European Union Legislative Proposals
Agenda item 1 is consideration of whether two European Union legislative proposals comply with the subsidiarity principle. Those are the proposal for a regulation of the European Parliament and of the Council on the establishment of a European public prosecutor’s office, which is document 12558/13, and a proposal for a regulation of the European Parliament and of the Council on the European Union agency for criminal justice co-operation—or Eurojust—which is document 12566/13.
We have only one opportunity to consider the proposals, which is why the EU reporter—Roderick Campbell—and I agreed that it would be helpful to hear from the Cabinet Secretary for Justice today. I welcome to the meeting Kenny MacAskill, the Cabinet Secretary for Justice; Kevin Philpott, senior policy officer with the Scottish Government’s criminal procedure policy unit; and David Dickson, of the international co-operation unit at the Crown Office and Procurator Fiscal Service. I thank our witnesses for agreeing to come at short notice. I also thank the cabinet secretary for the additional letter regarding the Government’s position on the proposals.
I ask the cabinet secretary to make a brief opening statement on both proposals before I open up the meeting to members’ questions.
On behalf of the Government, I echo your comments, convener, regarding David McLetchie in particular, but also regarding Graeme Pearson and Jenny Marra.
As members are aware, the Scottish Government has brought an issue of subsidiarity to the committee’s attention. I hope to give you some indications of the Government’s thinking on that, but I would also like to give you some information about aspects of policy and proportionality. You have received a letter from me outlining the Government’s thinking on the issues. I appreciate that the timing has not been altogether conducive to an examination of the issues, so I hope that the letter, along with what I have to say this morning, will help.
The two proposals are closely linked. The proposed European public prosecutor’s office would work out of the reformed Eurojust, and the reforms to Eurojust are in considerable measure about providing the framework to allow that to happen.
As I say in my letter, subsidiarity is defined in article 5 of the Treaty on European Union, which states:
“the Union shall act only if and in so far as the objectives of the proposed action cannot be sufficiently achieved by the Member States, either at central level or at regional and local level, but can rather, by reason of the scale or effects of the proposed action, be better achieved at Union level.”
I will begin with the EPPO proposal. The Commission believes that there is a major issue of fraud against the EU budget and that the need to tackle it is given added impetus by the current financial crisis. Members will have seen from the United Kingdom Government’s explanatory memorandum that it considers that the identified fraud of about £425 million in each of the last three years is actually the tip of a £2.55 billion iceberg.
It is incontestable that something needs to be done about EU fraud. However, the proposed action raises serious subsidiarity concerns. Members will have seen those concerns in the UK Government’s explanatory memorandum, but it is worth repeating the core of the concerns, which is that the Commission has moved directly to creating a new supranational EPPO with extensive and harmonised powers. There has been no consideration of whether less abrupt changes, such as prevention or deterrence at source, might be as effective—they would certainly be a great deal cheaper.
Even if we take the Commission’s view that a high prosecution rate is the way to deal with fraud, it is clear that the move to an EPPO is premature. In 2011, the Commission suggested that national prosecution authorities had conviction rates of between 14 and 80 per cent for cases that the European Anti-fraud Office—OLAF—transferred. It is therefore clear from the Commission’s figures that some member states are achieving high prosecution rates. The correct course of action, in line with the principle of subsidiarity, would be to recognise that some member states are effective, so what is needed is not a new EPPO but an effort to help all member states to reach the high levels that some have already achieved.
To turn to the Eurojust proposal, we acknowledge that Eurojust is already a feature of the landscape. We believe that it is successful; that is certainly the tenor of its recent annual report—its 11th—in which the organisation is said to have “reached ‘cruising speed’”. That being the case, one might wonder why now is the time to jump out of that vehicle and into a rebuilt one.
The specific subsidiarity concern with the Eurojust proposal relates to the powers that are given to national members. As currently constituted, the powers allow national members to initiate investigations
“in agreement with the competent national authority”.
The reforms would allow national members throughout the Union to initiate investigations themselves in undefined urgent circumstances. No effort has been made to establish whether the objectives could be better achieved by continuing with the existing arrangements, which respect national and local jurisdictions more. Members will have seen that any kind of bespoke impact assessment is missing. In those circumstances, we do not see how the subsidiarity case for the departure from the existing model is made.
Of course, when there are subsidiarity concerns, there are also likely to be proportionality concerns. According to article 5.4 of the treaty,
“Under the principle of proportionality, the content and form of Union action shall not exceed what is necessary to achieve the objectives of the Treaties.”
Relevant considerations are whether the Union measure has left as much scope as possible for national decision making and whether the proposals respect well-established national arrangements and the workings of member states’ legal systems. It is clear that there are difficulties with each of those considerations.
At the heart of our policy position is our prosecution system and in particular the position of the Lord Advocate at its head. Decisions by the Lord Advocate are to be taken independently of any other person. The proposals for an EPPO and for the reform of Eurojust trespass directly on that position by granting prosecutorial powers in member states to the EPPO and by allowing national members of Eurojust to direct investigations.
These are proposals. Ahead of them lies a period of negotiation, so it is too early to say what the final position will be. In particular, the UK Government has made it very clear that it does not intend to take part in the EPPO. That is stated at several points throughout its memorandum.
However, the proposals give considerable cause for concern. I believe that members will understand our policy position and the difficulties that the Commission’s proposals raise. The UK Government’s explanatory memoranda set out issues in respect of which both proposals fall short of satisfying subsidiarity concerns. We agree with that assessment. I hope that I have helped the committee with the background to why we have taken that view.
That was certainly robust in comparison with what I expected from reading the letters—that is just a comment.
I call Roddy Campbell first, as he is the committee’s EU reporter.
Good morning, cabinet secretary. Will you expand on the comment on the EPPO in your initial letter that
“there is little or no evidence that consideration has been given to possibilities short of the creation of a new supra-national agency”?
What evidence of the Commission’s investigations has been seen by you or your team?
Kevin Philpott (Scottish Government)
The point is that we have seen no evidence of any intermediate step between the current position and the all-singing, all-dancing EPPO. There has been no examination of anything less than the full measure that is in the proposal.
So, in terms of the Commission trying to persuade you—let alone this committee—that it has considered alternatives, you would say that that position has not been proven.
That is very much our position. There is no evidence of an intermediate step. There is no evidence that the Commission has acknowledged that there might be a subsidiarity problem by asking, “Is there something less than this that would achieve the objectives and would be in keeping with national and local measures?” and saying, “Let’s examine something less than the entire EPPO proposal.” There is no such examination.
The UK Government has not reached a final view on the Eurojust proposal.
Can we come back to that afterwards? Let us deal with the EPPO proposal first. I will come back to you.
The cabinet secretary made mention of the success rates for prosecution of fraud across Europe. I do not see any reference to the number of cases transferred to the UK as a member state or to the number of cases within Scotland. Do we have any knowledge of the number of cases transferred and our own success rate with regard to prosecution?
David Dickson (Crown Office and Procurator Fiscal Service)
The impact assessment indicated that there were something in the region of 25 cases in the UK. There have been very few cases in Scotland. Currently, there is one case.
I think that I am rehearsing the facts, but I do so for the record. It appears that we have not identified where the nub of the fraud difficulty lies in member states. Given that there is only one case in Scotland, we seek to crack a very small nut by making these arrangements.
The evidence seems to indicate that the European public prosecutor’s office is being established to tackle fraud as regards the European budget—the budget of the institutions. Fraud represents 0.5 per cent of the budget, so it is not a huge figure. Fraud of any type has to be tackled, but although the figure itself is significant, it is not a significant percentage of the European Union’s budget.
How do you know that it is 0.5 per cent?
The figure is in the impact assessment.
But how do people know that if they have not uncovered all the fraud?
That is the figure for recorded fraud. It is between £400 million and £600 million, depending on what you read.
So they know about 0.5 per cent, but the percentage could be a lot bigger.
It is suggested that the figure could be as high as £2.5 billion.
Paragraph 7 of the explanatory memorandum relating to the EPPO proposal states:
“The Commission believes that Member States are not able satisfactorily to identify, investigate and prosecute EU fraud.”
Were any representations about the ability to “identify, investigate or prosecute” made to the Scottish criminal justice system in advance of what seems to be an over-the-top, draconian proposal?
I will ask David Dickson to answer that from a prosecutorial point of view.
I am not aware of whether there has been any direct contact in that regard. The history of the proposal goes back to the 1990s. It has been resurrected, given the current economic situation. A University of Luxembourg study that looked at all member states’ approaches to tackling fraud in the European budget identified what is said to be a wide discrepancy. Some member states will investigate and prosecute every case that is referred to them. Conviction is never guaranteed—that is a different issue, but there are diverging conviction rates, too.
What underlies the issue is the fact that we are dealing with 30 different legal systems. Each member state has different rules of evidence and different ways of establishing guilt and so forth. The Commission’s position is that the only way that we can deal with that is to have a supranational body with rules of evidence that apply across the board in all member states. Model rules have been drafted, which deal with criminal procedure and evidence. The proposal is effectively an attempt to overcome all that, but it is also a severe criticism of member states’ national systems. As Kevin Philpott said, despite the study, there has not been much evidence that those systems are so defective that a supranational body is required.
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I should say that we have not had any communication from the Commission. Certainly, the Government believes that the prosecutorial system in this country works well in relation to such cases when they happen here.
So you are saying that the proposal goes far beyond just the administrative and policing aspects and that we are talking about changing the rules of evidence or applying different rules of evidence to jurisdictions that have their own systems, complete with different ways of determining guilt and of considering balance, juries and whatnot.
Yes.
Good morning, cabinet secretary and gentlemen. Following on from John Finnie’s question, I am concerned about the powers that may be transferred if the proposals go ahead. The cabinet secretary said that some member states have been very effective in relation to fraud. He also said that fraud is just a small issue in Scotland and that some member states should be given help to be as effective as others on the issue. Has the Scottish Government or the UK Government put forward the idea of helping other member states, rather than having this proposed huge body? The issue is difficult to tackle if some member states are effective but others are not. Has there been any communication from the Scottish Government to the UK Government or from the UK Government to the EU with regard to helping individual member states to be as effective as others on the issue?
We should put it on the record that, as far as we are concerned, Eurojust works well, as does Europol. Whether through the offices of the law officers, ourselves as the Government, the United Kingdom permanent representation to the European Union or whatever, we believe that it is important that we co-operate at that level. We believe that we are contributing and that any issues that there may be need to be tackled elsewhere.
It is not simply in this area that there are issues; we know that, in terms of information relating to previous victims, some European states are much better. We have had difficulties occasionally in Scotland because that information is not necessarily available to us or able to be accessed by us. However, the Government fully supports co-operating to address fraud, which is unacceptable. We believe that our justice resources—the Government, the independent law officers and the Crown Office and Procurator Fiscal Service—are capable of providing that co-operation. They will continue to co-operate fully, but we share the UK Government’s concern about the proposals, which would cut across the office of the independent Lord Advocate and perhaps result in difficulties if a different jurisdictional view is taken in a system where we have our own legal views.
I have a final question. The cabinet secretary has explained that we have concerns. Would we write to the EU or the UK Government with those concerns to ask whether it would be possible for other—
No. That is for the committee.
Sorry.
That is for us to decide.
Sorry. I have overstepped the mark there.
What the cabinet secretary does is his business, although sometimes we like to know it as well.
I would have liked an answer.
We will make up our minds about what we want to do on the issue.
I want to move on to the next bit. I cut off Roderick Campbell’s question about Eurojust and the second proposal.
The UK Government has yet to reach a final view on the proposal. Are the witnesses able to tell the committee whether the Scottish Government has had any recent discussions with the UK Government in relation to the Eurojust proposal? Are there any indications of its thinking?
I have had some recent discussions with colleagues in the UK Government, but they have not indicated any final thinking on what they intend to do about the issue. However, we are in regular touch about that. Indeed, a conference call has been arranged for tomorrow.
Do we really have no idea about the proposed investigations into undefined urgent areas and what is to be covered?
No, we do not; hence, the term remains undefined.
How does that satisfy the subsidiarity principle?
That is exactly the question. We have no way of assessing how the subsidiarity principle would be addressed as long as the undefined urgent matters remain undefined. “Urgent” could mean quite a lot of things. That is possibly more of a proportionality question than a subsidiarity one but, as you know, they are closely linked.
Reading the papers over the weekend, I struggled to understand the extent to which one proposal relates to the other and how much they rely on each other. If one proposal were to fall because of subsidiarity, how much impact would that have on the other? Are they so closely interlinked that it would have an impact, or are they completely separate?
There is clearly a link between the two. For example, the papers on the proposed directives say that Eurojust’s fraud cases—that in itself is a significant phrase, in comparison with the phrase “fraud cases reported to Eurojust by member states”—will be transferred to the European public prosecutor’s office. There is a link.
As far as the law officers are concerned, Eurojust plays a valuable role. The Council is evaluating the current structure of Eurojust with visits to all member states to see how they engage with Eurojust under the most recent decision. It has been suggested in various places that the Eurojust proposal is, perhaps, a little premature, as the current situation is still being evaluated.
There is a mechanism within Eurojust that can deal with all those issues. Ideally, it would be stand-alone because it has direct, substantial benefits to us as prosecutors.
Reading the papers on the two separate proposals, it seemed to me that if one were to engage in some kind of transnational investigation of fraud, Eurojust would necessarily need to change its method of governance to oversee that new capacity. I was trying to unpack that in my mind. If we decide that there are subsidiarity concerns—and concerns in relation to proportionality, in terms of fraud—that means that an awful lot more time is needed to re-evaluate the Eurojust element on its own, but they are presented as two separate issues. The spaghetti is there; the issue is separating it out, which is quite difficult when it comes to making decisions.
That issue will concern many jurisdictions, because the proposal can be implemented only if there is unanimity, failing which there could be enhanced co-operation if at least nine member states agreed to the proposal. If that were to happen, there would clearly be different levels at which the organisations would interact.
I am not trying to avoid the question. It is extremely difficult to see how an organisation that is valuable and works would interact with an organisation to which perhaps only half the member states had signed up. Eurojust would have to find a mechanism of operating within that situation, as would the member states’ national desks, but it is clear that Eurojust, the national desks and a gateway that we prosecutors could approach to gain assistance across borders would still exist.
I am grateful for that. Thank you.
I am going to say the fatal words that I see no member who wants to ask more questions—when I say that, somebody usually comes in. However, there are no further questions, so I thank the cabinet secretary and his officials for attending.
We will move straight on to decisions on each separate proposal. The first is the EPPO proposal. Please excuse me for just battering on, but we have a lot to do this morning. That is because of you, cabinet secretary, and all the bills that you give us. We have a lot of witnesses coming.
Three options are provided on page 3 of paper 2. The first is to agree that the EPPO proposal complies with the subsidiarity principle; the second is to agree that it does not comply, which would trigger a motion in the Parliament; and the third is to agree that there are concerns that the proposal may breach the subsidiarity principle and to write to the relevant Westminster committees highlighting those concerns.
In light of all that has been said, and in light of the UK Government’s position, I agree with the Scottish Government and take the view that the proposal does not comply with the principle of subsidiarity.
As everyone seems to agree with that, I think that we can move on. A motion to Parliament will be triggered. It does not necessarily mean that there will be a debate but we will lodge a motion to be taken this week.
The second proposal is to reform Eurojust. Again, can I take Roderick Campbell’s views on that proposal?
This one is a bit more difficult to assess. I note that the Government official said that the proposal is premature, and I think that it is, too. It is quite difficult to separate subsidiarity from proportionality. Because we do not know what undefined urgent cases are, the proposal is borderline.
I am not sure that I take quite so strong a view of the Eurojust proposal as I do of the EPPO proposal. Perhaps there is a halfway house: we could voice concerns about the Eurojust proposal, rather than take a specific view.
Does anyone take a different view? I think that we are all pretty well with Roderick Campbell on that. We could say that the proposal might breach the principle of subsidiarity, and we could write to the relevant Westminster committees to highlight our concerns. We should also thread in the concern that there is insufficient evidence. It all seems to be a bit hurried, opportunistic and not thought through. We will write to the relevant committees.
Mr Philpott said that he is to have a conversation with the UK Government tomorrow, so perhaps we could be advised of the outcome of that.
Would members be happy for the letter to be drafted in my name and for Roderick Campbell to give it the once over?
Members indicated agreement.
Thank you. We will have a brief suspension of a couple of minutes to allow the next panel of witnesses to sit down, so members should stay in their seats.
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Meeting suspended.
10:27
On resuming—