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OPINION No 8/2005

on a proposal for a Regulation of the European Parliament and of the Council on mutual administrative assistance for the protection of the financial interests of the Community against fraud and any other illegal activities

(Presented pursuant to Article 280(4) of the EC Treaty)

(2005/C 313/01)

CONTENTS

THE COURT OF AUDITORS OF THE EUROPEAN COMMUNITIES,

Having regard to the Treaty establishing the European Community, and in particular Article 280 thereof,

Having regard to the Council's request, dated 12 October 2004, for the Court of Auditors' opinion on the Commission proposal (1) for a Regulation of the European Parliament and of the Council on mutual administrative assistance for the protection of the financial interests of the Community against fraud and any other illegal activities;

HAS ADOPTED THE FOLLOWING OPINION:

I.   INTRODUCTION

II.   GENERAL OBSERVATIONS

III.   ADMINISTRATIVE COOPERATION IN THE FIELD OF TRADITIONAL OWN RESOURCES AND EXPENDITURE

IV.   ADMINISTRATIVE COOPERATION IN THE FIELD OF VALUE ADDED TAX

V.   ADMINISTRATIVE COOPERATION TO COMBAT MONEY LAUNDERING

VI.   CONCLUSIONS AND RECOMMENDATIONS

This opinion was adopted by the Court of Auditors in Luxembourg at its meeting of 27 October 2005.

For the Court of Auditors

Hubert WEBER

President

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(1)  COM(2004) 509 final of 20 July 2004.

(2)  Pursuant to Article 2 of Commission Decision 1999/352/EC, ECSC, Euratom of 28 April 1999 establishing the European Anti-fraud Office (OLAF) (OJ L 136, 31.5.1999, p. 20), the Office shall be responsible in providing the Commission's support in cooperating with the Member States in the area of the fight against fraud and for any other operational activity of the Commission in relation to the fight against fraud.

(3)  Interinstitutional Agreement of 16 December 2003 on better law-making (OJ C 321, 31.12.2003, p. 1) and Interinstitutional Agreement of 22 December 1998 on common guidelines for the quality of drafting of Community legislation (OJ C 73, 17.3.1999, p. 1).

(4)  See Article 35 of the Interinstitutional Agreement of 16 December 2003.

(5)  See Article 27 of the Interinstitutional Agreement of 16 December 2003.

(6)OJ L 312, 23.12.1995, p. 1.

(7)  Some guidelines can be found in a judgment of the Court of Justice. In Case C-11/00 the Court of Justice stated ‘that the expression “financial interests of the Community” in Article 280 EC is not restricted exclusively to the budget of the European Community in the strict sense’. (2003, ECR I-7147, paragraph 95).

(8)  See Special report No 1/2005, Summary, paragraph VI (OJ C 202, 18.8.2005, p. 1).

(9)  Pursuant to Council Regulation (EC) No 515/97 of 13 March 1997 on mutual assistance between the administrative authorities of the Member States and cooperation between the latter and the Commission to ensure the correct application of the law on customs and agricultural matters (OJ L 82, 22.3.1997, p. 1).

(10)  See paragraph 32 of Special Report No 1/2005.

(11)  See paragraphs 16 to 32 of Special Report No 3/2004 (OJ C 269, 4.11.2004, p. 1).

(12)  Pursuant to Council Regulation (ECC) 595/91 of 4 March 1991 concerning irregularities and the recovery of sums wrongly paid in connection with the financing of the common agricultural policy and the organisation of an information system in this field and repealing Regulation (EEC) No 283/72 (OJ L 67, 14.3.1991, p. 11).

(13)  Commission Regulation (EC) No 1681/94 of 11 July 1994 concerning irregularities and the recovery of sums wrongly paid in connection with the financing of the structural policies and the organization of an information system in this field. (OJ L 178, 12.7.1994, p. 43).

(14)  See Special Report No 10/2001 concerning the financial control of the Structural Funds, paragraphs 107 to 126 (OJ C 314, 8.11.2001, p. 26).

(15)  See page 6 of the Explanatory Memorandum accompanying the Commission proposal.

(16)  For example, pursuant to the proposed regulation, Member States must supply without prior request any relevant information in respect of irregularities which might have ramifications in other Member States and where the potential damage to the Community's financial interests is 100 000 euro or more. No deadlines for reporting are set. It could therefore be assumed that the information has to be provided as soon as the financial impact of a case can be assessed. Under Commission Regulation (EC) No 1681/94, each Member State is however already, regardless of the amounts involved, under an obligation to report forthwith any irregularities, where it is feared that they may very quickly have repercussions outside its territory.

(17)  See Article 5(3) of the proposal.

(18)  See paragraphs 1.45 to 1.55 of the Annual Report for 2001 (OJ C 295, 28.11.2002, p. 1).

(19)  In the case of VAT, fraud impacts indirectly on the Communities' own resources. The Communities' ability to meet its expenditure obligations does not depend on the degree of efficiency in collecting VAT and preventing fraud. The own resource based on gross national income (GNI) is meant to cover the balance of total expenditure not covered by other resources. The consequences of VAT fraud are thus borne not only by the Member State in which that fraud occurred but by all the Member States through an increased call for GNI own resources.

(20)  Council Regulation (EC) No 1798/2003 of 7 October 2003 on administrative cooperation in the field of value added tax and repealing Regulation (EEC) No 218/92 (OJ L 264, 15.10.2003, p. 1).

(21)  See Commission report on the use of administrative cooperation arrangements in the fight against VAT fraud, COM(2004) 260 final of 16.4.2004, p. 18.

(22)  In its Explanatory Memorandum, the Commission explicitly mentions that it used the standards developed in Regulation (EC) No 1798/2003.

(23)  See paragraphs XI and 94.

(24)  Council Decision 2000/642/JHA of 17 October 2000 concerning arrangements for cooperation between financial intelligence units for the Member States in respect of exchanging information (OJ L 271, 24.10.2000, p. 4).

(25)  See for example Article 5(4) which says that the FIUs shall undertake all necessary measures, including security measures, to ensure that information submitted under this Decision is not accessible by any other authorities, agencies or departments.

(26)  Interinstitutional Agreement of 22 December 1998 on common guidelines for the quality of drafting of Community legislation.

(27)  Interinstitutional Agreement of 16 December 2003 on better law-making.

(28)  See paragraphs 4.1. to 4.8. of Special report No 9/98 concerning the protection of the financial interests of the European Union in the field of VAT on intra-Community trade together with the Commission's replies (OJ C 356, 20.11.1998, p. 1).

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