The Biocides judgment: In search of a new chemistry for the principle of EU institutional balance
By Alberto Alemanno
Where to draw the line between delegated acts and implementing acts? That has been the one million dollar question since the entry into force of the Lisbon Treaty. But I did not dare to ask this important question at the final exams of my students a few weeks ago. Why not? Because nobody, not even their teacher (after having spent years of research on the subject), had a plausible answer. However, on 18 March 2014, the Court of Justice in Commission v Parliament and Council, made a first attempt to answer this question. So would I now consider including this question in my next exam? Probably not, because the Court’s answer in this eagerly awaited judgment turns out to be quite hermetic and largely incomplete. Moreover, unfortunately, also the Opinion of the Advocate General – despite its deep analysis and ambitious tenor – failed to provide the necessary clarification to this endless and unsolved conundrum. Having said that, let me provide a brief analysis of this judgment and measure its most immediate impact.
The facts of the case are so simple that they seem to make it the perfect case for providing a clear answer to our initial, big question.
In 2012, after some initial skirmishes during the negotiations, the European Parliament and the Council adopted Regulation 528/2012 governing the marketing and use of biocidal products in the EU. These are chemicals, such as insect repellents, disinfectants as well as industrial chemicals, like anti-fouling paints for ships and material preservatives, that because of their intrinsic properties can pose risks to humans, animals and the environment. As a result, according to the newly-adopted EU Regulation, these products cannot be brought on the market unless they are previously notified and evaluated by the European Chemical Agency (ECHA). Given the costs involved in that evaluation, the Regulation established that applicants must pay fees to the Agency to cover those costs. Article 80 of the Regulation conferred upon the Commission the power to adopt those fees via the adoption of an implementing measure based on Article 291(2) TFEU and not, as originally proposed by the Commission, by a delegated act under Article 290 TFEU.
The Commission contested this choice and sought as a result the annulment of Article 80(1) of the Regulation. In support of its action for annulment, the Commission claimed that the Regulation (hereinafter, ‘the basic act’) did not provide enough elements to guide its decision about the fee. Therefore, the Parliament and the Council were wrong in choosing an implementing measure (rather than a delegated act) in conferring authority to establish the fees.
In the post-Lisbon world, to determine whether the adoption of a particular act can occur through implementation (Article 291) or delegation (Article 290) of power matters considerably. While a delegated act is adopted by the Commission acting essentially alone, an implementing measure requires the Commission to act in conjunction with a committee of representatives of the Members States. This largely explains why the Commission was dissatisfied with the choice made by the Council and Parliament. The quarrel in the Biocides’ case should thus be considered as just one round ina permanent inter-institutional fight between the Commission, that prefers delegated acts, and the Council and the Parliament, that favour instead implementing measures. What is clearly at stake in this ‘war’ – fundamentally prompted by the lack of a clear demarcation line between these types of acts in the Treaty – is therefore the institutional balance of powers. Indeed, determining whether a particular normative activity, such as establishing a fee, should be carried out only pursuant to a delegation or an implementation, does not only define who does what and under which procedure, but also who enjoys which prerogatives in EU rulemaking. It is against this backdrop that one has to approach this judgment.
Called upon to judge whether the EU legislator made a correct choice of delegation authority, the Court proceeded as follows.
For a start, it notes that Article 291 does not provide a definition of ‘implementing act’ and suggests that, as a result, this should be determined in relation to the concept of a ‘delegated act’ as derived from Article 290. In the absence of a definition, the two concepts must be constructed together.
It then reminded us that before the Treaty of Lisbon the expression of ‘implementing powers’ in Article 202 EC covered both ‘the power to implement an EU legislative act or certain EU provisions and, also, in certain circumstances, the power to adopt normative acts which supplement or amend certain non-essential elements of a legislative acts’. This statement suggests that, a contrario, delegated acts do not create a new, additional ‘quasi-legislative’ power, contrary to what was argued by the Commission.
The Court then tackled the contrasting legal nature of delegated and implemented acts, by providing a very limited and rather ambiguous interpretative effort. It stated that, while the purpose of the power to adopt delegated acts is ‘to achieve the adoption of rules coming within the regulatory framework’ of the basic act, that of implementing measures is to provide further detail in relation to the content of a legislative act, in order to ensure that is it implemented under uniform conditions in all Member States’.
The two typologies of non-legislative acts would therefore emerge as mutually exclusive. However, given the discretion enjoyed by the EU legislator in determining whether to confer a delegated or an implementing power (para. 40), ‘judicial review is limited to manifest errors of assessment’. In particular, in scrutinizing the exercise of this choice, the Court’s review must focus ‘as to whether the EU legislator could reasonably have taken the view, first, that in order to be implemented, the legal framework which it laid down regarding the system of fees referred to in Article 80(1) of Regulation 528/2012 needs only the addition of further details without its non-essential elements having to be amended or supplemented and, secondly, that the provisions of the Regulation (…) relating to that system, require uniform conditions for implementation’.
On the basis of a rather detailed analysis of the extent of delegation contained in the basic act (paras 41-51), the Court concluded that the choice made by the EU legislator to confer an implementing power on the Commission under Article 291 could be considered ‘reasonable for the purposes of ensuring uniform conditions for the implementation of that system within the European Union’.
Therefore, while delegated and implementing acts are mutually exclusive categories of non-legislative acts, some ‘grey zone’ may persist between the two.
Contrary to some initial expectations, the judgment does not provide a definitive answer about how to distinguish between delegated and implementing acts. It rather focused on the most immediate issue faced by the Court in this particular case: which is the intensity of the judicial review that can be exercised upon the choice of the EU legislator when conferring powers on the Commission?
By tackling the case from this perspective, the Court addressed the issue of the appropriate demarcation line between delegated and implementing acts only indirectly. If the Commission suggested in its submissions that the ‘only decisive criterion’ to distinguish between the two ‘relates to the nature and purpose of the powers conferred on the Commission’, the Court rejected this reading. Instead, it advanced an alternative criterion: the degree of detail in the basic act. It is by applying this criterion to the present circumstances that the Court concluded that the legislator could reasonably take the view in favour of implementing over delegated power. But that is not all. The Court also indicated that the existence of some discretion left by the basic act to the Commission does not automatically rule out the possibility to validly confer upon it implementing powers, provided that the following two conditions are met: the basic act requires uniform conditions for implementation and the non-legislative act will be limited to the addition of further details. This is what has been aptly defined a ‘reasonableness’ test by Xavier Lewis from the EFTA Surveillance Authority in his newly-launched blog.
Therefore, while in principle only a well-framed power may lead to the use of implementing powers, there may be some variables which are not foreseen in the basic act and whose determination by the non-legislative act do not require the adoption of a delegated act. In other words, these ‘further details’ are not considered as ‘supplementing or amending’ the legislative act.
With this judgment, the Court seems to reverse the understanding put forward by the Commission in its 2009 Communication on delegated acts and here advanced in support of the action for annulment. Paradoxically, the Commission would enjoy more margin for manoeuvre under an implementing measure (‘by adding further details to the contents of the basic act’) than in a delegated act (‘by achieving the adoption of rules coming within the regulatory framework as defined by the basic act’). This seems prima facie counterintuitive to anyone who has become accustomed to the Commission’s proposed interpretation of delegated authority.
This judgment represents the very first, modest attempt to provide a workable dividing line between the two categories of non-legislative acts. Although not dramatic, its practical effects appear significant.
As of today, there seems to be only one instance in which the EU legislator has no choice but to opt for Article 290 (delegated act) when it comes to conferring powers upon the Commission: this is when a basic act must be formally amended (e.g. an annex is revised). In all other circumstances, the legislator is free to determine whether a particular power conferred on the Commission should be regarded as delegated or implementing. The Court will only scrutinize this choice in case of a manifest error of assessment.
This situation clearly provides a recipe for future inter-institutional wrangling. Legislative practices, such as the systematic removal of an annex or the inclusion of a duty to consult a committee, may be adopted with the sole purpose of transforming what would have a power to adopt delegated acts into a power to adopt implementing measures. This is exactly what has occurred in the recent Commission proposal aimed at adopting a common charger for mobile phones. Unfortunately, the College of Commissioners decided not to take action during the legislative process to defend their prerogatives in that case.
Given the high level of unpredictability surrounding the choice and use of the two categories of non-legislative acts, one may expect not only a cascade of future cases but also a lively inter-institutional debate as to how to better clarify when the legislator should confer delegated or implementing powers. Pending the TTIP negotiations, notably the horizontal chapter on regulatory coherence, fixing EU rulemaking should definitely be one of the priorities of the next political term.