Select Committee on European Scrutiny Twenty-Ninth Report





Amended proposal for a Council Regulation on the Statute for a European Co-operative Society.

Legal base:

Article 308 EC; consultation; unanimity


Deposited in Parliament:

26 February 2002


HM Treasury

Basis of consideration:

Minister's letter of 15 May 2002

Previous Committee Report:

HC 152-xxi (2001-02), paragraph 7 (13 March 2002)

To be discussed in Council:

21 May 2002

Committee's assessment:

Politically important

Committee's decision:





    1. The European Co-operative Statute consists of a Regulation, which sets out the framework for a European Co-operative Society (SCE), a new type of pan-European legal body, and a Directive[36], requiring a particular level of employee involvement in the SCE. The Statute would apply only to bodies that chose to form an SCE in order to operate in two or more Member States.
    2. When we considered the draft Regulation in March, we decided to keep it under scrutiny until we knew whether the Government had been successful in ensuring that control of the European Co-operative Societies lay with the members.
    3. The Minister's letter

    4. The Economic Secretary to the Treasury (Ruth Kelly) has now written to tell us that the Government has secured amendments to the revised text. She says:
    5. "The implications of these amendments to the text are that in every SCE the majority of the voting rights will always be vested in the user-members, and not in the capital. In addition to this, multiple votes according to capital contribution are only allowed in SCEs involved in financial or insurance activities, and only if the law of the Member State in which the SCE is registered allows such voting.

      "Accordingly, any SCE registered in the UK would not have multiple voting rights according to capital contribution, and would not have non-user (investor) members, in accordance with current practice.

      "I am satisfied that these amendments meet the aim of ensuring that the control of European Co-operative Societies lies with the members."

    6. The Minister tells us that the draft Regulation will go to the Internal Market Council for agreement on 21 May. She hopes to be able to support it there.
    7. Conclusion

    8. We thank the Minister for her helpful letter with its reassurance that the Government has secured amendments to ensure that the control of European Co-operative Societies lies with their members.
    9. We clear the document, but ask to be sent a copy of the agreed text.
















      Draft Council Framework Decision laying down minimum provisions on the constituent elements of criminal acts and penalties in the field of drug trafficking.

      Draft Council Framework Decision laying down minimum provisions on the constituent elements of criminal acts and penalties in the field of drug trafficking.

      Draft Framework Decision laying down minimum provisions on the constituent elements of criminal acts and penalties in the field of drug trafficking.

      Draft Framework Decision laying down minimum provisions on the constituent elements of criminal acts and penalties in the field of drug trafficking.

      Legal base:

      Articles 29, 31(e) and 34(2)(b) EU; consultation; unanimity


      Document originated:

      (d) 15 April 2002

      Deposited in Parliament:

      (d) 23 April 2002


      Home Office

      Basis of consideration:

      (a) and (b) EM of 25 March 2002

      (c) EM of 16 April 2002 and Minister's letter of 13 May 2002

      (d) EM of 10 May and Minister's letter of 13 May 2002

      Previous Committee Report:

      (a), (b) and (c) HC 152-xxvi (2001-02), paragraph 4 (24 April 2002)

      To be discussed in Council:

      13-14 June Justice and Home Affairs Council

      Committee's assessment:

      Legally and politically important

      Committee's decision:

      (all) Cleared





    11. We considered an earlier version of the draft Framework Decision on 7 November 2001, 9 January and 6 March 2002. The proposal defined drug trafficking and related offences, provided for maximum penalties of not less than five years' imprisonment in serious cases and also provided for a number of aggravating and mitigating circumstances to be taken into account in sentencing, for the liability of legal persons, and for the making of rules on jurisdiction.
    12. We raised with the Minister a number of issues of definition, notably that of "illicit drug trafficking" and of aggravating circumstances to be taken into account in sentencing, as well as the rules on jurisdiction where in both cases the draft appeared to diverge from the 1988 UN Convention against Illicit Traffic in Narcotic Drugs. These issues were addressed in the revised versions of the proposal (documents (a), (b) and (c)) which we considered on 24 April.
    13. We remained concerned that the proposal appeared to require Member States to establish jurisdiction over offences committed outside the national territory, but where the alleged offender was either a national of, or resident in, that Member State. This appeared to us to be too inflexible a rule and likely to lead to difficulties where (as in cases before the courts of the various parts of the United Kingdom) oral evidence was required.
    14. We also had concerns over the provisions of Articles 4 and 5, dealing with penalties and sentencing. We shared the concerns expressed by the Minister over the treatment of precursor chemicals, and wished to be reassured that Article 5 would not interfere with judicial discretion in individual cases.
    15. The Minister's letter

    16. In his letter of 13 May, the Parliamentary Under-Secretary of State at the Home Office addresses these concerns. On the question of establishing rules of jurisdiction, the Minister explains that it has been decided that it would be more appropriate to align the provisions on jurisdiction with those of the draft Framework Decision on combating sexual exploitation of children and child pornography. The Minister explains that this means that it will be optional rather than compulsory to establish jurisdiction over offences where the only connecting factor is that the offence is committed by a Member State's national, and that there will be no provision requiring jurisdiction to be established where the only connecting factor is residence in a Member State.
    17. On the provisions of Articles 4 and 5, the Minister comments as follows:
    18. "Discussions on Articles 4 and 5 have been more lengthy than we would have wished, due to differences of view between the Member States on the criteria for determining which offences should be considered serious, and on the proper level of penalties for trafficking in precursors. We are still examining the way that the proposed 10-year penalty would impact on domestic law in relation to Class C drugs. At present there is majority support for applying this penalty to organised trafficking, regardless of the type of drugs involved. We are considering whether to join this consensus, or seek greater flexibility in the text. I note that the Committee does not attach great weight to the distinction between trafficking by individuals and by organised groups."

    19. The Minister further comments that provisions in Article 5 which might have limited judicial discretion in sentencing have now been deleted following the Working Group examination of the proposal on 23 April.
    20. The revised proposal

    21. In his Explanatory Memorandum of 10 May the Minister describes the revised text of the proposal (document (d)) which has been prepared by the Presidency and circulated to Member States on 15 April. He explains that the Government is content with Articles 1 and 2, and that Articles 5 and 10 (which dealt with aggravating circumstances and cooperation between Member States) have been deleted following the Working Group's examination of the text on 23 April.
    22. The Minister further explains that the Government welcomes the proposed maximum penalty of at least 10 years for serious drug trafficking offences, now provided for in Article 4(3). The Minister explains that it is the Government's view that this move "will send out the correct signal in the EU's fight to combat illicit drug trafficking". However, the Minister also observes that the 10 year penalty for organised trafficking does not reflect the UK's current position in relation to trafficking in Class C drugs (where the maximum penalty is 5 years).
    23. Conclusion

    24. We thank the Minister for his letter and Explanatory Memorandum. Like the Minister, we welcome the amendments which have been made in relation to jurisdiction, which make it clear that it is to be optional whether or not to establish jurisdiction solely on the grounds of nationality or residence. We also welcome the deletion of provisions which might have interfered with judicial discretion in sentencing.
    25. We note, and share, the Minister's concern that the provisions in Article 4(3) on organised trafficking might have the effect of requiring an increase from five to ten years in the current UK maximum penalty for organised trafficking in Class C drugs. We note that the Minister is still considering whether to join the consensus in favour of the higher penalty, or to seek greater flexibility in the text.
    26. As the points we have raised have now been satisfactorily addressed, we are content to clear the documents.

17. We consider that the following documents do not raise questions of sufficient legal or political importance to warrant a substantive report to the House :-







COM(01) 621

Commission Opinion pursuant to Article 251(2), third subparagraph, point (c) of the EC Treaty, on the European Parliament's amendments to the Council's common position regarding the draft Directive relating to the Assessment and Management of Environmental Noise amending the proposal of the Commission pursuant to Article 250(2) of the EC Treaty.



COM(02) 146

Commission Report on the application of Directive 79/409/EEC on the conservation of wild birds. Update for 1996-1998 based on information supplied by the Member States on the application of national measures adopted pursuant to the Directive.


Draft Council Regulation amending Regulation (EEC) No. 2081/92 on the protection of geographical indications and designations of origin for agricultural products and foodstuffs.


Draft Council Decision relating to the conclusion of an Agreement between the European Community and the Republic of Bulgaria concerning fishery products, in the form of an additional Protocol completing the Europe Agreement establishing an association between the European Communities and their Member States and the Republic of Bulgaria.

Food Standards Agency




COM(01) 159

Amended draft Directive on the approximation of the laws of the Member States relating to food supplements.




Council Joint Action on a EU contribution towards reinforcing the capacity of the Georgian authorities to support and protect the OSCE Observer Mission on the Georgia/Chechen and Georgia/Ingush border.


Draft Common Position concerning the extension of restrictive measures against Liberia.





Draft Council Decision on the adaptation of Part VI of the Common Consular Instructions to the new uniform format for visa-stickers.

  Department for International Development




COM(02) 116

Commission Communication on education and training in the context of poverty reduction in developing countries.



COM(02) 183

Draft Council Decision on the position to be adopted by the Community in the ACP-EC Council of Ministers regarding the implementation of Articles 28, 29 and 30 of Annex IV to the Cotonou Agreement.


  Lord Chancellor's Department




SEC(02) 157

Commission Report on the implementation of the Robert Schuman Project 1999-2001.


  Department of Trade and Industry




COM(02) 160

Draft Regulation on the prolongation of the ECSC steel statistics system after the expiry of the ECSC Treaty.



COM(02) 171

Commission Communication entitled: 2002 Review of the Internal Market Strategy - Delivering the promise.



COM(02) 172

Draft Council Regulation confirming the definitive anti-dumping duty imposed on imports of cotton-type bed linen originating in India by Regulation (EC) No. 2398/97, as amended and suspended by Council Regulation (EC) No. 1644/2001.


  Department for Transport, Local Government and the Regions




COM(02) 97

Draft Council Decision concerning the conclusion of the Agreement on maritime transport between the European Community and its Member States and the People's Republic of China.


  HM Treasury



6564/02 ADD1

SEC(02) 154

Commission Communication concerning the preparation of the International Conference on Financing for Development (Monterrey, Mexico, 18-22 March 2002.)



SEC(02) 227

Preliminary draft amending budget No.1 to the budget for 2002 - Statement of revenue and expenditure by section - Section I: Parliament - Section II: Council - Section III: Commission.



SEC(02) 222

Preliminary draft amending budget No.2 to the budget for 2002 - General statement of revenue.


First Quarterly Report of transfers of appropriations within the general budget for the financial year 2002.


(23126) - : see paragraph 13 of this Report. Back

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Prepared 27 May 2002