European Scrutiny Committee Meeting Summary: 18 December 2013

This week the Committee considered the following documents:

Regulation of medical devices

These two draft Regulations have been held under scrutiny since November 2012.  Through them the Commission seeks to introduce a more rigorous system for Member State supervision of “notified bodies” – bodies responsible for certifying that medical devices are safe to use – and to ensure greater transparency and accountability in relation to devices and their manufacturers. The Government is broadly supportive but has highlighted particular concerns around the level of bureaucracy which could be involved, and the potential impact on the NHS.  The Minister’s latest letter updates the Committee on amendments agreed by the European Parliament and negotiations in Council.  We are holding the Regulations under scrutiny pending further updates, noting previous work conducted by the House of Commons Science and Technology Committee, and ask for information from the Government on the changes it is seeking to enhance transparency and accountability.

Gender balance on corporate boards
This draft Directive has also had a long scrutiny history and was the subject of a House of Commons Reasoned Opinion (that the proposal did not comply with the principle of subsidiarity) which was issued in January.  The latest update from the Minister reiterates the Government’s objection to the proposal and notes that these concerns are shared by a number of other Member States.  Despite these concerns a plenary vote taken in the European Parliament on 20 November broadly endorsed the Commission’s approach.  Progress in the Council has been slow and the Minister questions whether a workable compromise can be reached.  We note provisions which would enable Member States to derogate from the draft Directive if they have already put in place effective measures to ensure that, by 2020, at least 40% of non-executive directors on the boards of public listed companies are women.  We ask the Minister whether she thinks that the UK would be able to make use of this derogation.  We also ask the Government for the latest statistics about gender balance on corporate boards, details of how many listed companies might be excluded from the scope of the Directive on the grounds of being small- and medium-sized enterprises, the outcome of stakeholder consultations; and a summary of the main changes proposed by the European Parliament and the Government’s position on them.  The document remains under scrutiny.

Banking Union: single resolution mechanism
We have been following the negotiations on the SRM proposal closely and most recently reported on it on 4 December.  The Minister has now written to update us on discussions at the ECOFIN Council on 10 December, and further negotiations will be taking place this week at a special ECOFIN Council. Given the continuing uncertainty over the likely final form of the SRM we are not prepared to give clearance from scrutiny, but we do offer a scrutiny waiver with four conditions, relating to: the use of the Article 114 TFEU legal base; the need for clear and unambiguous limitation of the Commission’s role; the importance of ensuring that any intergovernmental agreement is limited to the Single Resolution Fund and does not regulate the use of EU institutions outside the framework of EU law; and the critical need to secure equality of treatment for participating and non-participating Member States. The documents remain under scrutiny pending a further report on developments in the Council negotiations.

European Defence Agency
The EDA is an EU Agency, which became operational in 2005.  Agency reports to the Council are deposited before Parliament and hence come for scrutiny to this Committee.  We report recent developments in the setting of the budget of the Agency, and ask the Government to let us know the outcome of negotiations (in the form of a Supplementary Explanatory Memorandum), as well as indicating to us its position on the UK’s continued membership of the EDA. 

Other documents reported
We are also reporting on documents relating to:

• Business, Innovation and Skills: Annual Growth Survey;
• Culture, Media and Sport: Telecoms Single Market; 
• Energy and Climate Change: Doha Amendment to the Kyoto Protocol;
• Environment, Food and Rural Affairs:  EU-Madagascar fisheries Partnership Agreement; Promotion of agricultural products; Coupled national support schemes under the CAP; 
• Foreign and Commonwealth Office: EU Special Representative to the South Caucasus and the Georgia conflict; Iran sanctions and the EU General Court; EU-Indonesia Partnership and Cooperation Agreement; EU’s comprehensive approach to external conflict and crises; Application of the principles of subsidiarity and proportionality;
• HM Treasury: Terrorist Finance Tracking Program; Money laundering and terrorist financing; 
• Home Office: Freezing and confiscation of the proceeds of crime; and
• International Development European Investment Bank.

The Committee’s Report will be published next week. The Committee’s Twenty-seventh Report covers: European defence industry, European External Action Service and the EU’s Common Security and Defence Policy; Regulation of tobacco and related products; European Semester: Annual Growth Survey, draft Joint Employment Report and Alert Mechanism Report; Financial reporting and auditing; The Aarhus Convention; EU-Syria relations; the EU’s Comprehensive Approach to external conflicts and crises; EU General Budgets; Croatia’s accession to the EU/Switzerland Agreement on the free movement of persons; Firearms and the internal security of the EU; Policy Coherence for Development; and Emission reductions from passenger cars.