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7314/14

COM(2014) 105 final

EXPLANATORY MEMORANDUM FOR EUROPEAN UNION DOCUMENTS

COMMUNICATION FROM THE COMMISSION TO COUNCIL: ACTION PLAN FOR MONITORING THE FUNCTIONING OF PREFERENTIAL AGREEMENTS

March 2014

Submitted by HM Revenue and Customs

SUBJECT MATTER

  1. This document sets out the Commission’s action plan for the monitoring of European trade preferences with developing countries. These agreements with non-EU countries provide for the granting of reduced or zero rates of customs duty under two schemes:
  • The Generalised System of Preference (GSP) unilaterally offers reduced or zero rated tariffs on exports to Europe for developing countries.
  • Economic Partnership Agreements (EPAs) are development-oriented trade agreements which fully remove tariffs on exports to Europe while supporting regional integration for African, Pacific and Caribbean countries.
  1. The actions in the document are designed to improve the monitoring systems for GSP and to ensure that only the intended countries benefit from preferential rates. The Commission concludes the document by inviting the Council to fully support the actions set out in this Communication.

SCRUTINY HISTORY

  1. This document contains no legislative proposals and has not previously been subject to Parliamentary scrutiny.
  1. By way of background, in 2008 and 2009 regulations to introduce nine Economic Partnership Agreements were considered and passed by the European Scrutiny Committees of both Houses. Two of these regulations are currently in force.
  1. With regard to the GSP, the (then) DTI submitted an EM on 1 September 2004 relating to Document No. 11393/04"Communication from the Commission to the Council, European Parliament & European Economic and Social Committee Developing countries, international trade & sustainable development: the function of the Community's generalised system of preferences (GSP) for 10 years period from 2006 to 2015". The Commons Scrutiny Committee cleared it as politically important (Report 31, session 03/04). The Lords Select Committee on the EU cleared it (POS 1 October 20014, session 03/04).

MINISTERIAL RESPONSIBILITY

  1. The Chancellor of the Exchequer has responsibility for United Kingdom policy on European Union monetary and economic issues. The Foreign and Commonwealth Secretary is responsible for overall United Kingdom policy towards the European Union.
  1. The Secretary of State for Business, Innovation & Skills has an interest as BIS is the lead Department for preferential trade agreements.
  1. The Secretary of State for International Development has an interest because of the use of preferential trade arrangements to support developing countries.

INTEREST OF THE DEVOLVED ADMINISTRATIONS

  1. Trade provisions, including preferential trade agreements, are a reserved matter under the UK’s devolution settlements and no devolved administration interests arise. The devolved administrations have therefore not been consulted in the preparation of this EM.

LEGAL AND PROCEDURAL ISSUES

i. Legal basis

  1. This is not a legislative proposal.

ii.Legislative procedure

  1. This is not a legislative proposal.

iii. Voting procedure

  1. This is not a legislative proposal.

iv. Impact on UK Law

  1. This is not a legislative proposal and has no impact on UK Law.

v. Application to Gibraltar

  1. Not applicable.

vi. Analysis of Fundamental Rights Compliance:

  1. No fundamental rights issues arise.

APPLICATION TO THE EUROPEAN ECONOMIC AREA

  1. The actions in this document are not applicable to the EEA.

SUBSIDIARITY

  1. Legal provisions are in place for monitoring activity, including verification visits by Commission or MemberState customs officials. The Commission is not intending to review the approach or processes of Member States in ensuring compliance but rather to address weaknesses in the current system, including those identified by the European Court of Auditors – a lack of risk profiles, and a focus on administrative cooperation rather than monitoring compliance. UK officials are satisfied that the Commission’s action plan will complement Member States’ activities.

POLICY IMPLICATIONS

  1. The actions set out in the document will help to ensure that beneficiary and partner countries are applying the rules consistently, and should ultimately result in fewer cases of irregularities, fewer disputes and better implementation of the rules. The UK therefore welcomes and supports the proposed actions. There are no policy or resource implications for Member States, including the UK.

CONSULTATION

  1. No consultation with outside bodies or the general public is needed or has been planned.

IMPACT ASSESSMENT

  1. An impact assessment is not required.

FINANCIAL IMPLICATIONS

  1. There are no significant and direct financial implications for the EU or the UK. More effective monitoring of the GSP and EPAs will protect the EU’s own resources: no estimates have been provided of the additional quantity of own resources that will be protected.
  1. The Commission plans to submit a proposal for funding of Member States’ travel costs to take part in meetings and carry out monitoring activities under the Customs 2020 programme (an EU funded cooperation programme which provides funding for customs activities), and will do the same for IT programme and database development. It may also look for training funding for beneficiary and partner countries under the 2014-2020 EU External Assistance Programmes.

TIMETABLE

  1. We expect the document to be discussed at the next Council Working Party on Customs Union on 25 March 2014.

NICKY MORGAN

ECONOMIC Secretary TO THE TREASURY

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