8. Takes the view that health and safety at work should be another priority in any strategy to foster
quality in work; expects to be consulted by the Commission on a draft action plan in this field as soon aspossible;
9. Calls upon the Commission to conduct a cost-benefit analysis of the measures to improve quality in
work so as to make the economic benefits of higher quality more visible;
On implementation
10. Acknowledges that benchmarking on the basis of commonly defined indicators and exchange of
good practices may be the most appropriate policy for some aspects of social and employment policy at
European level; stresses, however, that the open coordination method may complement other policyinstruments, in particular legislation, but must not replace them; takes the view that a quality-orientedpolicy should in fact result in gradual improvements in guaranteed minimum standards; in this context,draws attention to the proposals for supplementary actions contained in its resolution of 25 October 2000on the Social Policy Agenda;
11. Notes that, unless the majority voting in Council is considerably extended, the open co-ordination
method may become the standard instrument in social and employment policy in an enlarged EuropeanUnion;
12. Insists on the full involvement of the European Parliament as well as national parliaments in the
various methods of open co-ordination; with regard to its own involvement, calls for a consultation pro-cedure along the lines of those preceding the European Employment Strategy;
13. Takes the view that the Social Policy Agenda needs to be added to and adapted in the light of the
new priority of fostering quality; stresses that the monitoring of policy implementation, including thecontrol of full transposition of European legislation, needs to be reinforced;
*
**
14. Instructs its President to forward this resolution to the Commission and the Council.
22. Protection of the Communities’ financial interests
A5-0393/2001
European Parliament resolution on the Commission annual report 2000 on the protection of the
Communities’ financial interests and the fight against fraud (COM(2001)255 vdash C5-0469/2001 vdash2001/2186(COS)) and on the Commission communication on protecting the Communities’ finan-cial interests, Fight against fraud, Action plan for 2001-2003 (COM(2001)254 vdash C5-0470/2001 vdash
2001/2186(COS))
The European Parliament,
*dash having regard to the Commission annual report (COM(2001)255 *dash C5-0469/2001),
*dash having regard to the Commission communication (COM(2001)254 *dash C5-0470/2001),*dash having regard to Articles276(3) and 280(5) of the EC Treaty,27.6.2002 EN C153E/325 Official Journal of the European Communities
Thursday 29 November 2001
*dash having regard to Rule 47(1) of its Rules of Procedure,
*dash having regard to the report of the Committee on Budgetary Control (A5-0393/2001),
A. whereas the scale of the fraud and irregularities established by the Member States and the European
Anti-Fraud Office OLAF increased dramatically in the year 2000 to a record level of approximately€2,03 billion, which is double the figure for previous years and whereas this amount can be brokendown as follows:
*dash Revenue side:
Traditional own resources: €1143 million
*dash Expenditure side:
Agricultural Guarantee Fund: €576 millionStructural policy measures: €139 millionInternal policies: €13 millionExternal policies: €156 million
B. whereas detected fraud and irregularities on the revenue side (primarily from customs duties and other
levies) now account for 7,5% of total traditional own resources, but there was also a sharp increase inthe figures on the expenditure side, in particular in the case of expenditure managed directly by theCommission,
C. whereas the scale of the fraud and irregularities reported in the case of agricultural expenditure is far
greater than in previous years at €576 million,
D. whereas although the increase is partly attributable to greater efforts to combat fraud, the figures are
nonetheless alarming,
E. whereas the undisclosed figure for fraud and irregularities not detected must be significantly higher,
F. whereas underreporting must be significantly higher partly because, according to Court of Auditors
Special Report No 10/2001(
1) concerning financial control of the Structural Funds, Member States
fulfilled their obligation to report irregularities only to an extremely limited extent in the case of theStructural Funds, so that there are actually two types of underreporting, namely cases that are notdetected at all and cases that are detected in the Member States but are not reported to OLAF,
G. whereas, as in the past, only a small proportion of the amounts defrauded can be recovered and in the
case of own resources the average rate of collection has fallen by more than 50% since 1998 to only13,85%,
H. whereas it is not the detection of fraud and irregularities in itself that undermines the confidence of
citizens in the European Union and its institutions, but rather the fact that in most cases the lost fundscannot be retrieved and that those responsible are not punished,
1. Calls, in view of these worrying figures, for a real improvement in efforts to combat fraud, with the
following priorities being included or given greater emphasis in the Commission Action plan:
(a) creation of a European Public Prosecutor for financial matters by mid 2002,
(b) effective protection of the Communities’ financial interests in the candidate countries,
(1) OJ C 314, 8.11.2001, p. 26.C153E/326 EN 27.6.2002 Official Journal of the European Communities
Thursday 29 November 2001
(c) better monitoring of the Member States’ efforts by the Commission and rigorous disclosure of all
shortcomings,
(d) fraud-proofing of all new and amending legislative proposals which have budgetary implications;
Action plan for 2001-2003
2. Welcomes the four strategic objectives of the Commission 2001-2003 Action plan to combat fraud
as well as the specific measures detailed therein which represent a major advance in a concerted andcoordinated fight against fraud; asks to be kept regularly informed of progress in each of the measuresoutlined in the Action plan;
3. Underscores, in the light of past experience, the importance of objective 1.2.2 on improving financial
follow-up and penalties; recalls that Parliament is still awaiting clarification on the application of theprinciple of proportionality as regards the imposition of fines; is of the opinion furthermore, that theproposal for a regulation for a ‘blacklist’ mechanism for the EAGGF Guarantee Section should be presentedearlier than the 2003 deadline proposed in the action plan and should be complemented by a similarapproach with regard to the Structural Funds;
4. Agrees that a comprehensive interinstitutional approach is important to prevent and combat cor-
ruption (objective 3.1) but considers that the proposed memoranda of understanding between OLAF andCommission departments should not take as long as two years to put together and should preferablycontain a more formal mechanism for consultation and cooperation in suspected cases of irregularity;
Cooperation between the Commission and the Member States
5. Draws attention to the importance of the efforts made by the Member States to combat fraud and
irregularities and recover amounts wrongly paid;
6. Draws attention, for example, to the backlog in recovery in Italy and the irregularities alleged by the
European Court of Auditors in the United Kingdom in connection with the import of New Zealand butter,which have contributed significantly to the losses on the revenue side;
7. Notes with concern that the information compiled by the Commission in its annual report does not
make it possible to establish to what extent more effective and uniform protection of the Community’sfinancial interests has been achieved in all Member States;
8. Calls on the Commission in future not merely to list the steps taken by the Member States without
comment, but to make a comparative analysis and assessment of those steps, to disclose the shortcomingsfound and thus spur the Member States on to greater efforts;
Financial control of the Structural Funds
9. Notes that the situation must be described as disastrous if the Court of Auditors, in paragraph106 of
its Special Report No 10/2001, concludes that, more than six years after entry into force of the Commis-sion Regulation (EC) No 1681/94(
1) on the reporting of irregularities, the data forwarded to OLAF by
Member State authorities was in many cases incomplete, unreliable, misleading, out-of-date and thereforeof little value;
(1) OJ L 178, 12.7.1994, p. 43.27.6.2002 EN C153E/327 Official Journal of the European Communities
Thursday 29 November 2001
10. Notes with incomprehension the Court of Auditors’ observations in paragraphs120 and 121 of its
Special Report No 10/2001 that, both within the Structural Funds DGs and between OLAF and the rel-evant DGs, there is no agreed and documented system for the follow-up of irregularities communicated bythe Member States, so that analysis or further processing of reported cases is delayed considerably or doesnot take place at all;
11. Points out to the Commission right now that Parliament will return to the issue of inadequate
financial control of the Structural Funds in the context of the forthcoming discharge procedure and callson the Commission to submit to it by 15 December 2001 at the latest a list of all irregularities reportedsince entry into force of Regulation (EC) No 1681/94 indicating for each case the size of the financial lossand whether it has been possible to recover any money, and, if so, how much;
Cooperation with the candidate countries
12. Notes that establishing effective protection of the Community’s financial interests in the candidate
countries will be one of the major challenges of the years ahead and, in view of the likely rapid increase inpayments from the Community budget and the existing potential risk, it is necessary to adopt newapproaches;
13. Highlights the case of corruption involving EU funds in Slovakia which emerged in Spring 2001
and the latest reports from Poland that serious irregularities took place when the system for the adminis-tration and control of agricultural expenditure was set up; stresses that these cases must be fully investi-gated and those responsible must be punished where appropriate; emphasises also that it views the treat-ment of such cases by the candidate countries as an important test for their membership of the EuropeanUnion;
14. Calls on OLAF to set up similar units in all the candidate countries by mid 2002, in accordance
with the principle of decentralisation(
1) long advocated by Parliament;
15. Requests the European Court of Auditors to submit to it by the start of 2003 at the latest an
opinion on each candidate country showing whether the system of financial control in place in thesecountries is able to work in a way that will allow the shift to decentralised management of Communityfunds on accession without jeopardising the Community’s financial interests;
OLAF investigation activity
16. Notes that, at the end of May 2001, OLAF had recorded a total of 2343 cases in its Case Manage-
ment System, but that, according to the OLAF Supervisory Committee (Chapter III, paragraph3.2 of themost recent OLAF Supervisory Committee Progress Report), could not give any precise details as to theaction taken by the competent national authorities in the individual cases or as to whether administrativeor criminal penalties had been imposed and monies had been recovered;
17. Notes with concern the OLAF Supervisory Committee’s observations (Chapter IV, paragraph3.1.1)
that only in very, very few of these cases has OLAF forwarded reports or information to the competentnational judicial authorities, although a large number of the cases processed by OLAF include aspects thatare covered by criminal law;
18. Notes with concern that, so far, only in two out of altogether 92 internal cases investigated have
the accused been sentenced by national courts;
(1) Paragraph3(n) of its resolution of 7 October 1998 on the independence, role and status of the Unit for the Coor-
dination of Fraud Prevention (UCLAF) (Court of Auditors Special Report 8/98 concerning the Commission depart-
ments responsible for fighting fraud) (OJ C 328, 26.10.1998, p. 95).C153E/328 EN 27.6.2002 Official Journal of the European Communities
Thursday 29 November 2001
19. Notes with concern the observation made by the OLAF Supervisory Committee (in Chapter V,
paragraph3, of its report) that EU bodies and institutions evidently inform OLAF of suspected casesmore or less as they see fit and are thus in breach of Article7 of European Parliament and CouncilRegulation (EC) No 1073/1999 of 25 May 1999 concerning investigations conducted by OLAF(
1), pur-
suant to which all information relating to possible cases of fraud or corruption or other illegal activitymust be forwarded to OLAF without delay; expects that this rule will now be strictly complied with;
Suspected cases of fraud and favouritism in the Commission
20. Notes with incomprehension that the Commission, in spite of an announcement by Vice-President
Kinnock on this matter in March 2001, has still not complied with the call Parliament made (in para-graph14 of its resolution of 4 April 2001(
2) on implementation of the 1998 general budget) for the
Commission to appear as joint plaintiff in the PerryLux affair so that it would be able to gain access tothe files;
21. Recalls that a former Member of the Commission has been accused of misusing official vehicles for
private purposes, and that another former Member of the Commission has been accused:
(a) of irregular conduct as regards the award of several contracts to a firm with which she had connec-
tions, shortly before taking up office as a Commissioner;
(b) of having an expensive apartment in Brussels made available free of charge to one of her advisers;
(c) of having contracts for inconsequential studies and research awarded to a German lawyer as cover so
that he could visit her office and possibly gain access to and influence sensitive cases (LEUNA affair)with which the Commission was dealing at that time;
22. Points out to the Commission that whilst it might not be possible to take action in respect of such
conduct under Belgian criminal law, it can and must be punished as a breach of obligations within themeaning of Article213 of the EC Treaty; reaffirms therefore the call(
3) it made for the European Court of
Justice to be invoked where appropriate if it were to be confirmed that Members of the previous Commis-sion had breached the obligations of their office; calls explicitly on the Commission to abandon its wait-and-see approach and to initiate the relevant investigations;
European Public Prosecutor
23. Welcomes the latest progress in creating Eurojust; expects that the 15 members of Eurojust sec-
onded by the Member States will by mid-2002 at the latest be joined by a European Public Prosecutor forfinancial matters, because Eurojust can contribute effectively to protecting the financial interests of theEuropean Union only in cooperation with a public prosecutor with such a remit;
24. Welcomes the Commission’s support for the idea of a European Public Prosecutor and expects the
Commission in the Green Paper it has announced also to examine how, in accordance with paragraph8 ofits Resolution of 14 March 2001(
4) on the 1999 report on the fight against fraud, a European Public
Prosecutor’s Office for financial matters can be set up on the basis of the EU Treaty whose jurisdictionwould be limited initially to internal investigations and which would have a purely advisory and suppor-ting role vis-à-vis the national judicial authorities without any authority to issue instructions; points outthat the call to set up such an office, whose remit would initially be confined to internal investigations, isendorsed by the OLAF Supervisory Committee in its latest progress report and cited as one of the precon-ditions for ensuring the legality and legitimacy of OLAF’s investigations;
25. Welcomes and supports as a necessary second step the Commission proposal to amend the EC
Treaty at the earliest opportunity and thereafter to confer more extensive powers on the European PublicProsecutor for financial matters;
(1) OJ L 136, 31.5.1999, p. 1.
(2) ‘Texts Adopted’, Item 3.
(3) Paragraph18 of its abovementioned resolution of 4 April 2001.
(4) ‘Texts Adopted’, Item 11.27.6.2002 EN C153E/329 Official Journal of the European Communities
Thursday 29 November 2001
26. Considers also that ultimately the demands it made back in 1998(1) will have to be acted upon and
that arrangements should be introduced, on the basis of Article280 of the EC Treaty, for dealing with:
(a) cooperation between Union bodies 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;
Cigarette smuggling
27. Welcomes the fact that the Commission is maintaining its action against tobacco companies in the
USA, without whose involvement the smuggling of cigarettes in Europe on a vast scale over recent yearswould not be possible; regrets that Denmark, Ireland, Luxembourg, Austria and the United Kingdom,unlike the other ten Member States, have not joined this action;
28. Believes that, regarding the objective of fighting cross-border smuggling of cigarettes in the EU, and
into the EU from non-member countries, and tax fraud, greater convergence of tax rates is an insufficientapproach in itself for tackling the problem and requests the Commission to put forward effective proposalsas soon as possible;
29. Stresses that, in parallel with the continuing legal action in the USA, efforts must be stepped up
within the European Union to combat cigarette smuggling with the aim not only of stemming the flow ofconsignments of smuggled goods by means of border checks but also of taking targeted action before such
consignments are dispatched, i.e. by stepping up checks on manufacturers, warehouse keepers and firms
that misuse the official transit procedure as a legal cover for fraud;
30. Calls on the Commission to ensure that the Italian authorities now report without delay on the
steps they took after evidence, including precise details of those organising the smuggling of consignments,was forwarded to them following two UCLAF missions to Montenegro in 1996 and 1997;
Cooperation with Switzerland
31. Points out that European taxpayers are incurring losses amounting to billions because cooperation
with Switzerland in combating international organised smuggling, particularly involving high-risk goods(cigarettes, alcohol, precious metals, electronic goods) is not operating properly; notes that Parliamentcannot approve further agreements with Switzerland unless there is an improvement in cooperation inthe area of organised crime;
32. Notes that the fight against organised crime also concerns the credibility of Member States and in
this connection points by way of example to:
(a) recent changes in the law in Italy, where the introduction of new formal procedural requirements has
made cross-border legal assistance with Switzerland in the case of offences such as money launderingand arms, drug and cigarette smuggling more difficult or even impossible,
(b) the recent report drawn up for the French National Assembly, according to which European public
prosecutors and judges are complaining of serious difficulties encountered in cooperation with the UKin the fight against money laundering;
(1) Paragraph4 of its abovementioned resolution of 7 October 1998.C153E/330 EN 27.6.2002 Official Journal of the European Communities
Thursday 29 November 2001
Further development of OLAF
33. Reiterates its call(1) for OLAF, as an office with a horizontal and interinstitutional remit, also to set
up units in Luxembourg and draws attention in this context to the importance of Luxembourg for theCommunity’s financial operations and its institutions and services (almost 7000 officials);
34. Recalls that OLAF has the task of carrying out investigations in all Community institutions if
necessary; stresses, in view of OLAF’s interinstitutional remit, that it is in the interests of all Communityinstitutions to make full use of the scope offered by the Staff Regulations and to second officials tempor-arily to OLAF or the secretariat of the OLAF Supervisory Committee;
35. Calls on the Italian government to stop blocking leave of absence for Italian public prosecutors to
take up executive functions with OLAF;
36. Calls for those responsible to be identified and punished if it should be confirmed that OLAF’s
predecessor, UCLAF, misinformed or misled the Commission about the status of certain cases or thatfiles were tampered with in order to impede or prevent investigations;
Information for the European Parliament
37. Welcomes the fact that, following its resolution of 14 March 2001(
2) on fight against fraud (para-
graph22), OLAF is now forwarding reports on its internal and external investigations and has allowedthem to be examined in full accordance with Annex VII of its Rules of Procedure (confidential access toreports for all committee members); invites OLAF to indicate the date when the allegation was received,the overall cost, the main problems identified and the recommendations to the Commission and/or other
parties; calls on the Commission to follow this example and accordingly to open up access, on request
from Parliament and according to the rules on confidentiality, to its internal audit and monitoring reports;
38. Reminds the Director of OLAF that Parliament and its competent committee regularly need mean-
ingful information and statistics which indicate the results of OLAF’s investigations, the criminal and dis-ciplinary follow-up measures taken and the extent to which it has been possible in individual cases torecover undue payments;
39. Notes with great concern that the Director of OLAF is clearly being put under pressure to abandon
his former practice and, in future, no longer to submit to Parliament a list of current internal investi-gations; recalls that, as things stand, internal OLAF investigations are not subject to scrutiny by judges orpublic prosecutors and that, for that very reason, effective parliamentary scrutiny is of particular signifi-cance; recalls, further, that such scrutiny is carried out in strict compliance with Annex VII to its Rules ofProcedure (Procedure for the consideration of confidential documents communicated to the EuropeanParliament); instructs its President, on the basis of Parliament’s right to information laid down in Arti-cle276 of the EC Treaty, to initiate the appropriate legal procedure, should the appropriate committee ofthe European Parliament not have received a complete list of current internal investigations by 1January2002;
*
**
40. Instructs its President to forward this resolution to the Council, the Commission, the Director of
OLAF, the Court of Justice and the Court of Auditors.
(1) Paragraph3(n) of its abovementioned resolution of 7 October 1998.
(2) ‘Texts Adopted’, Item 11.27.6.2002 EN C153E/331 Official Journal of the European Communities
Thursday 29 November 2001