March 8, 2019
The Treaties give the European Commission an exclusive power of legislative initiative. In principle, only the Commission can draft and propose Directives, Regulations and Decisions. The Lisbon Treaty also gave the Commission the power to propose AND adopt delegated acts, with the risk of creating an imbalance of power.
Considered boring by the ‘Brussels Bubble’, secondary legislation (i.e. delegated acts and comitology) affects every issue: let us recall ‘Dieselgate’, endocrine disruptors, glyphosate, etc. On all of these topics we have expressed our views – not on the substance, but on the form. Each time we have denounced the complexity of procedures, the opacity, the exceptions and derogations, the interpretations and how every Institution is seeking to give itself the upper hand.
A delegated act on money laundering and terrorism
On 13 February 2019, the Commission published a delegated act that included 23 states and territories in a list of “high-risk third countries with strategic deficiencies” in the area of money laundering and terrorist financing. While 12 of these countries were listed based on findings of the international body known as the ‘Financial Action Task Force’, 11 others (including Afghanistan, Iraq, Libya, Nigeria, Puerto Rico, Guam and Saudi Arabia) were added by the Commission on the basis of its own assessment using additional criteria.
According to the information available, the Commission consulted the Expert group on Money Laundering and Terrorist Financing several times. Already involved in the methodology and the selection of states concerned, this Expert group was consulted on 28 January 2019 by written procedure on the draft delegated act. Any comments had to be sent by 1 February. Another discussion took place on 5 February, with further written comments possible by 7 February. As mentioned before, the act was adopted on 13 February. It seems that the countries listed in the delegated act were not informed until 23 January 2019, in other words 21 days before the adoption of the measure.
A group of experts, but merely advisory…
The legal capacity of the Commission both to propose and adopt delegated acts has been contested by Member States, as they no longer have the power to validate the Commission’s drafts. As for stakeholders, they ran the risk of not being informed about draft delegated acts. For these reasons, the Commission – via the ‘Better Regulation’ Package – committed itself to submit proposals for delegated acts to an ‘Expert group’. As we shall see, the label ‘Expert group’ symbolises just how hazy the EU can be.
An Expert group, yes…but which Expert group? It is kind of like a comitology committee (in that it is composed of representatives from every Member State and is chaired by the Commission), but has NO BINDING VOTING RIGHTS; in other words, it has a purely advisory function. The meetings of these Expert groups are very opaque in terms of their composition, their discussions and their conclusions.
A delegated act rejected unanimously by 28!
We can imagine that the Commission should have listened to any opposition expressed within the Expert group. Perhaps there was no opposition? Or maybe the Commission just ignored it? The latter would be surprising because the Commission is generally a past master in the art of assessing the balance of forces.
This file, kept strictly confidential at first, gradually became more visible following notification of the countries concerned on 23 January and the adoption of the text on 13 February which initiated a 1-month deadline for the European Parliament and/or the Council of Ministers to reject (i.e. veto) the delegated act. At a working party meeting of financial attachés within the Council on 1 March, the 28 Member States unanimously blocked the measure.
A small question: how many delegated acts have been vetoed these past 10 years? Answer: a dozen! How many of these vetoes came from the Council? Not even a quarter! And how many of these vetoes were unanimous? Zero!
How is this possible? Who or what is responsible?
To this complex question, the answer is simple: it is the opacity, the lack of transparency, the gap between bureaucracy and politics, a poor assessment by the Commission of the balance of forces. Clearly the system has malfunctioned and the fear is that, instead of changing it, each Institution will look to shirk its responsibilities