Documents considered by the Committee on 26 February 2014 - European Scrutiny Committee Contents


4 Conditional access services

(a)

(32375)

18124/10

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COM(10) 753

(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


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

DepartmentCulture, Media and Sport
Basis of considerationSEM of 13 February 2014
Previous Committee ReportsHC 428-xliv (2010-12), chapter 14 (14 December 2011); HC 428-xlii (2010-12), chapter 8 (23 November 2011); HC 428-xxx (2010-12), chapter 7 (22 June 2011); HC 428-xxiv (2010-12), chapter 2 (27 April 2011); HC 428-xvi (2010-11), chapter 5 (9 February 2011)
Discussion in CouncilNo date set
Committee's assessmentLegally and politically important
Committee's decisionNot cleared; further information requested

Background and previous scrutiny

4.1 Conditional access services are services offered by broadcasting or internet service providers in return for payment, such as pay-TV or other on-demand services. The purpose of the draft Council Decisions is to authorise the EU to sign and accede to a Council of Europe Convention on the legal protection of services based on, or consisting of, conditional access. The Convention largely replicates the provisions of an EU Directive adopted in 1998 which prohibits the manufacture, import, distribution, sale, rental or possession for commercial purposes of devices (such as pirate decoders, smart cards and software) which are designed to facilitate unauthorised access to protected services, but the scope of application of the Convention is potentially much wider because the Council of Europe has a larger membership than the EU. The Convention entered into force in July 2003 but relatively few Council of Europe members have acceded to it. EU accession would, the Commission believes, encourage more European countries to do so, thereby strengthening legal protection for legitimate providers of conditional access services beyond the EU's borders, reducing piracy, and creating a more secure trading environment.

4.2 The 1998 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. By contrast, the draft Decisions originally proposed by the Commission (in December 2010) to authorise signature and EU accession to the Convention cited as their substantive legal base Article 207(4) of the Treaty on the Functioning of the European Union (TFEU) which concerns the EU's common commercial policy and is an area of exclusive EU competence.

4.3 The Government, supported by other Member States, considered that the draft Decisions should cite Article 114 TFEU — an internal market legal base — instead of Article 207(4) TFEU, and that Member States should be included as parties to the Convention, in addition to the EU. Whilst the Government accepted that the EU had acquired exclusive external competence over most elements of the Convention, it highlighted two provisions — on confiscation measures (Article 6 of the Convention) and on the provision of mutual legal assistance (Article 8) — in which competence was shared with Member States. It considered that both of these provisions fell within the scope of the UK's Title V (justice and home affairs) opt-in and that, as the EU had not yet exercised competence in the areas covered by these Articles, Member States remained free to do so. As a precaution, to hedge against the possibility that the EU had acquired some competence in relation to either Article, the Government also notified us that it had decided to opt into the draft Decisions, even though neither cited a Title V legal base, adding:

    "Whether the opt-in has practical effect in such circumstances is a question that can ultimately only be answered by the ECJ [Court of Justice of the European Union] but the Government considers that it is in the UK's best interests to continue to defend the application of the opt-in to provisions falling within Title V, even where there is no citation of a Title V legal base."[18]

4.4 The draft Decision on signature of the Convention was formally adopted by the Council, with UK support, in November 2011.[19] It cited Article 114 TFEU as its substantive legal base, stipulated that both the EU and Member States should sign the Convention, and made clear that the EU had exclusive competence in relation to all elements of the Convention other than Article 6 (on confiscation) and Article 8 measures relating to confiscation. The adopted Decision made no reference to the application of the UK's Title V opt-in Protocol (Protocol No. 21) but the Government told us that it had tabled a statement at the Council to record its view that:

    "even in the absence of the citation of a legal base in TFEU Title V, the European Union's competence to enter into the JHA [justice and home affairs] obligations (in Article 8 of the Convention which concern cooperation in investigations and judicial proceedings save insofar as those obligations relate to Article 6 of the Convention and are being entered into by the Member States) derives from TFEU Title V and accordingly the United Kingdom will be bound by virtue of the fact that it has exercised its opt-in under Protocol No. 21 to the TEU [Treaty on European Union]."[20]

4.5 Our earlier Reports provide a more detailed overview of the draft Decisions and the Government's position.[21] We cleared both draft Decisions from scrutiny in December 2011.

The Government's Supplementary Explanatory Memorandum

4.6 The Minister for Culture, Communications and Creative Industries (Mr Edward Vaizey) has submitted a Supplementary Explanatory Memorandum on the draft Decisions, even though they have been cleared from scrutiny, because a ruling given by the Court of Justice last October has annulled the draft Decision on signature, whilst maintaining its effects for up to six months pending the adoption of a new Council Decision. The Minister explains:

"This has resulted in the Commission re-proposing its original proposal (which has Article 207(4) TFEU as its legal base) without going through the normal processes for approving and communicating a new proposal. Although this has come from the Commission, it has done so in such a way that no new document has been registered so there is nothing to deposit and trigger a fresh scrutiny process. This is somewhat irregular, but it is clear that a supplementary explanatory memorandum is required to ensure that Committees are aware of the background to this, the wider implications, and are content that we proceed. We anticipate that the Presidency will want to move this issue along quickly to try to secure formal adoption before the ECJ's 6 month suspension runs out towards the end of April."[22]

The Court's ruling on the draft Decision on signature[23]

4.7 The action for annulment was brought by the Commission on the grounds that the Council of Europe Convention falls within the scope of the EU's common commercial policy, is therefore an area of exclusive EU competence, and should be based on Article 207(4) TFEU. The UK was one of five Member States intervening in support of the Council's position that Article 114 TFEU is the correct legal base and that the EU has no power, under Article 207 TFEU, to conclude an international agreement involving judicial cooperation and seizure and confiscation measures of a criminal law nature.

4.8 In its judgment, the Court reiterates its settled case law that the choice of legal base must rest on objective factors, including the aim and content of the measure in question, that are amenable to judicial review, adding:

    "If examination of that measure reveals that it pursues a twofold purpose or that it has a twofold component and if one of those is identifiable as the main or predominant purpose or component, whereas the other is merely incidental, that measure must be based on a single legal basis, namely that required by the main or predominant purpose or component."[24]

4.9 The Court concludes that the primary objective of the draft Decision, in authorising the EU to sign the Council of Europe Convention, is to facilitate international trade between the providers of conditional access services based in the EU and other European countries by extending the legal protection secured within the EU by the 1998 Directive to non-EU members of the Council of Europe. The Court adds that:

    "since the approximation of the legislation of Member States in the field concerned has already been largely achieved by Directive 98/84, the primary objective of the Convention is not to improve the functioning of the internal market, but to extend legal protection of the relevant services beyond the territory of the European Union and thereby to promote international trade in those services."[25]

4.10 As regards Articles 6 and 8 of the Convention on confiscation measures and judicial cooperation, the Court notes that these provisions are intended generally to ensure effective legal protection for conditional access services throughout the territories of the Contracting Parties and are "purely incidental" to the primary objective of the draft Decision.

4.11 Turning to the application of the UK's Title V opt-in Protocol, the Court observes:

    "Protocol (No. 21) on the position of the United Kingdom and Ireland in respect of the area of freedom, security and justice and Protocol (No. 22) on the position of Denmark, which are annexed to the TEU and the TFEU, are not capable of having any effect whatsoever on the question of the correct legal basis for the adoption of the contested Decision.

    "Indeed, it is the legal basis for a measure — the appropriateness or otherwise of which falls to be assessed [...] on the basis of objective factors such as main or predominant purpose of the measure and its content — which determines the Protocols to be applied, and not vice versa.

    "In the present case, it can be seen from the above analysis that the appropriate legal basis is the one relating to the common commercial policy, which is not covered by Protocols Nos. 21 and 22."[26]

The Government's position

4.12 The UK has implemented the 1998 Directive and "would not disagree" with the case advanced by the Commission that extending the protection conferred by the Directive to the broader membership of the Council of Europe might help limit further damage from piracy. The Minister explains that the UK intervened in the case brought by the Commission in support of the Council:

    "in order to resist the expansion of the EU's external competence at the expense of that of Member States, and to promote the use of mixed agreements where there is shared competence."[27]

4.13 He adds:

    "Given that the Court annulled the Decision because it was adopted on the wrong legal base, it did not need to examine the issue of the correct test for exclusive external competence, because the correct legal base, TFEU Article 207, expressly confers exclusive external competence. The Court dismissed any possibility that Protocols 21 and 22 were capable of having any effect.

    "Since the decision of the ECJ is final, the UK and other Member States have no option but to accept that the correct legal base is Article 207 for the Convention. That being so, and since the overall policy objective of the Convention remains sensible, the Government is seeking approval to agree the Decision on that basis. Although undoubtedly a setback from a broader point of view, the broader issue of competence remains in play, and the Government will remain vigilant and challenge the Commission wherever it appears they are exceeding their remit."[28]

4.14 The Minister notes that annulment of the Decision on signature will take effect at the latest on 22 April 2014. A successor Decision, based on Article 207(4) TFEU, will therefore need to be in place before then to ensure that signature of the Council of Europe Convention (which took place on 21 December 2011) is not called into question.

Conclusion

4.15 We recall that, in earlier correspondence on the draft Decisions, the Minister told us:

    "In our view, a JHA obligation in a measure should never be regarded as ancillary for the purpose of the predominant purpose test and will always justify the citation of a JHA legal base. In such circumstances we consider that the UK is not bound by a measure which creates JHA obligations unless we have opted in pursuant to the Protocol. We consider this is the case irrespective of whether a JHA legal base has been cited. Furthermore, if we are unsuccessful in arguing that a JHA legal base should be cited in a Council Decision, we would nonetheless assert that the opt-in applies where an international agreement creates obligations in the JHA field, however minor, as they are in these Decisions."[29]

4.16 The Minister describes the Court's ruling on the Decision authorising the EU to sign the Council of Europe Convention on the legal protection of conditional access services as "undoubtedly a setback". In our view, its significance is far greater, as it appears categorically to discredit the Government's policy of asserting that the UK's Title V (justice and home affairs) opt-in can apply to EU measures which do not cite a Title V legal base. We note that, in intervening in the case in support of the Council, the UK did not press for the inclusion of a Title V legal base — the only outcome which would have laid to rest any doubts about the application of the UK's opt-in Protocol.

4.17 In light of the Court's ruling, we ask the Minister whether he accepts that it is no longer open to the UK to assert that its Title V opt-in applies to the draft Decisions on signature and conclusion, or to any other EU measures containing obligations in the justice and home affairs field, unless the Government succeeds in securing the inclusion of a Title V legal base?

4.18 We trust that the Court's judgment in this case, and in another case last September involving an amendment to the social security provisions of the EEA Agreement,[30] will have caused the Government to review its policy on the scope of application of the UK's Title V opt-in Protocol. We ask the Minister to confirm that such a review has been undertaken as a matter of urgency, given its important implications for many of the documents we have under scrutiny, and to provide an assurance that we will be informed of the outcome as soon as possible. Pending the Minister's response, the draft Decisions remain under scrutiny.


18   Letter of 26 May 2011 from the Minister for Culture, Communications and Creative Industries (Mr Edward Vaizey) to the Chair of the European Scrutiny Committee. Back

19   Council Decision 2011/853/EU, OJ No. L 336, 20.12.2011 p.1. Back

20   Letter of 7 December 2011 from the Minister for Culture, Communications and Creative Industries (Mr Edward Vaizey) to the Chair of the European Scrutiny Committee. Back

21   See headnote. Back

22   Para 5 of the Minister's Supplementary Explanatory Memorandum. Back

23   Case C-137/12, 22 October 2013. Back

24   Para 53 of the Court's judgment. Back

25   Para 67 of the Court's judgment. Back

26   Paras 73-5 of the Court's judgment. Back

27   Para 16 of the Minister's Supplementary Explanatory Memorandum. Back

28   Paras 17-18 of the Minister's Supplementary Explanatory Memorandum. Back

29   Letter of 7 December 2011 from the Minister for Culture, Communications and Creative Industries (Mr Edward Vaizey) to the Chair of the European Scrutiny Committee. Back

30   Case C-431/11 and (32587) 7591/11, (33298) 16231/11 and (33815) 8556/12, reported in HC 83-xxvi (2013-14), chapter 7 (8 January 2014). Back


 
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Prepared 11 March 2014