Scotland’s Place in Europe

SCOTLAND’S PLACE IN EUROPE | 33
Legislative and regulatory compliance
141. Membership of the European Single Market under the terms of the EEA Agreement
would require the Scottish Parliament and the Scottish Government to have
competence to legislate in the policy areas covered by the EEA Agreement in order
to uphold the core principles of the European Single Market; namely the free
movement of goods, services, capital and persons. In Chapter Four we set out in
more detail the additional competences that would need to be devolved to the
Scottish Parliament and Scottish Government. In essence, these involve legislative
and regulatory powers to ensure we are able to comply with the obligations of
European Single Market membership.
142. If Scotland achieved differentiated access to the European Single Market, the
Scottish Government would need to participate in the compliance machinery that
currently mediates relations between the EFTA State parties to the EEA Agreement.
143. Under the EEA Agreement the EFTA Surveillance Authority effectively functions as
a dispute resolution mechanism and also ensures that EFTA state parties to the EEA
Agreement implement the necessary EU laws and regulations. As far as the EEA
EFTA states are concerned, it is the key authority in the institutional structure, and
ensures that those states incorporate EU internal market rules into their domestic
law, and apply the rules correctly. It performs a similar enforcement role to the EU
Commission for the EU Member States.
144. The EFTA Court has jurisdiction with regard to the three EEA EFTA States and is
competent to deal with infringement actions brought by the EFTA Surveillance
Authority against an EEA EFTA State with regard to the implementation, application
or interpretation of the rules. Scotland would need to demonstrate it has the
necessary domestic regulatory structures for single market access. All of these
requirements are currently being met by either Scottish institutions (for example,
Food Standards Scotland), or through the current UK regulatory regime (for
example, UK Borders and Immigration, the Financial Conduct Authority, and the
Competition and Markets Authority, HM Revenue & Customs).
145. The extent to which these existing regulatory authorities will continue to ensure
compliance with European Single Market requirements will depend, in part, on the
nature of the post-Brexit relationship between the UK and the EU. However, clearly
there would be scope for policy divergence to emerge between the Scottish and
rest of the UK position. This may be particularly true with regard to competition,
procurement and state aid rules, where Scotland will continue to be bound by EU
regulations. In such instances it would be necessary for the Scottish Government to
demonstrate compliance with EU rules, and be empowered to represent its position
in any dispute resolution procedures to which it may be party.
146. There could also be instances where the Scottish Government would need to
establish new regulatory capacity in particular sectors of the economy in order to
meet the requirements of single market membership. Elsewhere it may be possible,
and more practical, to continue to share regulatory capacity with the UK
Government. However, in a number of sectors Scotland already has free-standing
regulatory organisations that are quite distinct from the remainder of the UK.