Full Letter from Mosley to the EU Commissioner

Dear Commissioner Byrne,

Full Letter from Mosley to the EU Commissioner

Dear Commissioner Byrne,

I am writing on behalf of the FIA's World Motor Sport Council to express our grave concern and dismay at the political agreement reached on the draft Directive on Tobacco Advertising and Sponsorship with an implementation date of 31 July 2005.

As you know the previous Directive adopted in 1998 gave 1st October 2006 as the final date for an EU-wide ban on tobacco sponsorship. As a result of this legislation the FIA advised teams with tobacco sponsorship not to enter into contracts beyond 2006. We understand that this advice has been followed and that sponsorship contracts were agreed extending up to, but not beyond, the end of 2006.

When the European Court of Justice annulled the 1998 Directive in October 2000, the World Motor Sports Council adopted a resolution supporting the 2006 date linked to the entry into force of the WHO's proposed Framework Convention on Tobacco Control. This resolution was adopted precisely to reinforce the FIA's advice to teams and to stop world championship competitors seeing the failure of the 1998 Directive as an opportunity to extend tobacco sponsorship agreements beyond 2006. At the time you praised the World Motor Sports Council's resolution, which helpfully (from your point on view) was taken on the same day that the Court annulled the legally flawed 1998 Directive.

Despite our efforts to maintain the timescale agreed in 1998, you decided in 2001 to propose a new date of 31st July 2005 for the Commission's second attempt at a Directive. At no time were we warned that the date would change, nor was any process of consultation offered to us prior to the Commission's adoption of the draft text.

In December 2001 I wrote to you highlighting the advice we had given to teams and expressing our concern that the earlier date would disrupt progress towards the worldwide ban in 2006. In your reply you indicated that the Commission was aware of the issue and that the date of implementation would be reviewed by the Council and Parliament. Later contacts with you yourself and with your services encouraged the FIA to lobby the European Parliament to support an amendment to change the date to 2006.

By adopting this essentially passive role you place the entire onus on the FIA to restore the consistency to the Commission's own legislative initiatives, notwithstanding that on such a sensitive matter, it would clearly be difficult for the FIA to succeed in promoting an amendment. In the event we came very close, losing only by eight votes. The loss was primarily a result of an opportunistic intervention by British Conservative MEPs to sabotage the necessary amendments. Regrettably the Council has also refused to alter the implementation date and the opportunity for a second reading has been lost.

Frankly the FIA is astonished at the inconsistency of the Commission's behaviour. To change the date of implementation was gratuitous and irresponsible. The 2006 date had, after all, been agreed by all the EU institutions under the democratic provisions of the Co-Decision procedure in 1998. The date of implementation was not an issue of concern to the European Court of Justice. There was therefore no need to change it.

In responding so weakly to our concerns the Commission has demonstrated a limited understanding of the issues at stake and a quite extraordinary failure to anticipate the consequences.

Whilst it is disappointing that the FIA's concerns have been ignored, it is truly remarkable that the request of the Australian Health Minister has also been brushed aside. The Australian Government, which has the toughest anti-tobacco legislation in the world, announced in 1998 a sponsorship ban adopting the original EU Directive's 2006 date. Their decision followed constructive discussions with the FIA. The Australian Health Minister wrote to Members of the Council this month urging them to support a second reading to enable amendments of the date of implementation. This request has been totally ignored.

For the EU to ignore the FIA is one thing; for it to ignore the concerns of a government that has probably the world's most successful anti-tobacco programme, and which is a leading advocate of the WHO Framework Convention on Tobacco Control, demonstrates clearly the flaws and inconsistency of the EU approach. However, the EU payment of nearly one billion euros per annum of taxpayers' money to subsidies tobacco growing indicates that inconsistency is not a Brussels characteristic.

As a direct consequence of the Commission's actions the proposed ban on tobacco sponsorship in Formula 1 now faces considerable problems. As the unfortunate experience of Spa in Belgium this year has just demonstrated, the FIA cannot force teams participating in its championships to break their obligations to sponsors.

As was pointed out by the Australian Minister, by choosing a date earlier than the world date, the EU will now force teams to seek events outside the EU during part of 2005 and all of 2006 in order to observe contracts which do not expire until the end of 2006. Such events will inevitably themselves seek long-term contracts and, of course, allow tobacco sponsorship. Quite obviously, the probable consequence is that the tobacco contracts which currently expire in 2006 will soon be extended beyond that date.

As a sporting body, the FIA has no independent regulatory authority over commercial contracts between teams and third parties. Indeed this separation of sporting and commercial interests has been reinforced as a result of the Commission's Competition Department examination of Formula One completed in October 2001.

Furthermore, unlike the European Commission, the FIA does not have unlimited resources to fight legal disputes to test its regulatory competence over tobacco sponsorship. Having lost one Directive you are able to use public funds to try again. For the FIA the costs of a similar battle with team sponsors would be huge and the outcome uncertain. The FIA would rather devote its scarce resources to promoting road safety and maintaining our legitimate role as sporting regulator.

As a result of the new Directive, the EU will now face a period of disruption in World Championship events occurring in the European Union in 2005 and 2006. This instability will also threaten progress on a worldwide ban as non-EU countries exploit the chaos to propose events without any sponsorship restriction. Hopefully the WHO Convention will be able to re-establish the level playing field that is now urgently needed world wide. However, the outcome of these important negotiations remains uncertain.

In conclusion, the Commission's decision to change the implementation date, the subsequent failure by both the Parliament and Council to amend the proposal will certainly disrupt international motor sport in the EU and make it harder to encourage countries to follow Australia's example and gain agreement on a world-wide ban in 2006. The World Motor Sports Council very much regrets this situation for which, as Commissioner enjoying the power of legislative initiative, you are ultimately and entirely responsible.

Yours sincerely

Max Mosley

President

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