Cleared from scrutiny
Proposed Regulation on the approval and market surveillance of motor vehicles and their trailers, and of systems, components and separate technical units intended for such vehicles
Article 114 TFEU, ordinary legislative procedure, QMV
(37497), 5712/16 + ADDs 1–4, COM(16) 31
13.1The Commission has proposed a framework regulation focussed on improving enforcement of vehicle type approval standards, partly in response to the September 2015 revelation that Volkswagen had been using a device to cheat type approval emissions tests. The proposal would make a number of changes to the functioning of the type approval system although, other than updating certain references in emissions regulations, it does not change the technical standards (emissions, braking, noise and so on) to which vehicles are approved. The proposal focuses instead on better enforcement of existing standards.
13.2The Committee has been scrutinising the proposal since March 2016. Most recently, in April 2017, it granted the Government a scrutiny waiver to support a General Approach at Competitiveness Council in May 2017. The Government subsequently wrote to confirm that it had supported the General Approach, and to provide an update on progress in trilogue negotiations.
13.3The Government now writes in advance of the final trilogue negotiation, to request that the Committee clear the proposal from scrutiny or grant a waiver in advance of the text being put to the Council of Ministers later this month.
13.4The Minister (Jesse Norman) notes that one issue that has not yet been fully resolved by negotiations is whether the Commission will have the power to audit national type approval authorities, something a number of Member States oppose. Regardless of the outcome on this point, the Minister states that the UK’s main objectives have been achieved. He reiterates the Government’s support for the proposal as a whole, particularly its provisions regarding market surveillance, peer review of type approval authorities and joint assessments of technical services, sharing of information between Member States and the Commission and the enhanced safeguarding clauses.
13.5Following the Minister’s letter, a provisional agreement was reached between the Parliament and the Council in the final trilogue on 7 December. A last-minute push by Germany and a number of other Member States to remove the Commission’s power to audit national type approval authorities was unsuccessful.
13.6A summary of the main provisions of the provisional agreement is provided in the final section of this chapter.
13.7We thank the Government for its update in relation to the proposed regulation. We note the Government’s support for the proposal, which includes provisions on enhanced market surveillance of vehicle approvals, peer review of type approval authorities and joint assessments of technical services and enhanced safeguarding clauses. We note the Government’s judgement that the package will restore trust in the type approval system, and that it strikes an appropriate balance between obligations on manufacturers and cost-impact on consumers.
13.8Despite the Government’s assurance that it had achieved its negotiating objectives regardless of the outcome of the final trilogue meeting, we were concerned by the efforts of Germany and a number of other Member States to remove the provision giving the Commission the power to audit national type approval authorities, and therefore welcome its retention in the text. Given the conspicuous failure of national type approval authorities to detect the anomalous practices and performance of a large number of Volkswagen and other diesel vehicles, external audit of national type approval authorities appears not only justified but necessary.
13.9In light of this, we are willing to clear the file from scrutiny. However, we emphasise that this clearance is on the understanding that scrutiny of the implications of withdrawal from the European Union for type approval processes by the UK Vehicle Certification Agency (VCA) will continue through scrutiny of other related documents, notably the proposal for a Council Decision at UN-ECE Working Party 29 (13120/17).
Proposed Regulation on the approval and market surveillance of motor vehicles and their trailers, and of systems, components and separate technical units intended for such vehicles: (37497), + ADDs 1–4, COM(16) 31.
13.10The EU has a range of harmonising legislation, applicable in the whole of the EEA, governing the type approval of automotive products destined for sale in the single market. The EU framework legislation incorporates a number of standards agreed by the United Nations Economic Commission for Europe (UN-ECE), on the formulation of which the EU and its Member States have considerable influence.
13.11The current requirements for type approval of motor vehicles and their trailers are set out in Directive 2007/46/EC, referred to as the ‘Framework Directive’. The legal frameworks for the other two automotive product categories (motorcycles and agricultural vehicles) were both revised in 2013.
13.12In 2013 the Commission completed a ‘fitness check’ of the Framework Directive which indicated that it was appropriate for the main aims of harmonisation, effective operation of the single market and fair competition, but that its effectiveness was reduced by differences in the interpretation and application between Member States.
13.13In September 2015 it was revealed that VW had been using a device to cheat type approval emissions tests. This has led to suggestions that the EU’s vehicle type approval regime needs tightening.
13.14With this proposed regulation the Commission aims to ensure that vehicle type approval and market surveillance systems for motor vehicles and their trailers are effectively achieving the policy objectives of single market integration, safety and health of citizens and protection of the environment. In presenting the proposal, the Commission notes the harsh criticism of the existing framework after the discovery of the VW issue.
13.15The proposal would make a number of changes to the functioning of the type approval system although, other than updating certain references in emissions regulations, it does not change the technical standards (emissions, braking, noise and so on) against which vehicles are approved. The changes focus on better enforcement of the existing standards, outlined below:
13.16New obligations are proposed for Member States to carry out market surveillance testing, to cooperate, to alert citizens of issues with testing and to review market surveillance activities at least every four years and report the results to other Member States and the Commission.
13.17The proposal sets out duties on manufacturers, importers and distributors to cooperate with market surveillance authorities and to show due diligence in avoiding supplying non-compliant vehicles.
13.18The proposed Regulation would provide the Commission with new powers to establish criteria setting out the scale, scope and frequency of compliance verification testing to be carried out by Member States, to establish structures for information sharing and to carry out testing itself. The latter would be funded by a new top-up fee levied on all applicants for type approval across the EU.
13.19Technical services are the bodies designated by Member States to carry out approval testing. The proposed Regulation enhances the regular assessment of these bodies and requires Member States to share the results with the Commission and other type-approval authorities. Manufacturers would in future be required to pay for testing via approval authorities rather than paying technical services directly.
13.20The proposal sets out additional powers for the Commission and Member States to challenge and refuse to accept type approvals which they believe are incorrectly issued, enhanced provisions for the suspension or withdrawal of type approval where it is thought to be incorrectly issued, as well as new powers for the Commission to rule on national measures taken under these provisions. The proposal specifies scenarios where a recall of vehicles by the manufacturer would be compulsory.
13.21The proposal sets out various enhancements to approval procedures, including compulsory five-year termination and renewal of a type approval, a more specific obligation for approval authorities to require testing of ongoing production, transparency obligations for manufacturers to aid third party testing of vehicle compliance and powers for the Commission to regulate type-approval authorities.
13.22The proposal would empower the Commission to impose administrative fines where they discover infringements of the Regulation, of up to €30,000 (£22,900) per non-compliant vehicle.
13.23On 19 April 2017, the then Parliamentary Under Secretary of State at the Department for Transport (Andrew Jones) provided the Committee with a letter updating the Committee on progress in Council Working Groups. The Government was broadly content with the outcome of negotiations, and felt that, despite early reluctance from a number of delegations, they had managed to retain the key measures of the proposal. He indicated that the Government had also succeeded in removing the provisions that crossed its red lines, notably the Commission’s proposal to fund its own testing with a levy on type approvals within Member States.
13.24The Committee’s report of 25 April 2017 summarised the progress that had been made in negotiations on an issue by issue basis and granted the Government a scrutiny waiver to support a General Approach at Competitiveness Council on 29 May 2017.
13.25The Parliamentary Under Secretary of State at the Department of Transport (Jesse Norman) informed the Committee that a General Approach was reached at the Competitiveness Council on 29 May 2017, and that the Government voted in support of the Council text, in line with the conditions of the Committee’s scrutiny waiver (“subject to the Government’s positive expectations being met”). The text of the General Approach is publicly available.
13.26The Minister stated that the one issue that was unresolved prior to the vote was the power for the Commission to fine non-compliant manufacturers where Member States have not taken action. A revision was agreed which means that the Commission retains the power to impose fines, but clarifies that the Commission cannot take action for which economic operators have been penalised so as to avoid cutting across the actions of Member States.
13.27The Minister wrote that trilogue negotiations with the European Parliament were underway, and progressing well. He noted that the repair and maintenance provisions were one potentially difficult area for the negotiations, as the Parliament and the Council’s positions were particularly far apart.
13.28On 5 December 2017 the Minister wrote to us to notify us that, although trilogue negotiations had not fully concluded, they were expected to do so on 7 December. COREPER would then consider the final text in mid-December before the proposal was put to the Council of Ministers in late December or early in the new year. As the Minister felt that there would not be enough time for the Committee to consider his update before a decision was made if he waited until the final trilogue meeting had taken place, he chose to write at this point in the process, to seek clearance or a scrutiny waiver from the Committee.
13.29By way of background, the Minister provides a helpful overview of the history of this proposal. He reminds the Committee that the Government was supportive of the original proposal, particularly its provisions regarding market surveillance, peer review of type approval authorities and joint assessments of technical services, the forum for the sharing of information between Member States and the Commission, and the enhanced safeguarding clauses.
13.30The Minister states that, as set out in Andrew Jones’ letter of 19 April, the Government was broadly content with working group negotiations on these issues and the General Approach which was agreed in May. The Government considered that this text managed to retain the key measures of the proposal, against the early reluctance from a range of delegations, and that the Government succeeded in removing the few provisions which it considered to be unhelpful.
13.31Regarding trilogue negotiations, the Minister states that the European Parliament’s position on the proposal was more radical than the Council General Approach. Changes to the Council text that have been secured are:
13.32The Minister states that one issue that has not yet been fully resolved, and was set to be discussed at a trilogue meeting on 7 December, was the role of the Commission in audits of type approval authorities. The Government indicates that it “would welcome further improvements in these areas”, without specifying what such improvements would look like, and asserts that it “recognise[d] that compromise between the two positions was necessary”, without specifying what these positions were.
13.33In summary, the Minister states that:
13.34On this basis the Minister requests that the Committee clear the file from scrutiny or grant a waiver.
13.35The final trilogue negotiation took place on 7 December 2017. As the Minister had expected, the role of the Commission in audits of type approval authorities was the key issue of the negotiations.
13.36The day before the trilogue took place, a news report suggested that Germany was leading a ‘rearguard action’ to keep European Commission auditors out of its domestic car-approval process:
“In a late amendment to the Council position, Germany called for its vehicle-approval authority, the KBA, to have the power to select another technical service to carry out the checks on a random basis, rather than involving the Commission. In its proposed text … Berlin said that “any kind of audit means extra bureaucracy without being beneficial.”
“That would scrap the Commission’s power to check up on the KBA and its peers. But that crosses a red line for MEPs who want to clamp down on national regulators, widely seen as being at fault in failing to catch Volkswagen’s cheating. The carmaker was in 2015 caught by tougher U.S. authorities.”
13.37However, the report also suggested that it appeared likely that the German effort would be unsuccessful, on the grounds that the Estonian presidency’s position of allowing checks every five years had the support of a majority of countries, who were keen to see political agreement on new controls.
13.38A provisional agreement was reached at the final trilogue which will now be submitted to COREPER for endorsement. Under the agreed rules, the European Commission would be allowed to carry out checks on national authorities every five years.
13.39In order to provide an overview of the effects of the regulation in its updated form, the key provisions of the regulation agreed in trilogue negotiations are summarised below:
138 Fortieth Report HC 71–xxxvii (2017–18), (25 April 2017).
139 Letter from the Minister of State at DfT to the Chairman ().
140 —General Approach as formally agreed by the Competitiveness Council on 29 May 2017.
141 Letter from the Minister of State at DfT to the Chairman ().
142 £1 = €1.336, or £0.8821 = €1 as at 31 October
143 Letter from the Minister, DfT, to the Chairman ()
144 Fortieth Report HC 71–xxxvii (2017–18), (25 April 2017).
145 Letter from the Minister, DfT, to the Chairman of the Committee ()
146 —General Approach as formally agreed by the Competitiveness Council on 29 May 2017.
147 Letter from the Minister, DfT, to the Chairman (5 December 2017).
148 Letter from the Minister, DfT, to the Chairman ().
149 Politico Pro, Germany fights a rear-guard action to weaken EU car-approval rules () (paywall).
150 Council of the European Union, Car emission controls: Council presidency and Parliament reach provisional deal on reform of type-approval and market surveillance system ().
151 Politico Pro, Type approval trilogue deal reached after four-hour session () (Paywall).
15 December 2017