European Standing Committee B
Wednesday 29 January 2003
[Mr. Nigel Beard in the Chair]
Financial Penalties
8.55 am
The Parliamentary Under-Secretary of State for the Home Department (Mr. Bob Ainsworth): We nearly got away without any scrutiny this morning, but the hon. Member for Surrey Heath (Mr. Hawkins) arrived in the nick of time. I appreciate, from previous conversations with him, the problems that he has had with the new hours of the House.
We are debating the draft framework decision on the mutual recognition of financial penalties. The instrument is still under negotiation and a number of member states—ours included—have parliamentary scrutiny reserves in place. The European Parliament was consulted on an earlier version of the text, but will be consulted again in the light of the many revisions that have since taken place.
The instrument is based on the principle of mutual recognition, which was recognised by the Heads of State and Government at the special European Council at Tampere as the cornerstone of judicial co-operation in the European Union. It is a joint initiative between the United Kingdom, France and Sweden. The instrument will fill a significant gap in EU judicial co-operation by providing a mechanism for enforcing financial penalties imposed in other member states. Existing arrangements are not in force in every member state, but where they are in force they are cumbersome and bureaucratic. That was demonstrated a few years ago when a Swedish company failed to pay a large fine imposed in the UK for serious health and safety offences relating to the collapse of the Ramsgate ferry walkway. It was also highlighted more recently when a French lorry driver whose poor driving had caused the death of a man in this country returned home, refused to pay the fine imposed on him by the UK court and caused great distress to the dead man's family. While the instrument would fill the gap, it also provides important safeguards to ensure that individuals have had an adequate opportunity to defend themselves in proceedings abroad.
Article 1 defines the scope of the instrument, and applies to financial penalties imposed for both criminal and administrative offences, provided that they are no longer subject to appeal. Penalties may relate to ''natural'' or ''legal'' persons. Where a penalty is being imposed by an authority other than a court, the defendant must have had an opportunity to have the case heard by a criminal court. The penalties can include compensation orders that form part of a sentence, such as those imposed in the UK under the Powers of Criminal Court (Sentencing) Act 2000. Article 1(a) requires member states to designate competent authorities responsible for enforcing financial penalties. Where necessary, they may also
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designate one or more central authorities responsible for receiving and transmitting authorities.
Article 1(b) ensures that the instrument does not affect member states' obligations in respect of fundamental rights, as enshrined in article 6 of the Treaty on European Union. In turn, article 6 requires member states to respect the rights guaranteed by the European convention on human rights.
Article 2 provides for the member state in which a fine is imposed to transmit its decision to the member state in which the defendant is normally resident, has property or income, or, in the case of a legal person, has its registered office. The decision must be accompanied by a certificate, as set out in the annexe to the instrument. The exact contents of the certificate will still require to be negotiated once the main text of the instrument has been agreed. The version of the certificate before the Committee does not, therefore, represent its final form.
Decisions are to be transmitted directly between competent authorities, but there is special provision for the UK and Ireland, permitting us to route decisions through a central authority for the time being.
Article 3 requires an executing state to recognise and enforce fines received from another member state without further formality, unless there are grounds for non-recognition. Article 4 sets out grounds for non-recognition. Those grounds include: where the accompanying certificate is incomplete; where the defendant benefits from an immunity or privilege; where the fine is below a specified threshold—70 euros is proposed, which works out at about £50—
Dr. Nick Palmer (Broxtowe): It is £55.
Mr. Ainsworth: I am corrected by my hon. Friend who is far more au fait than I am with the money markets.
Further grounds include those where the issuing state has exercised extraterritorial jurisdiction over conduct that is not an offence in the executing state. Enforcement can also be refused where a defendant has not been properly notified by the issuing state of the proceedings against him and could not therefore defend himself.
Article 5 allows an executing state to reduce a fine in cases where the issuing state has exercised extraterritorial jurisdiction. The fine may be reduced to the maximum allowed for the offence under the law of the executing state. Article 6 provides for fines transmitted under the instrument to be enforced in line with the law of the executing state. It also requires fines imposed on legal persons to be enforced even where legal persons are not normally liable under the law of the executing states.
Article 7 allows the executing state to impose an alternative sanction, with the agreement of the issuing state, in cases in which it is not possible to enforce a fine. Article 8 allows both the issuing state and the executing state to grant an amnesty or pardon in cases covered by the instrument. Article 9 requires an issuing state to notify the executing state of any subsequent
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decision that results in the fine's ceasing to be enforceable.
Article 10 provides that money obtained from the enforcement of fines will normally accrue to the executing state. An exception will be where the fine, or part of the fine, is compensation for a victim. Article 11 requires the executing state to inform the issuing state of any decision taken in respect of fines that it has received. For example, it must inform the issuing state of any decision not to execute—or partially to execute—a fine and any cases in which an alternative sanction is applied.
Article 12 prevents an issuing state from executing a fine that has been transmitted to another member state. It also provides for the right of execution to revert to the issuing state where the executing state has decided not to execute or partially to execute the fine, or where the issuing state has withdrawn it from the executing state.
Article 13 requires the certificate that will accompany each decision to be translated into one of the official languages of the executing state. If the executing state finds it necessary to have a translation of the decision, execution can be suspended while the executing state arranges for that to take place.
In the version of the text before the Committee, article 16 contains further limitations on the scope of the instrument. It allows for a dual criminality test for up to five years and for the exclusion of fines imposed by administrative authorities for the same period. Member states can apply reciprocity in relation to any member state that makes use of either limitation. The text on dual criminality has been subject to a lot of recent negotiation and is likely to be replaced with a positive list of offences to which dual criminality will not apply, along the lines of the lists used for the European arrest framework.
Article 16 also contains provisions for resolving disputes between member states. Where difficulties cannot be resolved by bilateral consultation, the Council may be asked to evaluate the implementation of the instrument at member state level.
That is a brief outline of the main elements. The Committee will, of course, want to question me on some of them.
The Chairman: We have until 9.55 am at the latest for questions to the Minister. I remind Members that questions should be brief and should be asked one at a time. There is likely to be ample opportunity for all Members to ask several questions.
Mr. Nick Hawkins (Surrey Heath): Welcome to the Chair, Mr. Beard. This is the first time I have appeared on a Committee under your chairmanship and I am sure that our proceedings will be effectively disposed of.
The Minister will agree that this matter has had something of a chequered history. It has been considered already about six times in its various forms by different scrutiny Committees of the House. Does the Minister recognise that the European Scrutiny Committee remains unhappy with
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the current draft, as it said in its report on 11 December? Does he recognise that one reason for that unhappiness is that the issuing state is not required to certify that it has followed a procedure
''which recognises the right of defendants to be made aware of the proceedings against them''?
The provisions on the certificate require only that the defendant should have been ''duly notified'' in accordance with the issuing state's own law. The Minister and I have been debating similar matters in the Standing Committee considering the Extradition Bill; is he not bound to recognise that there is continuing uncertainty?
While the Minister is answering that question, will he also comment on the rather provisional nature of the papers before us, having said that he expects this or that to be changed? Does he recognise that the final version should come to us for full debate, if not to the House?
Mr. Ainsworth: I heard about three or four questions in there. I am not going to criticise the scrutiny that occurs in the House. It is appropriate that people look carefully, in detail and on an ongoing basis at all the documentation that we receive following negotiations in the EU. That has been done in this case, and that is only right. I do not seek to discourage that, but the hon. Gentleman seems to take it as a downside when it is good that these matters are perused at great length and in great detail.
On notification, the certificate will require that a person has been given an opportunity to defend himself, and if that is not so, it will be a reason for non-enforcement.
The negotiations are ongoing. In the text, as I said earlier, matter have moved on, and we suspect that they will move further. If the House wants to consider these matters while the negotiation continues, it is right that it should do so.
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