The phenomenon of "agencification" in the administration of the European Union

1. Legal review by the Boards of Appeal

As stated above, it is possible to request the legal review of an administrative act, provided that it affects the legal position of a Member State or of an individual. Aware of the need to provide effective legal protection and taking into account the highly technical knowledge of regulatory agencies, the EU legislator has chosen to provide such agencies with so-called Boards of Appeal See concerning the Boards of Appeal Arana Garcia, E., “Los recursos administrativos en la Union Europea: Hacia un modelo comun de justicia administrativa”, Working Papers on European Law and Regional Integration, n° 27 (2015), Universidad Complutense.. Among the agencies having those Boards of Appeal are ECHA and EUIPO. The advantage of the Boards of Appeal lies in the possibility to harness the expertise of the agencies, while alleviating the workload of the EU judicial system. The Boards of Appeal have inspired the creation of judicial bodies such as the (late) Civil Service Tribunal and the UPC. It cannot be excluded that specialized chambers may be set up in the future in specific fields at the CJEU based on the experience gained in the agencies' practice.

Those Boards of Appeal allow for a legal review of decisions taken by the agencies themselves. The founding regulations provide for a number of mechanisms to ensure their impartiality and independence, such as requiring their members not to be officials of the agency itself and to be appointed on the basis of an external competition, although the requirements and the procedures for their appointment may vary from one agency to another. The founding regulations or procedural rules provide that the members of the Board of Appeal shall be independent and not bound by instructions when taking their decisions and may not exercise other functions within the Agency. The members of the Board of Appeal may not take part in any appeal proceedings if they have a personal interest in it or if they have acted or participated in the decision under appeal. In order to ensure these general prohibitions, the regulations provide for a system of abstention and recusal. Members of the chamber can normally be removed only due to serious misconduct, following the intervention of the bodies of the agency and upon a decision of the CJEU. The Boards of Appeal operate as courts incorporated in the agencies, but with a high degree of independence of the administrative bodies.

A common denominator is the requirement to bring together board members specialized in the respective technical field or in EU law, allowing quality decisions to be taken. Generally, the function of chairperson of the Board of Appeal is exercised by a lawyer specialized in EU law. The term of office of board members lasts several years, usually 5 years, thus enabling a continuous activity free from external interference. The number of members of a Board of Appeal may vary depending on the agency, with some 3 to 6 members with the respective alternate members.

The legal review carried out by the Boards of Appeal extends to decisions taken by the agency. The effect of the appeal may be to annul or to amend the respective decision. The Board of Appeal may also decide itself whether it has all the facts in order to do so or refer the case back to the administrative bodies in order to continue the necessary procedure, providing guidance that shall enable them to take the correct decision from a technical or legal point of view.

The rules governing the procedure before the Boards of Appeal are generally laid down in the founding regulations of each agency. However, for certain agencies, the procedural law is regulated in legal acts adopted by the Commission as a result of a delegation by the EU legislator. Agencies themselves may adopt administrative acts that further specify procedural law. In any event, procedural law is clearly inspired by the rules applicable to the CJEU, which creates a certain degree of judicial homogeneity.

Depending on the agency, the appeal may be optional or mandatory. The possibility of filing an action prior to bringing a case before a court in the strict sense is not new, as it is a widely known phenomenon at the level of national administrative law. The vast majority of Member States provide for some form of administrative appeal before the same body or a higher body in charge of the legal review See the comparative law analysis contained in the decision of the EFTA Surveillance Authority of 22 March 2017 (Case No: 78421, Document No: 845549, Decision No: 061/17/COL), which contains an account of several national legal systems providing for an admin-istrative review of legality (optional or mandatory) before being able to access the national courts. As is apparent from that decision, the coexistence of a variety of resource systems reflects the legal traditions in Europe.. Such actions generally enable the administrative body to verify the legality of its own decisions, thus having an effect which could be described as “didactic”, as well as being compatible with the principle of procedural economy See opinion of Advocate General Pikamae of 22 January 2020 in case C-114/19 P, Commission/Di Bernardo, EU:C:2020:22, paragraph 93.. Indeed, not all cases deserve to be dealt with by the EU judicial system. The administrative appeal has the advantages already identified, namely the benefit of technical expertise, as well as being the Boards of Appeal located geographically at the seat of the agency where the contested decision was taken. If an appeal is mandatory, this makes it a condition for the admissibility of any action before the CJEU. In other words, in the absence of an appeal to the agency before calling the CJEU, the action for annulment brought by the person concerned will be dismissed as inadmissible. Of course, this is not the case where the administrative appeal is merely optional. The General Court of the EU (GC) shall have jurisdiction to rule on an appeal against the decision taken by the agency's Board of Appeal.

Legal review by the CJEU

The central mechanism for controlling the legality of the agencies' activities is the judicial system created by the Treaties, in which the CJEU plays a leading role. As indicated in the previous paragraphs, the GC is generally responsible for examining the compatibility with EU law of decisions taken by the agencies. It should be noted, in order to avoid misunderstandings, that even if the Treaties refer to the CJEU, this reference should be construed as a reference to the institution, the GC being generally the competent jurisdiction within the CJEU. This is the case for actions for annulment aimed at examining the legality of the acts of an agency, as will be explained below. However, it will be the CJEU as the higher court that will be solely responsible for examining actions for annulment directed against the founding regulations of agencies, as these are EU legislative acts. This type of procedure generally provides for the intervention of the Council and the Parliament as co-legislators, which will be invited to submit observations on the pleas of illegality raised by the applicant. Therefore, the name “CJEU” can be understood as a reference to the higher institution or jurisdiction, depending on the context.

a) Action for annulment

Among the legal remedies available, the action for annulment is the appropriate legal remedy to examine the legality of the acts of an agency, including the decisions of the Boards of Appeal. Article 263(4) TFEU provides that “any natural or legal person may, under the conditions laid down in the first and second paragraphs, institute proceedings against an act addressed to that person or which is of direct and individual concern to them, and against a regulatory act which is of direct concern to them and does not entail implementing measures.” See Kuhn, W.M., “The Draft Protocol on the creation of the Court of Justice of Mercosur -- A new milestone in the judicialisation of regional integration law”, Journal of the Belarusian State University. International Relations, No 2 (2017), p. 62, on the action for annul-ment before the CJEU and other supranational courts. This provision excludes, by definition, the “actio popularis”, ensuring that only those who are genuinely prejudiced by a decision taken by an agency may institute proceedings.

As stated in the second sentence of Article 263(1) TFEU, the CJEU “shall also review the legality of acts of bodies, offices or agencies of the Union intended to produce legal effects vis-a-vis third parties” Lenaerts, K./Maselis, I./Gutman, K., EUProcedural Law, Oxford 2014, paragraph 7.70, p. 304.. As a rather broad notion, the reference to “bodies, offices and agencies” is understood to include agencies. That provision contrasts with the first sentence of that paragraph, in which “legislative acts, acts of the Council, the Commission and the European Central Bank, other than recommendations or opinions, and acts of the Parliament and of the European Council intended to produce legal effects vis-a-vis third parties” are referred to as acts open to challenge. In the absence of the second sentence, there would be a gap in the judicial protection of individuals, which would be incompatible with the image of a “Union of law” which the CJEU has established in its case law. The possibility of bringing an action for annulment against “legislative acts” allows for a legal review of the agencies' founding regulations. On several occasions, Member States have challenged these founding regulations, claiming that the EU legislator would have exceeded its powers by opting for the creation of an agency with certain competences. As mentioned above, these occasions allowed the CJEU to confirm the applicability of certain provisions as legal bases. This leads us to the grounds that may justify an action for annulment. Under Article 263(2) TFEU, the CJEU “shall have jurisdiction in actions brought by a Member State, Parliament, the Council or the Commission on grounds of lack of competence, infringement of an essential procedural requirement, infringement of the Treaties or of any rule of law relating to their application or misuse of powers”.

It follows from Article 264 TFEU that “if the action is well founded, the Court of Justice shall declare the contested act null and void”. However, the same provision states that the CJEU “shall, if it considers it necessary, indicate which of the effects of the act which it has declared void are to be regarded as definitive”. In general, the GC may itself decide on the action for annulment or refer the case back to the agency so that it can rule on certain aspects, in particular of a technical nature. The second case is obvious, since the GC will hardly be able to substitute the assessment made by the administration by its own considerations. Appeals before the CJEU shall not have suspensory effect. However, the CJEU may, if it considers that circumstances so require, order the suspension of the execution of the contested act.

b) Non-contractual liability

As the founding regulations provide for the non-contractual liability of EU agencies for damage caused by illegal acts committed to third parties, the GC is competent to deal with such disputes pursuant to Article 340(2) TFEU. The existence of non-contractual liability of the EU is subject to three conditions: firstly, the unlawful conduct of the institution or a staff member; secondly, the existence of damage suffered by the appellant; and thirdly, a causal link between the conduct of the institution or staff member and that damage. Compensation for such damage shall be made in accordance with the “general principles common to the laws of the Member States”.

c) Contractual liability

Unlike in the case of non-contractual liability, referred to above, Article 340(1) TFEU provides that “EU contractual liability shall be governed by the law applicable to the contract in question”. Therefore, where agencies conclude contracts with third parties, whether they are private or public operators, the cases that will give rise to the agency's liability, for example in the event of non-compliance with the obligations assumed, should be specified in those contracts.

Furthermore, from a procedural point of view, it should be mentioned that Article 274 TFEU provides that “without prejudice to the powers conferred on the CJEU by the Treaties, disputes to which the EU is a party shall not, for that reason, be excluded from the jurisdiction of the national courts”. This provision should be understood as meaning that it cannot be inferred from the mere fact that one of the parties to the contract is an EU agency that the CJEU has original jurisdiction to settle potential disputes. On the contrary, if not specifically provided for in contracts, jurisdiction will lie with the national courts. In the case of contracts concluded in the context of public procurement, such contracts shall generally provide for jurisdiction of the courts of the State where the agency is located. It shall also stipulate that the law of that host State shall apply where the contract does not provide for specific provisions. As agencies are supranational entities and national law does not always provide for solutions to legal problems that may arise during the performance of the contract, it is not unusual to specify that “EU contract law” will fill any legal loopholes that may arise. The result can be described as a “mixed” contract law, composed of national law and the general principles common to the laws of the Member States in matters relating to contracts.

It should be clarified that the contractual liability of an agency for any breach of contract obligations should be distinguished from the legality of the procurement procedure, which, as explained above, is carried out in accordance with the rules laid down in the EU Financial Regulations The provisions contained in the Financial Regulations, applicable only to EU institutions and other entities, are very similar to the provisions of the EU public procurement directives that Member States are obliged to apply. For a description of those directives, see Kuhn, W. M., “The reform of the EEA rules on public procurement”, Upphandlingsrattslig tidskrift, 2015, No 2, p. 150.. As it concerns the application of an EU regulation, participants in a public procurement procedure (to which the contract has been awarded or any other participant) claiming that the procedure is unlawful must submit a review procedure to the GC, whose jurisdiction is mandatory Poulsen, S., Jakobsen, P./Kalsmose-Hjelmborg, S., EU public procurement law, 2rd edition, Copenhagen, 2012, p. 50..The remedies available may be an action for annulment or an action for non-contractual liability, in accordance with the cited provisions.

d) Appeal

The CJEU has jurisdiction to hear appeals, which are limited to points of law and are directed against judgments and orders of the GC. The appeals do not have a suspensory effect. If the appeal is upheld, the CJEU shall quash the decision of the GC and itself rule on the dispute, or refer the case back to the GC, which shall be bound by the decision of the CJEU.

Accountability to the Commission

As indicated above, agencies are generally accountable to the Commission for the implementation of EU policies. Agencies usually consult the Commission on a wide range of questions that also include the legality of certain measures. The Commission is the natural contact point for queries on the application of EU administrative law, regardless of the autonomy of the agencies. There is also a liability towards the Commission where administrative law or founding regulations explicitly provide for this, for example in the context of procedures requiring cooperation between the agency and the Commission or the adoption of an act by the latter.

Legal review by other entities

There are also other entities that take on the role of a watchdog when it comes to legal review. Their role can be extended to all the activities of an agency or limited to a specific area. The EO has already been mentioned, whose role is to examine cases of illegality and maladministration. Opinions issued by the EO on matters brought to its attention are not legally binding but have some authority. The EO will include the outcome of its investigations in its report to Parliament, thus creating political pressure. Agencies shall generally take into account the assessment contained in such opinions and seek to remedy any instance of maladministration that has been detected As Advocate General Trstenjak pointed out in her opinion of 28 March 2007 in case C-331/05 P Internationaler Hilfsfonds/Commission, EU:C:2007:191, paragraphs 56 and 57, the primary purpose of the EO in the performance of his duties is “to optimise the Community administration” and not to guarantee individual legal protection. The EO “shall seek a solution with the institution or body concerned in order to eliminate instances of maladministration and satisfy the complainant's claim, which makes the EO rather administrative”..

Mention should also be made of the European Data Protection Supervisor (EDPS), which is an independent supervisory authority whose main objective is to ensure that the EU institutions and bodies respect the right to privacy and data protection when they process personal data and develop new policies. The EDPS is elected for a renewable term of five years. Regulation (EU) No Regulation (EU) 2018/1725 of the European Parliament and of the Council of 23 October 2018 on the protection of individuals with regard to the processing of personal data by the Union institutions, bodies, offices and agencies and on the free movement of such data, and repealing Regulation (EC) No 45/2001 and Decision 1247/2002/EC (OJ L 295, 21.11.2018, p. 39). 2018/1725 lays down the tasks and powers of the EDPS as well as its institutional independence as a supervisory authority. It also lays down the rules for data protection in the EU institutions. In practice, the tasks of the EDPS can be divided into three main functions: monitoring, advice and cooperation. As part of his advisory role, the EDPS advises the Commission, the Parliament, the Council, but also agencies on data protection matters in a number of policy areas. The intervention of the EDPS is generally provided for in the founding regulations, for example when it comes to concluding agreements between agencies on the exchange of personal data, as is the case between FRONTEX and EUROPOL.

VIII. The future of the agencification process

The past decades have shown that the agencification of the EU administration is an evolving process. However, some trends can already be observed which make it possible to predict their future to a certain extent. First of all, the somewhat chaotic proliferation that occurred at an early stage was remedied by the “Common Approach” criteria, which provide a clearer framework for setting up agencies. The EU legislator should henceforth be able to use these tools to set a certain order in shaping its internal structure. Furthermore, litigation before the CJEU has enabled the legislator to identify the appropriate legal bases in view of the need to fulfil the administrative tasks lying ahead. The recent creation of ELA on 20 June 2019 shows that there is still a commitment to agencification as an appropriate method of administering the EU.

Obviously, the trend of agencies will be to increase in number, as the EU is being given more powers and the benefits of agencification are not called into question. It cannot be excluded that agencies may be closed or merged and even join the institutions once they lose their “raison d'etre”. However, there does not seem to be a clear trend towards such a scenario. It rather appears that certain agencies could evolve to play a decisive role in certain areas, such as FRONTEX in the area of external border protection, which will be equipped with its own border and coast guards. Similarly, it cannot be ruled out that ECDC may become an even more important entity due to the pandemic and the need to support Member States' action in the area of public health On the evolution of public health policy in the EU, see Kuhn, W., "The social model established by the European Constitution: An analysis from the perspective of the protection of public health ", International Agenda, Year XII, N° 23, 2006, p. 327.. Consequently, the agencies will remain, hereby decisively influencing the functioning of the EU.

As EU “satellites”, the agencies are representatives of the supranational sphere in the territory of the Member States. Geographical distance and decentralization are challenges that put at risk the coherence of the administrative action by the agencies. These challenges can only be overcome through the use of telecommunication means, modern technologies, the organization of continuous meetings and staff exchanges, etc. Work in an agency therefore requires some effort. The advantages are not obvious, but they respond to a political demand to ensure greater representativeness of the EU in the Member States through administrative decentralization.

Conclusions

This article has presented various facets of the phenomenon of agencification in the European administration, explaining the status of agencies within the EU legal order, how they are set up, their internal organization and funding, their decision-making procedures and how they function. Agencies have also been classified according to certain categories in order to facilitate a better understanding of their “raison d'etre”. The challenges faced by the agencies in their day-to-day business have also been presented. The article has also focused on their relationship with the EU institutions, in particular on the control of legality carried out by the EU institutions. It has thus been shown that the agencies are far from operating in a legal vacuum. Instead, they are firmly anchored in the EU's institutional structure and subject to a strict scrutiny of legality by various actors, including the Commission, the Parliament, the EO and the CJEU. Agencification has succeeded in establishing itself as a new form of mixed administration, not initially provided for in the Treaties, including the participation of the Member States, hereby promoting the acceptance of EU law by the latter.

List of agencies mentioned

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