The Common Approach’s promise of good governance: the issue of the agencies’ seat

by: in Law

When the three main institutions adopted the Common Approach on EU Decentralised Agencies in 2012 one of the few innovative elements in this otherwise disappointing non-binding interinstitutional agreement were the provisions dedicated to the selection of the seat of EU agencies. As many EU-watchers will know, one of the characteristic features of EU Decentralised Agencies is that they are not located in Brussels but that they are instead spread over the entire territory of the EU.

EU agencies are therefore a nice ‘trophy’ for Member States and, as a result, the decision on the seat of a new agency has typically involved a lot of horse-trading at the level of the Council and even European Council.

That the seat of a new agency was not chosen in function of the proper functioning of the agency itself but that this choice was instead foremost informed by political considerations is also evidence by the 2004 Decision of the Representatives of the Member States, meeting at Head of State or Government level, “to give priority to Acceding States, once they have joined the Union, in the distribution of the seats of other offices or agencies to be set up in the future.” The prime consideration therefore appeared to be that every EU Member State ought to have an EU agency rather than that every EU agency should be located in such a way that it can properly perform its functions.

Mounting pressure on the Council’s horse trading on EU agencies’ seats
However, this approach increasingly came under pressure as some agencies were subsequently established in locations that are so remote or inaccessible that it frustrated the work of the agency concerned. The case of ENISA, located in Heraklion, is illustrative. A 2006 report on the agency’s functioning noted that its location on “the island of Crete, chosen by the Greek Government, is undeniably remote, even at risk of complete isolation.” For an agency that is supposed to perform networking functions this may indeed be problematic. The 2009 Ramboll report even noted that six EU agencies had significant or major remoteness problems. The location-issue has also been a recurring feature in the European Parliament’s yearly horizontal agency-resolutions in the budgetary discharge, ever since the Parliament first adopted these cross-cutting resolutions in 2012.

A new standard set by the Common Approach
This is the background against which the Common Approach (CA) dedicating an entire page to the question of the “Agencies’ seat and role of the host country” should be understood. The Common Approach sets out a number of principles without however calling into question “the political decision on an agency’s seat taken by common agreement between the representatives of the Member States meeting at Head of State or government level or by the Council” (more on this below). The CA’s main principles are that (i) the decision on the agency’s seat should be taken together with the decision on the establishment of the agency (and not years thereafter, as for instance happened with the EEA); (ii) objective criteria should be relied upon which may include the accessibility of the location, the proximity of adequate education facilities and appropriate access to the labour market for civil servants’ spouses; (iii) all agencies should have headquarters’ agreements with their host Member States.

Brexit as a catalyst for good governance
However, by 2012 the EU legislature had already established some 30 agencies with few additional ones in the pipeline, casting doubt on whether the Common Approach’s shiny principles would be applied much in practice. The first opportunity related to CEPOL but proved to be somewhat of a disappointment. First, the Commission failed to convince the Parliament and Council of the benefits of merging CEPOL with Europol, an option which the CA in fact prescribed. Seven Member States were interested in hosting CEPOL following its pre-Brexit move from the UK. Instead of assessing all seven bids, the Council first held successive voting rounds in order to select Budapest as CEPOL’s new location. Only the Hungarian bid was then formally assessed in an impact assessment.

The Brexit vote itself offered an opportunity to instill more good governance in the process. Following the UK’s decision, new seats had to be selected for the EBA and EMA. To select these seats the European Council devised an ad hoc procedure in 2017. The bids made by different Member States were publicly scrutinized and assessed (but not ranked) by the Commission, following which the Council held successive voting rounds in order to determine the new seat. The European Council was careful to point out that this procedure would not set a precedent for future decisions, but as Carlo Tovo pointed out in an earlier TARN Blog its ad hoc procedure “demonstrate[ed] the Member States’ willingness to implement the principles laid down in the 2012 Common approach and to take the decision on the agencies’ seat away from the traditional intergovernmental consensus, […] hopefully set[ting] the standard for future cases.” That the relocation of the EBA and EMA has indeed set a standard is clear from the decision on the location of the European Labour Authority, the newest EU agency. Between four bids, the Council in June 2019 selected Bratislava as the ELA’s seat following a procedure identical to the one followed for the EBA and EMA seats.

Remaining challenges
The Common Approach thus resulted in a greater degree of good governance in agencification, at least when it comes to the choice of the seat of EU agencies. However, even in this area work remains to be done and challenges persist. For instance, in preparation of the CA the inter-institutional working group noted that eighteen agencies had a seat agreement with their host Member State. In the Commission’s April 2019 report on the implementation of the Common Approach, it noted that 29 of the 33 agencies had concluded such an agreement. This is undeniably a numerical improvement but it evidently also means that four agencies still do not have such an agreement more than seven years after the adoption of the CA. Incidentally it is also remarkable to see that the Commission identifies (only) 33 decentralised agencies, despite the CA not setting out a definition of what a decentralized agency is to begin with. That the lack of a clear definition may be problematic is evidenced by discussions between some Member States and the Commission on whether the newly proposed European Cybersecurity Industrial, Technology and Research Competence Centre should be considered to be an EU decentralized agency or not.

A follow up question, and an interesting topic for future academic research, raises the issue of the degree to which the existing seat agreements conform to the seat agreement template which the Commission worked out and how the agreements are applied in practice. After all, as the Commission’s April 2019 report notes “Five headquarters agreements have been updated since their signature with no major modifications to the original headquarters agreements.” Having a headquarters agreement in place is one thing but proper commitments on the part of the host Member State are of course equally important.

Finally, among the many further interesting issues which could be included in this blogpost, a purely legal issue should be flagged. The Common Approach did not call into question the view that choosing on the location of a new agency is a prerogative of either the Council or the Member States to decide, by common accord, on the seat of EU agencies. In fact, this position has also been defended by the Commission in the past. Of course this statement is already problematic in itself since one arguably would have to make a choice: either the seat of agency is decided upon by the Council, or by the Member States but not possibly by both. The legal basis typically cited here is Article 341 TFEU which does not foresee a role for the Council. However, this Article also only refers to the seat of the institutions, not to the seat of subsidiary bodies. One could of course adopt a broad or generic reading of the reference to ‘institutions’ in Article 341 TFEU but one would have to do so mindful of the other Treaty provisions such as the legal bases pursuant to which EU agencies may be established and empowered. Following the principal decision to relocate the EBA and EMA, this Council decision had to be ‘effectuated’ by amending the agencies’ establishing acts. Here the European Parliament vehemently deplored to being confronted with an intergovernmental fait accompli which it needed to rubberstamp through the ordinary legislative procedure. The Parliament could very well make a legal claim that it should also be the co-legislature on the issue of an agency’s seat, arguing against the Member States’ broad reading of Article 341 TFEU and it has indeed decided to challenge the Council’s decision on the seat of the ELA. Case C-743/19 will allow the Court of Justice to address this issue for the first time.

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