European Scrutiny Committee Contents


12 Customs and taxation

(a)

(34197)

13265/12

COM(12) 464

(b)

(34202)

13346/12

COM(12) 465


Amended draft Regulation establishing an action programme for customs in the European Union for the period 2014-2020 (Customs 2020) and repealing Decision No 624/207/EC

Amended draft Regulation establishing an action programme for taxation in the European Union for the period 2014-2020 (Fiscalis 2020) and repealing Decision No 1482/2007/EC

Legal base(a) Article 33 TFEU; co-decision; QMV

(b) Articles 114, 197 and 212 TFEU; co-decision; QMV

DepartmentHM Revenue and Customs
Basis of considerationMinister's letter of 2 December 2012
Previous Committee ReportsHC 86-xiii (2012-13), chapter 12 (17 October 2012) and HC 86-xx (2012-13), chapter 12 (21 November 2012)
Discussion in Council(a) 10 December 2012 (b) Not known
Committee's assessmentLegally and politically important
Committee's decision(a) Not cleared but scrutiny waived; further information requested (b) Not cleared; further information requested

Background

12.1 The Customs 2013 Programme is an EU action programme, which provides funding for customs activities which support the effective functioning of the single market and fall within the exclusive competence of the EU, including:

  • implementation of the Modernised Customs Code;
  • introduction of a pan-EU paperless customs environment; and
  • providing a legal base and EU funding for the maintenance and development of EU communication and information exchange systems such as the New Computerised Transit System and the Common Communications Network (CCN/CSI).

12.2 The Fiscalis 2013 Programme is an EU funded programme which is designed to improve the operation of taxation administration systems in the single market, through strengthened administrative cooperation between Member States and candidate countries, their administrations and officials. Both programmes end on 31 December 2013.

12.3 In November 2011 the Commission proposed creation of a successor to the Customs 2013 and Fiscalis 2013 programmes, by merging both into a single successor programme, 'FISCUS', which would run from 2014 to 2020. FISCUS would be an administrative cooperation programme, which aimed to share best practice and increase cooperation between Member States and candidate countries, their administrations and officials. Following a decision of the Council and the European Parliament that there should be two separate legal instruments, the Commission withdrew its original proposal and replaced it with two amended draft Regulations, documents (a) and (b).

12.4 The draft Regulation, document (a), is to create a Customs 2020 programme, the purpose of which is to contribute to the Europe 2020 Strategy for smart, sustainable and inclusive growth, by strengthening the functioning of the EU's single market and its customs union. The new programme will also contribute to the establishment of a digital single market ('Digital Agenda for Europe'), the overall aim of which is to deliver sustainable economic and socials benefits from a digital single market. The budget proposed for the seven-year period is €548,080,000 (£435,888,000), to be allocated through annual work programmes drawn up by the Commission each year, on the basis of agreed priorities. This represents a 45% increase on the Customs 2013 programme.

12.5 The draft Regulation, document (b), is to create a Fiscalis 2020 programme, the purpose of which is to contribute to the Europe 2020 Strategy for smart, sustainable and inclusive growth, by strengthening the functioning of the tax systems within the Member States and the EU's single market. It will also have the objective of driving technical progress and innovation in national tax administrations with the aim of developing e-tax administrations. The new programme will also contribute to the establishment of a digital single market. The budget proposed for the seven-year period is €234,370,000 (£186,394,000), to be allocated through annual work programmes, drawn up by the Commission each year, on the basis of agreed priorities. This represents an increase of 28% on the Fiscalis 2013 programme.

12.6 Last month, when we considered these revised proposals for the second time we heard that:

  • satisfactory progress was being made in Council working group negotiation of both proposals; but
  • although the Government was trying to secure text in both proposals to eliminate JHA obligations, it was not certain that was achievable before expiry of its opt-in rights and it would need therefore to consider that possibility.

In particular we were told, on the Customs 2020 proposal, that the Government had received broad support for an explanatory text which clarified the remit of the programme and would remove the JHA obligations, but that it was possible that the Government would not gain enough support to bring about these changes.

12.7 We noted that our earlier question as to whether Parliament had been, or would be, informed of possible JHA opt-in decisions, with a written statement, as undertaken by the Minister for Europe (Mr David Lidington).[76] So, before considering the documents again, we asked to have, in addition to the Government's further progress reports, a speedy answer to that specific question. Meanwhile the documents remained under scrutiny.[77]

The Minister's letter

12.8 The Economic Secretary to Treasury (Sajid Javid) now tells us that the Government is opting into both the Customs 2020 and Fiscalis 2020 proposals and that he will be laying a Written Ministerial Statement to inform Parliament to this effect shortly.

12.9 The Minister also tells us, in relation to the Customs 2020 draft Regulation, document (a), that:

  • negotiations have progressed rapidly in the Council working group;
  • last week the Presidency tabled a new compromise text, which clarifies (the important point) that participation in programme activities is voluntary;
  • it has placed the file on the agenda for the Competitiveness Council on the 10 December to agree the Council position;
  • the Government has negotiated the addition of a joint Commission and Council minutes statement which makes clear that customs cooperation on matters pursuant to Title V TFEU are not within the scope of the programme; and
  • the Government welcomes these developments and considers that the proposal forms a good basis for trilogues with the European Parliament.

Recalling that the budgets for both proposals are being considered separately, as part of the Multiannual Financial Framework negotiation, the Minister tells us that the Competitiveness Council will not be asked to agree the budget for the programme.

Conclusion

12.10 We note that the Government is opting into both proposals and that Parliament will be formally informed in a Written Ministerial Statement.

12.11 In relation to the Customs 2020 draft Regulation, document (a), we presume that the Minister's reference to a joint Commission and Council minutes statement means that the Government has not been able to secure explanatory text in the proposal itself, which clarifies the remit of the programme as excluding JHA obligations. It is perplexing that the Government has chosen to opt-in, despite the absence of a Title V legal base, and after having obtained assurance that Title V obligations are excluded. Nonetheless we accept that, if it thinks it appropriate, in order to secure the improvements in the latest text, particularly in relation to voluntary participation in programme activities, the Government may acquiesce in agreement on a Council position for discussion with the European Parliament. The Minister appears to be unaware, however, that he needs to seek a waiver of the scrutiny reserve resolution in order to give his agreement to a Council common position for negotiation with the European Parliament (see paragraphs 2(c) and 3(b) of the Scrutiny Reserve Resolution). On this occasion, and in these circumstances, we are content to waive scrutiny in accordance with paragraph 3(b) of the Scrutiny Reserve Resolution, but we wish to hear a confirmatory account of the Competitiveness Council. Meanwhile the document remains under scrutiny.

12.12 As for the Fiscalis 2020 draft Regulation, document (b), we await a progress report before considering it again and meanwhile this document also remains under scrutiny.



76   See HC Deb, 20 January 2011, col.51WS. Back

77   See headnote. Back


 
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Prepared 13 December 2012