1 June 2011 to 30 November 2011
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House of Lords London European Union Committee SW1A 0PW www.parliament.uk/hleua The primary purpose of the House of Lords European Union Select Committee is to scrutinise EU law in draft before the Government take a position on it in the EU Council of Ministers. This scrutiny is frequently carried out through correspondence with Ministers. Such correspondence, including Ministerial replies and other materials, is published where appropriate. This edition includes correspondence from 1 June 2011 to 30 November 2011. ECONOMIC AND FINANCIAL AFFAIRS AND INTERNATIONAL TRADE (SUB-COMMITTEE A) CONTENTS ACCESS TO A BASIC PAYMENT ACCOUNT ..................................................................................................... 2 CERTAIN TYPES OF COMPANIES AS REGARDS MICRO-ENTITIES (7229/09) ....................................... 3 CO-FINANCING RULES FOR COHESION POLICY (13400/11) .................................................................... 4 COMMISSION'S MANAGEMENT ACHIEVEMENTS (11264/11) ..................................................................... 4 COMMON COMMERCIAL POLICY (11762/11) .................................................................................................. 7 COMMON CONSOLIDATED CORPORATE TAX BASE (7263/11) ............................................................. 8 CUSTOMS 2013 PROGRAMME (13884/11) ........................................................................................................10 DEPOSIT GUARANTEE SCHEMES (12386/10) ...................................................................................................11 DRAFT AMENDING BUDGET NO 2 AND THE MOBILISATION OF THE EU SOLIDARITY FUND (8243/11, 8244/11) .......................................................................................................................................................13 DRAFT EU BUDGET 2012: OUTCOME OF NEGOTIATIONS IN THE COUNCIL ...............................15 DRAFT EU BUDGET 2012 (14327/11) ..................................................................................................................19 EFFICIENCY SAVINGS IN THE EU BUDGET .....................................................................................................21 EMERGENCY AUTONOMOUS TRADE PREFERENCES: PAKISTAN (14969/10) ...................................22 ENERGY TAXATION DIRECTIVE (9267/11, 9270/11) ....................................................................................22 EU FINANCIAL STABILISATION MECHANISM (14331/11, 14332/11) ......................................................23 EU FRAMEWORK FOR CRISIS MANAGEMENT IN THE FINANCIAL SECTOR (15375/10) ..............23 EU INVESTMENT POLICY: TOWARDS A COMPREHENSIVE EUROPEAN INTERNATIONAL INVESTMENT POLICY (11953/10, 11952/10) .....................................................................................................25 EUROPEAN GLOBALISATION ADJUSTMENT FUND (11967/11) ..............................................................26 EUROPEAN GLOBALISATION ADJUSTMENT FUND (12122/11) ..............................................................27 EUROPEAN GLOBALISATION ADJUSTMENT FUND (13626/11) ..............................................................30 FINANCIAL TRANSACTION TAX (14942/11) ..................................................................................................31 THE FUTURE OF ECONOMIC GOVERNANCE IN THE EUROPEAN UNION (14496/10, 14497/10, 14512/10, 14515/10, 14520/10) ................................................................................................................................31 GENERALISED TARIFF PREFERENCES (10052/11) ...........................................................................................33 INVESTOR COMPENSATION SCHEMES (12346/10) ......................................................................................35 ORIGIN MARKING OF CERTAIN PRODUCTS IMPORTED FROM THIRD COUNTRIES (5091/06) ...........................................................................................................................................................................................39 OTC DERIVATIVES (13917/10) ...............................................................................................................................40 PROCEDURES FOR ADOPTING MEASURES RELATING TO THE COMMON COMMERCIAL POLICY (7455/11) ........................................................................................................................................................43 PROPOSED REGULATION ON NATIONAL AND REGIONAL ACCOUNTS (5053/11) ...................44 PRUDENTIAL REGIME FOR THE EU (13284/11 + 13285/11) ........................................................................44 RESIDENTIAL PROPERTY DIRECTIVE (8680/11) ..............................................................................................53 ROADMAP TO STABILITY AND GROWTH (15624/11) ...............................................................................57 SHORT SELLING AND CREDIT DEFAULT SWAPS (13840/10) ...................................................................57 TRADE AGREEMENT BETWEEN THE EU AND COLOMBIA AND PERU (14757/11, 14760/11) .....60 TRADE GROWTH AND WORLD AFFAIRS: TRADE POLICY AS A CORE COMPONENT OF THE EU'S 2020 STRATEGY (16183/10) ...........................................................................................................................61 UN FIREARMS PROTOCOL: PROPOSED REGULATION (10963/10) .......................................................61 VALUE ADDED TAXATION ON POSTAL SERVICES (11338/04) ...............................................................64 VAT GREEN PAPER (17491/10) ..............................................................................................................................64 ACCESS TO A BASIC PAYMENT ACCOUNT Letter from the Chairman to Mark Hoban MP, Financial Secretary, HM Treasury Thank you for your Explanatory Memorandum 13235/11, dated 1 September 2011, on the Commission’s Recommendation on access to a basic payment account. The EU Economic and Financial Affairs and International Trade Sub-Committee considered this document at its meeting on 1 November. We agree with the Government’s conclusion that the Commission’s Recommendation would add little in terms of consumer access to UK bank accounts. Pending consideration of any future legislation on the subject, we have agreed to clear this document from scrutiny. 1 November 2011 2 CERTAIN TYPES OF COMPANIES AS REGARDS MICRO-ENTITIES (7229/09) Letter from Edward Davey MP, Parliamentary Under Secretary of State, Department for Business, Innovation and Skills to the Chairman I refer to the Competitiveness Council’s meeting of 30 May 2011, which passed a compromise package to partially exempt micro-entities from the 4th Company Law Directive. An explanatory Memorandum (EM) on this subject was submitted on 17 March 2009, and was cleared by your committee. In my letter dated 11 August 2010 I updated the Committee outlining amendments to the original proposal. The 4th Company Law Directive, which establishes minimum requirements for the annual accounts of companies and certain partnerships, forms the basis for financial reporting by small and medium enterprises (SMEs) in the EU. Currently, micro-entities are mostly subject to the same rules as larger companies. Those rules put a burden on them which is disproportionate. The package agreed at the Competitiveness Council would allow Member States the option to simplify how micro-entities draw up annual accounts. This would enable the UK to harmonise tax and accounting rules for these companies, significantly reducing administrative and compliance burdens on them. An earlier proposal was approved by the European Parliament in February 2010 but was blocked by a minority of Member States in the Council. The subsequent package is a compromise that is designed to balance the concerns of all parties. It aims to relieve burdens for micro-entities and provides a balance between simplification and transparency. The key amendments agreed by the Competitiveness Council are: A change in the definition of micro-entity with a company defined as a micro-entity if it does not exceed the limits of two out of three criteria: — a balance sheet of €250,000; — a net turnover of €500,000; and — an average number of 10 employees Partial exemption rather that full exemption from the 4th Company Law Directive has been agreed. This still offers significant simplification as it allows Member States to exempt micro-entities from: a) presenting accruals in accounts b) drawing up notes to the accounts on the condition that 2 key notes are disclosed at the foot of the balance sheet. These are: (i) the amount of advances and credits granted to members of the administrative, managerial and supervisory bodies with indications of the interest rates, main conditions and amounts repaid as ell as commitments entered into on their behalf by way of guarantees of any kind, with an indication of the total for each category; (ii) Information referred to in Article 22 (2) of Directive 77/91/EEC concerning the acquisition by a company of its own shares is given in the notes to their accounts. c) Drawing up an annual report in accordance with the Directive, providing the information specified in (b) is disclosed. d) Publication of annual accounts provided balance sheet information is filed in accordance with national law with at least one competent authority. If the competent authority is not the register, it will have to provide