EUROPEAN COMMISSION Brussels, 26.4.2019 COM(2019) 187 final REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL on the implementation of the Joint Statement and Common Approach on the location of the seats of decentralised agencies



REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL on the implementation of the Joint Statement and Common Approach on the location of the seats of decentralised agencies 1.INTRODUCTION This report responds to a Council statement of October 2018 inviting the Commission to provide an analysis by the end of April 2019 of the implementation of the Joint Statement and Common Approach on decentralised agencies (‘the Common Approach’) on the specific topic of the location of the seats of the agencies. The request was made in the context of the relocation of the European Medicines Agency and the European Banking Authority. These two EU decentralised agencies previously based in London have had to move to a new host Member State as a result of the United Kingdom’s decision to withdraw from the Union. The 27 remaining Member States used a specific procedure to select the new seats of these two agencies, based on the principles enshrined in the Common Approach, a 2012 agreement between the European Parliament, the Council and the Commission. Following the selection by the 27 Member States to relocate the European Medicines Agency to Amsterdam and the European Banking Authority to Paris, the European Parliament and the Council adopted, on a proposal from the Commission, legislation providing for the new seats in the agencies’ founding acts. During the negotiations, the European Parliament requested that the Common Approach be revised, expressing its disagreement with the procedure used to select the seats of the two agencies and calling for a new procedure to be introduced in the Common Approach. The Council then invited the Commission to draft this report to serve as a ‘basis to assess the way forward in engaging with the process of such a revision’. As requested by the Council, the subject of this Commission report is limited to the part of the Common Approach concerning the location of decentralised agencies. It presents statistical and factual information on the implementation of the relevant elements of the Common Approach since its adoption on 19 July 2012. The report therefore constitutes a one-off initiative, separate from earlier Commission progress reports on the implementation of the Common Approach, or Commission evaluations of individual decentralised agencies. The report does not aim to evaluate the Common Approach, nor does it propose recommendations for the future. The report is based on data concerning all 33 decentralised agencies to which the Common Approach applies. However, when it comes to the part of the analysis on selecting the location of decentralised agencies, the report covers only the agencies for which a seat has been selected since 19 July 2012. To conduct its assessment, the Commission received input from the Council Secretariat General and from 28 decentralised agencies via the Network of EU Agencies. 2.PRINCIPLES OF THE COMMON APPROACH ON THE SEATS OF AGENCIES

2.1.Inter-institutional dialogue leading to the Common Approach The location of the seats of agencies is not a new topic for the EU institutions. The European Parliament, the Council and the Commission discussed this matter already in 2009, when the Commission published an evaluation serving as the basis for a debate on the future of the Union agency system, which later resulted in the Common Approach. That evaluation considered the location of the seats as an important element in the creation of agencies and one that ultimately contributes to their good governance. It found, in particular, that the accessibility of locations in terms of travel cost and time could affect agencies’ resources and effectiveness. The timing and the nature of decisions on the seats of agencies were also considered important elements in determining the conditions for the seats. The evaluation linked the existence of a headquarters agreement between an agency and its host state to the ability of an agency to benefit from certain privileges associated with its seat and to attract new staff to its location. In 2010, the three institutions again discussed the matter in a detailed analytical paper on ‘Agencies’ seat & role of host country’ as part of the inter-institutional work on the future of the Union agency system. This analysis fiche built on the 2009 evaluation, taking note of the state of play for the selection of agency seats and making a critical analysis of the issue at hand. The analysis observed that the seats of the EU agencies existing at the time were selected by common agreement between the representatives of the Member States meeting at the level of heads of state or government, or by the Council. The fiche noted, however, that there were no fixed criteria for selecting a seat; the seat of an agency was often selected later than the agency’s constituent act was adopted; and practices among the Member States in hosting agencies strongly varied. On 19 July 2012, the European Parliament, the Council and the Commission issued a Joint Statement to which the Common Approach was annexed, which was based on the conclusions reached by an Inter-Institutional Working Group. The Common Approach sets out agreed principles which are divided into five sections: role and position of agencies in the EU’s institutional landscape; structure and governance of agencies; operation of agencies; programming of activities and resources; accountability, controls and transparency and relations with stakeholders. 2.2.Principles relating to agency seats in the Common Approach In the first section entitled ‘Role and position of agencies in the EU’s institutional landscape’, the Common Approach sets out the main principles relating to agency seats. 2.2.1.Selection of the location of decentralised agencies

Point 6 of the Common Approach lays down several principles for selecting the location of decentralised agencies. However, it indicates upfront that this is without prejudice to the state of play at the time of its conclusion, i.e. that ‘the political decision on an agency’s seat [is] taken by common agreement between the representatives of the Member States meeting at Head of State or government level or by the Council’. The Common Approach further recalls the Member States’ agreement that there is a ‘desirability for the geographical spread’ of agencies, and that ‘priority should be given to new Member States’. The Common Approach then indicates how seats should be selected, laying down the main principles. It stipulates that such decision should be taken: (1) ‘before the end of the legislative process, in order to allow the agency to be set up directly in the location of its seat’; (2) on the basis of ‘objective criteria’ (which ‘may’ include the ‘assurance that the agency can be set up on site upon the entry into force of its founding act, the accessibility of the location, the existence of adequate education facilities for the children of staff members, appropriate access to the labour market, social security and medical care for both children and spouses’); (3) on the basis of offers to host an agency presented by Member States which ‘should address those criteria in a transparent way’. The Common Approach also notes that the Commission is available to help assess the offers of the Member States, if necessary. Point 8 of the Common Approach goes on to require that the host Member States make two commitments towards the agencies that they will host: (1) to ensure that all conditions necessary for the operation of the agencies are in place by the time they start their operational phase; (2) to continue to respond to the agencies’ needs and provide the necessary conditions for the long-term smooth operation of the agencies. 2.2.2.Relations between host Member States and agencies Point 7 of the Common Approach encourages Member States currently hosting an agency to consider if and how agencies can be made more accessible and therefore more efficient and more interactive with stakeholders. The Common Approach also recommends that the issue of accessibility be addressed in the regular evaluations of the agencies. Point 9 of the Common Approach states that all agencies should have headquarters agreements, and they should be concluded in a timely manner (before the agency begins its operational phase). This point applies to new agencies and to agencies already set up in their host State.

Headquarters agreements lay down the necessary arrangements that need to be provided for an agency in its host Member State. In order to guide future headquarters agreements, the Commission has been asked in the Common Approach to put together a set of provisions based on existing best practices. The Commission finalised these provisions in December 2013. 3.IMPLEMENTING THE PRINCIPLES OF THE COMMON APPROACH ON AGENCY SEATS 3.1.Selecting the location of decentralised agencies Four agency seats have been selected since the Common Approach’s adoption. The first was selected in 2014. Following the United Kingdom’s unilateral decision that it no longer wished to host the European Union Agency for Law Enforcement Training (CEPOL) on its territory, it was decided that the Agency would be relocated to Budapest. Then, that same year, it was decided that the Single Resolution Board (SRB) would be set up in Brussels. Finally, in 2018, in the context of the United Kingdom’s withdrawal from the Union, it was decided that the European Medicines Agency (EMA) would be relocated to Amsterdam and the European Banking Authority (EBA) to Paris. Further to the examination of the available information on these four agencies, the following observations can be made about how the locations of decentralised agencies have been selected since the Common Approach’s adoption. 3.1.1.Offers to host an agency In its July 2013 legislative proposal for the creation of the Single Resolution Board, the Commission proposed Brussels as the location of the seat of the Board. No Member State offered to host the Agency. From the outset, the Commission considered that its location should be Brussels, given the important interactions between the functions of the Agency and those of the Commission. It was felt, in particular, that having both bodies and institutions involved in the resolution process located in the same place would improve the overall efficiency of the policy framework. In October 2013, the representatives of the Governments of the Member States reached a common accord on the relocation of the European Union Agency for Law Enforcement Training from London to Budapest. Upon a request by the Council’s General Secretariat, seven Member States submitted offers to host the Agency. These offers addressed the following criteria: (1) detailed information about the proposed premises (including the actual office/conference space and other facilities to be made available to the Agency); (2) the location’s accessibility; (3) the regime of privileges and immunities of agency staff; (4) the existence of adequate education facilities for the children of agency staff. In 2018, the 19 offers submitted for the relocation of the European Medicines Agency and the 8 offers submitted for the relocation of the European Banking Authority addressed the following criteria: (1) the assurance that the agency can be set up on site and take up its functions at the date of the United Kingdom’s withdrawal from the Union; (2) the location’s accessibility; (3) the existence of adequate education facilities for the children of agency staff; (4) appropriate access to the labour market, social security and medical care for both children and spouses; (5) business continuity; (6) geographical spread.

3.1.2.Process for selecting the location of an agency On 8 October 2013, the seat of the European Union Agency for Law Enforcement Training in Budapest was selected by common accord of the representatives of the Governments of the Member States. On 15 May 2014, the Council adopted, on the initiative of twenty-five Member States, Regulation (EU) No 543/2014 amending the original Council Decision in order to state that the seat of the Agency was to be in Budapest. The proposed location of the seat of the Single Resolution Board, Brussels, was included in the Commission proposal for its creation and remained unchanged during the legislative process. The European Parliament and the Council adopted Regulation (EU) No 806/2014 in July 2014. Because of the specific context of the United Kingdom’s withdrawal from the Union, the Heads of State or Government of the 27 Member States had first agreed on 22 June 2017 on a detailed procedure for selecting the future seats of the European Medicines Agency and the European Banking Authority. Following successive voting rounds by the EU27 ministers, with the final votes cast by secret ballot, Paris and Amsterdam were selected in accordance with this procedure, on 20 November 2017, as the new locations of the seats of the two respective agencies. Following this, the Commission tabled two legislative proposals to incorporate the agencies’ new seats into their founding acts. In November 2018, the Council and the European Parliament adopted Regulations (EU) No 2018/1717 and 2018/1718. 3.1.3.Necessary conditions for the operation of an agency An independent evaluation report covering the period 2011-2015 found that the European Union Agency for Law Enforcement Training was relocated in a timely manner. According to the report, the Agency and its host Member State, Hungary, ‘managed the whole project in less than four months. Evidence gathered shows that the relocation had little to no impact on business continuity, despite the fact that a number of staff chose not to relocate to the new seat of the Agency’. The report also highlights that the relocation was cost-efficient with an estimated reduction of ‘administrative costs by €200,000 a year, due to the agreement with the Hungarian administration. Indeed, the use of the offices in CEPOL’s new headquarters is free of charge and the infrastructure will be provided for at least ten years.’ According to the Agency itself, the designated building was refurbished and equipped in accordance with the offer made by Hungary and was handed over to the Agency by the set deadline. Several agreements are in place for the Agency to use certain public services. Overall, the Agency indicates that the host State’s responsiveness to its needs is a positive experience. According to the 2015 annual report of the Single Resolution Board, the Agency ‘became operational in resolution planning for more than 120 banking groups in the Euro area and 15 other cross-border banking groups on January 2015. It de facto started its operations in March 2015.’ This suggests that all conditions necessary for the Agency to operate were in place by the time it began its operational phase. The Agency moved to its permanent premises in the centre of Brussels in April 2016 where it says that its overall operation runs smoothly. For the European Medicines Agency and the European Banking Authority, it is too early to assess whether and how the two host Member States will have ensured that all conditions necessary for the operation of the agencies were in place by the time they relocated to their new seat. The European Medicines Agency indicates that it ‘immediately began working with the Dutch authorities to prepare for the move and take up its operations in Amsterdam on 30 March 2019 at the latest.’ Both agencies have signed a headquarters agreement with their new host Member State ahead of their relocation. 3.2.Relations between host Member States and agencies 3.2.1.Requirement for a headquarters agreement

In the Common Approach, the three institutions recognised the need for all agencies to have headquarters agreements. In order to observe this principle and ensure long-term operating conditions, the requirement for such an agreement is now systematically inserted in the Commission proposals on agencies’ founding regulations. To date, out of 33 founding acts, 16 contain provisions requiring agencies and their host Member States to reach such an agreement. Since the Common Approach’s adoption, eight decentralised agencies have concluded headquarters agreements with their host Member States. Thus, to date, 29 of the 33 existing decentralised agencies have concluded headquarters agreements with their host Member States. Almost half of these agreements were signed within 2 years after the seat was selected. 3.2.2.Commission guidelines for headquarters agreements On 10 December 2013, the Commission issued guidelines for agencies and their host Member States to consider when negotiating a new headquarters agreement. According to the information provided by the decentralised agencies, around three quarters of the agreements were prepared and signed before the Commission guidelines were issued. However, the guidelines were used as a basis for negotiating the remaining quarter. These guidelines were also issued for revising existing headquarters agreements. Five headquarters agreements have been updated since their signature with no major modifications to the original headquarters agreements. 3.2.3.Nature of the provisions in headquarters agreements For aspects such as immunities, access to medical care, entry and stay, tax, social security contributions and custom duties exemptions, the provisions in most of the existing headquarters agreements are similar. For the provisions on immunities, the vast majority of headquarters agreements include the inviolability of the agencies’ premises, its assets and archives, diplomatic treatment of official communications and documents, and immunity from jurisdiction. In any event, even in cases where headquarters agreements do not provide for such conditions, all agencies benefit from the provisions of the Protocol (No 7) on the privileges and immunities of the European Union, as it is applicable in all Member States. Moreover, most headquarters agreements contain provisions offering exemptions from tax and custom duties. Under such conditions the agency’s premises, revenues and vehicles are exempt from taxes as is the supply of goods and services. Exemptions from custom duties apply to the agency’s articles for official use, publications and vehicles. For social security and medical care, almost all headquarters agreements exempt staff from making compulsory contributions to national social security systems. Around half of these agencies also have access to public services without discrimination.