Documents considered by the Committee on 4 December 2013 - European Scrutiny Committee Contents

11 Regulation of new psychoactive substances




COM(13) 619




+ ADDs 1-2

COM(13) 618

Draft Regulation on new psychoactive substances

Draft Directive amending Framework Decision 2004/757/JHA of 25 October 2004 laying down minimum provisions on the constituent elements of criminal acts and penalties in the field of illicit drug trafficking as regards the definition of drug

Legal base(a)   Article 114 TFEU; co-decision; QMV

(b)   Article 83(1) TFEU; co-decision; QMV

DepartmentHome Office
Basis of consideration Minister's letter of 11 November 2013
Previous Committee Report HC 83-xviii (2013-14), chapter 8 (23 October 2013)
Discussion in Council No date set
Committee's assessment Legally and politically important
Committee's decision Not cleared; further information requested

Background and previous scrutiny

11.1 The purpose of document (a) — the draft Regulation — is to establish the basis for EU-wide regulation of new psychoactive substances which present moderate or severe health, social and safety risks and to provide for the free circulation of those which present low, or no, risks. It would repeal and replace a 2005 Decision under which the Council may require Member States to introduce control measures and criminal penalties for new psychoactive substances assessed by Europol and the European Monitoring Centre for Drugs and Drug Addiction as posing unacceptable health and social risks. Whilst retaining many features of the regulatory system set up by the 2005 Decision, including mechanisms for the exchange of information and for common risk assessments, the draft Regulation would introduce a broader range of options for mandatory EU-wide marketing restrictions. These seek to distinguish between low, moderate and high risk substances and to introduce a more proportionate response, ranging from no market intervention to restrictions on consumer sales and, in the most severe cases, an outright ban accompanied by criminal sanctions. The draft Directive — document (b) — is the instrument through which Member States would implement criminal sanctions by amending a 2004 Framework Decision specifying which types of illicit drugs and drug precursors must be made subject to EU-wide controls and criminal penalties.

11.2 The 2005 Decision (which the draft Regulation would replace) and the 2004 Framework Decision (which the draft Directive would amend) are both subject to the UK's 2014 block opt-out of pre-Lisbon EU police and criminal justice measures. The Government notified Parliament, in July 2013,[35] that it does not propose to rejoin either measure, meaning that they will cease to apply to the UK from 1 December 2014. Our Nineteenth Report of 23 October 2013 provides a more detailed overview of the Commission's proposals and the Government's position.

11.3 In his Explanatory Memoranda on the proposals, the Minister for Immigration (Mr Mark Harper) raised a number of significant concerns, particularly with regard to the legal base for the draft Regulation and the application of the Schengen Protocol which, if accepted by the Commission and other Member States, would allow the UK to opt out of both proposals. Regrettably, the Minister provided no assessment of the compliance of the draft Regulation and draft Directive with the principle of subsidiarity, a significant omission given the tight eight-week deadline available to national Parliaments to produce a Reasoned Opinion. He did suggest, however, that by limiting the autonomy of the UK to determine what type of restrictions to apply to new psychoactive substances, the draft Regulation was in breach of the principle of proportionality.

11.4 We asked the Minister to address a number of issues which arose from his analysis of the Commission proposals, notably:

·  the appropriate legal base for the draft Regulation, in light of the Government's view that it is a justice and home affairs rather than an internal market measure;

·  whether it would be legally possible for the UK to participate in the draft Directive, given that its purpose is to amend an existing instrument (the 2004 Framework Decision) that will cease to apply to the UK from 1 December 2014;

·  a more detailed justification of the Government's reasons for considering that both proposals are Schengen-building measures and subject to the Schengen Protocol, as well as the views of other affected States (notably Denmark and non-EU Schengen-associated countries);

·  the absence of a Government impact assessment or consultation with external stakeholders, given that the Government appears to contest the evidence adduced by the Commission to demonstrate legitimate commercial or research uses for around one fifth of new psychoactive substances; and

·  the Government's view on the conferral of significant implementing powers on the Commission.

11.5 Whilst dissatisfied with the information made available to Parliament in the Minister's Explanatory Memoranda, and the absence of a subsidiarity assessment, we nevertheless concluded that market intervention on the scale envisaged in the draft Regulation, combined with the limitations placed on Member States' freedom of action, was unwarranted. We were not convinced that the Commission had produced sufficient evidence to demonstrate that divergent national regulatory approaches had led to a disruption of legitimate trade, or a displacement of the harmful effects of new psychoactive substances from one Member State to another, and recommended that the House send a Reasoned Opinion to the Presidents of the EU institutions. Our draft Reasoned Opinion was debated and agreed to in the House on 11 November 2013.

The Minister's letter of 11 November 2013

11.6 The Minister for Crime Prevention (Norman Baker) fulfils the commitment he gave in his Explanatory Memorandum to provide further information on the legal base for the draft Regulation and the Government's subsidiarity assessment.

11.7 Turning first to subsidiarity, the Minister describes the legal framework established by the EU Treaties for assessing compliance with the subsidiarity principle, as set out in Article 5(3) of the Treaty on European Union and Protocol (No.2) on the application of the principles of subsidiarity and proportionality. He observes:

    "Whether any proposed action cannot sufficiently be achieved by Member States and would be better achieved by action at Union level must be informed, in part, by an assessment of the merits of the proposed action. This is particularly relevant where, as with the proposed NPS [new psychoactive substances] measures, there may be a spectrum of possible options for EU-level action, but not all EU action will comply with the principle of subsidiarity. The role of national parliaments under Protocol (No. 2) to the Treaties would be academic if they were constrained to assess issues of subsidiarity with no corresponding assessment of the parameters of the Union's proposed action in the relevant area."

11.8 The Minister accepts that "some EU action could be justified", adding:

    "The development and use of NPS is a fast moving area which transcends national borders. There are clear benefits to sharing knowledge and expertise at an EU level, providing the systems established to do so are swift and responsive. To the extent that the proposed Regulation builds on existing information sharing arrangements, I am satisfied that it complies with the principle of subsidiarity."

11.9 The Minister considers, however, that the draft Regulation goes beyond these legitimate areas of activity, noting:

    "It mandates common standards; it is a harmonisation measure. This appears to be a consequence of the premise that there is a substantial licit trade in NPS which underpins the draft Regulation. In our experience, the trade in legitimate NPS is minimal at best. This in turn has led to the draft Regulation citing a single market legal base (Article 114 of the Treaty on the Functioning of the European Union - TFEU), a matter to which I shall return shortly.

    "Article 4 of the draft Regulation provides that, 'insofar as the Union has not adopted measures to subject a new psychoactive substance to market restriction under this Regulation, Member States may adopt technical regulations...' It is quite clear that Member States will no longer be able to control NPS as a matter of national competence.

    "This could have significant implications for our domestic legal framework for controlling drugs in at least two ways.

    "First, we may be compelled to declassify or downgrade the classification of existing controlled drugs if the new EU classification system leads to a lower EU classification. Because the new Regulation provides for a tiered scheme of restrictions, it is entirely possible that the EU may decide that a measure merits a moderate restriction, whereas our own scientific evidence suggests that it requires a severe restriction, with the ensuing categorisation under domestic drug control legislation. In the event of such a conflict, the categorisation under the Regulation would have to prevail.

    "While Article 114 TFEU contains two potential derogations for Member States, neither preserves national competence. Article 114(4) provides that Member States may apply for a derogation from a harmonisation measure to maintain existing national provisions on the grounds of major needs referred to in Article 36 TFEU.[36] Article 114(5) provides that after the adoption of a harmonisation measure, a Member State may apply to introduce national provisions on certain narrow criteria relating to the protection of the environment or the working environment, on the grounds of a problem specific to that Member State. In either case, it is the Commission which is to decide whether to permit the Member State so to derogate from the measure.

    "Secondly, we will be compelled to comply with the requirements of Directive 98/34/EC if we want to classify NPS outside the proposed EU system, which would be a lengthy process. This is in contrast to the responsive system we have under the Misuse of Drugs Act 1971, which allows temporary bans to be imposed on emerging NPS pending a full assessment by the Advisory Council on the Misuse of Drugs and a classification decision by the Secretary of State.

    "The net effect of the proposed Regulation would be significantly to undermine the competence of Member States to introduce domestic drug controls. Put simply, we do not consider that such extensive Union action in this area is appropriate. Member States should not be prohibited from unilaterally introducing more stringent controls for NPS. It is not necessary to remove that decision-making power from Member States and place it at EU level. To adopt the language of the Treaty, such an objective cannot 'be better achieved at Union level' when there is no justification for that objective in the first place (Article 5(3), Treaty on European Union).

    "Also, to the extent that Member States are permitted to introduce national measures, either through the Article 114 TFEU derogations or the process contained in Article 4 of the draft Regulation, the mechanisms for doing so are cumbersome and ill-suited to the speed required to deal with NPS. Given the manufacture of NPS for illicit use seeks to exploit the chemical differences in different psychoactive substances with the aim of evading the controls on existing substances, it is necessary for Member States to have the ability to respond to this emerging threat at pace. We cannot see how this aspect of the proposed system satisfies the requirement that action 'be better achieved at Union level.'

    "Finally, the draft Regulation assumes that Member States will, and indeed, should, have a reactive classification system, whereby particular substances are classified after they have been released to the illicit market. It should be open to Member States to introduce other control systems, such as proactive classification systems, which impose prohibitions based on the psychoactive effect of any substance, rather than by reference to their precise chemical composition. I am aware that the Republic of Ireland deploys such an approach: see the Criminal Justice (Psychoactive Substances) Act 2010.

    "We are not satisfied, therefore, that the draft Regulation in its current form complies with the principle of subsidiarity."

11.10 On the question of the legal base for the draft Regulation, the Minister observes that:

    "Assessment of the legal base for an EU measure must rest on objective factors that are amenable to judicial review, including the aim and content of the measure.

    "Our concerns in relation to the citation of an Article 114 TFEU legal base for the measure have their foundation in the overwhelmingly illicit nature of the trade in NPS. Many of the features of the NPS Regulation which do not comply with the principle of subsidiarity may be traced back to the unnecessary citation of an Article 114 legal base.

    "The Commission relies heavily on the underlying assumption that there is a significant market for NPS in commercial and industrial use, and for scientific research and development. By contrast, the UK's experience suggests the NPS trade is not 'legitimate', with very few exceptions for commercial and industrial purposes.

    "Our view, therefore, is that the aim and content of this measure relate to matters which fall within Title V TFEU, in particular Article 83(1): offences relating to NPS are 'particularly serious crime with a cross-border dimension resulting from the nature or impact of such offences'. In addition, it is accepted that there may be a 'special need to combat them on a common basis'. The second paragraph of Article 83(1) states that the areas of crime to which Article 83(1) applies may apply include 'illicit drug trafficking'. Indeed, the draft Regulation recognises the proximity of the 'trade' in NPS to organised crime, the illicit drugs market and the need to draw on the experience of Europol: see Articles 6(2)(e), 6(3), 10(2)(b), 11(b), 12(1)(b), and 13(1)(c).[37]

    "The draft Directive (which properly cites a Title V legal base) requires Member States to adopt criminal penalties for NPS which have been found to present severe risks and have been subjected to a permanent market restriction. In the experience of the UK, most if not all NPS will have to be so classified. Taken with the Directive, the primary effect of the Regulation, therefore, will be to subject new NPS to mandatory criminal classification. In our view, this reveals that the true aim and content of the draft Regulation relate to Title V matters.

    "We also consider this to be a Schengen-building measure, as drafted. Article 76 of the Schengen Convention (in which the UK participates: see Council Decision 2000/365/EC, Article 1(a)(i)), provides that the Contracting Parties shall:

    'where necessary, and in accordance with their medical, ethical and practical usage, adopt appropriate measures for the control of narcotic drugs and psychotropic substances which in the territory of one or more Contracting Parties are subject to more rigorous controls than in their own territory, so as not to jeopardise the effectiveness of such controls.'

    "The legal base for Article 76 was Article 95 EC, which is now Article 114 TFEU. It was clearly aimed at single market measures regulating the licit trade of certain substances where there is potential for illicit use. While we do not accept that there is a substantial licit trade in NPS, if there was such a trade, it would clearly fall within Article 76 of the Schengen Agreement.

    "Should the Commission revise its view that there is a substantial licit trade in NPS, it is our view that any revisions to the draft Regulation would be likely to take it within the terms of Article 71 of the Schengen Agreement in any event. Article 71 contains equivalent provision governing measures relating to the illicit trade in narcotics and psychotropic substances.

    "It is also important for the draft Regulation to be categorised as a Schengen-building and Title V measure because doing so recognises the delineation of competences between the United Kingdom and the EU under Protocols 19 and 21 to the Treaties. The UK has conferred competence on the EU in these areas in accordance with the framework contained in those Protocols."

11.11 The Minister concludes by summing up the Government's position in the following terms:

    "My concerns relating to subsidiarity and legal base are therefore linked to the incorrect premise on which the draft Regulation is based. I firmly believe that EU-level action is not required to harmonise EU-wide controls for NPS, and that any attempt to introduce controls at an EU level should be based on an accurate evidence-base and realistic assumptions."


11.12 We thank the Minister for the thoughtful and compelling case he advances to demonstrate that the draft Regulation does not comply with the principle of subsidiarity. Whilst we endorse his analysis, we very much regret that it was not made available to Parliament in advance of the Reasoned Opinion debate on 11 November. As we stated in our Nineteenth Report, it is unacceptable to expect Parliament to come to an informed view on compliance with the subsidiarity principle within the tight timeframe required for a Reasoned Opinion under Protocol No. 2 to the EU Treaties without the benefit of a preliminary assessment by the Government.

11.13 We note the Minister's view that Article 83(1) TFEU should replace Article 114 TFEU as the legal base for the draft Regulation. We note also that the differing views of the Commission and the Government on the correct legal base stem largely from differing perceptions of the existence and scale of the legitimate trade in new psychoactive substances. An accurate assessment of the licit market for new psychoactive substances, as well as the extent of cross-border trade in these substances and any displacement effect resulting from different national regulatory approaches will, in our view, be crucial in determining the "centre of gravity" of the draft Regulation and its classification as either an internal market or criminal law measure. As our earlier Report indicated, we think that there would be some value in undertaking a stakeholder consultation and producing an impact assessment to provide a clearer evidence base for the Government's assertion that trade in new psychoactive substances is "overwhelmingly illicit." We would also welcome some indication of the views of other Member States on the strength of the Commission's Impact Assessment and its analysis of the legitimate uses of new psychoactive substances.

11.14 The Minister helpfully explains why he considers that the draft Regulation and draft Directive are Schengen-building measures subject to the provisions of the Schengen Protocol. However, our earlier Report noted that the provisions of the 1990 Schengen Convention to which he refers appear to be limited in scope to narcotic drugs and psychotropic substances covered by three United Nations Conventions.[38] By contrast, the Commission proposals are intended to regulate new psychoactive substances that are not subject to international control measures under these Conventions. We ask him whether this difference in scope takes the draft Regulation and draft Directive outside the framework established by the 1990 Schengen Convention. We also ask him whether it would be possible, by means of an amending draft Directive, to re-categorise the 2004 Framework Decision as a Schengen-building measure, given that the recitals to the Framework Decision give no indication of its Schengen origins.

11.15 We note the importance the Minister attaches to the categorisation of the draft Regulation as both a Schengen-building and Title V (justice and home affairs) measure "because doing so recognises the delineation of competences between the United Kingdom and the EU under Protocols 19 and 21 to the Treaties." We would add, however, that these Protocols were agreed by all Member States and that their scope cannot be unilaterally determined by the UK. We are particularly interested to hear whether other Member States, as well as non-EU States (Iceland, Norway, Switzerland and Liechtenstein) associated with the application and development of the Schengen acquis, share the Government's position on the Schengen origins of the draft Regulation and draft Directive.

11.16 We look forward to receiving the Minister's response to the questions we have raised in this Report and our Nineteenth Report. Meanwhile, the proposals remain under scrutiny.

35   See Command Paper 8671 published in July 2013. Back

36   These are: public morality, public policy or public security; the protection of human, animal or plant health and life; the protection of national treasures; and the protection of industrial and commercial property. Back

37   The correct reference is to Article 13(1)(b) of the draft Regulation. Back

38   These are the Single Convention on Narcotic Drugs 1961 (as amended by the 1972 Protocol); the Convention on Psychotropic Substances 1971; and the United Nations Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances 1988. Back

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Prepared 11 December 2013