Joint Committee on Statutory Instruments Twentieth Report


APPENDIX III

Memorandum by the Minister of Agriculture, Fisheries and Food

CHARGES FOR INSPECTIONS AND CONTROLS REGULATIONS 1997 (S.I. 1997/2893)

1. The Joint Committee considered the above instrument at its meeting on 13 January and has requested a memorandum on the following point:

Regulation 3(3) authorises the Minister to reduce certain charges to reflect the actual costs of inspections and controls. Identify in Directive 85/73/EEC (as amended) the source of the authority to vary an amount which is (save for egg products) fixed in its Annex B and explain why the authority so to reduce charges does not extend to those in respect of poultry, game, wild game or milk.

The authority to vary an amount fixed in Annex B to Council Directive 85/73/EEC (OJ No. L162, 1.7.96, p.4) is found in Article 5(3) of that Directive.

Article 5(3) authorises member States to charge an amount exceeding the levels of the Community fees (i.e. those set out in Annex B to the Directive) provided that the total fees charged by each member State do not exceed the actual cost of inspection.

Article 5(3) was applied in respect of all the fees set out in the Schedule to the Regulations, except those relating to eggs, poultry, game, wild game and milk.

As respects eggs, in conformity with paragraph 1(d) of Annex B to the Directive (which requires the actual costs of the inspections to be charged), the fee concerned represents a worst-case estimate of the actual costs of the appropriate inspections. The final actual costs of carrying out those inspections were not known when the Regulations came into force since those final costs will not be known until the completion of a competitive tendering exercise for the analysis of the samples collected during the inspection process. Article 5(3) could not, therefore, have been applied in respect of eggs, since it can only relate to those Community fees expressed in precise monetary terms. Given that the fee concerned had to be incorporated into the Regulations before it could lawfully be charged in respect of future inspections, it is inevitable that it is an estimated fee. By "worst-case estimate" is meant the highest charge that could reasonably be foreseen.

As respects poultry, game, wild game and milk, the fees concerned are the sterling equivalent of the Community minima set out in Annex B to the Directive, calculated in accordance with its Article 7. Article 5(3) could not have been applied in respect of poultry, game, wild game and milk because the actual costs of the relevant inspections would have been less than the Community minima set out in Annex B. Article 5(3) can only be used where the actual costs are higher than the Community minima.

As respects the fees which Article 5(3) has been applied (those in respect of bovines, swine, solipeds, sheep, goats, salmon and trout), they (in the same way as the fee in respect of eggs) represent a worst-case estimate of the actual costs of the appropriate inspections. For the same reason given in respect of eggs, the final actual costs of carrying out those inspections were not known when the Regulations came into force.

The fees in respect of eggs, bovines, swine, solipeds, sheep, goats, salmon and trout were estimated on a worst-case basis because Article 5(2) of the Directive prohibits any direct or indirect refund of the fees provided for by it. The fees were set at the levels concerned because it was felt necessary to ensure that - pending the outcome of the competitive tendering exercise - the situation should not arise whereby the person liable to pay the fee was undercharged and thereby received an indirect refund. It may be that the true actual costs turn out to be less than the estimated costs and - insofar as the estimated fees are set in reliance on Article 5(3) - there must be an implicit power in that provision to reduce the estimated fees to reflect the true level of the inspection costs. That same argument can also be applied in respect of the estimated fees for carrying out inspections in respect of eggs.

2. This memorandum has been agreed with the Department of Health, the Scottish Office and the Welsh Office.

19th January 1998


 
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