A4-0297/98

Resolution on the independence, role and status of the Unit for the Coordination of Fraud Prevention (UCLAF) (Court of Auditors Special Report No 8/98 concerning the Commission departments responsible for fighting fraud) (C4-0483/98)

The European Parliament,

- having regard to Article 206 of the EC Treaty,

- having regard to its resolution of 22 October 1997 ((OJ C 339, 10.11.1997, p. 68.)) on the Commission's 1996 Annual Report (COM(97)0200 - C4-0230/97) and its Work Programme for 1997/98 on the protection of the Community's financial interests and the fight against fraud (COM(97)0199 - C4-0231/97),

- having regard to the Court of Auditors' Special Report No 8/98 concerning the Commission departments responsible for fighting fraud, notably the Unit for the Coordination of Fraud Prevention (UCLAF), accompanied by the Commission's replies (C4-0483/98) ((OJ C 230, 22.7.1998, p.1.)),

- having regard to the Commission communication: 'Sound Financial Management and Administration - Improving Action Against Incompetence, Financial Irregularities, Fraud and Corruption¨ (SEC(97)2198 - C4-0001/98),

- having regard to the report of the Committee on Budgetary Control and the opinion of the Committee on Civil Liberties and Internal Affairs (A4-0297/98),

A. alarmed at the outcome of the investigation by the Court of Auditors which shows that, despite the efforts made during the last few years, the Commission department responsible for combating fraud is capable of action only to a limited extent,

B. whereas, despite some individual successes, the results achieved to date by UCLAF in combating fraud have therefore fallen far short of its expectations, as well as falling short of the goals set by the Commission itself, and are not commensurate with the growing challenges in this field,

C. whereas only about 30 of the approximately 130 staff of UCLAF are capable of being employed in investigations, and whereas the shortcomings pointed out by the Court of Auditors largely result, therefore, from the fact that the staffing of UCLAF is inadequate in terms of both quantity and quality,

D. whereas the shortcomings pointed out by the Court of Auditors also result from the narrow legal and organisational framework within which UCLAF has to work,

E. whereas some of the defects described by the Court of Auditors are also linked to weaknesses in the political and administrative leadership of UCLAF,

F. whereas the Commission's policy in cases of corruption within its own ranks is still unclear and inconsistent; whereas there is, therefore, a tendency to cover up such cases wherever possible,

G. whereas all these circumstances have a demoralising effect on staff employed in the fight against fraud and may give the impression that UCLAF is, basically, only concerned with keeping up appearances,

H. whereas it has itself repeatedly urged UCLAF to carry out its own investigations in addition to coordinating the efforts of the Member States, particularly where cross-border organised crime directed against the Union's financial interests is involved or when offences in which EU staff are implicated are to be investigated,

I. having regard to the compelling need to protect the euro effectively from the outset against forgery and other forms of fraud; whereas this will require a concentrated effort at Community level,

J. whereas the enlargement of the Union must be accompanied and indeed preceded by credible efforts to combat fraud, so that a deterrent effect is created from the outset,

K. whereas the tasks of UCLAF and Europol with regard to organised crime directed against the EU are largely complementary,

L. whereas the protection of the Union's financial interests requires the development of a European criminal law area and the establishment of an EU public prosecution service,

M. whereas the aim, set out in paragraph 7 of its resolution of 31 March 1998 on criminal proceedings relating to the protection of the Union's financial interests ((OJ C 138, 4.5.1998, p. 61.)), of establishing a European Public Prosecutor cannot, in political terms, be achieved immediately and all at once, although steps in this direction are necessary and possible in the short term, and whereas UCLAF must be involved in this from the outset,

N. whereas the difficulties referred to by the Court of Auditors in investigations into the conduct of EU staff are partially attributable to the fact that UCLAF is currently a Task Force under the authority of the Secretariat-General of the Commission and does not, therefore, have the necessary independence to carry out such investigations,

O. having regard to the Council Recommendation of 9 March 1998 concerning the discharge to be given to the Commission in respect of the implementation of the 1996 budget (C4-0168/98), in which the Council indicates the need, where appropriate, for UCLAF to be empowered to carry out investigations in all European institutions,

P. whereas such investigations should not be carried out in an improvised manner and on a case-by-case basis but should be conducted in accordance with clearly defined rules and procedures,

Q. whereas the officials responsible for combating fraud, corruption and other offences against the Union's financial interests must enjoy a large degree of independence and freedom to take decisions in order to be able to act swiftly, flexibly and effectively,

R. whereas, at the same time, steps must be taken to ensure that their actions are subject to democratic and judicial supervision and scrutiny,

S. whereas the success of their work depends to a great extent on close cooperation, based on trust, with the financial controllers of the institutions,

T. whereas, in the context of Parliament's powers and responsibilities in respect of giving a discharge, effective political accountability must be guaranteed,

U. having regard to the Community's power to organise its own affairs - confirmed by the case-law of the European Court of Justice - which permits the establishment of subordinate authorities and offices by means of Community secondary legislation,

V. whereas Article 280 of the Treaty of Amsterdam opens up new possibilities for decisively improving the conditions for effective measures to combat fraud at Community level and whereas it would therefore make sense to re-examine unratified conventions and additional protocols on the protection of the Community's financial interests with a view to adopting parts of them under the new Article 280,

1. Regrets that the Court of Auditors' Special Report No 8/98 has revealed serious shortcomings in the operation of UCLAF and notes that the proposals set out by the Commission in its communication on improving action against incompetence, financial irregularities, fraud and corruption do not cover all the needs recognised;

2. Calls on the Commission, therefore, to submit a proposal for a joint decision of the European Parliament, the Council, the European Court of Justice and the European Court of Auditors for the establishment of an Anti-Fraud Office - Office de lutte anti-fraude (OLAF), no later than 1 December 1998;

3. Calls on the Commission to include the following points in that proposal:

a) In addition to taking over UCLAF's former powers and responsibilities, OLAF shall be made explicitly responsible for combating internal corruption and fraud in all the European Union's institutions which are party to that decision.

b) The Director of OLAF shall decide whether an internal investigation is to be carried out. He shall take this decision at the request of the institution concerned or on his own initiative.

c) The institutions shall do everything in their power to assist OLAF in the execution of its duties and shall provide any information which OLAF deems necessary for the purposes of internal investigations.

d) The outcome of the investigations shall be communicated to the competent judicial authorities. To that end, a unit shall be set up within OLAF consisting of experts, appointed by the national prosecutors, who will be responsible for compiling the relevant files and will, if the need arises, assist the national judicial authorities. This unit shall be consulted whenever a decision is taken to initiate an investigation.

e) OLAF shall immediately implement common rules on the registration and archiving of case documents so that it is not possible to destroy such documents on a discretionary basis.

f) The work of OLAF shall be managed by a Board of Directors whose members shall be appointed by the institutions.

g) The work of OLAF shall be supervised by a supervisory body composed of five people appointed by Parliament with the agreement of the other institutions, being persons whose independence is beyond doubt and who possess the qualifications required for appointment to high judicial office, or being jurisconsults of recognised competence.

h) The Commission shall act as the appointing authority. It shall take all decisions concerning the appointment of, disciplinary measures against, and the posting and transfer of OLAF staff on the basis of a proposal submitted by the Director and after approval by the Board of Directors.

i) The Director of OLAF shall be appointed by the Commission after approval by the European Parliament. To that end, the Commission shall submit to Parliament a list of at least three suitable candidates. The other institutions may also propose candidates.

j) The term of office of the Director of OLAF shall be five years. It may be extended in accordance with the procedure referred to under (i). The Director may be released from his duties before the end of his term of office only at the request of the Board of Directors.

k) The Director of OLAF shall report regularly and comprehensively on his work to the appropriate committee of the European Parliament. The arrangements for the submission of this report shall be laid down by Parliament in its Rules of Procedure.

l) The OLAF budget, which includes expenditure on administration and staff, shall be published as an annex to Part A of the Commission's budget.

m) OLAF's establishment plan shall provide for 300 posts, of which half shall initially be temporary posts, with an appropriate percentage of the officials in Category B. When these posts are being filled, care shall be taken to ensure that priority is given to experienced inspectors, investigators and prosecuting officers from the relevant departments in the Member States. Specific recruitment procedures are to be used for that purpose.

n) OLAF shall work in accordance with the principle of decentralisation. It shall have departments in Brussels and Luxembourg. Where necessary, branch offices shall be set up in the Member States or third countries on a permanent or temporary basis;

4. Calls on the Commission, immediately after the entry into force of the Treaty of Amsterdam, on the basis of the new Article 280 of the EC Treaty, to submit proposals for regulations dealing with:

a) cooperation between the Union's institutions and the national judicial authorities,

b) OLAF's exercise of its powers which have not yet been explicitly regulated, in particular as regards the power to bring proceedings, protect files and adopt measures to restrict a person's freedom,

c) judicial scrutiny of the work of OLAF,

d) the requirement for officers of OLAF to take the oath;

5. Calls on the Commission, on the basis of the EC Treaty's new Article 280, to submit proposals for regulations which may substitute for conventions and additional protocols that have not been ratified;

6. Informs the Commission that it will address the issue of what should be the main focus of future anti-fraud measures in a separate report;

7. Calls on the Commission and Europol to submit to it proposals as to how their collaboration may be stepped up and made more effective;

8. Instructs its President to forward this resolution to the Commission and the other institutions of the Union.