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: EU agencies’ contribution to the exercise of sanctioning power: current and future challenges

The huge ambiguity that still embraces EU agencies when it comes to the limits to their powers, functions, independence and, above all, their mission within the already well crowded and even more fragmented EU executive clearly has an impact also on EU agencies’ sanctioning powers. Even though some common features can be highlighted, those powers are currently exercised according to different procedures, depending on the sector involved; they are often shared with several other European or national actors, even within the same policy field; above all, after Short selling their legitimacy seems generally accepted, although this sometimes is a bare presumption.

Indeed, the evolution of EU agencies’ sanctioning powers has been occurring over the years fully in coherence with the general method according to which EU agencies have enhanced their powers: namely, on a case-by-case basis, through a silent erosion of the attributions of neighbouring authorities (European or national), only in those sectors where it was possible and needed, without any previous, general, institutional project. Such a trend is not per se negative: as already discussed above, the rise of agencies in exercising sanctioning powers has enabled to push the process of European integration forward even with regards to highly-sensitive policy fields, such as the banking and financial sectors in the troubled times between 2008 and nowadays. Moreover, even their support to established authorities as the Commission goes not always to the detriment of the latter’s prerogatives. For instance, when EU agencies bear only powers to propose sanctions, as EMA in the case of the revocation of market authorizations, they act as bodies who build consensus among the Member States or, if no unanimity is reached, who pave the way for a Europeanization of sanctions through the intervention of the Commission.

Against this framework, legal scholars and political scientists have often called for a treaty reform to fully recognise EU agencies. While this request obviously seems fully embraceable, one may wonder whether, before that, it might be worthwhile to open a real debate on EU agencies’ role and functions within the EU institutional landscape. Several unsuccessful attempts had been made in the past,[1] but the time might be ripe again for a new try. Indeed, the recognised status that nowadays EU agencies enjoy calls for committing these bodies to a reasoned evolution, and not to a trend imposed by contingencies.

Currently, it is actually quite hard to identify the driving forces according to which agencies are empowered with sanctioning powers. By way of a final assessment on the phenomenon under scrutiny, four elements could nevertheless be highlighted.

First, it is undeniable that this is a favourable timeframe. The Short selling case has certainly given new impetus to the possibility to enhance the agencies’ role in this regard. Indeed, the two most powerful sanctioning agencies (ESMA and SRB) are among the most recent ones and clearly owe their powers also to the Short selling judgment. However, it also holds true that ELA, which has been created only recently and well after the judicial legitimation just mentioned, has been endowed with mainly monitoring and inspective powers.

This is because a far more striking factor should instead be identified in the policy field: ESMA and SRB operates in the banking and financial sector, where powerful regulators have long been operating at the national level and which clearly needed, after the financial crisis, more stringent and cross-border control. Other important examples of EU agencies exercising sanctioning powers (albeit only to propose the imposition of fees) can be seen, as discussed above, in the fields of energy, electronic communication, transports: therefore, policy fields that are quite used to being regulated, also at a national level, through independent authorities.

These latter examples introduce the last two elements that should be taken into account for assessing the key factors that currently shape EU agencies’ involvement in sanctioning: national sovereignty and European interest.

Counterintuitively, the policy fields that are the closest to national interests are not always those where EU agencies are less likely to be endowed with sanctioning powers: the rise of agencies’ sanctions in financial fields clearly stands for the opposite conclusion.

Indeed, national sovereignty should always be matched with the interest of the Union: and in some circumstances the latter can be better protected through a common sanctioning framework managed by EU agencies. Here, again, the recent financial crisis is quite revealing. As pointed out by Chaînon, in the field of financial supervision, the Commission initially proposed to give ESMA only indirect sanctioning powers (with ESMA making monitoring and investigations and the Commission issuing fines).[2] The European Parliament rejected this approach, asking for (and obtaining) a more powerful EU technical regulator.' Conversely, in the field of energy the European Parliament tried to give similar sanctioning powers to ACER, and the Commission and the Council this time succeeded in opposing it and establishing a model of more indirect enforcement.

It is pretty clear that the threat to the EU financial stability and its impact on the EU political integration process have played a role in shaping a more powerful regulator in financial matters than in the field of energy, even though the former, over the recent years, has clearly been closest to the heart of national sovereignty. The special twist between national and European level that has been created with this agency has certainly played a role in reaching this outcome; ça va sans dire that for future agencies (or for further empowerment of existing ones) the balance between national and European interests may well be struck differently.

At the time being, therefore, the main role in shaping the agencies’ involvement in performing sanctioning functions still has to be devoted to political considerations, that may well vary from time to time and with regards to each specific dossier. Thus, assessing how EU agencies’ contribution to the ius puniendi might evolve over the next years seems a quite hard task. Indeed, even though EU agencies are often deemed as performing merely technical functions, the sanctioning powers recently attributed to them show the highly political implications tackled by these bodies in their day-to-day activity.

  • [1] See supra note 3. It bears noting that at a national level, agencification has often been anticipated by deep reflections on their role and functions: see, for a comparison, OCSE Report 'Public Administration after New Public Management’ (2010, Paris). 2 The relation between ESMA and Short selling is the closest possible, since this latter case deals exactly on the empowerment of the former; as for SRB, the powers of this agency have been shaped by the EU legislator exactly in view of what the Court stated in Short selling', see on this point M. Chamon, ‘The Empowerment of Agencies under the Meroni Doctrine and Article 114 TFEU: Comment on UK v Parliament and Council (Short-selling) and the Proposed Single Resolution Mechanism’, (2014) European Law Review 380. 3 "See the report of the High-Level Group (chaired by Mr J. de Larosière) on Financial Supervision in the EU published on 25 February 2009. 4 K. Verhoest (ed.), Government agencies: practices and lessons from 30 countries (2012, Palgrave).
  • [2] M. Chamon, supra, note 11, 38, footnote 222. 2 Ibidem, footnote 223. 3 9SM. Chamon, supra, note 11, 39, footnote 225-226.
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