# C_2007101EN.01000401.xml

| 4.5.2007 | EN | Official Journal of the European Union | C 101/4 |
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4.5.2007

EN

Official Journal of the European Union

C 101/4

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OPINION No 3/2007

OPINION

on a proposal for a Regulation of the European Parliament and of the Council amending Council Regulation (EC) No 515/97 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

(pursuant to Article 280(4), EC)

(2007/C 101/02)

TABLE OF CONTENTS

| 1-2 | Introduction |
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1-2

| 3-6 | General remarks |
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3-6

| 7-13 | Specific remarks |
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7-13

THE COURT OF AUDITORS OF THE EUROPEAN COMMUNITIES,

Having regard to the Treaty establishing the European Communities, and in particular Article 280(4) thereof;

Having regard to the proposal for a Regulation of the European Parliament and of the Council amending Council Regulation (EC) No 515/97 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 (1);

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Having regard to the request for an opinion submitted to the Court of Auditors by the Council on 23 February 2007,

HAS ADOPTED THE FOLLOWING OPINION:

INTRODUCTION

| 1. | The objective pursued by the draft regulation is the sound application of Community customs and agricultural legislation, providing the Commission and the Member States' customs and other authorities with more effective mechanisms to assist them in preventing, investigating and prosecuting operations that are in breach of customs and agricultural legislation. To that end the proposal:






  (a) | supplements the current case-by-case exchange mechanism for spontaneous assistance without prior request of the receiving Member State with an automatic and/or structured information exchange mechanism; |
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1.

The objective pursued by the draft regulation is the sound application of Community customs and agricultural legislation, providing the Commission and the Member States' customs and other authorities with more effective mechanisms to assist them in preventing, investigating and prosecuting operations that are in breach of customs and agricultural legislation. To that end the proposal:

(a)

supplements the current case-by-case exchange mechanism for spontaneous assistance without prior request of the receiving Member State with an automatic and/or structured information exchange mechanism;

| (b) | sets up an European central data directory to help the competent authorities of the Member States detect consignments of goods, including containers and/or means of transport, that may be in breach of customs and/or agricultural legislation; |
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(b)

sets up an European central data directory to help the competent authorities of the Member States detect consignments of goods, including containers and/or means of transport, that may be in breach of customs and/or agricultural legislation;

| (c) | makes it possible that the CIS (Customs Information System) be used for purposes of operational and/or strategic analysis and to include therein information about seized goods and cash controls; |
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(c)

makes it possible that the CIS (Customs Information System) be used for purposes of operational and/or strategic analysis and to include therein information about seized goods and cash controls;

| (d) | allows the interoperability between the CIS and the national risk analysis systems; |
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(d)

allows the interoperability between the CIS and the national risk analysis systems;

| (e) | creates a central database, FIDE (Customs Files Identification System), allowing to identify the investigation files opened in respect of individual persons or traders in any Member State along with the responsible case officers; and |
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(e)

creates a central database, FIDE (Customs Files Identification System), allowing to identify the investigation files opened in respect of individual persons or traders in any Member State along with the responsible case officers; and

| (f) | aligns Council Regulation (EC) No 515/97 (2) with data protection rules. |
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(f)

aligns Council Regulation (EC) No 515/97 (2) with data protection rules.

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| 2. | The Court has examined the Commission proposal in the light of the results of its audit work. |
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2.

The Court has examined the Commission proposal in the light of the results of its audit work.

GENERAL REMARKS

| 3. | The Court considers that the proposal will contribute to achieving the objective pursued by the regulation provided that the Commission takes proper action in order to implement without further delay the IT infrastructure, databases and software applications needed for its practical operation. However, the proposed regulation does not address important issues already highlighted by the Court which still remain valid and which are referred to in paragraphs 4, 5 and 6. |
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3.

The Court considers that the proposal will contribute to achieving the objective pursued by the regulation provided that the Commission takes proper action in order to implement without further delay the IT infrastructure, databases and software applications needed for its practical operation. However, the proposed regulation does not address important issues already highlighted by the Court which still remain valid and which are referred to in paragraphs 4, 5 and 6.

| 4. | The Court identified a potential overlap between the RIF (Risk Information Form) and MA (mutual assistance) communications and recommended that OLAF and DG TAXUD should streamline both reporting and monitoring and work towards a more integrated approach (3). |
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4.

The Court identified a potential overlap between the RIF (Risk Information Form) and MA (mutual assistance) communications and recommended that OLAF and DG TAXUD should streamline both reporting and monitoring and work towards a more integrated approach (3).

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| 5. | The Court found that in the special case of the mutual assistance procedure in the customs and agriculture sectors there is no systematic follow-up by OLAF (4). As at February 2007 the situation remained unchanged. |
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5.

The Court found that in the special case of the mutual assistance procedure in the customs and agriculture sectors there is no systematic follow-up by OLAF (4). As at February 2007 the situation remained unchanged.

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| 6. | The Court draws attention to its recommendation in its Special Report No 11/2006 on the Community Transit System (5) that the Commission should take measures to improve the reliability of sources of information on fraud, and should make better use of them by developing risk management strategies. As such, the Commission should strive to improve the completeness and reliability of MA communications and the CIS. |
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6.

The Court draws attention to its recommendation in its Special Report No 11/2006 on the Community Transit System (5) that the Commission should take measures to improve the reliability of sources of information on fraud, and should make better use of them by developing risk management strategies. As such, the Commission should strive to improve the completeness and reliability of MA communications and the CIS.

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SPECIFIC REMARKS

| 7. | The first indent of Article 2(1) of the draft regulation defines customs legislation including a reference to the body of Community provisions governing value added tax as regards imports and exports. The Court welcomes this approach but considers that, for reasons of consistency with the definition of customs legislation contained in the Naples II Convention (6), this article should also refer to the body of provisions adopted at Community level for harmonised excise duties on importation together with the associated implementing provisions. |
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7.

The first indent of Article 2(1) of the draft regulation defines customs legislation including a reference to the body of Community provisions governing value added tax as regards imports and exports. The Court welcomes this approach but considers that, for reasons of consistency with the definition of customs legislation contained in the Naples II Convention (6), this article should also refer to the body of provisions adopted at Community level for harmonised excise duties on importation together with the associated implementing provisions.

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| 8. | The new paragraph 2 added to Article 15 would require the inclusion in Article 2(1) of definitions of ‘progressive communication’, ‘communication at regular intervals’, ‘structured format’ and ‘unstructured format’. Moreover, the option of communicating at regular intervals is in contradiction with the current obligation existing in Article 15 to immediately notify to the other Member States concerned information relating to operations which constitute, or appear to them to constitute, breaches of customs and agricultural legislation. |
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8.

The new paragraph 2 added to Article 15 would require the inclusion in Article 2(1) of definitions of ‘progressive communication’, ‘communication at regular intervals’, ‘structured format’ and ‘unstructured format’. Moreover, the option of communicating at regular intervals is in contradiction with the current obligation existing in Article 15 to immediately notify to the other Member States concerned information relating to operations which constitute, or appear to them to constitute, breaches of customs and agricultural legislation.

| 9. | The Court considers that the possibility provided for MA communications to be used for the purpose of strategic analysis pursuant to the new paragraph 7 of Article 18 can help reinforce the effectiveness of OLAF. Nevertheless, the Court considers that the proposal should have gone further in Article 18a by giving the Commission full access to the information available in systems already implemented or foreseen (7) for all kinds of goods (not only for sensitive goods) for the purpose of operational and strategic analysis and risk management while ensuring adequate protection of personal data. |
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9.

The Court considers that the possibility provided for MA communications to be used for the purpose of strategic analysis pursuant to the new paragraph 7 of Article 18 can help reinforce the effectiveness of OLAF. Nevertheless, the Court considers that the proposal should have gone further in Article 18a by giving the Commission full access to the information available in systems already implemented or foreseen (7) for all kinds of goods (not only for sensitive goods) for the purpose of operational and strategic analysis and risk management while ensuring adequate protection of personal data.

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| 10. | Article 18b does not clearly provide the legal basis for a permanent infrastructure in order to ensure the coordination of joint customs operations open to the participation of representatives or liaison officers of competent international or regional organizations, European Union bodies or agencies and third countries, as announced in the explanatory memorandum. |
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10.

Article 18b does not clearly provide the legal basis for a permanent infrastructure in order to ensure the coordination of joint customs operations open to the participation of representatives or liaison officers of competent international or regional organizations, European Union bodies or agencies and third countries, as announced in the explanatory memorandum.

| 11. | The Court considers that Article 23(2) of the draft regulation does not essentially differ from the current article and that the aim of the CIS should be better explained specifying that the effectiveness of the cooperation and control procedures of the competent authorities can now also be increased through operational and strategic analysis. |
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11.

The Court considers that Article 23(2) of the draft regulation does not essentially differ from the current article and that the aim of the CIS should be better explained specifying that the effectiveness of the cooperation and control procedures of the competent authorities can now also be increased through operational and strategic analysis.

| 12. | The Court invites the Commission to include in Articles 41b(2)(b) and 41c(2)(b) the excise duties identification number (SEED identification number) foreseen in the Regulation on administrative cooperation in the field of excise duties (8) and in the Directive 92/12/EEC (9) in order to facilitate investigations by either the Commission or the competent authorities of a Member State. |
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12.

The Court invites the Commission to include in Articles 41b(2)(b) and 41c(2)(b) the excise duties identification number (SEED identification number) foreseen in the Regulation on administrative cooperation in the field of excise duties (8) and in the Directive 92/12/EEC (9) in order to facilitate investigations by either the Commission or the competent authorities of a Member State.

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| 13. | Although the Commission indicated that the proposal has no financial impact on revenue, the Court considers that the proposal should have a positive impact on traditional and VAT resources through the reduction of fraud, and this impact should have been estimated in the legislative financial statement of the proposal in order to allow a more accurate assessment of the value for money of the project. |
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13.

Although the Commission indicated that the proposal has no financial impact on revenue, the Court considers that the proposal should have a positive impact on traditional and VAT resources through the reduction of fraud, and this impact should have been estimated in the legislative financial statement of the proposal in order to allow a more accurate assessment of the value for money of the project.

This Opinion was adopted by the Court of Auditors in Luxembourg at its meeting of 21 March 2007.

For the Court of Auditors

Hubert WEBER

President

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(1)  COM(2006) 866 final of 22 December 2006.

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(2)  OJ L 82, 22.3.1997, p. 1.

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(3)  See paragraphs 4.12 and 4.27(a) of the Annual Report 2005 (OJ C 263, 31.10.2006, p. 1).

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(4)  See paragraphs 32 and 85 of Special Report No 1/2005 (OJ C 202, 18.8.2005).

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(5)  See paragraph 74 of Special Report No 11/2006 (OJ C 44, 27.2.2007).

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(6)  Convention drawn up on the basis of Article K.3 of the Treaty on European Union, on mutual assistance and cooperation between customs administrations (OJ C 24, 23.1.1998).

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(7)  Such as NCTS (New Computerised Transit System), ECS (Export Control System), AIS (Automated Import System), and EMCS (Excise Movement and Control System).

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(8)  Article 22(2)(a) of Council Regulation (EC) No 2073/2004 (OJ L 359, 4.12.2004, p. 1).

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(9)  Article 15a(2)(a) of Council Directive 92/12/EEC of 25 February 1992 on the general arrangements for products subject to excise duty and on the holding, movement and monitoring of such products (OJ L 76, 23.3.1992, p. 1), as amended by Council Directive 92/108/EEC of 14 December 1992 (OJ L 390, 31.12.1992, p. 124).

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