The European Labour Authority: a Brand New EU Agency in Bratislava

Bartłomiej Bednarowicz, PhD Researcher at the Faculty of Law of the University of Antwerp

Background

On Thursday, the Council decided that Bratislava will host the headquarters of a brand new EU agency: the European Labour Authority (ELA). The idea for the ELA was spelt out by President Juncker already in September 2017 in his annual State of the Union address. Juncker viewed ELA’s main mission to ensure EU labour mobility in a simple and effective manner and to strengthen fairness and trust in the internal market. Interestingly, the proposal to establish the ELA rolled out of the European Pillar of Social Rights (EPSR) and was presented as a part of the Social Fairness Package, together with a proposal for a Directive on transparent and predictable working conditions in the EU (adopted by the Council on the very same day as the Regulation establishing the ELA; see discussion of the Directive here), a proposal for a Council Recommendation for access to social protection for workers and the self-employed and a Commission Communication on the monitoring on the implementation of the EPSR.

In a speedy manner, in March 2018 the Commission put forward a legislative proposal to establish the European Labour Agency and on Valentine’s Day in 2019, the Commission, the European Parliament and the Council reached a provisional agreement and changed the name from Agency to Authority. Finally, in June 2019, the Council adopted the proposal for a Regulation and selected Slovakia to host the Authority. The ELA is to start its operations in October 2019 already in Brussels and is expected to reach its full operational capacity in Bratislava by 2024. [Update: the Regulation was published in the EU Official Journal in July 2019]

Competences

Pursuant to the Regulation establishing the ELA, the main objective of the Authority is to assist the Member States and the Commission in their effective application and enforcement of EU law related to labour mobility across the EU and the coordination of social security systems. The ELA has the mandate to act only within the scope of selected EU acts in the framework of: posting of workers, free movement of workers, social security coordination, social aspects of road transport and cooperation between the Member States to tackle undeclared work. This catalogue remains closed but can be extended on a basis of any future acts that confer tasks on the Authority. More importantly, to maintain its mandate, the ELA is to neither affect any rights or obligations of individuals or employers that are granted by either EU or national laws, nor the mandate of national authorities responsible for enforcement in these fields.

Furthermore, in order to attain its primary objective, the ELA has been fitted with some additional tasks. Firstly, it is to facilitate access to information on rights and obligations regarding labour mobility across the EU as well as to relevant services. Secondly, it is to promote and enhance cooperation between the Member States in the enforcement of relevant EU law across the Union, including facilitating concerted and joint inspections. Thirdly, it is to mediate and help to look for a solution in cases of cross-border disputes between the Member States. Finally, it is to support cooperation in tackling undeclared work.

Organisation and the seat selection

The European Labour Authority will have a permanent structure comprising of a Management Board (including representatives of the Member States, Commission, European Parliament and social partners), an Executive Director and a Stakeholder Group with purely advisory functions (including representatives of the Commission and social partners). On top of that, the Authority aims at being made up of around 140 staff members, some of them seconded from the Member States. In addition, there will be one national liaison officer seconded from each Member State who will facilitate the cooperation and exchange of information between the Authority and her Member State. The Executive Director, on the other hand, will be appointed for a five-year term by the Management Board from a list of candidates proposed by the Commission, following an open and transparent selection procedure including a hearing before the European Parliament. Finally, the Commission is willing to secure approximately €50 million for the Authority’s annual budget.

As for its seat, 4 Member States competed in the selection process: Slovakia, Cyprus, Bulgaria and Latvia. The Council, in a rather transparent way, steered the selection process and published on its website all the offers prepared by the governments. Then, the European Commission assessed the offers based on the geographical balance, accessibility of the location, availability of the proposed premises and overall city’s readiness to accommodate the needs of international staff. At the Council meeting convoked on 13 June 2019, 23 Member States voted in favour of the Regulation establishing the Authority with its seat in Bratislava, 3 voted against (Austria, Hungary and Sweden) and 2 abstained (Czechia and Poland). Admittedly, it will be the very first EU agency to be located in Slovakia that advertised itself with a rather dull slogan ‘ELA in Slovakia, a good idea’. At least, the ELA’s staff will enjoy the state-of-the-art L12 building at the ‘Eurovea City’ in Bratislava and a stunning view on the Danube river.

Comments

An idea for a (pan)-European labour inspectorate has been considered for a long time as simply ‘the wishful thinking’ of some social partners, especially workers organisations. It also has never really attracted a lot of attention, as the Commission feared scoring an own goal due to a lack of the Member States’ support to set up such an agency in the first place. However, the Juncker Commission has finally put the social rights back at the EU agenda and proposed a rather breakthrough initiative in a dazzling form of the European Pillar of Social Rights. The Commission has already delivered quite plenty on the Pillar and mainstreamed many fruitful debates surrounding the social aspects of employment that under the years of austerity and flexicurity have been put aside. The Authority indeed emanates from the EPSR and aligns well with the accompanying proposals presented by the Commission within a broad framework of European Union cross-border employment and the Social Fairness Package.

The potential of the Authority cannot be surely underestimated. Its main advantages can be summarised in three aspects. Firstly, in the field of legal issues of international employment, it will provide the national authorities with some valid operational and technical support, mostly to exchange information, develop some best practices, carry out inspections and also to settle any disputes. Bridging the information and cooperation gap between the Member States is indeed a noble objective and quite a desired one as well. In practice, it is often the case that national authorities are unable to facilitate dialogue with each other and exchange information due to the complex and lengthy internal procedures and the language barrier. Having national liaison officers from all Member States designated to be at the ELA’s disposal will definitely plug that gap and speed things up. Moreover, some national authorities might not have even dreamed of an ability of concerted and joint inspections, which is now a powerful tool in the ELA’s arsenal, subject however, to reaching an agreement between the Authority and the concerned Member State(s).

Secondly, what the enforcement of EU employment and social security law often lacked at national level, were synergies with the already existing EU agencies that would allow to rely on their expertise in areas such as health and safety at work, the management of an undertaking that is being restructured, skills forecasting or tackling undeclared work. Therefore, it is the ELA’s task to facilitate it all to untap the available potential and to strengthen the enforcement levels.

Finally, the Authority will simplify cooperation by integrating a number of existing committees and networks amongst the Member States which will hopefully lead to eliminating fragmentation in that area.

On the other hand, the Authority will definitely not serve as a panacea for all the flaws in the system. The role it will play mostly depends on how active the ELA with its Executive Director decides to be. There is a considerable room to be claimed by the Authority with some space for manoeuvre, but there are some open-ended questions as well. Sceptics and pragmatics may wonder how willing some of the national authorities will be to cooperate within the ELA’s network and agree to, for example, conduct inspections on their territory, which can expose the flaws of their own systems on an EU scale. It is also unsure whether the Member States known for a rather lenient approach towards social security laws will deem it in their best interest to assist ELA with the fight against fraud and abuse on their territories, as no such obligation arises. For them, it could mean the end of their competitive advantage of providing a legal framework for cheaper labour through foxy constructions such as letterbox companies.

Examples from the field of social security coordination and the experience with the Administrative Commission, a body comprising of government representatives, capable of reviewing cases of social fraud between the Member States, do not necessarily instil optimism. The number of successful outcomes of such cases is rather scarce and some national authorities are giving up on the Administrative Commission and often try to take matters in their own hands. Essentially, they reach out on their behalf to the institutions in the other Member States mostly without any tangible end-effects. Moreover, the Authority’s tasks might overlap with those of the Administrative Commission, which was a major point of discussion during the negotiations about the ELA. The exact tasks division, despite indicated as ‘without prejudice’, might prove to be more problematic to delineate and can lead to duplication and competence battles. It is also doubtful how effective the Authority can really be and police the EU labour mobility market consisting of approximately 17 million EU-movers with rather modest resources of 140 staff.

To conclude, as for now, the Authority has baby teeth. It will be up to its adopted strategy, action plans and frankly, leadership to make sure that it will eventually get real teeth. The ELA has definitely promising potential but it remains to be seen how it will be utilised and how big of a dossier can it claim and handle. The expectations are high so we should all give the European Labour Authority a big leap of faith and wait for its very first results.

Barnard & Peers: chapter 20

Photo credit: www.landererova12.sk

The new European Border and Coast Guard: Do increased powers come with enhanced accountability?

Mariana Gkliati, PhD researcher at Leiden University, working on the accountability of Frontex for human rights violations during its operations

With the political agreement on the new Regulation reached at the beginning of April, approved by the European Parliament today, the European Border and Coast Guard Agency, Frontex, is now closer than ever to its original conception as a fully-fledged European Border Police Corps. The new law, with its enhanced rules on removal to non-EU countries, will be approved in parallel to changes to the EU's visa code aimed at readmitting more irregular migrants to non-EU countries, discussed here.

The Commission’s proposal was presented in September 2018 and was agreed hastily within only six months, as the goal was for an agreement to be reached within the current Parliament before the European Parliament elections in May 2019. The new agency is expected to become operational this summer.

Moving towards full operational capacity the agency will have its own equipment and personnel, combined with an impressive budget, and is vested with an even broader mandate in border surveillance, returns, and cooperation with third countries.

The ambitions of the Commission have been accepted almost in their entirety. Notably, however, the proposal regarding controlled centres, where relevant EU agencies and participating states would cooperate in enforcing rapid procedures for either asylum or return, and the power of the agency to coordinate return operations from one third country to another did not survive the trilateral negotiations.

The new Regulation wants to address two main challenges. Firstly, it aims towards greater autonomy and operational effectiveness. The heavy reliance of the agency in the voluntary contributions of member states in staff and equipment resulted in persistent gaps that impacted the effectiveness of the agency and its flexibility to deploy border guard teams in a short time-frame.

Secondly, the 2019 EBCG Regulation comes in response to the call of the European Parliament for full implementation of the  IBM Strategy, regarding European Integrated Border Management, which is considered vital for the functioning of the Schengen area. Improving the effectiveness and capabilities of the agency to achieve higher impact levels, while reducing the hold of member states over its operations, and increased cooperation with third states to promote European border management and return standards, while attaining to fundamental rights norms are key components of the IBM Strategy.

This blog focuses on three of the most significant changes brought by the new Regulation from a fundamental rights angle and looks into whether the expanded mandate and powers are accompanied by an equally strong accountability regime. For a more detailed look into the overall changes, you may refer to an earlier blog on this next phase of the EBCG.

The agency’s own operational arm

Currently, Frontex joint operations rely solely on the contributions of member states. Now, the agency acquires its own operational arm: a EBCG standing corps with broad executive powers. Starting with 5.000 operational staff in 2021, the standing corps will be fully operational by 2027 counting 10.000 staff members under the exclusive and direct control of Frontex.

Moreover, the agency can still make use of temporary deployments and long-term secondments from member states, while a rapid reaction pool of 3.000 members will be at its immediate disposal for rapid border interventions. The standing corps will have executive powers similar to the border guards and return specialists of the member states, including competence to perform identity checks and authorise or refuse entry.

Here belongs also the increased capacity for the agency to acquire and operate its own air, maritime and land assets, including aircrafts and vessels. The Commission intends that the agency’s own equipment “should ultimately become the backbone of [its] operational deployments with additional contributions of Member States to be called upon in exceptional circumstances.”

Frontex driving returns

One of the most highlighted changes concerns the enhancement of the agency’s mandate on returns of irregularly staying third country nationals to their countries of origin, which the new Regulation makes a top priority. Frontex is vested with a broad mandate in pre-return and return-related activities, including providing its own return escorts and return monitors and preparing the return decisions.

Such expansive powers increase the possibility for Frontex to be held responsible for fundamental rights violations during its returns, especially since such return flights will be conducted in the agency’s own aircrafts, by the agency’s own escorts.

The inherent sensitivity of forced returns to physical abuse and violations of the right to non-refoulement calls for increased accountability, in the meaning of more possibilities for the agency to answer for the impact of its activities upon fundamental rights.

Forced returns monitoring is a crucial safeguard during return operations. As a step towards that direction, the new Regulation allows the Council of Europe’s Committee on the Prevention of Torture (CPT) to conduct visits to monitor the situation on board.

However, the EBCG Regulation does not abide by the safeguards set down in the Return Directive (Art. 8(6)), which calls for an effective monitoring system. This refers in particular to the independence of the monitoring mechanism, requiring that the authority that carries out the returns is not the same as the one in charge of monitoring the compliance with fundamental rights. The EU Fundamental Rights Agency (FRA) has suggested that the same standards should apply to the agency and has suggested in its report to the European Parliament the involvement of an international body with human rights monitoring expertise. Nevertheless, no such provision for an independent monitoring body with relevant expertise and sufficient resources is made in the Regulation.

Finally, the role of the agency in drafting the return decision which would be subsequently issued by the member states raises its own fundamental rights concerns. Even though the ultimate authority for the return decision rests with the member state, such powers may lead to the informal beyond mandate influence of the agency. This would not be unprecedented. Such concerns have been expressed by NGOs as well as the EU Ombudsman with respect to the extent of the involvement of the European Asylum Support Office (EASO) in assessing asylum applications in Greek hotspots, as in practice the national authorities rely disproportionately on the agency’s decision.

Besides the obvious questions of breach of mandate, state sovereignty, and jurisdictional independence that this raises, mistakes in the issuing of such preliminary decisions may lead to a violation of the rights to family life and non-refoulement or the rights of the child.

The FRA has brought this new power into question, wondering how Frontex deployed staff, which typically originate from different member states and will not be familiar with the national legal framework or the host country language, would be able to ensure compliance with the fundamental rights safeguards emanating from the Return Directive as these have been transposed into national law.

Art. 49(1) of the EBCG Regulation provides that the agency’s return activities will be carried out in respect of fundamental rights. However, the concrete safeguards issued in the Regulation are not adequate to guarantee such protection.

In the centre of extensive data sharing

The information sharing aspect of the agency’s work is also significantly strengthened along with the creation of new specialised structures and mechanisms, while EUROSUR is encompassed in the EBCG Regulation aiming at improving its functioning, and enlarging its scope to cover most IBM components.

In the context of its new powers, Frontex can exchange information with EU agencies, including Europol as well as third countries. This, combined with the interoperability-related competencies of Frontex, creates a quite broad mandate for the processing and especially the sharing of data both within the EU and outside, involving EU institutions, agencies, and law enforcement authorities.

Moreover, as part of the agency’s expansive mandate on returns, Frontex is tasked with developing and operating a centralised return management platform for processing all information. This centralised platform allows for an automated transfer of data.

The information processed in the centralised platform and also shared with third states may include personal data, biographic data or passenger lists, as well as information obtained during the personal asylum interview. This can prove detrimental for the safety of people seeking protection, while it would undermine the trust that is necessary for the asylum interview to allow applicants to present the grounds for their applications.

Nevertheless, this is not accompanied by appropriate safeguards for data protection, as these are suggested by the FRA, with the risk that the Regulation ‘may be perceived as giving the green light for a blanket sharing with the third country of all information that may be considered relevant for returns.’

To the contrary, safeguards seem to even be reduced in the EBCG Regulation, as it fails to correctly transfer the guarantee that is enshrined in the EUROSUR Regulation (Art. 20(5)), that any exchange of data that can be used to identify persons with a pending request for international protection or who are at serious risk of being subjected to torture or other fundamental rights violations are prohibited. In the EBCG Regulation this safeguard is only limited to personal data (Art. 90(4)). Other types of data, that is not covered by this safeguard may still reveal to the state of persecution information regarding a person’s political, religious or philosophical beliefs, or their attempt to flee to the EU and request asylum. This may expose the person or their family to retaliation measures, or allow the country of origin to stop them from reaching safety.

All in all, the new powers of Frontex regarding data processing and sharing can have a major impact on the rights of persons, beyond the right to the protection of personal data.

Steps towards increased accountability

The most significant changes that reflect the increased accountability of the agency in the light of its new powers concern the European Parliament, the Fundamental Rights Officer and the individual complaints mechanism.

The new EBCG Regulation takes steps towards increased political accountability, involving the European Parliament and national parliaments. To ensure effective scrutiny by the democratic institutions, the Regulation introduces greater inter-parliamentary cooperation.

The agency’s management board is required to attend joint meetings of the European and national parliaments, while it could – not should – invite an expert of the European Parliament to attend its meetings.

Finally, the European Parliament has now a new role with respect to cooperation agreements conducted with third countries. It will be informed before a working arrangement with a third country is concluded about the parties and the content of the agreement, but the agreement itself will not be shared. Similarly, when negotiating a status agreement with a third country, the Commission will make a fundamental rights assessment relevant not to the whole country, but only to the areas covered by the agreement, of which assessment the European Parliament will be informed.

Moreover, the role of the agency’s Fundamental Rights Officer (FRO) is enhanced as she acquires a preventive function, being tasked with providing opinions upon all operational plans, as well as pilot projects and technical assistance projects in third countries. Furthermore, Frontex liaison officers are tasked to cooperate with her. What is more important is that FRO is tasked with publishing an annual report regarding the protection of fundamental rights in the agency’s activities, which shall also include information about the complaints mechanism and the implementation of the Fundamental Rights Strategy.

In the light of her already increased mandate, the workload of the FRO has significantly increased without a proportionate increase in the necessary staff and resources, so that it has become increasingly difficult for her to fulfil her tasks. The agency recruited in November 2018 additional staff to support the FRO, but this only includes junior staff. Art. 107 (2a) of the Regulation promises that the FRO will be provided with necessary resources and personnel, however, without making concrete commitments, like in the case of the number of border guards.

Finally, the crown jewel of administrative accountability, the individual complaints mechanism introduced in 2016, becomes all the more relevant with the expansion of the agency’s activities in third countries where victims of violations do not have access to EU judicial remedies due to lack of jurisdiction. Notably, the reach of the complaints mechanism is now expanded to cover operational activities in third countries.

Moreover, the FRO will draft a standardised complaints form in an effort to enhance the accessibility of the procedure. She will also recommend to the Executive Director the appropriate follow-up when the complaint concerns a staff member of the agency, which has been specified in the Regulation to include ‘referral to civil or criminal justice procedures’.

This, however, still remains in the discretion of the Executive Director, as the Regulation does not introduce requirements as to the appropriate follow-up. More importantly no remedy is made available against the admissibility decision of the FRO or the decision of the Executive Director. Moreover, the mechanism remains highly inaccessible to ‘new arrivals’, including unaccompanied minors, while the FRO was not allowed to initiate a complaint ex officio.

Although these changes are certainly a step to the right direction in terms of increased accountability, they nevertheless do not correspond to the expansion of powers and competencies of the agency in any of the areas of its activity discussed here.

In particular, the role of the European and national parliaments remains fairly limited to be able to ensure effective political accountability, while, unless the FRO is provided with sufficient staff and resources, she will not be able to fulfil her preventive role. Finally, there is still ample room to be covered for the complaints mechanism to meet the international standards of accessibility, institutional independence, and adequate capacity for evidence-based investigation.

Barnard & Peers: chapter 26

JHA4: chapter I:3

Photo credit: bmi.bund.de

The Reform of Frontex: Saving Schengen at Refugees’ Expense?

Steve Peers

Years ago, shortly before the creation of Frontex (the EU’s border control agency) and the big EU enlargement of 2004, I discussed the future of EU borders policy with a senior German civil servant. Anxious about the forthcoming enlargement of the EU (and, in time, Schengen), his vision was that every Lithuanian or Polish border post would be jointly staffed by a friendly German.

Yesterday’s proposals from the European Commission don’t precisely reproduce that vision – but they do embody the same doubt that Member States (in the south, rather than the east) can be fully trusted to patrol the external border. Given that Frontex has been created in the meantime, it’s the agency itself – flanked by reserves from national border agencies – which would be sent in to help patrol the borders of Member States, albeit only in certain cases.

This is only one of a batch of proposals made yesterday. I’ll sum them all up, but focus on this one, as it’s the most important. Overall, though, the proposals are flawed, in two contradictory ways: they simultaneously seek to do too much in the area of border controls (where the Frontex proposal exceeds EU powers and is politically unprincipled) and too little in the area of asylum (since there is no significant attempt to address humanitarian or protection needs within the EU). In short, they seek to save the Schengen system, at the expense of refugees.

Overview

There’s a Commission communication issued yesterday which tries to sum up all the new proposals. But in an even smaller nutshell, here’s what the Commission has tabled. The flagship proposal is a Regulation which would replace the existing Frontex legislation, creating a new ‘European Border and Coast Guard’ (EBCG) consisting of national border guards plus the agency.  This is accompanied by two proposals for minor consequential amendments to the Regulations establishing the EU’s Fisheries Control Agency and Maritime Safety Agency, whose work would be coordinated with the EBCG.

Next, an amendment to the Schengen Borders Code would increase checks at the external borders on EU citizens and, to some extent, non-EU citizens, for security purposes. A fifth proposed Regulation attempts to make expulsion and readmission more effective, by creating a uniform document to be used during removals of irregular migrants to their country of origin.  

There are non-binding measures on border control issues too. The Commission has adopted a Handbook for use operating the EU’s ‘Eurosur’ system of maritime surveillance. It has also released its latest regular report on the Schengen system in practice.

In the area of asylum, there’s only one proposal for a binding measure: a Decision which would exempt Sweden from the EU’s system of relocation of asylum-seekers (which I previously discussed here), for a period of one year. There’s a non-binding Commission Recommendation for a voluntary humanitarian admission programme of refugees from Turkey. Finally, there are Commission reports on the operation of the ‘hotspots’ for immigration control in Greece and Italy, and on the application of the recent plan to manage asylum and migration flows coming through the Western Balkans.

The new European Border and Coast Guard

As noted already, the proposal would replace the existing legislation establishing Frontex, which was first adopted in 2004, then amended in 2007 and 2011. (I previously produced a codified text of the Regulation – see here). To compare it with the text of the rules it replaces, see the Annex to the proposal. There would be no change to the separate legislation, adopted in 2014, which regulates Frontex actions as regards maritime surveillance (see my comments on that law here).

It should be emphasised that the legislation would not apply to the UK or Ireland, because they don’t participate fully in Frontex. In fact, according to CJEU case law, they can’t participate fully in Frontex unless they join the Schengen system fully – which is hardly likely, to say the least (it would require a referendum in the UK). However, the current loose cooperation between Frontex, the UK and Ireland would be retained, particularly for joint expulsions.

These new rules would – if agreed – significantly transform the status and role of Frontex. I won’t examine every detail for now (I might come back to the finer points during or at the end of the negotiations). Rather, my focus here is on the key aspects of the proposal. Keep in mind that this proposal is far from a ‘done deal’, since it has to be approved by a qualified majority in the Council (the UK and Ireland don’t have a vote, due to their opt-out) as well as the European Parliament. Already press stories suggest that many Member States oppose some key features of the proposal.

The first key feature of the law is the relationship between Frontex and national border forces. At present, the current Regulation states that ‘the responsibility for the control and surveillance of the external borders lies with the Member States’. Frontex is merely tasked with the ‘coordination’ of national forces.

But the proposed Regulation would, in effect, promote Frontex from the job of tea lady to the role of chief executive officer. The new law would not just upgrade the EU agency itself, but create a ‘European Border and Coast Guard’ consisting of national forces and the Agency. The Agency will adopt an ‘operational and technical strategy for the European integrated border control management’. National authorities then adopt their own strategies, but they must be ‘coherent’ with the Agency’s strategy. To put the strategy into effect, the Agency will not only be ‘reinforcing, assessing and coordinating’ national forces, but also taking control of them when Member States are not able to do so effectively.

The current tasks of Frontex – training, risk analysis, research, operational support, border surveillance, and support for expulsions – would all be retained and considerably enhanced. For instance, Frontex would have powers to send liaison officers to Member States, to check the ‘vulnerability’ of external border controls, to create a ‘return office’, and to gather and analyse more personal data. It would also have powers to send staff to third countries to participate in operations, not just (as at present) liaison officers. It would have more staff and funding, as well as reserve forces from Member States to call upon for border control or joint return operations. Most significantly, it would be able to send forces to an external border, in certain cases, without a Member State’s consent.

Is this power compatible with the limits on the powers of the EU? Article 72 TFEU states that the Justice and Home Affairs (JHA) Title of the Treaty ‘shall not affect the exercises of the responsibilities incumbent upon Member States with regard to the maintenance of law and order and the safeguarding of internal security’. This Article must apply to border control as well as policing, since there was an equivalent clause in the border controls and immigration Title of the Treaty before it was merged with the policing rules by the Treaty of Lisbon. It obviously does not rob the EU of all power to adopt laws regulating borders, since Article 77 TFEU goes on to confer powers to adopt laws on ‘the checks to which persons crossing external borders are subject’ and which are ‘necessary for the gradual establishment of an integrated management system for external borders’.

But the JHA Title specifically restricts EU powers regarding intelligence agencies, and bans coercive powers for Europol (the EU police agency) and prosecutorial powers for Eurojust (the EU prosecutors’ agency). In my view these restrictions are particular applications of the general rule set out in Article 72, which must mean that while the EU can establish rules on border controls and regulate how Member States’ authorities implement them, it cannot itself replace Member States’ powers of coercion or control, or require Member States to carry out a particular operation.  This is consistent with Article 4(2) TEU, which requires the EU to respect Member States’ ‘essential state functions, including ensuring the territorial integrity of the State, maintaining law and order and safeguarding internal security’, and with the requirement that any common EU defence would have to be agreed unanimously and ratified by national parliaments.

So the EU does not have the powers to send Frontex or its reserve forces to other Member States without their consent, or to require Member States to deploy those reserve forces without their consent either. Moreover, this is politically problematic for many Member States, who have historic concerns about foreign forces coming on to their territory without consent, stemming from the Cold War, the Second World War, and earlier history besides. While Frontex and its reserves should not be regarded as an ‘army’, due to their limited size and functions, they will nonetheless be perceived as such. So this aspect of the proposals is not only legally suspect, but politically ill-judged.

What to make of Frontex’s other enhanced powers, which Member States are rather more likely to accept? The key issue here is the accountability of Frontex for human rights abuses. The agency has fought a long battle with the EU Ombudsman to evade any accountability for individual cases, but it would finally lose that war, if this proposal is accepted. Individuals (or someone acting on their behalf) could make a complaint about human rights abuses, but it would be rejected if it was ‘anonymous, malicious, frivolous, vexatious, hypothetical or inaccurate’. Each complaint would go through the Frontex Fundamental Rights Officer, who would decide on admissibility and then either forward the complaint to the Frontex Executive Director or a national border force. If the complaint is well-founded it will be followed up, possibly by disciplinary action.

However, the proposed process is inadequate. The Executive Director, who will decide on the merits of admissible claims, is obviously not independent of Frontex. There is no reference to a remedy if the complainant believes that his or his complaint has been wrongly rejected as inadmissible or not well-founded. Even where Frontex considers the complaint well-founded, the remedies are ineffective: there is no reference to damages, or a possible criminal prosecution in the most outrageous cases. Furthermore, the new rules are limited in scope, as they do not apply to national border guards, who are responsible for alleged cases of illegal push-backs and assaults upon migrants. To address this, the other proposals released yesterday should be amended to require Member States to hold independent investigations with effective remedies in any case where national border guards are alleged to have acted in breach of fundamental rights.  

There is also a need for specific rules regulating Frontex (and national authorities’) action as regards the ‘hotspots’ for migrants at external borders, to clarify that they are not making decisions on the merits of asylum applications or issuing return decisions, and that only national authorities can make such decisions with full respect for the safeguards and content of EU and national law. (For more on the lack of clarity regarding the ‘hotspots’, see Frances’ Webber’s analysis here).

Other new measures

The most significant other new measure is the proposal for changes to the Schengen Borders Code. At present (see codified text here), Member States must check EU citizens at the external borders (either on entry or exit), to ensure that they hold an EU Member State’s passport which is not registered as lost or stolen. But there is no obligation to check them in security databases, except on a ‘non-systematic basis’. As for non-EU citizens, they must be more thoroughly checked on entry, including the use of security databases, but on exit the consultation is only optional, and security checks need only be carried out ‘wherever possible’.

Both sets of rules would be amended by the new proposal. EU citizens would have to be checked in security databases, both on entry and exit. But if this ‘would have a disproportionate impact on the flow of traffic’ at land and sea borders, Member States could decide to carry out such checks on a ‘targeted’ basis. There is no such derogation for air borders, which will also be subject to separate legislation (recently agreed in principle) concerning the collection of passenger records (Member States will also apply this law to internal Schengen flights). Also, the enhanced border checks won’t be recorded as such in a database, although that would happen in future if recent plans to include EU citizens in the future ‘smart borders’ rules are put into effect. As for non-EU citizens, the current derogation relating to exit will be abolished, and there will always have to be a check in security databases, regardless of any disproportionate impact on traffic.

So overall, checks on EU citizens in security databases would no longer be the exception to the rule (as at present); they would be the rule – subject to exceptions. The exceptions are relatively limited and the proposal does not accept that pressure at air borders could also be ‘disproportionate’. Surely that is a possibility, since if checks add several seconds each to a check of hundreds of disembarking passengers, a back-up could swiftly ensue. Given that data on air passenger movements will soon be recorded anyway, and that the Schengen Information System can’t be used to deny entry to EU citizens, the only practical use for the new rules would be in catching someone who was meant to be arrested, perhaps on the basis of a European Arrest Warrant, or who should be placed under surveillance. But in the latter case it might be awkward to arrange for the surveillance to start without tipping off the person concerned that it’s happening. The proposal might prove useful in detecting people subject to potential arrest due to suspicion of receiving terrorist training (see the separate recent proposal on this point), but is it really necessary for that purpose that it apply at all air borders?

Overall, it may be questionable whether any increase in security that may result from this proposal is proportionate to its impact on passenger movements. There would be a stronger case to amend the Borders Code to allow Member States to check certain flights or border crossings systematically following a risk assessment. This may give rise to concerns about discrimination, but there are already distinctions based on nationality as to who needs a visa, and it would have to be specified that all those on the particular flight must be checked – not just those who ‘appear Muslim’. Checks on all flights could only be justified if it were clear that 'foreign fighters' were returning to the EU via other countries too.  

As for the other proposals, the Regulation on a standard travel document for expulsion would not change the substantive rules on expulsion; time will tell if it leads to non-EU countries accepting more expelled persons.

The real problem is with the lack of ambition of the asylum measures. As noted above, the only binding measure suggested yesterday would exempt Sweden from the EU’s relocation rules. This is largely a cosmetic gesture, since only a tiny fraction of the 160,000 who were meant to be relocated – which anyway is not a huge proportion of those entering Greece and Italy – have in fact been relocated. In the meantime, the capacity of Greece and other States to register migrants, process asylum applications, and ensure basic living conditions for the persons concerned is clearly under immense strain.

What the EU really needs is a new strategy to deal with these protection and humanitarian needs. Is there anything it can do to make the relocation programme work? Failing that, can it assist Member States to process asylum applications, or do more than it is doing to ensure basic living conditions are satisfied? Why the focus on empowering Frontex, and no parallel attempt to empower the EU’s asylum support agency to play a greater role to address some or all of these issues?

Furthermore, pending a full review of the EU’s Dublin system (to be completed early next year), the Commission could at least have issued a recommendation to Member States on how to apply the existing Dublin rules on family reunion, and to widen the admission of family members to admit siblings, and the relatives of EU citizens or non-EU citizens who are legally resident other than as refugees or asylum-seekers.

As Thomas Spijkerboer and Tamara Last have pointed out, there is no shortage of migration controls in the EU. The death toll of migrants and refugees has built up over the decades in which visa requirements were imposed and carriers were sanctioned for letting those without authorisation get on a flight or a ferry. Bolstering Frontex may have an impact on the management of those who arrive, but solves neither the underlying problems in the country of origin or the huge pressure placed on national asylum systems – or the human misery that accompanies it.

Barnard & Peers: chapter 26

Photo credit: https://nobordersnortheast.wordpress.com/2011/05/03/invitation-anti-frontex-days-of-action-warsaw/

Capping bankers' bonuses: a step too far for the EU?

Steve Peers

Bankers are never going to win a popularity contest. The collapse of international financial markets which started in 2008 and has led to austerity across Europe has been widely blamed on lax regulation of banks and irresponsible behaviour by bankers. It has led to a huge overhaul of EU banking regulation, including the transfer of banking supervision to the European Central Bank, new rules on bank bail-outs, and provision for criminal law sanctions against bankers involved in market abuse (discussed here). EU law has gone further still, and adopted rules which cap the amount of bonuses paid to bankers.

The United Kingdom, home to the biggest financial services industry in the EU, has had reservations about some of these new laws. It has opted out of some of them (the market abuse rules, the banking supervision rules and aspects of the bank bail-out rules), and has challenged others in the CJEU. Earlier this year, its challenge to the ban on ‘short-selling’ failed in the Court (see discussion here), and today’s Advocate-General’s opinion suggests that its challenge to the restrictions on bankers’ bonuses should fail too.

These restrictions are found in the EU’s revised rules on capital requirements and the authorisation to take up banking services, which are set out in a parallel Regulation and Directive adopted in 2013. In effect, they require that bankers’ bonuses cannot usually be more than the amount of their ordinary annual salary. By way of exception, the bonuses can be double the amount of the banker’s ordinary annual salary, if bank shareholders agree pursuant to a special procedure.

Advocate-General’s Opinion

The UK raised six main complaints against the bonuses rules: lack of competence by the EU to regulate pay; infringement of the principles of subsidiarity and proportionality; violation of the principle of legal certainty; illegal delegation of power to an EU agency (the European Banking Authority); breach of EU rules on data protection and privacy, due to the potential disclosure of the pay received by bankers; and a breach of the principles of customary international law, due to the extraterritorial effect of the rules. Advocate-General Jaaskinen argues that all five complaints be rejected.

First of all, the Advocate-General argues that Article 53 TFEU (the legal base for this measure) is correct, because that legal base can extend to banking regulation generally, not just the promotion of the freedom of establishment for banks. The pay cap does not constitute a ‘social policy’ measure, since it does not regulate the basic salary paid to bankers, which is the basis for calculating any additional bonus.

Secondly, data protection rules are not violated, because the disclosure of bankers’ pay is only discretionary, not mandatory. In the event that Member States make a request for such disclosure, they would then be bound by EU data protection law.

Thirdly, conferring powers upon the EU agency is not illegal, because the powers do not concern the essential elements of the legislation, and the EU Banking Authority does not adopt the measures itself, but merely recommends their adoption to the Commission.  Fourthly, the principle of legal certainty is not infringed by applying the new rules to pre-existing employment contracts. Fifthly, the principles of proportionality and subsidiarity are not violated, because the creation of a uniform system of risk management was better achieved at EU level, rather than national level, and the EU institutions have great discretion to assess how these principles apply. Finally, the UK has not made out its argument that customary international law rules out the extraterritorial application of such limits.

Comments

This case is not about whether limiting bankers’ bonuses is a good idea. Rather it concerns whether it is legal for the EU to limit them. If the EU lacks such power, there would in principle nothing to prevent Member States from limiting bankers’ bonuses individually, if they wished. The argument about whether to do so would then be held at a national level, rather than the EU level.

Some of the UK’s complaints are clearly unconvincing.  As the Advocate-General suggests, the argument about international law is not fully fleshed out or convincing. The legal certainty argument fails to consider that employment law regulation usually impacts upon existing contracts; this is justifiable in light of the public-interest principles underlying the very nature of employment law. Anyway, bonuses are inherently variable. As for the data protection argument, the Opinion largely follows what the CJEU established already in EP v Council (family reunion): if EU law provides for options for Member States, the compatibility of those options with human rights law should be judged when and if Member States exercise those options. In any event, prior case law on data protection and salary disclosure does not set out an absolute ban on release (see Satamedia, for instance).

The UK’s other arguments are rather stronger. While it is true to say that the EU’s banking agency does not actually take the final decision relating to implementation of the bonus cap, it does more than simply provide expert advice on this issue. The Commission must then either act on this advice or do nothing at all: so it does not have full discretion to adopt the delegated acts (see the complex decision-making system set up by the Regulation establishing the Banking Authority). This process is fundamentally questionable because it blurs the accountability for the decision being taken (and moreover, it is too convoluted to be transparent).   

As for proportionality and subsidiarity, certainly the events of the last six years have demonstrably indicated that a more decentralised system of managing banking risks was ineffective. Hopefully the EU-wide measures will be more successful, but in any event the nature of the subject-matter calls for an EU-wide response, in light of the level of integration between European financial markets and the potential cross-border impact of bank failures. But that isn’t the point: the UK is not challenging the entirety of the capital requirements rules, but only some of the handful of provisions which regulate bankers’ bonuses. In fact, it is not challenging those provisions which prevent bankers from receiving bonuses as a consequence of risky behaviour, but only those provisions which regulate bonuses regardless of bankers’ actions. So the opinion should instead have asked whether these provisions meet the requirements of the subsidiarity principle. It is hard to see how they do.

This brings us to the biggest problem with the Opinion: the argument that the legal base on freedom of establishment can regulate bankers’ bonuses. The legal base point here can only be understood by viewing the Treaty as a whole. It has separate provisions on social policy, which include a ban on EU regulation of pay (Article 153 TFEU). The general internal market power (Article 114 TFEU) specifically states that it ‘shall not apply to’ measures ‘relating to the rights and interests of employed persons’. The Treaty drafters’ intention was clearly to provide for lex specialis rules relating to regulation of pay.

The ban on EU regulation of pay has been clarified in the case-law of the CJEU. In the Impact judgment, for instance, it ruled that the EU could not regulate the level or components of pay, but it could establish non-discrimination rules relating to pay as regards categories of workers. Similarly, the working time directive provides for holiday pay, but does not regulate the level or components of pay which a worker normally receives (which then constitute the basis on which the holiday pay is calculated).

Following the logic of these precedents, it is true to say that the capital requirements legislation does not set the level of bankers’ pay, on the basis of which the bonuses are capped. But it does regulate the components of pay, by determining how much of the total amount of pay can be variable. The Advocate-General’s reasoning would mean that the EU would be free to regulate at least some aspects of workers’ pay in any area of law subject to special rules in the Treaty, rather than the general internal market legal base. So the EU could regulate aspects of the pay of farmers, fishermen, transport workers and anyone in other service industries.

It could reasonably be argued that aspects of pay in these other fields can exceptionally be regulated by EU law where that is an essential component of the regulatory framework. This could be the case in banking, for instance if the overall amount of pay could damage the existence of the bank or bonuses were linked to risky behaviour. The legislation does have rules on these issues, but the UK has not challenged them. So it follows that the opinion is fundamentally unconvincing on the legal base point.

In light of the financial crisis, there are many good reasons to regulate banks more effectively, and it would not be shocking if Member States wanted to react to understandable public anger at the huge cost of bank bail-outs by limiting bankers’ income. But resentment at bankers’ pay, even it is entirely justified, cannot authorise the EU to exercise powers which any reasonable interpretation of the Treaties suggests that it just does not have.


Postscript (November 21st): Like any Advocate-General's opinion, this view is non-binding, although a number of British journalists and politicians forgot this when the opinion was released. In any event, the point is moot since, following publication of the opinion, the UK's Chancellor decided to drop the legal challenge. His official reason was to save taxpayers' money, but this is not convincing since a large majority of the legal fees will surely already have been incurred, and there is still a chance to get them reimbursed if the UK wins the case. A victory for the UK would have not have been improbable, given that the CJEU did not follow this Advocate-General's views in the last major banking law case (concerning the ban on short-selling), and that the analysis of the legal basis point is not very convincing. 

 

Barnard & Peers: chapter 14, chapter 19

 

The reform of Europol: modern EU agency, or intergovernmental dinosaur?

Introduction

The EU’s police cooperation agency, Europol, has played a major role in the development of Justice and Home Affairs cooperation in the EU from an early stage. Europol was originally set up informally, then on the basis of a 1995 Convention, subsequently replaced by a Council Decision in 2009. While its powers have gradually been expanded, so has the controversy about its accountability and the adequacy of its data protection rules. Since it is a creature of the former 'third pillar' (the previous special rules on policing and criminal law) it is something of a 'dinosaur' in institutional terms, being an essentially intergovernmental body.

With the entry into force of the Treaty of Lisbon, the European Parliament (EP) now has joint powers with the Council as regards the adoption of a Regulation governing Europol, and the Treaty now refers expressly to the importance of ensuring accountability to both national parliaments and the EP. Furthermore, the EU institutions agreed in 2012 a ‘Common Understanding’ on standard rules which would apply to the governance of EU agencies. To expand Europol’s powers further, while addressing the issues of governance, accountability and data protection, the Commission proposed a new Regulation reconstituting Europol in 2013.

At the most recent Justice and Home Affairs Council, ministers agreed the Council’s position on the Commission’s proposal.  Since the European Parliament also recently agreed its own position, this clears the way for negotiations to take place between the two institutions for a final deal, once the EP is fully operational again following the recent elections. This is therefore a good time to examine the progress of discussions on the proposed Regulation so far.

It should be noted that Ireland has opted in to this proposed Regulation, while the UK and Denmark have opted out. The UK’s objections are due to the proposals to place national law enforcement bodies to comply with Europol’s requests to start investigations, and to supply information to Europol without a national security exception. However, as discussed further below, the Council’s and EP’s positions on the proposal address these issues, raising the possibility that the UK will opt in after adoption of the Regulation.

Europol’s powers

First and foremost, the Commission failed in its attempt to merge together Europol with the European Police College. The Commission thought it was a good idea to merge the two, given the overlap of their subject-matter. There has never been a merger of EU agencies before, for essentially political reasons: Member States fight bitter battles to host EU agencies, and so are reluctant to let one go once they have one. However, unusually, in this case the original host of the European Police College, the UK, was rather keen to kick the agency out, as it was planning to sell the space where the College was located and declared itself unable to find a new one.

So there was a golden opportunity to merge these two agencies, but neither the European Parliament nor the Council wanted to take it. In light of the Commission’s inflexible insistence on its proposal, an unprecedented group of 25 Member States tabled an initiative to amend the previous Decision establishing the European Police College, which was subsequently adopted. This new Regulation simply moves the College to Budapest. The Council has requested the Commission to make a separate proposal making further changes to the Police College, but it remains to be seen whether the Commission will do so, or whether it will continue to sulk about the failure of its original suggestion for a merger.

The Commission’s second main objective related to Europol itself. It cannot carry out ‘coercive powers’, according to the Treaties, and all three institutions agree that a clause to this effect should appear in the new Regulation.  So it is destined to remain an agency which gathers and analyses information, and it is only able to do the latter to the extent that it does the former. As dinosaurs go, Europol is clearly a herbivore, not a carnivore.

But the Commission nonetheless hoped to give Europol some sharper teeth. So it proposed two key amendments: a clarification of Member States’ obligation to give information to Europol, and an enlargement of Europol’s access to national databases. In parallel to this, the Commission’s proposal removed the detailed rules on the structure of data processing that existed in the Europol Decision (and before that, in the Europol Convention). In place of these very specific rules on analysis files and the Europol Information System, et al, there would instead be general provisions on data processing, which would be centred upon an obligation to ensure ‘privacy by design’.

The Council weakened the proposed rules which required national authorities in principle to act upon Europol’s request to initiate investigations. However, this issue is mainly symbolic, since there was no absolute obligation to act, under the Commission’s proposals (authorities could ‘decide not to comply’ with a request, on any grounds).

Furthermore, the Council did not accept the Commission’s proposal to allow Europol to contact national authorities directly in all cases, without going through the ‘Europol national units’ (the official points of contact between Europol and national forces). Instead, it simply provided (as at present) for the possibility for Member States to allow this. It also reinserted the current provisions which allow national authorities to refuse requests for information from Europol on grounds of national security, current investigations or intelligence activities.

However, the Council agreed with the proposal to give Europol a list of other new powers, and added new provisions giving Europol the power to assist with Schengen evaluations, as well as the evaluation of candidate Member States. It also specified that Member States have to allow their Financial Intelligence Units (special units dealing with money laundering) to collaborate with Europol. Finally, it wants to extend the fields of crime which Europol deals with to include war crimes and genocide as well as insider trading.

For its part, the EP, like the Council, voted against strengthening the provisions relating to Europol requests to Member States, although it did agree to Europol’s direct contact with national authorities (under certain conditions). It also agreed to retain the provisions allowing authorities to refuse requests from information from Europol.

Furthermore, the EP wants to reinsert the existing conditions relating to Europol’s participation in joint investigation teams, whereas the Commission (and the Council) want to provide only for general rules in this respect.

Data processing and data protection

Europol’s powers are inevitably closely linked with the data processing and data protection rules that apply to its processing of personal data. On this point, the Commission’s main objective with its proposal was to enhance the data protection framework of Europol by ensuring that its data protection supervisor was fully independent and had effective powers.

To this end, the Commission suggested more detailed rules on data processing and more data protection rights for individuals. The rules on external transfers of data outside the EU, which currently allow Europol itself to sign treaties with the Council’s approval, would be replaced by the general external relations rules of EU law (treaty negotiations carried out by the Commission, treaties concluded by the Council after consent by the EP). In general, the rules on transferring data to third States would be modelled on the rules in the EU data protection directive (see the recent post on this blog), allowing for transfers in principle only where a third State’s data protection has been judged ‘adequate’, with limited derogations from this rule. The supervisory powers currently held by a Joint Supervisory Board would be transferred to existing European Data Protection Supervisor (EDPS), which has data protection supervisory power as regards most EU agencies.   

The Council would amend the proposal to add a general power to process personal data in order to facilitate information exchange between Europol, other EU bodies, third countries, Member States and international organisations. Also, the Council would impose an absolute obligation for Europol to inform Member States about information concerning them. The Council would also allow for broader derogations from the normal rules as regards the transfers of data to third countries, adding grounds relating to legal claims and the combating of criminal offences.

As for data protection rules, the Council would strengthen the proposal by banning the selection of a group persons purely on the basis of a ‘sensitive’ ground, such as racial origin. It would also add a requirement for Europol to notify its data protection officer and the EDPS in the event of a security breach. Europol would also have to inform data subjects of the time period for the processing of their data, and the right to make requests to Europol for erasure, et al of that data.

However, the Council would drop the requirement for Europol to report on its processing of sensitive data every six months to the EDPS. Also, Europol would have to comply with any Member State’s objection to the release of data which it provided to Europol. A data subject’s request for correction et al of personal data would have to be funnelled through a national authority, rather than addressed directly to Europol, and the Council would include very broad grounds for Europol to refuse such requests.

The Council is also keen to amend the institutional ‘architecture’ regarding data protection in the Commission’s proposal. It would cut back a little on the proposed powers of the EDPS, and impose the condition that it considers law enforcement concerns when it communicates with data subjects. National data protection bodies would have the power to comment on the draft annual report of the EDPS before its conclusion. More generally, the EDPS would have further obligations to consult national data protection bodies, and the Council wants to establish a Cooperation Board that would have a large number of advisory powers.

For its part, the EP would subject all access to personal data by Europol to general rules of necessity and proportionality and the adoption of specific rules setting out data protection principles.  The categories of personal data which could be processed would be more tightly restricted, and the EP does not support anything similar to a general power to process personal data to facilitate relations with the Member States, et al. There would be a requirement to carry out an impact assessment before data processing operations.

The EP would ban access to Europol data by OLAF, the EU’s anti-fraud body, and also would impose a ban on processing of data obtained by means which breach human rights. Pre-existing treaties with third states relating to the processing of personal data would have to be renegotiated within five years. The EDPS would have to be consulted before treaties with third States are negotiated. 

While the EP broadly agrees with the Council regarding the derogations from the external transfer rules, it wants to require Europol’s Executive Director to consider the record of the third country concerned before authorising the use of these derogations. The EP also agrees with the Council on a clause regarding notification of a data breach to the EDPS, although its version is more detailed, and the EP also wants a clause on notification of such breaches to the data subject. Finally, the EP wants more detail in the annual report by the EDPS, and proposes more cooperation between the EDPS and national authorities, although it does not support the Council’s idea of creating a Board.

Governance

First of all, as regards Europol’s management board, in accordance with the Common Understanding on EU Agencies, the Commission proposed that it have two representatives, alongside one from each Member State. However, both the EP and Council want to cut this back to one representative (as at present). Moreover, the EP (based on the Common Understanding, which refers to full EP members on agencies’ management boards) proposes to let an observer from its Joint Parliamentary Scrutiny Group (see below) attend meetings of the Management Board. Both the EP and the Council want to drop the proposed clause (based on the Common Understanding) which would require Member States to limit turnover in the Board. 

The EP supports the Commission’s proposal to ‘aim to achieve a balanced representation between men and women’ on the board, but the Council does not. 

Next, the Council and Commission agree that (in accordance with the Common Understanding) members of the Management Board should have standard terms of four years. However, the EP wants their term of office to be set by each Member State.

Furthermore, the Council wants the chair of the Management Board to come (as at present) from one of the three Member States which is jointly holding the Council Presidency, whereas the Commission and the EP reject this. Finally, the EP wants all members of the Management Board to sign a declaration of interests, for such declarations to be published, and for the Commission to have the power to object to draft Management Board decisions on fundamental legal or policy grounds. These proposals are based on the Common Understanding.

Secondly, the Council wants to retain its current powers to appoint Europol’s Executive Director and the Deputy Executive Directors, instead of shifting this power to the Management Board as the Commission proposes, in accordance with the Common Understanding on agencies (the EP agrees with the Commission). But the Council does not want to share this power with the EP.

Thirdly, the Commission proposed the creation of a new Executive Board as part of the management structure. The EP rejects this idea completely, whereas the Council can accept it on condition that the Management Board agrees unanimously to create it, leaving it to the Board (rather than the Regulation) to set out the details.

Finally, the Council wants to curtail the scope of the future reviews of the Regulation, while the EP wants to enhance them to include the provisions on parliamentary accountability. The Commission and EP support the possibility of a future amendment or repeal of the Regulation, while the Council wants to drop this possibility. It should be noted that the Common Understanding refers to the possibility of disbanding an agency.

Parliamentary accountability

Currently, the EP can receive reports on Europol, plays a role as regards the budget, is consulted upon implementing measures and can hold hearings with the Director. Due to concerns about ensuring more effective parliamentary accountability for Europol’s actions, the Commission proposed a number of reforms, in particular sending the EP and national parliaments more reports, and involving the EP more in the process of choosing the (Executive) Director.

In response, the Council insists upon separate references to the EP and national parliaments. It would also delete many of the proposed powers for the EP, in particular dropping the proposed obligation for the Executive Director to report to the EP and the obligation for the candidate to be Executive Director to make a statement before the EP.

Conversely, the EP would enhance the parliamentary role in the Regulation, in particular by creating a Joint Parliamentary Scrutiny Group, which would comprise members of both the EP and national parliaments. In its view, references to the EP in the proposal should be replaced by references to this group. There would also be greater powers for the Joint Parliamentary Scrutiny Group as regards the process of appointing the Executive Director. 

Comments

The EP and the Council agree broadly on the modest extension of Europol powers, including in particular the removal of provisions relating to the European Police College and retaining the current limits on Europol’s powers as regards national authorities, so these will likely be the least controversial issues to negotiate. It is striking that these institutions did not take the opportunity either to reduce the agencies’ costs by means of a merger, or at least to increase their efficiency by means of co-location.

As regards data protection, there are significant differences between the EP and the Council as regards: the broadening or tightening of the grounds for data processing; the details as regards notification of security breaches; the rights of data subjects; the architecture of data protection authorities; and the grounds to refuse a data subject’s requests. Both support some further powers for national authorities.

Two specific points should be highlighted here. First of all, the Council’s suggestion of a general power for Europol to process personal data in order to facilitate information exchange has to be rejected on legal grounds, since this is far too broad and imprecise a legal basis on which to justify the exchange of personal data. The EP has the better approach: if (as all the institutions agree) EU legislation should no longer regulate the details of Europol’s databases and analysis files, there need to be strong and specific data protection principles in the Regulation instead.

Secondly, while both the EP and the Council agree on a general derogation from the external transfer rules for the combating of criminal offences, this exception is likely to become the rule, since combating criminal offences is Europol’s whole raison d’etre.

As for governance and accountability, the main issues are the extent of parliamentary powers, and also the nature of those powers (ie, whether there should be separate or joint roles for the EP and national parliaments). It is striking that the Council is keen to have a joint data protection supervisory body, but not a joint parliamentary body, whereas the EP’s preferences are the other way around.  Remarkably, the Council’s removal of the (Executive) Director’s obligation to report to the EP would actually mean less parliamentary accountability on this point than under the current Decision.

Also, the EP and the Council differ as regards: whether there should be an executive board; the role of Council as compared to the Management Board in appointing the executive director; retaining a special status for the Council Presidency chairing the Management Board; rules on conflict of interest; other aspects of the composition and functioning of the Management Board (term, turnover, gender equality, Commission control, conflict of interests); and the review and possible disbanding of Europol.

On these issues, the Council’s suggestion to go backwards, by eliminating any role for the EP questioning the Executive Director, is simply antedivulian. It flies in the face of the specific reference to parliamentary accountability in the Treaties, given the obvious importance that parliamentary questioning of an agency director can play in ensuring that body’s accountability.

The Council’s attempts to defend the status quo can also be seen in its approach to the appointment of the (Executive) Director and the composition and chairing of the Management Board. The more modern approach of the EP as regards gender equality, declarations of interests, scrutiny by the Commission, and review or disbanding of Europol, should be preferred. Furthermore, accountability surely demands a single parliamentary observer on the Management Board, given that 28 Member States will each have a voting member to advocate their interests.

It is striking that two years after agreeing standard rules on EU agencies, in a bid to forestall future conflicts and difficult negotiations, all three agencies have taken a ‘pick and mix’ approach to the Common Understanding, each selecting certain points that they like from these common principles and rejecting those which they dislike.

Overall, it is clear that the Council’s preference is for Europol to remain an essentially intergovernmental body, with merely another incremental increase in its powers, a modest enhancement of the data protection rules, and no significant change in either its governance or parliamentary accountability. The EP agrees that the increase in its powers should be limited, but is pushing instead for a modernisation of the agency in light of the Treaty of Lisbon and the Common Understanding, as regards stricter data protection rules, reforming its governance, and greater accountability. Time will tell whether the Council will succeed in preserving this intergovernmental dinosaur.