European Scrutiny Committee Meeting Summary: 7 January 2015
8 January 2015
European Scrutiny Committee met on Wednesday 17 December 2014
The Committee considered the following documents:
Ukraine and Russia: EU restrictive measures
The European Council has consistently said that it will not recognise the Russian annexation of Crimea, a position which the Government fully supports. Trade and investment bans were introduced in June and July 2014, which prohibited both the import of goods from Crimea and the investment in the development of infrastructure in the areas of transport, telecommunications or energy and export of listed key technologies for use in these sectors. New measures have now been proposed which extend some of the existing restrictions and place new prohibitions on acquiring real estate or providing services directly related to tourism in Crimea or Sevastopol. In his Explanatory Memorandum, the Minister recalls the Government’s view that the annexation of Crimea violates the UN Charter and is illegal under international law. Although these views are widely held, they are not universally supported; nor indeed is the EU’s approach to Ukraine and its relationship with Russia. We therefore recommend these new measures for debate on the floor of the House alongside the EU-Ukraine Association Agreement. The debate on this Agreement, which we recommended last October, has still not been scheduled, which we deplore.
Value added taxation
This week we consider a proposal to amend the 2006 Principal VAT Directive, which consolidated the legislation governing valued added taxation in the EU, and lays down rules to ensure a consistent approach to the questions about how much VAT to charge, when it should be declared and to which jurisdiction the tax should be paid. This proposal would amend the Directive in order to clarify and harmonise the rules related to the VAT treatment of vouchers. We considered this proposal in September 2012 and, in noting its importance in relation to the efficacy of the EU’s VAT system, requested that the Government provide us with further information in due course. The Government has now provided us with a helpful update, but it remains unclear how further Council consideration will pan out. As a revised text of the draft Directive may go to the ECOFIN Council in the coming months, we recommend this document for debate in European Committee. This debate will provide members with the opportunity to explore the details of the proposed solutions to what is a complex problem and the possible consequences for UK businesses.
European Semester
The annual European Semester is an EU-level framework for coordinating and assessing Member States’ structural reforms and fiscal/budgetary policy and for monitoring and addressing macroeconomic imbalances. An element of the European Semester is the Macroeconomic Imbalances Procedure, and as part of the first stage of this procedure, the Commission publishes an annual Alert Mechanism Report, which we consider this week. This Report discusses macroeconomic factors affecting the EU as a whole, presents short analyses of the macroeconomic situation of most Member States and says that the Commission will be conducting In Depth Reviews for 18 Member States, including the UK, during the first quarter of 2015. We recommend this document for debate in European Committee alongside three other documents, which we recommended for debate last month and which form the other element for the first stage of the European Semester: the Commission’s Annual Growth Survey, the draft Joint Employment Report, and the Autumn European Economic Forecast.
Other documents
We are also reporting on documents relating to:
- Foreign and Commonwealth Office: The EU’s Special Representative (EUSR) to Bosnia and Herzegovina; Free movement and public documents; EU training of Malian security forces; Enlargement Strategy and Main Challenges 2014-15; Restrictive measures against Iran: nuclear issues;
- Home Office: Forced labour; Repeal of obsolete EU police and criminal justice measures;
- International Development: Food and Agriculture Organisation;
- Office for National Statistics: Statistics
- Transport: Seafarers
- Treasury: Financial management: investigations of fraud; Taxation; Financial services: benchmarks; Financial services: occupational pension funds;
The Committee’s 27th Report of Session 2014-15 was published on 23 December 2014, covering: EU General Budgets for 2014 and 2015; European Semester; Animal health law; European Neighbourhood Policy Action Plans with Lebanon, Morocco, Jordon and Tunisia; EU-Turkmenistan relations; Ukraine and Russia: EU restrictive measures; Customs: mutual assistance; Europol; The functioning of the Schengen area; Test procedures for vehicle emissions; Eurozone membership; Investment plan for Europe; Financial services: resilience of credit institutions.