Documents considered by the Committee on 17 January 2018 Contents

2International cooperation to combat match-fixing

Committee’s assessment

Legally and politically important

Committee’s decision

Not cleared from scrutiny; further information requested; drawn to the attention of the Digital, Culture, Media and Sport Committee

Document details

(a) Proposal for a Council Decision on the conclusion, on behalf of the European Union, of the Council of Europe Convention on the manipulation of sports competitions with regard to matters not related to substantive criminal law and judicial cooperation in criminal matters;

(b) Proposal for a Council Decision on the conclusion, on behalf of the European Union, of the Council of Europe Convention on the manipulation of sports competitions with regard to matters related to substantive criminal law and judicial cooperation in criminal matters

Legal base

(a) Articles 114, 165 and 218(6)(a) TFEU, EP consent, QMV; (b) Articles 82(1), 83(1) and 218(6)(a) TFEU, EP consent, QMV

Department

Digital, Culture, Media and Sport

Document Numbers

(a) (38991), 11723/17, COM(17) 387

(b) (38992), 11724/17, COM(17) 386

Summary and Committee’s conclusions

2.1The Council of Europe Convention on the Manipulation of Sports Competitions (“the Convention”) was agreed in July 2014 and opened for signature shortly afterwards, in September 2014. Its purpose is to protect the integrity of sport and sports ethics by establishing a range of measures to prevent, detect and sanction match-fixing which apply, variously, to public authorities, sports governing organisations, competition organisers, and those providing sports betting services. The Convention is open for signature by Member States of the Council of Europe, the EU and certain third countries. So far, 21 EU Member States (not including the UK) have signed and one (Portugal) ratified the Convention.12

2.2Council Decisions agreed in 2013 authorised the Commission (alongside Member States) to take part in the negotiations leading to the adoption of the Convention, but only on those matters falling within EU competence, as set out in accompanying negotiating directives. A recital to both Decisions provided:

“In the case that the EU decides to join the future Convention, the legal nature of the Convention and distribution of the powers between the Member States and the Union will be determined separately at the end of the negotiations on the basis of an analysis of the precise scope of the coverage of the individual provisions.”13

2.3In May 2015 the Commission proposed two Council Decisions authorising the EU to sign the Convention, accompanied by a competence analysis which sought to clarify whether the Convention dealt with areas of policy or law falling within the exclusive competence of the EU (meaning that only the EU, not Member States, could act) or areas of shared competence (meaning that either the EU or Member States could act). The Council was unable to reach agreement and the proposed Decisions were not adopted.14 The EU has not therefore signed the Convention.

2.4The Commission’s latest proposals (published in August 2017) would authorise the EU to conclude (ratify) the Convention and enable the EU to participate in its own right. Two Council Decisions are required to reflect the different areas of EU competence covered by the Convention and the different procedures to be followed for their adoption. The first—document (a)—covers those elements of the Convention which fall within the powers conferred on the EU by Article 114 (the internal market) and Article 165 (sport) of the Treaty on the Functioning of the European Union (TFEU). The second—document (b)—covers those elements dealing with criminal law, judicial cooperation and law enforcement which fall within the scope of Articles 82(1) and 83(1) TFEU (judicial cooperation in criminal matters). These Articles are subject to the UK’s Title V (justice and home affairs) opt-in, meaning that the UK is not bound to participate in the second Council Decision unless it chooses to opt in, but will be bound by the first Decision if it is adopted. The full text of the Convention is annexed to both the proposed Council Decisions.

2.5The UK did not opt into the earlier proposed Council Decision establishing the Commission’s negotiating mandate or the proposed Council Decision authorising the EU to sign up to the criminal law elements of the Convention. The Government disagreed with the Commission’s view that the EU had exclusive competence for two provisions of the Convention: the parts of Article 11 dealing with illegal sports betting services provided from and to third countries and Article 14 on data protection. It considered that the Convention covered areas of shared competence, that Member States and not the EU should act in areas of shared competence and that the Commission had failed to provide a clear rationale for the EU to participate in the Convention.

2.6The Minister for Sport and Civil Society (Tracey Crouch) accepts that the EU may have “a yet to be determined role to play” in combatting match-fixing and that “it is legitimate for the EU to act where it has exclusive competence” but disputes the Commission’s view that the Convention covers areas in which the EU has exclusive competence. She questions “what value the EU could add over and above Member States’ efforts” and whether it is necessary for the EU to participate in the Convention given that Article 165 TFEU only empowers the EU to encourage cooperation and support and supplement Member State action in the field of sport and excludes any harmonisation of national laws.

2.7The Minister notes that document (b) on the criminal law aspects of the Convention is subject to the UK’s Title V (justice and home affairs) opt-in and that the Government has decided not to opt in.

2.8The Minister has not complied with the commitments set out in the Government’s Code of Practice on scrutiny of opt-in decisions.15 Her Explanatory Memorandum, submitted on 15 December 2017, is three months overdue. It does not set out the date on which the three-month opt-in period will expire or the factors likely to influence the Government’s opt-in decision. The delay means that the Government has failed to comply with its own undertaking to ensure that the Scrutiny Committees have an eight-week period in which to consider the factors informing the Government’s opt-in decision and express a view before a final decision is reached. Nor has the Minister complied with the provisions of the Code which require her to write to inform the Committees of the Government’s decision not to opt in “as soon as it has been reached” and to publish a Written Ministerial Statement setting out the reasons.

2.9A similar lapse occurred during scrutiny of the proposed Council Decisions on signature of the Convention. The Minister told our predecessors in January 2016 that she was “mortified” at the delay, that “lessons have been learned”, that appropriate processes had been put in place “so this is never repeated” and that her Department would in future ensure full compliance with the Code of Practice.16 We ask the Minister to provide a full explanation of the reasons for this second lapse and to tell us:

2.10The proposed Council Decision on the criminal law elements of the Convention—document (b)—does not include a recital making clear that the UK’s Title V opt-in Protocol applies. We ask the Minister to ensure that that an appropriate recital is added. We also ask her to explain the legal and practical implications for the UK of being bound by the first proposed Council Decision—document (a)—but not the second.

2.11When our predecessors examined the earlier proposed Council Decisions on signature, they supported the Government in resisting further EU encroachment in areas of shared or supporting competence, questioned whether EU action in these areas would produce clear “added value” and suggested that a degree of caution was warranted, given the Commission’s reticence to use its existing internal market powers to harmonise gambling laws and practices across the EU. They nevertheless considered that:

Our predecessors’ analysis of areas of exclusive EU competence is set in out in the Annex to this chapter. We see no reason to depart from their analysis.

2.12The Minister indicates that the Commission is asserting exclusive EU competence in two areas: data protection (relevant to Article 16 TFEU) and the provision of illegal sports betting services to and from third countries (relevant to Article 207 TFEU on the common commercial policy). Recital (2) of the proposed Council Decision on the criminal law aspects of the Convention—document (b)—suggests that the Commission also considers that the EU has exclusive competence for the money laundering aspects of the Convention. We ask the Minister:

2.13During negotiations on the earlier proposed Council Decisions on signature, Member States succeeded in limiting EU participation in the Convention through the addition of new recitals clarifying that the EU was only authorised to act in areas where it had exclusive competence and through the removal of Article 114 TFEU as the legal base for the proposed Decision dealing with the non-criminal law aspects of the Convention. The Minister considered that this would “reduce the risk of political momentum in favour of EU harmonising legislation in the area of gambling”. None of these changes appear in the proposed Council Decisions concluding (ratifying) the Convention. We ask the Minister to explain the reason for these omissions and their significance in terms of EU involvement in implementing the Convention. We also ask her whether she intends to press for changes to the substantive legal base of document (a) so that it only cites Article 165 TFEU, a supporting competence which precludes any harmonisation of national laws.

2.14We invite the Minister to clarify the timing and sequence envisaged for agreeing EU participation in the Convention and to explain, in particular, why the Commission has presented for adoption proposed Council Decisions on the conclusion of the Convention when the earlier Decisions on signature have not yet been adopted and whether it would be feasible to proceed directly to conclusion without first authorising the EU to sign the Convention.

2.15The Minister made clear in 2015 that the Government intended to accede to the Convention but said that signing it in a national capacity would be contrary to the “duty of sincere cooperation” (set out in Article 4(3) of the Treaty on European Union) until the question of EU participation had been resolved.19 We ask her whether this remains the Government’s position, even though it is not disputed that most of the provisions of the Convention do not fall within the EU’s exclusive competence and most (21) Member States have already signed it. Are there any other factors, apart from the unresolved question of EU participation, which are impeding the UK from signing?

2.16Pending further information, we are holding the proposed Council Decisions under scrutiny. We draw this chapter to the attention of the Digital, Culture, Media and Sport Committee.

Full details of the documents

(a) Proposal for a Council Decision on the conclusion, on behalf of the European Union, of the Council of Europe Convention on the manipulation of sports competitions with regard to matters not related to substantive criminal law and judicial cooperation in criminal matters: (38991), 11723/17, COM(17) 387; (b) Proposal for a Council Decision on the conclusion, on behalf of the European Union, of the Council of Europe Convention on the manipulation of sports competitions with regard to matters related to substantive criminal law and judicial cooperation in criminal matters: (38992), 11724/17, COM(17) 386.

Background

2.17The Explanatory Report accompanying the Convention explains the reasons for establishing an international agreement to tackle match-fixing.20 It notes that “greater commercialisation of sport and the extensive media coverage given to it have led to an increase in the economic stakes involved in achieving certain sport results”. The incidence of match-fixing has risen significantly since the early 2000s, prompted in part by a proliferation of different types of betting which are easier to manipulate and harder to detect by supervisory authorities, as well as the development of a large illegal market and the involvement of organised crime.

2.18The Convention establishes a set of commonly agreed standards and principles to prevent, detect and punish match-fixing. It includes provisions on:

The proposed Council Decisions

2.19The Commission describes match-fixing as “one of the major threats facing contemporary sport”, undermining “integrity, fair play and respect for others”. The involvement of organised crime networks means that match-fixing has become “a priority for public authorities, the sport movement and law enforcement agencies worldwide”.21 It considers that EU participation in the Convention would form an important part of the EU’s wider efforts to protect the integrity of sport and combat match-fixing.

2.20The Commission sets out its analysis of the nature and scope of EU competence for matters covered by the Convention. It identifies six legal bases in the EU Treaties which may be relevant:

2.21Article 165 TFEU enables the EU to “contribute to the promotion of European sporting issues”, with a particular focus on “promoting fairness and openness in sporting competitions and cooperation between bodies responsible for sports” as well as “protecting the physical and moral integrity of sportsmen and sportswomen” and fostering co-operation with relevant international organisations, notably the Council of Europe. However, EU competence is limited in scope, excluding any harmonisation of Member States’ laws and “supporting and supplementing” rather than superseding Member State action.

2.22The Commission suggests that measures relating to betting services “may touch upon the internal market freedoms concerning the right of establishment and the freedom to provide services, to the extent that betting operators exercise an economic activity” and that certain provisions of the Convention (Articles 9–11) concerning the regulation of sports betting and sports betting operators “could lead to a certain degree of approximation of laws” and provide a basis for the harmonisation of laws under Article 114 TFEU. It considers that Article 11 of the Convention may affect illegal sports betting services provided from a third country and fall within the scope of the EU’s common commercial policy under Article 207 TFEU.

2.23The Commission accepts that certain criminal offences provided for in the Convention are “currently not covered by Article 83(1) TFEU”.22 It considers, however, that the EU does have competence for money laundering (Article 16 of the Convention) based on various EU measures adopted under Articles 83(1) and 114 TFEU. It also considers that the criminal procedural provisions of the Convention dealing with electronic evidence, protection measures and seizure and confiscation (Articles 20, 21 and 25) “may be covered” by Article 82(2)(a) and (b) TFEU.

2.24The Commission notes that the Convention “does not contain any legal regime that would replace existing rules, and it is therefore without prejudice to instruments which already exist in the field of mutual assistance in criminal matters and extradition”. It lists “a comprehensive set” of EU instruments which facilitate judicial cooperation in criminal matters and would apply to the different aspects of match-fixing covered by the Convention or to any new match-fixing offence.23

2.25The Commission concludes its analysis of EU competence:

“Certain offences are currently not covered by Article 83(1) TFEU. The Union has competence over the rest, but is exclusive only over two provisions—Article 11 (to the extent that it applies to services from and to third countries) and Article 14 on data protection (in part). The remainder is shared or ‘supportive’ competence.”24

2.26The Commission sets out the legal test applied by the Court of Justice to determine the appropriate legal base for EU measures, based on the identification of the main or predominant purpose. It concludes that the main legal bases for the criminal law elements of the Convention are Articles 82(1) and 83(1) TFEU, and that the remaining elements of the Convention are covered by Articles 114 and 165 TFEU. The Commission considers that Article 207 TFEU is “ancillary to the internal market aspects” and so does not need to be cited as a legal base, but makes clear that Member States have no competence for parts of the Convention which are within the scope of the EU’s common commercial policy.25 Similarly, the Commission considers that data protection is “incidental” to the main objective of the Convention but that this too, in part, is an area of exclusive EU competence.

2.27The Commission recognises that the Convention straddles areas of EU and Member State competence, noting:

“It follows from the intertwined nature of the Convention, and the fact that it involves competences which may be exclusive [to] the EU and competences not granted to the EU, that it is not possible for the Union or the Member States to conclude the Convention in isolation.”26

2.28The outcome of the Commission’s legal analysis is two proposed Council Decisions, the first—document (a)—citing Articles 114 and 165 TFEU as the legal bases for elements of the Convention not involving criminal law and judicial cooperation, the second—document (b)—citing Articles 82(1) and 83(1) TFEU. Both also cite a procedural legal base—Article 218(6)(a) TFEU—which determines how both instruments are to be adopted by the Council.

2.29The recitals to each proposed Council Decision seek to clarify which provisions of the Convention fall within EU competence. The first—document (a)—indicates that:

2.30The recitals to the second proposal—document (b)—indicate that:

2.31The proposal does not include a recital establishing that the UK’s Title V (justice and home affairs) opt-in applies.

The Minister’s Explanatory Memorandum of 15 December 2017

2.32The Minister agrees with the Commission that match-fixing and the manipulation of sports competitions pose a “significant threat” to the integrity of global sport. She considers the Convention to be “a potentially powerful tool in combating match-fixing”, given the global nature of sport and sports betting and the involvement of international criminal networks, and is “broadly content” with its provisions which she describes as “primarily risk-based” and respectful of “differences of each territory’s gambling market and methods of regulation”.27 She highlights the UK’s leading role in combatting match-fixing and the importance of sharing expertise and raising standards in other countries, adding:

“Combating match-fixing effectively requires a co-ordinated multi-agency approach—involving the sports movement, governments, betting operators, law enforcement authorities and international organisations—and the scope of the Convention is therefore wide-ranging, incorporating areas such as data protection as well as JHA [justice and home affairs]—as reflected in these two Council Decision proposals.”28

2.33The Minister explains that the UK is already “broadly compliant” with the main provisions of the Convention and does not expect it to “impose any new unwelcome measures on the UK”, although some changes may be required to UK criminal law to ensure compliance with Article 15 on criminal offences.29 She notes that the UK has already fulfilled one of the key requirements of the Convention by launching (in 2014) an independent Sports Betting Integrity Forum which brings together all the key actors in the UK (such as sports bodies, betting operators, the Gambling Commission and law enforcement representatives).

2.34The UK participated in the negotiation of the Convention and intends to become a signatory in its own right. The Minister adds:

“[…] in so doing, we will be joining the number of other EU Member States who have already become signatories. However, EU Member States are unable to ratify and implement the Convention’s provisions until such time as the EU’s participation is resolved. This is in line with the duty of sincere cooperation. It is important to note that one EU Member State, Portugal, has gone ahead and ratified the Convention, however, in so doing, has not adhered to the sincere duty of cooperation—there have been no consequences as a result of this to-date.”30

2.35Whilst the Government accepts that the EU could have “a yet to be determined role to play in the fight against match-fixing which complements the Council of Europe’s efforts”, the Minister says that it is “not clear what value the EU could add over and above Member States’ efforts that goes beyond providing a platform to exchange best practice”. She continues: “It is arguable that the Commission does not need to be a Convention signatory for this purpose.”31

2.36The Minister expands on her reservations as to the necessity of EU participation in the Convention. Whilst she accepts that the proposed Council Decisions are “arguably within the boundaries of the legal bases cited”, she considers that the Commission “has not explained why any of the obligations in the Convention (other than those where it considers the EU has exclusive competence) need to be carried out at EU level and not at Member State level.”32

2.37As well as raising subsidiarity concerns, the Minister also questions the Commission’s assertion that the EU has exclusive competence (albeit limited) for elements of the Convention. She considers that the proposed Council Decisions authorising the EU to conclude the Convention go further than the earlier Decisions on signature. This is because Member States succeeded in securing the addition of a recital in each of the proposed Council Decisions on signature which limited EU competence to provisions of the Convention affecting common EU rules or altering their scope, the intention being only to authorise the Commission to exercise powers in the limited areas where the EU had exclusive competence, with Member States acting in areas of shared competence.33 In addition, Article 114 TFEU was removed as a legal base for the proposed Decision on the non-criminal law aspects of the Convention. On this basis, the Government was willing to support EU signature of the Convention. Neither Decision on signature was adopted, however, because of “Malta’s reluctance to allow the EU to accede to the Convention on any basis”.34

2.38By contrast, the Commission’s explanatory memorandum accompanying the proposed Council Decision indicates that it is seeking to exercise competence in areas of shared and exclusive competence.35 The Minister considers that language limiting the EU’s competence should be included as a substantive provision in document (a) but doubts whether this will be achievable.

2.39The Minister makes clear that “it is legitimate for the EU to act where it has exclusive competence” but does not accept that the Commission has established exclusive EU competence for matters covered by the Convention. She says that “the exact division of competence” will require further discussion but notes that the most relevant Treaty provision—Article 165 TFEU—“only provides the EU with a supporting, co-ordinating and supplementing competence for sport. Harmonisation of Member States’ regulations or legislation on sport is explicitly excluded by the terms of the Article and so the EU’s competence does not supersede that [of Member States] in this area”.36

2.40The Minister notes that the proposed Council Decision on the criminal law aspects of the Convention—document (b)—triggers the UK’s Title V (justice and home affairs) opt-in. She says that the Government has decided not to opt in. Whilst she does not set out the factors informing the Government’s decision, she indicates that opting in would likely require changes to UK criminal law to give effect to the provisions in Article 19 of the Convention on extra-territorial jurisdiction. This is because the EU would be unlikely to enter a reservation under Article 19 to limit the scope of extraterritorial jurisdiction for match-fixing offences. By not opting in to the proposed Council Decision, this possibility would remain open to the UK.

2.41The Minister explains that the voting procedure in Council for both proposed Decisions is a qualified majority but says the Government shares the Council Legal Service view that a consensus is needed before proceeding to a vote, as the Convention is a “mixed agreement” (covering areas of EU and Member State competence). She notes that the proposals were discussed by a Council Working Party on Sport in September but have made no further progress. The UK has entered a scrutiny reservation and made clear that it will not opt into the proposed criminal law Decision. She anticipates that there may be an impasse on the proposals on conclusion as well as the earlier proposals on signature of the Convention for the same reason—“Malta’s reluctance to allow the EU to accede to the Convention on any basis”.37

Annex: Our predecessors’ analysis of areas of exclusive EU competence

The Commission’s claim for exclusive competence in respect of the data protection provisions in the Convention (Article 14) is based on the fact that these provisions may affect the EU’s internal rules on data protection.38 The Minister’s Explanatory Memorandum sets out the Government’s view that the Convention does not “adversely affect or otherwise require any changes to be made to EU internal rules on data protection.”39 However, the Court of Justice has made it clear that internal rules can be “affected”, even if they are consistent with the relevant international agreement. Moreover, EU exclusive competence can arise if the subject matter of the international agreement is “largely covered” by EU internal legislation, as is, arguably, the case with existing EU data protection legislation.

The Commission claims that the incidence of the Convention on trade with third countries falls within the scope of the EU’s common commercial policy which, in itself, is a matter of EU exclusive competence. The Minister asserts that the relevant provisions of the Convention (in Article 11) requiring closure of remote sports betting operations if their activity is illegal where the consumer is located (even if not illegal where the operator is located), the blocking of financial flows and the prohibition of advertising, do not have any effect on international trade. However some effect on international trade in betting appears likely, albeit one tainted with illegality.

The matter is potentially the subject of litigation before the Court of Justice. However that Court often takes what may be regarded as an expansive view of EU exclusive competence.40

Previous Committee Reports

None on these documents. Earlier Committee Reports on proposed Council Decisions to sign the Council of Europe Convention on the manipulation of sports competitions are relevant: Thirty-ninth Report HC 219–xxxvii (2014–15), chapter 1 (24 March 2015), Thirteenth Report HC 342–xiii (2015–16), chapter 3 (9 December 2015) and Twenty-first Report HC 342–xx (2016–17), chapter 9 (27 January 2016).


12 See the full list of signatures and ratifications.

13 See recital (6) of Council Decision 2013/304/EU and recital (8) of Council document 10180/13.

14 Although the procedure for adopting the proposed Decisions only requires a qualified majority, the Council Presidency at the time made clear that it would only proceed with the consent of all participating Member States.

15 See the Code of Practice which is included as Annex S to Cabinet Office guidance on parliamentary scrutiny of EU documents.

16 See the Minister’s letter of 20 January 2016 to the Chair of the European Scrutiny Committee.

17 See their Thirty-ninth Report HC 219–xxxvii (2014–15), chapter 1 (24 March 2015).

18 We have in mind the Court of Justice Opinion on EU participation in the Marrakesh Treaty, Opinion 3/15 issued on 14 February 2017.

19 See the Minister’s letter of 29 November 2015 to the Chair of the European Scrutiny Committee.

20 Explanatory Report accompanying the Convention.

21 See p.2 of the Commission’s explanatory memorandum accompanying the proposed Council Decisions.

22 See p.5 of the Commission’s explanatory memorandum accompanying the proposed Council Decisions.

23 See pp. 4–5 of the Commission’s explanatory memorandum accompanying the proposed Council Decisions.

24 See p.5 of the Commission’s explanatory memorandum accompanying the proposed Council Decisions.

25 The Commission’s analysis makes no reference to Opinion 3/15 of the Court of Justice on EU participation in the Marrakesh Treaty to Facilitate Access to Published Works for Persons Who Are Blind, Visually Impaired, or Otherwise Print Disabled. The Court concluded that Article 207 TFEU was not an appropriate legal base for a Council Decision authorising the EU to conclude the Marrakesh Treaty, stating: “It must therefore be held that the conclusion of the Marrakesh Treaty does not fall within the common commercial policy defined in Article 207 TFEU and, consequently, that the European Union does not have exclusive competence under Article 3(1)(e) TFEU to conclude that Treaty”.

26 See p.6 of the Minister’s Explanatory Memorandum.

27 See paras 23–4 and 27 of the Minister’s Explanatory Memorandum.

28 See para 26 of the Minister’s Explanatory Memorandum.

29 See para 27 of the Minister’s Explanatory Memorandum, as well as para (iv) under the heading Legal and Procedural Issues.

30 See para 29 of the Minister’s Explanatory Memorandum.

31 See para 31 of the Minister’s Explanatory Memorandum.

32 See para (i) under the heading Legal and Procedural Issues.

33 The recital to the proposed Decision on the criminal law aspects of the Convention stated that the EU should only participate in the Convention “as regards matters falling within the Union’s competence insofar as the Convention may affect these common rules or alter their scope. The Member States retain their competences insofar as the Convention does not affect common rules or alter the scope of such rules”. The recital to the proposed Council Decision on the non-criminal law aspects of the Convention stated that the EU would “not be exercising shared competence, hence Member States retain their competence in the areas covered by the Convention which do not affect common rules or alter the scope of such rules”.

34 See paras 12 and 35 of the Minister’s Explanatory Memorandum.

35 See para (v) of the Minister’s Explanatory Memorandum under the heading Legal and Procedural Issues

36 See para 30 of the Minister’s Explanatory Memorandum and para (v) under the heading Legal and Procedural Issues.

37 See paras 12 and 35 of the Minister’s Explanatory Memorandum.

38 Article 3(2) TFEU.

39 See para 18 of the Minister’s Explanatory Memorandum.

40 For a recent example see Opinion 1/13.




19 December 2018