Mr. Declan Smyth:

I will address the legal issue in relation to both services and goods. As my colleague, Mr. Keown, explained, we are operating in both fields, goods and services, which, as regards external trade with states and territories outside the European Union, fall within the exclusive competence of the European Union. There is a very limited scope for member states to take measures in either field. The Treaty on the Functioning of the European Union is clear that where the Union has exclusive competence in a field, the member states are not entitled to adopt legislation or legally binding measures without being empowered to do so by some European Union legal Act. In the case of goods, there is an opening. We have identified a public policy exception in European Union regulation which controls imports of goods and allows member states to adopt prohibitions on the import of goods for public policy reasons. It is on that basis that this scheme proposes to prohibit the import of settlement goods. There is no similar broad public policy exception relating to external trade in services.

For that reason the Tánaiste has asked the Attorney General to look at that question. When the Tánaiste, who at the time was Taoiseach, asked the Attorney General to look at Senator Black's Bill last year, his advice was that if that Bill were limited to the prohibition of importation of settlement goods, it was a much more defensible basis on which to act at the level of European Union law. While there still remained a legal risk of infringement proceedings being taken against the State, it was a much more defensible proposition for the Government. On that basis, the Government has now come forward with this present scheme. The Attorney General is looking at what basis, if any, there may be in European Union law to deal with the question of services and he will have advice for the Tánaiste as soon as possible.