MarIus

2.3.1 The EEA “legislator”

The aim of the EEA Agreement, according to Article 1 no. 1 EEA, is to create a homogeneous European Economic Area by promoting a continuous and balanced strengthening of trade and economic relations between the parties to the agreement, with equal conditions of competition, and respect for the same rules. Thus, a basic principle in the EEA Agreement is that it shall be dynamic, in the sense that it shall develop in step with changes in EU law that lie within the scope of the EEA Agreement, creating homogeneity between the law of the EU and that of the EEA, within the field of application of the EEA Agreement.

In order to facilitate homogeneity, the basic substantive provisions are placed in the main part of the EEA Agreement, and EU secondary legislation in the annexes. The EEA Joint Committee is vested with the power to amend both a number of the protocols to the EEA Agreement and all of the annexes, in order to make new EU secondary legislation a part of the EEA Agreement. The decisions of the EEA Joint Committee are made by unanimity between the EU on the one side, and the EFTA States, speaking with one voice, on the other.(1) Article 93 (2) EEA. This power to amend parts of the Agreement may be considered a legislative power. Strictly legally speaking, however, this is not the case, since each amendment to the EEA Agreement is made by the parties acting by consent in the EEA Joint Committee. Thus, the procedure by which protocols and annexes to the EEA Agreement is amended is a simplified treaty-making procedure, not a legislative procedure in the truest sense.

The discretion of the EEA Joint Committee is quite limited, since proposals for new legislation to be included in the EEA Agreement have to be treated in a rather binary manner. Either the proposal has to be adopted, as they always have been until now, or it has to be rejected. Admittedly, minor adjustments may be made, but this does not alter the main point.

Keeping the backlog as short as possible may seem to be a task comparable to Hercules' assignment of cleaning the Augean stables. The backlog is currently considerable and causing some concern on the EU side. Still, the inclusion of secondary legislation in the EEA Agreement is normally uncontroversial.

As mentioned, the EEA Agreement is connected to the «community pillar» of the then EC. With the dismantling of the pillar structure, the inclusion of new policy areas and a shift towards legislation covering more than one of the old pillars, the issue of EEA relevance, i.e. whether a legislative act adopted by the EU also falls within the ambit of the EEA Agreement, has become more pressing. This gives rise to the issue of whether the decision to add a legislative act to the annexes to the EEA Agreement can be made the subject of legal review.

2.3.2 Assessment of the legality of acts adopted

The legislative acts included in the EEA Agreement are all acts already adopted by the European Union. As such, they may be made subject to legality scrutiny according to EU law. Where an extension of a piece of EU legislation to the EEA Agreement entails more than technical adjustments, the EU’s stance in the EEA Joint Committee to such adjustments is established by a decision of the EU Council.(2) See regulation (EC) 2894/94 concerning arrangements for implementing the Agreement of the European Economic Area, art. 1. This decision can be challenged before the ECJ under Article 263 TFEU.(3) Case C-431/11, United Kingdom of Great Britain and Northern Ireland v Council of the European Union may serve as an example.

Article 108 EEA requires the EFTA States to establish the EFTA Court, but does not require that court to have jurisdiction over decisions establishing the stance which EFTA States are to take in the EEA Joint Committee on proposed amendments to annexes and protocols to the EEA Agreement. Neither does the SCA give the EFTA Court jurisdiction over this issue, something that underlines the political aspect of the decision of the EEA-EFTA States in these matters.

As far as the decisions of the EEA Joint Committee are concerned, the EEA Agreement does not provide for legal scrutiny of whether the decisions made are within the limits of the EEA Agreement. One could argue that there is no need for such mechanisms, since unanimity is required by the EEA Joint Committee. It is, however, not difficult to envisage situations where judicial control could be desirable. The consequences of not amending an annex to the EEA Agreement may be quite serious. Article 102 (5) EEA provides that where a decision has not been taken on amending an annex to the Agreement, the affected part of that annex is to be regarded as provisionally suspended. On the face of it, this does not seem very burdensome. However, the European Commission has stated that

“In order to effectively oppose any attempt by an EEA EFTA partner to incorporate EEA-relevant EU legislation in a selective manner, the EU side should, evidently, ensure that the part of the Annex to be ultimately suspended would impact negatively on the partner’s interests, rather than merely suspend parts of the Agreement that the contravening partner wishes to ignore.”(4)Commission Staff Working Document, A review of the functioning of the European Economic Area, SWD(2012) 425 final, page 9.

Thus, one can envisage a situation in which the EEA EFTA States accept EU legislation that falls outside the scope of the Agreement, out of fear of the consequences of refusal. Some would therefore welcome the possibility of legal scrutiny of that decision. Another potential issue is that a legislative act may encroach upon fundamental rights. The judgment in Digital Rights Ireland may serve as an example.(5)Joined cases C‑293/12 and C‑594/12, Digital Rights Ireland Ltd. Judgment 8. April 2014.As the EEA legal order does not offer judicial control on the EEA level of these issues, they have to be dealt with either in the EU pillar or in the EFTA pillar.

Turning to the EFTA pillar, the Surveillance and Court Agreement gives the EFTA Court the power to review the legality of decisions adopted by the EFTA Surveillance Authority, but not those of the EEA Joint Committee. Despite this, the EFTA Court has found that it has jurisdiction, under the advisory opinion procedure, to give advisory opinions on the interpretation of provisions of the EEA Agreement concerning the functioning of the EEA Joint Committee.(6)Case E-6/01, CIBA. The same must apply in relation to the ECJ. There is thus the possibility for legal review to establish that the EEA Joint Committee has acted ultra vires when adjusting a legislative act of EU law for the EEA Agreement.

The EFTA Court has found that:

“the provisions of the EEA Agreement as well as procedural provisions of the Surveillance and Court Agreement are to be interpreted in the light of fundamental rights. The provisions of the ECHR and the judgments of the European Court of Human Rights are important sources for determining the scope of these fundamental rights”.(7) See case E-18/11, Irish Bank Resolution Corporation Ltd., paragraph 63,

Thus, if the issue in Digital Rights Ireland had been put before the EFTA Court under an Article 34 SCA procedure,(8)Joined cases C‑293/12 and C‑594/12, Digital Rights Ireland Ltd. it is rather unlikely that the EFTA Court would have found that it lacked jurisdiction to determine whether a directive or regulation included in the EEA Agreement encroaches upon fundamental rights, for instance rights also protected by the European Convention on Human Rights. This could have been seen as a challenge to the monopoly of the ECJ to assess the validity of legislative acts of EU institutions. However, it could be argued that the EFTA Court in such a case would only be assessing the compatibility of that legislative act with EEA law, leaving it to the ECJ to do the same with regard to EU law. It would, however, be near to impossible for the ECJ to find that the act is in accordance with EU law, while at the same time incompatible with EEA law, as determined by the EFTA Court.

In Digital Rights Ireland, the ECJ found that directive 2006/24/EC, the Data Retention Directive, was invalid, since it interfered with the rights laid down in the Charter of Fundamental Rights of the European Union. That directive was of EEA-relevance, but due to Icelandic concerns it had not yet been incorporated into the EEA Agreement. However, if the directive had been incorporated into the EEA Agreement, this would have raised the question as to the EEA implications of the judgment. One could argue that a judgment from the ECJ, declaring invalid a legislative act incorporated into the EEA Agreement, also implies EEA invalidity. As both the EU and the EU Member States are bound by the EEA Agreement, it seems impossible to accept that a legislative act can be found invalid as a matter of EU law, but can at the same time be binding as a matter of EEA law. On the other hand, it could be argued that the decision of the EEA Joint Committee to adopt a legislative act of the EU, which later turns out to be invalid, must be assessed on the basis of EEA law. Whichever view is correct, the relevant point is that the law within one of the pillars of the EEA may have repercussions for the EEA legal order.

Looking at the EEA legal order, we see that there are no mechanisms for judicial control of the actions of the EEA institutions on the EEA level. Judicial control is handled in the pillars, and only indirectly. We have also seen that this gives rise to questions seldom relevant to other legal orders, making the EEA legal order distinct in this respect.