The OMC, Intelligent Accountability and the Monitoring of National Tax Authorities
| Published date | 01 September 2022 |
| Author | Stephen Daly |
| Date | 01 September 2022 |
| DOI | http://doi.org/10.1111/1468-2230.12730 |
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Modern Law Review
DOI:10.1111/1468-2230.12730
THE
MODERN LAW REVIEW
Volume 85 September 2022 No. 5
The OMC, Intelligent Accountability and the
Monitoring of National Tax Authorities
Stephen Daly∗
EU governance is not straightforward. Novel supranational methods of checking compliance
with the panoply of EU Membership responsibilities therefore are needed. The open method
of co-ordination (OMC) – inappropriately named given that ‘coordination’is at best the result
of second order eects – is one such example of a distinctly supranational method of holding
Member States to account. This article argues that the OMC should be used in respect of the
collection of taxes due by large taxpayers. In doing so, the article argues that tax collection
practices should be monitored at the EU level. It further defends the use of the OMC by
demonstrating that OMC initiatives can engender a desirable form of accountability, namely
‘intelligent accountability’.
INTRODUCTION
EU governance is not straightforward. Take even the obligation of Member
States to integrate EU law into national legal systems – a paradigm duty of EU
Membership.1The European Commission (Commission) as ‘Guardian of the
Treaties’ ensures this application of EU law.2Compliance with the obligation
to formally introduce EU law into domestic law is ‘usually easy to establish
and relatively easy to rectify’.3The Commission can ask very basic questions
∗Senior Lecturer in Law at King’s College London. Previous iterations of the article received im-
mensely helpful comments from the anonymous reviewers at the Moder n Law Review,Iain Camp-
bell, Dominic de Cogan, Hans Gribnau,Jane Frecknall Hughes,David Hummel, Leandra Lederman,
Ruth Mason, Steve Shay,and Edoardo Traversa. The author also thanks attendees at the Possibilities
and Limits of State Aid Law in the Field of Tax Law Conference in Vienna, a lunchtime seminar at
the Max Planck Institute for Tax Law and Public Finance in Munich, the Global Tax Symposium,
and the Indiana/Leeds Summer Tax Workshop Series for their insightful comments. All URLs last
visited 6 January 2022.
well as Art 4(3) TEU on sincere cooperation and Art 288 TFEU on the bindingness of EU law.
2Art17TEU.
3 C. Harlow and R. Rawlings, ‘Accountability and Law Enforcement: The Centralised EU In-
fringement Procedure’(2006) 31 European Law Review 447, 453.
© 2022 The Authors. The Moder n Law Review published byJohn Wiley & Sons Ltd on behalf of Modern Law Review Limited.
(2022) 85(5) MLR 1109–1135
Thisis an open access ar ticle under the terms of the CreativeCommons Attr ibution License,which permits use,distr ibution and reproduction
in any medium, provided the or iginal work is properly cited.
Stephen Daly
of Member States, for instance, about whether and how Directives have been
transposed into national law.4Ensuring the substantive implementation and en-
forcement of EU law ‘is very much harder for the Commission to identify …
and much harder to prove’.5It is unsurprising that ad hoc processes develop in
response, with multiple par ties involved. As Hofmann and Türk r ightly point
out, ‘integrated administration’, whereby national and supranational agencies
work together in order to execute tasks, is central to all policy phases in EU
law.6
Member States are subject, of course, to a panoply of other responsibilities
by virtue of EU Membership. In terms of being under a legal compulsion to
act, these range from hard – as with the duty to adjust the shing capacity of
their eet to their shing opportunities over time7–tosoft – as with the com-
mitment to refrain from introducing harmful tax measures.8Ensuring com-
pliance with these obligations too calls for a distinctly supranational approach.
Accountability for Member State policies and actions, as a result, may take place
through a combination of dierent methods of control,such as parliamentary,
governmental and judicial control (essentially ‘the replication of state structures
at transnational level’)9or ‘mutual control’,where control is formally shared be-
tween national actors and the EU,as with the comitology process.10 The ‘open
method of coordination’ (OMC) also emerges as a means of holding Member
States to account.
The OMC is a framework for cooperation between EU countries which
is ‘based on benchmarking, mutual learning by doing and promotion of “best
practices”, rather than on formal government law-making or enforcement’.11
The word ‘coordination’in OMC is liable to mislead however, for coordination
is at best a result of second order eects and the OMC is really about ‘govern-
ing governance’.12 As such, an OMC initiative can also perform an important
accountability role.And not just basic accountability. The OMC envisages the
4 And if the deadline for transposition has passed, the Commission can ne the Member State
(Arts 258 and 260(3) TFEU).
5 Harlow and Rawlings, n 3 above,453.
6 H. Hofmann and A.Türk, ‘The Development of Integrated Administration in the EU and its
Consequences’ (2007) 13 European Law Journal 253, 266.
7 See Regulation (EU) No 1380/2013 of the European Parliament and of the Council
of 11 December 2013 on the Common Fisheries Policy, amending Council Regulations
(EC) No 1954/2003 and (EC) No 1224/2009 and repealing Council Regulations (EC)
No 2371/2002 and (EC) No 639/2004 and Council Decision 2004/585/EC [2012] OJ L
354/22.
8SeeConclusions of the ECOFIN Council Meeting on 1 December 1997 concerning taxation policy; Res-
olution of the Council and the Representatives of the Governments of the Member States meeting with the
Council of 1 December 1997 on a code of conduct for business taxation [1998] OJ C 2/1 and European
Commission,Harmful tax competition: Code of Conduct,at https://ec.europa.eu/taxation_customs/
business/company-tax/harmful-tax- competition_en (Conclusions of the ECOFIN Council Meet-
ing).
9 C. Harlow and R. Rawlings, ‘Promoting Accountability in Multilevel Governance: A Network
Approach’ (2007) 13 European Law Journal 542, 560.
10 Hofmann and Türk, n 6 above, 266-270.
11 E. Chiti, ‘Is EU Administrative Law Failing in some of its Cr ucial Tasks?’(2017) 22 European
Law Journal 578, 586.
12 K. Armstrong, ‘The Character of EU Law and Governance: From “Community Method” to
New Modes of Governance’(2011) 64 CLP 179, 198.
1110 © 2022 The Authors. The Moder n Law Review publishedby John Wiley & Sons Ltd on behalf of Modern Law Review Limited.
(2022) 85(5) MLR 1109–1135
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