Source: www.efta.int

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EFTA Secretariat

The EFTA Secretariat is not part of the EEA's two-pillar structure, but is an EFTA authority that dates back to the foundation of the EFTA. The EFTA Secretariat has offices in Brussels, Geneva and Luxembourg. The Secretary General is based in Geneva. Nevertheless, the EEA accounts for a large part of the work of the EFTA Secretariat. This includes, in particular, assisting the EEA EFTA states in the incorporation of new EU law into the EEA Agreement, and in so-called ‘decision shaping’. In addition, the EFTA Secretariat provides the public with various information on the processes and institutions of the EEA and the development of law in the EEA. In simple terms, the EFTA Secretariat has a coordinating function vis-à-vis the EEA EFTA states and the EU, provides the institutions and actors of the EEA with expertise, and takes care of the public image of the EEA. Although the EFTA Secretariat is not part of the two-pillar structure of the EEA and is not mentioned elsewhere in the EEA Agreement, it occupies an outstanding position for the way the Agreement operates.

 

EEA Surveillance Mechanism: EFTA Surveillance Authority

The monitoring mechanism of the EFTA pillar consists of the ESA, located in Brussels, and the EFTA Court, located in Luxembourg. As in the case of the Standing Committee, the tasks and powers of the ESA and the EFTA Court are governed by a separate agreement between the EEA EFTA states, the so-called Surveillance and Court Agreement (SCA). In contrast to the Standing Committee, however, the establishment of the ESA and the EFTA Court was provided for in the EEA Agreement itself (see Art. 108 EEA Agreement).

 

ESA and the EFTA Court are responsible for ensuring that the EEA EFTA states fulfil their obligations under the EEA Agreement. In addition to general monitoring of legal implementation and enforcement in the EEA EFTA states, ESA has extended powers in the areas of competition, state aid and public procurement. These powers correspond to the increased powers of the European Commission in these areas within the EU. The EEA Agreement provides for close cooperation between the ESA and the European Commission.

 

The policy area of competition is a special case with regard to the distribution of competences between the ESA and the European Commission. Article 56 of the EEA Agreement lays down the principle of a ‘one-stop-shop’. Put simply, this means that the ESA is primarily responsible for cases limited to trade between EEA EFTA states, while the European Commission handles most cases concerning trade between an EEA EFTA state and an EU State. Other specific cases relating to the ESA result from the increasing number of EEA relevant EU agencies that carry out surveillance tasks. For parallel EFTA agencies there is no legal basis and no practical justification in the EEA Agreement. Thus, when an EU act establishing an EU agency is incorporated into the EEA Agreement, specific adaptations laid down in the JCD govern the concrete responsibilities of the EU agency, the ESA and the national authorities of the EEA EFTA states. This generally means that, for the purposes of the EEA EFTA states, the ESA is empowered to take decisions similar to those of the EU agencies.

 

EEA Surveillance Mechanism: EFTA Court

The EFTA Court deals with infringement procedures brought by the ESA against an EEA EFTA state concerning the implementation, application or interpretation of EEA law. At the request of a court of an EEA EFTA state, the EFTA Court also issues opinions on the interpretation of EEA law in the EEA EFTA states, has jurisdiction to settle disputes between two or more EEA EFTA states, and hear complaints about decisions of the ESA. There is an ongoing formal and informal exchange between the ESA and the European Commission as well as between the EFTA Court and the CJEU.

 

Through the SCA, the EEA EFTA states have established a surveillance mechanism very similar to that of the EU. But there are also some differences. For example, the members of the ESA College are appointed solely by the EEA EFTA governments and do not have to be approved by a parliament, as in the case of the European Commission. There is also no provision in the EEA Agreement which gives the EFTA Court the right, at the ESA's request, to impose a lump sum or penalty payment for non-compliance with a judgment of the EFTA Court.

 

Furthermore, judgments and opinions of the EFTA Court are not meant to be binding. In practice, however, they have a "persuasive authority", i.e. in the vast majority of cases they are complied with, just like rulings of the CJEU. Finally, we should also mention the small size of the EFTA Court, with only three members, and the small number of cases compared to the CJEU, which is due not only to the fact that there are only three EEA EFTA states, but also to the fact that their courts less frequently obtain an opinion from the EFTA Court by comparison with the average EU state.

 

Conclusions

With the two-pillar structure, in laborious negotiations, an institutional framework for the EEA Agreement was created which is compatible with both the preferences and principles of the EEA EFTA states and those of the EU. This has not changed since the entry into force of the EEA Agreement. Accordingly, the two-pillar structure remains in place. The basic idea behind the two-pillar structure is that the institutions of the EFTA pillar mirror the EU institutions relevant to the EEA Agreement. The aim is also to regulate EEA EFTA matters within the EFTA pillar. However, in a common economic area such as the EEA, this cannot be easily defined. As a result, competences regulated in EEA-relevant EU law can be allocated variously to the EEA EFTA states, the EFTA institutions, the joint EU EFTA institutions and the EU institutions.

 

However, the institutional framework of the EEA must not be reduced to this basic idea. Another essential feature of the two-pillar structure is the cooperation between the two pillars. This cooperation is not limited to the common institutions, but extends to all the institutions of the EFTA and EU pillars. In particular, the ESA and the EFTA Court have in recent years succeeded in establishing a good exchange with the relevant EU institutions. This exchange can be both formal and informal in nature. The EU’s willingness to engage in such an intense dialogue can be seen as a recognition of the expertise of the EFTA institutions and their ability to take practical action. In sum, the two-pillar structure should both separate the EU and EEA EFTA states by assigning concrete decision-making competences to each pillar and also connect the two pillars by establishing an intensive exchange on decision-making, implementation and interpretation of the EEA relevant EU rules.

 

The institutional framework of the EEA is obviously a necessary condition for the proper functioning of the EEA. Efficiency and effectiveness are equally relevant. The institutional framework of the EEA is not only responsible for decision-making within EFTA and between the two pillars (i.e. decision making in the EEA), but is also the basis for the participation of the EEA EFTA states in the EU decision-making process (so-called decision shaping). In this way, the institutional framework contributes significantly to the legitimacy of the EEA Agreement in the EEA EFTA states.

 

However, the two-pillar structure of the EEA should not be idealized. Indeed, its complexity must be viewed critically. The complexity results on the one hand from the very high number of institutions and committees and on the other from the various links between the EFTA and EU institutions, as well as with the national authorities of the EEA EFTA states. Furthermore, the dynamic adoption of EU law has led to the incorporation of new institutional rules into the EEA Agreement which have not always been consistent with the two-pillar structure. This lack of consistency has further increased the complexity of the two-pillar structure. Moreover, the EEA and its institutions in the EEA EFTA states may in general have a high degree of political backing but there are also certain shortcomings - such as the frequently troublesome relationship between the Supreme Court in Norway and the EFTA Court. There is also a lack of political will on the part of the EEA/EFTA States to extend the competences of the EFTA Secretariat for the efficient administration of the EEA Agreement.

 

To conclude, the institutional structure of the EEA is a necessary but not a sufficient condition for the good functioning of the EEA. Instead, the functioning of the EEA depends heavily on the specific characteristics of the EEA EFTA states. The traditionally high political stability of the EEA EFTA states and their basically high administrative capacity and efficiency should be highlighted. The high economic interdependence between the EEA EFTA states and the EU also facilitates the functioning of the EEA. First and foremost, however, it should be pointed out that from the perspective of the EEA EFTA states there are no credible alternatives to the EEA and its institutions.

 

The lack of alternative integration models forms the basis for the pragmatism with which the EEA EFTA states have met practical challenges to the EEA’s two-pillar structure. As a result, over the past 25 years, case-specific solutions have been found whenever necessary. How these solutions have changed the distribution of competences within the two-pillar structure and to what extent they were actually consistent with the basic principles of the two-pillar structure will be clarified elsewhere. This contribution  therefore restricts itself to the conclusion that dynamic integration, as envisaged by the EEA Agreement, always creates new institutional challenges. The possibility of being able to locate the competences required by EEA-relevant EU law within the EEA EFTA states, the EFTA institutions, the joint EU EFTA institutions, or the EU institutions is both the cause of and the solution to these institutional challenges.