ADMINISTRATIVE

REGULATION OF
BUSINESS

Week 3
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SUMMARY
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1. Administrative agencies i
is t n
2. Regulatory powers
3. Executive powers
4. Adjudicatory powers
5. Judicial review
6. Regulation of the hospitality industry
 ADMINISTRATIVE REGULATION

Courts and parliaments are not particularly well suited

to answer to the needs of an increasingly complex
society.

They lack the technical expertise and the promptness

to face the challenges of world.
 ADMINISTRATIVE AGENCIES

Since the end of the 19th century, administrative

agencies have been created to address some of the
most pressing social problems (public health,
environmental protection) and the emergence of new
technologies (aviation, communication, internet).
ADMINISTRATIVE AGENCIES

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ADMINISTRATIVE AGENCIES
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Administrative agencies are created when a
parliament passes enabling legislation
specifying the agency's name, composition, role,
and powers.
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ENABLING LEGISLATION theauthority
21 U.S. Code § 393 - Food and Drug Administration

There is established in the Department of Health and Human Services the Food and Drug
Administration [ ].

The Administration shall

1. promote the public health by promptly and efficiently reviewing clinical research and taking
appropriate action on the marketing of regulated products in a timely manner;
2. with respect to such products, protect the public health by ensuring that
A. foods are safe, wholesome, sanitary, and properly labeled;
B. human and veterinary drugs are safe and effective;
C. there is reasonable assurance of the safety and effectiveness of devices intended for
human use;
D. cosmetics are safe and properly labeled; and
E. public health and safety are protected from electronic product radiation;
 ENABLING LEGISLATION

21 U.S. Code § 393 - Food and Drug Administration

There shall be in the Administration a Commissioner of Food and Drugs [...] who shall be appointed by the
President by and with the advice and consent of the Senate.
powers
The Secretary, through the Commissioner, shall be responsible for executing this chapter and for
(A) providing overall direction to the Food and Drug Administration and establishing and implementing
general policies respecting the management and operation of programs and activities of the Food and Drug
Administration;
(B) coordinating and overseeing the operation of all administrative entities within the Administration;
(C) research relating to foods, drugs, cosmetics, devices, and tobacco products in carrying out this chapter;
(D) conducting educational and public information programs relating to the responsibilities of the Food and
Drug Administration; and
(E) performing such other functions as the Secretary may prescribe.
 ENABLING LEGISLATION
REGULATION (EU) No 1095/2010 - Article 1 - Establishment and scope of action

1.This Regulation establishes a European Supervisory Authority (European Securities and Markets Authority)

2.The Authority shall act within the powers conferred by this Regulation and within the scope of Directive
97/9/EC, Directive 98/26/EC, Directive 2001/34/EC, Directive 2002/47/EC, Directive 2003/6/EC, Directive
2003/71/EC, Directive 2004/39/EC, Directive 2004/109/EC, Directive 2009/65/EC and to Directive

5. The objective of the Authority shall be to protect the public interest by contributing to the short, medium
and long-term stability and effectiveness of the financial system, for the Union economy, its citizens and
businesses. The Authority shall contribute to:
(a) improving the functioning of the internal market, including in particular a sound, effective and
consistent level of regulation and supervision,
(b) ensuring the integrity, transparency, efficiency and orderly functioning of financial markets,
(c) strengthening international supervisory coordination,
(d) preventing regulatory arbitrage and promoting equal conditions of competition,
(e) ensuring the taking of investment and other risks are appropriately regulated and supervised, and
(f) enhancing customer protection.
 ADMINISTRATIVE AGENCIES

Administrative agencies may be found under a variety of labels:

administration, Food and Drug Administration (FDA);
agency, Environmental Protection Agency (EPA);
authority, Federal Labor Relations Authority (FLRA);
board, National Transportation Safety Board (NTSB);
bureau, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF);
commission, Federal Trade Commission (FTC);
department, Department of Defence (DOD);
service, United States Secret Service (USSS).
 ADMINISTRATIVE AGENCIES

Usually, the government (President of the United States,

Prime Minister, Swiss Federal Council, EU Commission)
appoints the governing body (chairperson and
board).

Agencies hire a large number of employees (civil servants)

with technical expertise.
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ADMINISTRATIVE AGENCIES Thenhe
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Generally speaking, administrative agencies may:
I adopt legal rules that have an effect on future behaviour
(quasi-legislative power); and competitions
oversee and enforce the application of the law by
2
citizens and business, and prosecute alleged violations
(quasi-executive power); and
3 adjudicate disputes concerning alleged violations of the
law (quasi-judicial power). likecourts
regulation I go h m lg at

ADMINISTRATIVE AGENCIES
Administrative agencies primary task is to enforce a set of
statutes and regulations in a given sector, regulating
and conduct.

Often agencies have the power to grant permissions to engage

in regulated activities (licensing powers).

Example: the IRS collects taxes; the EPA administers the Clean
Air Act; the OSHA administers the Occupational Safety and
Health Act that protects safety and health on the job.
 EDF
REGULATORY POWERS

Many administrative agencies are granted by

enabling legislation the power to adopt legal
rules, intended to complete the statutes and
regulations adopted by parliaments and
governments.
 REGULATORY POWERS
FDA, Milk and Cream Products and Yogurt Products; Final Rule To Revoke the
Standards for Lowfat Yogurt and Nonfat Yogurt and To Amend the Standard for Yogurt
https://www.regulations.gov/document/FDA-2000-P-0126-0096

The final rule amends the standard of identity for yogurt by making certain technical
changes, permitting reconstituted forms of basic dairy ingredients (cream, milk, partially
skimmed milk, and skim milk used alone or in combination) and the use of any optional
safe and suitable milk-derived ingredient under certain conditions. The final rule also
establishes functional classes of safe and suitable ingredients including cultures,
flavoring, color additives, stabilizers, emulsifiers, and preservatives, and replaces the list
of nutritive sweeteners with the term carbohydrate sweeteners. The final rule
permits the optional labeling statement live and active or similar
statement if the yogurt contains specified amounts of live and active cultures. For yogurt
treated to inactivate viable microorganisms, the final rule requires a statement of
not contain live and active on the label.
 EXECUTIVE POWERS

Administrative agencies exercise executive powers, such as:

granting licenses and permits,
requiring registration,
enforcing compliance with standards and procedures by
means, for example of inspections and auditing accounts and
other documents.
power ofthestate
executive agencies
Policeissa administrative
Administrative agencies can also carry out operations (flood
relief work), and public services (health care, public transport).
 execute
power
LICENSING POWERS

A license is any permit, certificate, approval, registration,

charter, statutory exception, or another form of permission
granted by an administrative agency to a person or
company that want to exercise a regulated activity.
FYI.IM
A license confers the right to do something that would
otherwise be prohibited.
 LICENSING POWERS

The goal of licensing requirements is to prevent

businesses from becoming menaces to the public
welfare by requiring licensed businesses to maintain
specified standards for operation, sanitation,
construction, compliance with safety rules, and fire
protection.
LICENSING POWERS

FAA engages in
licensing when it
authorizes a new type of
plane to be put into
service.
LICENSING POWERS

authorization to
market a new vaccine is
another example of
licensing.
 C ADJUDICATORY
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Administrative agencies have the power to conduct proceedings
to determine whether regulatory or statutory violations have
occurred.

The administrative adjudication process is at once similar to, but

substantially different from, the judicial process in front of a court.

The agency operates as investigator, plaintiff, judge, and jury at

the same time.
 DISCRETION

Administrative agencies have broad powers that

necessitate the exercise of significant discretion when they
are employed.

In other words, enabling legislation grants agencies a

significant amount of leeway to use their powers as they
consider most appropriate.
 ADMINISTRATIVE AGENCIES POWERS
The law provides meaningful safeguards to individuals
concerned with administrative agencies activities.

The Constitution, statutes (Administrative Procedure Act

APA), and case law set significant limitations to
powers.

Administrative agencies must exercise their powers in a

lawful way.
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JUDICIAL REVIEW

Judicial review represents the means by which the courts

control the exercise of governmental power.

Judicial review is concerned with the legality of the

a ut hor i
decision made, not with the merits n
of the particular decision. by
 JUDICIAL REVIEW

An individual has the right to challenge actions if

her interests have been substantially affected by the
agency actions.

The aggrieved party can sue the agency to have a

regulation or an order invalidated by the court.
 JUDICIAL REVIEW
ment regulation Forgrown
Individuals can challenge Thegoer actions for several reasons
(grounds for judicial review):
the agency exceeded its authority as granted by its enabling
legislation (the agency acted ultra vires);
the agency substantially deviated from procedural requirements
contained in administrative procedure legislation or in the
enabling legislation; dont
comply toproceduralrequirement
actions breach a constitutional or statutory rule;
the agency erroneously interpreted a statute;
actions are unsubstantiated by the facts;
the agency decisions are arbitrary or disproportionate.
 JUDICIAL REVIEW charades
TFEU - art. 263

2. [The Court of Justice] shall also review the legality of acts of bodies, offices or
agencies of the Union intended to produce legal effects vis-à-vis third parties. It
shall for this purpose have jurisdiction in actions brought by a Member State, the
European Parliament, the Council or the Commission on grounds of lack of
competence, infringement of an essential procedural requirement, infringement of
the Treaties or of any rule of law relating to their application, or misuse of powers.

4. Any natural or legal person may, under the conditions laid down in the first and
second paragraphs, institute proceedings against an act addressed to that
person or which is of direct and individual concern to them, and against a
regulatory act which is of direct concern to them and does not entail
implementing measures.
x
REGULATION OF THE HOSPITALITY BUSINESS
Hotel and restaurant owners must obtain all necessary licenses before opening
their businesses.

Usually, local government agencies are tasked by the law with overseeing the
hospitality sector.

Every state sets different requirements, but usually hospitality businesses must
obtain:
hotel and/or restaurant license;
liquor license;
health and fire code permits;
zoning permits.
 x
REGULATION OF THE HOSPITALITY BUSINESS

A business owner has to obtain a license from a competent local government

authority in order to open a hotel or restaurant.

https://www2.minneapolismn.gov/business-services/licenses-permits/business-
licenses/lodging/hotels-motels/

https://www2.minneapolismn.gov/business-services/licenses-permits/business-
licenses/food-licenses/restaurants-coffee-cafes/restaurants/
REGULATION OF THE HOSPITALITY BUSINESS

A restaurant must comply with regulations about food

safety.

Health inspectors usually investigate the

premises of the restaurant to determine if it complies with
all health and sanitations rules.
 X
REGULATION OF THE HOSPITALITY BUSINESS

Specific rules apply to alcohol sales and often restaurants

and hotels must obtain a special license.

https://www2.minneapolismn.gov/business-
services/licenses-permits/business-licenses/alcohol-
tobacco/license-permit-applications/
REGULATION OF THE HOSPITALITY BUSINESS

Local governments are usually competent for safety.

They regulate both new building construction and additions or
renovations.

Standards for lighting, ventilation, restrooms, elevators, and

public corridors and entryways may be established by local
agencies.

The business must also comply with fire prevention regulations.

THANK YOU FOR YOUR
ATTENTION