Documents considered by the Committee on 22 January 2014 - European Scrutiny Committee Contents

7 Regulation of new psychoactive substances




+ ADDs 1-2

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

Department Home Office
Basis of consideration Minister's letter of 13 January 2014
Previous Committee Reports HC 83-xxiii (2013-14), chapter 11 (4 December 2013); 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

7.1 Document (a) — the draft Regulation — would establish a new framework for EU-wide regulation of new psychoactive substances which present moderate or severe health, social and safety risks and provide for the free circulation of those which present low, or no, risks. Document (b) — the draft Directive — is the instrument through which Member States would implement criminal sanctions for the highest risk substances. Our earlier Reports provide a detailed overview of the Commission's proposals and the Government's position.[32]

7.2 We sought further information from the Government on a number of issues, 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 (a 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.

7.3 We also considered that the Commission had produced insufficient information to demonstrate that market intervention on the scale envisaged in the draft Regulation, as well as the limitations placed on Member States' freedom of action, were justified. Our recommendation to send a Reasoned Opinion to the Presidents of the EU institutions was debated and agreed to in the House on 11 November 2013. It was one of only two Reasoned Opinions issued by national Parliaments (the other by the House of Lords), insufficient to meet the threshold required to trigger a formal review of the proposal by the Commission.

7.4 The Minister for Crime Prevention (Norman Baker) told us that the Government shared our subsidiarity concerns, adding that "the net effect of the proposed Regulation would be significantly to undermine the competence of Member States to introduce domestic drug controls".[33] He rejected the internal market legal base proposed by the Commission for the draft Regulation, on the grounds that trade in new psychoactive substances is "overwhelmingly illicit" and should therefore be regulated as a criminal matter, with the EU's competence to act based on the criminal law provisions contained in Title V of Part Three of the Treaty on the Functioning of the European Union (TFEU). He reiterated the Government's view that the draft Regulation should be categorised both as a Title V measure and as a Schengen-building measure, bringing the UK's Title V opt-in and Schengen opt-out Protocols into play.

7.5 Given that the differing views of the Commission and the Government on the correct legal base appeared to stem largely from differing perceptions of the existence and scale of the legitimate trade in new psychoactive substances, we asked the Government to provide 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.

7.6 Whilst noting the Government's view that the draft Regulation and draft Directive should both be considered Schengen-building measures, we asked the Minister to address the point we made in our earlier Report which noted that the provisions of the 1990 Schengen Convention relied on by the Government appear to be limited in scope to narcotic drugs and psychotropic substances covered by three United Nations Conventions.[34] By contrast, the Commission proposals are intended to regulate new psychoactive substances that are not subject to international control measures under these Conventions. In particular, we asked the Minister whether this difference in scope took the draft Regulation and draft Directive outside the framework established by the 1990 Schengen Convention, and 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.

The Minister's letter of 13 January 2014

7.7 The Minister (Norman Baker) provides an update on recent discussions attended by officials which have focused on the evidence base to justify EU action, the internal market legal base proposed for the draft Regulation, and subsidiarity concerns (including the impact on Member States' competence to adopt domestic measures). He continues:

    "My officials continued to contest all three areas strongly and I am pleased to note that the UK arguments on legal base and subsidiarity appear to be chiming with a number of other countries."

7.8 The Minister reiterates the Government's view that trade in new psychoactive substances is "overwhelmingly illicit", adding that this view is informed by experts from the Centre for Applied Science and Technology and the Advisory Council on the Misuse of Drugs. He notes that the Home Office also consults:

·  other Government departments and industry on new psychoactive substances that are being recommended for temporary or permanent control measures, in addition to statutory consultation of the Government's independent expert advisers on drugs;

·  the Department for Business, Innovation and Skills in relation to legitimate industrial uses of substances;

·  the Medicines and Healthcare Products Regulatory Agency in relation to legitimate medicinal uses and/or use in production of medicines; and

·  the PISTOIA Alliance, encompassing life science companies, academic groups, informatics vendors, and publishers, whose aims are to lower barriers to innovation by improving the interoperability of research and development business processes through pre-competitive collaboration.

7.9 Given this extensive consultation, the Minister suggests that a formal public consultation at this stage would be unlikely to add value to existing information sources and expertise.

7.10 Turning to the evidence base for the legitimate use of new psychoactive substances set out in the Commission's Impact Assessment, the Minister explains:

    "What has become clearer over time is that the European Commission has used a broad definition of 'legitimate use' to include new psychoactive substances with medicinal use, plants and herbs and scientific research. We, and others, strongly contest this. Medicines, whether or not they have a psychoactive effect, are dealt with in a separate EU regime and [the] draft Regulation expressly excludes medicinal new psychoactive substances from the scope of the proposed internal market control mechanisms. The Commission's justification for taking invasive single market measures is essentially made by reference to the trade in medicinal use of new psychoactive substances which is a separate market expressly excluded from the scope of the control mechanism which lies at the heart of the draft Regulation. We are also not convinced of the need to include plants and herbs, nor scientific research, in the theoretical market the Regulation purports to protect."

7.11 The Minister indicates that there is "growing doubt from a sizeable number of Member States about the estimated legitimate market" and that five or six Member States also have concerns about the internal market legal base for the draft Regulation. He says that the Government is "actively building alliances with these countries" and continues:

    "Some Member States have suggested that a public health legal base under Article 168 of the Treaties of the European Union (TFEU) would be appropriate, while others agree with us that the measure should cite Article 83(1) TFEU. Others are content with Article 114. We, with others, are pushing for a written opinion from the Council Legal Service. We will be encouraging the Greek Presidency to resolve these issues in the forthcoming meetings."

7.12 The Minister amplifies the Government's reasons for considering that the draft Regulation and draft Directive are Schengen-building measures. He contends that Article 71 of the 1990 Schengen Implementing Convention is the source of the underlying Schengen obligation for the draft Directive, as is Article 76 of the Convention for the draft Regulation, and adds:

    "It is our view that Article 71 of the Convention Implementing the Schengen Agreement incorporates the procedures and law enforcement standards of the UN Conventions, while not limiting the scope of measures building on Article 71 to the substances listed in those Conventions.

    "Article 76 of the Schengen Convention is not anchored to the UN Conventions. Within its scope is the licit trade in psychoactive substances. To the extent that there is a licit trade in new psychoactive substances, we consider the proposed measures to build on this aspect of the acquis."

7.13 The Minister concedes that the UK is so far alone in considering the draft Regulation and draft Directive to be Schengen-building measures, but suggests:

    "That is hardly surprising given the present lack of certainty on the legal base and uncertainty surrounding the scope and evidence base for the Regulation. We will of course continue to focus on the Title V nature of the measure on which we share common ground with a number of Member States."

7.14 He notes that the issue is "academic" as far as the draft Directive is concerned, since it cites a Title V legal base and is subject to the UK's Title V opt-in Protocol. He refutes the suggestion, made in our earlier Report[35] that, the Government has sought unilaterally to determine the scope of the Title V opt-in and Schengen opt-out Protocols, but adds:

    "It must be true that those Protocols reflect the particular conferral of competence in Schengen and Title V matters by the United Kingdom on the Union. Therefore, Union measures which involve the exercise of competence in areas covered by those Protocols engage those Protocols, regardless of whether the Union measure in question expressly recognises that engagement."

7.15 The Minister agrees with us that the conferral of significant implementing powers on the Commission represents an important shift in decision making powers from the Council (under the current regulatory framework) to the Commission and says that the Government has voiced its concern at the reduction in the influence of Member States. He continues:

    "In practice what it means is that it would be the Commission, rather than the Council, which would decide when to request a joint report and risk assessment to be produced on a new psychoactive substance. At that point Member States would have influence through qualified majority voting on agreeing whether a substance should be the subject of a joint report, but this is only after a Commission proposal. Member States could not make a proposal themselves and this process will also impact on the decisions around adoption of control measures."

7.16 Finally, the Minister explains that the Government has decided to "opt out" of the draft Regulation and the draft Directive, basing its opt-out on the Schengen Protocol, adding:

    "This is largely based on the arguments set out in the House's Subsidiarity Reasoned Opinions. We do not think the proposals comply with the principle of subsidiarity and we want the UK to retain competence on regulating new psychoactive substances."

7.17 The UK will nonetheless continue to play an active part in negotiations, and seek to:

    "shape the current proposals in such a way as to achieve the most favourable outcome for the UK, particularly in our ability to respond quickly to public health risks posed by new psychoactive substances as they emerge on the market."

7.18 The Minister underlines the global challenge presented by the emergence of new psychoactive substances and says that the Government's opt-out decision will not in any way lessen its commitment to addressing the issue.


7.19 As we have stated previously, we consider 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, to be crucial in determining the "centre of gravity" of the draft Regulation and its classification as either an internal market or criminal law measure. We thank the Minister for clarifying the various sources of information and expertise utilised by the Home Office to estimate the extent of legitimate trade, and note that some other Member States share the Government's concerns regarding the strength of the Commission's Impact Assessment. We look forward to hearing how this matter is resolved during the Greek Presidency.

7.20 The Minister tells us that the Government has decided to opt out of the draft Regulation and draft Directive in reliance on the opt-out rights conferred on the UK under the Schengen Protocol.[36] This decision is difficult to reconcile with the Minister's statement that:

    "at present we are the only Member State to consider the measures to be Schengen building"


    "we will of course continue to focus on the Title V nature of the measure [the draft Regulation] on which we share common ground with a number of other Member States."

7.21 As the Minister indicates, consideration of the Schengen origins of the draft Directive is "academic" as the Government's decision not to opt in (however described) means that the UK will not participate in its adoption or be bound by it. The same cannot be said for the draft Regulation. We have consistently held that the UK cannot rely on its Title V opt-in Protocol in relation to a measure which does not cite a Title V legal base. It must also follow that the UK cannot rely on its Schengen opt-out Protocol in relation to a proposal which does not state that it is a Schengen-building measure or which is not accepted as such by other Member States.

7.22 We note that, under the terms of the Schengen Protocol, once the Government has formally notified the Council of its decision to opt out, the usual decision making procedures must be suspended until the Council has decided whether, and to what extent, the UK should remain bound by the existing regulatory framework for new psychoactive substances (set out in a 2005 Council Decision). We ask the Minister to report back to us on whether and how these provisions of the Schengen Protocol are being applied, given that no other Member State so far accepts that the Schengen Protocol is in play. We also ask him whether the Government considers it to be desirable and/or feasible for the UK to remain bound by the 2005 Decision without also participating in the draft Regulation.

7.23 We welcome the Government's intention to continue to play an active role in negotiations on the draft Regulation, not least because the UK will be legally bound by the outcome of negotiations unless doubts as to the application of the Title V opt-in or Schengen opt-out Protocols are resolved. We therefore ask the Minister to continue to provide progress reports on the negotiations, as well as the additional information we have requested in this chapter. Meanwhile, the proposals remain under scrutiny.

32   See headnote. Back

33   Reported in HC 83-xxiii (2013-14), chapter 11 (4 December 2013). Back

34   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

35   See HC 83-xxiii (2013-14), chapter 11 (4 December 2013). Back

36   See also the Minister's Written Ministerial Statement, HC Deb, 13 January 2014, col.22WS. Back

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Prepared 5 February 2014