12 Customs: illicit trade in tobacco
products ~
| (a)
(35218)
12605/13
COM (13) 538
(b)
(35219)
12606/13
COM(13) 539
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Draft Council Decision on the signing, on behalf of the European Union, of the Protocol to Eliminate Illicit Trade in Tobacco Products to the World Trade Organisation's Convention on Tobacco Control, in so far as the provisions of the Protocol which do not fall under Title V of Part III of the Treaty on the Functioning of the European Union are concerned
Draft Council Decision on the signing, on behalf of the European Union, of the Protocol to Eliminate Illicit Trade in Tobacco Products to the World Trade Organisation's Convention on Tobacco Control, in so far as the provisions of the Protocol are concerned which fall under Title V of Part III of the Treaty on the Functioning of the European Union are concerned
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| Legal base | (a) Articles 33, 113, 114, 207 and 218(5) and (8); —; unanimity
(b) Articles 82(1), 83, 87 (2) and 218 (5); —; QMV
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| Documents originated | 18 July 2013
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| Deposited in Parliament | 22 July 2013
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| Department | HM Revenue and Customs
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| Basis of consideration | EM of 31 July 2013
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| Previous Committee Report | None
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| Discussion in Council | Not known
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| Committee's assessment | Legally and politically important
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| Committee's decision | Not cleared; further information requested
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Background
12.1 In November 2012 the parties to the World Health Organisation
(WHO) Framework Convention on Tobacco Control (FCTC) adopted the
Protocol to Eliminate Illicit Trade in Tobacco Products (the Protocol).
12.2 The FCTC is an international, legally-binding
treaty designed to reduce tobacco-related deaths and disease around
the world. Adopted in May 2003, the objective of the FCTC is 'to
protect present and future generations from the devastating health,
social, environmental and economic consequences of tobacco consumption
and exposure to tobacco smoke'. There are 177 parties to the FCTC,
including both the UK and the EU.
12.3 The Protocol is intended to provide a framework
for international regulation of tobacco production and distribution
and for international cooperation between enforcement authorities.
The benefits will depend on the take up by the parties and the
geographical coverage.
The documents
12.4 These draft Council Decisions are intended to
enable the EU to sign the Protocol. The documents recognise that
the Protocol covers material with both a Title V TFEU legal base(s)
and non-Title V TFEU legal base(s) and the UK's right to choose
whether to opt-in to new Title V measures.
12.5 The Protocol contains a complex set of measures
and rules, the main objective of which is to contribute to overall
tobacco control efforts by combating all forms of illicit trade
in tobacco products and manufacturing equipment. This objective
is pursued through several sets of measures which fall into different
areas of EU activity which may be divided as follows.
12.6 First are provisions concerning the manufacture,
presentation and sale of tobacco products, which are covered by
EU legislation based on Article 114 TFEU concerning tracking and
tracing and sales by internet, telecommunications and other evolving
technology. Next are provisions concerning harmonised taxation
and related rules, which are covered by EU legislation on indirect
taxation, notably licensing, record-keeping, duty free sales and
administrative cooperation, based on Article 113 TFEU. Thirdly,
there are provisions concerning customs controls and cooperation,
including through mutual administrative assistance in customs
matters, which are covered by EU legislation based on Articles
33 and 207 TFEU concerning control and verification measures applicable
to the international transit or transhipment of tobacco products
and manufacturing equipment and on international cooperation including
mutual administrative assistance. Last, are provisions concerning
approximation of criminal offences, judicial cooperation in criminal
matters and police cooperation, which are covered by existing
EU legislation concerning approximation of criminal offences,
law enforcement cooperation and judicial cooperation in criminal
matters based on Title V.
12.7 One of the draft Decisions, document (a), concerns
EU signature of the Protocol insofar as it relates to non-Title
V matters and the other, document (b), concerns EU signature insofar
as the Protocol relates to Title V matters. The UK has the choice
as to whether to take part in adoption of, that is vote on, the
second draft Decision.
12.8 The Commission has not published an assessment
of the legal bases for each individual Article in the Protocol,
although it has set out which legal bases are applicable in the
draft Decisions. It is expected that there will be an assessment
of the applicable legal base to each individual Article in the
Protocol alongside draft Council Decisions on conclusion of the
Protocol (the EU's formal consent to be bound by the articles
in the Protocol) at a future date.
The Government's view
12.9 The Economic Secretary to the Treasury (Sajid
Javid) says that:
- the Government is committed
to implementing the Protocol and it will work with the EU and
other Member States to do so in the most effective and efficient
way;
- the Government expects to sign the Protocol,
alongside the Commission, before the end of the year;
- there are no policy implications for the UK in
signing the Protocol;
- the process of signing the Protocol signals the
Government's intention to ratify and implement its provisions
in the future;
- further Council Decisions will be required to
conclude the Protocol on behalf of the EU; and
- at the same time, the UK will ratify (provide
its formal consent to be bound by its terms and conditions of
the Protocol) and implement its provisions.
12.10 The Minister comments that:
- primary issues covered by the
Protocol are supply chain control, including licensing of businesses
making and handling tobacco products, customer identification
and verification, tracking and tracing and record keeping and
law enforcement and international cooperation;
- many of these provisions are already in place
in the UK and any additional policy implications will be set out
to accompany the legislation required (both EU and domestic) to
meet the remaining requirements; and
- there will be some, as yet unquantifiable, financial
implications for both government and businesses.
12.11 The Minister also says that:
- by agreeing the draft Decisions
as drafted, the UK is not committed to any legal base for any
particular Article; and
- the Government retains the right to opt-in to
any specific Title V TFEU measures which are identified in future
Council Decisions on conclusion of the Protocol.
Conclusion
12.12 Whilst we have no concern as to the EU's
signature of this Protocol, we are confused as to the Government's
opt-in intentions. Recital (4) of the draft Decision relating
to signature of the Protocol in so far as it concerns Title V
document (b), has two alternative texts. The first presumes that
the UK opts into the draft Decision's adoption and application,
the second that it does not. The Minister gives us no indication
whatsoever as to the case for choosing either option.
12.13 It seems to us that the possibilities are
that:
- the Government opts in and
the EU signs the Protocol with the UK's consent in relation to
both non-Title V and Title V aspects and with the UK signing in
its own right; or
- the Government does not opt in and the EU
signs the Protocol without the UK's consent in relation to Title
V aspects, but with the UK still signing in its own right.
It is not clear to us how either of these possibilities
would leave the UK in relation to future draft Decisions allowing
the EU to conclude the Protocol, by which time the Commission
is expected to have given its view as to which aspects of the
Protocol concern Title V. If the Government opts into the present
draft Decision, does that preclude opting out of a future EU conclusion
of the Protocol? Equally does opting out now preclude opting in
later?
12.14 Before we consider these draft Decisions
further we wish to hear the Government's view of this situation
and to have an indication of which version of Recital (4)
of the second draft Decision it intends to support. Meanwhile
both documents remain under scrutiny.
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