Annual Report 1994

The 1994 edition is EFTA Surveillance Authority's first annual report.

FOREWORD

The first year in the life of an organization is always exciting.   For an organization with such complex  and specialized tasks as the EFTA Surveillance Authority the excitement was naturally also mingled with apprehension that the basic concepts might be inadequate, the performance flawed by lack of experience, or the tasks simply too overwhelming.  By the same token, there were inevitable questions as to whether the EFTA States would be able to take on, in very short time indeed, the whole of the Agreement on the European Economic Area, and to relate to an unfamiliar system of surveillance. 

            What one really does not need in such a situation are profound changes in the political setting. Yet--not unexpectedly, of course--such changes did occur, and with considerable frequency. The Authority had only just started to operate routinely when the breakthrough in the Accession Negotiations gave firm indications that the life of the organization might not extend beyond its first year. Three referenda followed, strengthening this belief.  A fourth referendum again changed  the outlook, followed by the decision of the EEA Council to retain the EEA Agreement, including its institutional aspects.

Despite such external fluctuations, the Authority endeavoured to pursue its surveillance functions with steadiness and consistency. The EFTA States, for their part, generally strove to meet the obligations imposed on them by the EEA Agreement, and co-operated well with the Authority. Furthermore, certain decisions related to the political situation facilitated the Authority's work and helped to assure continuity. The EFTA States realized that without proper transitional arrangements to safeguard rights acquired under the EEA Agreement, the Agreement would lose much of its binding effect in respect of the States acceding to the European Union. They therefore agreed to retain the competences of the Authority (and the EFTA Court) for a period after accession in respect of cases where EU institutions would not be competent. And, after the decision of the EEA Council in respect of the continuation of the EEA Agreement, the Authority was able very quickly to reorganize to meet the tasks of the future in a smaller configuration.

All in all, the results of the Authority's work in 1994 must be deemed satisfactory.  With regard to its own performance, the Authority found that good recruitment and thorough preparations for over a year before the entry into force of the Agreement served to offset the disadvantages of being a new organization.

Already in its report on the activities during the first half year of 1994, the Authority was in a position to conclude that the process of implementing EEA legislation in the EFTA States was progressing well, so that by and large the mechanisms necessary for the functioning of the European Economic Area had been established. Now, half a year later, the Authority may conclude that the EEA Agreement, as it stood at the time of its signature, has in its major aspects been implemented in the national legal systems of the EFTA States.  Furthermore, existing state aid schemes have been adapted to conform with the EEA rules, the disciplines with regard to public procurement are being enforced and the business communities are reacting to the exigencies of the competition rules. 

Through decisions of the EEA Joint Committee, several hundred new acts were added to the EEA Agreement in the course of 1994, bringing the legal basis of the EEA into parallel with that of the EC Internal Market.  When the Authority during 1995 has finalized conformity assessments in respect of this additional legislation, the homogeneous European Economic Area will have been fully realized.

This is not to say that the process of implementing the vast EEA Agreement in the EFTA States has proceeded without difficulties altogether.  This report lists numerous imperfections of technical/legal nature, several instances of delays in the legislative processes, some cases of nonchalant tardiness, and finally a very restricted number of instances where disagreement on substance has prevailed.

However, these occurrences should not be allowed to distort the very positive general image of the efforts the EFTA States have made to adjust their legislation and administrative practices to the requirements of the EEA in such a short time.

It is symptomatic that in spite of the numerous formal actions which the Authority has launched against Governments, it has so far not had to resort to legal action before the EFTA Court in order to have infringements corrected.

As to the future, the activities of the Authority will bring more into focus the problems which will stem from the application of the Agreement and the national legislation emanating from it at the various administrative levels in the EFTA States.  This will require new approaches and new techniques as compared with those employed during the implementation phase. 

Above all, this will require broader and more direct contacts with individuals and enterprises who have rights under the Agreement in order for the Authority to be able to fulfil its role as  their "ombudsman".  It is my hope that the description in the present report of the Authority's work during its first year of operation may inspire and facilitate such contacts.

Brussels, 31 March 1995
Knut Almestad
President of the EFTA Surveillance Authority