A4-0287/97

Resolution 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)

The European Parliament

- having regard to the Commission's 1996 Annual Report (COM(97)0200 - C4- 0230/97) and its Work Programme for 1997/98 (COM(97)0199 - C4-0231/97),

- having regard to the report of the Committee on Budgetary Control and the opinion of the Committee on Civil Liberties and Internal Affairs (A4-0287/97),

A. whereas, according to the Commission, detected irregularities totalling ECU 1.3 billion affected the 1996 budget, though the true figure for losses resulting from fraud is inherently difficult to estimate and is probably much higher,

B. whereas the largest single area of loss resulting from fraud against the EU budget is in traditional own resources, a problem which, owing to the nature of Community financial provisions, directly impacts on the national budgets of Member States,

C. whereas a relatively small number of large-scale frauds, usually the work of organized crime, account for the bulk of the losses sustained by the EU budget each year,

D. whereas a series of recent high-profile cases have highlighted the risk of corruption occurring in the Commission's own ranks and the inadequacy of provisions for dealing with it,

E. whereas the Commission's 1997 Work Programme does not address the issue of internal corruption,

F. whereas none of the Member States have yet ratified the Convention on the protection of Community financial interests or the first protocol on corruption,

G. whereas the complexity and opacity of much Community legislation, together with the dispersal of responsibility for expenditure through a huge range of public and private organisations whose accountability cannot be guaranteed, renders the EU budget particularly vulnerable to fraud,

H. whereas, in its resolution of 17 July 1997 on Court of Auditors' Special Report No 1/96 on the MED programmes (submitted pursuant to Article 188c(4) second subparagraph of the EC Treaty), together with the Commission's replies ((Minutes of that Sitting, Part II, Item 20.)), Parliament considered it essential for the Community to have an independent anti-fraud unit which would, pending the establishment of a European prosecution body to deal with fraud and corruption cases involving the EU budget, liaise with national courts and inform them of the facts concerning offences or crimes discovered in the course of its inquiries,

1. Welcomes the Commission's simultaneous publication of its annual report on the fight against fraud for 1996 and its Work Programme for 1997/98 as requested by the European Parliament; notes however that it did not respond to Parliament's request to incorporate in its annual report a precise evaluation of the implementation of last year's Work Programme and asks it to do so without fail next year;

2. Notes with disappointment that losses to the EU budget from fraud remain unacceptably high and have shown no signs of decreasing over recent years; notes in this context the assessment of the Council's High Level Working Group that fraud prevention measures consistently lag 'one step behind¨ organized crime and major economic and financial crime;

3. Believes that, just as international fraudsters act unimpeded by borders within the EU, so the EU must have at its disposal investigative services able to deal with fraud against the EU budget on a supranational basis and that, in order to ensure full political supervision of such services, they must be established within the framework of the EU institutions;

4. Questions whether, at present, UCLAF represents the optimum basis for the development of such an investigative service able to carry out inquiries at its own initiative throughout the territory of the European Union in defence of the financial interests of the Community; reaffirms in this context recommendation 2 of its Committee of Inquiry into the Community Transit System;

5. Welcomes the initiatives announced in the 1997 Work Programme to establish a 'Community intelligence and forward planning cell¨ and a centralised intelligence database in the customs field; notes that these proposals respond to recommendation 3 of the Committee of Inquiry into the Community Transit System; asks that similar initiatives be taken in respect of the expenditure side of the budget in the Commission's 1998 Work Programme;

6. Welcomes the creation of a 'liaison and criminal law expertise interface¨ within UCLAF aimed at assisting and coordinating prosecutions of cross- border fraud cases; notes that this proposal responds to recommendations 15 and 18 of the Committee of Inquiry into the Community Transit System;

7. Supports all initiatives aimed at establishing anti-fraud structures in the applicant countries with a view to transposition of the 'acquis communautaire'; welcomes the establishment of a separate unit within UCLAF to monitor development programmes in third countries;

8. Calls on the Commission to ensure that UCLAF is sufficiently staffed and resourced to accomplish its new tasks, in particular by ensuring that suitably qualified legal experts are available to it in order to assist prosecution services in all Member States;

9. Emphasises that the new 'liaison and criminal law expertise interface¨ represents only a preliminary solution to the difficulties of bringing prosecutions in cross-jurisdictional cases of fraud against the interests of European Community, above all in those where fraud occurs within the EU institutions, over which no judicial authority currently has automatic criminal jurisdiction;

10. Considers that judicial cooperation can be stepped up further and urges the Member States to take the necessary action;

11. Believes that internal fraud and corruption in EU institutions can only adequately be addressed through increased transparency and openness and by an independent European judicial authority able, on its own responsibility and without the impediment of official immunity, to direct investigations and bring prosecutions as appropriate;

12. Calls on the Commission and the other Union institutions to refer all cases of suspected fraud or corruption involving their officials automatically to the competent national judicial authorities, pending the establishment of an independent European judicial authority;

13. Instructs its Committee on Budgetary Control to submit to it:

- a report on the independence, role and status of UCLAF,

- a report on the legal proceedings likely to protect Community finances;

14. In order to ensure a more effective and credible response to cases of internal corruption, and more effective cooperation with the relevant judicial authorities, calls on the Commission to present to the European Parliament by 30 June 1998, on the basis of Parliament's guidelines, a formal consultation document in preparation for proposals to ensure full independence for UCLAF on the basis of an interinstitutional agreement, in particular by:

- granting agents of UCLAF a special separate statute within the Community staff regulations in order to guarantee their protection from pressure,

- granting greater budgetary independence to UCLAF within the Commission section of the budget,

- reviewing the chain of accountability in cases of alleged internal corruption and fraud in EU institutions,

- ensuring the full democratic accountability of UCLAF;

15. Calls on the Commission, in its next annual Work Programme, to address measures to be taken to improve the means by which alleged cases of corruption are investigated internally and referred to UCLAF, and to enhance the transparency of the procedure for waiving immunity at the request of the judicial authorities, taking into account the views of the European Parliament;

16. Calls on the EU institutions affected by the alleged irregularities in the award and implementation of security contracts covering European institution buildings to refer such matters immediately to the competent national judicial authorities;

17. Calls on the Commission to carry out a comparative law analysis of the technical and constitutional feasibility of the European prosecution body provided for in the Commission's 'Corpus Juris' proposal being incorporated into the judicial systems of the Member States;

18. Continues to believe that an appropriately integrated area in the criminal law field is a prerequisite for the adequate defence of the financial interests of the Community and for an effective fight against international fraud of all sorts; in this respect calls on the Commission and the Member States to cooperate with it with a view to full implementation of Article 209a of the EC Treaty which, pursuant to the Amsterdam draft Treaty, provides for the introduction of effective and equivalent protection of Community finances in all the Member States; proposes to this end that future initiatives be based on the proposals in 'Corpus Juris', if they prove to be technically and constitutionally compatible;

19. Demands that the Member States ratify and fully transpose without delay the Convention on the protection of the Community's financial interests; considers that Member States which fail to do so are failing to meet their obligations under Article 209a of the EC Treaty and therefore deserve, in accordance with recommendation 31 of the Committee of Inquiry into the Community Transit System, to forfeit a proportion of the 10% of traditional own resources retained by national administrations;

20. Instructs its President to forward this resolution to the Commission and the Council and the governments and parliaments of the Member States.