Documents considered by the Committee on 18 March 2015 - European Scrutiny Contents

18 Regulation of new psychoactive substances

Committee's assessment Legally and politically important
Committee's decisionNot cleared from scrutiny; further information requested
Document details(a) Draft Regulation on new psychoactive substances; (b) Draft Directive amending Framework Decision 2004/757/JHA 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


Document numbers

Home Office

(a) (35324), 13857/13 + ADDs 1-2, COM(13) 619

(b) (35325), 13865/13 + ADDs 1-2, COM(13) 618

Summary and Committee's conclusions

18.1 A Council Decision adopted in 2005 ("the 2005 Council Decision") established a mechanism for the exchange of information on new psychoactive substances, risk assessments, and the introduction of EU-wide control measures and criminal penalties.[43] Document (a) — the draft Regulation — would repeal and replace the 2005 Council Decision and establish a new framework for EU-wide regulation of new psychoactive substances which present moderate or severe health, social and safety risks, whilst providing 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.

18.2 The draft Directive is a Title V (EU criminal law) measure and is subject to the UK's Title V opt-in Protocol. By contrast, the draft Regulation cites an internal market legal base, largely on the strength of the Commission's assertion that there is a significant legitimate trade in new psychoactive substances for commercial, medicinal or research purposes. The Government disputes this, describing the trade as "overwhelmingly illicit". It considers that the draft Regulation (like the draft Directive) should cite a Title V criminal law legal base. It also argues that both proposals build on provisions of the 1990 Schengen Implementing Convention and are therefore subject to the UK's Schengen opt-out Protocol. The Government confirmed in January 2014 that it had notified the Council of its decision to opt out of the draft Regulation and the draft Directive.[44]

18.3 In our earlier Reports, we reviewed the draft Regulation and Directive for compliance with the principle of subsidiarity and concluded that the regulatory framework proposed by the Commission would fetter Member State action to an unacceptable degree. Our draft Reasoned Opinion was debated and agreed to by the House of Commons on 11 November 2013. We have also sought further information from the Government on a number of issues, including the appropriate 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.

18.4 In April 2014, the European Parliament agreed its first reading position on the draft Regulation. The Government considered that the changes proposed to the draft Regulation were "helpful, but not sufficient to mitigate our concerns that these proposals fetter the UK's legislative freedom to respond to the complex challenges posed by new psychoactive substances. This is because the UK would still need to effectively seek approval from the EU to control such substances unilaterally".[45]

18.5 Negotiations continue within the Council. We have asked the Government to seek a legal opinion from the Council Legal Service to inform discussions on the legal base for the draft Regulation.

18.6 In her latest letter, the Minister for Crime Prevention (Lynne Featherstone), noting (wrongly) that we have cleared both proposals from scrutiny, provides an update on negotiations, describes the Government's reservations about some aspects of the changes proposed by the European Parliament, and explains the "helpful" contribution made by the Council Legal Service.

18.7 We remind the Minister that these proposals remain under scrutiny. As our earlier Reports have consistently made clear, the choice of legal base has particular significance since it will determine whether the draft Regulation is essentially an internal market or a criminal law measure, and whether the UK's Title V (justice and home affairs) opt-in Protocol applies. We are unlikely to clear the proposals from scrutiny until a satisfactory outcome on the legal base has been achieved within the Council and the Government is able to tell us which of the UK's Title V opt-in or Schengen opt-out Protocols apply and how this will be reflected in the recitals to the draft Regulation and the draft Directive.

18.8 We note that the Government appears to have made some headway in securing support within the Council for a Title V legal base. We ask the Minister to ensure that we have sight of any alternative compromise text being prepared by the Latvian Presidency so that it can be considered by our successor Committee before the Council is invited to agree a general approach. Meanwhile, the draft Regulation and draft Directive remain under scrutiny and we look forward to receiving further progress reports.

Full details of the documents: (a) Draft Regulation on new psychoactive substances: (35324), 13857/13 + ADDs 1-2, COM(13) 619; (b) 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: (35325), 13865/13 + ADDs 1-2, COM(13) 618.

Background and previous scrutiny

18.9 Psychoactive substances — often referred to as "legal highs" — affect the central nervous system and functioning of the brain, inducing changes in mood, perception and behaviour similar to those associated with the consumption of illicit drugs. Whilst their composition and effects are often unclear, they can be toxic, addictive, damaging to health and carry longer-term social risks, not least because of the involvement of organised crime groups in their distribution. The market in new psychoactive substances is highly adaptable, responding rapidly to the imposition of new drug controls.

18.10 The Commission considers that the 2005 Council Decision establishing the existing EU regulatory framework for new psychoactive substances is inadequate on the grounds that: it is too reactive, following rather than anticipating developments in the market; it lacks the flexibility to respond quickly to changes in the chemical composition of new psychoactive substances; and it only provides for criminal sanctions even though lighter risk management options might be beneficial in some cases. The Commission also highlights the risk that divergent national approaches to new psychoactive substances may impede their legitimate use (for example, for commercial, industrial or scientific research and development purposes) or divert trade in harmful substances from one Member State to another, thereby fragmenting the internal market.

18.11 The Government argues that the draft Regulation, like the draft Directive, should cite a Title V (criminal law) legal base on the grounds that trade in new psychoactive substances is "overwhelmingly illicit" and that the aim and content of the proposal falls within the scope of Article 83(1) of the Treaty on the Functioning of the European Union (TFEU) because it concerns an area of "particularly serious crime with a cross-border dimension". It also considers that both measures build on the Schengen acquis and are therefore subject to the UK's Schengen opt-out Protocol. We have questioned the basis for this assertion and noted that the UK appears to be alone in regarding the proposals as Schengen-building measures. The Government nevertheless notified its decision to opt out of both proposals in January 2014. Although the Council and Commission do not accept that the draft Regulation is a Schengen-building measure and, as a result, have not followed the procedures set out in the Schengen Protocol following notification of the UK's opt-out, the Government told us:

"Nevertheless, we do not consider the Schengen Protocol to be deprived of effect simply by virtue of the draft Regulation's failure to recognise that it builds upon the Schengen acquis. Other Member States do, of course, share many of our concerns about the scope of the measure, legal basis, and its impact on national ability to control harmful drugs, and we expect the measure to evolve significantly before adoption."[46]

18.12 We have questioned the practical utility and effect of the Schengen Protocol in this case since, if its application is not accepted by the Commission and other Member States, the UK will be automatically bound by the draft Regulation unless it is amended to cite a Title V legal base, thereby bringing the UK's Title V opt-in into play, or the UK is able to establish in legal proceedings before the Court of Justice that the Regulation is a Schengen-building measure.

The Minister's letter of 10 March 2015

18.13 The Minister (Lynne Featherstone) notes that negotiations are continuing within the Council and that "the final form and legal base of the draft measure has yet to be agreed". She adds:

    "We continue to press for all elements of the measure to have an appropriate Justice and Home Affairs legal base and for proportionate EU level action that enhances information sharing while protecting Member States' national competence.

    "I have previously highlighted our work with a group of like-minded partners to challenge the core objectives and legal base of the measure. This is delivering results, and last month fifteen Member States (including the United Kingdom) delivered a coordinated message that we could not support action under an internal market legal base. In response, the Latvian Presidency are drafting an alternative measure based on a Justice and Home Affairs legal base. This is a significant milestone."

18.14 We asked the Minister to clarify how changes proposed by the European Parliament, which are intended to enable Member States to introduce or maintain stricter rules on new psychoactive substances domestically, would apply in practice. The Minister explains that the mechanism suggested by the European Parliament (which requires Member States to communicate the relevant domestic measures to the Commission and other Member States) has not yet been discussed by the Council, and adds that "there has been no agreement on its form or necessity". She expresses concern that the European Parliament's proposals would require Member States to notify the Commission of their intention to control an illicit substance under the Technical Standards Directive, adding:

    "This would potentially require Member States to impose a stand still period in order to allow the Commission and Member States to challenge potential impediments to free trade. This is clearly inappropriate for illicit substances, and we are working with European partners to advocate an alternative mechanism. One that enhances Member States' collective understanding of the rapidly changing market in new psychoactive substances, but which removes any stand still period or de facto legislative veto."

18.15 The Minister notes that the Council Legal Service has not produced a written legal opinion on the proposals, but continues:

    "However, they have provided a series of verbal opinions on the potential harmonisation risk to Member States' national competence posed by an internal market legal base, and on the relative benefits of an alternative Justice and Home Affairs legal base. This has been a helpful development, and has supported the Government in advocating for a change in legal base."

Previous Committee Reports

Second Report HC 219-ii (2014-15), chapter 6 (11 June 2014); First Report HC 219-i (2014-15), chapter 15 (4 June 2014); Forty-fourth Report HC 83-xxxix (2013-14), chapter 7 (26 March 2014); Thirty-first Report HC 83-xxviii (2013-14), chapter 7 (22 January 2014); Twenty-sixth Report HC 83-xxiii (2013-14), chapter 11 (4 December 2013); Nineteenth Report HC 83-xviii (2013-14), chapter 8 (23 October 2013).

43   Council Decision 2005/387/JHA, OJ No. L 127, 20.05.2005. Back

44   See letter of 13 January 2014 from the then Minister for Crime Prevention (Norman Baker) to the Chair of the European Scrutiny Committee and his Written Ministerial Statement of the same date (HC Deb, col. 22WS). Back

45   Letter of 3 June 2014 from the then Minister for Crime Prevention (Norman Lamb) to the Chair of the European Scrutiny Committee. Back

46   Letter of 19 March 2014 from the then Minister for Crime Prevention (Norman Baker) to the Chair of the European Scrutiny Committee. Back

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