Term and Legal Classification of Federal Agencies
The term Federal Agency is a commonly used organizational form in German public law. It refers to legally dependent or independent institutions that are entrusted with specific administrative tasks at the federal level. Federal agencies are essential instruments of federal administration, whose legal structure and functions are regulated by specific legislation or legal ordinances.
Distinction: Federal Agency, Federal Authority, and Federal Office
In the German legal system, it is customary to distinguish between different organizational forms:
- Federal agencies are legally and organizationally distinct from federal authorities (such as ministries or federal offices).
- Federal authorities exercise sovereign powers on behalf of the federal government and are usually part of the direct federal administration.
- Federal agencies on the other hand, are regularly organized as independent organizational units and perform tasks as direct federal corporations, institutions, or foundations under public law.
A Federal Agency is generally a public-law institution with nationwide competence. Its tasks often fall into areas that, due to their supra-regional importance, cannot be regulated at the state or municipal level.
Legal Forms and Organizational Structure
Public-law institution
The vast majority of federal agencies are constituted as public-law institutions with legal capacity (§ 2 para. 1 VwVfG analogously). Thus, they have the capacity to be holders of rights and obligations themselves. They act in their own name, but their legal relationships are governed by public law.
Autonomy and Supervision
Federal agencies usually enjoy administrative autonomy, but are subject to the specialist supervision or legal supervision of the competent federal ministries. The scope of this supervision varies according to the statutory basis.
Organizational Manifestations
A federal agency may
- consist of a central administrative unit,
- have regional branches,
- or independently manage various special areas of responsibility as a holding structure.
Direct and Indirect Federal Administration
Classification:
- Direct federal administration: Federal agencies that are part of the direct administration are directly subject to the instructions and control of the federal government.
- Indirect federal administration: Legally independent federal agencies that act as corporations or institutions under public law, but are still accountable to the federal government.
Statutory Basis and Establishment
Acts of Establishment
The establishment of a federal agency generally occurs through
- federal law,
- legal ordinance based on a law,
- and less frequently through administrative acts, if a corresponding statutory authorization exists.
Examples of relevant laws include the Act on the Federal Agency for Real Estate Tasks (BImAG) or the Act on the Federal Agency for Financial Services Supervision (FinDAG).
Delegation of Functions and Scope of Tasks
The tasks of a federal agency are defined by the relevant act of establishment. Typical areas of responsibility include:
- Supervision of specific branches of the economy (e.g. financial services at BaFin)
- Management of federal assets (e.g. real estate at the Federal Agency for Real Estate Tasks)
- Implementation of cross-departmental technical tasks (e.g. occupational health and safety through the Federal Institute for Occupational Safety and Health)
- Research, development and scientific advice
Articles of Association and Organization
Internal organization is usually governed by articles of association, which require approval from the competent ministry. These set out the bodies, procedures, and decision-making structures.
Sovereign Powers and Services
Exercise of Sovereign Tasks
Federal agencies are usually charged with administrative tasks, and to some extent are also vested with sovereign powers, especially in the area of supervision (e.g. BaFin). In certain cases, they also have the right to issue administrative acts or enforce coercive measures.
Economic Administrative Functions
Some federal agencies perform economic administrative activities, i.e., they manage federal assets, promote certain economic sectors, or secure infrastructures.
Doctrine and Jurisprudence
Administrative Power and Self-Government
The special status of federal agencies in the administrative system is characterized by a balance between self-government and state control. Case law has especially discussed the extent to which federal agencies may be subject to instructions and interventions from the federal ministry without losing their administrative autonomy.
Legal Protection
Federal agencies are subject to the same legal remedies and avenues of legal protection under administrative law as other administrative bodies. Decisions of the federal agency can be reviewed by administrative courts.
Examples of Major Federal Agencies
Federal Financial Supervisory Authority (BaFin)
As a public-law federal agency with legal capacity, BaFin regulates and supervises credit institutions, financial service institutions, insurance companies, and securities trading.
Federal Agency for Real Estate Tasks (BImA)
The BImA is responsible for federal property management, especially for the administration and realization of federal assets in the real estate sector.
Federal Institute for Occupational Safety and Health (BAuA)
The BAuA conducts research and policy advice in the field of health protection and occupational safety.
Financing
The financing of a federal agency generally takes place either
- through allocations from the federal budget,
- through fees and contributions from supervised entities (e.g. BaFin),
- through own economic activities (e.g. services, asset management).
Supervision and Oversight
Federal agencies are generally subject to specialist and legal supervision by their respective competent federal ministry. The structure of supervision is either directly based on statutory provisions or specified in the articles of association of the respective institution.
Distinction from Other Organizational Forms
Federal agencies are distinguished from other public-law corporations, institutions, and foundations in particular by their nationwide exercise of functions and their direct control by the federal government.
Significance in the State Structure
Federal agencies play a central role in implementing federal policy objectives, especially in areas requiring uniform, professionally specialized administrative solutions.
Sources and Further Information
More broadly, the legal bases, current developments, and specific aspects can be found at federal ministries, in the Federal Law Gazette, and in the Federal Register.
This article comprehensively presents the term ‘federal agency’ in German law and explains its legal foundations, structures, and functions in detail.
Frequently Asked Questions
What is the legal form of federal agencies and how does it differ from other federal organizational types?
Federal agencies are legally independent administrative entities of the federal government, usually established by law or on the basis of a law. They represent the form of the ‘federally-owned legal person under public law.’ In contrast to authorities, which are organizationally and administratively part of the direct state administration (federal administration), federal agencies have their own legal personality. This allows them, in particular, to participate in legal transactions in their own name, own assets, and conclude contracts. A significant difference from public-law corporations, institutions, or foundations of other sponsorship lies in the fact that federal agencies are always attributable to the federal government, that is, the Federal Republic of Germany, and not—as with municipal institutions—to other territorial authorities. Additionally, depending on the structure, they are subject to different types of specialist or legal supervision. Special statutory provisions, such as the Federal Agency Act (BAnstG), govern, alongside the act of establishment, in particular their functions, powers, external and internal supervision, as well as matters of liability.
How is the supervision of a federal agency regulated by law?
Supervision of federal agencies is determined in the relevant act of establishment or in special legal regulations and differs in type and scope. As a rule, federal agencies are at least subject to so-called legal supervision, meaning the competent federal ministry examines whether the agency’s activities are in accordance with the applicable law. In some cases, there is also specialist supervision, which includes substantive authority to issue instructions to the federal agency. The details are regulated in the founding law or in the relevant articles of association. For federal agencies under public law with responsibilities in public services or security administration, the authority to issue instructions is typically more extensive, while for agencies with far-reaching self-administration (e.g. social insurance agencies), it can be limited. The legal basis and scope of supervision can therefore vary greatly depending on the agency and the legal basis.
Who is liable for actions by a federal agency in the legal sense?
Under German law, federal agencies, as independent legal entities, are generally responsible and liable for their own actions. This means they are liable both for contractual obligations and for tortious acts, insofar as the acts were performed in fulfillment of their tasks. According to § 89 BGB (German Civil Code), liability generally lies with the legal entity itself and not directly with the federal government for damages arising from or in connection with its activities. In cases involving breaches of official duty, the law of official liability (§ 839 BGB in conjunction with Art. 34 GG) applies, in which case the state is liable. If the tasks are performed in their own name and on their own responsibility, liability remains with the agency. Measures for limitation of damages and internal recourse may be further regulated by articles of association or special legal regulations.
How is the financing of federal agencies regulated from a legal perspective?
Federal agencies are governed as to their financing by the relevant enabling act or by budgetary regulations. In general, there are various funding models: Many federal agencies receive allocations from the federal budget, often specified in the respective federal budget plan. Others may—if legally regulated—levy fees, contributions, charges, or other revenues (for example, from providing services or operating their own facilities). The use of funds is subject—as with all public institutions—to the rules of the Federal Budget Code (BHO) and the specific requirements of the establishing statute. Audit bodies such as the Federal Audit Office monitor the proper use of funds. This guarantees transparency and the lawful use of resources.
What is the relationship between federal agencies and general administrative law?
Federal agencies generally act like other holders of public administration and are therefore bound in their activities to the Basic Law, general administrative law, and specific administrative regulations. This means that the provisions governing the administrative procedure (VwVfG), administrative acts, administrative conduct, administrative court procedures (VwGO), as well as types of public-law contracts, generally apply comprehensively unless special statutory provisions provide otherwise. The federal agency often acts as an independent legal entity, but its administrative actions are governed by the general principles of German administrative law, including legal protection options for affected parties.
What are typical legal bases for the establishment and organization of a federal agency?
The legal basis for the establishment of a federal agency is generally a federal law which regulates both the organization, allocation of responsibilities, competences, as well as internal decision-making processes and external relations of the institution. Typical examples include the ‘Act on the Deutsche Bundesbank’ (BbankG), the ‘Act on the Federal Agency for Real Estate Tasks’ (BImAG), or the ‘Act on the Federal Financial Supervisory Authority’ (FinDAG). Key components regularly include: act of establishment, determination of seat, specification of purpose, responsibilities and powers, appointment of bodies (such as board, supervisory board), provisions on supervision, financing, rights and obligations of employees, as well as representation in legal transactions. Additionally, internal rules are often laid down in articles of association or rules of procedure, which build on and further detail the statutory provisions.
What significance do articles of association and rules of procedure have for federal agencies from a legal point of view?
The articles of association and rules of procedure of a federal agency are central instruments of internal organization and legal regulation within the given legal framework. The articles of association, in accordance with the establishing law and often after approval by the competent ministry, are adopted by the responsible bodies of the agency and determine, in particular, details of how responsibilities are exercised, how administrative actions are conducted, internal processes, as well as the rights and duties of the members of the governing bodies. The rules of procedure further specify the working method of the internal organs, such as the board or supervisory board, in particular decision-making procedure, convening and chairing meetings, rules for representation, etc. Articles of association and rules of procedure are subordinate norms that have external effect for those concerned and at the same time serve as internal organizational rules. They are subject to judicial review, insofar as they infringe the rights of third parties, and must always be consistent with the act of establishment and higher-ranking law.
