# C_2018383EN.01000101.xml

| 23.10.2018 | EN | Official Journal of the European Union | C 383/1 |
| --- | --- | --- | --- |

23.10.2018

EN

Official Journal of the European Union

C 383/1

---

ACTIVITY REPORT OF THE OLAF SUPERVISORY COMMITTEE — 2014

(2018/C 383/01)

Members of the OLAF Supervisory Committee

Mr Herbert Bösch, Mr Tuomas Pöysti (Chairman), Mr Johan Denolf, Ms Catherine Pignon, Mr Dimitrios Zimianitis

Tuomas PÖYSTI (Chairman)

| | Auditor General of Finland, President of the National Audit Office, Finland |
| --- | --- |

Auditor General of Finland, President of the National Audit Office, Finland

Herbert BÖSCH

| | Former Member of the European Parliament |
| --- | --- |

Former Member of the European Parliament

| | Former Chairman of the Committee of Budgetary Control of the European Parliament, |
| --- | --- |

Former Chairman of the Committee of Budgetary Control of the European Parliament,

| | Austria |
| --- | --- |

Austria

Johan DENOLF

| | Chief Commissioner of the Belgian Federal Police and Member of the Financial Intelligence Unit (FIU), Belgium |
| --- | --- |

Chief Commissioner of the Belgian Federal Police and Member of the Financial Intelligence Unit (FIU), Belgium

Catherine PIGNON

| | Chief Public Prosecutor at the Court of Appeal in Angers, France |
| --- | --- |

Chief Public Prosecutor at the Court of Appeal in Angers, France

Dimitrios ZIMIANITIS

| | Senior Public Prosecutor at the Court of First Instance in Athens, Greece |
| --- | --- |

Senior Public Prosecutor at the Court of First Instance in Athens, Greece

CONTENTS

| MISSION STATEMENT | 3 |
| --- | --- |

| FOREWORD BY THE CHAIRMAN | 4 |
| --- | --- |

| OVERVIEW | 5 |
| --- | --- |

| 1 | MONITORING | 6 |
| --- | --- | --- |

1

| 1.1 | IMPLEMENTATION OF OLAF INVESTIGATIVE FUNCTION | 6 |
| --- | --- | --- |

1.1

| OLAF's policies for opening cases | 6 |
| --- | --- |

| Opening of cases in OLAF in 2012 | 6 |
| --- | --- |

| Investigation Policy Priorities for 2015 | 6 |
| --- | --- |

| OLAF's investigative independence | 7 |
| --- | --- |

| Supervisory Committee's observations regarding OLAF's independence | 7 |
| --- | --- |

| Requests to the Supervisory Committee to defend OLAF's independence | 7 |
| --- | --- |

| Application by OLAF of procedural guarantees | 8 |
| --- | --- |

| Legality check and review in OLAF | 8 |
| --- | --- |

| Complaints and requests addressed to the Supervisory Committee | 8 |
| --- | --- |

| OLAF's competence to gather evidence by way of recording private telephone conversations | 9 |
| --- | --- |

| Decisions to defer the information to institution, body, office or agency | 9 |
| --- | --- |

| Duration of OLAF's investigations | 9 |
| --- | --- |

| Recommendations made by the OLAF Director-General | 10 |
| --- | --- |

| 1.2 | MANAGEMENT OF THE OLAF INVESTIGATIVE FUNCTION | 10 |
| --- | --- | --- |

1.2

| Preliminary draft budget for 2015 | 10 |
| --- | --- |

| OLAF Annual Reports — statistics and reporting tools | 11 |
| --- | --- |

| 2 | COOPERATION | 11 |
| --- | --- | --- |

2

| 2.1 | COOPERATION WITH OLAF | 11 |
| --- | --- | --- |

2.1

| Implementation by OLAF of the Supervisory Committee's recommendations | 11 |
| --- | --- |

| Implementation of the Working Arrangements with OLAF | 11 |
| --- | --- |

| 2.2 | COOPERATION WITH STAKEHOLDERS | 12 |
| --- | --- | --- |

2.2

| Meetings with EU Institutions | 12 |
| --- | --- |

| Meetings with other stakeholders | 12 |
| --- | --- |

| 3 | GOVERNANCE | 13 |
| --- | --- | --- |

3

| 3.1 | SUPERVISORY COMMITTEE | 13 |
| --- | --- | --- |

3.1

| Working methods | 13 |
| --- | --- |

| Budgetary independence | 13 |
| --- | --- |

| Communication policy and transparency | 13 |
| --- | --- |

| 3.2 | SUPERVISORY COMMITTEE'S SECRETARIAT | 14 |
| --- | --- | --- |

3.2

| ANNEXES | 15 |
| --- | --- |

MISSION STATEMENT

| Article 15(1) of Regulation (EU, Euratom) No 883/2013:



  The Supervisory Committee shall regularly monitor the implementation by the Office of its investigative function, in order to reinforce the Office’s independence in the proper exercise of the competences conferred upon it by this Regulation.


  The Supervisory Committee shall in particular monitor developments concerning the application of procedural guarantees and the duration of investigations in the light of the information supplied by the Director-General in accordance with Article 7(8). |
| --- |

Article 15(1) of Regulation (EU, Euratom) No 883/2013:

The Supervisory Committee shall regularly monitor the implementation by the Office of its investigative function, in order to reinforce the Office’s independence in the proper exercise of the competences conferred upon it by this Regulation.

The Supervisory Committee shall in particular monitor developments concerning the application of procedural guarantees and the duration of investigations in the light of the information supplied by the Director-General in accordance with Article 7(8).

The mission of the Supervisory Committee (SC) of the European Anti-fraud Office (OLAF), as outlined by Regulation (EU, Euratom) No 883/2013 (1), is to reinforce OLAF's independence in the proper exercise of the competences conferred upon it (2). To accomplish this mission, the EU legislator entrusted the SC with a threefold role:

1

2

| — | The SC is the supervisory body of OLAF and a guardian of OLAF's independence; it regularly monitors the implementation by OLAF of its investigative function and, in particular, developments concerning the application of procedural guarantees and the duration of investigations. |
| --- | --- |

—

The SC is the supervisory body of OLAF and a guardian of OLAF's independence; it regularly monitors the implementation by OLAF of its investigative function and, in particular, developments concerning the application of procedural guarantees and the duration of investigations.

supervisory body

| — | The SC plays an advisory role with regard to the Director-General of OLAF, whom it assists in the discharge of his responsibilities:






  — | by communicating to him the results of the SC's monitoring of the implementation of the OLAF investigative function, the application of procedural guarantees and the duration of investigations as well as, where necessary, making appropriate recommendations; |
| --- | --- | --- |

—

The SC plays an advisory role with regard to the Director-General of OLAF, whom it assists in the discharge of his responsibilities:

advisory role

—

by communicating to him the results of the SC's monitoring of the implementation of the OLAF investigative function, the application of procedural guarantees and the duration of investigations as well as, where necessary, making appropriate recommendations;

| — | by addressing opinions to him, including, where appropriate, recommendations on, inter alia, the resources needed to carry out OLAF's investigative function, on the investigative priorities and on the duration of the investigation; |
| --- | --- |

—

by addressing opinions to him, including, where appropriate, recommendations on, inter alia, the resources needed to carry out OLAF's investigative function, on the investigative priorities and on the duration of the investigation;

inter alia,

| — | by submitting its observations (including, where appropriate, recommendations) on the guidelines on investigation procedures (and any modification thereto) adopted by the Director-General in accordance with Article 17(8) of the Regulation. |
| --- | --- |

—

by submitting its observations (including, where appropriate, recommendations) on the guidelines on investigation procedures (and any modification thereto) adopted by the Director-General in accordance with Article 17(8) of the Regulation.

| — | The SC is a dialogue partner of the EU Institutions, to which it reports on its activities, at whose request it may issue opinions and with whom it exchanges views at a political level, thus providing the EU Institutions with unique expertise based on its monitoring experience. |
| --- | --- |

—

The SC is a dialogue partner of the EU Institutions, to which it reports on its activities, at whose request it may issue opinions and with whom it exchanges views at a political level, thus providing the EU Institutions with unique expertise based on its monitoring experience.

dialogue partner

FOREWORD BY THE CHAIRMAN

FOREWORD BY THE CHAIRMAN

As Chairman of the Supervisory Committee of the European Anti-Fraud Office, I have the pleasure to submit the Annual Activity Report of our Committee, in accordance with Article 15(9) of Regulation (EU, Euratom) No 883/2013.

The European Anti-Fraud Office has a unique position as an inter-institutional service of the European Commission. The Office enjoys independence in its investigative function and the Supervisory Committee has a remit to ensure vital aspects of good administration and good governance related to the investigative activities of the Office. This contributes to the legitimacy and reliability of the Office in its investigative mission and, ultimately, to the trust towards the European Union as a community based on the rule of law.

This Activity Report provides an overview of the monitoring activities performed by the Supervisory Committee during 2014. Their results were presented in documents adopted by the Committee between February 2014 and March 2015. Chapter 1 offers an account of the implementation and management of OLAF’s investigative function whereas Chapter 2 focuses on the cooperation with OLAF and stakeholders and, in particular, on the follow-up by OLAF to the Supervisory Committee's recommendations. Chapter 3 gives an overview of the governance of the Supervisory Committee in the light of the broader notion of accountability.

Chapter 1

Chapter 2

Chapter 3

In 2014 the Supervisory Committee’s work has focused on the reporting on the duration of the investigations and on OLAF's independence. Another main issue during the reporting period is the supervisory framework of the Office concerning which the Supervisory Committee has sought to improve conditions for effective and independent, professionally performed supervision in accordance with the principles of good administration and good governance applicable in the European Union. The Supervisory Committee has devoted a significant amount of its efforts to improvement in its working relations and Working Arrangements with the Office. It is the Supervisory Committee's view that OLAF's independence comes together with a high level of accountability and therefore the core message of the Supervisory Committee is that the Institutions should improve the procedures ensuring the accountability of OLAF and its senior management in the performance of their duties.

Brussels, 25 March 2015

Tuomas PÖYSTI

Chairman of the Supervisory Committee

OVERVIEW

OVERVIEW

Monitoring activities

Monitoring activities

Analysis and assessment of:

| — | 658 reports on investigations lasting more than 12 months; |
| --- | --- |

—

658 reports on investigations lasting more than 12 months;

| — | 92 opinions on final reports and recommendations; |
| --- | --- |

—

92 opinions on final reports and recommendations;

| — | 39 complaints and requests from individuals; |
| --- | --- |

—

39 complaints and requests from individuals;

| — | 2 requests for public access to the SC's documents; |
| --- | --- |

—

2 requests for public access to the SC's documents;

| — | 1 request for cooperation from a national judicial authority; |
| --- | --- |

—

1 request for cooperation from a national judicial authority;

| — | 94 OLAF case files. |
| --- | --- |

—

94 OLAF case files.

Opinions and reports

Opinions and reports

| — | 3 opinions in relation to the implementation and management of OLAF's investigative function:






  — | Opinion No 3/2014: OLAF's Preliminary Draft Budget for 2015; |
| --- | --- | --- |

—

3 opinions in relation to the implementation and management of OLAF's investigative function:

—

Opinion No 3/2014: OLAF's Preliminary Draft Budget for 2015;

| — | Opinion No 4/2014: Control of the Duration of Investigations conducted by the European Anti-fraud Office; |
| --- | --- |

—

Opinion No 4/2014: Control of the Duration of Investigations conducted by the European Anti-fraud Office;

| — | Opinion No 5/2014: OLAF External Reporting on the Duration of Investigations. |
| --- | --- |

—

Opinion No 5/2014: OLAF External Reporting on the Duration of Investigations.

| — | 3 special reports to the EU Institutions:






  — | Report 1/2014: Safeguarding OLAF's Investigative Independence; |
| --- | --- | --- |

—

3 special reports to the EU Institutions:

—

Report 1/2014: Safeguarding OLAF's Investigative Independence;

| — | Report 2/2014: Implementation by OLAF of the Supervisory Committee's Recommendations; |
| --- | --- |

—

Report 2/2014: Implementation by OLAF of the Supervisory Committee's Recommendations;

| — | Report 3/2014: Opening of Cases in OLAF in 2012. |
| --- | --- |

—

Report 3/2014: Opening of Cases in OLAF in 2012.

| — | 2013 Activity Report |
| --- | --- |

—

2013 Activity Report

Position and policy papers

Position and policy papers

| — | Decision on Transparency of the Supervisory Committee's Activities; |
| --- | --- |

—

Decision on Transparency of the Supervisory Committee's Activities;

| — | Note on the Supervisory Committee’s Analysis of the OLAF Draft IPPs for 2015. |
| --- | --- |

—

Note on the Supervisory Committee’s Analysis of the OLAF Draft IPPs for 2015.

1   MONITORING

MONITORING

| The third paragraph of Article 15(1) of Regulation (EU, Euratom) No 883/2013:


  The Supervisory Committee shall address to the Director-General opinions, including where appropriate, recommendations on, inter alia, the resources needed to carry out the investigative function of the Office, on the investigative priorities of the Office and on the duration of investigations. Those opinions may be delivered on its own initiative, at the request of the Director-General or at the request of an institution, body, office or agency, without however interfering with the conduct of investigations in progress. |
| --- |

The third paragraph of Article 15(1) of Regulation (EU, Euratom) No 883/2013:

The third paragraph of Article 15(1) of Regulation (EU, Euratom) No 883/2013:

The Supervisory Committee shall address to the Director-General opinions, including where appropriate, recommendations on, inter alia, the resources needed to carry out the investigative function of the Office, on the investigative priorities of the Office and on the duration of investigations. Those opinions may be delivered on its own initiative, at the request of the Director-General or at the request of an institution, body, office or agency, without however interfering with the conduct of investigations in progress.

The Supervisory Committee shall address to the Director-General opinions, including where appropriate, recommendations on, inter alia, the resources needed to carry out the investigative function of the Office, on the investigative priorities of the Office and on the duration of investigations. Those opinions may be delivered on its own initiative, at the request of the Director-General or at the request of an institution, body, office or agency, without however interfering with the conduct of investigations in progress.

1.1   IMPLEMENTATION OF OLAF INVESTIGATIVE FUNCTION

IMPLEMENTATION OF OLAF INVESTIGATIVE FUNCTION

OLAF's policies for opening cases

OLAF's policies for opening cases

Opening of cases in OLAF in 2012

| 1. | The SC noted that at the time of the reorganisation of OLAF (1 February 2012), 423 cases were opened on the same day by a single decision of the Director-General of OLAF (OLAF DG). The SC examined to what extent this single decision was in line with the criteria established by the caselaw of the European Court of Justice, which stated that a decision by the OLAF DG to open an investigation cannot be taken unless there are ‘sufficiently serious suspicions’ relating to acts of fraud, corruption or other illegal activities detrimental to the financial interests of the EU. |
| --- | --- |

1.

The SC noted that at the time of the reorganisation of OLAF (1 February 2012), 423 cases were opened on the same day by a single decision of the Director-General of OLAF (OLAF DG). The SC examined to what extent this single decision was in line with the criteria established by the caselaw of the European Court of Justice, which stated that a decision by the OLAF DG to open an investigation cannot be taken unless there are ‘sufficiently serious suspicions’ relating to acts of fraud, corruption or other illegal activities detrimental to the financial interests of the EU.

| 2. | The SC presented the results of its analysis in its Report No 3/2014 on Opening of cases in OLAF in 2012 (3) addressed to the European Parliament, the Council, the European Commission and the European Court of Auditors. On the basis of the analysis of the information provided by OLAF, including a sample of investigations, the SC concluded that (i) OLAF did not conduct any appropriate assessment of the incoming information for any of the cases analysed by the SC, (ii) for the vast majority of cases there was not even a trace of any assessment activity and (iii) the OLAF DG opened all the cases in question without establishing beforehand the existence of a sufficiently serious suspicion that there had been fraud, corruption or any other illegal activity affecting the financial interests of the Union — which is in contradiction with the legal requirement for opening an OLAF investigation, in force at that time. |
| --- | --- |

2.

The SC presented the results of its analysis in its Report No 3/2014

Opening of cases in OLAF in 2012

3

| 3. | At the request of the SC and before the Report was sent to the Institutions, OLAF provided its comments in which it did not agree with the SC’s conclusions. The SC took note of OLAF’s position and decided to forward the Report to the Institutions without any modifications. |
| --- | --- |

3.

At the request of the SC and before the Report was sent to the Institutions, OLAF provided its comments in which it did not agree with the SC’s conclusions. The SC took note of OLAF’s position and decided to forward the Report to the Institutions without any modifications.

Investigation Policy Priorities for 2015

| 4. | Following the transmission of the draft OLAF Investigation Policy Priorities (IPPs) for 2015 by the OLAF DG, the SC analysed them in the light of its Opinion No 1/2014 on OLAF Investigation Policy Priorities (4). The SC observed — in its Note on the Investigation Policy Priorities for 2015 — that, to its knowledge at the time of adopting this note, OLAF did not take into account the three recommendations made in the Opinion No 1/2014: (i) the OLAF DG did not issue guidelines on application of the selection principles arising from Regulation (EU, Euratom) No 883/2013 (efficient use of resources, proportionality, subsidiarity/added value) and, instead of reviewing the financial indicators to adapt them to the reality of spending programmes, he has abolished them completely; (ii) the draft IPPs 2015 appear to take into consideration several documents from stakeholders, but no dialogue with the stakeholders seems to have taken place with regard to financial indicators and to possible follow-up of the cases showing sufficient suspicion of fraud, but dismissed on the basis of the IPPs or selection principles; (iii) the OLAF DG did not transmit to the SC an assessment of the application of the previous IPPs or a summary of the feedback provided by the stakeholders, despite a previous commitment to do so (5). |
| --- | --- |

4.

Following the transmission of the draft OLAF Investigation Policy Priorities (IPPs) for 2015 by the OLAF DG, the SC analysed them in the light of its Opinion No 1/2014 on OLAF Investigation Policy Priorities (4

Note on the Investigation Policy Priorities for 2015

5

| 5. | Consequently, the SC would point out that it is impossible to conclude whether the IPPs are correctly identified and whether their application has positive or negative consequences for the fight against fraud and corruption. |
| --- | --- |

5.

Consequently, the SC would point out that it is impossible to conclude whether the IPPs are correctly identified and whether their application has positive or negative consequences for the fight against fraud and corruption.

OLAF's investigative independence

OLAF's investigative independence

Supervisory Committee's observations regarding OLAF's independence

| 6. | The SC adopted, on 2 July 2014, its Report No 1/2014 on Safeguarding OLAF’s independence (6) addressed to the European Parliament, the Council, the European Commission and the European Court of Auditors. The report is focused on OLAF's investigative independence and on the SC's ability to reinforce it. |
| --- | --- |

6.

The SC adopted, on 2 July 2014, its Report No 1/2014

Safeguarding OLAF’s independence

6

| 7. | The SC expressed the view that the Commission's legislative proposal to create a Controller of procedural guarantees for OLAF contains provisions which would compromise the independence of the OLAF DG and the inter-institutional balance. The SC therefore called on the legislator to amend the legislative proposal, so that (i) the control of the respect of procedural guarantees in ongoing, closed or dismissed cases is exercised within the SC and/or under its supervision and (ii) the legality check in OLAF, in particular concerning invasive investigative measures, is reinforced and formalized. |
| --- | --- |

7.

The SC expressed the view that the Commission's legislative proposal to create a Controller of procedural guarantees

| 8. | In addition, the SC expressed its concerns with regard to the lack of transparency of OLAF's participation in the Commission ‘Clearing House’ meetings and its inherent risks with regard to OLAF's investigative independence. The SC also called for clarification of OLAF’s role in the implementation of the Commission’s antifraud policy in the cigarettes sector. |
| --- | --- |

8.

In addition, the SC expressed its concerns with regard to the lack of transparency of OLAF's participation in the Commission ‘Clearing House’ meetings and its inherent risks with regard to OLAF's investigative independence. The SC also called for clarification of OLAF’s role in the implementation of the Commission’s antifraud policy in the cigarettes sector.

| 9. | The SC expressed a number of concerns regarding its ability to reinforce OLAF's independence. The lack of clarity concerning the SC's role and mandate, in particular with regard to the monitoring of individual cases, and the SC's difficulties in obtaining access to case files effectively put in question the supervision of OLAF. Lack of effective supervision combined with investigative independence may therefore lead to lack of accountability of OLAF. Therefore, the SC called on the EU Institutions either to reinforce its competences, in particular through full access to OLAF case files, or to take other measures ensuring OLAF’s accountability. |
| --- | --- |

9.

The SC expressed a number of concerns regarding its ability to reinforce OLAF's independence. The lack of clarity concerning the SC's role and mandate, in particular with regard to the monitoring of individual cases, and the SC's difficulties in obtaining access to case files effectively put in question the supervision of OLAF. Lack of effective supervision combined with investigative independence may therefore lead to lack of accountability of OLAF.

| 10. | Moreover, the SC drew the Institutions' attention to the need to implement the requirements of Regulation (EU, Euratom) No 883/2013 concerning the independent functioning of the SC Secretariat, which still remains under the exclusive administrative control of the OLAF DG. |
| --- | --- |

10.

Moreover, the SC drew the Institutions' attention to the need to implement the requirements of Regulation (EU, Euratom) No 883/2013 concerning the independent functioning of the SC Secretariat, which still remains under the exclusive administrative control of the OLAF DG.

Requests to the Supervisory Committee to defend OLAF's independence

| 11. | Following the presentation of SC's Report No 1/2014 in the European Parliament and the disclosure of the SC's Opinion No 2/2012, the OLAF DG took note of the disclosure and expressed hope that it will end all the speculation concerning the contents of this Opinion. Together with his two staff members, he then requested the SC to protect their independence and the independence of OLAF as a whole against what they considered to be ‘biased illegitimate attacks’ and ‘undue political interference’ by Members of the European Parliament and by the press. |
| --- | --- |

11.

Following the presentation of SC's Report No 1/2014

Opinion No 2/2012

| 12. | In response, the SC pointed out that: (a) no other factual findings apart from those contained in the disclosed Opinion are endorsed by the SC; (b) OLAF, although independent in its investigative function, shall be accountable for its actions by law and the Director General of OLAF remains accountable for the management and performance of the duties of OLAF in accordance with Union law and the principles of good governance; (c) impartial and independent monitoring by the SC of the investigative function of OLAF and eventual criticisms by the SC as the guardian of OLAF’s independence seek to improve the functioning of OLAF. |
| --- | --- |

12.

In response, the SC pointed out that: (a) no other factual findings apart from those contained in the disclosed Opinion are endorsed by the SC; (b) OLAF, although independent in its investigative function, shall be accountable for its actions by law and the Director General of OLAF remains accountable for the management and performance of the duties of OLAF in accordance with Union law and the principles of good governance; (c) impartial and independent monitoring by the SC of the investigative function of OLAF and eventual criticisms by the SC as the guardian of OLAF’s independence seek to improve the functioning of OLAF.

Application by OLAF of procedural guarantees

Application by OLAF of procedural guarantees

| The second paragraph of Article 15(1) of Regulation (EU, Euratom) No 883/2013:


  The Supervisory Committee shall in particular monitor developments concerning the application of procedural guarantees (...).


  Article 17(7) of Regulation (EU, Euratom) No 883/2013:


  The Director-General shall put in place an internal advisory and control procedure, including a legality check, relating, inter alia, to the respect of procedural guarantees and fundamental rights of the persons concerned (...). |
| --- |

The second paragraph of Article 15(1) of Regulation (EU, Euratom) No 883/2013:

The second paragraph of Article 15(1) of Regulation (EU, Euratom) No 883/2013:

The Supervisory Committee shall in particular monitor developments concerning the application of procedural guarantees (...).

The Supervisory Committee shall in particular monitor developments concerning the application of procedural guarantees (...).

Article 17(7) of Regulation (EU, Euratom) No 883/2013:

Article 17(7) of Regulation (EU, Euratom) No 883/2013:

The Director-General shall put in place an internal advisory and control procedure, including a legality check, relating, inter alia, to the respect of procedural guarantees and fundamental rights of the persons concerned (...).

The Director-General shall put in place an internal advisory and control procedure, including a legality check, relating, inter alia, to the respect of procedural guarantees and fundamental rights of the persons concerned (...).

| 13. | Regulation (EU, Euratom) No 883/2013 does not explicitly include a specific tool allowing the SC to monitor the application of procedural guarantees by OLAF. The SC's assessment in this area therefore remains based only on information obtained upon request and only in ‘duly justified situations’, as foreseen by the Regulation. Complaints received from individuals may also be an indicator of systemic problems and therefore the SC may take them into account for information purposes in the framework of its monitoring activities. The SC competences in this area would require further clarification, providing necessary monitoring tools and active cooperation from OLAF. |
| --- | --- |

13.

Regulation (EU, Euratom) No 883/2013 does not explicitly include a specific tool allowing the SC to monitor the application of procedural guarantees by OLAF. The SC's assessment in this area therefore remains based only on information obtained upon request and only in ‘duly justified situations’, as foreseen by the Regulation. Complaints received from individuals may also be an indicator of systemic problems and therefore the SC may take them into account for information purposes in the framework of its monitoring activities. The SC competences in this area would require further clarification, providing necessary monitoring tools and active cooperation from OLAF.

Legality check and review in OLAF

| 14. | OLAF's Investigation Selection and Review Unit (ISRU) plays a central role in the OLAF investigative activity: it deals with both the selection of information and with the review of cases. It is thus involved in the whole lifecycle of an investigation or coordination case, most of the decisions taken by the OLAF DG in the investigative area being based on its opinions. The activities of the ISRU have therefore a major and direct influence on the performance of the whole OLAF investigative function. |
| --- | --- |

14.

OLAF's Investigation Selection and Review Unit (ISRU) plays a central role in the OLAF investigative activity: it deals with both the selection of information and with the review of cases. It is thus involved in the whole lifecycle of an investigation or coordination case, most of the decisions taken by the OLAF DG in the investigative area being based on its opinions. The activities of the ISRU have therefore a major and direct influence on the performance of the whole OLAF investigative function.

| 15. | This unit also plays an essential role in ensuring the legality of OLAF's investigative activities and in verifying compliance with fundamental rights and procedural guarantees. Consequently the SC decided to continue the examination of the activities of the ISRU with a thorough assessment of the ISRU’s review function (7). To that end, the SC has requested and received access to a sample of 32 OLAF cases. In addition, the SC received copies of 244 case-related documents from a sampling of another 60 closed cases (i.e. requests from investigative units for authorizations to conduct specific investigative activities, opinions of the ISRU on the proposed investigative activity, decisions of the OLAF DG taken on the basis of the ISRU's opinions). |
| --- | --- |

15.

This unit also plays an essential role in ensuring the legality of OLAF's investigative activities and in verifying compliance with fundamental rights and procedural guarantees. Consequently the SC decided to continue the examination of the activities of the ISRU with a thorough assessment of the ISRU’s review function (7

| 16. | The SC's examination of the case files and case-related documents is currently on-going; the results will be published in a forthcoming opinion to be adopted later this year. |
| --- | --- |

16.

The SC's examination of the case files and case-related documents is currently on-going; the results will be published in a forthcoming opinion to be adopted later this year.

Complaints and requests addressed to the Supervisory Committee

| 17. | During the reporting period, the SC received two complaints regarding the duration of on-going OLAF investigations, respect of procedural guarantees and/or allegations of conflict of interest of the investigator(s) in charge. In reply, the complainants were informed that, as long as OLAF investigations were in progress, the SC was not competent to interfere in any way with their conduct. They were also informed that, while the SC is competent to monitor them, a conclusive reply to a request for examination of the duration of investigations and/or of compliance with procedural guarantees, if any, could be delivered by the SC only after the investigations are closed. The SC informed the complainants with regard to the complaints procedure put in place within OLAF and asked to be informed of the outcome of the potential complaints addressed to OLAF. The SC has not yet received any information in this respect. |
| --- | --- |

17.

During the reporting period, the SC received two complaints regarding the duration of on-going OLAF investigations, respect of procedural guarantees and/or allegations of conflict of interest of the investigator(s) in charge. In reply, the complainants were informed that, as long as OLAF investigations were in progress, the SC was not competent to interfere in any way with their conduct. They were also informed that, while the SC is competent to monitor them, a conclusive reply to a request for examination of the duration of investigations and/or of compliance with procedural guarantees, if any, could be delivered by the SC only after the investigations are closed. The SC informed the complainants with regard to the complaints procedure put in place within OLAF and asked to be informed of the outcome of the potential complaints addressed to OLAF. The SC has not yet received any information in this respect.

| 18. | Two other complaints received from a whistle-blower and an informant concerned OLAF's decisions to dismiss cases following information received from those persons. In response, they were informed that the SC had no instruments to deal with complaints of this nature on an individual basis. They were also informed of the possibility of using the complaints procedure established by OLAF. |
| --- | --- |

18.

Two other complaints received from a whistle-blower and an informant concerned OLAF's decisions to dismiss cases following information received from those persons. In response, they were informed that the SC had no instruments to deal with complaints of this nature on an individual basis. They were also informed of the possibility of using the complaints procedure established by OLAF.

| 19. | Moreover, the SC received copies of 32 complaints (8) or requests from individuals and from an EU institution, addressed to OLAF and/or other EU Institutions, which did not require any direct action from the SC. Three other letters sent to the SC by an NGO and by individual persons contained allegations of corruption/irregularities concerning EU funds or requested access to documents relating to an OLAF investigation and were therefore forwarded to OLAF for appropriate action. |
| --- | --- |

19.

Moreover, the SC received copies of 32 complaints (8

| 20. | During the SC's plenary meeting of 11-12 March 2014, the OLAF DG committed to report to the SC once a year on the number of complaints received, the timeliness of their processing and their classification as either justified or not. To date, the SC has not received any such information. |
| --- | --- |

20.

During the SC's plenary meeting of 11-12 March 2014, the OLAF DG committed to report to the SC once a year on the number of complaints received, the timeliness of their processing and their classification as either justified or not. To date, the SC has not received any such information.

OLAF's competence to gather evidence by way of recording private telephone conversations

OLAF's competence to gather evidence by way of recording private telephone conversations

| 21. | In its Opinion No 2/2012 of December 2012, the SC questioned OLAF’s competence to gather evidence by way of recording private telephone conversations which, having regard to the lack of legal basis, constituted an unjustified interference with the right to the respect for private life. The SC therefore recommended that OLAF, inter alia, carry out the relevant legal analysis. |
| --- | --- |

21.

In its Opinion No 2/2012

inter alia

| 22. | OLAF transmitted its analysis (seemingly still incomplete) to the SC on 12 June 2014. The analysis is mainly based on a review of Member States’ national laws and of the European Court of Human Rights’ case-law. In the SC's opinion, the analysis would appear to confirm OLAF's lack of competence to record private telephone conversations with the assistance of a public official without the consent of all participating parties and without any judicial authorisation. The SC has not as yet received any information on procedures initiated as a follow-up to these conclusions. |
| --- | --- |

22.

OLAF transmitted its analysis (seemingly still incomplete) to the SC on 12 June 2014. The analysis is mainly based on a review of Member States’ national laws and of the European Court of Human Rights’ case-law. In the SC's opinion, the analysis would appear to confirm OLAF's lack of competence to record private telephone conversations with the assistance of a public official without the consent of all participating parties and without any judicial authorisation. The SC has not as yet received any information on procedures initiated as a follow-up to these conclusions.

Decisions to defer the information to institution, body, office or agency

Decisions to defer the information to institution, body, office or agency

| Article 4(6) of Regulation (EU, Euratom) No 883/2013:



  Where internal investigations reveal that an official, other servant, member of an institution or body, head of office or agency, or staff member may be a person concerned, the institution, body, office or agency to which that person belongs shall be informed. (...)


  In exceptional cases, the provision of such information may be deferred on the basis of a reasoned decision by the Director-General, which shall be transmitted to the Supervisory Committee after the closure of the investigation. |
| --- |

Article 4(6) of Regulation (EU, Euratom) No 883/2013:

Article 4(6) of Regulation (EU, Euratom) No 883/2013:

Where internal investigations reveal that an official, other servant, member of an institution or body, head of office or agency, or staff member may be a person concerned, the institution, body, office or agency to which that person belongs shall be informed. (...)

In exceptional cases, the provision of such information may be deferred on the basis of a reasoned decision by the Director-General, which shall be transmitted to the Supervisory Committee after the closure of the investigation.

| 23. | The OLAF DG is obliged to transmit to the SC, following the closure of an investigation, his reasoned decision to defer the information to an EU institution, body, office or agency to which the person concerned by an internal investigation belongs. The SC was informed by OLAF that, during the reporting period, there had been no such deferrals. |
| --- | --- |

23.

The OLAF DG is obliged to transmit to the SC, following the closure of an investigation, his reasoned decision to defer the information to an EU institution, body, office or agency to which the person concerned by an internal investigation belongs. The SC was informed by OLAF that, during the reporting period, there had been no such deferrals.

Duration of OLAF's investigations

Duration of OLAF's investigations

| Article 7(8) of Regulation (EU, Euratom) No 883/2013:



  If an investigation cannot be closed within 12 months after it has been opened, the Director-General shall, at the expiry of that 12-month period and every six months thereafter, report to the Supervisory Committee, indicating the reasons and the remedial measures envisaged with a view to speeding up the investigation. |
| --- |

Article 7(8) of Regulation (EU, Euratom) No 883/2013:

Article 7(8) of Regulation (EU, Euratom) No 883/2013:

If an investigation cannot be closed within 12 months after it has been opened, the Director-General shall, at the expiry of that 12-month period and every six months thereafter, report to the Supervisory Committee, indicating the reasons and the remedial measures envisaged with a view to speeding up the investigation.

| 24. | The duration of investigations is at the core of the SC’s mandate. On one hand, it is directly connected to the fundamental right of persons affected by the investigation to have their affairs handled in reasonable time, without unnecessary delays or unjustified periods of inactivity (the principle of proportionality). On the other hand, it is an important performance indicator of OLAF's efficiency. Therefore, in the years 2014-2016, the SC is focusing on different aspects of the duration of OLAF’s investigations. |
| --- | --- |

24.

The duration of investigations is at the core of the SC’s mandate. On one hand, it is directly connected to the fundamental right of persons affected by the investigation to have their affairs handled in reasonable time, without unnecessary delays or unjustified periods of inactivity (the principle of proportionality). On the other hand, it is an important performance indicator of OLAF's efficiency. Therefore, in the years 2014-2016, the SC is focusing on different aspects of the duration of OLAF’s investigations.

| 25. | OLAF investigations are only the preparatory part of judicial, administrative or disciplinary procedures leading to a final decision or ruling. Therefore, the duration of OLAF investigations must be seen in the wider perspective of the whole procedure and, consequently, investigations should be conducted expeditiously and without any undue delay. The benchmark provided by the EU legislator is 12 months. |
| --- | --- |

25.

OLAF investigations are only the preparatory part of judicial, administrative or disciplinary procedures leading to a final decision or ruling. Therefore, the duration of OLAF investigations must be seen in the wider perspective of the whole procedure and, consequently, investigations should be conducted expeditiously and without any undue delay. The benchmark provided by the EU legislator is 12 months.

| 26. | In 2014, OLAF transmitted to the SC 658 reports explaining the reasons why investigations lasted more than 12 months (‘12-month reports’) and the remedial measures envisaged to speed them up. Due to the lack of substantial content in many of the reports, the SC was unable to draw any substantial conclusions, i.e. whether the investigations were conducted continuously and without undue delays and whether their duration was proportionate to the circumstances and to the complexity of the cases. |
| --- | --- |

26.

In 2014, OLAF transmitted to the SC 658 reports explaining the reasons why investigations lasted more than 12 months (‘12-month reports’) and the remedial measures envisaged to speed them up. Due to the lack of substantial content in many of the reports, the SC was unable to draw any substantial conclusions, i.e. whether the investigations were conducted continuously and without undue delays and whether their duration was proportionate to the circumstances and to the complexity of the cases.

| 27. | While Regulation No 888/2013 has reinforced the role of the Supervisory Committee in the monitoring of the duration of OLAF's investigations, paradoxically, on its own initiative, OLAF has provided a significantly reduced amount of information in comparison with that provided to it over previous periods. Notwithstanding OLAF’s formal compliance with its obligation to regularly report to the SC on investigations lasting more than 12 months, the SC has concluded, in its Opinion No 4/2014 on Control of the Duration of Investigations conducted by OLAF, that the information provided to it has been insufficient to enable it to properly and effectively monitor the duration of OLAF's investigations. |
| --- | --- |

27.

While Regulation No 888/2013 has reinforced the role of the Supervisory Committee in the monitoring of the duration of OLAF's investigations, paradoxically, on its own initiative, OLAF has provided a significantly reduced amount of information in comparison with that provided to it over previous periods. Notwithstanding OLAF’s formal compliance with its obligation to regularly report to the SC on investigations lasting more than 12 months, the SC has concluded, in its Opinion No 4/2014

Control of the Duration of Investigations conducted by OLAF

| 28. | As a result, the SC recommended that OLAF appreciably improve the information it provides and, in particular, enrich the content of the reports on investigations lasting more than 12 months, in accordance with the SC's recommendations and suggestions. The SC and OLAF have already begun to work together on this issue. In as much as the SC has been informed, it has also noted that OLAF is primarily focused on the internal monitoring of the duration of investigations and has put in place a number of relevant tools and procedures, the use of which could still be optimized. |
| --- | --- |

28.

As a result, the SC recommended that OLAF appreciably improve the information it provides and, in particular, enrich the content of the reports on investigations lasting more than 12 months, in accordance with the SC's recommendations and suggestions. The SC and OLAF have already begun to work together on this issue. In as much as the SC has been informed, it has also noted that OLAF is primarily focused on the internal monitoring of the duration of investigations and has put in place a number of relevant tools and procedures, the use of which could still be optimized.

Recommendations made by the OLAF Director-General

Recommendations made by the OLAF Director-General

| The third paragraph of Article 17(5) of Regulation (EU, Euratom) No 883/2013:


  The Director-General shall inform the Supervisory Committee periodically:







  (a) | of cases in which the recommendations made by the Director-General have not been followed (...). |
| --- | --- |

The third paragraph of Article 17(5) of Regulation (EU, Euratom) No 883/2013:

The third paragraph of Article 17(5) of Regulation (EU, Euratom) No 883/2013:

The Director-General shall inform the Supervisory Committee periodically:

The Director-General shall inform the Supervisory Committee periodically:

(a)

of cases in which the recommendations made by the Director-General have not been followed (...).

of cases in which the recommendations made by the Director-General have not been followed (...).

| 29. | As in the previous years, in spite of a clear obligation cited in Article 17(5) of Regulation (EU, Euratom) No 883/2013, the OLAF DG did not report to the SC in 2014 on those OLAF recommendations which were not implemented. In 2012 and 2013 OLAF promised the SC an imminent introduction of appropriate monitoring tools in this respect. On 23 May 2014 OLAF transmitted to the SC the Guidelines on judicial, financial and financial monitoring, adopted with a view to ensuring consistent and timely follow-up of OLAF's recommendations. The SC took note of the adoption of these guidelines and intends to analyse this issue more thoroughly and at the source. |
| --- | --- |

29.

As in the previous years, in spite of a clear obligation cited in Article 17(5) of Regulation (EU, Euratom) No 883/2013, the OLAF DG did not report to the SC in 2014 on those OLAF recommendations which were not implemented. In 2012 and 2013 OLAF promised the SC an imminent introduction of appropriate monitoring tools in this respect. On 23 May 2014 OLAF transmitted to the SC the Guidelines on judicial, financial and financial monitoring, adopted with a view to ensuring consistent and timely follow-up of OLAF's recommendations. The SC took note of the adoption of these guidelines and intends to analyse this issue more thoroughly and at the source.

1.2   MANAGEMENT OF THE OLAF INVESTIGATIVE FUNCTION

MANAGEMENT OF THE OLAF INVESTIGATIVE FUNCTION

Preliminary draft budget for 2015

Preliminary draft budget for 2015

| 30. | In its Opinion No 3/2014 on OLAF's Preliminary Draft Budget for 2015, the SC welcomed the priority given by OLAF to the fight against fraud and recommended to OLAF (i) to present more detailed information on the allocation of resources to priority areas, (ii) to develop a human resources strategy and to inform the SC regularly on the progress achieved in this area and (iii) to adopt internal rules ensuring the independent functioning of the SC Secretariat in accordance with the requirements of Regulation (EU, Euratom) No 883/2013. The OLAF DG expressed his willingness to implement the SC's recommendations in the future. |
| --- | --- |

30.

In its Opinion No 3/2014

OLAF's Preliminary Draft Budget for 2015,

OLAF Annual Reports — statistics and reporting tools

OLAF Annual Reports — statistics and reporting tools

| 31. | In relation to the monitoring of the duration of OLAF's investigations, the SC noticed certain discrepancies in OLAF’s reporting and therefore decided to analyse the issue thoroughly. In its Opinion No 5/2014 on OLAF External Reporting on the Duration of Investigations, the SC concluded that the reporting on the duration of investigations by OLAF has not provided a comprehensive view of its investigative performance. While OLAF reported in its annual report that ‘investigations are being completed in less time’, the SC concluded that the improvement in the results of OLAF investigations is due to the introduction of new calculation methods. Therefore, the SC recommended that OLAF should calculate the duration of investigations on the basis of cases closed during the reporting period. The SC furthermore underlined that OLAF should also report transparently on the duration of the longest lasting investigations. |
| --- | --- |

31.

In relation to the monitoring of the duration of OLAF's investigations, the SC noticed certain discrepancies in OLAF’s reporting and therefore decided to analyse the issue thoroughly. In its Opinion No 5/2014

OLAF External Reporting on the Duration of Investigations

2   COOPERATION

COOPERATION

2.1   COOPERATION WITH OLAF

COOPERATION WITH OLAF

| 32. | There were regular contacts between the SC and the OLAF DG: during the plenary meetings of the SC and in bilateral meetings between the SC Chairman and the OLAF DG. In addition, the rapporteurs appointed by the SC to deal with specific monitoring tasks had several working meetings with OLAF staff. |
| --- | --- |

32.

There were regular contacts between the SC and the OLAF DG: during the plenary meetings of the SC and in bilateral meetings between the SC Chairman and the OLAF DG. In addition, the rapporteurs

Implementation by OLAF of the Supervisory Committee's recommendations

Implementation by OLAF of the Supervisory Committee's recommendations

| 33. | Having reached the first half of its five-year mandate, the SC presented to the European Parliament, the Council, the European Commission and the European Court of Auditors a midterm Report No 2/2014 on the Implementation by OLAF of the Supervisory Committee's Recommendations, prepared on the basis of OLAF’s self-assessment and the SC's own monitoring activities. For the first time, the SC evaluated the extent to which OLAF has implemented the SC’s recommendations. |
| --- | --- |

33.

Having reached the first half of its five-year mandate, the SC presented to the European Parliament, the Council, the European Commission and the European Court of Auditors a midterm Report No 2/2014

Implementation by OLAF of the Supervisory Committee's Recommendations

| 34. | The SC noted with concern that 72 % of its recommendations had not been implemented: with regard to 20 out of 50 recommendations, no satisfactory actions had been taken and implementation of 15 other recommendations could not be verified, since OLAF did not provide sufficiently substantial information. The OLAF DG expressed his disagreement with the SC's findings. |
| --- | --- |

34.

The SC noted with concern that 72 % of its recommendations had not been implemented: with regard to 20 out of 50 recommendations, no satisfactory actions had been taken and implementation of 15 other recommendations could not be verified, since OLAF did not provide sufficiently substantial information. The OLAF DG expressed his disagreement with the SC's findings.

| 35. | The SC decided to continue the exercise and to report regularly to the EU Institutions on the implementation of its recommendations by OLAF. The SC intends to provide OLAF with implementation guidelines, including prioritisation of recommendations and advice on possible methods of their implementation. The SC regrets that OLAF, in its 2015 Annual Management Plan, did not include any action plan for implementation of the SC’s recommendations. It therefore remains unclear as to whether OLAF has any intention to implement the SC's recommendations. |
| --- | --- |

35.

The SC decided to continue the exercise and to report regularly to the EU Institutions on the implementation of its recommendations by OLAF. The SC intends to provide OLAF with implementation guidelines, including prioritisation of recommendations and advice on possible methods of their implementation. The SC regrets that OLAF, in its 2015 Annual Management Plan, did not include any action plan for implementation of the SC’s recommendations. It therefore remains unclear as to whether OLAF has any intention to implement the SC's recommendations.

Implementation of the Working Arrangements with OLAF

Implementation of the Working Arrangements with OLAF

| 36. | During the reporting period, the SC continued to have extensive and lengthy discussions with the OLAF DG on the subjects of SC access to case-related information and the implementation of the Working Arrangements signed on 14 January 2014. |
| --- | --- |

36.

During the reporting period, the SC continued to have extensive and lengthy discussions with the OLAF DG on the subjects of SC access to case-related information and the implementation of the Working Arrangements signed on 14 January 2014.

| 37. | OLAF has provided insufficient information to enable the SC to properly and effectively monitor the investigative function, notwithstanding its formal compliance with its obligation to regularly report to the SC on investigations lasting more than 12 months. The last years' experience showed that the Working Arrangements have been implemented in such a manner as to result in a reduction of the scope of information provided to the SC, since the information provided by OLAF is limited to lists, statistics and summary reports, which contain very little or no substantial information on OLAF's cases. In addition, access to OLAF's case files was obtained only after several requests, since OLAF, on several occasions, questioned the justification provided by the SC and requested supplementary justification and/or explanations. |
| --- | --- |

37.

OLAF has provided insufficient information to enable the SC to properly and effectively monitor the investigative function, notwithstanding its formal compliance with its obligation to regularly report to the SC on investigations lasting more than 12 months. The last years' experience showed that the Working Arrangements have been implemented in such a manner as to result in a reduction of the scope of information provided to the SC, since the information provided by OLAF is limited to lists, statistics and summary reports, which contain very little or no substantial information on OLAF's cases. In addition, access to OLAF's case files was obtained only after several requests, since OLAF, on several occasions, questioned the justification provided by the SC and requested supplementary justification and/or explanations.

| 38. | The SC would emphasise that the guarantee of OLAF's independence requires the detection of instances of potential undue influence on its investigations. This cannot be ascertained conclusively in the absence of proper access to investigative case files and comprehensive information on OLAF's cases. |
| --- | --- |

38.

The SC would emphasise that the guarantee of OLAF's independence requires the detection of instances of potential undue influence on its investigations. This cannot be ascertained conclusively in the absence of proper access to investigative case files and comprehensive information on OLAF's cases.

| 39. | As the SC pointed out in its Report No 1/2014 on Safeguarding OLAF’s independence (9), the difficulties in obtaining case-related information and access to case files have compromised the effectiveness of its supervisory role. The core of the problem is not poor implementation of the Working Arrangements, but a fundamental difference of views between the SC and the OLAF DG in the perception of the role of the SC. The OLAF DG advocated for the SC’s main role to be to support his independence and to monitor statistical data on a very general level. The SC underlines its supervisory role as the only body which can ensure accountability of OLAF’s investigative function. The OLAF DG’s perspective means the SC acting on the basis of information that the OLAF DG decides to provide. The SC’s perspective requires its independent access to information to ensure objective monitoring. |
| --- | --- |

39.

As the SC pointed out in its Report No 1/2014

Safeguarding OLAF’s independence

9

The core of the problem is not poor implementation of the Working Arrangements, but a fundamental difference of views between the SC and the OLAF DG in the perception of the role of the SC.

| 40. | This basic disagreement has very negatively affected the last three years of the SC’s activities. In view of a divergent interpretation of the law and of the intentions of the legislator, a common understanding between the SC and the current OLAF DG on those matters is far from being reached. Therefore the SC considers the intervention of the Appointing Authorities has now become necessary in order to confirm the precise role of the SC. |
| --- | --- |

40.

This basic disagreement has very negatively affected the last three years of the SC’s activities. In view of a divergent interpretation of the law and of the intentions of the legislator, a common understanding between the SC and the current OLAF DG on those matters is far from being reached. Therefore the SC considers the intervention of the Appointing Authorities has now become necessary in order to confirm the precise role of the SC.

2.2   COOPERATION WITH STAKEHOLDERS

COOPERATION WITH STAKEHOLDERS

Meetings with EU Institutions

Meetings with EU Institutions

| 41. | In April 2014, the SC representatives participated in the first exchange of views with EU Institutions related to OLAF's activities, as foreseen by Article 16 of Regulation (EU, Euratom) No 883/2013. The meeting was focused on (i) OLAF’s new investigative procedures, including procedural guarantees, (ii) OLAF's Investigation Policy Priorities, (iii) Working Arrangements between OLAF and the SC and (iv) the establishment of antifraud cooperation services (AFCOS) in the Member States. |
| --- | --- |

41.

In April 2014, the SC representatives participated in the first exchange of views with EU Institutions related to OLAF's activities, as foreseen by Article 16 of Regulation (EU, Euratom) No 883/2013. The meeting was focused on (i) OLAF’s new investigative procedures, including procedural guarantees, (ii) OLAF's Investigation Policy Priorities, (iii) Working Arrangements between OLAF and the SC and (iv) the establishment of antifraud cooperation services (AFCOS) in the Member States.

| 42. | Between April and July 2014, the SC presented its 2013 Activity Report to the EU Institutions and bodies. |
| --- | --- |

42.

Between April and July 2014, the SC presented its 2013 Activity Report to the EU Institutions and bodies.

| 43. | In June 2014, the SC met Commissioner Šemeta, for discussions concerning the Commission's legislative proposal on the Controller of procedural guarantees, OLAF's participation in Clearing House meetings, the SC's access to OLAF case files and the implementation of the Working Arrangements with OLAF. |
| --- | --- |

43.

In June 2014, the SC met Commissioner Šemeta, for discussions concerning the Commission's legislative proposal on the Controller of procedural guarantees

| 44. | In July, September and November 2014, the European Parliament Committee on Budgetary Control (CONT Committee) invited the SC to exchange views on the SC’s Report No 1/2014 on Safeguarding OLAF's Independence and on the Commission's legislative proposal on the Controller of Procedural Guarantees. In addition, the SC Chairman met the Chair and Members of the CONT Committee, the President of the European Court of Auditors, the Commission VicePresident and the European Ombudsman, for introductory discussions concerning the SC's role, status and responsibilities under EU law. |
| --- | --- |

44.

In July, September and November 2014, the European Parliament Committee on Budgetary Control (CONT Committee) invited the SC to exchange views on the SC’s Report No 1/2014

Safeguarding OLAF's Independence

Controller of Procedural Guarantees

Meetings with other stakeholders

Meetings with other stakeholders

| 45. | In a plenary meeting, the SC met the Parliamentary Ombudsman of Finland and the Chairman of the Governing Board of the European Union Fundamental Rights Agency (FRA) to discuss the respect of procedural guarantees in investigations conducted at the EU level. An SC member visited the FRA to identify possible fields of cooperation between, on the one hand, OLAF and the FRA and, on the other, the SC and the FRA. As a result, the SC formally invited the OLAF DG to establish cooperation with the FRA, to submit OLAF procedures to a fundamental rights check by the Agency and to include the expertise of the FRA in the legislative processes under the responsibility of OLAF. The SC has requested an action plan from OLAF detailing where cooperation will be established and implemented. |
| --- | --- |

45.

In a plenary meeting, the SC met the Parliamentary Ombudsman of Finland and the Chairman of the Governing Board of the European Union Fundamental Rights Agency (FRA) to discuss the respect of procedural guarantees in investigations conducted at the EU level. An SC member visited the FRA to identify possible fields of cooperation between, on the one hand, OLAF and the FRA and, on the other, the SC and the FRA. As a result, the SC formally invited the OLAF DG to establish cooperation with the FRA, to submit OLAF procedures to a fundamental rights check by the Agency and to include the expertise of the FRA in the legislative processes under the responsibility of OLAF. The SC has requested an action plan from OLAF detailing where cooperation will be established and implemented.

| 46. | In two of its plenary meetings the SC met, firstly, 30 magistrates from 15 EU Member States, to present its mandate and, at a subsequent meeting, high representatives from the French judiciary, in order to discuss their cooperation with EU bodies. Individual SC Members took part in four conferences and workshops on fighting fraud and corruption. The SC was represented by its Secretary at one further event. |
| --- | --- |

46.

In two of its plenary meetings the SC met, firstly, 30 magistrates from 15 EU Member States, to present its mandate and, at a subsequent meeting, high representatives from the French judiciary, in order to discuss their cooperation with EU bodies. Individual SC Members took part in four conferences and workshops on fighting fraud and corruption. The SC was represented by its Secretary at one further event.

3   GOVERNANCE

GOVERNANCE

3.1   SUPERVISORY COMMITTEE

SUPERVISORY COMMITTEE

Working methods

Working methods

| 47. | In 2014, the SC held 10 plenary meetings in Brussels, Helsinki and Paris. The Chairman, the rapporteurs and members of the Secretariat also met regularly to work on particular issues as well as on the preparation of and follow-up to the plenary meetings. |
| --- | --- |

47.

In 2014, the SC held 10 plenary meetings in Brussels, Helsinki and Paris. The Chairman, the rapporteurs

| 48. | For every major topic examined, the SC appointed a rapporteur. Such was the case notably for the SC reports addressed to the EU Institutions and the opinions addressed to the OLAF DG. The rapporteurs worked with the SC Secretariat to prepare draft reports, opinions, or papers to be discussed in the plenary meetings. Working meetings were also arranged between SC rapporteurs and OLAF senior and middle management and staff, in the framework of the preparation of the SC's opinions and reports. |
| --- | --- |

48.

For every major topic examined, the SC appointed a rapporteur

rapporteurs

rapporteurs

| 49. | The SC has applied the principle of consultation with OLAF, opinions and reports being sent to the OLAF DG for his comments prior to publication. |
| --- | --- |

49.

The SC has applied the principle of consultation with OLAF, opinions and reports being sent to the OLAF DG for his comments prior to publication.

Budgetary independence

Budgetary independence

| 50. | There is a separate budget line for the expenses of the SC Members in the OLAF budget. However, the expenditure related to the SC Secretariat is incorporated within different OLAF budget items. Regulation (EU, Euratom) No 883/2013, which entered into force on 1 October 2013, introduced, for the first time, a separate reference to the SC and its Secretariat in Article 18 on the financing of OLAF. During the discussions on the 2014 budget, the European Parliament interpreted this provision as requiring the combined budget of the SC and its Secretariat to be specified in a separate line of the OLAF budget. This proposal concerning the 2014 budget was not opposed by the Council; however, in the last stage of the negotiations, it was dropped from the agenda by the Commission which chaired the discussions. |
| --- | --- |

50.

There is a separate budget line for the expenses of the SC Members in the OLAF budget. However, the expenditure related to the SC Secretariat is incorporated within different OLAF budget items. Regulation (EU, Euratom) No 883/2013, which entered into force on 1 October 2013, introduced, for the first time, a separate reference to the SC and its Secretariat in Article 18 on the financing of OLAF. During the discussions on the 2014 budget, the European Parliament interpreted this provision as requiring the combined budget of the SC and its Secretariat to be specified in a separate line of the OLAF budget. This proposal concerning the 2014 budget was not opposed by the Council; however, in the last stage of the negotiations, it was dropped from the agenda by the Commission which chaired the discussions.

| 51. | Under the circumstances described above, and considering that extracting the expenditure relating to the SC Secretariat from different items of the general OLAF budget and presenting it separately in the chapter on the SC expenses would show a clear picture of the total cost of the supervision of OLAF and in order to avoid the danger of a potential conflict of interest (in the current situation, the OLAF DG may freely increase or decrease expenditure related to the supervision of his own activities), on 25 February 2014, the SC addressed a letter to the Council in which it requested its support for the proposal to extract the expenditure related to the SC Secretariat from the general OLAF budget and to include it in the chapter on the SC expenses as a separate item. |
| --- | --- |

51.

Under the circumstances described above, and considering that extracting the expenditure relating to the SC Secretariat from different items of the general OLAF budget and presenting it separately in the chapter on the SC expenses would show a clear picture of the total cost of the supervision of OLAF and in order to avoid the danger of a potential conflict of interest (in the current situation, the OLAF DG may freely increase or decrease expenditure related to the supervision of his own activities), on 25 February 2014, the SC addressed a letter to the Council in which it requested its support for the proposal to extract the expenditure related to the SC Secretariat from the general OLAF budget and to include it in the chapter on the SC expenses as a separate item.

| 52. | The SC welcomes the fact that the OLAF DG made the commitment to include a justification for a separate budget line for the SC Secretariat in the Draft Budget 2015. In the interim, as a temporary solution, on 28 May 2014, the OLAF DG sent the SC a proposal for the implementation of the budget allocated to the SC and its Secretariat which clarifies the responsibilities of the Head of the SC Secretariat and his discretion in the implementation of the budget. At the same time, he underlined the fact that, as the responsible Appointing Authority and Authorising Officer by delegation, he would continue to consult the SC on the staff and budget decisions affecting the Secretariat. Unfortunately, the elements concerning the SC Secretariat are missing in the Preliminary Draft Budget 2016. |
| --- | --- |

52.

The SC welcomes the fact that the OLAF DG made the commitment to include a justification for a separate budget line for the SC Secretariat in the Draft Budget 2015. In the interim, as a temporary solution, on 28 May 2014, the OLAF DG sent the SC a proposal for the implementation of the budget allocated to the SC and its Secretariat which clarifies the responsibilities of the Head of the SC Secretariat and his discretion in the implementation of the budget. At the same time, he underlined the fact that, as the responsible Appointing Authority and Authorising Officer by delegation, he would continue to consult the SC on the staff and budget decisions affecting the Secretariat. Unfortunately, the elements concerning the SC Secretariat are missing in the Preliminary Draft Budget 2016.

Communication policy and transparency

Communication policy and transparency

| 53. | The SC is an independent inter-institutional body appointed directly by the European Parliament, the Council and the European Commission, which reports to the appointing Institutions as well as informs the public, the civil society and the relevant national authorities of its role and activities. For the purposes of transparency and of communication with the public and the stakeholders, and to reflect its independence, by its Decision on Transparency of its Independent Activities of 5 November 2014, the SC decided to establish its own dedicated website, located within the europa.eu website system, independent from and in parallel with the OLAF website. |
| --- | --- |

53.

The SC is an independent inter-institutional body appointed directly by the European Parliament, the Council and the European Commission, which reports to the appointing Institutions as well as informs the public, the civil society and the relevant national authorities of its role and activities. For the purposes of transparency and of communication with the public and the stakeholders, and to reflect its independence, by its Decision on Transparency of its Independent Activities

europa.eu

3.2   SUPERVISORY COMMITTEE'S SECRETARIAT

SUPERVISORY COMMITTEE'S SECRETARIAT

| 54. | The Secretariat of the SC consists of lawyers, former investigators and assistants who ensure the daily monitoring of OLAF investigative activities and assist the SC Members in the execution of their tasks. The Secretariat receives information provided to the SC and carries out its initial examination. The Secretariat is also responsible for preparing legal advice for the SC Members. In 2014, the Secretariat had eight posts, allocated to five administrators (four lawyers, including a member of management), two assistants and one contractual agent. |
| --- | --- |

54.

The Secretariat of the SC consists of lawyers, former investigators and assistants who ensure the daily monitoring of OLAF investigative activities and assist the SC Members in the execution of their tasks. The Secretariat receives information provided to the SC and carries out its initial examination. The Secretariat is also responsible for preparing legal advice for the SC Members. In 2014, the Secretariat had eight posts, allocated to five administrators (four lawyers, including a member of management), two assistants and one contractual agent.

| 55. | According to Regulation (EU, Euratom) No 883/2013 (10), the independent functioning of the SC Secretariat should be guaranteed by OLAF. The Secretariat must be able to assist the SC in implementing its monitoring functions in a loyal and efficient manner without being exposed to the risk of potential conflicts of interest as OLAF staff subordinate to the OLAF DG. The SC has consistently underlined, during the past few years, the importance of its independent and effective functioning which requires an independent and adequately staffed Secretariat. |
| --- | --- |

55.

According to Regulation (EU, Euratom) No 883/2013 (10

| 56. | However, it has to be noted that, while the SC Secretariat is functionally attached to the SC, it is administratively fully subordinated to the OLAF DG. As a result, the Secretariat of the supervisory body is under the (administrative) control of the supervised body (11). The OLAF DG executes the Appointing Authority powers, including discretionary decisions on promotions and transfers. This situation leads to conflicts of interest and exposes the Secretariat staff to conflicting instructions, as it was the case e.g. with the disclosure of the SC's Opinion 2/2012. |
| --- | --- |

56.

However, it has to be noted that, while the SC Secretariat is functionally attached to the SC, it is administratively fully subordinated to the OLAF DG. As a result, the Secretariat of the supervisory body is under the (administrative) control of the supervised body (11

| 57. | The SC has identified four basic conditions ensuring the independent functioning of the Secretariat: (i) recruitment, appraisal and promotion of the Head of the Secretariat on the basis of the SC's decisions; (ii) reclassification of the Head of the Secretariat as a senior manager; (iii) recruitment, appraisal and promotion of the staff of the Secretariat by its Head; (iv) sub-delegation of the Secretariat's budget implementation to its Head. The relevant arrangements should be implemented as soon as possible, as required by Regulation (EU, Euratom) No 883/2013. |
| --- | --- |

57.

The SC has identified four basic conditions ensuring the independent functioning of the Secretariat: (i) recruitment, appraisal and promotion of the Head of the Secretariat on the basis of the SC's decisions; (ii) reclassification of the Head of the Secretariat as a senior manager; (iii) recruitment, appraisal and promotion of the staff of the Secretariat by its Head; (iv) sub-delegation of the Secretariat's budget implementation to its Head. The relevant arrangements should be implemented as soon as possible, as required by Regulation (EU, Euratom) No 883/2013.

How to contact the Supervisory Committee

How to contact the Supervisory Committee

Via the SC Secretariat:

Via the SC Secretariat:

By post

By post

| J30 13/62 |
| --- |
| Rue Joseph II 30 |
| 1049 Bruxelles/Brussel |
| BELGIQUE/BELGIË |

J30 13/62

Rue Joseph II 30

1049 Bruxelles/Brussel

BELGIQUE/BELGIË

By email

By email

| OLAF-FMB-supervisory-committee@ec.europa.eu |
| --- |
| By fax |
| +32 22959776 |

OLAF-FMB-supervisory-committee@ec.europa.eu

OLAF-FMB-supervisory-committee@ec.europa.eu

By fax

By fax

+32 22959776

---

(1)  Regulation (EU, Euratom) No 883/2013 of the European Parliament and of the Council of 11 September 2013 concerning investigations conducted by the European Anti-Fraud Office (OLAF) and repealing Regulation (EC) No 1073/1999 of the European Parliament and of the Council and Council Regulation (Euratom) No 1074/1999 (OJ L 248, 18.9.2013, p. 1).

1

(2)  Article 15.

2

(3)  http://ec.europa.eu/anti_fraud/documents/reports-sup_comm/2014/report_opening_cases_2012_en.pdf

3

(4)  http://ec.europa.eu/anti_fraud/documents/reports-sup_comm/2014/3_opinion_on_ipps_en.pdf

4

(5)  In his note to the Chair of the Budgetary Control Committee of the European Parliament (Ref. Ares(2014)2878354 of 3 September 2014) the OLAF DG stated that ‘OLAF will carry out an assessment of the implementation of past IPPs, including 2012-2013, in view of the preparation of the 2015 IPPs. They will be sent to the SC beforehand, in time for them to react’.

5

(6)  http://ec.europa.eu/anti_fraud/documents/reports-sup_comm/2014/special_report_2014_supcom_en.pdf

6

(7)  The results of the SC's assessment of the selection function of the ISRU were outlined in the SC's Opinion No 2/2014 on Case Selection in OLAF, presented in the previous Activity Report.

7

(8)  28 of these complaints were sent by the same person. The complainant was informed of the possibility of using OLAF's complaints procedure or lodging a complaint with the European Ombudsman, after which the correspondence with him was discontinued on the basis of Article 14(3) of the European Code of Good Administrative Behaviour.

8

(9)  http://ec.europa.eu/anti_fraud/documents/reports-sup_comm/2014/special_report_2014_supcom_en.pdf. See points 25 to 30.

9

(10)  Recital 40.

10

(11)  This issue was also raised by Transparency International (see http://www.transparencyinternational.eu/european-union-integrity-system-study/).

11

---

ANNEXES

Opinion No 3/2014: OLAF's Preliminary Draft Budget for 2015

Opinion No 4/2014: Control of the Duration of Investigations conducted by the European Anti-fraud Office

Opinion No 5/2014: OLAF External Reporting on the Duration of Investigations

Report 1/2014: Safeguarding OLAF's Investigative Independence

Report 2/2014: Implementation by OLAF of the Supervisory Committee's Recommendations

Report 3/2014: Opening of Cases in OLAF in 2012

Note on the Supervisory Committee’s Analysis of the OLAF Draft IPPs for 2015

Decision on Transparency of the Supervisory Committee's Activities

(OLAF's comments and replies to the SC's Opinions and Reports can be found on OLAF's website: http://ec.europa.eu/anti_fraud/about-us/reports/index_en.htm).

---