Opinion on the proposal for a Council Directive amending Council Directive 90/428/EEC of 26 June 1990 on trade in equidae intended for competitions and laying down the conditions for participation therein (1) (94/C 195/15)

On 17 February 1994, the Council decided to consult the Economic and Social Committee, under Articles 43 and 198 of the Treaty establishing the European Community, on the abovementioned proposal.

The Section for Agriculture and Fisheries, which was responsible for preparing the Committee's work on the subject, adopted its Opinion on 7 April 1994. The Rapporteur was Mr Proumens.

At its 315th Plenary Session (meeting of 27 April 1994) the Economic and Social Committee adopted the following Opinion unanimously.

The Committee welcomes the proposal, subject to the following remarks:

1. Background

1.1. The key provisions of the basic Directive (90/428/EEC), which this proposal seeks to amend, are outlined below.

1.2. The main aim of the Directive, based on Articles 42 and 43 of the Treaty, was to promote the breeding of equidae and facilitate the equitable distribution of the percentages retained on prize money and profits accruing from competitions, seeking harmonization wherever possible.

1.3. The Directive acted to prevent discrimination by establishing the following basic rules for competitions:

- the requirements for entering the competition;

- the judging of the competition;

- the prize money or profits which may accrue.

1.4. However, derogations were permitted in the following cases:

- competitions reserved for equidae registered in a stud book;

- regional competitions for selecting equidae;

- historic or traditional events.

1.5. However, to avail themselves of derogations, Member States on whose territory such competitions are held must inform the Commission in advance.

1.6. Under Directive 90/428/EEC, Member States are authorized to reserve a certain percentage of the prize money or profits accrued, which is not to exceed 20 % from 1993 onwards.

1.7. The reserved funds may be distributed in the Member State concerned after the Commission has been notified of the general criteria for distribution.

2. Specific comments on the background

2.1. The meaning of 'competition' should be clarified: 'any equestrian competition including horse racing, show-jumping, eventing, dressage, events reserved for horse-drawn vehicles and showing classes'.

2.2. The derogations mentioned in point 1.4. above are essentially aimed at encouraging the rearing of national breeds.

2.3. The prize money and profits concerned relate to those awarded to competition winners excluding, for instance, receipts from bets and race courses.

2.4. As of 1993, the annual overall percentage of this total prize money to be reserved may not exceed 20 %.

2.5. The reservation of this percentage is not mandatory for every competition.

2.6. Reservation shall be understood to denote provision for this 20 % in the total prize money and awards allocated.

3. General comments on the amending proposal

3.1. It appears from the review provided for in Directive 90/428/EEC, to be carried out before 31 December 1992, that three key points fall outside the scope of Articles 42 and 43 of the Treaty, the legal basis for the Directive.

3.2. These are:

- taxation of activities involving horses;

- rules on betting;

- intellectual ownership of racing results (see 4.2).

3.3. The Committee considers that the above three points, in particular taxation and betting rules, are liable to compromise the desired effects of non-discrimination in the distribution of reserved funds.

3.4. These two areas, in particular betting, are a potential source of funding for national breeds notably through horse-breeding promotion associations to which some mutual betting associations make official and regular contributions.

3.5. It is worth noting that total expenditure on betting in the European Union is in the region of ECU 15,000 million. In contrast, the overall value of awards and prizes is only ECU 300 million. It is from the latter sum that the 20 % referred to in the amendment to Directive 90/428/EEC is to be retained.

3.6. To tackle these problems, the Commission proposes only:

- that the percentage of the prize money and profits (...) be specified (i.e. 20 % ceiling),

- that the same percentage be retained in competitions which qualify for a derogation.

4. Comments on the principle of subsidiarity

4.1. The Committee wonders how far the provisions of the Directive and the amendment conflict with the principle of subsidiarity.

4.2. Member States are, in fact, if they so wish, entitled to retain a lower percentage than the 20 % specified in the draft Directive. This figure is already laid down by Directive 90/428/EEC and was agreed after discussions with representatives from the parties concerned and the competent authorities in the Member States.

4.3. Furthermore, as provided for in the amending proposal, a higher percentage may be retained in specific cases, following an advance request to the Commission.

4.4. The percentage of prize money and profits is retained by the competition organizers but funds are distributed by the competent authorities in the Member States among horse-breeders or associations for the rearing and improvement of national breeds, in line with the general criteria which have been forwarded to the Commission.

5. Specific comments

5.1. The Committee recommends that terminology be standardized to avoid any ambiguity: 'retain' or 'reserve'.

5.2. The expression 'intellectual ownership of racing results' is extremely vague and needs clarification (at least with an explanation in the preamble). It refers to the laying of bets or forecasts by mutual betting societies or bookmakers of one Member State, on competitions held in another Member State, thereby evading the payment of the usual charges on backers' winnings to that Member State or authorized bodies.

5.3. The Committee would like the Commission to specify that competitions reserved for equidae registered in a stud book refer to national breeds, reared principally if not solely in the Member State organizing the competition.

5.4. The Commission must obviously postpone the proposed date (1 January 1994) for the implementation of this amendment.

Done at Brussels, 27 April 1994.

The Chairman

of the Economic and Social Committee

Susanne TIEMANN

(1) OJ No C 51, 19. 2. 1994, p. 6.