Select Committee on European Scrutiny Fifth Report





COM(00) 492

Draft Council Regulation on the protection of the euro against counterfeiting.
Legal base: Articles 123(4) and 308 EC; consultation; unanimity
Department: HM Treasury
Basis of consideration: SEM of 1 February 2001
Previous Committee Report: HC 23-xxviii (1999-2000), paragraph 4 (1 November 2000)
To be discussed in Council: 12 February 2001
Committee's assessment: Legally and politically important
Committee's decision: Cleared, but request to be kept informed


  9.1  On 1 March 2000 the Committee reported on[19] and cleared a draft framework Decision on increasing protection of the euro against counterfeiting by means of penal sanctions. On 1 November 2000, the Committee reported on but left uncleared a draft Regulation that would require the Member States to take further steps to safeguard the euro against counterfeiting. The Committee shared a number of concerns expressed by its sister committee in the House of Lords and requested further information.

  9.2  These concerns were that the proposal:

  • sought to amend the intergovernmental Europol Convention by requiring Member States to "ensure" that a unit is set up by Europol to combat counterfeiting;

  • created a new offence in the case of non-compliance by financial institutions and similar bodies regarding their obligations under the proposal to withdraw counterfeit euros; and

  • lacked clarity regarding whether such "offences" would be civil or criminal matters.

The document

  9.3  The revised proposal reflects the discussions that have taken place in the Working Party, most recently under the Swedish Presidency, but leaves the aim of the original proposal largely unchanged. It provides:

  • for the gathering and processing of technical information on counterfeit notes and coins. Amongst other things, Member States would have to establish a National Coin Analysis Centre (NCAC) which would transmit information to the European Technical Scientific Centre (ETSC — to be established), and financial institutions (including bureaux de change) would be obliged to withdraw counterfeit euros and pass them to national authorities;

  • for the processing of operational and strategic data, including allowing Europol access to data held by the European Central Bank (ECB); and

  • for co-operation and mutual assistance both between Member States and within the proposed Europol unit.

  9.4  The original proposal would have required Member States to introduce "effective, proportionate and dissuasive penalties" for non-compliance by financial institutions with their obligations to withdraw counterfeit euros. The Presidency proposal, however, removes the explicit requirement upon institutions to make appropriate checks on the authenticity of all euro notes and coins that they receive. Instead institutions have a number of obligations: to make appropriate and systematic checks before distributing euros to the public; to withdraw from circulation all euro notes and coins that they know or have sufficient reason to believe are counterfeit; and to hand them over to the competent national authorities. In the event of non-compliance, sanctions will be of a non-penal nature and will take the form of incentives to ensure that counterfeits are not rife. For example, financial institutions would have an incentive to ensure that their reputations and finances are not damaged by receiving or passing on counterfeit currency.

  9.5  The Supplementary Explanatory Memorandum also makes clear that there is now general agreement among Member States and the Commission that legislation adopted by Community institutions cannot be used to amend the Europol Convention, a convention agreed between Member States. This feature of the original proposal has been removed. The revised proposal still includes a role for Europol in that it will have access to technical and statistical data on counterfeiting held by the ECB, but this is to be achieved by an amendment to the Europol Convention agreed by Member States.

The Government's view

  9.6  In her Supplementary Explanatory Memorandum of 1 February 2001, the Economic Secretary to the Treasury (Miss Melanie Johnson) reaffirms the Government's commitment to the principle of protection of the euro against counterfeiting. The Government emphasises that counterfeiting of any currency is a serious criminal offence in the UK.

  9.7  The Government welcomes the requirement for Member States to designate or establish a National Analysis Centre (NAC) for notes and a National Coin Analysis Centre (NCAC). The Minister reports that, after a series of discussion with possible bodies, the National Criminal Intelligence Service (NCIS) has said that the preferred option would be for NCAC to be located within it.

  9.8  It is the Government's view that the revised proposal has resolved the problem of using Community instruments to place an obligation on Europol. The Government also welcomes the removal from the regulation under the Presidency compromise of the obligation upon financial institutions to verify all euro notes.

  9.9  The current proposal is tabled for the ECOFIN meeting on 12 February.


  9.10  In our earlier report, we joined our sister Committee in the House of Lords in setting out a number of concerns relating to the original draft regulation. Following receipt of the Supplementary Explanatory Memorandum we consider that the Presidency compromise proposal addresses those concerns without undermining the degree of protection given to the euro.

  9.11  We now clear the document, but request to be kept informed of developments.









Amended proposal for a Council Directive establishing a general framework for equal treatment in employment and occupation.

Council Directive establishing a general framework for equal treatment in employment and occupation.

Legal base: Article 13 EC; consultation; unanimity
Documents originated: (a) 12 October 2000

(b) —

Forwarded to the Council: (a) 13 October 2000

(b) —

Deposited in Parliament: (a) 3 November 2000

(b) 15 January 2001

Department: Education and Employment
Basis of consideration: EM of 25 January 2001
Previous Committee Report: None; but see (20801) 13540/99: HC 23-vii (1999-2000), paragraph 4 (2 February 2000), HC 23-xix (1999-2000), paragraph 2 (24 May 2000) and HC 23-xxiv (1999-2000), paragraph 1 (12 July 2000).
Discussed in Council: 27 November 2000
Committee's assessment: Legally and politically important
Committee's decision: (Both) Cleared


  10.1  We recommended an earlier version of this document[20] for debate in Standing Committee C , where it was debated, and the motion agreed to, in July 2000. During the debate, the Minister for Employment, Welfare to Work and Equal Opportunities at the Department for Education and Employment (the Rt. Hon. Tessa Jowell) said:

"In negotiating the proposal, we are working towards a final text that is clear and workable to the employers, workers and training providers whom it will affect".[21]

  10.2  The proposal received political agreement at the Employment and Social Policy Council on 17 October 2000. The Directive was adopted by the Council on 27 November 2000.

  10.3  Earlier in November, the Minister deposited an updated text (document (a)), which contained amendments made by the European Parliament but took no account of progress made by Member States in negotiations. She has now deposited the final text (document (b)), together with an Explanatory Memorandum which covers both documents. As document (a) has been superseded by document (b), our report concentrates on the latter.

The final text

  10.4  In her Explanatory Memorandum, the Minister helpfully reminds us of the key features of the Directive and tells us about the derogations, and the timescale for implementation, as follows:

"The Directive requires Member States to introduce laws giving effect to 'the principle of equal treatment', which prohibits direct and indirect discrimination and harassment on the grounds of a person's age, disability, religion, belief or sexual orientation in the fields of:

"—  employment, self-employment and occupation;

"—   vocational training and guidance; and

"—  membership of, involvement in, and benefits from workers' or employers' organisations and professional organisations.

"It will also require employers to provide 'reasonable accommodation' to enable disabled people to have access to, participate in or advance in employment, or to undergo training. Moreover, Member States will have to repeal all laws, regulations and administrative principles which are contrary to the equal treatment principle. They will also have to give aggrieved individuals the right to seek redress.

"The Directive provides for certain derogations:

"—  differences of treatment based on a characteristic related to the grounds of discrimination covered by the Directive may be permitted in certain circumstances on the basis of 'genuine and determining occupational requirement';

"—  Member States may retain laws and practices already in place that permit religious organisations to treat employees or prospective employees differently on account of their religion or belief where the ethos of the organisation means that a person's religion or belief becomes a genuine occupational requirement;

"—  service in the Armed Forces may be exempt from the provisions on age and disability;

"—  Member States may provide for differences of treatment on grounds of age to be justified (even where this would otherwise amount to direct discrimination). They may also completely exempt occupational pension schemes when transposing the provisions of the Directive relating to age;

"—  a public policy exemption will allow Member States, when implementing, not to give protection to paedophiles, religious cults or other similar groups where there is a public policy interest in limiting or preventing their activities; and

"—  payments made by the state, for example under state social security schemes, are not covered by the Directive.

"Special provisions are included in respect of the situation in Northern Ireland. There is an exception for the special recruitment measures under the Police (N.I) Act 2000 (which addresses imbalances in the composition of the police service in terms of religious communities). There is also an exemption for the recruitment of teachers in schools to maintain a balance in recruitment between the religious communities.

"Member States are required to implement the sexual orientation and religion or belief provisions by 2 December 2003 (i.e. within three years of adoption). They have until 2 December 2006 (i.e. within six years of adoption) to implement the age and disability provisions. If Member States choose to take six years to implement the age and disability provisions, they will be required to submit annual progress reports to the European Commission after three years."

The Government's view

  10.5  The Minister tells us:

"The Directive represents a significant improvement over the original proposal. The final text offers a reasonable framework which allows Member States to put in place workable, implementing legislation where necessary.


"...The agreed text will allow the UK to maintain the approach of the DDA [Disability Discrimination Act] which does not distinguish between direct and indirect discrimination. There will need to be some amendments to the DDA, in particular extending the range of employment and occupation currently covered... .


"The extended implementation period for the age provisions will allow time for research and widespread consultation with employers, individuals and expert groups to clarify which differences in treatment on grounds of age are justified and which are not. The way in which the provisions are drafted, and the exceptions secured will allow the UK to shape its implementing legislation to confirm existing best practice on non-ageist approaches to employment.


"The provisions of the Directive will allow the UK to give legal force to its policy of equality for all in the workplace, whilst safeguarding specific national provisions such as section 60 of the Schools Standards and Framework Act 1998 — which allows schools with a religious character, when recruiting teachers, to give preference to candidates who adhere to the particular religion or denomination concerned. Implementation of the provisions on religion in Great Britain will be guided by the results of research currently being carried out into the extent and nature of religious discrimination in England and Wales.

Sexual orientation

"The provisions on sexual orientation are in line with the Government's commitment to equality for all in the workplace. It will mean legal protection from discrimination and harassment on grounds of sexual orientation in the area of employment and occupation. The Directive does not affect national laws on marital status and the benefits dependent thereon."

  10.6  The Minister points out that new legislation will be needed throughout the UK to give effect to the provisions prohibiting discrimination on the grounds of age and sexual orientation. New legislation will also be needed in Great Britain to implement the provisions concerning discrimination on the grounds of religion and belief, and the Fair Employment and Treatment (Northern Ireland) Order 1998 will need to be extended and amended in some respects relating to religious belief.


  10.7  Now that we are (at last) able to see the final text of this Directive, we are pleased to be able to agree with the Minister that it represents a significant improvement over the original proposal. The provisions about which we were particularly concerned — those relating to discrimination on grounds of disability and of age — have been more tightly drafted, and Article 8, dealing with "occupational requirements" now presents fewer problems for religious schools and other organisations.

  10.8  The other key problem which arose in relation to this proposal — its last-minute negotiation on the basis of confidential texts — is neatly illustrated by the emergence, in the final text, of derogations related to service in the Armed Forces and special provisions in respect of Northern Ireland, neither of which we had any opportunity to consider. We hope such a situation will not arise again.

  10.9  We clear both documents.

19  (20624) 12585/99; see HC 23-x (1999-2000), paragraph 5. Back

20  (20801) 13540/99; see headnote to this paragraph.  Back

21  Official Report, Standing Committee C, 24 July 2000, col.3. Back

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