Communication from the Commission - The operating framework for the European Regulatory Agencies
Date: 2002-12-11
Institutions: European Commission
Subjects: EU office or agency, competence of the institution, governance, institutional reform, interinstitutional relations (EU), operation of the Institutions

COMMISSION OF THE EUROPEAN COMMUNITIES

Brussels, 11.12.2002
COM(2002) 718 final

COMMUNICATION FROM THE COMMISSION

The operating framework for the European Regulatory Agencies

COMMUNICATION FROM THE COMMISSION

The operating framework for the European Regulatory Agencies

INTRODUCTION

In the White Paper on European Governance1, the Commission affirmed that one possibility
envisaged  for  improving  the  way  rules  and  policy  are  applied  across  the  Union  was  to  use
regulatory  agencies.  With  this  in  view,  criteria  were  needed  for  the  creation,  operation  and
supervision of such agencies under the current legal and institutional system.

In its Communication on "better lawmaking"2, the Commission placed the use of regulatory
agencies in the broader context of the exercise of the executive function and definition of the
responsibilities of the institutions.

What is needed, if European Community action is to be more effective, coherent, legitimate
and  transparent,  is  for  the  institutions  to  be  able  to  assume  their  responsibilities  fully.  To
achieve this, their respective roles must be clearly determined and current practices changed
where necessary.

In particular, the Commission sees a need to refocus on its core functions, with an emphasis
on  its  executive  responsibilities  under  the  EC  Treaty,  when  it  comes  to  adopting  the
implementing  measures  for  certain  legislation  at  Community  level.  Obviously,  these
responsibilities must be performed within the limits defined by the legislation and subject to
the  appropriate  control  and  monitoring  arrangements  put  in  place  for  the  purpose.
Furthermore,  the  legitimacy,  effectiveness  and  credibility  of  the  Community  depend  on
preserving, even reinforcing the unity and integrity of the Community executive function and
ensuring that it continues to be vested in the chief  of the Commission, if the latter is to have
the  required  responsibility  vis-à-vis  Europe's  citizens,  the  Member  States  and  the  other
institutions.

It  is  essential  to  keep  this  requirement  in  mind  when  considering  the  European  regulatory
agencies. By virtue of their nature and the tasks assigned to them, these agencies share in the
executive function at Community level. Their participation must be organised in a way which
is  consistent  and  in  balance  with  the  unity  and  integrity  of  the  executive  function  and  the
Commission's ensuing responsibilities.

To this end, the Commission would like to begin work with the European Parliament and the
Council on defining the framework criteria for recourse to the agencies in question in the light
of this fundamental requirement and the considerations set out below.

1. 

CONCEPT – REGULATORY AGENCY

Within  the  European  Union's  legal  system,  there  are  various  decentralised  organisations
which  can  be  grouped  together  under  the  general  umbrella  of  European  agencies.  These

1

2

COM (2001) 428, 25.07.2001.
COM (2002) 275, 05.06.2002.

2

                                                
include  15  agencies  created  under  the  EC  Treaty3,  one  under  the  Euratom  Treaty4  and  four
under  the  second  and  third  pillars  of  the  European  Union5.  Two  proposals  for  regulations
creating further agencies are currently pending6.

These  agencies  have  certain  formal  characteristics  in  common:  they  were  created  by
regulation in order to perform tasks clearly specified in their constituent Acts, all have legal
personality and all have a certain degree of organisational and financial autonomy.

However, their differences – in terms of internal structure, their relations with the institutions,
responsibilities and powers - far outweigh their similarities. These differences arise from the
fact that the agencies were created at different points in the past to meet specific requirements
identified at the time. In other words, there is no single model for a European agency; there
are several.

In view of these great differences, some specialists have suggested that existing agencies be
classified by various criteria, such as the institutional and legislative  frame of reference, the
tasks  they  have  been  delegated  and  the  executive  powers  they  have  been  given,  etc.  Each
classification envisaged is made up of several categories of agencies.

More pragmatic discussions conducted by the Commission have identified the profiles of two
types of agencies: executive and regulatory ones.

Executive agencies are responsible for purely managerial tasks, i.e. assisting the Commission
in  implementing  the  Community’s  financial  support  programmes  and  are  subject  to  strict
supervision by it. The Commission has presented a proposal for a regulation to establish their
general status in order to make it easier to set up an agency of this type whenever it is deemed
to  be  suitable  for  implementing  a  specific  programme.  This  proposal  for  a  framework
regulation is already at an advanced stage of examination by the Council after having elicited
a favourable opinion from the European Parliament.

3

4

5

6

European  Centre  for  the  Development  of  Vocational  Training  (Regulation  (EEC)  No  337/73  of
10.02.75); European Foundation  for the Improvement  of  Living  and  Working  Conditions  (Regulation
(EEC)  No  1365/75  of  26.05.75);  European  Environment  Agency  (Regulation  (EEC)  No  1210/90  of
07.05.90);  European  Training  Foundation  (Regulation  (EEC)  No  1360/90  of  07.05.90);  European
Monitoring Centre for Drugs and Drug Addiction (Regulation (EEC) No 302/93 of 08.02.93); European
Agency for the Evaluation of Medicinal Products (Regulation (EEC) 2309/93 of 22.07.93); Office for
Harmonisation in the Internal Market (Regulation  (EC)  No  40/94  of  20.12.93);  European  Agency  for
Safety and Health at Work (Regulation (EC) No 2062/94 of 18.07.94); Community Plant Variety Office
(Regulation  (EC)  No  2100/94  of  27.07.94);  Translation  Centre  for  bodies  of  the  European  Union
(Regulation (EC) No 2965/94  of  28.11.94); European  Monitoring  Centre  on  Racism  and  Xenophobia
(Regulation (EC) No 1035/97 of 02.06.97); European Agency for Reconstruction (Regulation (EC) No
2454/1999 of 15.11.99); European Food Safety Authority (Regulation (EC) No 178/2002 of 28.01.02);
European  Maritime  Safety  Agency  (Regulation  (EC)  No  1406/2002  of  27.06.02);  European  Aviation
Safety Agency (Regulation (EC) No 1592/2002 of 15.07.02).
Euratom  Supply  Agency,  Article  52  ff  of  the  Euratom  Treaty  (see  also  the  Statutes  of  the  Agency,
published in OJEC No 534, 06.12.58).
European Union Institute for Security Studies (Joint Action of 20.07.2001, OJEC No L 200, 25.07.01);
European  Union  Satellite  Centre  (Joint  Action  of  20.07.2001,  OJEC  No  L  200,  25.07.01).  European
Police  Office-Europol  (Convention  of  26.07.95,  OJEC  No  C  316,  27.11.95);  Eurojust  (Decision  of
28.02.02, OJEC No L 63, 06.03.02).
Proposal for a Council Regulation laying down the statute for executive agencies to be entrusted with
certain  tasks  in  the  management  of  Community  programmes,  COM  (2000)  788,  December  2000;
proposal for a Regulation establishing a European Railway Agency, COM (2002) 23, 23.01.2002.

3

                                                
By contrast, regulatory agencies are required to be actively involved in the executive function
by  enacting  instruments  which  help  to  regulate  a  specific  sector.  The  majority  of  them  are
intended to make such regulation more consistent and effective by combining and networking
at  Community  level  activities  which  are  initially  a  matter  for  the  Member  States.  They  are
examined in detail in the White Paper on European Governance.

It  should  be  stressed  that  some  of  the  existing  agencies  in  the  Union  —  that  also  play  an
important part in the European system — do not fall into either of the above categories.

The  concept  of  European  Regulatory  Agency  designates  agencies  required  to  be
actively involved in exercising the executive function by enacting instruments which
contribute to regulating a specific sector.

2. 

REASONS FOR THE FRAMEWORK

The White Paper on European Governance proposes setting out a framework of conditions for
the use of agencies, focusing on the regulatory agencies under the EC Treaty.

There are many factors in favour of this proposal.

Firstly, it is not possible to draw up a single framework covering all the prospective agencies,
in  view  of  the  major  differences  between  them.  Nor  is  there  any  point  in  devising  several
different frameworks for the various categories of agencies. It is best therefore to concentrate
on the above two types of agencies which are likely to play an important part at Community
level in the immediate future in coping with the shortcomings the system is known to have.
As  mentioned  above,  a  proposal  for  a  regulation  has  accordingly  been  presented  for  the
executive agencies but nothing of this nature is in the pipeline for the regulatory agencies as
yet.

Secondly, the conditions for the creation, operation and supervision of the regulatory agencies
need to be more coherent and transparent than they are at present. At the moment, even within
this  fairly  restricted  category,  there  are  differences  in  the  internal  structures,  such  as  the
composition  and  method  of  appointing  the  governing  bodies;  in  their  relations  with  the
institutions,  for  example  the  role  played  by  the  Commission;  and,  especially,  in  their
responsibilities  and  powers.  In  the  case  of  the  latter,  looking  only  at  the  existing  agencies
under the EC Treaty, a distinction can be made between:

– 

– 

– 

those whose function is primarily to provide assistance in the form of opinions
and recommendations, which provide the technical and scientific basis for the
Commission's decisions (cf. European Agency for the Evaluation of Medicinal
Products and the European Food Safety Authority);

those primarily providing assistance in the form of inspection reports, intended
to  enable  the  Commission  to  meet  its  responsibilities  as  "guardian"  of
Community law (cf. the European Maritime Safety Agency);

those  empowered  to  adopt  individual  decisions  which  are  legally  binding  on
third parties (cf. Office for Harmonisation in the Internal Market, Community
Plant Variety Office and the European Aviation Safety Agency).

4

Thirdly, criteria should be defined once and  for all which guarantee  greater effectiveness of
the agencies' activities while ensuring that the agencies themselves fit in fully with the general
scheme of the Treaty and its fundamental principles.

In other words, an appropriate framework will make for a coherent approach to creating future
regulatory  agencies,  by  providing  for  an  internal  organisation  which  is  up  to  the  tasks  the
agency  will  be  called  upon  to  perform.  It  will  also  facilitate  the  decision-making  process
involved in the creation of each individual agency, by guaranteeing that its sound organisation
and operation are not prejudiced by tactical considerations connected with particular sectors
or  interests.  And,  finally,  use  of  agencies  as  an  executive  instrument  will  be  governed  by
greater transparency vis-à-vis Europe's citizens.

With regard to the above, it should be stressed that the framework in question is not intended
to apply directly to agencies which do not come under the heading of regulatory agencies or
any agencies which might be set up outwith the institutional framework of the EC Treaty.

3. 

BASIS OF THE OPERATING FRAMEWORK

Although, generally speaking, executive responsibility for Community policies is delegated to
the  Member  States  and  their  internal  administrative  bodies,  in  certain  cases  the  Treaties  or
Community legislative acts require executive tasks to be implemented centrally at European
level to ensure coherence and proper functioning of the policies concerned or to maintain fair
competition, in order to increase confidence among the operators concerned and the public in
general.

In  such  cases,  it  is  up  to  the  Commission,  as  the  institution  normally  responsible  for  the
executive function, to ensure that these tasks are accomplished correctly and effectively. This
does not necessarily mean, however, that it must always act alone, particularly in view of its
limited  resources,  the  upcoming  enlargement  and  the  future  reforms  of  the  Union's
institutional system.

In certain cases, therefore, the Community legislator may consider it better to delegate certain
clearly defined tasks to European regulatory agencies with the competence needed to achieve
the aims pursued by the legislation in question. In particular, this would make the executive
more  effective  at  European  level  in  highly  specialised  technical  areas  requiring  advanced
expertise and continuity, credibility and visibility of public action.

Clearly,  these  agencies  fulfil  a  very  important  public  service  function.  Their  structure  must
permit  them  to  perform  that  function  correctly.  It  is  particularly  important  that  they  should
have genuine autonomy in their internal organisation and functioning if their contribution is to
be effective and credible. The independence of their technical and/or scientific assessments is,
in  fact,  their  real  raison  d’être.  The  main  advantage  of  using  the  agencies  is  that  their
decisions are based on purely technical evaluations of very high quality and are not influenced
by political or contingent considerations.

Given  this  autonomy,  the  regulatory  agencies  must  also  be  accountable  to  the  institutions,
operators  concerned  and  more  generally  the  public.  This  also  means  that  the  agencies’
activities  need  to  be  fully  transparent  so  that  the  various  players  concerned  can  effectively
monitor their operations.

However, as stated in the introduction, use of the regulatory agencies must be in accordance
with the basic principles on which the system of the Union is founded. This means respecting

5

the  balance  of  powers  between  the  institutions  under  the  Community  method.  In  particular,
the unity and integrity of the executive function at European level must be preserved, as must
the  Commission's  capacity  to  assume  responsibility  for  the  satisfactory  general  exercise  of
that function. This affects the scope of the responsibilities and powers which can be delegated
to the regulatory agencies, and the relations between these agencies and the Commission.

Whether  a  regulatory  agency  should  be  used  in  a  specific  case  will  always  be  up  the
legislator, on the Commission’s initiative, to decide, via the adoption of a specific legislative
instrument governing the organisation and functioning of the agency and its relations with the
institution and with the operators concerned.

Nevertheless,  for  the  reasons  given  above,  it  is  essential  for  the  European  Parliament,  the
Council and the Commission — as their respective roles in the legislative process demand —
to  commit  themselves  to  respecting  certain  criteria  and  conditions  when  creating  individual
new regulatory agencies, in order to contribute to improving the European Union's system of
governance. The framework conditions for the use of regulatory agencies will be defined with
these considerations in mind, via an appropriate legal instrument.

The Commission must ensure that the unity and integrity of the executive function at
Community level is safeguarded.

For  certain,  clearly  specified  tasks,  legislative  provision  may  be  made  for  the
regulatory agencies to participate in exercising this executive function.

In  discharging  their  public  service  responsibilities,  the  agencies  must  have  a  certain
degree of organisational and functional  autonomy  and be  accountable  for the action
they take. Their activities must be transparent.

The  agencies'  role  and  activities  must  form  a  coherent  part  of  the  Community's
institutional system. Their autonomy must be compatible with the unity and integrity
of the executive function, to ensure that the Commission is able to assume its general
overall responsibility.

4. 

CONTENT OF THE FRAMEWORK

The criteria governing the regulatory agencies must be based, on the one hand, on the need to
foster  their  independence,  competence  and  credibility  whilst  ensuring  that  they  are
accountable  and  transparent;  and,  on  the  other,  on  the  need  to  reconcile  this  with  the
Commission's overall responsibility, which must include the possibility of intervention by the
latter in the event of serious dysfunction which could prejudice the integrity of the European
executive function.

The various elements to be incorporated into this framework are set out below. Many of the
observations are based on experience with the current regulatory agencies.

4.1. 

Creation of the agencies

Legislative act — As emphasised above, the creation of individual regulatory agencies must
be at the explicit choice of the legislator, whose responsibility it is to determine the conditions
for implementation at European level of certain specific instruments.

6

Legal basis — Since the regulatory agency is an instrument of implementation of  a specific
Community  policy,  it  follows  that  the  legal  instrument  creating  it  must  be  based  on  the
provision of the Treaty which constitutes the specific legal basis for that policy. This was the
approach  adopted  when  creating  the  most  recent  regulatory  agencies  in  the  fields  of  food
safety  and  transport,  which  represented  a  break  with  the  previous  system  of  automatically
using Article 308 of the  EC Treaty as the  legal basis. Of course, in  the  current  institutional
framework,  when  the  legal  basis  for  a  specific  action  is  Article  308  itself,  the  instrument
setting up the agency must also be based on this provision7.

Legal personality — Each  regulatory agency must have legal personality  as  is currently the
case  with  all  the  existing  agencies.  This  both  strengthens  the  agencies'  independence  and
gives them a higher profile in the Community legal system.

Location — The constituent Acts of most of the existing agencies did not make any specific
provision concerning the location of their headquarters. In these cases, the decision was taken
by  the  Heads  of  State  and  Government,  applying  by  analogy  Article  289  of  the  EC  Treaty
concerning the seat of the institutions of the Community.

This practice is not without its disadvantages, as illustrated by the failure to reach a decision
on the headquarters of certain agencies at the Laeken European Council in December 2001. It
has also caused certain administrative and practical problems, particularly at the delicate start-
up  stage  of  the  agencies'  activities:  problem  of  selecting  a  provisional  location,  problem  of
recruiting staff when the final location of the headquarters is not known, additional cost and
practical difficulties in switching activities to the definitive location.

Given these problems and the fact that, in the final analysis, determining the seat of an agency
is part and parcel of  its  creation,  it  would  seem  reasonable  to  include  such  provision  in  the
instrument establishing each agency.

Each  regulatory  agency  must  be  created  by  a  specific  legislative  instrument,  on  a
proposal from the Commission.

The  legal  basis  for  that  instrument  shall  be  the  provision  of  the  EC  Treaty  which
constitutes the specific legal basis for the policy the agency in question will be called
upon to implement.

Each agency must have legal personality.

The seat of each agency must be specified in the instrument of establishment.

4.2. 

Functioning of the agencies

Powers — Experience has shown that, within the category of European regulatory agencies,
their responsibilities and powers can differ8.

Generally speaking, these agencies may be given tasks which involve only assistance, such as
drawing up opinions  or  studies  so  that  the  Commission  can  prepare  legislative  proposals  or
take  specific  decisions,  carrying  out  or  coordinating  checks  and  inspections  at  certain
operators so that the Commission can fulfil its role as the “guardian” of Community law, and

7

8

See examples of regulations on Community industrial property rights.
See examples of the existing Community agencies given in section II above.

7

                                                
any  other  tasks  to  assist  the  institutions  which  may  be  necessary  to  carry  forward  various
Community  policies.  Such  assistance  may  also  involve  external  aspects  of  certain  policies,
whereby these agencies take part in international  cooperation  activities  without  encroaching
on the Commission’s exclusive responsibility in that area.

Under  certain  conditions,  granting  regulatory  agencies  their  own  decision-making  powers
might  also  be  envisaged.  However,  it  is  essential  to  stress  that  the  principles  governing  the
current  Community  legal  order  impose  constraints  on  the  scope  of  such  powers.  These
agencies may, for example, be empowered to adopt individual decisions in a clearly specified
area  of  Community  legislation  but  not  legislative  measures  of  general  application,  although
their decision-making practices might result in codifying certain standards9.

In practice, each regulatory agency would normally be responsible for a variety of tasks which
means that any classification based on them would tend to be artificial.  For the  purposes of
the framework in question, a distinction can be made between the decision-making agencies,
i.e.  those  empowered,  inter  alia,  to  enact  legal  instruments  binding  on  third  parties,  and
executive  agencies,  i.e.  those  which  have  no  independent  power  of  decision  vis-à-vis  third
parties but perform all other regulatory tasks, including the organisation and coordination of
activities  which,  in  part,  fall  within  the  remit  of  national  authorities  in  order  to  enable  the
Commission to discharge its duties.

In view of this distinction, it may be appropriate to provide for operating and control criteria
specific to each of these two types.

Scope – As stated above, particularly appropriate areas for intervention by regulatory agencies
are  those  of  high  technical  specialisation  which,  on  the  one  hand,  require  specialised  skills
and expertise  which are not available  in  an  administration  like  the  Commission  and,  on  the
other,  must  allow  the  agencies  the  margin  of  autonomy  needed  for  their  technical  and
scientific appraisals.

In view of considerations in connection with both the purely technical nature of the agencies
and, more generally, the principles on which the Community legal order is based, the White
Paper on  European  Governance  placed  further  restrictions  on  the  decision-making  agencies'
scope  for  action,  authorising  them  to  intervene  only  in  areas  where  a  single  public  interest
predominates and in areas where the agencies are not called upon to arbitrate on conflicting
public interests, exercise any powers of political appraisal or conduct any complex economic
assessments.  Neither  can  they  be  delegated  responsibilities  for  which  the  EC  Treaty  has
conferred  direct  power  of  decision  on  the  Commission  (for  example  in  the  field  of
competition or,  mutatis  mutandis, in infringement proceedings under  Articles  226  to  228  of
the EC Treaty).

Administrative board – The regulatory agency's administrative board must have responsibility
for defining the agency's general operating guidelines within the legal framework established
by  the  legislator  and  the  regulatory  measures  adopted  by  the  Commission.  In  particular,  it
should be responsible for adopting the agency's work programme and rules of procedure, and
play a central role in the adoption of its budget. In the case of the executive agencies, given
that  the  Commission  must  have  a  guarantee  that  the  work  programme  will  enable  it  to
discharge  its  own  responsibilities  correctly,  these  procedures  must  be  subject  to  the
Commission’s prior agreement.

9

See the tasks attributed to the European Agency for Aviation Safety.

8

                                                
The administrative board must also deal with the agency's internal administrative matters; for
example,  it  must  be  involved  in  the  appointment  of  the  Director  and  the  members  of  the
agency's other bodies.

The  existing  agencies  have  taken  differing  approaches  to  the  composition  of  the
administrative board10, but their experience is not necessarily of value where it is a question
of preserving the unity and integrity of the executive function at European level, essentially
because they fail to take sufficient account of the Community dimension. This consideration,
and the need for the agencies to function effectively with the upcoming enlargement, argues
in favour of a smaller administrative board which reflects the executive at Community level,
while  taking  account  of  the  expertise  of  the  Member  State  executives.  It  would  also  be  of
benefit  to  include  representatives  of  the  interested  parties,  so  that  the  views  of  both  the
economic players in the sector in question and the persons affected by the agency's activities
could be taken into account, provided that this does not give rise to any conflicts of interest
and is not likely to undermine proper management of the agency. This would ensure greater
transparency and might enhance public confidence.

On  this  basis,  a  15-member  administrative  board  could  be  envisaged,  including  six
representatives  appointed  by  the  Commission  and  six  by  the  Council  —  representing  the
national executives — and three, with no voting rights, representing the interested parties.

Appointment  of  members  by  the  European  Parliament,  on  the  other  hand,  would  seem
inappropriate  in  view  of  the  nature  of  the  regulatory  agencies’  work  and  the  fact  that  the
Parliament must be free to exercise external political supervision over their activities, without
feeling tied by its membership of the administrative board.

Director  –  The  Director  must  have  overall  charge  of  the  agencies’  operational  tasks  and  is
hence  responsible  for  adopting  individual  decisions  in  the  case  of  the  decision-making
agencies  and,  depending  on  the  legal  framework,  preparing  or  organising  opinions,  studies
and other contributions in the case of the executive agencies.

The  Director  would  have  to  be  given  technical  and  scientific  assistance  to  discharge  these
responsibilities.  In  certain  cases  he  would  be  assisted  by  the  agency’s  staff  and  in  others  it
would be necessary to  provide  for specific advisory  bodies set up within  the  agency, which
might take the form of a restricted executive board and an advisory committee. The advisory
committee would be made up of independent experts appointed by the administrative board in
accordance with predetermined and transparent criteria and would be responsible for drawing
up technical and scientific opinions within a legal framework which would duly safeguard its
powers  of  independent  judgement.  The  restricted  executive  board  would  be  made  up  of  the
chairman of the Advisory Committee and several senior officials of the agency and would be
responsible  for  giving  the  director  an  opinion  in  specific  cases,  such  as  on  highly  sensitive
subjects or if major differences of opinions arose in the Advisory Committee.

The  Director  must  also  be  responsible  for  preparing  discussions  within  the  administrative
board and for representing the  agency.  In the latter  role, it is up to him to maintain suitable

10

While,  in  most  cases,  the  administrative  board  is  composed  of  one  (or  two)  representative(s)  of  each
Member State and of the Commission, some include members appointed by the European Parliament or
the social partners. The administrative board of the European Food Safety Authority is a special case,
being  composed  of  one  Commission  representative  and  14  members  appointed  by  the  Council,  in
consultation with the Parliament, on the basis of a list drawn up by the Commission, four of whom must
have experience of working within consumer organisations and other operators concerned.

9

                                                
relations  with  the  bodies  that  the  agency  has  dealings  with  and  especially  the  Community
institutions.

The procedure for appointment/dismissal of the Director should differ according to the type of
agency.  In  the  case  of  the  executive  agencies,  appointment  should  be  by  the  administrative
board on the basis of a list of candidates put forward by the Commission.  For the  decision-
making  agencies,  however,  appointment  —  and  dismissal,  if  necessary,  on  the  basis  of  a
transparent procedure specifying the grounds — should be by the Commission on the basis of
a  list  of  candidates  put  forward  by  the  administrative  board.  Making  the  Commission  the
appointing  authority  in  the  latter  case  —  which,  to  an  extent,  marks  a  departure  from  the
existing  situation11  —  is  necessary  if  it  is  to  assume  its  responsibility  for  the  executive
function at European level effectively while respecting the autonomy of the decision-making
agency. The agency Director would thereby retain the entire margin of discretion in decision-
making  recognised  under  the  applicable  legislative  and  regulatory  framework.  He  must,
however, as a general principle, be capable of gaining and maintaining the confidence of the
administrative board and, especially, of the Commission, as the authority ultimately in charge
of implementation.

At all events, in order to consolidate the agency’s authority, it is appropriate to make formal
appointment  of  candidates  for  the  post  of  Director  dependent  on  a  hearing  before  the
European Parliament.

Boards  of  appeal  –  Provision  should  be  made  in  decision-making  agencies'  internal
organisation  for  boards  of  appeal  to  deal  with  any  complaints  by  third  parties  arising  from
decisions they adopt, as is already the case with the Office for Harmonisation in the Internal
Market,  the  Community  Plant  Variety  Office  and  the  European  Aviation  Safety  Agency.
These  appeal  boards  would  act  as  an  initial  internal  control,  independent  of  the  decisions
taken by the agency director, prior to any referral to the Court of First Instance.

The specific rules governing the composition and procedure of these boards should be defined
by  the  legislator,  and  possibly  supplemented  by  implementing  measures  adopted  by  the
Commission.  The  basic  requirement  is  that  they  can  make  an  independent  judgement.  The
criteria for selection and appointment of their members must ensure that this requirement is
met.

Financial  and budgetary  aspects –  The  new  Community  Financial  Regulation  applicable  to
the European Communities' general budget12 provides for specific rules applying to agencies.
Specifically, Article 185 of the Regulation contains provisions which are directly applicable
to discharge of the agencies' budgets, their audits and their accounting rules. The Article also
requires  the  Commission  to  adopt  a  framework  Financial  Regulation  which,  in  principle,
applies to all the Community agencies that receive subsidies from the European Communities'
budget. Obviously, the provisions contained in these texts must be taken into account in the
framework in question; in particular, financial regulation of a regulatory agency must comply
with the above framework Regulation unless the specific requirements of this agency dictate
otherwise and the Commission has given prior approval.

11

12

The  Director  is  appointed  by  the  Commission  only  at  the  European  Centre  for  the  Development  of
Vocational  Training  and  the  European  Foundation  for  the  Improvement  of  Living  and  Working
Conditions,  both  created  in  1975,  which  cannot  be  considered  as  regulatory  agencies  in  the  sense
described above.
Regulation (EC, EURATOM) No 1605/2002 of 25.6.02.

10

                                                
Furthermore,  it  is  particularly  important  to  provide  for  a  straightforward  procedure  for
drawing  up  the  regulatory  agencies'  budgets,  according  to  which  the  Director  prepares  the
draft budget, which is then examined and approved by the administrative board, after ensuring
that it has the Commission's approval, in the light of the decisions taken in connection with
the Communities' general budget. Discharge must be given by the European Parliament at the
Council’s recommendation.

Concerning  the  agencies'  revenue,  the  –  at  least  partial  –  subsidy  element  from  the  general
budget  should  be  generalised  in  view  of  the  importance  of  the  regulatory  agencies'  public
service  mission.  Self-financing  of  agencies,  through  fees  paid  for  services  rendered  to  the
operators  concerned,  would  also  be  justified,  following  the  example  of  some  existing
regulatory  agencies.  However,  to  ensure  that  they  remain  impartial  and  are  not  unduly
influenced by operators, mechanisms are needed to keep the agencies financially independent
of such revenue. Finally, in certain cases, contributions from the Member States might also be
envisaged.

Other  administrative  aspects  –  The  EC  Treaty  and  certain  acts  of  secondary  legislation
impose  a  number  of  obligations  on  the  institutions,  which  generally  relate  to  principles  of
sound administration. These include, for example, principles in respect of operators’ right to
be heard and to present counter-arguments prior to the adoption of any decisions detrimental
to their interests, the obligation to justify instruments, provisions on transparency and access
to documents, rules on personal data protection and business confidentiality, on protection of
the  Community's  financial  interests,  on  combating  fraud,  corruption  and  any  other  illegal
activity which is harmful to the interests of the Community.

Given  that  the  regulatory  agencies  participate  actively  in  the  executive  function,  the  public
and the Member States can legitimately expect them to be equally subject to the Community's
principles  and  rules  on  sound  administration,  including  those  on  the  use  of  languages.
Provision  is  therefore  needed  imposing  similar  obligations  on  these  agencies  relating  to  all
their activities.

For  the  purposes  of  this  framework,  the  regulatory  agencies  can  be  divided  into
decision-making  agencies  empowered,  inter  alia,  to  enact  instruments  binding  on
third  parties,  and  executive  agencies  responsible  for  performing  various  executive
tasks  to  assist  the  Commission  in  the  discharge  of  its  responsibilities  but  without
any real decision-making powers.

The  decision-making  agencies  may  adopt  individual  decisions  but  not  legislative
measures of general application.

The  use  of  regulatory  agencies  is  appropriate  in  areas  of  high  technical
specialisation.

Use of decision-making agencies is restricted to areas where a single public interest
predominates  and  where  they  do  not  have  to  arbitrate  on  conflicting  public
interests,  exercise  powers  of  political  judgement  or  make  complex  economic
assessments.  These  agencies  may  not  be  granted  responsibilities  for  which  the  EC
Treaty confers decision-making power directly on the Commission.

The  agency's  administrative  board  should  be  responsible  for  defining  its  general
operating guidelines (work programme, rules of procedure, budget, appointment of
the Director  and  the  members  of  the  agency’s  other  bodies).  Its  composition  must

11

reflect  the  agency's  position  in  the  Community  executive,  while  taking  account  of
the expertise  of the  national  executives  and,  under  certain  conditions,  the  point  of
view of interested parties.

The  agency's  Director  should  have  responsibility  for  operational  tasks  (adopting
individual  decisions,  preparing  opinions  and  studies,  representing  the  agency  and
relations  with  Community  institutions).  In  discharging  his  duties,  he  may  be
assisted, as appropriate, by agency staff, a restricted executive board or an advisory
committee, which may be  required to prepare independent technical and scientific
opinions.

Appointment  of  the  Director  should  be  by  the  administrative  board  or  by  the
Commission,  as  appropriate.  To  reinforce  the  agency's  authority,  the  European
Parliament should be involved in the appointment procedure.

The internal organisation of the decision-making agencies should include boards of
appeal to provide an initial internal control  function while  remaining  independent
of decisions.

Article 185  of  the  new  general  Financial  Regulation  contains  provisions  directly
applicable  to  the  agencies'  financial  and  budgetary  aspects.  The  framework
Financial Regulation for the agencies drafted by the Commission must also be taken
into account. Moreover, a straightforward procedure is needed for drawing up the
agency’s budget. This budget should be supplemented by a subsidy from the general
budget of the European Communities and, where appropriate, by revenue from fees
for services rendered to interested operators, whilst ensuring that the agencies are
not  unduly  dependent  on  such  revenue.  In  certain  cases,  contributions  from  the
Member States might be envisaged.

Certain principles and rules of sound administration (operators' rights to a hearing
and  to  present  counter-arguments,  obligation  to  justify  instruments,  access  to
documents,  protection  of  personal  data  and  business  confidentiality,  protection  of
the Communities' financial interests, combating fraud and corruption and language
rules) must be made applicable to the agencies.

4.3. 

Controls

As emphasised above, the autonomy conferred on the regulatory agencies also requires them
to  assume  clear  responsibilities.  It  is  therefore  essential  that  they  should  be  subject  to  an
appropriate control system.

Relations with the Commission – Firstly, for the reasons  given above, provision needs to be
made for special relations with the Commission.

Obviously, this is not a question of giving the Commission powers of legal supervision; i.e.
empowering  it  to  issue  instructions  to  the  regulatory  agencies  or  quash  or  oblige  them  to
withdraw certain individual decisions.

It is a question rather of establishing a coherent framework for relations which reconciles the
agencies'  autonomy  with  the  Commission's  ultimate  responsibility  within  the  Community
system. Reference has already been made to the role the Commission must have in appointing
the agency's Director; in adopting the work programme and the budget; and, indirectly, in the

12

other  affairs  of  the  agency's  administrative  board,  through  the  members  it  appoints.
Article 185 of the general Financial Regulation has already been mentioned, which provides
that audits of the agencies must be performed by the Commission’s internal auditor.

To this should be added, on the one hand, a mention of the Commission's obligation to act as
the “guardian” of Community law,  which  requires that it must  able to  take  action  to  ensure
that the agencies comply with the provisions under this law as regards, say, application of the
staff  regulations  of  Community  officials  to  agency  personnel.  On  the  other  hand,  the
Commission  must  be  able  to  take  steps  to  ensure  that  its  overall  responsibility  for
implementation of the European Communities' general budget, as laid down in Article 274 of
the EC Treaty, is not encroached upon by any action taken by the agencies.

Administrative  supervision  –  In  accordance  with  Article  43  of  the  Charter  of  Fundamental
Rights of the European Union, provision should be made subjecting the regulatory agency to
administrative  supervision  by  the  European  Ombudsman,  in  accordance  with  the  conditions
set out in Article 195 of the EC Treaty.

Political supervision – The European Parliament and the Council should have certain powers
of  political  supervision  over  the  regulatory  agencies.  There  could,  for  example,  be  a
requirement for hearings of the agency Directors by these institutions and for the agencies to
draw up regular reports on their own operation.

Financial supervision – Implementation of the regulatory agencies' budget must be subject to
control  initially  by  the  Court  of  Auditors,  pursuant  to  Article  248  of  the  EC  Treaty,  and
subsequently  by  the  European  Parliament  under  the  discharge  procedure  for  the  agency's
budget.

The  regulations  on  the  investigative  powers  of  the  European  Anti-Fraud  Office  (OLAF)
should also be made applicable, without restrictions, to these agencies.

Judicial supervision – Guarantees are needed ensuring that the regulatory agencies respect the
principles of the institutional system of which they  form a part,  and the specific  regulations
applicable to them. Provision must therefore be made for appeal by the Member States or the
institutions to the Court of Justice for confirmation of any breach of these principles and rules
by the agencies and annulment of any acts vitiated by such breaches.

More specifically, in the case of the decision-making agencies, compliance with the  general
legality principle includes the requirement to provide for appeal by interested third parties to
the Court of First Instance or, in the future, to a specialised tribunal, to request the annulment
of  decisions  taken  by  the  agency  –  possibly  reviewed  by  the  internal  boards  of  appeal  –  in
respect of those third parties, or for a declaration of failure to act, in the event of unjustified
absence of a decision.

Finally, the regulatory agencies must assume legal responsibility for acts attributable to them.
Consequently, provision must be made for compensation by them for any damages caused by
such acts, where appropriate after judicial confirmation of their liability.

To  ensure  that  the  activities  of  the  regulatory  agencies  are  consistent  with  the
Community  executive  function,  provision  must  be  made  for  special  relations
between  them  and  the  Commission:  in  addition  to  the  existing  proposals  (direct
participation in the appointment of the Director and in the adoption of certain acts
of  major  importance,  participation  on  the  administrative  board,  performance  of

13

audits), provision must be made ensuring that the Commission can exercise its role
as the guardian of Community law and its overall responsibility for implementation
of the Community budget.

The  agencies  should  be  subject  to  the  administrative  supervision  of  the  European
Ombudsman.

They should be subject to political supervision by the European Parliament and the
Council (hearings of the Director, activity reports).

They should  also be subject  to financial  supervision  by  the  Court  of Auditors  and
the  European  Parliament.  The  regulations  on  the  investigative  powers  of  OLAF
must be made applicable to the agencies without restrictions.

Any binding acts adopted by the agencies must be subject to judicial supervision, by
providing for the Member States, the institutions and the third parties concerned to
appeal for annulment. The latter must also  be able to bring a  failure  to  act  action
against  the  agencies,  and  action  for  damages  arising  from  acts  attributable  to  the
agencies.

14