Frontex under the budgetary scrutiny of the European Parliament

By Stéphane Saurel, Professor at Université Saint-Louis (Bruxelles), at Université catholique de Louvain, and author of the book Le budget de l’Union européenne (La Documentation française, 2018)

The budgetary scrutiny is one of the most powerful cards the European Parliament can play to make effective its oversight over a decentralised agency. The budgetary discharge procedure is indeed an instrumental tool to enhance the political accountability of the agencies. The European Border and Coast Guard Agency (Frontex) provides a good illustration of how the European Parliament uses this power as, from the second year in a row, it withheld its approval of the management of the agency’s budget. By contrast, the budgetary procedure offers to the European Parliament less possibility to influence the functioning of an agency.

  1. The discharge: a powerful tool in the hands of the EP

The two arms of the budgetary authority, the European Parliament and the Council, share budgetary powers. However, the former assumes the essential responsibility for political control over the implementation of the budget of the EU. In accordance with Article 319 of the Treaty on the Functioning of the European Union (TFEU), “the European Parliament, acting on a recommendation from the Council, shall give a discharge to the Commission in respect of the implementation of the budget”. By doing so, the Parliament releases the Commission from any further liability in respect of its management of the budget and therefore paves the way for the final closure of the accounts. The discharge has also a political significance, as it is a verdict on the manner the Commission exercises its responsibility for implementing the budget. Therefore, the Parliament’s refusal to grant discharge may have a reputational and potentially political impact. However, there are no direct legal or financial consequences.

The discharge decision is the culmination of a procedure that shall be completed normally by 15 May of the second year after the implementation of the budget (n+2). After the Council has drawn up a recommendation, the Committee on Budgetary Control of the Parliament establishes a draft report submitted to the plenary. To this end, the Committee examines the documents provided by the Commission (accounts, financial statement of the assets and liabilities of the Union, evaluation report) and the European Court of Auditors (annual report, special reports, statement of assurance as to the reliability of the accounts and the legality and regularity of the underlying transactions).

By 15 May of year n+2, the Parliament may either grant discharge to the Commission or decide to postpone its decision for six months should it require further information or action to overcome the obstacles preventing the approval of the management of the Commission’s budget. After a postponement, the second decision can only be to grant or to refuse discharge. This is in accordance with the European Parliament’s Rules of Procedures, as neither the Treaty nor the Financial Regulation applicable to the EU budget mentions the possibility for the Parliament to refuse the discharge.

While the Treaty only refers to the discharge to be given to the Commission, Rule 100 of the Parliament’s Rules of Procedure extends the scope of this procedure to each European institution and body carrying tasks on behalf of the EU. Moreover, with regard to bodies set up under the Treaties, having legal personality and receiving contributions charged to the budget, Article 70-4 of the Financial Regulation, complemented by Article 105 to 107 of the Commission delegated regulation 2019/715 on the framework financial regulation for the bodies referred to in Article 70 of the Financial Regulation, clearly states that the European Parliament on the recommendation of the Council shall give them the discharge for the implementation of their budgets. The Parliament introduced a strict parallelism between the provisions laid down in the Treaty and those that shall be applied to the procedure for granting discharge to all the European institutions and bodies, including decentralised agencies.

In the case of a decentralised agency, such as the European Border and Coast Guard, the Parliament can exercise its control over the implementation of the actions undertaken by the agency through the means of the discharge procedure. In that context, taking into account the Court of Auditors’ annual report on EU agencies, the Parliament may ask the agency to provide evidence with regard to the execution of expenditure or the operation of financial control systems. The agency shall submit any necessary information to the European Parliament at the latter’s request. The agency must take all appropriate steps to act on the observations in the decision giving discharge and, if so requested, report on measures taken in the light of these observations. The discharge procedure gives the European Parliament a graduated arsenal to influence the management of an agency.

Firstly, the Parliament has the possibility to postpone the discharge in order to make its granting conditional on the agency’s fulfilment of certain conditions. The mere threat of a postponement is generally sufficient to change the conditions of the dialogue between the agency and the Parliament. Secondly, the Parliament may refuse to grant discharge to the agency on important grounds of disagreement. A decision to refuse discharge is an important political act, putting a high degree of pressure on the agency’s management.

The analysis of the resolutions adopted shows that the European Parliament goes far beyond the mere assessment of the conformity and performance of the EU spending, with a clear trend to spill over to broader issues, notably in relation with the governance of the agencies.

With regard more specifically to agencies in the field of migration and asylum, both the European Asylum Support Office and Frontex went into trouble in the context of the discharge procedure. The European Parliament refused two years in a row to grant the executive director of the European Asylum Support Office (EASO) discharge in respect of the implementation of the Office’s budget for the financial years 2016 and 2017. The European Anti-Fraud Office (OLAF) was investigating EASO and the European Court of Auditors had previously pointed to shortcomings in its procurement procedures. The first step of the discharge procedure (a postponement decided on 18 April 2018) had led to the resignation of the executive director in June 2018 as well as to strong corrective measures taken by the Commission’s Directorate-General for Migration and Home Affairs, the management board of the Office and the new ad interim executive director. In spite of those measures having partially responded to its reservations, the Parliament refused to grant discharge because of the OLAF’s investigation against the previous leadership of the Office being uncompleted. As the budget for the financial year 2017 was still implemented under the supervision of the Office’s previous management, the Parliament also refused to grant discharge for the 2017 budget.

In a challenging context, the European Border and Coast Guard Agency is experiencing a considerable increase of its tasks, powers, responsibilities and budget. Thus, it does not come as a surprise that the Parliament increased its scrutiny on the now most important EU agency. The allegations of Frontex being involved in – or least aware of – possible violations of migrants’ fundamental rights reinforced the European Parliament in doing so.

On 29 April 2021, the European Parliament decided to postpone the decision on granting discharge to the Agency. In its observations, it expressed concerns regarding the implementation of the agency’s budget, the delays in the recruitment of the fundamental rights officer and monitors, the gender imbalance, the transparency policy, the management of conflict of interest, as well as the incidents of non-respect of fundamental rights at the external borders.

On 21 October 2021, the Parliament finally decided to grant discharge to Frontex for the 2019 budget, recognising the ongoing efforts of the agency to remedy shortcomings identified in the Parliament’s first discharge report. However, it also referred to the European Court of Auditors’ Special Report 082021, raising that the agency’s support for external border management was not sufficiently effective and pointing to shortcomings in the agency’s primary activities.

On 4 May 2022, the European Parliament withheld its approval of the management by Frontex of its 2020 budget. As justification, the resolution, adopted by 492 votes in favour, 145 against and 8 abstentions, cites a failure to fulfil the conditions set out in Parliament’s previous discharge report, as well as the ongoing investigations by OLAF regarding fundamental rights incidents, including migrant push-backs. Members of the European Parliament pointed to the fact that they have not seen the full investigation report and thus were unable to take an informed decision at this point.

  1. The unsuccessful attempt to put part of the agency’s appropriations in reserve

When finally granting the discharge on the implementation of Frontex’s 2019 budget in October 2021, the European Parliament requested part of the agency’s 2022 budget to be put into reserve. The budgetary authority may use this mean in particular when there are serious grounds for doubting the adequacy of the budgetary appropriations or the possibility of implementing them under conditions consistent with sound financial management. The consequence of such a decision is the freezing of part of the budget. That means that a percentage of the budget – in that case, an amount of EUR 90 million, representing around 12% of the proposed draft budget for 2022 (EUR 757.8 million) – is allocated to the agency, but is not available for implementation. It requests a decision of the budgetary authority to transfer this amount from the reserve to the operational line once certain conditions are fulfilled at a later stage of the year.

In the case of Frontex, the aim was to urge the agency to implement swiftly a set of measures, identified by the Special Report of the European Court of Auditors, to address issues concerning the agency’s management and operational activities. These include recruiting twenty missing fundamental rights monitors and three deputy executive directors sufficiently qualified to fill these positions, setting up a mechanism for reporting serious incidents on the EU’s external borders and an effective fundamental rights monitoring system.

The outcome of the negotiations between the two arms of the budgetary authority did not meet this demand of the Parliament. There are several reasons for this. Firstly, though having been largely supported in plenary (470 votes in favour, 96 against and 125 abstentions), the freezing of part of Frontex’s budget was not necessarily among the top priorities of the negotiating team of the European Parliament for the 2022 budget. Therefore, it had to define on which priority its political weight is best invested in the negotiations with the Council.

Secondly, though putting appropriations in reserve and conditioning their relief to the fulfilment of conditions have to be co-decided by the legislator, it is mainly seen as a tool in the hands of the European Parliament to push its own agenda. The Council is not very keen on accepting reserves as it creates additional burden on the management of the funds and requires further decisions of the budgetary authority during the year to move appropriations from the reserve to the operational budgetary lines.

Thirdly, it was even more difficult for the Council to accept because Frontex’ management board is composed of one representative from each EU Member State and two representatives from the Commission. Accepting to put part of the agency’s budget in reserve could have been seen as a partial shift of power from the Member States to the European Parliament. Therefore, the idea put forward by the Parliament has not been taken on board in the joint project agreed by the two arms of the budgetary authority as the outcome of the conciliation phase of the negotiation of the 2022 budget.

During the conciliation phase, the Parliament and the Council decided that there are no reserves in addition to those proposed by the European Commission. Instead, they agreed to reduce the level of commitment and payment appropriations in 2022 by EUR 65 million, so that the approved Frontex budget amounts to EUR 692.8 million. In line with the Council’s position, this is a net reduction, and not just a freeze.

In conclusion, it is clear that the influence of the European Parliament is stronger in the context of the discharge procedure, as it has the final say on the decision to grant discharge, the Council issuing only a recommendation. As far as the adoption of the annual budget is concerned, the European Parliament and the Council are almost on equal footing. Moving from a sphere – the discharge – where the balance of power is asymmetrically in favour of the European Parliament to another – the annual budgetary procedure – in which both institutions have to find a common ground – did not help the European Parliament to promote its agenda and increase its influence on the management of Frontex.