Instruments drawn to the special attention of the House
Draft Kimberley Process Certification Scheme (Amendment) (EU Exit) Regulations 2019
Date laid: 20 December 2018
Parliamentary procedure: affirmative
The Kimberley Process Certification Scheme (“the Scheme”) was set up to stop the trade in ‘conflict diamonds’ and ensure that diamond purchases were not financing violence in Africa. The Scheme does not allow diamonds from unaccredited sources to be traded. The UK has participated in the certification scheme, as an EU Member State, since it was set up in 2002. This instrument makes technical amendments to the existing legislation to ensure that it is operable after the UK leaves the EU. However, for much of the revised legislation to function, the UK needs to be accredited in its own right under the Scheme. If the UK leaves the EU in March 2019 without a deal then the UK diamond trade will be frozen until such time as it becomes a member of the Scheme in its own right. The Committee is disappointed that the Explanatory Memorandum does not set out the potential consequences more clearly.
These Regulations are drawn to the special attention of the House on the ground that the explanatory material laid in support provides insufficient information to gain a clear understanding about the instrument’s policy objective and intended implementation.
1.These Regulations have been laid by the Foreign and Commonwealth Office (FCO) under section 8(1) of the European Union (Withdrawal) Act 2018, together with an Explanatory Memorandum (EM). They amend, amongst other things, Council Regulation (EC) 2036/2002 (“the Council Regulation”) which gives legal effect to the Kimberley Process Certification Scheme (“the Scheme”) throughout the EU and which will constitute retained EU law after exit day.
Description of legal powers
2.The draft Regulations follow the affirmative procedure because regulation 29 of the instrument gives the Secretary of State power, by statutory instrument subject to the affirmative procedure, to make further amendments to the Council Regulation where he or she “considers that this [Council] Regulation is no longer effective to ensure that the law of the United Kingdom is consistent with the international Kimberley Process requirements”. The reference to international requirements appears to indicate something wider than deficiencies in EU retained law. The confusion is made greater by paragraph 2.4 of the EM, which says “These Regulations are required as part of the UK’s overall preparations to achieve full independent participant status to the Kimberley Process after we leave the EU and to ensure an effectively functioning statute book” which again seems to indicate a wider purpose.
3.In additional material the FCO has clarified that Annex 1 of the Council Regulation contains the Kimberley Process (KP) principles and rules as agreed amongst KP participants:
“Given the manner in which this Annex interacts with the [Council] Regulation, it is being retained as it is under the EU (Withdrawal) Act. As such, it will also be retained EU law … The power in regulation 29 to amend the retained EU law by further regulations is limited to circumstances where the KP requirements have been separately amended by the KP participants. Given how the KP is currently enacted across the EU, if the KP is amended this will likely equally require the EU to amend the current EU Regulation, and regulation 29 gives the UK similar powers. …The power would still be functional after the UK has acquired independent participant status in the KP.”
4.We are now satisfied that, although convoluted, this mechanism allows no more than is appropriate, but, given the series of changes on the EU, international and domestic fronts that may be needed in the near future to ensure that the Scheme functions in the UK, we are disappointed that the EM provided did not give a clearer description of how this power is intended to be used.
Background
5.The Scheme was set up to stop the trade in conflict diamonds and ensure that diamond purchases were not financing violence in Africa. It prohibits trade in diamonds from unaccredited sources.
6.The UK has participated in the Scheme as an EU Member State since it was set up in 2002. This instrument makes technical amendments to the existing legislation to ensure that it is operable after the UK leaves the EU, so that the UK, as an independent participant in due course, has a domestic framework which appropriately enacts the Scheme. These changes will only involve minor administrative costs; however, for much of the revised legislation to function, the UK needs to be accredited in its own right under the Scheme.
7.Paragraph 2.8 of the EM explains:
“The practical effect of this instrument on Exit Day will depend on whether the UK is recognised as an independent participant in the Kimberley Process by that date. Under the internationally-agreed Kimberley Process rules, Participants are not to trade rough diamonds other than with other Kimberley Process Participants. Therefore if the UK is not an independent Participant we would expect there [not] to be any trade in rough diamonds to or from the UK.”
The application process
8.We asked for more detail on whether the UK has already applied for separate recognition and, if it has, when a decision is likely to be made. The FCO replied that the UK’s application was submitted at the end of December 2018 following the Cabinet’s decision on 18 December 2018 to implement the UK’s no deal preparations in full. The process for the UK’s accreditation will be set by the Kimberley Process Chair (India) and the Committee on Participation and Chairmanship (now chaired by the EU). The UK’s application proposes to use a shorter route than would be followed by default (taking two to three months) but this would need to be agreed by the KP body. If not agreed, UK trade in rough diamonds would be frozen until at least November 2019.
The impact of disruption
9.We asked for clarification of what the consequences would be if UK trade in diamonds was disrupted. The FCO explained that the rough diamond trade comprises around 15 regular traders, with a few additional ad-hoc traders. De Beers also imports rough diamonds for research and development, and exhibition purposes.
10.The vast majority of trade (94%) is with the EU, which will fall away after exit day regardless of the UK’s status in the Scheme. The FCO explained:
“Thanks to the UK’s efficient customs processes, the UK has acted as a gateway to the EU for the rough diamond trade. Once we have withdrawn from the EU and become an independent participant in the KP, we can expect that trade to go directly to the EU. It is unlikely that any rough diamond consignments destined for the EU will come to the UK, as they will need KP certificates to leave, causing delays and extra charges for the traders.”
11.The value of KP certificates issued in 2017 was £67 million, which represents the value of UK exports of rough diamonds to countries outside the EU. FCO states they are exploring options to limit disruption in the event of ‘no deal’ and have been in contact with traders to help them prepare for this scenario.
12.The FCO was, however, keen to point out that combatting the trade in conflict diamonds remains a Government priority and that this instrument ensures continuity of the UK’s powers to seize uncertified rough diamonds upon entry to the UK, maintaining the integrity of the UK in relation to the ban on conflict diamonds, whatever its accreditation status may be.
13.The statement of impact at paragraph 12.1 of the EM states: “There is no significant impact on business as this instrument broadly replicates requirements which already exist under the EU’s framework for the Kimberley Process Certification Scheme”. It is true that if there is a seamless transition between the schemes, the industry may notice very little difference. However, paragraph 2.2 of the EM states that these Regulations will apply in a ‘no deal’ situation, and the additional material makes clear the strong possibility that in that situation the UK’s trade in rough diamonds will be disrupted for a time. The Committee therefore found the EM deficient for not articulating more clearly the potential financial and commercial consequences for the trade if endorsement of the UK’s application to the Scheme is delayed.
Conclusion
14.This instrument makes technical amendments to the existing legislation so that the rough diamond certification Scheme can operate as it does now after the UK leaves the EU. The UK’s ability to participate in the Scheme in its own right, however, is closely tied to wider negotiations with the Kimberley Process organisation, where the UK does not control the timetable. If the UK leaves the EU in March 2019 without a deal, then it is likely that the UK diamond trade will be frozen until such time as the UK becomes a member of the Scheme in its own right. A key function of the EM is to ensure that the House is informed of the broad context so that it can properly consider the consequences of the legislation that it is being asked to approve: we consider that this EM failed to fulfil that role.
Draft Motor Vehicles (International Circulation) (Amendment) (EU Exit) Order 2019
Date laid: 19 December 2018
Parliamentary procedure: affirmative
International Driving Permits (Fees) (EU Exit) Regulations 2019 (SI 2019/1)
Date laid: 10 January 2019
Parliamentary procedure: negative
This draft Order and the related Regulations are laid by the Department for Transport to ensure that UK motorists continue to be able to drive across Europe after exit day in the event of ‘no deal’ with the EU. The provisions enable UK driving licence holders to obtain International Driving Permits (IDPs) issued under the format inherent in the 1968 Vienna Convention on Road Traffic and will therefore permit travel to EU Member States (plus Norway and Switzerland), with the exception of Cyprus, Ireland, Malta and Spain (for which a 1949 Geneva Convention IDP will be required), after exit day.
Given the extent of motor travel between the UK and the EU, the House may wish to ask the Minister if there are sufficient resources in place to deal with an increase in applications and to ensure that the IDPs are in place for exit day.
We draw these instruments to the special attention of the House on the grounds that they give rise to issues of policy interest likely to be of interest to the House and that the explanatory material laid in support provides insufficient information to gain a clear understanding about the instruments’ policy objective and intended implementation.
Background
15.At present, UK driving licence holders can drive for work and leisure purposes throughout the EU without other documents.
16.Currently, individuals driving in some countries outside of the EU are required to obtain an International Driving Permit (IDP) and around 110,000 IDPs are issued annually in the UK. Around 98,000 are issued each year by the Automobile Association (AA) over the counter at 89 Post Office branches, with the remainder being provided by mail order services offered by the AA and the RAC direct. The AA also offers IDPs at their shop in Folkestone.
17.The fee for an IDP is £5.50 and is paid to the Post Office. The fee for IDPs has not been increased since 2004.
‘No deal’ with the EU
18.In the event of ‘no deal’ with the EU, UK driving licence holders will need to obtain an IDP to drive in the EU. An IDP is a document which is carried alongside a driving licence.
19.There are two types of IDP required by EU countries. Each is governed by separate United Nations conventions:
- The 1949 Geneva Convention on Road Traffic (the 1949 Convention).
- The 1968 Vienna Convention on Road Traffic (the 1968 Convention).
Draft Motor Vehicles (International Circulation) (Amendment) (EU Exit) Order 2019 and International Driving Permits (Fees) (EU Exit) Regulations 2019 (SI 2019/1)
20.The draft Motor Vehicles (International Circulation) (Amendment) (EU Exit) Order 2019 (“the Order”), laid by the Department for Transport (DfT) with an Explanatory Memorandum (EM), provides for the UK to issue IDPs under the 1968 Convention to persons resident in the UK for use outside the UK.1
21.The International Driving Permits (Fees) (EU Exit) Regulations 2019 (SI 2019/1) (“the Regulations”), also laid by DfT with an EM, enable the Secretary of State to charge UK driving licence holders for the issue of IDPs.
22.Both EMs lack sufficient information to gain a clear understanding about the instruments’ policy objectives. We therefore requested additional supplementary material from DfT.
23.The UK originally signed the 1968 Convention in November 1968, but it was not ratified. However, as part of the Government’s preparations for leaving the EU, the UK ratified the 1968 Convention on 28 March 2018, and it comes into force on 28 March 2019.
24.Once the Government have ratified the 1968 Convention and issued IDPs in the 1968 Convention format, holders of UK driving licences will have a minimum level of recognition of their licences when driving in any Member State of the EU, except Cyprus, Ireland, Malta and Spain. For travel within the latter four countries, UK driving licence holders will be required to hold an IDP in the format set out in the 1949 Convention (to which the UK is already party). IDPs issued in the 1949 Convention format are valid for 12 months and will continue to apply in countries where that Convention remains in force. 1968 Convention format IDPs are valid for three years (or for a shorter period if the validity of the relevant driving licence ends at an earlier date).
25.The Order also provides for the recognition of an IDP issued by another contracting party to the 1968 Convention to a person who is resident outside the UK and who is temporarily in Great Britain.2
Impact
26.After March 2019, UK drivers will need both a UK driving licence and the appropriate IDP. Drivers will need both a 1968 Convention IDP and a 1949 Convention if visiting EU countries covered by different Conventions, such as France and Spain.
27.UK motorists may be turned away at the border of a Member State or face other enforcement action, such as a fine, if the correct IDP is not held.
28.The National Audit Office published a report in July 2018 which set out that the estimated range of IDPs to be issued in the first year in the event of ‘no deal’ was between 100,000 and 7 million IDPs.
29.DfT believe that “this upper number is very unlikely, as it is based on each IDP being used once.” DfT explains that “realistically, we expect that many IDPs3 will be used multiple times and so even in a scenario where all Member States require UK licence holders to have an IDP, the upper number of IDPs that need to be issued is likely to be significantly lower than 7 million.”
Obtaining an IDP
30.Until 31 January 2019, mail order services offered by the AA and the RAC will continue. However, DfT has withdrawn the delegation to the RAC and the AA to issue IDPs with effect from 1 February 2019. The RAC and the AA expressed their disappointment with this decision to DfT. After 1 February, IDPs will be issued by the Driver and Vehicle
Licensing Agency (DVLA) on behalf of the Secretary of State, through an over-the-counter service that will be available at 2,500 Post Office branches. DfT states that “this will mean that 90% of the population will live within 10 miles of an IDP issuing branch”, and notes that:
“Should 2,500 post offices be insufficient to cope with demand, an IDP service can also be expanded to an additional 2,000 branches, further reducing the distance to an issuing branch to 3 miles for 90% of the population. These plans should minimise the inconvenience to motorists of having to obtain an IDP if one is required for their journey.”
31.DfT acknowledges that “the scaling up of the IDP issuing Post Office network will be particularly significant in Northern Ireland, where the number of branches issuing IDPs will increase from 2 to around 70.”
32.Given the impact of the changes on the potential numbers of applications for IDPs at the Post Office, the House may wish to ask the Minister if the Post Office and the DVLA have sufficient resources and adequate capacity to deal with these requests.
33.The fee for an IDP will remain at £5.50.4
34.In response to our question as to whether these IDPs will be in place before exit day, DfT has explained:
“IDPs will be available from 1 February 2019. Whilst the Motor Vehicles (International Circulation) (Amendment) (EU Exit) Order 2019, which will enable the charging for 1968 Convention format IDP, cannot come into in force before 28 March 2019, which is when the 1968 Convention comes into force, we recognise that UK licence holders need to be able to obtain the IDPs they require in advance of that date. To allow for a fee to be charged for IDPs in anticipation of the 1968 Convention coming into force, the government has made the International Driving Permits (Fees) (EU Exit) Regulations 2019 (SI 2019/1) under Section 56 of the Finance Act 1973. These Regulations will come into force on 1 February 2019. This means that we will be able to charge for IDPs as of 1st February, allowing individuals 8 weeks to apply for a permit before exit day. 1968 format IDPs issued prior to 28 March 2019 will be post-dated to become valid on that date. Currently IDPs in the 1926 and 1949 Convention formats are available post-dated up to 3 months ahead of travel, and we are maintaining this approach, and applying it to all 3 IDP formats once the service is taken over by DVLA.”
35.The Government’s technical guidance Driving in the EU if there’s no Brexit deal explains that:
“In the event that we do not achieve a comprehensive agreement, we will also pursue agreements with individual EU countries. The UK already has a number of these arrangements with non-EU countries including Australia, Canada and New Zealand. EU countries have their own similar arrangements with third countries. However, we cannot guarantee that we will have individual agreements with all EU states by exit day in the event of no deal.”5
36.Given the need for UK motorists wishing to drive across the EU after exit day to hold the correct IDP, the House may wish to ask the Minister for assurances that drivers will have sufficient time to gain these permits before 29 March 2019.
Travel to the Republic of Ireland
37.The Government have confirmed that Ireland does not require licence holders from third countries (which will include the UK after exit day) to hold an IDP if they have their domestic driving licence.6 This will be recognised for the duration of a temporary visit to Ireland (up to 12 months). If an individual from a third country stays in Ireland for more than 12 months, they can apply for an Irish driving licence.7
Travel to the UK
38.After exit day, arrangements for EU licence holders who are visiting or living in the UK will not change.
39.The UK does not require visiting motorists, for example those coming to the UK on holiday or who wish to drive on business, to hold a separate IDP to guarantee the recognition of their driving licence.
Conclusion
40.Given the potentially significant impact on UK motorists travelling to Europe, we draw this Order together with the Regulations to the attention of the House on grounds of public policy interest. We also consider that the EMs to the instruments provided insufficient information for their policy impact to be adequately understood, and we have asked DfT to revise them accordingly.
1 The powers under which this instrument is made cover the entire United Kingdom in respect of the issue of IDPs to persons reside in the UK.
2 The recognition of IDPs held by persons who are not resident in the UK but who are temporarily in Northern Ireland is a transferred matter and will therefore be the subject of a separate Order.
3 Especially 1968 Format IDPs which are valid for 3 years, and will apply in 23 EU Member States, plus Switzerland and Norway after Exit Day as well as 51 other States worldwide. The Convention will also come into force in two further countries Cabo Verde (12 June) and Nigeria (18 October) in 2019.
4 DFT explain that as part of their preparations for the new issuing arrangements, the £5.50 fee was reviewed and was found to still be appropriate.
5 Department for Transport, Driving in the EU if there’s no Brexit deal (13 September 2018): https://www.gov.uk/government/publications/driving-in-the-eu-if-theres-no-brexit-deal/driving-in-the-eu-if-theres-no-brexit-deal [accessed 29 January 2019]. This guidance has since been withdrawn and replaced with Prepare to drive in the EU after Brexit (14 January 2019): https://www.gov.uk/government/publications/prepare-to-drive-in-the-eu-after-brexit. [accessed 29 January].
6 National Driver Licence Service [Republic of Ireland], Holders of Foreign Licences: https://www.ndls.ie/holders-of-foreign-licences.html#holders-of-driving-licences-from-other-countries [accessed 29 January 2019].
7 Ibid.