Economic Affairs - Approved Panel Minutes - 17 October 2007

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Agenda matter

Action

1.

Minutes

The Panel considered the Minutes its meeting of 3rd October 2007. It directed officers to amend the record to reflect the fact that it had delegated Deputy Breckon and Deputy Martin to develop questions on glasshouse payments' and the Single Area Payment under the Rural  Economy  Strategy.  The  members  were  to  put  these questions  to  the  Director  of  Agriculture  at  his  offices  on  14th November 2007. The Panel did not require a briefing on the subject as had been recommended by the Department.

The minutes of 5th September 2007 were approved.

AB JM NJF

2.

Item 3 5th Sept 2007

Incorporation of Jersey Post

The Panel recalled that it had directed officers to obtain a 6-month post-incorporation report on the performance of Jersey Post.

The  Panel  was  informed  that  such  a  report  had  not  been undertaken, and that the current position of the JCRA was that while  work  on  pricing  and  regulation  of  postal  services  was ongoing, no overall efficiency report was planned, and there was no intention at this time to investigate the matter of cross-subsidy.

The Panel decided that it would be appropriate to carry out further work in to the operation of Jersey Post post-incorporation. It agreed a budget of £3,000 to £5,000 for accountancy advice in this regard.

Authority was delegated to the Chairman to make the necessary arrangements.

GS

3.

Tourism Development

The Panel recalled that the Economic Development Minister had indicated in a Public Hearing held on 13th June 2007 that he

intended to oversee the development of a body designed to act for the tourist industry in the same manner as Jersey Finance Limited currently acted for the finance industry.

Officers were directed to obtain information about this body for the next meeting.

ELK

4.

Reduction of Panel quorum

The  Panel  noted  briefing  notes  of  the  Chairmen's  Committee meeting held on 5th October 2007.

The Chairman, in reference to a matter raised at that meeting, noted  that  the  current  quorum  level  for  meetings  and  Public Hearings (fifty percent of a Panel's membership plus one) was restrictive  and  unnecessary,  especially  when  one  or  more members were for whatever reason conflicted and unable to take part in reviews.

The  Panel  noted  that  the   Deputy  Greffier  of  the  States  was studying  the  feasibility  and  reasonableness  of  reducing  Panel quora.

5.

Forthcoming propositions

The Panel noted that the projects entitled P.150/2007 - JFSC: Appointment of Commissioner' and P.153/2007 - JT Group Ltd: Proposed Sale' had been lodged.

6.

Marine Leisure Growth Group

The Panel recalled that officers had attended the first meeting of the Marine Leisure Growth Group, held on Friday 6th July 2007 in the Conference Room, Maritime House. The Panel received and noted minutes from this meeting.

7.

Panel expenditure report

The Panel received a report on its expenditure during 2007, and the funds available to it as at 16th October 2007.

The  Panel  noted  that  £67,792.87  of  its  £80,000.00  budget remained.

8.

Intellectual Property

The Panel welcomed Mrs. C. van Dijk of Lysaght & Company', an intellectual property registration business, who had been invited to the meeting to brief the Panel on the current situation regarding intellectual property generally and the legislative situation in Jersey.

The Panel was informed that intellectual property consisted of a number of different rights. Some were automatically acquired (e.g. copyright), and others (trade marks, patents and designs) required registration to be enforceable. The focus of the discussion was on

registered rights.

Intellectual property rights were territorial, and had to be registered in each jurisdiction where protection was required. Jersey maintained a secondary registration system, which did not provide for primary stand-alone' registrations, and essentially provided an extension of rights registered in the United Kingdom.

The shortcoming of this system was that Jersey trade mark owners with no interest in obtaining a registration in the United Kingdom were nevertheless obliged to register their rights in the United Kingdom before they were able to obtain protection in Jersey.

Furthermore, without offering primary registration, Jersey was not eligible to join a number of important intellectual property treaties, including the GATT TRIPs agreement relating to intellectual property and the Paris Convention.

The disadvantage of not being a party to these treaties was that Jersey companies were not eligible to hold patents and trademarks acquired through international registration systems such as the Patent Co-operation Treaty and Madrid Agreement and Protocol. These registration systems were widely used by intellectual property owners for obtaining their rights around the world.

Mrs van Dijk stated that from a tax point of view Jersey could potentially be an attractive place for setting up intellectual property holding companies for licensing purposes. A Jersey company could be formed to own the worldwide intellectual property portfolio of a business, and could license these rights to subsidiaries or manufacturers in other countries, who would pay royalties to the Jersey company for the use of the intellectual property rights. However, the lack of a primary registration system and membership of these treaties precluded Jersey companies from holding various international rights, so Jersey was currently not a suitable jurisdiction for such holding companies.

Companies incorporated to hold intellectual property rights in Jersey by overseas parents were likely to have few direct employees. Furthermore, under the 0/10 tax system they would provide little direct taxation revenue. The benefit would be in the form of company and intellectual property registration fees, and trickle-down' business to local business which serviced these companies. In determining the value of a primary registration system the States would have to weigh these benefits against the implementation costs.

The Panel was informed that there were currently only three businesses working in the intellectual property sector in Jersey. The introduction of a primary registration system might also encourage more businesses specialising in this field to set up in Jersey.

Were Jersey to develop a primary system, it would require a government body to administer applications and registrations, similar to the Patent Office of the UK. This would represent a significant investment.

The cost of running a primary registration system would be high, and the official fees that could be charged might not be sufficient to cover this cost. It was the opinion of Mrs. van Dijk that there would be an overwhelming case for implementation of a comprehensive primary registration system only if the access that this would provide to numerous international agreements would stimulate sufficient additional business in the financial services sector and provide additional benefits.

Nevertheless, revision of the Trade Marks (Jersey) Law 2000 would be welcome, particularly with regard to the discrepancy between the manner in which UK rights acquired through international registration systems and the UK Registry were treated. Under the current Trade Marks (Jersey) Law 2000, trade marks registered with the UK Trade Marks Office were required to be registered in Jersey to extend to Jersey, whereas Community Trade Marks and International Trade Marks that extended to the UK were automatically protected in Jersey without requiring local registration. This meant that in practice Jersey companies were penalised, as if they were only interested in obtaining protection in Jersey, they were forced to register their trade mark in the UK first and then pay local registration fees, whereas foreign companies that were able to use the international registration systems obtained protection in Jersey free of charge.

It was suggested that a good start might be to introduce a primary registration system for trade marks, as Guernsey had done.

In respect of any changes that were made to Jersey's intellectual property legislation, including in respect of unregistered rights (e.g. the Copyright law which was currently under review) it was recommended that such laws should, insofar as possible, comply with the provisions of corresponding international agreements, so that ratification of these agreements would be possible in the future.

It was additionally noted that the involvement of industry professionals in the development of further legislation in this regard would produce an improved legislative framework.

The Panel thanked Mrs. Van Dijk for her assistance.

9.

Draft Price and Charge Indicators (Jersey) Law 200-

The Panel noted that the draft Price and Charge Indicators (Jersey) Law 200- was scheduled for debate on 6th November 2007.

The  Panel  received  a  report  based  on  advice  from  the  Law Draftsman concerning proposed amendment to the aforementioned law.

The  Panel  recalled  that  its  intention  had  been  to  require  the mandatory  provision  of  receipts  for  transactions  with  GST- registered businesses. It now appeared that this would not be not possible by means of an amendment to the draft Price and Charge Indicators (Jersey) Law 200-, as it fell outside of its scope and

would therefore require a fundamental change to the mechanics of the law.

The Panel was informed that it could best achieve its objective by means of an amendment to Article 20 of the forthcoming GST Regulations. The Panel noted that the timetable of debates at the current time was such that no amendment could be brought in time for the debate on these Regulations.

The Panel therefore agreed to bring to the States at some point in the future amending Regulations to effect the changes to price marking that the Panel required.

The Chairman was delegated power to make a statement to the assembly  informing  members  that  the  Panel  would  take  the aforementioned action.

Deputy  Breckon  reserved  his  position  on  this  subject,  and  the Panel  agreed  that  the  statement  would  be  made  without  his involvement.

GS NJF

10.

Item 16 03.10.07

Annual Business Plan

The  Panel  noted  a  report  to  be  passed  to  the  Chairmen's Committee  detailing  its  experience  of  reviewing  the  Economic Development Department Business Plan 2008.

The  Panel  directed  officers  to  additionally  include  background information  previously  used  in  questions  to  the  Economic Development Minister.

The  Panel  noted  that  the  2008  Budget  proposals  were  to  be presented to States members at St. Paul's Centre on 22nd October at 9.30am.

NJF

11.

Item 3 03.10.07

Privatisation of Jersey Telecom

The Panel received a request from the Economic Affairs Sub-Panel (Telecoms Privatisation) for further funding.

The Panel noted that the Sub-Panel was studying P.153/2007 – JT Group Limited ('Jersey Telecom') - proposed sale', a proposition to privatise  Jersey  Telecom,  produced  following  the  work  of  the Telecoms Privatisation working group.

The Sub-Panel had noted while some of the concerns raised by Scrutiny  in  relation  to  the  previously  withdrawn  proposition (P.28/2007  –  JT  Group  Limited  ('Jersey  Telecom')  -  proposed sale')  numerous  others  remained  unaddressed.  Numerous assurances  had  been  made  by  the  Treasury  and  Resources Minister, the reliability of which were uncertain.

The Sub-Panel was therefore requesting £10,000 to continue its work.

After discussion of the subject, the Panel approved the sum of £10,000  for  the  Economic  Affairs  Sub-Panel  (Telecoms

Privatisation) to undertake work into P.153/2007.

12.

Item 18 03.10.07

Role and funding of Jersey Finance Limited

The  Panel  received  a  briefing  from  officers  in  respect  of  the progress of this matter.

The Panel was informed that the draft terms of reference for this review had been prepared for the Panel's approval. It had initially been intended to await terms of reference for reviews into the finance industry from the Minister for Economic Development but as  these  had  not  yet  been  forthcoming  the  Panel's  terms  of reference had been prepared.

The Panel considered it unlikely that these terms of reference would impinge on other reviews.

The Panel noted the position.

13.

Retail Strategy Review

The  Panel  received  an  officer  report  on  the  response  of  the Economic Development Minister to the Retail Strategy Review.

The report was noted.

14.

Questions to Ministers

The Panel noted that the Economic Development Minister would be receiving questions without notice at the States meeting on 23rd October 2007.

16.

Future meetings

The Panel noted that its next meeting was to be held at 2.30pm on 14th November 2007 in the Blampied Room, States Building.