# C_2006302EN.01004101.xml

| 12.12.2006 | EN | Official Journal of the European Union | C 302/41 |
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12.12.2006

EN

Official Journal of the European Union

C 302/41

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OPINION No 6/2006

OPINION N

on a proposal for a decision by the European Parliament and the Council amending and extending Decision No 804/2004/EC of the European Parliament and of the Council of 21 April 2004 establishing a Community action programme to promote activities in the field of the protection of the Community's financial interests (Hercule II programme)

(pursuant to Article 248(4), second subparagraph, EC)

(2006/C 302/02)

THE COURT OF AUDITORS OF THE EUROPEAN COMMUNITIES

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

Having regard to the proposal for a decision by the European Parliament and the Council amending and extending the Community action programme to promote activities in the field of the interest of the Community's financial interests (1),

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Having regard to the Council's request for an opinion on this proposal, which was received by the Court of Auditors on 14 July 2006,

Having regard to Opinion No 8/2003 of the Court of Auditors of 11 November 2003 on the original Community action programme,

Whereas the proposed decision is based on Article 280(4) of the Treaty, which provides that: ‘The Council ... after consulting the Court of Auditors, shall adopt the necessary measures in the fields of the prevention of and fight against fraud affecting the financial interests of the Community’,

Whereas the main purpose of the Commission's proposal is to extend the Hercule (2) programme for a further period of seven years (2007 to 2013). The indicative allocation of 98,5 million euro results in average annual instalments of approximately 14 million euro. The programme provides OLAF with the financial resources needed to operate the service platform offered to the Member States for the purpose of coordinating the fight against fraud at European Union level (3),

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HAS ADOPTED THE FOLLOWING OPINION:

| 1. | The main programme sectors (technical assistance, training activities and information exchange between legal authorities in the area of the fight against fraud) have not been evaluated according to the terms of Article 27(3) of the Financial Regulation, which require achievement of the objectives to be monitored by performance indicators. Instead activities have been judged rather in terms of level of activity, without measurable indicators. Therefore the achievement of the expected results and impact of the programme remain difficult to determine. |
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1.

The main programme sectors (technical assistance, training activities and information exchange between legal authorities in the area of the fight against fraud) have not been evaluated according to the terms of Article 27(3) of the Financial Regulation, which require achievement of the objectives to be monitored by performance indicators. Instead activities have been judged rather in terms of level of activity, without measurable indicators. Therefore the achievement of the expected results and impact of the programme remain difficult to determine.

| 2. | Article 7(a) of the proposal provides for a report by OLAF on the implementation of the programme and the appropriateness of continuing it by 31 December 2010 at the latest. Article 7(b) postpones the evaluation of the achievement of the programme until 31 December 2014. The Court considers that to be too late. Therefore the Court suggests that the independent evaluation should be delivered by no later than 2010 and should include an intermediate evaluation of the achievements of the programmes objectives. Furthermore, information about the actions financed and the results obtained in the framework of the Hercule II programme should be presented in the annual report submitted by the Commission pursuant to Article 280 (5) of the Treaty. In the annex attached to the proposal the clarity and specificity of the general criteria established should be improved in order to facilitate an eventual evaluation of the programme. |
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2.

Article 7(a) of the proposal provides for a report by OLAF on the implementation of the programme and the appropriateness of continuing it by 31 December 2010 at the latest. Article 7(b) postpones the evaluation of the achievement of the programme until 31 December 2014. The Court considers that to be too late. Therefore the Court suggests that the independent evaluation should be delivered by no later than 2010 and should include an intermediate evaluation of the achievements of the programmes objectives. Furthermore, information about the actions financed and the results obtained in the framework of the Hercule II programme should be presented in the annual report submitted by the Commission pursuant to Article 280 (5) of the Treaty. In the annex attached to the proposal the clarity and specificity of the general criteria established should be improved in order to facilitate an eventual evaluation of the programme.

| 3. | The public contracts referred to in Title V of the Financial Regulation offer OLAF the possibility of managing the programme. This procedure is to be welcomed as a means of enabling the Office to have greater control over the implementation of the programme. |
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3.

The public contracts referred to in Title V of the Financial Regulation offer OLAF the possibility of managing the programme. This procedure is to be welcomed as a means of enabling the Office to have greater control over the implementation of the programme.

| 4. | The structure of the programme set out in the legislative financial statement is expressed in operational objectives, which are themselves broken down into activities. On the face of it this structure meets the requirements of Article 27(3) of the Financial Regulation. However, the structure in the legislative statement does not correspond to the programme's management structure (consisting of three separate components). The appointment of a programme coordinator is not likely to clarify the achievement of objectives that are both formal and diverse or of activities which do not correspond to the practical reality of management. It would therefore be desirable for the stated objectives to be reformulated and linked more closely to the aims actually pursued by the managers. If this is not done performance indicators are likely to prove very difficult to put in place. |
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4.

The structure of the programme set out in the legislative financial statement is expressed in operational objectives, which are themselves broken down into activities. On the face of it this structure meets the requirements of Article 27(3) of the Financial Regulation. However, the structure in the legislative statement does not correspond to the programme's management structure (consisting of three separate components). The appointment of a programme coordinator is not likely to clarify the achievement of objectives that are both formal and diverse or of activities which do not correspond to the practical reality of management. It would therefore be desirable for the stated objectives to be reformulated and linked more closely to the aims actually pursued by the managers. If this is not done performance indicators are likely to prove very difficult to put in place.

| 5. | Following action by OLAF in the fight against cigarette smuggling, an agreement was reached on 9 June 2004 between the Commission, 10 Member States and a major manufacturer in the tobacco sector (4). Under this agreement, the manufacturer agreed to pay the sum of approximately 1 250 million USD over a period of 12 years. This sum, which the Commission shares with the countries which signed the agreement, is intended in particular ‘to provide an additional source of funding for initiatives to combat smuggling and counterfeiting’. The annual budget of the Hercule II programme thus includes a sum of approximately 6 million euro by virtue of the agreement. While the provision of additional funds to combat fraud in the tobacco sector is to be welcomed, appropriate measures should be taken to ensure that adequate resources are available for the fight against fraud in other equally sensitive sectors. |
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5.

Following action by OLAF in the fight against cigarette smuggling, an agreement was reached on 9 June 2004 between the Commission, 10 Member States and a major manufacturer in the tobacco sector (4). Under this agreement, the manufacturer agreed to pay the sum of approximately 1 250 million USD over a period of 12 years. This sum, which the Commission shares with the countries which signed the agreement, is intended in particular ‘to provide an additional source of funding for initiatives to combat smuggling and counterfeiting’. The annual budget of the Hercule II programme thus includes a sum of approximately 6 million euro by virtue of the agreement. While the provision of additional funds to combat fraud in the tobacco sector is to be welcomed, appropriate measures should be taken to ensure that adequate resources are available for the fight against fraud in other equally sensitive sectors.

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This opinion was adopted by the Court of Auditors in Luxembourg at its meeting of 26 October 2006.

For the Court of Auditors

Hubert WEBER

President

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(1)  COM(2006) 339 final of 28 June 2006.

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(2)  Decision No 804/2004/EC of the European Parliament and of the Council (OJ L 143, 30.4.2004, p. 9).

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(3)  Special Report No 1/2005 of the Court of Auditors, paragraphs 50 and 76 (OJ C 202, 18.8.2005).

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(4)  Philip Morris Group (PMI).

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