Documents considered by the Committee on 28 February 2018 Contents

Meeting Summary

The Committee looks at the significance of EU proposals and decides whether to clear the document from scrutiny or withhold clearance and ask questions of the Government. The Committee also has the power to recommend documents for debate.

Brexit-related issues

The Committee is now looking at documents in the light of the UK decision to withdraw from the EU. Issues are explored in greater detail in report chapters and, where appropriate, in the summaries below. The Committee notes that in the current week the following issues and questions have arisen in documents or in correspondence with Ministers:

Brexit implications

Interoperable EU information systems for security, border control and migration management

The Single European Sky (SES)

Import of cultural goods

Prudential requirements for investment firms

Quality of Trade Statistics

Summary

Interoperable EU information systems for security, border control and migration management

The Commission has put forward two proposals to make EU security, border and migration information systems fully interoperable so that information on cross-border security threats and irregular migration can be shared more rapidly. The main features are the creation of a European search portal (a “one-stop shop” enabling multiple EU information systems to be searched simultaneously), a shared biometric matching service, a common identity repository and a multiple identity detector. All four features are intended to be mutually reinforcing, making it quicker and easier to spot individuals using multiple identities to evade detection. The UK is only entitled to participate in the first proposal covering two EU information systems in which the UK already takes part (the police cooperation elements of the Schengen Information System and the EU’s asylum database, Eurodac) and a third system which the UK has opted into but is still under negotiation (ECRIS-TCN which will record the convictions of third country national offenders in the EU). The Commission’s second proposal covers other Schengen-related information systems from which the UK is excluded. The Government indicates that the main factors in deciding whether to participate in the first proposal are the costs (expected to be substantial) set against the potential benefits for law enforcement and immigration control purposes. The European Scrutiny Committee requests further information on: the impact of interoperability on the rights of individuals whose data may be held in EU information systems (post-exit this will include the data of British citizens); the factors that will inform the Government’s decision on participation in the first proposal; and the wider Brexit implications, including the scope and content of a future (post-exit) strategic treaty with the EU on security and law enforcement cooperation.

Not cleared from scrutiny; further information requested; drawn to the attention of the Home Affairs Committee, the Justice Committee and the Committee on Exiting the European Union.

Single European Sky

The Single European Sky (SES) is an EU programme to improve the efficiency of European air traffic management (ATM) and air navigation services to cope with traffic growth in a safe and cost-efficient manner. On the implications of EU exit for UK participation in the SES, the Government indicates that it recognises the need to ensure interoperability between the UK’s arrangements for managing air traffic and those of the EU, and that there are mechanisms other than Functional airspace blocks (FABs) for organising air navigation services on a cross-border basis. The Committee concludes that the Single European Sky (SES) regime would cease upon withdrawal to apply to the UK, but notes that it is possible for European countries that conclude an agreement with the EU to participate in it. The Committee also observes that ATM issues are less critical in the context of Brexit than other challenges facing the sector, such as traffic rights, participation in EASA, and other arrangements affecting trade in aerospace products. The Committee requests further information from the Government about the implications of EU exit for air traffic management, and further detail regarding the UK’s air navigation service provider NATS’ preference to leave SES.

Waiver granted; further information requested; drawn to the attention of the Transport Committee.

Port reception facilities for waste from ships

As part of the Commission’s strategy to reduce the amount of plastics in the marine environment, the Commission has proposed a number of improvements to ports’ facilities for accepting waste from ships. The Committee notes that, under the proposal, fishing vessels would effectively pay to land plastic waste collected while fishing and considered that this does not seem consistent with the polluter pays principle. The deadline for implementing the legislation is 31 December 2020, but the requirements would in any event apply to UK vessels arriving at EU ports post-Brexit.

Not cleared; further information requested; drawn to the attention of the Transport Committee, Environmental Audit Committee and the Environment, Food and Rural Affairs Committee.

Import of cultural goods

The European Commission has proposed a change to EU customs legislation which would require national customs authorities to check the provenance of certain artworks and archaeological artefacts, to ensure they are not being trafficked into the EU for sale on the black market. The Government and the UK art market industry (the EU’s largest), as well as other Member States, have expressed serious reservations about the implications of the proposal, in particular the costs of the additional resources required compared to the potentially very limited benefits.

The Committee has retained the proposal under scrutiny, and requested further information on the legislative negotiations as they progress. It concluded that the new customs requirements may have to be implemented by HMRC at UK borders if the new legislation takes effect during the proposed post-Brexit transitional period (during which the UK would stay in the Customs Union. It also noted the possible implications of the proposal for the UK’s future trade flows with the EU, in particular at the Irish border, if Ireland’s customs authorities were required by EU law to perform checks on cultural goods transported from Northern Ireland into Ireland.

Not cleared from scrutiny; drawn to the attention of the Digital, Culture, Media & Sport Committee.

Data Protection and the EU institutions: Proposed Regulation

This proposed Regulation aims to adapt the rules of the new General Data Protection Regulation (GDPR) adopted in 2016 to the EU institutions and agencies. It would replace the existing institutional Regulation (45/2001). The proposal would have few immediate implications for the UK as requirements largely apply to data controllers/processors of EU bodies. The Commission’s original plan was for the proposal to be adopted so that it would be directly applicable in May 2018. This would be before UK exit and any possible implementation/transitional period. However, despite a General Approach being agreed on 8 June 2017, the Government now reports that trilogues have stalled due to some “controversial amendments” from the EP. These concern the inclusion of Eurojust and Europol and the CSDP within the scope of the Regulation.

The previous Committee had questioned whether the proposal could assume a greater significance if, post Brexit, EU bodies process more data to enable “third country” UK citizens to travel to the EU or to work/provide services there. The Government seeks to answer that question by reassuring the Committee that EU bodies must process personal data according to the same rules, whether they come from EU citizens or not. However, we point out that the question asked was about the volume of data required about third countries citizens, not the way it is processed.

The Government also provides a very short update on a very significant and related proposal: the proposed e-Privacy Regulation which will provide specific rules on processing of e-communications data. We request a far more extensive update, dealing with the publicised difficulties of the pro-privacy position of the EP and how this sits with the UK’s equally well publicised wish to access encrypted communications used by providers such as Whats App.

Until there is further progress in trilogue negotiations on the proposed Regulation on data protection and the EU institutions, we will retain it under scrutiny.

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

Prudential requirements for investment firms

The European Commission has proposed to create a new legal framework on the capital requirements for investment firms, which are currently covered by the Capital Requirements Directive for banks. The new regime would be calibrated to the financial and market risks posed by investment firms specifically. The Government support the thrust of the proposals, which were informed by a European Banking Authority review which started four years ago and would lead to a more targeted prudential regime for the investment services sector. However, it has not commented on the assumption—made explicit repeatedly by the Commission—that UK-based investment firms will shift some of their operations to the EU after Brexit in an economically significant way, especially large Swiss, US and Japanese investment banks currently headquartered in London.

In view of the clear Brexit implications and the lack of information from the Government about the implications of the UK’s exit from the Single Market for the financial services industry, the Committee retained the proposals under scrutiny.

Not cleared from scrutiny; further information requested; drawn to the attention of the Treasury Committee.

Documents drawn to the attention of select committees:

(‘NC’ indicates document is ‘not cleared’ from scrutiny; ‘C’ indicates document is ‘cleared’)

Business, Energy and Industrial Strategy Committee: High Performance Computing [Proposed Regulation (NC)]; Copyright in the Single Market [Proposed Regulation (NC)]; EU research funding: interim evaluation of Horizon 2020 [Commission Communication (C)]

Defence Committee: EU-Iraq Partnership and Cooperation Agreement [(a) Council Decision (NC), (b) Commission Communication (C)]

Digital, Culture, Media and Sport Committee: Data Protection and the EU institutions [Proposed Regulation (NC)]; Import of cultural goods [Proposed Regulation (NC)]

Education Committee: EU research funding: interim evaluation of Horizon 2020 [Commission Communication (C)]

Environmental Audit Committee: Port reception facilities for waste from ships [Proposed Directive (NC)]

Environment, Food and Rural Affairs Committee: Port reception facilities for waste from ships [Proposed Directive (NC)]

Committee on Exiting the European Union: Interoperable EU information systems for security, border control and migration management [Commission Communication (C), (b) and (c) Proposed Regulations (NC)]

Foreign Affairs Committee: EU-Iraq Partnership and Cooperation Agreement [(a) Council Decision (NC), (b) Commission Communication (C)]

Home Affairs Committee: Interoperable EU information systems for security, border control and migration management [Commission Communication (C), (b) and (c) Proposed Regulations (NC)]

International Trade Committee: Quality of trade statistics [(a) Commission Report (C), (b) Staff Working document (C)]

Justice Committee: Interoperable EU information systems for security, border control and migration management [Commission Communication (C), (b) and (c) Proposed Regulations (NC)]

Public Administration and Constitutional Affairs Committee: Quality of trade statistics [(a) Commission Report (C), (b) Staff Working document (C)]

Science and Technology Committee: EU research funding: interim evaluation of Horizon 2020 [Commission Communication (C)]

Transport Committee: Single European Sky [Court of Auditors Report (NC)]; Port reception facilities for waste from ships [Proposed Directive (NC)]

Treasury Committee: Prudential requirements for investment firms [(a) Proposed Regulation (NC), (b) Proposed Directive (NC)]





5 March 2018