Ahead of the EU Elections 2024 | 2 | An Effective Defence of Democracy
Introduction
The interest representation Directive, the legislative proposal of the Defence of Democracy Package which was adopted by the European Commission on 12 December 2023, aims to bring transparency and accountability on foreign-funded individuals and entities, carrying out activities on behalf of third countries against remuneration.
Stepping into 2024, the European elections year, both co-legislators have started preliminary discussions on the legislative file. We have compiled a list of key topics that have been points of discussion and contention among policymakers, alongside our own recommendations on these issues for the upcoming term. Specifically, we have identified the following topics of discussion:
- Scope – Capturing interference effectively
- Maximum vs minimum harmonisation argument
- The case for independent national authorities
- Appropriate sanctions with strong safeguards
- Fundamental rights’ aspects: A long road with twists and turns
The Defence of Democracy Package also includes a Recommendation on inclusive and resilient electoral processes. It is unfortunate that the proposal’s timing will not allow Member States to implement the recommendation effectively before the European elections in 2024. Additionally, the proposal comes in the form of a recommendation without any binding effect on the Member States.
Recommendations
Scope – Capturing interference effectively
Extensive discussions have taken place among policymakers on the scope of the Directive. Questions have arisen about whether the scope of activities covered by this Directive should be broadened, whether the link between third countries and interest representatives should extend beyond its financial nature, or whether a Directive targeting only foreign-funded individuals and entities will effectively address cases of interference.
Recommendation 1: Comprehensive EU-level approach addressing internal and external threats
It is important that the Commission’s interest representation Directive is turned into a law securing transparency and accountability for all entities, regardless of whether they receive funding from abroad (or not). In our recent paper, we have examined key issues emerging from the current version (e.g., geopolitical consequences, key loopholes and the EU’s credibility in its external relations). We further examined the added value of adopting a general transparency register. The current version restricts, inter alia, the freedom to provide services and the free movement of capital. It discriminates between actors funded from abroad and those funded by domestic sources, focusing solely on the former category without adequately assessing why this discrimination is justified and proportionate. While the Commission has acknowledged the substantial divergences in legislation among Member States on transparency laws, it has failed to explain how focusing on the creation of foreign funding registers (or the modification of existing ones) will mend the already fragmented landscape of national transparency registers. Especially when the national transparency registers do not necessarily focus only on foreign-funded entities. In the upcoming term, the two co-legislators should propose the amendments necessary to transform the current Directive into an instrument that effectively captures all cases aimed at influencing policy and decision-making processes, irrespective of their origin, whether domestic or foreign.
Maximum vs minimum harmonisation argument
At present, 15 Member States maintain transparency registers for interest representation activities, each operating under different scope and imposing varying obligations or forms of sanctions. Several countries have proposed lowering the level of harmonisation from maximum to minimum arguing that Member States which have stricter rules should not be forced to lower their standards. This means, however, that all Member States will have the ability to adopt stricter measures (or even criminal sanctions) against critical voices, such as individuals or entities opposing government policies.
Recommendation 2: Minimum harmonisation will fall short in safeguarding EU law
The Commission has proposed the maximum harmonisation element as necessary to prevent “gold-plating” and ensure that Member States implement a comprehensive system of safeguards. Member States, in which the rule of law and other democratic values have been declining in recent years, would exploit a “minimum harmonisation” Directive to serve their interests by imposing stricter measures against specific actors. Such measures could also circumvent the application of the Charter as they could be considered outside the scope of EU law (Article 51 of the Charter).
The case for independent national authorities
So far, neither the Commission nor policymakers have guaranteed that both types of national authorities, namely the “supervisory authorities” and the “authorities in charge of setting up and maintaining national registers”, must be independent. They have given more emphasis on the former type over the latter. Similarly, there has been a lack of discussion regarding the potential conflicts arising between national authorities from different Member States in their cross-border cooperation and exchange of information.
Recommendation 3: We need independent national authorities – and an enhanced role for the Advisory Group
In light of the extensive powers that the national authorities hold over the interests representatives, both types should be clearly characterised as independent. Furthermore, in the next term, the co-legislators should make a priority to enhance the role of the Advisory Group (Art. 19). This advisory body should mediate conflicts between national authorities and facilitate their cross-border cooperation.
Appropriate sanctions with strong safeguards
Discussions have also touched upon the possibility of raising the proportion of administrative sanctions (currently at 1% of the annual turnover), proposing dissolution of entities or even introducing criminal sanctions, mirroring what is currently envisaged in certain national registers.
Recommendation 4: Strong safeguards for the administrative sanctions
The instrument should not be expanded to include criminal sanctions or dissolution of entities. The sanctions foreseen in this Directive should always be proportionate and subject to independent and impartial judicial review, according to the principle of effective legal protection articulated in Article 19 TEU and in line with Article 47 of the Charter.
Moreover, strong safeguards should be introduced in the sanctioning procedure. For example, removing the “prior warning” step from the sanctions process in cases of circumvention (Art. 22(4)) should be followed by substantial evidence that the circumvention was carried out knowingly and intentionally. The burden of proof should fall on the national authority making such a decision. Otherwise, this provision could be manipulated by national authorities to impose sanctions without adhering to the prescribed procedure.
Fundamental rights’ aspects: A long road with twists and turns
Initially, the Commission intended to propose the file without first conducting a fundamental rights’ Impact Assessment. However, following a robust reaction by civil society organisations, the Commission decided to conduct such an assessment.
The Directive incurs significant implications for fundamental rights and freedoms, restricting a number of them in the name of transparency. The question remains whether the level of interference is in line with the European and international standards on human rights. With the European Parliament’s Civil Liberties Committee (LIBE) opting out of involvement in this file, other Committees involved have been exploring the possibility of requesting an opinion from an external body with a mandate on fundamental rights, such as the Venice Commission and the Fundamental Rights Agency (FRA).
Recommendation 5: Improving the proposal with the opinion of a human rights body
As the file has major implications for fundamental rights, including freedom of expression and association, the Committee on the Internal Market and Consumer Protection (IMCO), responsible for this file, should request the opinion of the Venice Commission and the FRA. The questions addressed to these bodies should focus, among other, on all the topics we discussed above. This opinion would guide policymakers during the upcoming term in adopting a legislation that is in line with EU primary law, the CJEU case law and international human rights’ standards.
An effective defence of democracy: Photo by Liam Edwards on Unsplash.