EUROPEAN FREE TRADE ASSOCIATION 1 18 September 2019
Principle of homogeneity Internal market legislation should be implemented, interpreted and applied uniformly throughout the EEA Dynamic agreement New internal market legislation should be continuously incorporated into the EEA Agreement (Joint Committee Decision (JCD)) These two objectives require an institutional framework : To ensure a uniform application of EEA law throughout the EEA To allow for new internal market legislation to be continuously made part of EEA law EUROPEAN FREE TRADE ASSOCIATION 2 18 September 2019
> EEA Agreement establishes that this objective of homogeneity is to be achieved: > without the transfer of legislative powers to supranational institutions. > by separate and independent EU and EFTA pillars > This two-pillar structure was informed by: > Constitutional considerations by the EFTA States > EU’s wish to preserve the autonomy of its own institutions EUROPEAN FREE TRADE ASSOCIATION 3 18 September 2019
> Part VII of the EEA Agreement contains the institutional provisions of the Agreement > Chapter 1: Establishes the joint institutions of the Agreement (EEA Council, EEA Joint Committee, EEA Joint Parliamentary Committee and the EEA Consultative Committee). > Chapter 3: Provides that the EFTA States establish an independent surveilance authority and a court of justice > EFTA States regulate the competences and functions of the EFTA institutions in an agreement between themselves (SCA) > The EU and the EFTA sides supervise and control their internal matters separately – but the EEA provides for procedures to address possible conflicts arising out of conflicting decisions EUROPEAN FREE TRADE ASSOCIATION 4 18 September 2019 > .......
Two-pillar system: Acts are incorporated: Decisions by the EEA Joint Committee No transfer of legislative competence Separate system of surveillance and judicial control EUROPEAN FREE TRADE ASSOCIATION
> Maintaining homogeneity in a two-pillar system raises two types of issues: > The more general one: How to ensure that EEA law is implemented, interpreted and applied uniformly across the EEA. > The more specific one: When EU legislations grants certain tasks and competences to EU institutions, how should they be mirrored in the EFTA pillar? EUROPEAN FREE TRADE ASSOCIATION 6 18 September 2019
> In order to achieve homogeneity within the two-pillar system, specific tasks and competences that EU legislations grants to EU institutions must be entrusted to a counterpart in the EFTA pillar. > Who are these counterparts?: > The EFTA Surveillance Authority > The EFTA Standing Committee > National authorities > In some cases, the EEA Agreement may regulate how to address such issue (e.g. Protocol 1). > In other cases, an adaptation text to a JCD incorporating such acts may be needed EUROPEAN FREE TRADE ASSOCIATION 7 18 September 2019
> Regul gulatory atory agencies ncies and d bodies ies > Fines es or financ ncial al penal nalties ties > Surveillance acts vs regulatory acts > Market ets author thorisations ations > Recognitations of professional qualifications > Verfication and approval EUROPEAN FREE TRADE ASSOCIATION 8 18 September 2019
> Adaptations texts adapt the content of EU legal acts for the purposes of the EEA Agreement (e.g. add, amend, derogate) > Protocol 1 EEA – horizontal adaptations > Provides general adaptations that apply to all acts in the EEA Annexes, e.g. regarding the execution of certain functions of the Commission in the EFTA pillar > Sectoral adaptations > Apply to all acts within an annex, e.g. Annex XIV specifies that the term “Commission” shall be read as “competent competition authority” (as defined in Art. 56 EEA) > Specific adaptations > Provide ad hoc solutions to two-pillar challenges in specific legal acts > Part of the EEA Joint Committee Decision (JCD) EUROPEAN FREE TRADE ASSOCIATION 9 18 September 2019
> EEA Agreement does not provide for the competence to impose fines/penalties on undertakings for breaches of EEA law (except in the area of competition) > Consequently, a legal basis needs to be created in each specific case to assign such competence to a body in the EFTA pillar > National authorities > EFTA Surveillance Authority EUROPEAN FREE TRADE ASSOCIATION 10 18 September 2019
> Medicinal products > Original adaptation text to Art. 84 of Regulation (EC) No 726/2004 (JCD 61/2009): EUROPEAN FREE TRADE ASSOCIATION 11 18 September 2019
> Medicinal products > New adaptation text to Regulation (EC) No 726/2004 (JCD 92/2017): EUROPEAN FREE TRADE ASSOCIATION 12 18 September 2019
Protocol 1(4)(d) EEA: “Functions of the EC Commission in the context of procedures for verification or approval , information , notification or consultation and similar matters shall for the EFTA States be carried out according to procedures established among them […]” (emphasis added) In practice, covers many of the typical tasks of the Commission However, not always clear whether a task falls into the categories of Protocol 1(4)(d) EUROPEAN FREE TRADE ASSOCIATION 13 18 September 2019
Marketing authorisations for medicinal products Regulation (EC) No 726/2004 (JCD 61/2009) EUROPEAN FREE TRADE ASSOCIATION 14 18 September 2019
> “EU agencies are distinct bodies from the EU institutions – separate legal entities set up to perform specific tasks under EU law” (europa.eu) > Agencies not foreseen in the EEA Agreement > Constitutional challenges > Two-pillar system of EEA Agreement > Participation rights? > Cooperation mechanisms? > Dispute-settlement mechanisms? > Binding decisions? > Access to court? EUROPEAN FREE TRADE ASSOCIATION 15 17 September 2019
The European Financial Supervisory Authorities > European Banking Authority (EBA) [Regulation (EU) No 1093/2010] > European Insurance and Occupational Pensions Authority (EIOPA) [Regulation (EU) No 1094/2010] > European Securities and Markets Authority (ESMA) [Regulation (EU) No 1095/2010] > European Systemic Risk Board (ESRB) [Regulation (EU) No 1092/2010] EUROPEAN FREE TRADE ASSOCIATION
The European Financial Supervisory Authorities > EBA, EIOPA and ESMA together entrusted with improving the micro-prud prudent ential al supervis ervision on of financ ncial l institut tutions ns. > They have powers to adopt bindi ding ng deci cisions ons addressed sed at financi ncial al market t parti ticipants cipants and d nationa onal l compete petent nt author thorities ties. > Also direct ect super pervi vision on (in specific instruments, only specific categories of market participants, e.g. CRA, trade repositories, in future also securitisation repositories [STS]). > Also coordi dinatio nation n of supervis ervisory ry acti tiviti vities es of national authorities and involvement in development of regulatory framework. EUROPEAN FREE TRADE ASSOCIATION
The European Financial Supervisory Authorities > Specific two-pillar challenges: > Dilemma: ma: How to maintain the advantages of a centralised and harmonised supervision while safeguarding the two- pillar principle? > Soluti tion: n: The European financial supervisory authorities do the technical work, but the EFTA Surveillance Authority has the formal decision-making powers as regards the EFTA States, their authorities and their market participants. > However: «on the basis of drafts prepared by the agencies». EUROPEAN FREE TRADE ASSOCIATION
The European Financial Supervisory Authorities > Participation EUROPEAN FREE TRADE ASSOCIATION 19 17 September 2019
The European Financial Supervisory Authorities > Competence of the EFTA Surveillance Authority EUROPEAN FREE TRADE ASSOCIATION 20 18 September 2019
The European Financial Supervisory Authorities > Modalities for cooperation, dispute settlement EUROPEAN FREE TRADE ASSOCIATION 21 18 September 2019
For more information and practical examples, see EFTA Bulletin (June 2019), available at https://www.efta.int/sites/de fault/files/publications/bulleti ns/efta_bulletin_legal_notes. pdf EUROPEAN FREE TRADE ASSOCIATION 22 18 September 2019
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