1
In the margins of the Council
The competence to adopt the decision on the seat of an EU agency
Bene Colenbrander
bene.colenbrander@student.uva.nl 10248943
European Union Law (International and European Law) J.H. Reestman
June 26 2020
Table of contents
I. Introduction 2
II. Definition of agencies 3
III. Legal basis and establishment 5
IV. Decisions on the seat of agencies 6
V. Institutional debate on seat decision procedure 10
V.I. Institutional debate leading up to the Common Approach 10
V.II. Institutional debate leading up to case C-743/19 Parliament v Council 12
VI. Case C-743/19 Parliament v Council 15
VI.I Content of the action brought by the Parliament 15
VI.II Legal analysis of the action brought by the Parliament 15
VI.II.I Admissibility 15
VI.II.I.I Case law of the Court of Justice and the General Court 17 V.I.II.I.II. The competence to adopt Decision (EU) 2019/1199 of 13 June 2019 20 V.I.II.I.II.I Article 341 TFEU as a legal basis for the decision on the seat of the 21
European Labour Authority
V.I.II.I.II.II Articles 46 and 48 TFEU as a legal basis for the decision on the seat 24 of the European Labour Authority
V.I.II.I.II.III. Conclusion on competence 26
V.I.II.II Possible ruling on admissibility and substance of C-743/19 Parliament 26
v Council
V.I.III Consequences of possible ruling for future decisions on the seat of agencies 27
VII. Conclusion 28
2
I. Introduction
In case C-743/19 Parliament v Council the European Parliament poses to the Court of Justice of the European Union the main research question of this study: who has the competence to decide on the seat of an agency that has been established through a regulation of the Parliament and the Council? Does this competence rest with the member states of the European Union or with the Parliament and the Council as the EU legislature? This question has led to institutional debate1 and media coverage2 but has not been dealt with in the literature. While the development, functioning and autonomy of agencies has received considerable attention of legal scholars3, the seat of agencies has only been discussed in relation to the functioning of agencies. As such, scholars have studied how the seat of the agencies impact their functioning and how these seats have been selected. However, the issue of who has the competence to decide on the seat of agencies has been overlooked.
Besides the direct concern for the functioning of agencies, the issue of competence to decide on the seat of agencies has a broader European legal relevance. As it stands, decisions on the seat of agencies are in most cases taken by common accord of representatives of the governments of the member states. These decisions constitute a distinct category of Union acts: while they are formally intergovernmental in nature, they are also indissolubly linked to the institutional functioning of the Union. Because of the fact that fewer legal and procedural constraints apply to these decisions, it has been argued that a growing tendency to regulate matters through these decisions would lead to interference with the EU’s institutional balance.4
Scrutiny of the member states’ competence to decide on the seat of agencies therefore adds to the instutitional and scholarly debate on this somewhat forgotten5 issue.
As the Court has not given a ruling in case C-743/19 Parliament v Council yet and a hearing has not taken place6, this study aims to formulate an answer to the main research question by analyzing possible arguments to substantiate the competence of either the member states or the parliament to decide on the seat of on agency. After a definition of agencies is given, the legal basis of agencies and the procedure to establish agencies is set out. In addition,
1 See section V.II. 2 Cokelaere (2019).
3 Chamon (2016), Groenleer (2009), Vos (2014). 4 Kapteyn and Verloren van Themaat (1973) 122. 5 De Witte (2001) 251.
3 this study provides an overview of the different decisions on the seat of agencies between the 1975 and 2019, the year in which the European Labour Authority, the last agency to be established, was given a seat. Only then is the institutional debate on the seat decision procedure set out. Subsequently, the content of case C-743/19 Parliament v Council is analysed and a possible ruling is formulated. Lastly, the consequences of the possible ruling for future seat decisions is set out.
In doing so, this study aims to contribute to the institutional and scholarly debate on the competence to decide on the seat of agencies and to shine a light on the use of intergovernmental decisions to settle EU institutional matters.
II. Definition of agencies
This study deals with the decision on the seat of EU decentralised agencies. The decentralised agency is a distinct type of EU body. Besides the well-known institutions,7 several other types of bodies exist within the EU. One such type is the agency, of which three subtypes exist: decentralised agencies, executive agencies and agencies set up under the Common Security and Defence Policy.8
There is no official definition of agencies. Agencies are mentioned in the Treaties, but only laterally.9 Furthermore, the Treaties do not make a distinction between the different
subtypes of agencies; instead they mention agencies as a single group of European bodies. As a result, scholars have proposed their own definitions of decentralised agencies. According to Vos, decentralised agencies “can broadly be defined as bodies governed by European public law that are institutionally separate from the EU institutions and have their own legal personality. They are created by secondary legislation by the Council and/or European Parliament, they have clearly specified tasks and have a certain degree of administrative and financial autonomy.”10 Chamon calls decentralised agencies ‘EU agencies’ and proposes a slightly different definition: “EU agencies may be defined as (i) permanent bodies, (ii) under EU public law, (iii) established by the institutions through secondary legislation, and (iv) endowed with their own legal personality.”11
7 Article 13(1) TEU stipulates the institutions. 8 Everson et al. (2014) 241-262.
9 See for instance article 9 TEU. For more on lateral references see Chamon (2016) 135.
10 Vos (2014) 19. 11 Chamon (2016) 10.
4 Above definitions ensure that decentralised agencies are clearly distinguishable from executive agencies, agencies set up under the Common Security and Defence Policy and other EU bodies. One of the most important aspects of both definitions is that they make clear that EU bodies can only be regarded as decentralised agencies when they are established by the institutions through EU secondary law. This makes them fundamentally different from the Treaty-based institutions, which have been set up by the member states.12 Both definitions also recognize the legal personality of decentralised agencies, which sets them apart from other EU bodies.13 The fact that decentralised agencies are defined as EU public law bodies further separates them from bodies that are set up by EU institutions as a private body – such as the European Financial Stability Facility (EFSF) - or by EU institutions on the basis of an international agreement with third entities.14 Chamon adds an important requirement to the definition of Vos that distinguishes decentralised agencies from executive agencies, namely that decentralised agencies are set up for an indefinite period, while executive agencies have a so-called sunset clause set by the Commission.15 This might appear as a purely formal difference, but it shows that – in contrast to decentralised agencies – executive agencies are dependent on the Commission.16 Not only does the Commission decide how long an agency will exist, it also establishes them and appoints their steering committees and directors.17
Decentralised agencies have different powers and tasks. Although most decentralised agencies only gather and spread information about topics within their policy field to provide policy makers with accurate input, some decentralised agencies actually adopt legally binding decisions and directly implement EU policies.18 In 2020, no less than thirty-four decentralised agencies exist.19 Besides being functionally decentralised, agencies are also geographically decentralised. Almost all decentralised agencies are located outside of Brussels and Luxembourg.20
12 Andoura & Timmerman (2008) 5.
13 Chamon (2016) 13. 14 Chamon (2016) 11-12. 15 Chamon (2016) 10. 16 Groenleer (2009) 19.
17See Articles 3.1, 8.1 and 10.1 of Council Regulation (EC) No 58/2003 of 19 December 2012, OJ L 11 16.1.2003.
18 Vos (2014) 22.
19 The European Commission listst thirty-four agencies on Europa.eu. See also Chamon (2016) 16-17. Chamon
counts thirty-six agencies, but ELA should be added to Chamon’s list as it did not exist at the time of his writing.
5 As this study only concerns decentralised agencies, in the course of this study they will referred to simply as ‘agencies’.
III. Legal basis and establishment
The Treaties do not contain an explicit legal basis for the establishment of agencies. Nevertheless, this lack of a legal basis in the Treaties has not rendered it impossible to set up agencies.21
Since 1975 several agencies have been set up successfully by the EU legislature, even if a clear delegation concept is lacking in EU law.22 In 1958, the Court ruled in Meroni23 that EU institutions could delegate “clearly defined executive powers” to bodies other than the institutions, provided that all legal restrictions on the exercise of powers would continue to apply.24 However, legislative practice has shown that the Commission and other institutions have adopted a rather relaxed attitude towards the conditions imposed by Meroni.25 When the Court was asked to apply its Meroni judgment to the establishment of the European Securities and Markets Authority (ESMA), it narrowed Meroni down and applied it flexibly.26 While the scope and meaning of Meroni and subsequent rulings have been exhaustively analyzed27, it can
be concluded that neither primary law nor jurisprudence has formed an obstacle to agency creation in the EU.
Until the 2000s the flexibility clause of article 352 TFEU was used as a general legal basis for the establishment of agencies.28 This article provides the EU legislature with a competence to act in cases where the Treaties have not provided the necessary powers. In later years, it was thought that agencies should be based on a provision relating to a specific policy area, because the mandate of the agency could be limited more easily to the scope of a specific Treaty provision instead of a general Treaty article.29 This led to debate between the institutions30 and a legal conflict between the United Kingdom and the Union, in which the
21 Andoura & Timmerman (2008) 7.
22 Chamon (2016) 235.
23 Case 9/56, Meroni & Co. v High Authority, (1957-1958) ECR 133.
24 Bergström & Rotkirch (2003) 25. For a thorough analysis of Meroni, see Chamon (2016) 175-258.
25 Vos (2014) 41.
26 Case C-270/12 United Kingdom of Great Britain and Northern Ireland v European Parliament and Council of
the European Union, ECLI:EU:C:2014:18 at 53. See also Chamon (2016) 247-248.
27 See Chamon (2016) 187-192 for an overview of different viewpoints on a possible ‘Meroni-doctrine’.
28 European Parliament (2018) 36.
29 Groenleer (2009) 116. See Chamon (2016) 139-141 for an overview of the scholarly debate on the issue.
6 former argued that only article 308 EC Treaty (the current article 352 TFEU) could serve as a proper legal basis as it required unanimous voting in the Council.31 Ultimately, the Court
disagreed and ruled in favour of the Union.32 Since the 2000s it has become institutional standard practice to establish agencies on specific Treaty articles.33
Regarding the choice of instrument to set up an agency, the regulation is the standard instrument to be used, as is apparent from the fact that nearly all agencies have been set up through regulations.34 The Commission regards the regulation as the only suitable act because it provides “the necessary level of legal certainty” to set up an agency.35
The distribution of power to adopt a regulation to set up an agency has evolved through the years. From 1975 until the early 2000s, the Council was the sole decision maker with regard to the establishment of agencies. Until the early 2000s, regulations were adopted by the Council, acting on a proposal from the Commission. The role of the Parliament remained relatively small, with the Council only being obliged to have regard for the opinion of the Parliament on draft Council Regulations. This changed with the Treaties of Maastricht and Amsterdam, which came into effect in 1999 and 2003 respectively and brought the European Parliament new powers. Maastricht introduced the co-decision legislative procedure, while Amsterdam broadened its scope to a host of policy domains. From that moment on, agencies in those policy domains could only be set up when both the Council and the European Parliament agreed on it.
IV. Decisions on the seat of agencies
One of the defining characteristics of decentralised agencies is that they are geographically spread over Europe. It has been suggested that the geographical decentralization is meant as a symbolic gesture of bringing the EU closer to its citizens, thereby increasing the visibility of the EU and mitigating criticism of the EU being completely centered in Brussels.36 However,
31 Case C-217/04 United Kingdom of Great Britain and Northern Ireland v European Parliament and Council of
the European Union, ECLI:EU:C:2006:279.
32 See Chamon (2016) 143-146 for an overview of the ruling. 33 Groenleer (2009) 116 and Ooik (2005) 130.
34 Chamon (2016) 154. The Commission has argued that any other legal instrument than a regulation would be
‘inappropriate’ to establish an agency. See Commission proposal COM(2009) 66 final, 5. However, some former third-pillar agencies such as Europol were created on the basis of a Council decision. Later, these Council decisions have been recast as regulations.
35 COM(2018) 131 final, 5-6.
7 in reality member states appear to have national interests at heart, as they vie for the prestige of having an agency within their borders.37
The geographical spread of agencies was first commented upon by the member states in 1992, when the definite decision on the seats of the institutions in Brussels, Luxembourg and Strasbourg was taken following a provisional decision in 1965. In the margins of the European Council, the member states stated that when the seats of existing or future bodies and departments would be chosen, “appropriate priority” should be given to member states that did not already “at present provide the sites for Community institutions.”38 In 2003, the member states added that states that were acceding to the EU should be given priority in the distribution of future agencies.39 However, in practice this spreading has not been balanced. Some member states host multiple agencies, while others host none. In 2008, the member states recalled that future agencies should be “primarily” located in member states that acceded in or after 2004 and that “appropriate priority” should be given to member states that did not already host an agency.40 In 2012, the “desirability of geographical spread” of agencies was endorsed in a non-binding agreement between the Commission, Parliament and Council.41
Three things characterize the decisions on the seat of the agencies. First, while the decisions have been taken by different actors, they have been dominated by member states’ decision making. Decisions have been adopted by the Council,42 by ministers of the member
states,43 by the heads of state or government of the member states,44 or in a triologue between
the Commission, Council and Parliament.45 Secondly, decisions on the seat of agencies have
almost always been adopted separately from the procedure to set up the agencies itself. For example, the founding regulation for the European Environment Agency (EEA) was adopted in 1990 after swift cooperation between the Council, Commission and the Parliament, but due to the fact that all member states except Luxembourg were in the race for the agency’s seat, a
37 Korver (2018) 20, Vos (2014) 16.
38 European Council (1992) Conclusions of the Presidency of the Edinburgh Summit of 11-12 December 1992,
48.
39 European Council (2003) Conclusions of the Presidency of the Brussels European Council of 13 December 2003, 27.
40 Council of the European Union (2008) Conclusions of the Presidency of the Brussels European Council of 19-20 June 19-2008, 11018/1/08 REV 1, 13.
41 European Commission, European Parliament and Council of the European Union (2012) Joint Statement and annexed Common Approach, 4.
42 In the case of the Eurofound and Cedefop in 1975, Frontex in 2005. See bibliography.
43 In the case of the EUMC in 1997, EIGE in 2006, ACER in 2009, BEREC and EASO in 2010, eu-LISA in 2011,
CEPOL in 2013, EMA and EBA in 2017 and ELA in 2019. See bibliography.
44 In the case of the EEA, ETF, EMCDDA, EMA, EU-OSHA, OHIM, Europol, CdT in 1993, CPVO in 1996, EAR in
1999, CEPOL, EFSA, Eurojust, EMSA, EASA, ERA, ENISA, ECDC, ECHA, EFCA in 2003. See bibliography.
8 decision on the seat could only be reached in 1993.46 Thirdly, the seat decisions have always
been adopted by unanimity or common accord.47
Since the first agencies were set up by the Council, different actors have adopted the decisions on the seat of newly established agencies. As the decisions on the seat of the European Foundation for the Improvement of Living and Working Conditions (Eurofound) and the European Centre for the Development of Vocational Training (Cedefop) were part of the legislative procedures establishing these agencies in the 1970s and were included in the resulting founding Council Regulations, the Council saw no reason to provide a separate a legal basis for its competence to decide on the seat of the agencies. This changed in the 1990s. Starting with the founding Council Regulation of the EEA, the Council included the provision that the location of the seat of agencies should be decided by the “competent authorities”.48 However, it stopped short of clarifying who were the competent authorities or how this competence should be established. As the provision was not included in the Commission proposal for the EEA’s founding Council Regulation or hinted upon by the Parliament in its opinion on the draft, it appeared that the Council itself had decided that it was no longer competent to decide on the location of the seats of agencies it had established. From that moment, the competence to adopt a Regulation establishing an agency was effectively separated from the competence to decide on the seat of that agency.
From the 1990s representatives of the member states, either ministers or the heads heads of state or government, adopted the decisions on the seats of agencies. In 199349 and 200350,
the decisions on the seats of newly established agencies were taken together in a political package deal at summits of the heads of state or government of the member states. The representatives of the member states cited article 289 TEC (currently 341 TFEU), which stipulates that the seats of the institutions have to be decided by common accord of the member states, as a legal basis for their competence. This practice did not change when the Parliament in 2002 became a co-decision maker in the legislative procedures used to set up agencies, as the two competences remained separated. At the same time, the reference to the “competent
46 Teffer (2017) 13.
47 Common accord is similar to unanimy, but lacks the possibility of abstentions. See section V.I.II.I. 48 Council regulation (EEC) 1210/90, OJ L 120, 11.5.1990, 1, article 21.
49 European Commission (1993) Conclusions of the Presidency of the Brussels European Council of 29 October
1993, Bulletin of the European Communities, No. 10 1993, 11-12.
50 European Council (2003) Conclusions of the Presidency of the Brussels European Council of 13 December
9 authorities” disappeared from newly established agencies’ founding regulations. In contrast, no mention of the seat of agencies was made in these regulations at all.
This has been the dominant practice since, but there have been exceptions. Besides the decisions on the seat of Cedefop and Eurofound in 1975, notable are the decisions on the seat of the European Border and Coast Guard Agency (Frontex) in 2005 and the seat of the European Supervisory Authorities (ESAs) in 2010.
The establishment of Frontex differed from the setting up of other agencies in the 2000s because it was founded as a measure in the area of freedom, security and justice, regarding which the Council at the time still had legislative primacy.51 Accordingly, Frontex’ founding act was a Council regulation, which included an article that provided that the location of the seat of Frontex should be decided by a unanimous Council decision.52 Subsequently Warsaw was confirmed as the seat of Frontex in a Council decision, which only referred to the Council regulation article and not to article 289 TEC as a legal basis.
In 2010, the decision on the location of the seats of the three ESAs produced a unique case of cooperation between the Commission, Parliament and Council.53 In its proposal for three founding regulations, the Commission suggested to maintain the seats of the committees from which the agencies developed. For the first time, the seats became part of the legislative procedure to adopt the agencies’ founding regulations. In response to the Commission proposal, for reasons of operational efficiency the Parliament suggested in its position in first reading to locate all three agencies in Frankfurt.54 In turn, the member states feared that locating
all seats in one city would lead to lengthy political battles on the issue.55 After multiple trilogue meetings, a compromise was struck. The agencies would indeed be seated in London, Paris
51 Art. 67 EC Treaty.
52 Council Regulation (EC) No 2007/2004 of 26 October 2004, OJ L 349, 25.11.2004, Article 15.
53 The seat of eu-LISA was the subject of similar intense discussions between the Parliament and Council which
also resulted the agency’s seat being confirmed in its founding regulation without a separate decision by the representatives of the governments of the member states, but this case does not constitute a clear exception to the general practice on seat decisions. In contrast to the discussions on the seat of the ESA’s, during the discussions on the seat of eu-LISA the Council confronted the Parliament with a draft decision of the
governments of the member states to locate eu-LISA in Tallinn. While this decision was never formally taken, its text was incorporated in eu-LISA’s founding regulation. Thus, the seat decision was de facto taken by the representatives of the governments of the member states. See Coucil of the European Union, 10827/2/11 REV 2, point 13.
54 European Parliament Report, A7-0168/2010, 21.
10 and Frankfurt, but their founding regulations also included an article which provided that the appropriateness of the separate seats should by reviewed by the end of 2021.56
V. Institutional debate on seat decision procedure
From the very start of agency creation in the EU, seat decisions were the subject of institutional debate.57 But even as criticism of individual seat decisions was vented regularly by the Parliament58, it did not lead to a review of the competence to adopt these decisions. Until 2012, the issue of competence was all but circumvented. However, the problematic nature of the political package deals on agencies’ seats was addressed, as was the fact that the decision to establish an agency was separated from the decision on its seat. The latter issues were resolved in 2012 in a non-binding Common Approach, while the issue of competence was brought before the Court in 2019 in case C-743/19 Parliament v Council.
V.I. Institutional debate leading up to the Common Approach
In 2002, the Commission published a Communication in which it called for an “operating framework for the European Regulatory Agencies”. Concerning the procedure to decide on the seats of agencies, the Commission noted that not all Council regulations that established an agency included a provision on the seat of the agency and that there was a causal link between the absence of such a provision and cases where the heads of state and government had taken the decision on the seats. According to the Commission, this practice was “not without its disadvantages”, citing the inability of the leaders to reach a decision on the seats of agencies in the margins of a 2001 European Council summit59 even when these agencies were already set up, which resulted in difficulties with the selection of provisional headquarters, costs for
56 Regulation (EU) No 1093/2010 of 24 November 2010, OJ L 331, 15.12.2010, Regulation (EU) 1094/2010 of 24 November 2010, OJ L 331, 15.12.2010, Regulation (EU) 1095/2010 of 24 November 2010, OJ L 331, 15.12.2010, Article 81(1)(h).
57 The Parliament first touched upon the seat of the agencies in 1975. In response to Commission proposal
COM(74) 352 final of 27 March 1974 to set up Cedefop, which left the seat of the agency open, the Parliament in a resolution called on the Commission to ‘make practical proposals regarding the seat of the centre’. See OJ C 127, 18.10.74, 21. In the end, the resolution was all but ignored.
58 For instance, in 1999, the Parliament in a Resolution rejected the decision of the heads of state or
government of the member states to locate the seat of EAR, the European agency established to assist in the reconstruction of Kosovo, in the Greek city of Thessaloniki. See point 12 of the Resolution on the situation in Kosovo and the reconstruction of South-Eastern Europe adopted on 22 July 1999.
11 relocating agencies from their provisional headquarters to the permanent ones and problems with hiring staff for unknown locations. To help overcome these problems, the Commission proposed that the location of the seat of each agency should be included in its founding act. According to the Commission, this “would seem reasonable”, given the fact that determining the seat of an agency “is part and parcel of its creation”.60
The Parliament agreed and welcomed the Commission proposals. It took the view that “decisions on the location of any future regulatory agencies should form an integral and vital part of the basic instruments establishing them.”61 The Council was however less enthusiastic and only conceded that “questions relating to the location of such agencies should be resolved at the earliest possible opportunity”, but added that in doing so, account should be taken of “the current practice regarding decision making”.62
In the final draft of the interinstitutional agreement on an operational framework for regulatory agencies, the Commission tried to paper over the cracks. It recalled its earlier assessment of the problems concerning the existing practice of deciding on the location of the seat and stated that “like the Parliament, the Commission also feels that the agency’s seat is a constituent element of the basic act and should therefore be included in it”. But crucially it now stopped short of proposing to make the decision on the seat part of the broader legislative process concerning the establishment of an agency. Instead, it proposed that “without denying the Member States the right to decide the agency’s seat at the highest political level” this decision should be taken in time for it to be incorporated in the founding act, or six months after the adoption at the latest.63
In the end, the draft interinstitutional agreement was not adopted. While the Parliament generally supported it, negotiations stalled in the Council, which was not convinced of the advantages of a binding interinstitutional agreement.64
In 2008, the Commission tried to revive the debate by withdrawing the draft agreement and proposing to come to a common approach to the governance of agencies between the three institutions.65 In 2012, this effort led to a Joint Statement and Common Approach, in which the institutions inter alia agreed on future seat decision procedures. As had been the demand of the Council, the Common Approach was not binding and the competence of the member states
60 European Commission, COM(2002) 718 final, 7.
61 European Parliament, Resolution P5_TA(2004)0015, OJ C92 E, 16.4.2004, point 6. 62 Council of the European Union, Press release 10746/04, 40.
63 European Commission, COM(2005) 59 final, 4.
64 European Commission, COM(2008) 135 final, 6. See also Vos (2014) 5. 65 European Commission, COM(2008) 135 final, 8.
12 to decide on the seat was not impinged upon. Instead, the Common Approach established that “without prejudice to 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”, the decision on the seats of agencies should be taken before the end of the legislative process so that the agencies can be set up directly at their definitive location, while the geographical spread as promoted by the heads of state or government should be taken into account. Furthermore, the Common Approach established that the seat decision should be based on objective criteria such as accessibility of the location and the facilities available to relatives of staff members.66
V.II. Institutional debate leading up to case C-743/19 Parliament v Council
A first sign of a simmering conflict between the Council and Parliament over the issue of competence to decide on the seat of agencies came in 2012, when the United Kingdom stated that it no longer wished to host the European Union Agency for Law Enforcement Training (CEPOL). While the Commission proposed a merger of the small police training agency with the European Union Agency for Law Enforcement Cooperation (Europol) in The Hague, the Parliament and Council did not agree and as a result a new seat had to be found for CEPOL.67
In the margins of a 2013 Justice and Home Affairs Council, ministers reached a political agreement on Budapest as the new seat.68 However, this was not as usual the end of the story,
because the existing seat of CEPOL was included in its founding Council decision. To change this decision, a regulation from the Council and Parliament was required. In the ensuing legislative procedure, the Parliament took the opportunity to express its irritation regarding the fact that the ministers had decided on the new seat on their own, without involving the Parliament.69 Although the regulation was subsequently adopted, the position of the Parliament was striking because it had agreed to the competence of member states to take the seat decision in the Common Approach only two years earlier.
The dispute rose again when the seats of the European Medicines Agency (EMA) and European Banking Authority (EBA) had to be relocated from their seats in London due to
66 European Commission, European Parliament and Council of the European Union (2012) Joint Statement and
annexed Common Approach, 4.
67 European Commission, COM(2013) 173 final 2013/0091 (COD) 4.
68 Council of the European Union, 14149/13, 10.
13 Brexit. After an unusually detailed selection procedure,70 the ministers of foreign affairs
decided in the margins of the Council that Amsterdam and Paris would be the new seats of EMA and EBA respectively.71 Again, the founding regulations of the two agencies had to be amended.
In its Resolutions on the relocation of EMA, the Parliament stated that it regretted that “the European Parliament - and ultimately the representatives of the Union’s citizens - were not fully involved in the procedure to select the new seat.” It subsequently condemned “the procedure followed for the selection of the new location of the seat, which has de facto deprived the European Parliament of its prerogatives since it was not effectively involved in the process, but is now expected to simply confirm the selection made for the new location of the seat by means of the ordinary legislative procedure.” To conclude, the Parliament denounced the 2012 Common Approach, recalled that it was legally non-binding72 and insisted that the procedure for the selection of a new location for the agencies should be revised and not used again.73 It did the same in its Resolution regarding the decision on EBA, in which it recalled that “the 2010 decision on the location of EBA, along with the decision on the location of EIOPA and ESMA, was concluded in accordance with the ordinary legislative procedure following a full-fledged trilogue procedure” and observed that the location of the new seat of EBA was chosen on the basis of the Common Approach “which is of a lower legal order” compared to EBA’s founding regulation. It called for an immediate review of the Common Approach, while it believed that the Parliament “should be systematically and on equal terms with the Commission and Council involved in defining and weighing the criteria for the location of all Union bodies and agencies.”74 The Council responded by inviting the Commission to analyse the implementation of the location provisions in the Common Approach.75 Subsequently, both regulations were adopted.
In its analysis of the implementation of the seat provisions, the Commission found that the objective criteria set out in the Common Approach were a fundamental part of the considerations on the seats of the agencies that had to be decided on after 2012 and that the
70 Procedure mentioned in the Council of the European Union, Press release 405/17, 22.06.2017, 8. 71 Council of the European Union, Press release 14559/17, 20.11.2017, 3.
72 Strikingly, the Commission had referred to the CA in order to maintain that member states had competence
to decide on the seat of agencies. See the Commission’s answer on a question of two MEP’s: E-002930/2017(ASW).
73 European Parliament, Annex to P8_TA(2018)0427. 74 European Parliament, P8_TA(2018)0426, at 5. 75 European Parliament, Annex to P8_TA(2018)0426.
14 Common Approach in this aspect was functioning as it was supposed to.76 This did however
not settle the question of competence to adopt the seat decisions that the Parliament had put forward.
At the same time, the Commission sent a proposal for a regulation establishing a European Labour Authority (ELA) to the Parliament and the Council. It included an open provision on the location of the seat, which according to the Commission had to be decided by the member states before the end of the legislative procedure.77 In a Parliament committee report on the matter, a resolution was drafted which called for the inclusion in the regulation of a recital stating that “the seat of the Authority should be decided by the ordinary legislative procedure on the basis of objective and substantive criteria. The European Parliament should be involved systematically and on equal terms with the Commission and the Council in defining and weighing such criteria.”78 As the Council did not agree, the legislative proposal was made the subject of trilogue discussions between the Commission, Council and Parliament. This resulted in a compromise package in which the seat of ELA was not touched upon.79 While the Parliament had agreed to leave the seat out of the regulation to make sure it would be adopted before the upcoming Parliament elections,80 the representatives of the member states, meeting in Coreper I, agreed on a procedure to decide on the seat. It was starkly similar to the procedure used to decide on the new seats of EBA and EMA. On the competence of the member states to decide on the location of the seat of ELA, in spite of the earlier Resolutions of the Parliament, Coreper I referred to the non-binding competence clause in the Common Approach and the “general political nature” of the seat decision.81 Three months later, ministers of the member states in the margins of the Council decided to locate the seat of ELA in Bratislava.82 The final regulation setting up ELA was adopted in June 2019, without a reference to Bratislava as its seat.83
In response, the Parliament brought an action against the decision of the member states on the seat of ELA before the Court of Justice.84
76 European Commission, COM(2019) 187 final, 9.
77 European Commission, COM(2018) 131 final 2018/0064 (COD), 11. 78 European Parliament, A8-0391/2018, 24.
79 Council of the European Union, A 0016240, 21.02.2019. 80 Cokelaere (2019), Hansens (2019).
81 Council of the European Union, 7491/19, 2.
82 Decision (EU) 2019/1199, OJ L 189, 15.7.2019.
83 Regulation (EU) 2019/1149 of 20 June 2019, OJ L 186, 11.7.2019.
15
VI. Case C-743/19 Parliament v Council
VI.I Content of the action brought by the Parliament
In its action, the Parliament claims that the Court should annul Decision (EU) 2019/1199 taken by common accord between the representatives of the governments of the member states of 13 June 2019 on the location of the European Labour Authority (hereafter the contested decision). In its first plea,85 the Parliament claims that the “author of the contested decision, be it the Council or all the Member States, does not have the power to determine the location of the seat of the European Labour Authority.” In support of this claim, the Parliament alleges that article 341 TFEU „does not constitute an appropriate legal basis to determine the seat of bodies of the European Union such as decentralised agencies”, because ELA was established by a regulation of the Council and Parliament by means of the ordinary legislative procedure. The Parliament therefore considers „that Article 341 TFEU cannot withdraw from the scope of competence of the EU legislature, which established ELA, the power to decide on the location of its seat, by attributing it instead to the Member States.”
VI.II. Legal analysis of the action brought by the Parliament
V.I.II.I Admissibility
While the Parliament does not refer to a Treaty article to base its claim for the annulment of the contested decision on, it seems reasonable to assume that the Parliament bases its claim on article 263 TFEU, because this is the sole article dedicated to the action for annulment of acts adopted by either the legislative or executive branch of the EU.86 This complex Treaty article sets out which acts can be reviewed by the Court, who can bring an action, on what grounds and within what timeframe.
Before the Court can judge the contested decision on its merits, the Court first has to rule on the admissibility of the case. It immediately becomes clear that the wording of article 263 TFEU poses an existential problem in that regard. The first and third paragraph provide that only legislative acts and certain acts of the institutions and bodies, offices or agencies of
85 The second plea regarding a failure to state reasons is not relevant for this study and will not be discussed. 86 Schütze (2016) 347.
16 the EU are eligible for review. However, the contested decision is published in the Official Journal as a decision taken by common accord between the representatives of the governments of the member states.87
Decisions of the representatives of the governments of the member states form a distinct category of EU acts.88 These decisions are not adopted within the EU institutional framework, but are adopted by representatives of the member states at intergovernmental conferences,89 which can take place at any political level.90 The decisions are prepared in Coreper, the Council or the European Council, but when they are formally adopted “hats are swapped” and Coreper, the Council or the European Council becomes an intergovernmental conference comprising of representatives of the governments of the member states.91 The decisions can thus be defined as executive agreements between the governments of the member states. Consent of a member state is given by signature of the representative, without the need of ratification.92 When “common accord” is required, consent of all member states is required, unlike unanimity in the Council, when member states can abstain.93
Two groups of decisions of the representatives of the governments of the member states can be distinguished: decisions required by the Treaties and decisions not required by the Treaties. The latter are designed to complement EU action, mostly regarding external relations policies.94 The decision by common accord of the governments of the member states on the
seat of the institutions required by article 341 TFEU is an example of a decision of the former group.95 These decisions have the formal status of international agreements, but are
indissolubly linked to the functioning of the EU’s institutional system.96 When the Treaties direct the member states to adopt a decision, the member states de facto act as an EU organ.97 As such, these decisions are part of the acquis communautaire and are published in the Official Journal. In substance, they are similar to sui generis decisions that are used by the institutions to settle institutional affairs. These decisions are binding on the institutions,98 but are
non-87 Decision (EU) 2019/1199, OJ 2019 L 189, 68. 88 De Witte (2001) 251.
89 De Witte, Geelhoed and Inghelram (2008) 301. 90 Westlake (2004) 190.
91 Westlake (2004) 191. 92 De Witte (2001 251. 93 Westlake (2004) 190. 94 De Witte (2001) 252-253.
95 De Witte, Geelhoed and Inghelram (2008) 301. 96 De Witte, Geelhoed and Inghelram (2008) 302. 97 Kapteyn and Verloren van Themaat (1973) 122. 98 Best, 87-88.
17 legislative in nature.99 Like decisions of the representatives of the governments of the member
states, sui generis decisions have no addressees, in contrast to decisions that are specifically addressed.100 Indeed, in the Dutch and German language versions, both sui generis decisions and decisions of the representatives of the governments of the member states are labeled as the same type of decision.101
The fact that the contested decision has been branded a decision of the member states instead of a decision of the Council has important consequences for the admissibility of the present action for annulment. The contested decision is in principle not up for review by the Court, because it originates not from an EU institution, body, office or agency, but from the member states of the EU.102 Furthermore, it has implications for the time limit to institute proceedings provided for in the sixth paragraph of article 263 TFEU. That paragraph provides for a time limit of two months after the publication of the contested measure to institute proceedings. The contested decision was published in the Official Journal on July 15 2019, whereas the Parliament brought the action before the Court on 9 October 2019. The two-month deadline can only be prolonged in case the contested decision concerns an act of an institution.103 When the contested decision is regarded as a decision of the member states, the current action has been brought too late.
In sum, whether the contested decision is indeed a decision of the member states or a decision of the Council is of fundamental importance to the admissibility of the action for annulment. The Parliament seems to dismiss this by stating in its application that regardless whether the contested decision was adopted by the member states or by the Council, the Court should annul the decision anyway. In the past, however, the Court has dealt with the issue of distinguishing an act of the member states from an act of the Council with great care.
V.I.II.I.I. Case law of the Court of Justice and the General Court
99 See Curtin and Manucharyan (2015) 119 for a description of non-legislative acts. According to article 297(2)
TFEU, a decision can be a non-legislative act.
100 This difference becomes especially clear when one looks up the different language versions of sui generis
decisions and decisions that are specifically addressed. In Dutch or German, a decision in the first category is called a “Besluit” or “Beschluss”, while a decision in the second category is called a “Beschikking” or
“Entscheidung”. See Best (2008) note 7 and 8.
101 See previous note. In the Dutch or German language version, the contested decision is named a “Besluit”
or “Beschluss”.
102 De Witte, Geelhoed and Inghelram (2008) 301.
18 In 1993, the Court ruled on an action for annulment brought by the Parliament on the basis of article 173 E(E)C (the current article 263 TFEU) against an act adopted at a session of the Council. In Joined Cases C-181/91 and C-248/91 Parliament v Council and Commission104 the Court was confronted with the question whether it could review the legality of the decision adopted by ministers of the member states. The Parliament claimed that the decision was in reality not taken by the ministers of the member states, but by the Council and that its prerogatives in budgetary matters had been infringed. In support of that claim, the Parliament submitted that the contested decision was published under the title “Council conclusions” and was adopted at a session of the Council in which all ministers of foreign affairs of the member states were present.105 On the other hand, the Council claimed that the Parliament’s application should be declared inadmissible by the Court on the ground that the contested decision was not taken by the Council, but by the member states and thus could not be the subject of an action for annulment under article 173 E(E)C.106
The Court started off by underlining two preliminary points. First, it was clear from the wording of article 173 E(E)C “that acts adopted by representatives of the Member States acting, not in their capacity as member of the Council, but as representatives of their governments, and thus collectively exercising the powers of the Member States, are not subject to judicial review by the Court.”107 Secondly, the Court reiterated that “an action for annulment is
available in the case of all measures adopted by the institutions, whatever their nature or form, which are intended to have legal effects.”108 Then it brought the two points together by stating
that “it is not enough that an act should be described as a “decision of the Member States” for it to be excluded from review under Article 173 of the Treaty. In order for such an act to be excluded from review, it must still be determined whether, having regard to its content and all
104 Joined cases C-181/91 and C-248/91, Parliament v Council and Commission, ECLI:EU:C:1993:271. In 1991,
the Parliament in separate cases brought actions for annulment against two acts relating to the grant of special aid to Bangladesh, which was at the time struggling with the impact of a deadly cyclone. The first act involved the granting of aid and was adopted at a session of the Council, while the second act was adopted by the Commission and consisted of the ensuing budgetary implementation measures. Because of their
interrelation, the Court decided to join the two cases. For the purpose of this study, only Case C-181/91 Parliament v Council is relevant.
105 Ibid., para. 10 106 Ibid., para. 11. 107 Ibid., para. 12.
108 Ibid., para. 13. This issue was first dealt with by the Court in Case 22/70 Commission v Council (also known
as the ERTA case) to which the Court also refers. The question whether the contested decision to locate the seat of the European Labour Agency can be considered an act or not is however not at issue in Case C-743/19 Parliament v Council. Therefore, this study will not elaborate on the details of the ERTA Case. See for further comment on the relevance of the ERTA case in this regard the Opinion of Advocate General Jacobs in Joined Cases C-181/91 and C-248/91 Parliament v. Council and Commission.
19 the circumstances in which it was adopted, the act in question is not in reality a decision of the Council.”109 To conclude, the Court remarked that “the assessment of the admissibility of the
application is bound up with the assessment to be made of the complaints levelled against the contested act.”110
Before the Court considered the Parliament’s complaints, it shortly delved into the issue of competence. It pointed out that because the Community did not have exclusive competence in the field of humanitarian aid, the member states were “not precluded from exercising their competence in that regard collectively in the Council or outside it.”111 When it finally got to the Parliament’s complaints, the Court needed few words to dismiss them as unfounded. None of the Parliament’s arguments were deemed conclusive. In its conclusion, the Court pointed out that “it followed from the whole of the foregoing” that the contested act was not an act of the Council but a decision taken by the member states collectively and that therefore the action for annulment should be declared inadmissible.112
In a second case concerning the attributability of an act of the member states, the General Court in a 2017 gave a ruling in Case T-192/16 NF v. European Council113 on an action for annulment of the EU-Turkey statement on cooperation to stem illegal migration flows. In its ruling, the General Court invoked the Court’s ruling in Joined Cases C-181/91 and C-248/91 Parliament v Council and Commission, but was later criticised by legal scholars for applying the ruling in a wrong manner.114
In this case, the applicant argued that the EU-Turkey statement should be attributed to the European Council instead of the member states. In its judgment, the Court did not review whether the member states had the competence to adopt the contested statement but immediately embarked on a study of the circumstances in which the EU-Turkey statement was adopted, such as the invitations that were sent for the summit at which the contested statement was adopted and the press material that was released afterwards.115 It finally judged that these circumstances could only lead to the conclusion that the contested statement could not be regarded as a measure adopted by the European Council and that therefore the Court did not have jurisdiction to rule on the lawfulness of the statement.116
109 Ibid., 14. 110 Ibid., 15. 111 Ibid., 16. 112 Ibid., 25.
113 Case T-192/16, NF v European Council, ECLI:EU:T:2017:128. 114 Cannizzaro (2017) 254.
115 Case T-192/16, NF v European Council, para. 46-71. 116 Ibid., para. 73.
20 The Court attracted criticism for the fact that it had “carefully abstained” from an analysis of the competence to adopt the contested statement, which according to one critic would have led the Court “to find that, by virtue of the fact that measures plainly fall in an area thickly regulated by EU law, the Statement should be qualified as an act of the EU institutions.”117 Without such an analysis, it was claimed, the General Court had reduced the test referred to in Joined Cases C-181/91 and C-248/91 Parliament v Council and Commission to the question whether or not the contested measure was described as a measure adopted by the member states, which was exactly what the Court had ruled out as a valid test.118
In sum, the ruling in Joined Cases C-181/91 and C-248/91 Parliament v Council and
Commission provides a clear route to assess the admissibility of Case C-743/19 Parliament v Council. The fact that the contested decision was labeled as a decision taken by common accord
between the representatives of the governments of the member states is in itself not sufficient to establish that the decision is not a decision by the Council and therefore is not reviewable under article 263 TFEU. In order to establish whether the contested act is an act of the member states, the Court has to have regard to the content of the contested decision and all the circumstances in which it was adopted. In doing so, the Court accepts that the assessment of admissibility becomes intertwined with the assessment of the complaints levelled against the contested decision. From the start, the Court has to establish who had competence to take the contested decision.
V.I.II.I.II. The competence to adopt Decision (EU) 2019/1199 of 13 June 2019
The concept of competence is a central theme in EU law. Because of the sheer volume of research on the topic,119 it is not possible to reflect on all aspects of competence in EU law before analyzing the question of competence to decide on the seat of agencies. Only a few remarks will be made.
Firstly, competence issues can arise with regard to its vertical division between the member states and the EU. Article 5(2) TEU sets out the principle of conferral, meaning that competences that are not conferred upon the EU remain with the member states. Article 2 TFEU sets out the different forms of competences that can be conferred upon the EU. The
117 Cannizzaro (2017) 255. 118 Cannizzaro (2017) 253-354.
21 competence of the EU can be exclusive, shared, coordinating or complimentary.120 A typical
issue in this regard is the question whether the EU or the member states have competence to act in a certain policy area.
Secondly, competence issues can arise with regard to its horizontal division within the EU. A typical issue in that regard is the question which institution or body has the power to act when the EU acts within one of its competences.
Case C-743/19 deals with an issue in the latter category. The case is strictly within the realms of EU law, as it deals with the question who has the competence to decide on the seat of an agency that has been set up by the EU legislature as a means to secure the freedom of movement for workers.121 The EU legislature has thus exercised its shared competence under article 4(2)(a) TFEU, which means that the member states can no longer exercise their competence outside the framework of EU law.122 As has been mentioned, although the contested decision is formally intergovernmental in nature, in reality it is indissolubly linked to the functioning of the EU’s institutions and is an example of a special category of EU acts.123
Within this dispute on the division of horizontal competence, the representatives of the governments of the member states refer to article 341 TFEU as a source for their competence to decide on the seat of the European Labour Authority.124
The Parliament contends that article 341 TFEU cannot withdraw the decision on the seat of the European Labour Authority from the competence of the EU legislature, that is the Council and the Parliament, which established the European Labour Authority in a regulation on the basis of articles 46 and 48 TFEU.
In sum, two possible bases for the competence to decide on the location of the European Labour Authority can be distinguished: article 341 TFEU and articles 46 and 48 TFEU. They will be examined in turn.
V.I.II.I.II.I Article 341 TFEU as a legal basis for the decision on the seat of the European
Labour Authority
120 Schütze (2012) 76.
121 ELA’s founding Regulation refers inter alia to article 46 TFEU, which refers to article 45 TFEU in which the
freedom of movement of workers is enshrined.
122 Article 2(2) TFEU. 123 See section V.I.II.I.
124 The member states also refer to the TFEU as a whole as a legal basis for their competence, separately from
its article 341. The purpose of this rather vague reference remains unknown, as the Council has not commented on it before.
22 Article 341 TFEU reads: “The seat of the institutions of the Union shall be determined by common accord of the governments of the Member States.” As is immediately clear, article 341 TFEU does not explicitly mention agencies. Neither are agencies mentioned as institutions in Article 13(1) TEU, which lists the institutions.
Although the European Council and the Council have referred to article 341 TFEU often in decisions on the location of the seat of agencies, they have never elaborated on their choice of that article or their reading of it. At the most, the Council has participated in an interinstitutional working group that produced an analysis of the seat decision procedure. The analysis established only that article 341 TFEU was referred to “by analogy”, without delving into the issue.125 In an opinion, the Council’s legal service has touched upon the fact that the decision on the seat of agencies was regularly taken by representatives of the member states collectively, but only noted this happened “in the context of Article 341 TFEU”, without going into detail.126
Regarding the required substance of an argument by analogy, Langenbucher has analyzed such arguments in EU law in great detail.127 She identifies two different forms of argument by analogy. The rule-based argument is used to extend the scope of a norm to a similar case, while the principle-based argument is used to apply a precedent to a new case.128
The analogy in the present case is a prime example of a rule-based argument of analogy, as it is used to extend the scope of a Treaty provision.129 To apply a rule-based argument of analogy,
according to Langenbucher three requirements have to be fulfilled.130 Firstly, it is necessary to
prove that there exists a lacuna in article 341 TFEU in the sense that the legislature did not foresee, but therefore also did not rule out, applying article 341 TFEU to the decision on the location of the seat of agencies. Secondly, it is necessary to establish that EU constitutional law does not categorically restrict the use of arguments by analogy. Finally, there is a need to demonstrate a relevant similarity between the decision on the seat of institutions and the decision on the seat of agencies in order to be able to base them both on article 341 TFEU. This is the centerpiece of an argument by analogy.131
125 Inter-institutional Working Group on Agencies (2010). Agencies’ seat and Role of the Host Country.
Analytical Fiche No. 3, 1.
126 European Council, EUCO 37/16, footnote 1. 127 Langenbucher (1998).
128 Ibid., 519-520. 129 Ibid., 520 130 Ibid., 483. 131 Ibid., 504
23 Regarding the first requirement, nothing in the wording of article 341 TFEU suggests that it was meant to be applied to a decision on the seat of an agency, neither does anything in its wording rule out that possibility. The wording of the article dates back to the very start of the European project in 1951, when it was included in article 77 of the ECSC Treaty. The provision was left unaltered by subsequent treaty revisions.132 It is highly unlikely that the contracting parties of the ECSC Treaty foresaw a situation in which the scope of article 77 of the Treaty would be extended to other bodies of the Union. In any case, nothing points in that direction.
Regarding the second requirement, it is sufficient to note that the Court previously has used arguments by analogy to settle cases of European law. For instance, in Case 294/83, Parti
écologiste “Les Verts” v European Parliament, the Court has ruled that measures adopted by
the European Parliament intended to have legal effects vis-á-vis third parties can be the subject of an action for annulment on the basis of article 173 EEC Treaty, regardless of the fact that the article only provided for actions for annulment against acts of the Council and the Commission. According to the Court, as the general scheme of the Treaty made “a direct action available against all measures adopted by the institutions (…) which are intended to have legal effects”, the Parliament, being an institution, could not be exempted from that rule.133 Hence,
a lacuna in the EEC Treaty was covered by the Court relying on the extension of the scope of a provision to a similar case.
The third requirement in the test of an argument by analogy is in casu the most troublesome. Article 341 TFEU provides a procedure to decide on the seat of the institutions. Whether the scope of this provision can be extended to the seat of the agencies depends on the similarity between the two cases. However, not all similarities are relevant. According to Langenbucher, one needs a specific comparator to single out the relevant similarities, which is provided by the ratio legis of the rule in question.134 If that ratio can be applied to agencies just as it can be applied to institutions, article 341 TFEU can be relied on to decide on the seat of agencies.
While the ratio of article 77 ECSC Treaty was not commented upon by its drafters, the circumstances in which the article was drafted may offer some clues. During the negotiations of the ECSC Treaty, the seat of the institutions became a matter of heated debate between the
132 Except for the term ‚Community’, which was replaced by ‚Union’ when it was included in the Treaty of
Lisbon.
133 Case 294/83 Parti écoogiste “Les Verts” v European Parliament, ECLI:EU:1986:166, paras. 23-25. 134 Langenbucher (1998) 488.
24 future founding member states. The debate ended in deadlock, with the member states being unable to include the seat of the institutions in the ECSC Treaty. Instead, a provisional seat of the High Authority was decided on135 and the definitive seat decision was reserved to the member states in article 77. It appears that the member states would have included the seat of the institutions in the Treaty if they had been able to adopt a decision, but the deadlock prevented them from doing so. As a consequence, they postponed their final decision. Indeed, when the definitive decision was adopted in 1992, the decision was annexed to the Treaties in a protocol.136
The ratio of article 341 TFEU thus appears to be to preserve to the member states the right to decide on the seat of the institutions they have established through the Treaties. Put more generally, the ratio legis of article 341 TFEU would be that the competence to decide on the seat of a body rests with the actor that has established that body. When that ratio is applied to the seat of the agencies, it is clear that the member states do not have a competence to decide on the seat of agencies. Indeed, while the institutions are set up by the member states through primary law, agencies are set up by the EU legislature through secondary law. As a result, the ratio of article 341 TFEU advocates for a competence of the EU legislature to decide on the seat of agencies, instead of a competence of the member states.
It thus can be concluded that the argument by analogy relied on by the member states fails with respect to the third requirement of the test provided for by Langenbucher. When the
ratio legis of article 341 TFEU is applied to the seat of agencies, it becomes clear that the
relevant similarity is missing. Instead, a relevant difference becomes clear: because agencies are not set up by the member states but by the EU legislature, the member states cannot claim the competence to decide on the seat of agencies.
V.I.II.I.II.II. Articles 46 and 48 TFEU as a legal basis for the decision on the seat of the
European Labour Authority
In the preamble of Regulation (EU) 2019/1149 of the European Parliament and of the Council of 20 June 2019, the EU legislature cite articles 46 and 48 TFEU as the legal basis for the establishment of the European Labour Authority, which enable the legislature to “make regulations setting out the measures required to bring about freedom of movement for workers”
135 Muñoz (2016) 2.
136 Protocol on the location of the seat of the institutions and of certain bodies and departments of the
25 and to “adopt such measures in the field of social security as are necessary to provide freedom of movement by workers”. Articles 46 and 48 TFEU obviously do not contain an explicit competence for the legislature to decide on the seat of agencies, but they do provide the EU legislature with a competence to adopt a broad set of measures, which includes the establishment of agencies.137 With a competing claim of competence of the member states on the basis of article 341 TFEU being ruled out, nothing suggests that the EU legislature is not competent to adopt a provision on the seat of ELA as part of the legislative procedure to establish that agency.
Indeed, in the past the legislature had adopted such acts on multiple occasions, either by including a seat provision in the agency’s founding regulation or by adopting a regulation amending the agency’s founding regulation. For example, in 2010, the seats of the three European Supervisory Authorities were included in their founding regulations after discussions between the Commission, Parliament and Council.138 When one of these agencies, namely the European Banking Authority, had to be moved from London due to Brexit, the decision on the new seat taken by the member states had to be confirmed in an amending regulation from the EU legislature. The same applied to the relocation of CEPOL and of EMA.139
In most instances, the legislature was confronted with a draft regulation stating that the seat decision of the representatives of the governments of the member states simply had to be confirmed in a regulation.140 However, the legislature could have refused to confirm the
member states’ decision and instead could have decided on the seat itself. As a matter of fact, the content of a legislative act is up to the EU legislature to decide. The contention that a decision on the seat is not a legislative decision is not grounded in EU law, as the TFEU regards all legal acts that are adopted by legislative procedure as legislative acts.141 As the agencies’ founding regulations and the regulations amending these founding regulations are adopted through the ordinary legislative procedure, they too can be regarded as legislative acts, which results in the EU legislature being competent to decide on the content of these acts.142 It is thus up to the EU legislature to decide whether it adopts a provision on the seat of the agency in these legislative acts.143 The fact that the EU legislature decided not to include a provision on
137 See section III. 138 See section IV. 139 See section V.II.
140 See for instance the Commission proposal for a regulation amending the seat of EBA, COM(2017)734 final. 141 Article 289(3) TFEU.
142 Article 294 TFEU.
26 the seat of ELA in the agency’s founding regulation,144 does not result in the competence being
withdrawn from the EU legislature. The EU legislature remains competent to adopt a regulation amending the founding regulation and insert a seat provision at a later stage.
In sum, articles 46 and 48 TFEU provide the EU legislature with a competence to adopt a broad set of measures, which can include the setting up of an agency. With the competing competence claim of the member states being ruled out, nothing suggests that the EU legislature cannot adopt a seat provision in the agencies’ founding regulations or the regulations amending these founding regulations. Indeed, every act established through a legislative procedure is regarded by the TFEU as a legislative act, the content of which is up to the EU legislature. This competence is not withdrawn when the EU legislature has decided not to include a seat provision in the agencies’ founding regulation or amending regulations.
V.I.II.I.II.III. Conclusion on competence
On the basis of the previous conclusions, it can be established that there are good arguments to conclude that the EU legislature is competent to decide on the seat of agencies. Article 341 TFEU arguably cannot be applied by the member states by analogy to the seat of agencies. In light of the ratio legis of article 341 TFEU, institutions and agencies differ in an important respect, namely the way they are established. On the other hand, article 46 and 48 TFEU provide the EU legislature with a competence to adopt a broad set of measures, which can include the setting up of an agency. It follows that in such cases the EU legislature is competent to decide on the content of the legislative act establishing the agency and in that regard can include a seat provision. As a result, it is very well possible that the Court will conclude that the competence to decide on the seat of ELA rests with the EU legislature.
V.I.II.II Possible ruling on admissibility and substance of C-743/19 Parliament v Council
A conclusion by the Court that the EU legislature is competent to decide on the seat of ELA would have clear implications for the admissibility and outcome of case C-743/19 Parliament
v Council. As the contested decision could only have been adopted by the EU legislature, the
decision to establish ELA in Bratislava cannot be regarded as a decision by the member states
