CELEX: 62003TJ0309
Investigation by the European Anti-Fraud Office (OLAF) concerning the management and funding of the Institute for European-Latin American Relations (IRELA)
Potential conflict of interest on the part of an investigator
Removal from the investigating body
Impact on the conduct of the investigation and the content of the report of the investigation
Report terminating the investigation
Action for annulment
Admissibility
Action for damages
Admissibility

Legal framework
The European Anti-Fraud Office (OLAF), established by Commission Decision 1999/352/EC, ECSC, Euratom of 28 April 1999 (OJ
1999 L 136 p. 20), is responsible inter alia for carrying out internal administrative investigations intended to investigate
serious facts linked to the performance of professional activities which may constitute a breach of obligations by officials
and servants of the Communities likely to lead to disciplinary and, in appropriate cases, criminal proceedings.
Regulation (EC) No 1073/1999 of the European Parliament and of the Council of 25 May 1999 concerning investigations conducted
by the European Anti-Fraud Office (OLAF) (OJ 1999 L 136 p. 1) states that investigations concerning the institutions, bodies,
offices and agencies of the Communities are to be carried out subject to the rules of the Treaties and with due regard for
the Staff Regulations of Officials of the European Communities (second subparagraph of Article 4(1)). Article 6 specifies
how the investigation procedure is to be conducted, and provides for that procedure to be carried out under the authority
of the Director of OLAF by OLAF’s employees, whose attitude must be in keeping, inter alia, with the Staff Regulations of
Officials of the European Communities.
Article 9 of Regulation No 1073/1999 provides that on completion of an investigation carried out by OLAF, the latter is to
draw up a report, under the authority of its Director, specifying in particular the findings of the investigation, including
the recommendations of the Director on the action that should be taken. Article 9(4) states that reports drawn up following
an internal investigation and any related documents are to be sent to the institution, body, office or agency concerned, which
is, where necessary, to take such disciplinary or legal action on the internal investigations as the results of those investigations
warrant.
Article 14 of that regulation provides that any official or other servant of the European Communities may submit to the Director
of OLAF a complaint against an act adversely affecting him committed by OLAF as part of an internal investigation, in accordance
with the procedures laid down in Article 90(2) of the Staff Regulations of Officials of the European Communities.
The first paragraph of Article 4 of Commission Decision 1999/396/EC, ECSC, Euratom of 2 June 1999 concerning the terms and
conditions for internal investigations in relation to the prevention of fraud, corruption and any illegal activity detrimental
to the Communities’ interests (OJ 1999 L 149, p. 57) states that where the possible implication of a Member, official or servant
of the Commission emerges, the interested party is to be informed rapidly as long as that would not be harmful to the investigation.
It goes on to provide that no conclusion referring to the interested party by name may be drawn once the investigation has
been completed without his having been enabled to express his views on all the facts which concern him.

Background
From 1992 to 1997, Mr Camós Grau, an official of the Commission in Grade A 3, was employed in the directorate responsible
for Latin America of the Directorate General (DG) for external economic relations and was involved in the management of the
Institute for European‑Latin American Relations (‘IRELA’), established in 1984.
After a number of reports, in particular from the Financial Control DG of the Commission, in 1997, and the Court of Auditors,
in 1998, had shown evidence of budgetary and accounting irregularities at IRELA, the Director of OLAF decided on 4 July 2000
to initiate an investigation concerning IRELA and on 29 January 2001 to extend the initial investigation and at the same time
to initiate an internal investigation regarding three officials of the Commission, including the applicant.
As required by Article 4 of Decision 1999/396, the Director of OLAF advised Mr Camós Grau on 30 January 2001 that the investigation
had been initiated and that it was possible that he could be implicated in any irregularities that might be established. He
also gave him details of the names of the OLAF employees responsible for carrying out the investigation.
Mr Camós Grau, who was accompanied by his lawyer, was heard on 22 February 2001 by three of the four OLAF agents carrying
out the investigation.
By letters of 22 February 2002, sent to the Director of OLAF and the OLAF Supervisory Committee, Mr Camós Grau drew attention
to the role of the Financial Control DG and expressed his concerns regarding one of the investigators, Mr P., on the ground
that the latter could not possess the objectivity needed for carrying out the investigation, as part of his career had been
undertaken in that Directorate-General. The Director of OLAF sent him a holding reply on 22 March 2002.
In a letter of 15 April 2002 sent to the Director of OLAF, Mr Camós Grau’s lawyer set out his client’s concerns in relation
to the potential conflict of interest on Mr P.’s part in the light of the duties undertaken by the latter in the Unit responsible
for monitoring IRELA in the Financial Control DG at the time of the events subject to the investigation and his conduct in
the course of that investigation. The applicant’s lawyer wrote in similar terms to the chairman of the OLAF Supervisory Committee
on 26 April 2002.
Mr Camós Grau, accompanied by his lawyer, was heard on 22 April 2002, by the head of the OLAF Magistrates, Judicial Advice
and Follow-up unit at a hearing convened for the purpose of his giving greater detail with regard to his allegations concerning
Mr P. On 23 April 2002, the head of the unit heard the investigator in question.
By letter of 17 May 2002, the head of the Magistrates, Judicial Advice and Follow-up unit informed Mr Camós Grau that his
unit had given a legal opinion to the Director of OLAF that ‘the position of Mr P. as an assistant investigator in the [IRELA]
case could be perceived as involving a conflict of interest’ and that, in accordance with the recommendation made to the director
of that unit, OLAF had decided ‘to remove [that investigator] from the investigation’ (‘the decision of 17 May 2002’).
On 29 July 2002, Mr Camós Grau brought a complaint under Article 90 of the Staff Regulations of Officials of the European
Communities, in its version applicable to the present case (‘the Staff Regulations’) pursuant to Article 14 of Regulation
No 1073/1999, seeking in particular the annulment of the decision of 17 May 2002 in so far as it left extant the measures
with which Mr P. had been involved in the investigation concerning IRELA, which were, according to the applicant, contrary
to the requirements of impartiality and objectivity, and seeking payment of compensation for non-material damage caused to
him and damage caused to his employment prospects.
The Director of OLAF acknowledged receipt of that complaint on 14 August 2002.
On 25 September 2002, Mr Camós Grau’s lawyer sent a further letter to the Director of OLAF and the chairman of the Supervisory
Committee in which he restated his client’s objections as to the conduct of the investigation concerning IRELA.
On 17 October 2002, the final report of the investigation concerning IRELA was sent by the Director of OLAF to the Secretary-General
of the Commission, the Secretary-General of the European Parliament and the Belgian and Spanish judicial authorities. It was
also sent to Mr Camós Grau on 4 November 2002. The Spanish and Belgian judicial authorities notified OLAF of their decision
to take no further action in the case on 13 February and 10 March 2003 respectively.
The OLAF report criticised the conditions under which IRELA had been managed and the role assumed by the Commission in that
regard. It implicated, in particular, three Commission officials, including Mr Camós Grau, who had been involved in the management
of IRELA, declaring them responsible for having proposed and authorised a system of funding which allowed budgetary and accounting
irregularities to arise. The report recommended that disciplinary proceedings be initiated against them.
As the complaint brought by Mr Camós Grau on 29 July 2002 had not been the subject of an express reply in the period of four
months laid down by Article 90(2) of the Staff Regulations, that complaint was impliedly rejected on 29 November 2002 (‘the
decision of 29 November 2002’).
In its edition of 11 December 2002, the Spanish daily newspaper
El País
published an article on OLAF’s findings in its report regarding IRELA, headed ‘the European Union implicates Spanish politicians
and officials in uncorroborated expenditure of 3.6 million’, which mentioned the applicant by name.
On 4 February 2003, Mr Camós Grau submitted to the Director of OLAF a complaint directed against the report of 17 October
2002 terminating the OLAF investigation.
Following the delivery of the OLAF report, the Commission instructed the Investigation and Disciplinary Office (‘IDOC’) on
10 February 2003 to carry out a further administrative investigation in order to determine whether certain acts had complied
with the rules in force at the relevant time and to determine whether any responsibility might lie with any of the officials
referred to in the OLAF report.
By application lodged at the Court Registry on 10 March 2003, Mr Camós Grau brought an action, registered under number T-96/03,
seeking, first, the annulment of the decision of 17 May 2002 removing Mr P. from the investigation concerning IRELA, in so
far as it left extant measures with which he had been involved, and the decision of 29 November 2002 impliedly rejecting his
complaint and an order that the Commission should pay him damages in respect of the non-material damage and the damage to
his employment prospects allegedly suffered by reason of those decisions.
By decision of 28 May 2003, the Director of OLAF rejected Mr Camós Grau’s complaint directed against the report of 17 October
2002, on the basis, primarily, that the report did not adversely affect him and, also, that the assertions made by him as
to the lawfulness of the investigation were without merit.
IDOC delivered its report on 2 July 2003. The report concluded that the involvement of the Commission officials in the management
of IRELA complied with the Community rules then in force and that, in the absence of evidence to show that those officials
had adopted an attitude that was incompatible with those rules in relation to IRELA’s restructuring plan, they could not be
held to be responsible. The report stated that no instances of individual responsibility had been brought to light by the
investigation, but that the latter had, on the other hand, disclosed a lack of coordination between the Commission’s staff
responsible for the monitoring of the Community funds granted to IRELA. Lastly, it proposed that either the further administrative
investigation be terminated without further action being taken, or that additional investigations, which would be long and
complicated, be carried out.
On 2 September 2003, the Appointing Authority informed Mr Camós Grau that it had decided to terminate the case without initiating
disciplinary proceedings.
By order of 9 June 2004 in Case T-96/03
Camós Grau
v
Commission
[2004] ECR-SC I-A-157 and II-707, the Court rejected the applicant’s application referred to in paragraph 23 above as being
inadmissible. The Court held in particular that the contested decision constituted an intermediate step which formed part
of the investigation procedure initiated by OLAF, that it was without binding legal effects capable of affecting the applicant’s
interests and altering his legal position and that its unlawfulness could be raised before the Court in an application against
the challengeable act terminating the procedure.

Procedure
By application lodged at the Court Registry on 8 September 2003, Mr Camós Grau brought the present action.
By letter of 29 September 2003, the applicant requested the Court to order the Commission to produce documents relating to
OLAF’s investigation and actions taken pursuant to it.
By measure of organisation of procedure notified on 30 March 2004, the Court requested the Commission to produce all of the
annexes to the OLAF report, the report of the further administrative investigation carried out by IDOC and the draft report
prepared by one of the investigators responsible for the OLAF investigation, which formed the basis of OLAF’s final report.
The Court also requested the Commission to indicate the changes made to the draft OLAF report and which measures undertaken
by the investigation had been given further consideration, and to specify the reasons why OLAF did not undertake a more detailed
analysis of the role of the Financial Control DG.
The Commission produced the documents requested and replied to the questions put by the Court on 10 May 2004, and the applicant
submitted his observations in relation to those productions and replies on 1 July 2004.
Pursuant to Articles 14 and 51 of its Rules of Procedure, the Court, after hearing the parties, decided on 6 June 2005 to
refer the case to the Fourth Chamber, composed of five judges.
By measure of organisation of procedure notified on 27 June 2005, the Court requested the parties to produce the complaint
of 4 February 2003 referred to in paragraph 21 above, and, with regard to the applicant’s application for a director’s post
referred to in his written pleadings, to indicate the circumstances in which the vacancy arose, the nature of the post and
the application procedure adopted. The Court also asked the defendant to provide examples of acts adversely affecting the
applicant which might, in its view, be capable of forming the subject of a complaint made under Article 14 of Regulation No
1073/1999 and to explain why the passages in the draft OLAF report relating to the involvement and the responsibility of the
Financial Control DG had been deleted in the final version of the report. The defendant and the applicant replied to the questions
put by the Court on 5 and 9 August 2005, respectively.
The parties presented oral argument and replied to questions put by the Court at the hearing on 14 September 2005.
By letter of 23 September 2005, the Commission indicated that it wished to provide further details in relation to certain
questions addressed at the hearing regarding the distribution of the OLAF report within its services and the placing of that
report on the applicant’s personal file.
By order of 26 October 2005, the President of the Fourth Chamber of the Court (Extended Composition) reopened the oral procedure
in order to place on the file the information so provided and to allow the applicant to submit any observations he might have
on the additional material supplied by the Commission.
The applicant did not submit any observations within the period laid down by the Court.
The President of the Fourth Chamber of the Court (Extended Composition) ended the oral procedure by decision of 3 January
2006.

Forms of order sought
The applicant claims that the Court should:
–        annul the decision of 17 May 2002 removing Mr P. from the investigation concerning IRELA in so far as it leaves extant measures
undertaken with his involvement without reconsidering them, annulling them or laying down new measures;
–        annul the decision of 29 November 2002 impliedly rejecting his complaint of 29 July 2002 brought against the decision of 17
May 2002;
–        annul the OLAF report of 17 October 2002 terminating the investigation relating to IRELA;
–        annul the decision of 28 May 2003 of the Director of OLAF rejecting the applicant’s complaint of 4 February 2003 against that
report;
–        order the Commission to pay him a sum provisionally assessed at EUR 10 000 in compensation for his non-material damage;
–        order the Commission to pay him a sum provisionally set at EUR 1 in compensation for damage to his employment prospects;
–        order the Commission to reimburse him the expenses incurred in his defence in relation to the investigation and his administrative
complaints against the decision of 17 May 2002 the OLAF report of 17 October 2002;
–        order the Commission to pay the costs.
The Commission contends that the Court should:
–        dismiss the action as being inadmissible in its entirety or, alternatively, as regards the application for the annulment of
the first two contested decisions;
–        in the alternative, dismiss the action as being unfounded;
–        order the applicant to pay the costs.

Law

The claims for the annulment of the decision of 17 May 2002 and the decision of 29 November 2002
The first and second heads of claim set out in this action, which seek the annulment of the decisions of 17 May and 29 November
2002, do no more than repeat in identical terms the claims previously put forward in Case T-96/03. On 8 September 2003, when
the present action was brought, they were accordingly inadmissible by virtue of the objection of
lis alibi pendens
which the Court must, in any event, raise of its own motion (Joined Cases 45/70 and 49/70
Bode
v
Commission
[1971] ECR 465, paragraph 11, and Case T-99/95
Stott
v
Commission
[1996] ECR II‑2227, paragraphs 22 and 23). Moreover, as mentioned in paragraph 27 above, the Court held in its order in
Camós Grau
v
Commission
that those claims were inadmissible on the basis that they were not directed towards a challengeable act.
It follows from the above that the first and the second heads of claim in the present action are, as such, inadmissible. That
does not mean that the arguments put forward in support of them may not be taken into account in determining, if appropriate,
the lawfulness of measures undertaken subsequently to those to which those claims refer.

The claims for the annulment of the decision of 28 May 2003 rejecting the applicant’s complaint of 4 February 2003 brought
against the OLAF report
It is settled case-law that claims directed against the rejection of a complaint have the effect of bringing before the Court
the act against which the complaint was submitted and as such lack any independent content (Case 293/87
Vainker
v
Parliament
[1989] ECR 23, paragraph 8). It must therefore be held that the sole purpose of the third head of claim, directed against
the OLAF report, and the fourth head of claim, directed against the rejection of the complaint brought against that report,
is to seek the annulment of the OLAF report of 17 October 2002 (see, to that effect, Case T-310/02
Theodorakis
v
Council
[2004] ECR-SC I-A-95 and II-427, paragraph 19).

The claims for the annulment of the OLAF report of 17 October 2002

Admissibility
Arguments of the parties
The Commission argues that the contested measure constitutes a preparatory act which does not adversely affect the applicant
and cannot be the subject of an application for annulment. A report of an investigation carried out by OLAF, in the same way
as the investigation and measures of organisation undertaken during it, are merely preparatory steps which do not mean the
final decision of the administration will necessarily adopt the same approach. Accordingly, even were the claims regarding
all kinds of procedural irregularities affecting the investigation to be proved, they would not undermine the conclusion that
the disputed report was of the nature of a preparatory act and not of an act adversely affecting the applicant, in the absence
of any change to his legal position. The infringement of procedural rules does not establish that an act adversely affecting
the applicant has been committed, but may on the other hand be relied on in the course of proceedings against a final decision
of the administration, which will, as such, represent an act adversely affecting the applicant. The defendant adds that the
alleged effect on the applicant’s non-material interests and employment prospects is irrelevant, as these represent factual
considerations and not necessary consequences of the report which alter his legal position. It also maintains that, notwithstanding
its functional independence, OLAF has no decision-making power and that reports of its investigations have no binding legal
effect, their purpose being, in particular, to form a basis for disciplinary proceedings.
The applicant contends that his application is admissible, as the OLAF report is an act which adversely affects him. The report
directly and immediately affects his legal situation by reason of the irregularities comprised in it. The report represents
the culmination of a complex procedure tainted by the irregularity of previous measures of investigation or failures to act
on OLAF’s part, by the infringement of principles of natural justice, impartiality, the protection of legitimate expectations
and sound administration and the failure to have regard to the right to a fair hearing. It was adopted in irregular circumstances,
as this was done without the concurrence of the only investigator whose authority continued until the end of the investigation
and without having been submitted to the applicant, who, however, was implicated personally. Mr Camós Grau argues that the
report directly and immediately affects his non-material interests, first, because it refers to him by name and wrongly ascribes
responsibility to him for the irregularities that were established and, secondly, because it was sent to the Commission and
the Spanish and Belgian judicial authorities and was the subject of publicity in the press. The report is also capable of
having an effect on the applicant’s employment prospects and appears also to have prevented his being promoted to a director’s
post which he had applied for. The OLAF report is of the nature of a decision, as it results from a decision of the Director
of OLAF, in terms of Regulation No 1073/1999. Lastly, the applicant argues that the internal investigation procedure undertaken
by OLAF must be treated as being separate from the disciplinary procedure by reason of OLAF’s functional independence.
Findings of the Court
The action is directed against the act adopted by OLAF under the authority of its Director which approved the conclusions
of the report terminating the investigation concerning IRELA.
According to established case-law, measures the legal effects of which are binding on and capable of affecting the interests
of the applicant by bringing about a distinct change in his legal position are acts or decisions which may be the subject
of an action for annulment in terms of Article 230 EC (Case 60/81
IBM
v
Commission
[1981] ECR 2639, paragraph 9, and Case 346/87
Bossi
v
Commission
[1989] ECR 303, paragraph 23).
A report such as that drawn up by OLAF on the conclusion of its external and internal investigations concerning IRELA does
not bring about a distinct change in the legal position of those persons who, like the applicant, are referred to in it by
name.
It is true that the report terminating an investigation, which is a completed document, adopted at the end of an autonomous
administrative procedure by a service having functional independence, cannot, on that ground, be categorised as a measure
preparatory to administrative or judicial proceedings liable to be initiated pursuant to it but which may equally well be
initiated at the same time as or before OLAF is involved. However, the final nature of an OLAF report for the purposes of
the procedure governing investigations which that office carries out does not thereby confer on it the nature of an act having
binding legal effects.
The reports by which OLAF’s investigations are completed and the drawing up and delivery of which complete its task contain,
apart from the narrative of the facts established, a statement of the findings which are drawn from them and recommendations
as to the action, in particular disciplinary measures and those involving criminal proceedings which may, in OLAF’s view,
be taken pursuant to the reports, with those conclusions and recommendations being addressed to the competent authorities
of the Member States and the institutions concerned in order that they may decide whether or not to act upon them. While OLAF
may recommend in its reports that measures be adopted having binding legal effects adversely affecting the persons concerned,
the opinion it provides in that regard imposes no obligation, even of a procedural nature, on the authorities to which it
is addressed.
In that regard, it is clear from the provisions of Regulation No 1073/1999, in particular the 13th recital in the preamble
and Article 9, that the findings of OLAF which are set out in a final report do not lead automatically to the initiation of
judicial or disciplinary proceedings, since the competent authorities are free to decide what action to take pursuant to a
final report and are accordingly the only authorities having the power to adopt decisions capable of affecting the legal position
of those persons in relation to which the report recommended that such proceedings be instigated (order of 13 July 2004 in
Case T-29/03
Comunidad Autónoma de Andalucía
v
Commission
[2004] ECR II‑2923, paragraph 37).
It is moreover not in dispute in the present case that, although the disputed report recommended that disciplinary proceedings
be initiated against the applicant, such proceedings were not brought, as, on the contrary, the Appointing Authority informed
Mr Camós Grau on 2 September 2003 that it had decided to bring the matter to a close without taking disciplinary measures.
As a result of that decision to bring the matter to a close, together with the Appointing Authority’s statement that it was
not seeking to hold the applicant responsible for the matters which gave rise to OLAF’s investigation, the contested report
could no longer serve as the legal basis for any subsequent decision of the Appointing Authority concerning him and could
not be taken into account in any way, unlike, for example, a staff report, in the career planning of the party concerned.
Nor did the report have consequences in terms of criminal proceedings, as the Belgian and Spanish judicial authorities informed
OLAF on 13 February and 10 March 2003 respectively of their decisions to take no further action in the case, as mentioned
in paragraph 17 above. That being so, it follows in such circumstances that the applicant’s professional situation cannot
be affected by the contested report.
The arguments put forward by the applicant relative to the manner in which the investigation was conducted and the content
of the report do not alter those conclusions in any way.
Procedural irregularities and infringements of essential procedural requirements raised in an action for annulment, in terms
of which it is argued, as in the present case, that they have vitiated a report of an OLAF investigation, cannot confer on
that report the status of an act adversely affecting the applicant. A challenge lies against such failures only in support
of an action directed against a previous challengeable act, to the extent that they have influenced its content, and not independently,
in the absence of such an act (see, to that effect, Joined Cases 181/86 to 184/86
Plato and Others
v
Commission
[1987] ECR 4991, paragraphs 10, 22, 25, 33, 35, 36 and 38).
Furthermore, even if it were the case that the OLAF report affected the applicant’s non-material interests inasmuch as, on
the one hand, it referred to him by name and wrongly attributed responsibility to him for the irregularities that were established
and, on the other, it was sent to the Commission and the Spanish and Belgian judicial authorities and was publicised in the
press, such matters, which are capable of causing harm, cannot however confer on the report the status of an act adversely
affecting the applicant for the purposes of Article 230 EC.
Lastly, the challengeability of the OLAF reports is unaffected by the fact that they are adopted, under the authority of the
Director, by an act of OLAF, which takes the form, in the present case, of the adoption of the disputed report and its forwarding
to the authorities concerned on 17 October 2002.
It follows from the above that the application for the annulment of the OLAF report of 17 October 2002 concerning IRELA is
directed against a document which has no legal effects which are binding on and capable of affecting the interests of the
applicant, by bringing about a distinct change in his legal position. The claims for the annulment of the report are accordingly
inadmissible.

The claims for compensation for the alleged harm

Admissibility
Arguments of the parties
The Commission, which pleads that the action is inadmissible in its entirety, contends that the fact that the claims for annulment
are inadmissible has the consequence that those for payment of monetary compensation are also inadmissible where, as in the
present case, the two claims are closely connected.
Furthermore, as the complaint against the OLAF report which the applicant made to the Director of OLAF on 4 February 2003
did not include a request for monetary compensation, the claims of Mr Camós Grau for such compensation are also inadmissible
by reason of Articles 90 and 91 of the Staff Regulations, to which Regulation No 1073/1999 refers.
The applicant submits that his application for compensation for the damage caused by the unlawfulness of the OLAF report and
by the serious errors made by OLAF in his regard is admissible.
Findings of the Court
–       The obligation to make a prior complaint
The documents before the Court show that in his complaint of 4 February 2003 against the OLAF report, the applicant restricted
himself, as regards the damage for which he seeks compensation in the present action, to ‘reserv[ing] the right to seek compensation
for the extremely serious material and non-material damage which that report has caused him and is liable to cause him in
the future’.
The defendant’s position is based upon the premiss that Article 14 of Regulation No 1073/1999 requires that a complaint under
Article 90(2) of the Staff Regulations be made before any application is brought by an official or servant against a decision
of OLAF, whether that application seeks the annulment of a measure or compensation for damage. As a result, an application
for monetary compensation must, in order to be admissible, have been preceded by a complaint having the same subject-matter.
An exception can only be made where the claims for damages are clearly ancillary to claims for annulment which are both preceded
by a complaint and admissible, which is not the case in these proceedings.
However, Article 14 of Regulation No 1073/1999 provides for the opportunity to submit a complaint to the Director of OLAF
only where there is an act adversely affecting the person concerned, and not in the case of a request for damages based on
allegedly wrongful acts or omissions on OLAF’s part arising in the course of an investigation. It is therefore necessary to
determine whether the broad interpretation given by the Commission to that provision as regards the duty to make a previous
complaint is justified.
In so doing, it is necessary to consider whether this case falls to be treated as being covered by the general rules governing
disputes based on non-contractual liability under Article 235 EC and Article 288 EC or those concerned with relations between
the Community and its servants under Article 236 EC. In the former case, it is possible to bring claims for damages directly
before the Court. By contrast, in the latter case, an action for damages in which compensation is sought for injury caused,
not by a measure adversely affecting the applicant which it is sought to annul, but by a number of wrongful acts and omissions
allegedly committed by the administration, must, according to case-law, be preceded by a two-stage procedure. It is imperative
that that procedure should begin with the presentation of a request asking the Appointing Authority to make good the alleged
injury and continue, if necessary, with the lodging of a complaint against the decision rejecting the request (Case T-20/92
Moat
v
Commission
[1993] ECR II-799, paragraph 47).
In the present case, the applicant’s challenge is not brought against the Commission in its capacity as Appointing Authority,
under whose auspices he comes within as an official, but as the institution to which OLAF is attached. The latter is a service
possessing functional autonomy and whose relations with the officials and servants of the various institutions are not subject
to the normal rules applying to relations between officials and servants and their Appointing Authority. The fact that the
Commission is the defendant in these proceedings, as in all actions directed against OLAF, is a consequence of the administrative
and budgetary attachment of that service to the institution concerned and the fact that it is without legal personality. It
is sufficient in that regard to note that had Mr Camós Grau not been an official of the Commission, but of another institution,
he would still have been required to address a request for damages allegedly suffered by reason of OLAF’s conduct to the Commission.
Furthermore, the dispute does not concern the actings or the conduct of the Commission which may affect the applicant’s employment
prospects, as the OLAF report has, of itself, no legal effect on his professional situation, as was held above. The objections
he raises, which relate to the errors committed by OLAF in his regard in the course of the investigation concerning IRELA
and which led to the report including opinions and findings that are unfavourable to him, put Mr Camós Grau in the same position
as any person, whether or not an official of the Communities, who is implicated in a report by OLAF. The fact that OLAF’s
findings relating to the applicant concern his role as a Commission official in the management and operation of IRELA does
not alter the subject-matter of the dispute, which does not relate to Mr Camós Grau’s professional activity but to the way
in which OLAF conducted and concluded an investigation which refers to him by name and ascribes to him responsibility for
the irregularities that were established.
The fact that Mr Camós Grau submitted a complaint to the Director of OLAF in terms of Article 14 of Regulation No 1073/1999,
which was applicable at the time, under the procedure laid down in Article 90(2) of the Staff Regulations, for the purpose
of having the OLAF report annulled, is irrelevant in that regard.
First, the organisation of legal remedies and, in that context, the applicability of the Staff Regulations are questions of
law which are not subject to the will of the parties. Secondly, Article 14 of Regulation No 1073/1999 did not apply, since
it allows a complaint to be made only where there is an act adversely affecting the person concerned; as has already been
established, the OLAF report did not constitute such an act and as a result that provision did not make the procedure involving
a complaint through official channels applicable to the dispute.
It is true that since the entry into force on 1 May 2004 of the new provisions of the Staff Regulations, an Article 90a, which
relates to OLAF, has been inserted. In addition to the opportunity, as before, to submit a complaint to the Director of OLAF
pursuant to Article 90(2) of the Staff Regulations against an act of OLAF carried out in the course of an OLAF investigation
which adversely affects the person concerned, it allows a person to submit a request within the meaning of Article 90(1) of
the Staff Regulations to the Director, asking him to take a decision relating to him in connection with an investigation by
OLAF.
However, prior to that new provision coming into force and since Article 14 of Regulation No 1073/1999 is silent on the point,
it was not necessary to have regard to the rules governing disputes set out in the Staff Regulations in the case of requests
for damages in connection with OLAF investigations. The applicant was therefore not obliged to follow the procedure laid down
under Article 90 of the Staff Regulations in order to submit such a request for damages. In those circumstances, the claims
for damages in this action cannot be rejected on the ground that Mr Camós Grau failed to comply with a procedure which was
not laid down under the provisions in force at the relevant time.
It should, moreover, be noted that in his complaint of 4 February 2003 against the OLAF report, Mr Camós Grau referred, admittedly
on a hypothetical basis, to his right to request compensation for the damage caused by the report. Even though that reference
cannot be considered to amount to a prior request for damages in the formal sense, the purpose of a complaint is to allow
the Appointing Authority to adopt a position on a question concerning the Staff Regulations prior to an action being brought.
The defendant cannot therefore reasonably submit in the context of the present case that it has been denied the opportunity
of preparing itself prior to an action for damages being raised.
It is settled case-law that no form is prescribed for administrative complaints brought under Article 90(2) of the Staff Regulations,
which must be interpreted and understood by the administration with all the care that a large and well-equipped organisation
owes to those having dealings with it, including members of its staff (Case 54/77
Herpels
v
Commission
[1978] ECR 585, paragraph 47).
In the present case, the Commission was given the opportunity to take a view on the essential elements of Mr Camós Grau’s
request for damages, both at the administrative stage and when the dispute was before the Court and, even if it is assumed
that Article 90 of the Staff Regulations were to apply, a failure to make a prior complaint cannot preclude the applicant’s
claims for damages on the ground that, prior to his action being brought, he did not make a formal request for compensation
other than to request the annulment of the report.
–       The connection between the claim for damages and the claim for annulment
The defendant cannot rely on the case-law which provides that, where a claim for damages and an action for annulment are closely
connected, the inadmissibility of the action for annulment entails the inadmissibility of the claim for damages (
Bossi
v
Commission
, cited in paragraph 47 above, at paragraph 31).
That case-law is expressly designed to prohibit an official who has failed to contest within the prescribed period a decision
of the Appointing Authority which has adversely affected him circumventing the consequences of his being out of time by bringing
an action for damages based on the purported unlawfulness of that decision (Case 59/65
Schreckenberg
v
Commission
[1966] ECR 543, 550, Case 4/67
Collignon
v
Commission
[1987] ECR 365, 373, 374, and Case 401/85
Schina
v
Commission
[1987] ECR 3911, paragraphs 10 and 13).
The position must be the same where the inadmissibility of claims for annulment arises not because they are out of time but
from the nature of the contested measure which, while not allowing the person concerned to seek its annulment, may none the
less give rise to a claim for damages.
Individuals who, by reasons of the conditions as to admissibility laid down under the fourth paragraph of Article 230 EC,
cannot contest directly certain Community acts or measures, none the less have the opportunity of putting in issue conduct
lacking the features of a decision, which accordingly cannot be challenged by way of an action for annulment, by bringing
an action for non-contractual liability under Article 235 EC and the second paragraph of Article 288 EC, where such conduct
is of such a nature as to entail liability for the Community (Joined Cases T-377/00, T-379/00, T-380/00, T-260/01 and T-272/01
Philip Morris International and Others
v
Commission
[2003] ECR II-1, paragraph 123). It is open to individuals in an action for damages of that kind to put forward unlawful
acts which have been committed when an administrative report is drawn up and adopted, even though that report is not a decision
directly affecting the rights of the persons mentioned therein (Case C‑315/99 P
Ismeri Europa
v
Court of Auditors
[2001] ECR I-5281, paragraphs 29 and 30).
Moreover, the action for damages is an independent form of action, with a particular function to fulfil within the system
of legal remedies and subject to conditions for its use conceived with a view to its specific purpose (see Case C-234/02 P
Ombudsman
v
Lamberts
[2004] ECR I‑2803, paragraph 59, and the case-law cited there).
Accordingly, the admissibility of the action for damages brought by Mr Camós Grau, which seeks compensation for non-material
damage and damage to his employment prospects arising from the unlawful acts committed by OLAF in the investigation concerning
IRELA and the drawing up of the subsequent report, must be considered separately from the action for annulment.
It follows that the applicant’s claims in respect of the damage caused to him by OLAF’s conduct must be held to be admissible.

Substance
Arguments of the parties
The applicant argues that the unlawful acts committed by OLAF in the investigation concerning IRELA and in the adoption of
the report of 17 October 2002 not only constituted maladministration but also damaged his employment prospects.
His application contains six pleas relating to the alleged unlawful acts.
First, the decision by OLAF to release Mr P. from the investigation did not satisfy the obligation to state adequate reasons
required by Article 253 EC and by Article 25 of the Staff Regulations, as Mr Camós Grau was informed of it only by the notice
given to him on 17 May 2002 by the head of the Magistrates, Judicial Advice and Follow-up unit, which did not state the reasons
for that decision in detail.
Secondly, OLAF infringed the right to a fair hearing, together with the principle of the protection of legitimate expectations
and the principle of sound administration. The external audit report of 14 December 2000 concerning IRELA was not provided
to Mr Camós Grau in sufficient time prior to his hearing by OLAF on 22 February 2001. At that hearing, the investigators led
him to understand that he was being heard as a witness and not with a view to his responsibility being determined. Nor was
there available to him, at his hearing and thereafter for him to reply to the written questions which were subsequently put
to him, information necessary to his defence, in particular evidence gathered by OLAF against him. The right to a fair hearing
and Article 4 of Decision 1999/396 were also infringed, inasmuch as the OLAF report and the annexes to it were not provided
to him before the report was adopted.
Thirdly, the applicant submits that the OLAF report was drawn up in breach of Article 6(1) to (3) and Article 9(1) and (2)
of Regulation No 1073/1999 and the principle that OLAF reports should be objective, as the only investigator remaining responsible
for the investigation until its conclusion did not concur in it. The draft report prepared by that investigator before his
departure from OLAF at the beginning of September 2002 differed significantly from the final report, which, moreover, did
not bear his signature. The applicant maintains that OLAF reports must be drawn up by the investigators and that the Director
of OLAF is not authorised by Regulation No 1073/1999 either to adopt or to amend a report of an investigation.
Fourthly, the applicant submits that the investigation was not carried out in compliance with the fundamental principles of
Community law and the Staff Regulations, in particular Article 14, as Regulation No 1073/1999 requires.  As Mr Camós Grau
had given OLAF serious reason to believe that there was a conflict of interest on the part of one investigator, OLAF should
have satisfied itself that the acts of that investigator and the policies adopted by the investigation were objectively necessary
and were not the result of the conflict of interest he complained of. The relevance of the objections put forward by Mr Camós
Grau at the time is substantiated by the contradictory reasoning of the decision of 28 May 2003 rejecting his complaint against
the disputed report, as that decision acknowledged that the removal of Mr P. was necessary for the objectivity of the investigation,
but held at the same time that his involvement had had no detrimental consequences.
Fifthly, OLAF had committed manifest errors in its assessment of Mr P.’s actual role, first, as regards the monitoring of
IRELA by the Commission  by reason of the responsibilities passed by the investigator to the Financial Control DG and, secondly,
by refusing to accept that the conflict of interest on Mr P.’s part had had an impact on the investigation when Mr P. had
played a major and essential role in the policy and conduct of the investigation, as is shown by the final version of the
report.
Sixthly, the applicant contends that the principles of natural justice and impartiality were infringed. Although OLAF acknowledged
that the independence and objectivity of Mr P. could not be guaranteed and removed him from the investigation for that reason,
OLAF failed to draw the appropriate conclusions from that, and allowed the actions of Mr P. to stand. Thus, no account was
paid to the responsibility of the officials of the Financial Control DG in the report, which instead ascribed primary responsibility
for the irregularities established to the Commission officials who had been involved in the management of IRELA, in particular
the applicant.
In support of his application for damages, Mr Camós Grau argues that OLAF thereby committed two serious errors, the first
in entrusting, by its decision of 17 May 2002, its investigation into IRELA to an official whose independence could not be
formally guaranteed, and the second in adopting findings that were not based upon adequately strong evidence, as is shown
by the further investigation conducted by the Appointing Authority.
The applicant maintains that the errors committed by OLAF caused him damage in two ways. First, OLAF damaged his peace of
mind, his honour and his professional reputation in allowing unjustified suspicions in his regard to continue to exist and
in threatening him with the instigation of disciplinary and criminal proceedings until the decision by the competent judicial
and administrative authorities to take no further action, thereby causing him non-pecuniary damage. Mr Camós Grau refers in
that regard to the length of the procedure, the gravity of OLAF’s findings in his regard and the publicity given to them in
the press. Secondly, the applicant suffered damage to his employment prospects, as his application for a director’s post was
rejected when he had been assured of being appointed to the post on an acting basis and thus satisfied the conditions necessary
for being appointed to it.
The Commission submits that the conditions necessary for incurral of the non-contractual liability of the Commission are not
met, given that no allegations of unlawful conduct can be made against it, as the OLAF investigation was carried out and the
report was drawn up in accordance with the requisite requirements as to objectivity and impartiality.
First, the defendant argues that the decision of 17 May 2002 satisfies the obligation to provide adequate reasons and that
the applicant is wrong to rely on Article 25 of the Staff Regulations, as it is Article 14 of Regulation No 1073/1999 which
is applicable.
Secondly, it contends that the right to a fair hearing was not infringed. Mr Camós Grau was given ample time before his hearing
to consider the external audit report concerning IRELA and was provided during the investigation with all information relevant
to his defence. The investigators did not provide him with misleading information as to the subject-matter of the investigation
and the large number of questions put to him enabled him to be fully aware of the matters for which he might be held responsible.
Furthermore, neither Regulation No 1073/1999 nor Article 4 of Decision 1999/396 require that a draft of OLAF’s report be supplied
to the person concerned, but only that he is to be allowed to state his position on all the facts which concern him, as was
done in the present case.
Thirdly, the Commission states that OLAF’s internal rules provide that the drawing up of the report of an investigation, which
Article 9 of Regulation No 1073/1999 requires to be under the authority of the Director, is to be entrusted to an executive
board and that there is no general principle which requires that there be continuity in the membership of the group of officials
and servants carrying out an investigation.
Fourthly, the Commission maintains as regards the proper conduct and the objectivity of the investigation, that OLAF carefully
considered the possibility of a conflict of interest on Mr P.’s part and that once this was recognised OLAF removed the investigator
at a point where the report had not yet been finalised.
Fifthly, OLAF’s appraisal of the role of Mr P. was not vitiated by a manifest error of assessment, either as regards his previous
responsibility or the investigation at issue in this case. The defendant submits that Mr P. was involved only as an assistant
investigator, did not determine the strategy and policy of the investigation in any way and was not in charge of drawing up
the report. The latter was prepared by another investigator and drawn up by the executive board of OLAF in the full knowledge
of Mr P.’s removal.
Sixthly, the Commission maintains that the conduct of the investigation complied with the principles of impartiality and natural
justice, since the decision to remove Mr P. was taken precisely in order to ensure the impartiality and objectivity of the
investigation. The contested report makes it clear that other officials, particularly from the Financial Control DG, may have
been responsible and that the documents produced by the applicant in that regard were placed in the file.
As regards the damages sought by Mr Camós Grau, the Commission submits that the applicant has failed to provide any concrete
evidence in support of the true extent of the non-pecuniary damage claimed, nor has he provided any evidence as to the alleged
damage to his employment prospects.
Findings of the Court
–       The incurral of the Community’s non-contractual liability
According to established case-law in relation to the liability of the Community for damage caused to an individual by a breach
of Community law for which a Community institution or organ is responsible, a right to reparation is conferred where three
conditions are met: the rule of law infringed must be intended to confer rights on individuals; the breach must be sufficiently
serious; and there must be a direct causal link between the breach of the obligation resting on the author of the act and
the damage sustained by the injured parties (Joined Cases C-46/93 and C-48/93
Brasserie du pêcheur and Factortame
[1996] ECR I-1029, paragraph 51; Case C-352/98 P
Bergaderm and Goupil
v
Commission
[2000] ECR I-5291, paragraphs 41 and 42; and Case C-312/00 P
Commission
v
Camar and Tico
[2002] ECR I‑11355, paragraph 53).
–       The rules of law which are alleged to have been infringed
In order to give a ruling on the non-contractual liability of the Community, it is necessary in the present case to consider
first of all whether the rules of law which are alleged to have been infringed are intended to confer rights on individuals.
The applicant relies on infringements of the principles of impartiality, natural justice and objectivity, of the protection
of legitimate expectations and of sound administration. He also argues that the right to a fair hearing, the procedural requirements
relating to the drawing up of reports by OLAF and the obligation to provide adequate reasons were contravened.
It is sufficient to hold in that regard that at least the requirement of impartiality, to which the institutions are subject
in carrying out investigative tasks of the kind which are entrusted to OLAF, is intended, as well as ensuring that the public
interest is respected, to protect the persons concerned and confers on them a right as individuals to see that the corresponding
guarantees are complied with (see, to that effect, Case C-269/90
Technische Universität München
[1991] ECR I‑5469, paragraph 14).
It must accordingly be held that the applicant is alleging the infringement of a rule which is intended to confer rights on
individuals.
–       OLAF’s conduct in carrying out the investigation and the drawing up of the report concerning IRELA
In order to give a ruling on the non-contractual liability of the Community, it is necessary next to determine whether OLAF’s
conduct in carrying out the investigation and the drawing up of the report concerning IRELA constitutes a sufficiently serious
breach of the rule as to impartiality relied on, that is to say, according to case-law, whether it discloses a manifest and
grave disregard on the limits of its discretion (see, to that effect,
Ombudsman
v
Lamberts
, cited in paragraph 79 above, at paragraphs 49, 60, 62 and 63).
By virtue of the rules which apply to it, OLAF must conduct investigations falling within its competence in compliance with
the Treaty and the general principles of Community law, in particular the requirement of impartiality and with the Staff Regulations,
Article 14 of which in particular seeks to avoid a situation where there is a conflict of interest on the part of officials.
In order to appraise OLAF’s conduct, it is necessary to consider, first, whether there was, in fact, a conflict of interest
on Mr P.’s part, having regard to the responsibilities held by him in relation to IRELA in the context of his previous duties
at the Financial Control DG, secondly, his actual involvement in the conduct of the investigation concerning IRELA and, thirdly,
if necessary, the effect of that involvement on the drawing up of the report of 17 October 2002.
First, as regards the question whether there was a conflict of interest on Mr P.’s part, the letter of 17 May 2002 sent to
Mr Camós Grau by the head of the Magistrates, Judicial Advice and Follow-up unit states that in the light of the legal opinion
given by that unit to the Director of OLAF, according to which ‘the position of [Mr P.] as an assistant investigator in the
[IRELA] case could be perceived as a conflict of interest’ and in accordance with the proposal made to the Director by that
unit, OLAF had decided to remove the person concerned from the investigation. In addition, the Commission’s defence shows
that it was in the light of that risk of a conflict of interest and in order to ensure the impartiality and objectivity of
the investigation that Mr P. was removed from it.
Indeed, the fact that there was a conflict of interest on Mr P.’s part was hardly in doubt in the present case. The documents
before the Court show that effectively all of IRELA’s resources came from the Community budget, that the DG responsible for
Latin America, within which Mr Camós Grau was working at the relevant time, carried out technical and financial monitoring
of IRELA and that the Financial Control DG, the countersignature of which is required on all commitments as to expenditure
and on payments made from Community funds, had authorised all the projects attributed to IRELA.
Mr P., who was an accountant by training, had worked, at the time of the facts which were the subject-matter of the investigation,
at the Financial Control DG in the unit responsible for the monitoring of IRELA’s expenditure, as the person in charge of
the horizontal and methodological affairs of the food and humanitarian aid sector. He was in particular acting head of that
unit from 1 March to 30 November 1998 and in March 2000, which gave him the authority to sign documents concerning IRELA.
IDOC thus mentions in its report a memorandum of 3 January 1997, signed by Mr P. and addressed to the directorate responsible
for Latin America, giving the Financial Control DG’s approval to a project concerning IRELA.
The existence of a conflict of interest on Mr P.’s part is therefore established.
Secondly, as regards Mr P’s actual involvement in the conduct of the investigation concerning IRELA, it should be noted that,
according to the decision to initiate the internal investigation of 30 January 2001, four OLAF agents, including Mr P., were
appointed to conduct the investigation. Two of them left OLAF on 30 September 2001 and therefore ceased to be involved in
the investigation. Following Mr P.’s removal from it by the decision of 17 May 2002, the only investigator remaining responsible
for the investigation and who, according to OLAF, was in charge of it and had drawn up with Mr P. the draft report dated 20
September 2002, drew up the definitive report. As that investigator left OLAF on 30 September 2002, he did not sign the report.
The documents before the Court show that the investigator who was removed participated in all the hearings conducted in OLAF’s
name, which took place between February 2001 and April 2002, apart from that of the previous director of the directorate responsible
for Latin America, who was Mr Camós Grau’s immediate superior. That investigator was, moreover, one of the two authors of
the report of the inspection carried out at IRELA’s seat in Madrid and of the interim report of 20 December 2000 referred
to above. It is also the case that all acts of an investigatory nature were completed before Mr P.’s withdrawal and that these
were undertaken by two or three persons, the investigator who was removed being, with one exception, always involved.
It is clear that Mr P. participated in the conduct of the investigation in its entirety. The Commission’s argument that he
was not entrusted with the running of the investigation but had an ancillary and subordinate role cannot offset the findings
set out above as to a continuing presence and a substantial involvement on Mr P.’s part in the investigation concerning IRELA.
Thirdly, as regards the influence of Mr P.’s participation in the investigation in the drawing up of the report of 17 October
2002, the defendant argues that OLAF took account of the possibility of a conflict of interest on the part of an investigator
in the preparation of the final report and that the report was drawn up in full knowledge of the position in that regard.
It is therefore necessary to examine the series of documents which led to the report being produced, by considering in particular,
as the applicant suggests should be done, first, whether they show that any responsibility of the Financial Control DG was,
notwithstanding its function, improperly excluded or minimised, secondly, whether, as OLAF had acknowledged, in removing Mr
P. from the investigation, that there was a risk of a conflict of interest on his part, it took that risk into account in
the report of 17 October 2002 and, thirdly, more generally, whether the applicant’s objections regarding the lack of impartiality
of the investigation and of the subsequent report are substantiated by that examination.
Three documents that fall to be considered, namely the interim report of 20 December 2000 drafted by Mr P. and the investigator
who remained responsible for the investigation until its completion, the draft report prepared by the latter at the end of
August 2002, and the final report of 17 October 2002.
It is clear, first of all, from the interim report of 20 December 2000 that the latter emphasises the participation, which
it describes as significant and questionable involvement, of Commission officials in the management of IRELA and states that
they were the instigators of the creation of a financial reserve and that they approved, together with the members of the
Parliament, such an unlawful practice in order to supply that fund. As regards any role of the Financial Control DG in the
management of IRELA, that directorate is mentioned only in relation to the audit report on IRELA carried out by it in 1997
and the criticisms it made at that time of IRELA’s financial management, which are described as having been a possible cause
of the withdrawal of Commission officials from IRELA’s management. The document also treats knowledge of the unlawful acts
on the part of the Commission officials as an established fact.
Next, as regards the draft report prepared at the end of August 2002, it appears that some passages concerning the role of
the Financial Control DG and that of the Commission as a whole were toned down or removed in the definitive version of the
report. In particular, the draft report referred to the knowledge the Commission had of the practices which enabled IRELA
to obtain unlawful payments in so far as the institution (Financial Control) accepted the documents which supported them.
The draft stated that the Financial Control DG carried out a partial analysis of the situation in its report of 1997. It stated
that it was beyond comprehension that the auditors of that directorate failed to ask more detailed questions of a kind which
would arise automatically once irregularities had been established. As regards the responsibility of the Commission, it stated
that ‘the IRELA case went beyond the responsibilities of a single DG and the Financial Control DG failed to take thorough
steps when it had all the means necessary to undertake a detailed examination of [IRELA]’s financial problems’. The draft
concluded by stating that the involvement of the Commission in the IRELA case was not limited to the actings of three people
but was the ‘result of an institutional activity’, as the Commission’s monitoring systems had failed to operate effectively,
with the Financial Control DG having exercised ‘weak supervision’ and the Commission’s staff having failed to act in a coordinated
manner.
Lastly, the final report of 17 October 2002 shows that it merely states at the outset, as regards the involvement of and any
responsibility the Financial Control DG may have had, that it was decided not to consider those issues in order not to delay
the investigation. Although it adds that it must be determined whether any of the officials of that directorate were responsible,
that issue is not addressed in the remainder of the report, which records that only one official of the directorate concerned
was questioned during the investigation.
At the end of its scrutiny of the facts, the report states that the investigation showed that only those Commission officials
who had been involved in IRELA’s management had the knowledge of the operating arrangements which would have allowed unlawful
profit margins to be achieved and draws attention to the ‘active involvement’ and the ‘primary responsibility’ of the persons
concerned in the implementation and functioning of the system.
When looking at the involvement of the Commission, the report concentrates on the role and the responsibility of the directorate
responsible for Latin America and states, in particular, that the officials in that directorate operating within IRELA made
use of their position ‘to allow the use of documents which enabled payments to be made’. As regards the Financial Control
DG, the report refers only to the audit carried out in 1997 and the fact that it was never completed.
The final conclusions of the report reiterate that the system for funding IRELA, which was the source of the irregularities
that were established, was set up within a body the most active members of which were the Commission servants and that the
directorate responsible for Latin America was aware of its operating arrangements. The role of the Financial Control DG does
not appear to be addressed, although mention is made at the end of its ‘passivity’ and its ‘lack of proper controls’.
As regards individual responsibility, the only Commission servants the report mentions by name are the officials of the directorate
responsible for Latin America who were involved in IRELA’s management and recommends that disciplinary proceedings be instituted
against them. Those recommendations are repeated in the section headed ‘Action to be taken’, under the comment that they are
‘to be extended, if appropriate, to other officials, in particular in the Financial Control DG’.
A comparison of the successive versions of the OLAF report shows that the definitive version clearly discounts and minimises
the involvement of the Financial Control DG and at the same time apportions all responsibility for the irregularities for
which the Commission was held to be responsible to those officials who had been involved in IRELA’s management alone, thus
electing to confirm the bias shown by the interim report, one of the authors of which was Mr P., and rejecting the more carefully
shaded presentation of the draft report prepared without Mr P.’s participation at the end of August 2002, which addressed
the role of the Financial Control DG in greater detail, making findings as to its own failings in the IRELA case, refused
to attribute responsibility within the Commission only to those officials mentioned above and ultimately concluded that such
responsibility resulted instead from an institutional malfunctioning for which the Financial Control DG was also answerable.
It follows from the above, first, that there was indeed a conflict of interest on Mr P.’s part. Secondly, that Mr P. was involved
in almost all of the investigatory acts, none of which was called into question after his removal from the investigation.
In addition, he was a member of a team which was reduced in size over the period of its existence and was one of the two persons
who drafted the interim report. Thirdly, Mr P. played an effective and significant part in the conduct of the investigation.
In addition, the documents before the Court show that the influence exercised by Mr P. in the conduct of the investigation
was prejudicial to the requirement of impartiality. The terms of their respective duties were such that two services, namely
the directorate responsible for Latin America and the Financial Control DG, were responsible for the monitoring and control
of IRELA’s activities, in particular their financial aspects. There was all the more reason to consider the involvement of
the Financial Control DG in the internal investigation carried out by OLAF, since IRELA was entirely dependent on Community
subsidies and the Financial Control DG, which monitors all applications of Community funds, had expressed concerns regarding
IRELA on a number of occasions.
It is clear that a decision was taken not to make inquiries into the Financial Control DG, since, as regards any possible
responsibility of the Commission, the investigation related exclusively to the involvement of the directorate responsible
for Latin America. It appears in that regard that the inquiries made in the period from February 2001 to April 2002, during
which only one person employed in the Financial Control DG was questioned, against five from the directorate responsible for
Latin America, followed the direction given to the investigation by the interim report. That report, one of the two authors
of which was Mr P., thus did not seek to implicate the Financial Control DG, but included, by contrast, clear assertions as
to the involvement of officials in the directorate responsible for Latin America in the irregularities that were established.
The finding that the direction given to the investigation as a result of Mr P.’s influence was decisive is supported by the
opinion of 2 May 2002 referred to by the defendant in its replies to the questions put by the Court of First Instance regarding
the drawing up of the disputed report mentioned at paragraph 30 above, in which the head of the OLAF Magistrates, Judicial
Advice and Follow-up unit proposed that the investigator be removed and recommended that the final report should disregard
‘suggestions emanating from [Mr P.]’.
The one-sided, and therefore biased, attitude to the Commission’s involvement, which is methodologically suspect given the
essential role of the financial monitoring function, could lead only, by omission, to an erroneous appraisal of the precise
responsibility of the relevant services of the institution and, accordingly, of their members.
In attributing all responsibility for the fraudulent actings for which the Commission was answerable solely to the officials
of the directorate responsible for Latin America who had been involved in IRELA’s management, without referring to the material
relating to the role of the Financial Control DG appearing in the draft report prepared at the end of August 2002, which included
a number of observations critical of that directorate, confirms the imbalance which resulted from that one‑sided and biased
examination of the responsibility of the institution.
The justification set out in the report of 17 October 2002 for the failure to examine the involvement of the Financial Control
DG, namely that ‘in order not to delay the investigation, it has been decided not to inquire into the responsibility of the
Financial Control DG’, cannot be accepted. Although legitimate when the facts are old and liable to become subject to limitation,
the concern of OLAF to conduct its investigations rapidly cannot however justify a one-sided or selective inquiry into the
potential responsibility of different services of the institution when it is plain, as in the present case, that those services
had, in different ways, a role to play in the facts of the matter which was the subject of the investigation.
It follows from the above that the content and the conclusions of the OLAF report fail to satisfy the requirement of impartiality.
Such an infringement by OLAF of the rule of law concerned represents an infringement which is all the more serious since OLAF
was set up in order to carry out investigations into all unlawful activities that might damage the interests of the Communities
and against which administrative or criminal proceedings may lie and was established as an autonomous service of the Commission
in order to give it the functional independence judged necessary for it to carry out its duties. Furthermore, in the light
of the knowledge of the conflict of interest on Mr P.’s part, which OLAF moreover accepted in removing that investigator,
the confirmation in the final report of the bias given to the investigation under Mr P.’s influence means that the infringement
of the requirement of impartiality is manifest in its nature.
That finding is also confirmed by the IDOC report of 2 July 2003. It should be noted that IDOC had been tasked with determining
the compatibility with the Community legislation then applying: (1) of the involvement of Commission officials in IRELA’s
management; (2) of the proposal for and/or the acceptance of the financial restructuring plan and to indicate any individual
responsibility on the part of officials which might arise from it, and (3) any responsibility on the part of Commission officials
who had been involved in IRELA’s management and that of the services responsible for the monitoring of Community funds in
the hands of IRELA.
Thus, the IDOC report, which considered the involvement of the Financial Control DG, noted that no reference whatever was
made to that directorate in OLAF’s final report, apart from the recommendation set out under the heading ‘Action to be taken’.
As regards the decision to create a financial reserve, which was the source of the irregularities, IDOC observed that that
reserve was created well before the involvement of the three officials implicated in the OLAF report, that it was recommended
by the directorate responsible for Latin America and the Financial Control DG in 1986, decided upon in 1988 and accepted,
not to say encouraged, by the Commission. IDOC also pointed out that the unlawfulness of that practice was raised only belatedly,
in 1997, by the directorate responsible for Latin America, which referred the matter to the Commission’s legal service and
the Financial Control DG, which expressed its doubts as to the lawfulness of the arrangement, contrary to the opinion it had
given in 1986.
The IDOC report also states that Mr Camós Grau had informed OLAF that the Financial Control DG gave its approval each year
to the audit of IRELA, undertaken by a firm of accountants, and that it was expressly stated in the audit report for 1995
that IRELA had generated profits of EUR 1.194 million. IDOC observed that the document referred to by Mr Camós Grau in support
of his position was not placed in the file which accompanied OLAF’s final report, but was found in the file retained by OLAF.
The IDOC report added that, having carried out its review in 1997, the Financial Control DG failed to undertake a more detailed
examination and that, although it was asked by the former head of the financial unit of the directorate responsible for Latin
America whether it was possible [for IRELA] to invoice the Commission for fees and expenses in excess of the working plan
that had been adopted and of its subvention, the Financial Control DG ultimately authorised the commitments. The authors of
the IDOC report expressed their astonishment that, although  it was the duty of the Financial Control DG to authorise each
project attributable to IRELA, it had waited until 1997 to raise criticisms. They also expressed astonishment as to the terms
of the memorandum signed by Mr P., which is referred to at paragraph 112 above, indicating to the directorate responsible
for Latin America that the Financial Control DG was giving its approval for a project, but nevertheless wished to receive
appropriate supporting documents in every case.
The assessments by IDOC of the responsibility of the three Commission officials who were involved in IRELA’s management are,
moreover, considerably more carefully shaded. It is noted that the propriety of that involvement was raised only belatedly,
in 1994, and that such involvement was expressly authorised, following opinions received from the Secretariat-General, the
legal service and the Financial Control DG on 17 October 1995. IDOC formed the view, contrary to the conclusions reached in
the OLAF report, that it had not been shown that the three officials declared to be responsible by OLAF had been aware of
the irregularities comprising in particular the justification of overstated costs by false records of expenditure and stated
that the unlawfulness of the setting up of financial reserves was raised only in 1997 ‘in relatively vague terms’.
The conclusions reached by the IDOC report, which found, at least implicitly, that there were a number of failures in the
investigation conducted by OLAF, were in any event considerably less clear cut than those of OLAF. IDOC stated that it was
not possible to make findings as to the existence of acts that were objectionable from a disciplinary point of view. It refused
to make findings of responsibility against individuals, taking the view that the matter instead showed a lack of coordination
between the Commission services concerned in the monitoring of the Community funds granted to IRELA.
None of the arguments put forward by the defendant is capable of calling that finding into question. The Commission contends
that the investigation concentrated in particular on the involvement of the Community officials in the functioning of IRELA’s
departments, whereas the role played by the Financial Control DG was of another kind; it stated that a widened investigation
would have presented difficulties given the age of the facts and the human and material resources that would be required and
that OLAF had full discretion as to the scope of its inquiries. However, those arguments cannot justify, where an investigating
body is concerned, the bias which has been shown to exist in the conduct of its inquiries. Nor can the assertion that there
is nothing which would go to show any manipulation of the facts on the investigator’s part which would be capable of preventing
the true position being disclosed undermine that finding.
Furthermore, the Commission’s claims that account was taken in the final report of the circumstances in which Mr P. was removed
from the investigation are disproved by the content itself of the report, as the reference in it to the possibility of other
officials, in particular those of the Financial Control DG, being responsible appears to be no more than a formality. While
the argument that OLAF could not have made any findings in relation to the officials in that directorate without first having
heard them is admittedly correct, it does not justify the Commission’s lack of objectivity in restricting its investigation
concerning the involvement of the Commission in the IRELA case to a single directorate. It seems neither comprehensible nor
correct that consideration of the involvement of the Financial Control DG should have been removed from the scope of the inquiries
made within the Commission when approval by that directorate is a precondition of the commitment of all Community funds, with,
moreover, the IDOC report confirming in that respect the degree to which the roles and responsibilities in the IRELA case
overlapped.
In conclusion, the unlawfulness of OLAF’s conduct in the carrying out of the investigation and the drawing up of the disputed
report, as to which findings are set out in paragraphs 126 to 132 above, is established, since OLAF acted in serious and manifest
breach of the requirement of impartiality. Such an infringement constitutes a fault capable of giving rise to liability on
the part of the Community, since there is a direct and certain causal link between the wrongful behaviour and the damage claimed.
–       The causal link between the OLAF’s wrongful behaviour and the damage claimed by the applicant
It must be held in this regard that the heads of damage, namely damage to his employment prospects and non-pecuniary damage,
claimed by Mr Camós Grau originate directly in the personal criticism of his actings set out in the report and which takes
the form of findings and recommendations which concern him as an individual. The causal link required by case‑law is therefore
established between the unlawful conduct described by the report and the damage which is deemed to result on the part of the
person concerned.
It should however be stated in that regard that the fact that, by reason of its personal criticisms of the applicant, the
report is the direct cause of the damage claimed does not mean that that damage is established. Such a finding may, if appropriate,
be made only after assessing separately for each head of claim the actual impact that the findings and recommendations set
out in the report may have had, first, on the applicant’s professional position and, secondly, on his personal position.
By contrast, as regards the other unlawful acts relied on by the applicant, which relate, first, to the statement of reasons
for OLAF’s decision to remove Mr P. from the investigation, secondly, to compliance with the right to a fair hearing and the
principles of the protection of legitimate expectations and sound administration, in relation to his hearing by OLAF and the
making available of the report prior to its adoption, and, thirdly, to the power to draw up and adopt OLAF’s reports within
OLAF, it is clear that these could not, on any basis, by themselves have caused damage to the applicant distinct from that
arising from the report itself.
–       The damage suffered by the applicant
Two types of damage were caused to the applicant as a result of OLAF’s wrongful conduct, namely material damage, affecting
his employment prospects, and non-material damage, arising from the accusations made against him.
In the first place, as regards the damage which affected the applicant’s employment prospects, it is necessary to consider
whether, as the applicant contends, his application for a director’s post was rejected, when he had been assured that he would
be appointed as acting director and thus had shown that he met the conditions for holding such a post.
The information given by the parties in reply to the questions put by the Court, referred to at paragraph 33 above, shows
that Mr Camós Grau applied for a director’s post in Directorate A ‘Estonia, Latvia, Lithuania, Poland’ of the Enlargement
DG, having, as the official  with the greatest seniority of the highest grade, been acting director between December 2002
and 1 April 2003, when he took up other duties. The appointment procedure, initiated by the publication of a vacancy notice
on 4 March 2003, proceeded, in accordance with the institution’s normal practice on the basis of criteria relating to the
particular skills and abilities required for the post concerned. A panel comprising four directors, three from the Enlargement
DG and one from the Agriculture DG carried out a preselection, retaining eight people at that stage. The candidate ultimately
selected was appointed by decision of 9 July 2003.
As regards the unfavourable impact that OLAF’s conclusions may have had on the applicant’s application, the latter relies
on circumstances connected with the timing of the facts, which show that the OLAF report may have influenced the rejection
of his application.
However, although it is a matter of agreement that the IDOC report was delivered to the Commission on 2 July 2003, that is
to say effectively at the end of the procedure for making an appointment to the post concerned, and that the decision of the
Appointing Authority to terminate the procedure without taking any action was not taken until 2 September 2003 when the post
was filled, that history of events cannot constitute adequate evidence of a link between the OLAF report and the decision
of the Appointing Authority to reject Mr Camós Grau’s application in the absence of any other factor which might suggest that
in other circumstances his application would have been preferred by the Appointing Authority, within the framework of its
wide discretionary powers, over that of the successful candidate.
It must accordingly be held that the applicant has not shown that his application was rejected by reason of the accusations
made against him in the OLAF report.
More generally, it should be noted that no damage to the applicant’s employment prospects can be directly imputed to the OLAF
report since, as mentioned at paragraphs 51 to 53 above, once the decision was taken not to initiate disciplinary proceedings
in reliance upon it, that report could not serve as the basis of any measure affecting the applicant’s employment prospects.
In that regard, the Commission expressly stated at the hearing that where, on the basis of an OLAF report, it decides not
to initiate disciplinary proceedings, that report can no longer be of any effect. Furthermore, the Commission stated in its
letter of 23 September 2005 referred to at paragraph 35 above that ‘no OLAF report has been placed on the applicant’s personal
file’ and that ‘part H of the applicant’s personal file, which is reserved for disciplinary matters, remains clean, as the
person concerned has elected not to exercise his right, of which he was informed, to request that there be placed on his file
a note that, following the further administrative investigation, the Appointing Authority decided to end the case without
taking any disciplinary action’.
The defendant added that its invariable practice is not to put OLAF reports involving officials onto personal files, as those
reports are not considered to fall within Article 26(a) of the Staff Regulations (which refers to reports relating to the
official’s ability, efficiency and conduct). The Commission also stated that ‘documents relating to disciplinary matters or
preparatory to possible disciplinary proceedings are placed on personal files only in cases involving sanctions or a warning
under Article 3(b) of Annex IX to the Staff Regulations’. It should be noted at this point that the defendant refers to the
provisions of the Staff Regulations in the version which came into force on 1 May 2004, by virtue of which the abovementioned
provision was amended and that Article 3(b) of Annex IX to the Staff Regulations provides: ‘on the basis of the investigation
report, after having notified the official concerned of all evidence in the files and after hearing the official concerned,
the Appointing Authority may: … (b) decide, even if there is or appears to have been a failure to comply with obligations,
that no disciplinary measure shall be taken and, if appropriate, address a warning to the official …’.
That information shows that the OLAF report does not appear in Mr Camós Grau’s personal file, which makes no reference to
the IRELA case. In particular, it contains no reference to the fact that that case was closed without disciplinary proceedings
being taken, the decision in that regard having been taken after the issuing of the additional report by IDOC. Lastly, the
defendant concluded its submissions at the hearing by pointing out that ‘after the decision to take no action in relation
to the criminal and disciplinary procedures set in motion on the basis of a report [by OLAF], the Commission could not, as
a matter of law, make use of that report in another underlying way or in another context against the official concerned and
the principle of the presumption of innocence means that the Appointing Authority cannot make use of that report in a negative
manner [against the official concerned]’.
It follows that the damage which is claimed to the applicant’s employment prospects has not been established.
Secondly, as regards the non-pecuniary damage claimed, it is necessary to determine whether, as the applicant contends, the
unlawful acts committed by OLAF adversely affected his peace of mind, his honour and his professional reputation having regard,
in particular, to the gravity of the wrongdoing of which OLAF accused him, the length of the procedure and the publicity given
to the case in the press. Account should be taken in that regard of the applicant’s arguments that not only was he effectively
the only person implicated by OLAF, which found that he had acted in a manner which gave rise to contraventions on a criminal
and disciplinary level, but also that by reason of the accusations made against him he remained under threat of a disciplinary
sanction at least until the IDOC report was delivered and the decision was made to take no further action in the case.
It is clear that the accusations made in the disputed report against Mr Camós Grau, which ascribe to him and two other Commission
officials who were involved in IRELA’s management, primary responsibility for the implementation and operation of a system
which enabled unlawful profit margins to be achieved, and maintains in particular that those wrongful acts had been committed
in the knowledge that they were unlawful and by those concerned taking advantage of their position within the Commission,
represent particularly serious accusations, which adversely affect the honour and professional reputation of an official,
especially one of the applicant’s seniority, having regard to the gravity of the conduct complained of.
In particular, because of the one-sidedness of the procedure conducted by OLAF, which voluntarily removed the Financial Control
DG from the scope of its inquiries, all blame which might be ascribed to the Commission was concentrated on the directorate
having responsibility for Latin America and, more specifically, on the three officials in that directorate who had been involved
in IRELA’s management. Furthermore, as the other two officials who were implicated with the applicant were no longer in their
posts at the Commission but were on leave on personal grounds when the report was issued, Mr Camós Grau in fact found himself
in the position of being the only person designated as responsible by the report of 17 October 2002 remaining in office at
the institution who was required to bear the weight of OLAF’s accusations when he continued in the employment of that institution.
All of that aggravated the damage caused to him.
The difficulties faced by the applicant in his living conditions as a result of OLAF’s conduct, his dealings with it and the
threat of judicial and disciplinary proceedings arising from the findings of the report affected the applicant for more than
a year and a half. Mr Camós Grau, who was informed by OLAF that an internal investigation was being initiated on 30 January
2001 and heard on 22 February 2001, challenged, as from 22 February 2002, the investigator whom he suspected of having a conflict
of interest and tried to ensure that the objectivity and impartiality of the investigation, the one‑sidedness of which was
already apparent in the interim report of December 2000, were restored and thereafter that the final report was corrected
as a result. Quite apart from those fruitless steps, the applicant found himself, definitely no later than once the OLAF report
was issued on 17 October 2002, under threat, first of criminal proceedings being instigated by the Belgian and Spanish judicial
authorities until the latter decided, on 13 February and 10 March 2003 respectively, to take no further action in the matter,
and, secondly, of disciplinary proceedings being initiated by the Appointing Authority pursuant to OLAF’s recommendations
until the Commission decided, as the judicial authorities had done, to take no further action in the matter on 2 September
2003.
The adverse effect on Mr Camós Grau’s honour was aggravated by the external publicity given to the OLAF report, as mentioned
in paragraph 20 above. Although the disputed report was an internal document, intended to be communicated only to the parties
referred to in Article 9 of Regulation No 1073/1999, it was distributed outside that restricted group and its findings were
commented on in the press, the Spanish daily newspaper
El País
having reported the implication of Mr Camós Grau by name in an article which appeared on 11 December 2002.
By contrast, it cannot be held that there is a connection between the unlawful actings that have been established and the
damage claimed by reason of the applicant not having been ‘cleared’ of the accusations made against him and not being free
from the threat of additional investigations which might be decided upon in the future or might continue to be the subject
of a report which remains in the records of the authorities and services to which it was issued.
However, it follows from the above that the non-material damage caused to Mr Camós Grau, who, by reason of the accusations,
the findings and the recommendations made against him by OLAF, had his honour and professional reputation impaired and suffered
difficulties in his living conditions, is established.
The applicant has provisionally assessed his non-material damage at the sum of EUR 10 000. The Commission has not submitted
any observations regarding the amount claimed.
In the circumstances of the present case, the damage suffered by the applicant as a result of the OLAF report is not less
than the amount claimed. Mr Camós Grau’s claim for damages should therefore be allowed in its entirety and the Commission
should be ordered to pay him the sum of EUR 10 000 in compensation for his non-material loss.
–       The request for compensation in respect of the expenses incurred by the applicant in conducting his defence in the administrative
procedure
Mr Camós Grau also asks the Court to order the Commission to reimburse him the expenses incurred by him in relation to the
investigation and his administrative complaints against the decision of 17 May 2002 and the OLAF report of 17 October 2002.
It must however be pointed out that no figure is provided in relation to that request and that the applicant has not established,
or even claimed, special circumstances justifying the failure to provide a figure in the application for that head of loss.
Therefore, the claim for compensation for the material damage in question fails to satisfy the requirements of Article 44(1)
of the Rules of Procedure of the Court of First Instance and must accordingly be rejected (Case C-150/03 P
Hectors
v
Parliament
[2004] ECR I‑8691, paragraph 62).

Costs
The first subparagraph of Article 87(3) of the Rules of Procedure states: ‘Where each party succeeds on some and fails on
other heads, or where the circumstances are exceptional, the Court of First Instance may order that the costs be shared or
that each party bear its own costs.’
In the circumstances of the present case, the Commission should be ordered to bear all the costs of the case.
On those grounds,
THE COURT OF FIRST INSTANCE (Fourth Chamber, Extended Composition)
Hereby orders:
1.
The Commission shall pay Mr Camós Grau the sum of EUR 10 000.
2.
The remainder of the claims are dismissed.
3.
The Commission shall bear the costs.
Legal
Lindh
Mengozzi
Wiszniewska-Białecka

Vadapalas
Delivered in open court in Luxembourg on 6 April 2006.
Registrar

President
E. Coulon

H. Legal
Table of contents
Legal framework
Background
Procedure
Forms of order sought
Law
The claims for the annulment of the decision of 17 May 2002 and the decision of 29 November 2002
The claims for the annulment of the decision of 28 May 2003 rejecting the applicant’s complaint of 4 February 2003 brought
against the OLAF report
The claims for the annulment of the OLAF report of 17 October 2002
Admissibility
Arguments of the parties
Findings of the Court
The claims for compensation for the alleged harm
Admissibility
Arguments of the parties
Findings of the Court
– The obligation to make a prior complaint
– The connection between the claim for damages and the claim for annulment
Substance
Arguments of the parties
Findings of the Court
– The incurral of the Community’s non-contractual liability
– The rules of law which are alleged to have been infringed
– OLAF’s conduct in carrying out the investigation and the drawing up of the report concerning IRELA
– The causal link between the OLAF’s wrongful behaviour and the damage claimed by the applicant
– The damage suffered by the applicant
– The request for compensation in respect of the expenses incurred by the applicant in conducting his defence in the administrative
procedure
Costs
*
Language of the case: French.