OTNYR
EXPLANATORY MEMORANDUM ON THE
COMMON FOREIGN AND SECURITY POLICY
EUROPEAN
UNION’S
Council Decision amending Joint Action 2008/124/CFSP on the European Union
Rule of Law Mission in Kosovo (EULEX KOSOVO)
Submitted by the Foreign and Commonwealth Office on 1 November 2016.
SUBJECT MATTER
1.
The draft Council Decision on the European Union Rule Of Law Mission in
Kosovo (EULEX) covers two separate budgets: (a) implementation of the
mandate for EULEX Kosovo; and (b) a discrete budget for the Specialist
Chambers and Specialist Prosecutor’s Office.
2.
The focus of the draft Council Decision is a proposed new budget of
€23,250,000 to cover implementation of the EULEX mandate from 15
December 2016 to 14 June 2017, a breakdown of which is below. In respect of
the Specialist Chambers and Specialist Prosecutor’s Office, there is no change
to the existing budget of €29,100,000 which covers the period 15 June 2016 to
14 June 2017.
SCRUTINY HISTORY
3.
An Explanatory Memorandum on this subject was submitted for Parliamentary
Scrutiny to the House of Lords Select Committee on the European Union on 27
May 2016. They cleared the document on 21 July 2016 after referral to SubCommittee C. A post-adoption Explanatory Memorandum was sent to the
House of Commons European Scrutiny Committee on 28 June 2016. They
cleared the document as “politically important” on 6 July 2016 (ESC 37865, 7th
Report, Session 2016/17).
MINISTERIAL RESPONSIBILITY
4.
The Secretary of State for Foreign and Commonwealth Affairs is the Minister
with overall responsibility for UK policy on the EU’s Common Foreign and
Security Policy. The Secretary of State for Defence retains a close interest.
INTEREST OF THE DEVOLVED ADMINISTRATIONS
5.
The UK’s Foreign Affairs policy is a reserved matter under the UK’s devolution
settlements and no devolved administration interests arise. The devolved
administrations have therefore not been consulted in the preparation of this EM.
POLICY IMPLICATIONS
6.
On 23 June, the EU referendum took place and the people of the United
Kingdom voted to leave the European Union.
Until exit negotiations are concluded, the UK remains a full member of the
European Union and all the rights and obligations of EU membership remain in
force. During this period the Government will continue to negotiate, implement
and apply EU legislation.
7.
The EU Rule of Law Mission (EULEX) was established in 2008 to provide
support to Kosovo’s fledgling judiciary, police and customs institutions. It also
has an executive mandate to investigate serious crime including high-level
corruption and war crimes. Improving the rule of law and combating corruption
and organised crime is central to delivering our objective of a more stable and
secure Kosovo. An effective EULEX helps us deliver these objectives.
8.
The Government has consistently argued that EULEX needs to become a
smaller and more focused mission and that the Executive part of the Mission
should be downsized as far as possible. The new mandate from June 2016 to
June 2018 (agreed in June) will be much smaller, with a reduction of staff from
just over 1300 to 800, and will focus its activity in particular on capacitybuilding for the Judiciary, including through peer-to-peer mentoring.
BUDGET
Proposed expenditure for implementation of the mandate for EULEX Kosovo
9.
The proposed budget follows a six-month reconfiguration period in which the
mission has implemented changes to its mandate and reduced in size. The
proposed budget of €23m represents a 32% decrease on the current budget.
However, the mission will continue to absorb some small costs on a
discretionary basis for the Specialist Chambers. The reduction in staff has not
meant a strictly proportionate decrease in the budget: the mission’s core
structure and mandate has not changed. The mission will carry out its tasks and
functions as before, but in a more focused way with fewer staff. We judge the
proposed budget to be commensurate with mission activities; and to deliver an
appropriate level of savings.
10.
An overview of the proposed budget is contained within the table below. This
contains a breakdown of the preceding six-month budget to help highlight the
variance between the proposed budget and current one-year budget.
Current budget (€)
Proposed budget (€)
15 June 2016 to
15 December 2016 to
14 December 2016
14 June 2017
1. Personnel costs
27,719,666
17,261,112
2. Missions
141,888
120,032
3. Running
4,860,741
4,553,013
Budget heading
expenditure
4. Capital
expenditure
678,350
523,025
5. Representation
20,250
34,500
6. Contingencies
1,079.105
758,318
Total
34,500,000
23,250,000
Personnel Costs - (€17,261,112):
Personnel costs account for approximately 74% of total mission expenditure.
Proposed expenditure represents a decrease of 35% against the current
personnel subhead. This reflects a reduction of staff from 1300 to 800 over the
course of the current budget period.
Missions Expenditure (€120,032):
This expenditure relates to the costs incurred in implementing the mandate and
includes transportation, per diems and accommodation. In comparison to the
current budget, proposed expenditure will fall by approximately 15%.
Running Costs (€4,553,013):
This covers a range of costs such as transport, IT, communications and goods &
services. The proposed budget represents an approximate reduction of 6%
compared to the existing budget. Notable expenditure within this subhead
includes:
 Transport: The proposed 6-month budget of €534,550 signifies an
approximate reduction of 26% on current expenditure. The principal
reason for this decrease is the reduction of the car fleet which has reduced
to 408 from 600 in April 2016.
 IT running costs: This subhead covers IT warranties, parts, goods and
services and maintenance of software, printers and copiers. Proposed
expenditure of €507,725 is around 36% less than expenditure for the
current period. The majority of costs relate to warranty extensions and
software maintenance.
 Communications: This is for GSM, landline and satellite costs, internet,
maintenance and postage, and rental of hilltop sites to enable
communications in the north. The new budget of €252,779 represents a
saving of around 18% when compared to present subhead expenditure.
Savings relate to the reduced number of staff using telephonic equipment.
The majority of expenditure is for renting hill-top land to aid the
communication network; and equipment maintenance.
 Premises rent and services: This subhead covers a range of expenditure
including office rents, heating, generators, air conditioning maintenance,
cleaning and waste removal. EULEX has a mix of office and camp
accommodation in Pristina and Mitrovica. Although reconfiguration of the
mission will generate a reduction of premises and associated costs, the
financial benefits will not be immediate. The reduction in premises will
begin after the departure of personnel in December. In addition, some
construction/refurbishment will be necessary to congregate staff in fewer
premises. Work is expected to conclude in March 2017, following which
EULEX hopes to return some premises to the owners by June 2017.
Proposed expenditure of €1,706,846 is a marginally less than the current
budget.
 Security: This includes external security costs, access control systems and fire
extinguishers. Following reconfiguration of EULEX, fewer security staff
will be required, with half the present force being made redundant.
However, because of a need now to outsource many security tasks and
increase technical security (e.g. alarm systems and CCTV), proposed
expenditure of €441,631 is an increase of approximately 35%.
 Mandate-related operational costs: The proposed 6-month budget is
€636,810. Expenditure here would be an increase of approximately 41%
on the current figure. The primary reason for this is to allow EULEX to
step-up its capacity-building support to the Special Prosecution of the
Republic of Kosovo (SPRK). At present Kosovo’s institutions lack key
resources in areas such as translation and transcription, forensic expertise,
procurement and witness expenses. Assistance from EULEX can therefore
help the SPRK to carry out their responsibilities. In addition, this subhead
will also cover a range of projects which will progress mandate delivery
e.g. the provision of €75,000 for the translation of case files.
Capital Expenditure (€523,025):
This covers vehicles and workshop, and equipment and works for:
communications, premises, medical, security and civilian protection equipment.
Proposed expenditure represents a decrease of around 23% compared to the
current budget. The major expense is IT equipment and works, which would
rise from €18,150 to €301,325. Although a huge increase, this is necessary to
cover the replacement of essential equipment (20 critical access switches at a
cost of €237k). Other expenditure will cover inter alia the upgrading of
buildings; and construction materials.
Representation (€34,500):
This covers a representation budget of €1000 per month; and Residence
expenditure, encompassing the actual cost of rent and utilities of the residence
used by the Head of Mission for representational purposes. This does not
include expenditure for insurance, fuel (heating), generators and maintenance,
all of which fall under running costs.
The Commission has explained that the variance between the figures for
proposed expenditure and the current six-month period is due to an error and not
an actual increase: the current budget provided for only half of the required
amount for Residence costs. A budget rider will be issued to correct the error.
Contingencies (€758,318):
The contingency reserve would be used to cover unforeseen expenses related to
the reconfiguration of the mission. The allocation is 3.26% of the total budget.
The UK contributes a number of secondees in strategic positions, including
Deputy Head of the Strengthening Division and the President of EULEX
Judges. We will continue to put forward candidates for suitable positions under
the new mandate, while reducing our footprint in the mission in proportion to
the overall reduction in staff numbers. My officials will continue to evaluate
closely the impact of EULEX throughout the course of the new mandate, which
should remain flexible and appropriate for its operating environment, whilst
maintaining value for money.
SUBSIDIARITY
11.
No subsidiary issues arise. EULEX represents a significant component of the
EU’s overall policy under the Common Foreign and Security Policy (CSFP) on
Kosovo as unanimously agreed by Council.
LEGAL AND PROCEDURAL ISSUES
12.
Legal Basis: Article 28, 42(4) and 43(2) of the Treaty on European Union.
13.
Voting Procedures: Unanimity.
14.
Impact on UK Law: None.
15.
Application to Gibraltar: Yes.
16.
Fundamental rights analysis: No fundamental rights issues arise.
APPLICATION TO THE EUROPEAN ECONOMIC AREA
17.
None.
REGULATORY IMPACT ASSESSMENT
18.
Not applicable.
FINANCIAL IMPLICATIONS
19.
EULEX’s new budget will be funded from the CFSP budget. The UK
contributes a proportion to the pre-agreed CFSP budget, not the individual
programmes within it.
Funds for EULEX’s budget will be found within existing resources in the CFSP
budget, so this proposal does not present additional costs to the UK.
TIMETABLE
20.
The current budget commitment expires on 14 December 2016. The Council
Decision is due to be submitted for agreement at the ECOFIN Council on 8
November. I would appreciate early consideration of this Explanatory
Memorandum by your Committee to enable adoption of the Council Decision.
OTHER OBSERVATIONS
21.
None.
The Rt Hon Sir Alan Duncan MP
Minister for Europe and the Americas
Foreign and Commonwealth Office