Committee Reports > List of Committees > Joint > 1985 > Committee on the Secondary Legislation of the European Communities (4th Committee) > Report No. 23 - Statutory Instruments [33]

APPENDIX 2

An Runai

An Roinn Airgeadais

I am directed by Mr. Gerard Collins T.D., Chairman of the Joint Committee on the Secondary Legislation of the European Communities, to state that it has been considering further the question of the implementation of EEC Directives which it dealt with in paragraph 10 of its report of 7th November, 1984.

The Joint Committee noted that in most cases Regulations made under the European Communities Act, 1972 which implement EEC Directives seek to incorporate the Directive into Irish law either in whole or in part. For example, Regulations often provide that the terms of a Directive shall be complied with thus making those terms directly binding on Irish citizens. Again such Regulations regularly provide that a word expression used both in the Regulations and the Directive shall have the meaning it has in the Directive. These practices seem to the Joint Committee to be open to a number of objections.

Firstly, the effect in many instances seems to amount to giving Council Directives or some of the terms thereof the same status as if these provisions had been adopted by the Council as a Regulation and not as a Directive in the first instance. As Directives are binding on the State only “as to the result to be achieved” it remains within the competence of the Oireachtas to determine the “form and methods”. When Irish implementing Regulations provide in effect that whatever is required by a Directive shall be done it seems to the Joint Committee that it amounts to a surrender of legislative competence to the Community institutions which the EEC Treaty does not require.

Secondly, it seems to the Joint Committee that it is a matter for the Department concerned to determine what is “the result to be achieved” by a particular Directive and to assist it, it has available not merely the text of the Directive but the knowledge of its officials who participated in the Council Committee which examined the Directive in draft.

In the Joint Committee’s opinion it should not be left to Irish citizens affected by the Directive to interpret what it means. Irish citizens should only have to concern themselves with Irish Regulations drafted exclusively in the terms normally used in Irish legislation and expressing what the Minister concerned has decided “the result to be achieved” by the Directive is to be in this State.

Finally, the Joint Committee is concerned that the drafting practices referred to could unnecessarily lead to an increase in the costs of litigation. If Regulations provide that words or expressions are to have the same meaning as they have in a Directive it seems to the Joint Committee that a reference to the European Court cannot be avoided in any justiciable dispute as to what such words or expressions mean.

I am to request the observations of your Department on the foregoing points in the light of the following Statutory Instruments made by your Minister:-

European Communities (Customs) Regulations, 1984 (S.I. No. 365 of 1984)

European Communities (Customs) (No. 2) Regulations, 1984 (S.I. No. 366 of 1984).

I am also to request your observations on the fact that both instruments which were made on 20th December, 1984 are expressed to be operative from 1st January, 1984 although the European Communities Act, 1972 contains no authority for making regulations with retrospective effect.

Cleireach an Chomhchoiste

2 Mean Fomhair, 1985.

12 November, 1985.

Clerk of the Committee

Joint Committee on Secondary

Legislation of the European Communities

I am directed by the Minister for Finance to refer to your minute of 2 September, 1985 concerning the implementation of EEC Directives, and in particular European Communities (Customs) Regulations, 1984 (S.I. No. 365 of 1984) and European Communities (Customs) (No. 2) Regulations, 1984 (S.I. No. 366 of 1984).

As your minute raised general matters regarding the implementation of EEC Directives the views of the Office of the Attorney General have been sought. These will be forwarded to you when they come to hand.

As regards the above-mentioned regulations this Department, after consultation with the Office of the Revenue Commissioners, forwards the following views.

The regulations in question were made, under the European Communities Act, 1972, to give effect to certain provisions of, respectively, Council Directive No. 81/177/EEC of 24 February, 1981, and Council Directive No. 79/695/EEC of 24 July 1979. The provisions concerned specific procedures designed to simplify, in certain circumstances, the formalities applicable to the importation (S.I. No. 366) and exportation (S.I. No. 365) of goods. The provisions did not impose new obligations on importers and exporters. Rather, they offered facilitation in such matters as lodgment of customs entry and the sending of codified data for computer-processing. Accordingly, the regulations were of the nature of enabling legislation to permit implementation of the simplified procedures prescribed.

Because the Directives actually specified the simplified procedures to be applied, there was little scope for discretionary application of the provisions at Member State level. However, it will be noticed that the Community provision, in the import procedures (Dir. 79/695/EEC), for assessment of composite consignments (Art. 22) was not catered for by national regulation. It was considered that the terms of Article 22 (2) inhibited the successful introduction of the provision in Article 22 (1).

Reference is made to the practice whereby words or expressions used in national implementing legislation are expressly related to the corresponding words or expressions in the relevant Community Directives. This practice was followed in the case of the regulations in question, mainly to avoid unnecessary repetition of Community definitions. For example, the word “entry” in the special procedures for imports (S.I. No. 366) relates to the “entry” referred to in Article 2 and Article 3 of Dir. 79/695/EEC, but inclusion in full of all such defining texts would have made the regulation unduly lengthy. The correspondence formula also has the merit of ensuring proper interpretation of the background Community legislation, whereas some paraphrase might not be seen to express adequately what the Community meant. It might be expected that, in case of dispute, the appeal would be to the basic Community text.

The preparation of national legislation implementing Community legislation involves, of course, close collaboration between the Department concerned and the Parliamentary Draftsman’s Office (which has the decisive role in the formulation of the text).

L. O’Toole

Secretary

Department of Industry, Trade, Commerce and Tourism

I am directed by Mr. Gerard Collins T. D., Chairman of the Joint Committee on the Secondary Legislation of the European Communities, to state that it has been considering further the question of the implementation of EEC Directives which it dealt with in paragraph 10 of its report of 7th November, 1984.

The Joint Committee noted that in most cases Regulations made under the European Communities act, 1972 which implement EEC Directives seek to incorporate the Directive into Irish Law either in whole or in part. For example, Regulations often provide that the terms of a Directive shall be complied with thus making those terms directly binding on Irish citizens. Again such Regulations regularly provide that a word or expression used both in the Regulations and the Directive shall have the meaning it has in the Directive. These practices seem to the Joint Committee to be open to a number of objections.

Firstly, the effect in many instances seems to amount to giving Council Directives or some of the terms thereof the same status as if these provisions had been adopted by the Council as a Regulation and not as a Directive in the first instance. As Directives are binding on the State only “as to the result to be achieved” it remains within the competence of the Oireachtas to determine the “form and methods”. When Irish implementing Regulations provide in effect that whatever is required by a Directive shall be done it seems to the Joint Committee that it amounts to a surrender of legislative competence to the Community institutions which the EEC Treaty does not require.

Secondly, it seems to the Joint Committee that it is a matter for the Department concerned to determine what is “the result to be achieved” by a particular Directive and to assist it, it has available not merely the text of the Directive but the knowledge of its officials who participated in the Council Committee which examined the Directive in draft.

In the Joint Committee’s opinion it should not be left to Irish citizens affected by the Directive to interpret what it means. Irish citizens should only have to concern themselves with Irish Regulations drafted exclusively in the terms normally used in Irish legislation and expressing what the Minister concerned has decided “the result to be achieved” by the Directive is to be in this State.

Finally, the Joint Committee is concerned that the drafting practices referred to could unnecessarily lead to an increase in the costs of litigation. If Regulations provide that words or expressions are to have the same meaning as they have in a Directive it seems to the Joint Committee that a reference to the European Court cannot be avoided in any justiciable dispute as to what such words or expressions mean.

I am to request the observations of your Department on the foregoing points in the light of the following Statutory Instrument made by your Minister:-

European Communities (Stock Exchange) Regulations, 1984.

Clerieach an Chomhchoiste

2 Mean Fomhair, 1985.

2 Nollaig 1985

Mr. S. Phelan

Cleireach an Chomhchoiste

Joint Committee on the Secondary

Legislation of the European Communities

Leinster House

Dublin 2

A Chara

I am directed by the Minister for Industry, Trade, Commerce and Tourism to refer to your request of 2 Mean Fomhair, 1985 regarding the European Communities (Stock Exchange) Regulations, 1984.

The following observations will hopefully respond to the points raised by the Joint Committee on the implementation of EEC Stock Exchange Directives.

Background

1.Between 1979 and 1982 the Council of Ministers of the European Community adopted three directives relating to Stock Exchanges operating in Member States. These directives dealt with:

(a)conditions governing the admission of securities to stock exchange listing,

(b)the contents of prospectuses published when securities are admitted to stock exchange listing, and

(c)the information to be published on a regular basis by companies whose shares are listed on a stock exchange.

By virtue of a fourth directive, which extended the implementation of (a) and (b), all three were required to be translated into national law by 30 June, 1983.

The directives form part of the EEC Commission’s programme for harmonization of the law governing stock markets, with a view to an eventual European capital market. Common minimum standards, it is hoped, will ensure equivalent investor protection throughout the Community.

2. Implementation of the Directives

A directive is binding, as to the result to be achieved, upon each Member State to which it is addressed, but the choice of method of its implementation is left to the national authorities (Treaty of Rome, Article 189). In addition, in their Report of 7 November, 1984 the Joint Committee maintained:

“It is the duty of Departments to identify the objectives of a Directive and then to arrange for the provisions concerned necessary to achieve those objectives to be expressed in the legal language normally used…”.

A substantial part of the provisions of these Directives was already in effect, by means of the “admission to listing” rules of the Stock Exchange. However, as these are internal rules of the Stock Exchange their legal status was unclear. The Joint Committee in its report of July, 1975 recommended that Directives should be implemented.

“…by statute or statutory instrument except when adequate legislative provisions exist or when it is considered that the provisions of Directives are directly applicable.”

It was necessary to introduce legislation to give effect to these Directives.

In this instance the implementation of the Directives by statutory instrument, in the form and content of the European Communities (Stock Exchange) Regulations, 1984 was, with the consent of the Attorney General, deemed to be appropriate.

The preparation of secondary legislation, avoiding the lengthy procedures attendant on primary legislation, was preferable, due to a threat of legal action by the EEC Commission in January, 1984 for the non-implementation of these Directives.

3. Legal Implications

The Joint Committee has expressed concern at the practice of including in Regulations words or expressions from Directives and providing that these words or expressions shall have the same meaning as in the Directive. Their concern is that this practice could lead to increased litigation costs, by virtue of a necessary reference to the European Court, in the event of a dispute as to the meaning of the word or expression. The European Communities (Stock Exchange) Regulations, 1984 in addition to the text of the Statutory Instrument, incorporated the text of the Directives themselves. This, it was judged, with the concurrence of the Stock Exchange, would contribute to the clarity of the Instrument. The day-to-day responsibility for implementing the provisions of these Regulations was delegated to the Stock Exchange, by virtue of it being designated Competent Authority by these Regulations. The provisions of these Regulations were incorporated by the Stock Exchange into their “admission to listing” rules and were expressed in the termin normally used in their Rule Books. These rules now have the statutory backing of the European Communities (Stock Exchange) Regulations, 1984.

Mise le meas

___________________________

D. Puirseal

Principal Officer

Company Law Branch