The Welsh Assembly recently introduced legislation to instruct entrepreneurs and other traders to issue a charge of five pence on ‘single use carrier bags’ called the Single Use Carrier Bags Charge (Wales) Regulations 2010.
For simplicity I will refer to eligible bags in the legislation (specifically Part 1) as ‘naturally versatile bags’ (i.e. they fall within paragraph 2a), ‘non-reusable standard bags’ (i.e. they fall within paragraph 2b), ‘small bags’ (i.e. they fall within part 3a), ‘big bags’ (i.e. the fall within paragraph 4), ‘non-reusable big bags’ (i.e. they fall within paragraph 3b), ‘loop-hole small bags’ (i.e. they fall within paragraph 5 and also outside paragraph 4), and ‘Distance Selling loop-hole bags‘ (i.e. those referred to as ‘bags for packaging and delivery of mail order goods’ in Schedule I, section 1i, as discussed at the bottom of this article).
The five pence charge must be applied to naturally versatile bags, non-reusable bags, small bags, non-reusable big bags.
They are not charged on big bags where these are manufactured as reusable. Nor are they charged on what I call ‘loop-hole small bags’, which are small bags which have a label on them saying they are ‘manufactured for multiple re-use‘ and which have a charge on them of say 2 pence (like in Mary Poppins) and where the person issuing the bag promises to replace it if it gets broken.
So in terms of EU Law. There are three important articles in the EU Treaty that cover this piece of legislation. Articles 30, 34, and 35. They state:
Article 30 (ex Article 25 TEC)
Customs duties on imports and exports and charges having equivalent effect shall be prohibited between Member States. This prohibition shall also apply to customs duties of a fiscal nature.
Article 34 (ex Article 28 TEC)
Quantitative restrictions on imports and all measures having equivalent effect shall be prohibited between Member States.
Article 35 (ex Article 29 TEC)
Quantitative restrictions on exports, and all measures having equivalent effect, shall be prohibited between Member States.
In this context, Member State refers to the United Kingdom. The United Kingdom can discriminate amongst its own persons (e.g. those in England, Wales, Scotland, Northern Ireland), but not against other countries. It may be that if Wales and Scotland became independent members of the EU, then such discrimination would be unlawful, as a Briton who was a Welsh Citizen would have more rights in England when they were also a Welsh and EU Citizen than simply being a Welsh UK Citizen and EU Citizen, and vice versa.
Applying Article 30 is simple, as there is no ‘rule of reason’ as with Article 34. The Regulations say that this charge is applied where say an entrepreneur sells goods from a place in Wales (which may include exports to the EU) and where say an entrepreneur sells goods which are delivered to Wales (which may include imports from the EU). If this charge was applied on transactions from the EU then this would fall within Article 30 and therefore be unlawful under EU law.
Now turning to Articles 34 and 35, where there is a ‘rule of reason’. The Regulations state that the entrepreneur I refer to earlier must keep an accurate record of the various pieces of information referred to in paragraph 3 of section 8 of Part 3, which I call ‘red-tape measures’.
These red-tape measures it would seem apply to imports into Wales (falling within Article 34) and exports from Wales (falling within Article 35). It is not as easy to say whether this is as much of a breach of these Articles as with Article 30, but I shall explore this.
The rule of reason says it is fair practice to introduce a measure where it serves to protect the consumer interest and/or the environment. However, it does breach the provisions of this rule where it has a substantial negative impact on cross-border trade, particular where the measure favours the entrepreneurs in the Member State making the rule more than the entrepreneurs outside of that Member State.
It is clear to see that after a period of time Welsh entrepreneurs will have developed efficient mechanisms for handling this red-tape measure. It can also be seen that entrepreneurs from outside the UK and Wales also, will have a disincentive to trading with Wales, because of the records they will be expected to keep in order to do so. Therefore this red-tape measure could be seen of having the equivalent effect of creating barriers to cross-border trade as if it clearly said, ‘No one outside of Wales is allowed to sell to Wales without following our rules’.
Distance Selling Directive
The Distance Selling Directive, as implemented through the Consumer Protection Distance Selling Regulations applies to: ‘contracts concerning goods or services concluded between a supplier and a consumer under an organised distance sales or service provision scheme run by the supplier who, for the purpose of the contract, makes exclusive use of one or more means of distance communication up to and including the moment at which the contract is concluded‘. I would regard this directive to apply to the ‘Distance Selling loop-hole bags‘ above. By virtue of this, bags used for Chinese take-aways and other fast-food or other home-delivery services such as Tesco.com Groceries, where the payment for the goods is made over the phone, Internet or other distance means and not in person (such as at the door of one’s house) should not be subject to the charge under the EU definition of mail order goods in the Distance Selling Directive.
I will not speculate on the specific provisions in the Government of Wales Act that make it unlawful to make laws which affect Law and Order in England such as through the issuing of penalties on English entrepreneurs, nor the provisions on the European Convention on Human Rights applying to Wales, but suffice to say that unless Schedule I is updated to reflect that these Regulations do not apply outside of Wales then these regulations appear to clearly breach EU Law.