Brussels Bulletin No. 516: 2 September 2016

NATIONAL PARLIAMENT OFFICE

HOUSE OF COMMONS

BRUSSELS BULLETIN NO. 516

2 September 2016

Contents Page

AUTUMN LOOK ...... 2 A LOOK AHEAD TO THE KEY EU EVENTS FOR THE AUTUMN ...... 2 COUNTER-TERRORISM ...... 5 HOME AFFAIRS MEPS DISCUSS RECENT TERRORIST ATTACKS IN MEMBER STATES ...... 5 OTHER NEWS ...... 8 EU AND INDONESIA TO LAUNCH TRADE TALKS ...... 8 UK TO GIVE UP 2017 COUNCIL PRESIDENCY; NEW ORDER AGREED ...... 8 POSTING OF WORKERS DIRECTIVE ...... 8 COMMISSION ISSUES RULE OF LAW RECOMMENDATION TO POLAND ...... 8 TIMOTHY KIRKHOPE MEP BECOMES LORD KIRKHOPE ...... 9 VICTIMS' CAMPAIGNER RAYMOND MCCORD TAKES THE UK TO COURT OVER BREXIT ...... 9 BOSNIA AND HERZEGOVINA TAKES FURTHER STEP TOWARDS EU MEMBERSHIP ...... 9 NORWEGIAN PM SOFTENS STANCE ON UK JOINING EFTA ...... 9 COMMISSION RULES THAT IRELAND GAVE PREFERENTIAL TAX TREATMENT TO APPLE ...... 10 COMMISSION PROPOSES AMENDMENT TO PSYCHOACTIVE SUBSTANCES LEGISLATION...... 10 CALENDAR ...... 12 SLOVAK PRESIDENCY: FORTHCOMING COUNCIL MEETINGS (JULY TO DECEMBER 2016) ...... 12 SLOVAK PRESIDENCY: FORTHCOMING INTER-PARLIAMENTARY MEETINGS IN BRATISLAVA (JULY-DECEMBER 2016) ...... 12 FORTHCOMING INTER-PARLIAMENTARY COMMITTEE MEETINGS (ICMS) IN THE EUROPEAN PARLIAMENT13 OTHER EVENTS ...... 13

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Autumn look A look ahead to the key EU events for the autumn This article aims to summarise some of the key issues facing the EU institutions this autumn.

“Brexit”: the UK’s vote to leave the EU Following the UK’s vote to leave the EU on Thursday 23 June, Prime Minister David Cameron attended and addressed the European Council summit on 28 June. The following day, the other 27 Heads of State and Government met informally and without the UK to begin a debate on the future of the EU. This discussion will continue in Bratislava on Friday 16 September, again without the UK. European Council President Donald Tusk has stated his intention to meet with all 27 EU leaders in advance of the September meeting. He first met with German Chancellor Angela Merkel on 18 August, and has since met with the leaders of Belgium, France, Luxembourg, Slovakia, Cyprus and Bulgaria, with further meetings still to take place. The next formal European Council summit, with the UK present, will take place on 20 and 21 October.

Angela Merkel has also spoken to several EU leaders in preparation for the September gathering. On Monday 22 August, Merkel met with French President Francois Hollande and Italian Prime Minister Matteo Renzi for a “consultation”. The leaders of the three largest EU countries by population, excluding the UK travelled to the island of Ventotene. Ventotene is the location of the grave of Altiero Spinelli, one of the founding fathers of the EU, and also gives its name to the manifesto co-written by Spinelli calling for a federation of European countries to counter the nationalism that had led Europe to war. At a press conference following the meeting, Merkel, Hollande and Renzi emphasised that the EU would continue and stressed the need to cooperate on security and job creation, but nothing substantial was announced. On Friday 26 August, Merkel met with the leaders of the Visegrád countries. In a news conference following the meeting, she said that Brexit was a “turning point in the history of European integration”, noting that “citizens will only accept the EU if it makes it possible for them to prosper”.

Both the Commission and Council have begun to appoint their negotiating teams ahead of Brexit talks. In June, it was announced that Didier Seeuws, a Belgian diplomat, will lead the Council’s Special Task Force on the UK. On Wednesday 27 July, it was announced that Commission President Jean-Claude Juncker had appointed Michel Barnier as Chief Negotiator of the Commission Taskforce for the Preparation and Conduct of the Negotiations with the United Kingdom under Article 50 of the Treaty on European Union (TEU). Barnier will take up the role on 1 October and will report directly to Juncker. Barnier has been a Member of both the French Sénat and Assemblée Nationale, an MEP, Minister in the French Government and European Commissioner. In August, UK Prime Minister Theresa May confirmed that the Government will not trigger Article 50 (the Treaty Article covering how a Member State leaves the EU) before the end of 2016.

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The UK’s new Commissioner Following the referendum result, Lord Jonathan Hill, the UK Commissioner, resigned his post. The UK Government nominated Sir Julian King, a career diplomat and current UK Ambassador to France, as his replacement, and on Tuesday 2 August, his portfolio of the Security Union was announced. Sir Julian remains a Commissioner-designate; before being confirmed by the Council, Sir Julian will appear before MEPs on the EP’s Civil Liberties, Justice and Home Affairs Committee (LIBE) on Monday 12 September in Strasbourg. EU- focused publication Politico described has Juncker’s decision as “smart but cynical”; one that will get through the EP and Council.

Transatlantic Trade and Investment Partnership (TTIP) The EU started talks with the USA on a trade and investment deal, known as the Transatlantic Trade and Investment Partnership (TTIP) in 2013. On Sunday 28 August, German Vice- Chancellor and Economy Minister Sigmar Gabriel said that TTIP talks between the EU and the US had "de facto failed", noting that in 14 rounds of talks, the two sides had not reached agreement on a single chapter of the 27 being discussed. Gabriel also suggested that the US was “angry” about the EU-Canada Comprehensive Economic and Trade Agreement (CETA), because it contained elements that the US did not want to be included in TTIP. The Commission has said that it remains “committed to conclude the talks before the end of the Obama administration”. Two days later, on Tuesday 30 August, the French Secretary of State for Foreign Trade, Matthias Fekl, said that there was “no more political support” in France for the TTIP negotiations. He subsequently tweeted: “France demands the cessation of negotiations”, calling for a “clear and definitive halt” to the talks in order to restart on a “good foundation”. On the same day, French President Francois Hollande said that TTIP would not be finalised before Barack Obama left office. Comments also came from former Commissioner and MEP Viviane Reding (EPP, Luxembourg), who called for an end to the “useless” negotiations, and Dutch Trade Minister Lilianne Ploumen, who said that without the concessions from the US, a TTIP deal was unlikely. The 15th round of TTIP talks is scheduled to take place in October, with an informal meeting of Foreign Affairs Ministers in Bratislava on 22 September to review progress on the deal. It is understood that a motion to halt the talks will be proposed at that meeting.

EU-Canada Comprehensive Economic and Trade Agreement (CETA) On Tuesday 5 July, the Commission published its proposal for the signature and conclusion of the EU-Canada Comprehensive Economic and Trade Agreement (CETA), a Free Trade Agreement between the EU and Canada. The Commission proposed CETA as a mixed agreement, meaning it requires ratification by national Parliaments as well as consent from the European Parliament and the agreement of Member State Governments. Trade Commissioner Cecilia Malmström acknowledged that the decision to class CETA as a mixed agreement was a political one, and she also confirmed the Commission’s intention to provisionally apply parts of the Agreement. To provisionally apply parts of CETA before it fully enters into force, a decision of Member States acting on a qualified majority basis is required. That vote is expected to take place before the EU-Canada Summit on 27 October. EU-focused publication Politico has reported that the Commission supports provisional application in the areas of investment market access provisions, transport services and sustainable development, whereas provisions concerning investment protection and the Investment Court System would not be included in any provisional application. On Wednesday 31 August, the EP’s International Trade ______Track national parliament scrutiny at www.ipex.eu

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Committee (INTA) held an exchange of views on the conclusion of the CETA Agreement. The discussion launched the official consent procedure. Views as to the merits of CETA were mixed. EP rapporteur Artis Pabriks, said that for CETA to be of maximum benefit, all of the trade-related parts had to be provisionally applied as soon as possible, but only after the EP had given its consent.

2017 EU Budget At the end of June, the Commission came forward with its proposal for the 2017 budget. The Commission proposed €157.7 billion in commitments and €134.9 billion in payments (commitments refers to the funding that can be agreed in contracts in a given year; payments to the money actually paid out). The proposal has to be jointly agreed by the EP and Member States. On Wednesday 20 July, Member States representatives reached agreement on a common position for the budget. It is expected that the Council will formally adopt its position by mid-September, after which negotiations will begin with the European Parliament. The EP is expected to adopt its position at the Strasbourg plenary session at the end of October. Member State representatives agreed on €156.38 billion in commitments and €133.79 billion in payments. These figures are a 0.9% increase in commitments and a 7% decrease in payments compared to the 2016 EU budget.

European Parliament In August, the European Parliament produced an overview of the key issues that MEPs will be working on for the remainder of 2016. These include: • in the field of migration: a Commission proposal for a permanent mechanism to relocate those in need of international protection; as well as a Commission proposal for a common list of safe countries of origin; • in the field of terrorism: updated rules on firearms, and legislation to make travelling or receiving training for terrorist purposes a criminal offence; • in the field of taxation: a Commission proposal to improve the transparency of multinational companies’ taxation. In addition, the EP inquiry committee set up to investigate tax evasion and money laundering practices in the EU will start its work; • in the environmental field: the EP inquiry committee set up to investigate emission measurements in the car industry will present its final report.

The EP’s Constitutional Affairs Committee (AFCO) is also expected to agree two reports examining the current and potential future functioning of the European Union. Guy Verhofstadt (ALDE, Belgium) has drafted a report on the possible evolutions of and adjustments to the current institutional set-up of the European Union, with Elmar Brok (EPP, Germany) and Mercedes Bresso (S&D, Italy) are co-authoring a report on improving the functioning of the European Union building on the potential of the Lisbon Treaty.

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Counter-terrorism Home Affairs MEPs discuss recent terrorist attacks in Member States On Wednesday 31 August, Members of the EP’s Committee on Justice, Home Affairs and Civil Liberties (LIBE) held an exchange of views with the Commission and Slovak Council Presidency relating to the EU’s ongoing fight against terrorism and to take stock in light of attacks in Member States over recent months. The discussion took place as EP committees held their first sessions back following the summer recess.

Introduction Luigi Soreca (Director for Internal Security, European Commission) began his opening statement by saying that the terrorist threat faced throughout the EU was both very real and not going anywhere. He noted that, in light of recent attacks, the summer months had been a busy period during which the Commission had explored means of improving coordination between Member States with the aim of better enabling them to address ongoing security concerns. Soreca noted that the profile of the threat posed by terrorism in the EU had risen and that, as a result, so too had the nature of the suspects carrying out attacks. He suggested that the radicalisation rate throughout Europe was increasing and that the ability of terrorist networks to recruit was accelerating as well. In short, the modus operandi of terrorist groups was changing which, in turn, made the potential threat of jihadists striking within the EU all the more pressing. Soreca stated that the Commission condemned all attacks on EU soil and he expressed collective solidarity for the victims of the attacks. He emphasised the Commission’s commitment to improving the safety of European citizens and said that President Juncker’s decision to give the Security Union policy portfolio to UK Commissioner-designate Sir Julian King was evidence of this priority. (NPO note: Sir Julian’s confirmation hearing with the EP will take place at 7:00PM CET on Monday 12 September in Strasbourg). In Soreca’s view, Sir Julian’s responsibilities would closely overlap with those of Commissioners Dimitris Avramopolous (Migration, Home Affairs and Citizenship) and Frans Timmermans (Better Regulation, Interinstitutional Relations, the Rule of Law and the Charter of Fundamental Rights) with the intention of validating many of the priorities outlined in the mission statement of the Commission’s European Agenda on Security.1 Soreca stated that the sharing of information and coordinating of actions needed to be improved across all Member States. In his view, making progress on legislative files relating to Counter-Terrorism, Firearms and the Schengen Border Code would all go some way to helping Member States pre-empt and prevent future attacks. He also added that tackling the root causes of radicalisation and working closely with social media companies, such as Facebook, were two additional means which could be used to help prevent further attacks. Soreca closed by stressing the important work that was already being carried out by Europol and emphasised the added value that its new Counter- Terrorism Centre in The Hague would bring. He acknowledged that the nature of terrorism in 2016 was changing and said that as a result there was a duty on all EU policy-makers to move with the times as well.

Vladimir Simonak (First Secretary for Home Affairs, Slovak Permanent Representation to the EU), representing the Council Presidency, said that summer events across Europe underlined the pressing urgency of tackling terrorism now. He noted that improving security was one of the top priorities of the Slovak Presidency and said that all 28 EU Heads of State and

1 Full details of the European Agenda on Security can be found here - http://ec.europa.eu/dgs/home- affairs/what-we-do/policies/european-agenda-security/index_en.htm ______Track national parliament scrutiny at www.ipex.eu

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Government were on board with this objective. In light of the Brussels attacks of 22 March, Simonak stressed the importance of sharing information and increasing the interoperability of databases between Member States. He noted that the Counter-Terrorism Centre and Internal Referral Unit at Europol strengthened collective capabilities to deal with future threats and suggested that this would put EU leaders in a “better position” to develop a coordinated strategy. Simonak did acknowledge that the speed of radicalisation in Europe was rapidly accelerating and he stressed that, therefore, making progress on legislative dossiers designed to address this was essential. In his view, it was becoming increasingly important to find consensus on files relating to terrorist financing and firearms, as well as implementing the new mandate of Frontex by the end of 2016. For him, cooperation at all levels was the best means of countering future terrorist threats: cooperation between Member States, cooperation within the intelligence communities and cooperation among the EU’s legislative institutions.

Debate Anna Maria Corazza (EPP, Sweden) said that, during such a crisis, solidarity among the people of Europe was of the utmost importance. She agreed that the rate of radicalisation within the EU was increasing and suggested that taking an all-inclusive approach to countering the threat would lead to better results. Corazza said that better education in skills, rehabilitation in prisons and coordinated monitoring of social media platforms should all be important components. Monika Holmeier (EPP, Germany) said that holding discussions and analysing Directives in the EP didn’t necessarily mean that fighting terrorism would improve. She called for real and effective measures to be taken and suggested that all Member States had a responsibility to improve their coordination and cooperation when it came to tackling the threat. Holmeier also highlighted the importance of distinguishing between genuine asylum seekers and those who had abused the EU’s ongoing migration crisis. She acknowledged that a number of jihadists had come to Europe through these channels and remarked that it had also led to a situation where native EU citizens viewed refugees with heightened distrust. Monica Flasikova Benova (S&D, Slovakia) asked for greater information sharing between EU policy- makers. She called on the Commission to provide more details on how Europol’s remit had changed in recent months and sought further details on how its new Counter-Terrorism Centre would work. Juan Fernando Lopez Aguilar (S&D, Spain) focused his attention on Turkey and said that more effort was required to tackle radicalisation and the abuse of migration flows passing through the country.

Helga Stevens (ECR, Belgium) said that EU policy-makers should be focusing on the interoperability of counter-terrorism measures. She added that, while offering solidarity was well-intentioned, European citizens needed more. Stevens said that clamping down on terrorist financing and strengthening the fight against cyber criminality were both priorities and she underlined the important role that Europol’s new Counter-Terrorism Centre had to play. Sophie in ‘t Veld (ALDE, Netherlands) called for a comprehensive evaluation of EU counter-terrorism policy and suggested that, for the last 15 years, it had been inadequate. She suggested that some legislative files - including the Passenger Name Records (PNR) Directive - had been rushed through to adoption, yet were not being correctly implemented. In ‘t Veld also intimated that the European community was too fast to label every attack as “terrorism”. For her, there were a number of deranged individuals who were using IS as a pre-text for their actions and she noted that knee-jerk reactions from EU leaders simply allowed IS to claim more successful strikes than they may, in fact, have actually perpetrated. Judith Sargentini (ALDE, Netherlands) said that strengthening the EU’s external borders was all well and good, but she suggested that that the real battlefield for countering terrorism was in the heads of those carrying out attacks. She called for more to be done by means of education and rehabilitation ______Track national parliament scrutiny at www.ipex.eu 6 Brussels Bulletin No. 516: 2 September 2016

and suggested that if more work was done to create a respectful and more socially equal society, then the proliferation of radicalisation may slow down. Sargentini closed by questioning the merit of committing so many resources to trying to limit the funding of terrorist operations. In her view, such attacks were being carried out “on the cheap” and legislation such as the Anti- Money Laundering Directive would bring little added value.

Jan Philipp Albrecht (Greens/EFA, Germany) agreed that more “soft power” had to be deployed to fight internal radicalisation across EU Member States. He suggested that additional measures should be put in place to supplement work already carried out by Frontex and he called for the PNR Directive to be extended to internal EU flights as well. Cornelia Ernst (GUE/NGL, Germany) said that the EU was facing an existential crisis in its fight against terrorism. She questioned whether measures to date had enjoyed any real success and suggested that a more honest and open debate was required. Ernst argued that more had to be done to tackle Arab countries, such as Saudi Arabia and Qatar, that she believed to be financing terrorist groups, and suggested that a strategic approach, rather than knee-jerk activism, would be more successful. Kristina Winberg (EFDD, Sweden) said that terrorist attacks were now so commonplace that she had to write them down just to remember. She suggested that, however well-intentioned, the Schengen Border Code was now making the fight against terrorism in Europe more challenging and she also stated that there was a clear link between ongoing high levels of migration and increased radicalisation. In her view, this connection had to be addressed before any substantive progress could be made. Harald Vilimsky (ENF, Austria) said that, while the EU was not necessarily the cause of heightened terrorist attacks, it certainly wasn’t helping with solutions. He called for more power to be given back to Member States as they were in the best position to control their borders and understand the concerns of their citizens.

Conclusion Luigi Soreca acknowledged the wide-ranging contributions from EP political groups and said that these highlighted how important a time this was for countering terrorism across the EU. He stated that tackling radicalisation and increasing the monitoring of social media were two key ingredients to a more successful counter-terrorism strategy. Soreca acknowledged that the European Agenda on Security was an evolving process and that, inevitably, there was room for improvement. Soreca suggested that screening for asylum seekers entering the EU and developing a more coordinated approach to the registering of fingerprints were both items on the Commission’s agenda. He also added that fully implementing the PNR Directive and bringing forward proposals on fraudulent documents would be two areas in particular that the Commission hoped to make progress on by the end of the year. Vladimir Simonak made reference to the upcoming informal meeting 27 EU Heads of State and Government (minus UK representation) as an ideal opportunity to present the vision of a safer, more secure Europe. He stressed that security was a top priority for the Slovak Presidency and noted that all related meetings held under their stewardship would provide a chance to take stock and evaluate the ongoing effectiveness and suitability of EU policies in the field.

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Other News EU and Indonesia to launch trade talks On Monday 18 July, Trade Commissioner Cecilia Malmström and Indonesian Minister of Trade Tom Lembong announced that the EU and Indonesia had agreed to begin talks on a Free Trade Agreement. The first round of negotiations is expected to take place later in 2016.

UK to give up 2017 Council Presidency; new order agreed On Tuesday 19 July, UK Prime Minister Theresa May spoke with European Council President Donald Tusk and, as part of the phone call, suggested that the UK should no longer hold the rotating Presidency of the Council in the second Semester of 2017. On Tuesday 26 July, the Council adopted a decision establishing a revised order in which the Member States will hold the presidency of the Council of the EU until 2030.2 Although it had been rumoured that another country could step in to replace the UK, the Council decided to bring forward by six months the order of Presidencies, meaning Estonia will now occupy the second Semester of 2017.

Posting of Workers Directive On Wednesday 20 July, the College of Commissioners decided to maintain its proposal to amend the Posting of Workers Directive. The decision followed the triggering of a “Yellow Card” by national Parliaments in relation to the initiative.3 In total, 14 Chambers from 11 Member States issued a Reasoned Opinion: the Bulgarian National Assembly, Croatian Parliament, Czech Senate, Czech Chamber of Deputies, Danish Parliament, Estonian Parliament, Hungarian National Assembly, Latvian Saeima, Lithuanian Seimas, Polish Senate, Polish Sejm, Romanian Senate, Romanian Chamber of Deputies and Slovak National Council. The announcement from the College followed the previous week’s exchange of views between Marianne Thyssen, Commissioner for Employment, Social Affairs, Skills and Labour Mobility, and Members of the EP’s Committee on Legal Affairs (JURI) at which Thyssen said that a fair internal market remained a top priority for the Commission while stressing her belief that posted workers should not be treated as “second class” citizens. Thyssen said that the Commission was grateful for the active involvement of national Parliaments in the European legislative process but added that the College believed the proposal “fully complied” with the principle of subsidiarity.

Commission issues Rule of Law Recommendation to Poland On Wednesday 27 July, the Commission adopted a Rule of Law Recommendation on the situation in Poland.4 Although the Polish Parliament passed a law in July intending to end the constitutional crisis that has been ongoing since 2015, the Commission concluded that important issues regarding the rule of law in the country still remain. The Commission has published concrete recommendations to the Polish Government, and requested that the Government inform the Commission of the steps taken within the next three months to address the situation.

2 See Council press release at http://www.consilium.europa.eu/en/press/press-releases/2016/07/26- council-rotating-presidencies-revised-order/ 3 See Brussels Bulletin No. 511 4 See Commission press release at http://europa.eu/rapid/press-release_IP-16- 2643_en.htm?locale=en ______Track national parliament scrutiny at www.ipex.eu 8 Brussels Bulletin No. 516: 2 September 2016

Timothy Kirkhope MEP becomes Lord Kirkhope On Thursday 4 August, it was announced that Timothy Kirkhope MEP (ECR, UK) had been made a life peer in David Cameron’s resignation honours list. Mr Kirkhope has been MEP for Yorkshire and the Humber since 1999. Under EP rules, an MEP cannot also be a member of the legislature of a Member State, so it is expected that Mr Kirkhope will stand down as an MEP when he takes up his seat in the Lords.

Victims' campaigner Raymond McCord takes the UK to court over Brexit On Friday 12 August, it was announced that a victims’ campaigner in Northern Ireland had launched the country’s first legal challenge to the UK’s decision to leave the EU. Raymond McCord lodged papers at the High Court in Belfast seeking a judicial review of the British Government’s move towards Brexit by claiming that it would be unlawful to trigger Article 50 of the Lisbon Treaty without Parliament first giving its consent to the move. He also claimed that leaving the EU would undermine the UK’s domestic and international treaty obligations under the Good Friday Agreement and inflict damage on the ongoing peace process. McCord’s legal team contended that the Northern Irish population had not been given any assurances that Article 50 would not be invoked without first securing a Parliamentary mandate, while stressing that any attempt to use Royal Prerogative instead could not be justified. McCord himself described the legal challenge as an important constitutional case which engaged the Northern Irish public interest “in a way that no other case has or is likely to for many decades”.

Bosnia and Herzegovina takes further step towards EU membership On Wednesday 17 August, Bosnia and Herzegovina made further progress on its path towards full EU membership as stalled accession negotiations were reinvigorated in light of the country’s Serb and Bosniak-Croat representatives reaching an agreement on how to coordinate their respective positions. Tensions have long existed between the two sides, however following a meeting in the country’s capital Sarajevo, Chairman of the Council of Ministers, Danis Zvizdic, confirmed that full consensus had been achieved on how membership discussions with Brussels should continue. Zvizdic acknowledged disagreements between the country’s two factions, however suggested that Wednesday’s development highlighted that representatives from both sides were “fully supportive” of the EU integration process. It was his hope that Bosnia and Herzegovina could be in a position to have official candidacy for membership status by the end of 2017 and, therefore, join Albania, Serbia, Montenegro, Turkey and the Former Yugoslav Republic of Macedonia (FYROM) in the queue for EU accession.

Norwegian PM softens stance on UK joining EFTA On Thursday 18 August, Norwegian Prime Minister, Erna Solberg, said that she saw some advantages to the UK potentially joining the four-nation European Free Trade Association (EFTA) after leaving the EU, qualifying previous doubts about British membership. Solberg did, however, note that Britain’s 65 million people would “radically change” EFTA, which currently comprises a population of just 14 million from Norway, Liechtenstein, Iceland and Switzerland. Solberg said that it was “easy” to see the possible benefit of British EFTA membership as the UK was “a big country with a big economy”, however she did add that Britain’s clout could lead to a situation where the UK might demand trading conditions that mainly helped its own needs, rather than those of its smaller EFTA partners. Within EFTA, all member countries have to approve new members, giving each country a theoretical veto, while

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the group currently has around 30 free trade deals with nations across the globe including Canada, Morocco, Chile and Singapore.

Commission rules that Ireland gave preferential tax treatment to Apple On Tuesday 30 August, the Commission ruled that Ireland gave illegal tax benefits to Apple, allowing the company to pay substantially less tax than other businesses. The Commission also ruled that Ireland must recover the unpaid taxes.5 In June 2013, the Commission began to investigate the tax ruling practices of some Member States, extending the inquiry to all Member States in December 2014. The Commission has already ruled that Luxembourg and the Netherlands gave selective tax advantages to Fiat and Starbucks respectively, and investigations are continuing into the treatment of Amazon and McDonalds in Luxembourg. As part of its investigation in Ireland, the Commission focused on a tax ruling granted to Apple in 1991 and replaced by a second tax ruling in 2007. The 2007 ruling was terminated in 2015 after Apple changed its company structure. The Commission ruled that the two rulings “substantially and artificially” lowered the tax paid by Apple in Ireland. This is illegal under EU state aid rules, because it gave the company a significant advantage over other businesses operating in Ireland. The Commission has the power to order the recovery of illegal state aid for a 10-year period preceding its first request for information. The Commission first requested information in 2013, meaning it can order the recovery of unpaid taxes in Ireland from Apple for the period 2003-2014. This is calculated to be €13 billion, plus interest.

Reaction from Apple In reaction to the ruling, Apple Chief Executive Tim Cook published a letter on the company’s website.6 The letter noted that:

The Commission’s move is unprecedented and it has serious, wide-reaching implications. It is effectively proposing to replace Irish tax laws with a view of what the Commission thinks the law should have been. This would strike a devastating blow to the sovereignty of EU member states over their own tax matters, and to the principle of certainty of law in Europe. Ireland has said they plan to appeal the Commission’s ruling and Apple will do the same. We are confident that the Commission’s order will be reversed.

Reaction from Ireland Following the ruling, Irish Ministers were summoned to an emergency Cabinet meeting on Wednesday 31 August. A second Cabinet meeting was held on Friday 2 September, during which the Irish Government was expected to take the decision to appeal the Commission’s decision. There have also been calls to recall the Irish Parliament (which is due to sit again at the end of September).

Commission proposes amendment to psychoactive substances legislation On Wednesday 31 August, the Commission proposed both a ban on the psychoactive substance MDMB-CHMICA (also known as “Black Mamba") and an amendment to the founding Regulation of the European Monitoring Centre for Drugs and Drug Addiction (EMCDDA).7 The aim of the proposed amendment is to ensure faster and more effective EU action in the fight against new psychoactive substances, by streamlining and accelerating data collection and assessment procedures. The Commission states that the amendment is part of the “new

5 See Commission press release at http://europa.eu/rapid/press-release_IP-16-2923_en.htm 6 The full letter is available at http://www.apple.com/ie/customer-letter/ 7 See Commission press release at http://europa.eu/rapid/press-release_MEX-16-2929_en.htm ______Track national parliament scrutiny at www.ipex.eu 10 Brussels Bulletin No. 516: 2 September 2016

approach” agreed with the European Parliament and the Council to advance negotiations on the package of legislative proposals proposed in September 2013. As part of that package of proposals, the Commission came forward with a Regulation on new psychoactive substances. The European Parliament agreed its position in April 2014, but the Council has yet to find a common position, with the last debate on the subject taking place in September 2015. In November 2013, the House of Commons issued a Reasoned Opinion on the proposed Regulation. The House of Lords was the only other Chamber to issue a Reasoned Opinion on the draft legislation.

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Calendar Slovak Presidency: forthcoming Council meetings (July to December 2016) 2-3 September: Informal Foreign Affairs Council (Gymnich) 9-10 September: Informal ECOFIN 13-14 September: Informal Agriculture and Fisheries 20 September: General Affairs Council 23 September: Informal Foreign Affairs Council 27 September: Informal Defence 29-30 September: Competitiveness 3-4 October: Informal Employment, Social Policy, Health and Consumer Affairs 10-11 October: Agriculture and Fisheries 11 October: ECOFIN 13 October: Employment, Social Policy, Health and Consumer Affairs 13-14 October: Justice and Home Affairs 14 October: Transport, Telecommunications and Energy 17 October: Environment 17 October: Foreign Affairs Council 18 October: General Affairs Council 20-21 October: European Council 8 November: ECOFIN 11 November: Foreign Affairs Council 14-15 November: Agriculture and Fisheries 14-15 November: Foreign Affairs Council 15-16 November: General Affairs Council 16 November: ECOFIN 21-22 November: Education, Youth, Culture and Sports 28 November: Foreign Affairs Council 28-29 November: Competitiveness 1-2 December: Transport, Telecommunications and Energy 5 December: Transport, Telecommunications and Energy 6 December: ECOFIN 8-9 December: Justice and Home Affairs 8-9 December: Employment, Social Policy, Health and Consumer Affairs 12 December: Foreign Affairs Council 12-13 December: Agriculture and Fisheries 13 December: General Affairs Council 15-16 December: European Council 19 December: Environment

Slovak Presidency: forthcoming inter-parliamentary meetings in Bratislava (July-December 2016)

2-4 September: Inter-parliamentary Conference for the Common Foreign and Security Policy (CFSP) and the Common Security and Defence Policy (CSDP)

16-18 October: Inter-parliamentary Conference on Stability, Economic Coordination and Governance in the European Union

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13-15 November: COSAC Plenary Meeting

19-20 April: Meeting of the Chairpersons of the Committees on Energy Union

Forthcoming inter-parliamentary Committee meetings (ICMs) in the European Parliament

28 September: Exchange of views with national Parliaments on “The 2016 Cycle of the European Semester” (organised by the EP’s Economic Affairs Committee)

11 October: ICM: “Access to culture in the EU Member States and new strategies for the culture and creative sectors” (organised by the EP's Culture and Education Committee)

17 October: Workshop: “Robotics and Artificial Intelligence” (organised by the EP's Legal Affairs Committee)

7-8 November: ICM: “State of play of the Common Foreign and Security Policy” (organised by the EP's Foreign Affairs Committee)

8 November: ICM: “Towards better spending in shared management: a more cooperative model of parliamentary scrutiny” (organised by the EP's Budgetary Control Committee)

Other Events

7-8 September: Inter-institutional Conference on the future financing of the European Union, organised within the framework of the High Level Group on Own Resources (Brussels)

11-13 October: EU40: meeting of EU parliamentarians under the age of 40

Alison Groves [email protected]; [email protected] Fraser McIntosh [email protected]; [email protected]

House of Commons, UK National Parliament Office, Brussels

00 32 2 284 3703/4656 (Brussels) (#6 24 3703/4656 from Westminster) 00 33 3 88 17 6846/6842 (Strasbourg) (#6 23 6846/6842 from Westminster)

Mobile: 00 32 486 646948 / 0032 486 646949

Website: www.parliament.uk/npo

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