we have stated previously, we doubt that the Government's position is in accordance with Articles 2 and 3 of Protocol 21 on the Position of the United Kingdom and Ireland in respect of the Area of Freedom, Security and Justice.

2.11  Notwithstanding, the Government tells us that it has exercised its right to opt into the draft Council Decisions, while also pressing for the inclusion of a Title V legal base and recital reflecting the basis for the UK's participation. If, however, the draft Council Decisions are amended to include the Member States as parties to the Convention, in addition to the EU, the Minister says that UK will not opt in because the Government considers that the provisions of the Agreement which fall within the scope of Title V of Part Three of the TFEU are areas of shared competence and the UK would be bound in its own right, not as part of the EU.

2.12  We think that it is essential to be able to understand the basis on which the UK participates in, and is bound by, international agreements to which the EU is a party and which contain provisions falling within the scope of Title V of Part Three of the TFEU. As we understand the Government's position, the UK has already opted into the draft Council Decisions and so would be bound by the Convention to which they relate as a matter of EU law if the proposals were to be adopted without further amendment. We are then told that if, as the Government wishes, the draft Council Decisions are replaced or amended in the course of negotiations to include the UK and all other Member States as separate contracting parties, a fresh opt-in decision will be required. In that case, the Government would not opt in because it considers that it would be bound in its own right by those provisions which are not exclusively within the EU's competence.

2.13  We are confused by the Government's position. We ask the Minister to tell us why the Government has decided to opt into the draft Decisions if, as his letter appears to suggest, it does not wish the UK to be bound by the obligations contained in the Convention which fall within areas of shared competence as a matter of EU law. We also ask the Minister to explain why he believes that a fresh opt-in decision would necessarily be required if the draft Council Decisions were simply amended to include the Member States as parties to the Convention. Is there not at least some risk that the Council and Commission will consider that the UK's opt-in remains effective with regard to the amended draft Council Decisions?

2.14  Finally, we note that the Minister believes that consensus is emerging on the use of Article 114 TFEU (on the internal market) as the legal base for the draft Council Decisions. There would therefore seem to be a real possibility that the proposals might be adopted solely on this basis, that the UK would be legally bound, and that any declaration made by the Government asserting that its Title V opt-in applies would have no practical effect.

2.15  We look forward to receiving further clarification from the Minister on the issues we have raised and ask to be kept informed of developments. Meanwhile, the draft Council Decisions remain under scrutiny.





 
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Prepared 10 May 2011