This proposal has been considered by Sub-Committee E. We welcome EC membership of the World Customs Organisation, which seems to be a sensible way of ensuring a co-ordinated EC approach in matters of exclusive Community competence. We note the measure is being made under Article 133 TEC but it is clear from the declaration of competence that the Community's involvement may extend beyond the Common Commercial Policy. Are the Government satisfied that Article 133 provides an adequate legal base? It would be helpful to have your analysis of the legal position.

  You say that for matters falling under joint or national competence, "it will be desirable for the Member States and the European Commission to try and co-ordinate an agreed position to present a unified view in the WCO Meetings" and that a coordination mechanism will need to be agreed in discussions on the proposal in the Council working group. In this context you also refer to action on Third Pillar issues. We are puzzled by your reference to Third Pillar matters as these clearly do not fall within the ambit of this Decision. We would be grateful for your clarification of what is envisaged here and how it is expected to be achieved.

  Finally, we would be interested in your views on the declaration of EC competence annexed to the proposal. Are the Government content that the matters listed in the declaration do fall within the Community's exclusive competence?

  We have decided to retain the proposal under scrutiny.

26 June 2007

  Thank you for your letter of 26 June 2007 to John Healey, following consideration of this proposal by Sub-Committee E. I am replying to you as the newly appointed Financial Secretary to the Treasury, with Ministerial responsibility for HM Revenue & Customs. I am pleased to provide some further information on the legal base and the arrangements for Community coordination for meetings of the World Customs Organisation.

  I must first tell you that the Decision has already been agreed at the Competitiveness (Internal Market, Industry and Research) Council on 25 June. Member States were given the minimum of six weeks to complete their scrutiny procedures because the EC membership issue was on the agenda of the annual meeting of the WCO Council on 28-30 June and the Commission was working to a tight deadline. The proposal cleared scrutiny in the House of Commons on 6 June 2007, but the UK abstained from voting at the Competitiveness Council because the proposal had yet to clear scrutiny in the House of Lords. This did not affect the outcome as the decision was subject to qualified majority voting and all other Member States were in a position to support the proposal. It is worth noting that the UK has supported EC membership of the WCO since a common position was reached in the Community in 2002. The EC's application for membership has subsequently been agreed by the WCO Council and came into effect from 1 July 2007 under the interim arrangements.

  Turning to the questions in your letter of 26 June, our legal advice is that the use of Article 133 TEC for the legal base of this Decision is appropriate as the issue of EC membership of the WCO is predominantly a matter of common commercial policy and we do not regard any other matter as having any significant or equivalent relevance. Another potential legal base would be Article 37 in relation to cooperation between Member States and the Commission on customs law and agricultural matters, but this concerns common agricultural policy which in itself is not appropriate to membership of the WCO. A further potential legal base is Article 135 which concerns customs cooperation. Although by the title of this provision it would appear to be appropriate, the objective of the article is primarily aimed at internal relations between the Member States and the Commission, not external relations with other non-Community customs authorities or the Commission's competence on international organisations.

  The Decision was examined in the European Council Customs Union Working Group as a result of which there was some redrafting of both the body of the Decision and Statement of Community Competence. The final version of the Council Decision is attached to this letter.

  The recital on Community coordination was amended as follows:

"For matters falling under European Community competence a European Community position must be established. For matters falling partly within Community competence, Member States of the European Community should strive to adopt a common position to ensure the unity of external representation of the European Community and its Member States."

  We are content that the matters listed in the declaration do fall within the Community's exclusive competence.

  On the question of mixed competence the WCO makes no distinction between 1st and 3rd Pillar issues although the main working bodies have a similar division between customs procedures and enforcement matters.

  Member States do retain the right to speak in WCO Meetings on all matters which are not subject to Community competence. However we recognise that it is desirable for the Member States and Commission to avoid public disagreements in an international organisation, particularly as many delegates from other countries are not aware of the subtle distinctions between Community and national competence. For this reason it is likely that the Commission and Member States will try informally to reach a common view to follow in a meeting even though the Commission would not speak on behalf of the Member States.

  I hope you find this helpful.

18 July 2007

  Thank you for your letter of 18 July 2007 which was considered by Sub-Committee E at its meeting of 10 October 2007.

  We are grateful for your views on the legal base of the Decision and for your clarification of the position as regards Member States' cooperation in matters of joint or national competence. We also welcome your confirmation that you are content with the Declaration of Competence.

  We have decided to clear the proposal from scrutiny.

16 October 2007