COMMISSION OF THE EUROPEAN COMMUNITIES 
Brussels, 06.05.1997 
COM(97) 199 final 
PROTECTION OF THE COMMUNITY'S FINANCIAL INTERESTS 
FIGHT AGAINST FRAUD 
WORK PROGRAMME 1997/8 
(presented by the Commission) 

Introduction 
The present work programme strengthens presence on the ground and continues the 
policy of partnership with national authorities. It also aims at strengthening antifraud 
legislation to ensure compatibility of national judicial norms, and transnational 
cooperation. 
The efforts will focus on 6 themes: 
• detection of irregularities; 
• recovery of the amounts concerned; 
• fraud-prevention and proof-fraud legislation;; 
• administrative sanctions and deterrence; 
• a judicial area for the protection of the Union's financial interests; 
• the preparation for enlargement and relations with non-member countries. 
In each of these themes the SEM 2000 principles on financial management will be 
supplemented. The accent will be put on the prevention aspect, especially the quality 
and applicability of legislation as well as their correct and homogeneous application. In 
the customs area, the principles identified in the "customs 2000" programme will be 
implemented. 
A few priorities merit to be highlighted. The European Parliament's recommendations 
to strengthen custom cooperation in the transit field will be given priority. Priority will 
also be given to an improvement of preferential regimes so as to better prevent and 
combat fraud. 
In the field of indirect taxes, strengthened cooperation with Member States at Union 
level will be put in place so as to improve the functioning of VAT and excise systems in 
the internal market. 
Targeted anti-fraud actions will be developed in certain non-member countries, in 
particular the new independent States as well as the accession candidate countries in 
Central and Eastern Europe. This is particularly important in view of enlargement. 
The most recent improvements in the legal framework for the fight against fraud are 
essentially : 
• provisions concerning notifications of frauds which now cover all Community areas; 
• a regulation for the protection of the financial interests of the Community adopted in December 
1995; 
• the on the spot checks and inspections regulation adopted in November 1996; 
• A Convention and Protocol on the approximation of norms and strengthening of cooperation and 
penal protection signed in July 1995 and September 1996. These two texts remain to be ratified and 
transposed in Member States. 
Since 1994 some Member States have set up specialized structures for the protection of 
EU finances while others have introduced provisions to strengthen cooperation with the 
Commission. These are positive and encouraging signs. The success of the anti-fraud 
policy relies on a continued effort by Member States in improving measures at national 
level to protect financial interests more efficiently. Some aspects of action in Member 
States, such as close collaboration and networking, also form part of the work 
programme. 
1. REINFORCING THE DETECTION POLICY AND IMPROVING ANALYSIS OF 
INFORMATION 
Combating Community fraud effectively is based on operational activity and requires a 
firmer grasp of the phenomenon on the ground. It is a question of emphasizing the policy 
of detecting fraud cases by improving investigative techniques in a legal framework 
strengthened in particular by the adoption of EC Euratom Council regulation 2185/96. 
This regulation represents an important step forward for work on the ground. It 
establishes conditions for on the spot checks and inspections carried out by the 
Commission in close cooperation with the competent authorities in the Member States, in 
principle, in all the fields of activity of the Communities. Also, the Member States and 
the Commission will from 1998 be able to use the improved mutual assistance 
mechanism in the customs and agricultural fields (EC regulation 515/97)1 which 
introduces the legal base for the establishment of a database in the customs information 
system. 
It is now up to the Commission and the Member States to concentrate their efforts and 
bring together the means which are indispensable to put into practice this new legislative 
framework. These instruments and those being finalized in the framework of penal 
protection will allow the investigative work carried out in the framework of the 
Commission/Member State strengthened partnership to be developed. It is on the basis of 
the initial results that the qualitative steps necessary for protection of the European 
finances and taxpayer can finally be envisaged and realized. 
The Commission and the Member States will have to do everything possible to improve 
prevention, detection and cooperation and develop a common approach at Union level. 
The programme presented by the Commission for the setting up of a new common VAT 
system2 and the report concerning administrative cooperation in the field of indirect 
taxes3 which point out the existing weaknesses and lacunae in the current framework for 
combating major international tax frauds will serve as a framework to define the 
guidelines for action. 
With regard to the Commission's role, the accent will be put on the means intended to 
combat more effectively major financial crime, transnational fraud and the most serious 
OJL 82 of 22.03.1997. 
2 COM(96)681 final : second report on article 14 for the implementaiton of regulation 218/92 on 
administrative cooperation in the field of indirect taxes. 
3 COM(96)328,22.07.1996. 
irregularities. These are the areas of activity where the Commission is also best placed to 
provide added value and support to the actions of all national authorities. 
To accomplish this first set of activities, a number of initiatives must be undertaken in all 
the sectors of activity of the Union: 
1.1. Effective implementation on the ground of regulation 2185/96 concerning on 
the spot checks and inspections with all the national authorities. 
Presentation of practical means of application of the EC Euratom Council regulation n° 2185/96^ 
concerning on the spot checks and inspections carried out by the Commission for the protection of 
the European Communities 'financial interests against frauds and other irregularities. 
First assessment of experience of implementation of the on the spot checks and inspections 
regulation at the end of 1998. At this time, the Commission will envisage the possibility of 
providing for the application of fines or Community administrative sanctions with regard to 
economic operators who refuse the right of access to information and/or right of access to 
premises, with a view to strengthening the "on the spot checks and inspections" regulation. 
1.2. Selective establishment of Task Groups and their use in high risk sectors 
where organized crime rings are involved. 
Following the example of what has been successfully achieved in the areas of olive oil and 
cigarettes, the Commission will put in place where resources are available new Task Groups to 
intensify action against organized networks or rings, in particular in the alcohol sector. 
1.3. Strengthening customs cooperation instruments. 
• Cooperation between customs investigation services. 
Joint investigation between specialized customs investigation services will be developed with the 
help of the Commission for more effective coordination, in particular where there are transnational 
aspects. 
Operational activity will be increasingly focused (mutual assistance and where necessary on the 
spot checks and inspections regulation) on sensitive sectors and products (transit, preferential 
origin, anti-dumping ...) both with investigations within the Community as well as with 
investigations in non-member countries. 
The customs services will be called upon to use more effectively the computerized instruments at 
their disposal such as the early warning system for targeted checks on sensitive goods and the 
Customs Information System (CIS) with the technical assistance and operational aid of the 
Commission. 
In the field of transit, reinforcement of the security of movements of goods will involve taking 
measures to limit the risks of diversion or substitution of products and facilitating surveillance, 
monitoring and checks on operations (cf. point 3.3). 
• Establishment of a Community intelligence analysis cell. 
The establishment of such a ''intelligence and forward planning" cell will enable a better 
Coordination of risk management to be ensured. Particularly in the sensitive textile sector, this 
cell could make use of the results of the statistical work already undertaken (and which must be 
4 OJL 292 of 15.11.1996. 
5 strengthened in the future) so as to establish, on the basis of thorough analysis of the trade and the 
anomalies detected, "warming criteria" making possible the identification of cases which should 
be investigated. In general, the orientations resulting from this cell's work will also allow the 
necessary assistance to be provided to the Task Groups. 
• Use of the "Early Warning System" (transit regimes). 
Having shown its effectiveness, the use of this system will be systematic to make its application 
compulsory for transit movements involving high risk products. It will also be compulsory for 
countries participating in the common transit system (Visegrad 4 and EFTA)5 
4 
In the area of Community/common transit, future participants in the common transit system have to 
guarantee their capacity of ensuring the proper functioning of the transit procedures and its 
instruments of which the early warning system is an integral part. 
• Setting up of a central database (CIS)6. 
So as to improve the effectiveness of the use of information exchanged between Member States via 
an optimized AFIS' network, the Council regulation on mutual assistance and the convention on 
the use of information technology in the field of customs" provides in particular for the creation of 
a customs information system (CIS) comprising a central database which will be managed by the 
Commission. This will assist the Member States in the prevention, detection and prosecution of 
operations contrary to customs or agricultural regulations by strengthening by means of a more 
rapid dissemination of information the effectiveness of cooperation and control procedures by the 
competent authorities. 
Ic4. Increase in action in the field of direct expenditure -, in particular for the 
major regional development programmes. 
See theme 6, "Enlargement". 
1.5. Development of mutual assistance and cooperation between the Member 
States with the help of the Commission in the field of indirect taxes. 
With regard to VAT, the Commission and the Member States must, in line with the guidelines 
identified in the report on implementation of regulation no. 218/92^ on administrative cooperation 
in the field of indirect taxes (VAT)'®, must improve their efforts to develop cooperation in the 
areas of detection and prevention of fraud. The lack of information at Community level allied to 
the restrictions in the current framework for handling complex international fraud cases represents 
Visegrad: Poland, Czech Republic, Slovakia and Hungary (cf point 6.5); EFTA: Switzerland, 
Norway and Iceland. 
6 Customs Information System. 
7 Anti Fraud Information System (formerly SCENT). 
8 OJ C 316 of 27.11.1995. Convention to be ratified by the Member States. 
9 OJL 24 of 01.02.1992. 
10 COM(96)681 final. 
a risk which must be confronted. The Commission will continue the analytical work already 
started, together with the Member States, in the fraud prevention sub-committee of the Permanent 
Committee on Administrative Cooperation. 
The Commission will continue to encourage and support contacts and cooperation between its 
investigation services and Member States investigation services. It will facilitate and contribute to 
the fight against fiscal fraud in cases involving Community interests. The Commission will assess 
the results of this cooperation and will take them into account where necessary in the detailed 
examination of Community regulations (EEC Council regulation n° 218/92 and Council Directive 
n° 77/799 and where necessary the regulation on protection of financial interests) so as to improve 
the tools and mechanisms of mutual assistance in the field of indirect taxes. All these activities will 
contribute to the FISCALISA programme as well as to the programme for the new common VAT 
system* 2. 
With regard to excise, the Commission will work together with the member States, in the framework 
of the high level group, particularly focusing on the movement of products subject to excise duty 
(tobacco, alcohol), to define a common fraud prevention and cooperation strategy and to identify 
improvements including possible legislative amendments at national and Community level. 
1.6. Strengthening the fight against economic crime. 
Over and above areas in which own resources or Community finance are at risk, the Commission 
will use all means available for cooperation between customs authorities and the other national 
services responsible for reinforcing the fight against economic crime harmful to Community 
interests (intellectual property, counterfeiting .., quotas, anti-dumping), in particular in sensitive 
sectors such as for example textiles where the coherence, the very credibility of the common 
commercial policy is largely based on the definition and implementation of an effective anti-fraud 
strategy. 
On the basis of an assessment of legislation in these fields, legal instruments could if necessary be 
proposed, in particular in the area of action against counterfeiting** to strengthen with the help of 
the Commission : 
• reciprocal information 
• cooperation between Member States ' specialized services. 
In this context, the Commission might envisage the proposal of a legal instrument enabling 
cooperation to be extended to cover the authorities responsible for combating economic and 
financial crime to improve coordination at Community level of all operational activities preceding 
the opening of judicial proceedings. This instrument could in this way contribute to strengthening 
the fight against counterfeiting and piracy which represent an evergrowing scourge. 
1.7. Improvement of equipment and tools for data processing; making use of 
follow up of notifications and development of risk analysis. 
Cooperation with theJRC'^to improve the use of all relevant information, especially to strengthen 
methods of risk analysis. The pilot actions and use of risk analysis especially in the areas of 
11 COM(97)175 of 23.04.1997. Programme intended to improve the functioning of the internal market 
provisions concerning indirect taxation. 
12 COM(96)328 of 22.07.1996. 
13 In particular for the protection of consumer health and safety and intellectual property. 
activity of the customs services to target better documentary and/or physical checks will be 
continued. 
In all sectors, particularly in the area of structural policies, this action will aim to facilitate the 
primary control work of the national authorities, follow up of cases under investigation, 
rationalization and exploitation of information on a real time basis to identic trends and monitor 
the development of sectors of interest to organized crime. 
This work will have to be carried out regularly in a concerted manner in the ad hoc and specialized 
working groups (typology, fraud profiles, sensitive sectors, targeting of checks...). The Commission 
will ensure in the specialized bodies of the advisory committee (forum for exchange of experience) 
the promotion of methods of detection based on modern technology. Use of notifications, results of 
risk analysis carried out by the JCR and information resulting from the work of the Court of 
Auditors will allow the sectors in which the discovery of fraud is highly probable to be identified. 
1.8. Strengthening of the Commission/Member State15 cooperation at all stages of 
the investigation and follow up of inquiries. 
To ensure a comprehensive follow up of cases, the Commission's technical and operational 
assistance will be carried out at all stages of the administrative inquiry and prosecution (cf point 
5.5). This assistance should facilitate operations involving prosecution and seizure in cases of 
illicit traffic going beyond the single area of national sovereignty (cfpoints 5.4 and 5.6). 
1.9. Establishment of relations between UCLAF and Europol. 
Organization of regular contacts, in particular in the area of analysis of the phenomenon of 
economic and financial crime and its development contrary to Community interests. Pooling of 
technical knowledge, especially in training and gathering of information, processing and analysis 
of data. 
1.10. Targeted training action, development of exchange of officials 
Organization of targeted training action for the authorities responsible for the fight against 
economic and financial crime (customs, police and judicial authorities) and in the fiscal field 
(Matthaeus-Tax16). 
The exchange of officials should also be extended for officials of accession candidate countries in 
the framework of the provisions on customs cooperation provided in the Europe agreements (cf. 
point 6.4). 
2. FINANCIAL FOLLOW UP OF FRAUD CASES AND OTHER ^REGULARITIES AND 
RECOVERY OF MONIES 
To complement its anti-fraud strategy and develop its actions, the Commission has opted 
clearly for a strengthening of financial management. The dynamic effect of operation 
SEM 2000 allowed a series of measures to be undertaken to strengthen financial 
management. The Commission has therefore made substantial progress in developing 
14 Joint Research Centre of Ispra. 
15 On the spot checks and inspections regulation, Convention and protocols concerning protection of 
financial interests, CIS Convention.. 
16 See "Fiscalis". 
new instruments and financial management procedures. This work is to be continued, 
care will have to be taken with the implementation of these strengthened provisions. 
Recovery is the logical consequence of action on the ground. It constitutes a simply 
reparatory measure whereby the European taxpayer's money is justifiably returned. 
Recovery is therefore an equitable measure and a fundamental element in the fight 
against fraud. It is also one of the parameters for identifying success in the fight against 
fraud. It is fully in line with the content of the horizontal regulation concerning 
protection of the Community's financial interests17 which establishes a general 
framework at Union level. 
2.1. Area of own resources 
• Implementation of new provisions of regulation 1552/89 which allows the monitoring of the 
recovery carried out by member States of cases of fraud and irregularity; 
• Strengthening of the recovery provisions of regulation no. 1552/89 (cf. point 3.4). 
• Strengthening of mutual cooperation of recovery in the fiscal and traditional own resources 
areas*°. 
2.2. Agriculture 
Establishment of separate so-called B accounts for debts identified but not yet recovered in the 
EAGGF-Guarantee sector'^ 
2.3. Area of structural policies 
Ensure better continuity of financial follow up (cf point 3.6); 
2.4. Area of direct expenditure 
Ensure and reinforce continuity of the financial follow-up of regional aid programmes to certain 
non-member countries on the basis of a clear separation between the management structure and 
the beneficiaries to avoid conflicts and confusion of interests; better general evaluation of the 
impact of decentralized programmes; concentration of responsibility for the execution of projects 
intended for multiple beneficiaries. 
2.5. Assessment of the coherence of legislative systems and recovery procedures 
The Commission will organize a comprehensive follow up of exemplary and 
selected cases from the stage of the inquiry up to the final financial settlement. 
17 Article 4 of EC Euratom regulation no. 2988/95 O.J. L 312 of 23 December 1995. 
18 EEC Directive 76/308 O.J.L. 73/18 of 19.03.1976. 
19 In the area of own resources, B accounts have existed since 1989; in this framework the Member 
States have the obligation to account on the one hand for duties detected and recovered and on the 
other hand duties detected but not yet recovered or not covered by guarantees. It should be noted 
that this separate accounting system will allow the Commisison to check recovery of own resources 
including where frauds or irregularities have been notified by the Member States. The 
implementation of such a system in the EAGGF area is planned for 1997. 
Comparison of these cases with the analysis of all information communicated will 
allow an assessment of the need for legislative action to be carried out so as to put 
in place mechanisms at national and/or Community level to avoid the confluence of 
conditions favourable for the organization of the insolvency of the beneficiaries and 
debtors (period of limitation, provisional measures, protective measures, 
preferential credit, appeal systems, centralization of cases handled by several 
Member States,...). 
3. IMPROVEMENT OF LEGISLATION AND PREVENTIONS 
In this context, the need to add to sectoral legislation especially in the area of checks will 
be examined. In parallel, the Commission will take the provisions necessary to examine 
and assess, especially by way of their actual application, legislative texts with a view to 
whether they should be strengthened or simplified. 
The guidelines laid down in SEM 2000 will allow measures to be taken to facilitate the 
setting up of mechanisms to adapt legislation better to the risks of fraud and other 
irregularities. 
3.1. Practical application of the measures taken concerning assessment of 
regulations 
This assessment will be carried out on the basis of ex-ante mechanisms as well as on the basis of an 
ex-post checks system both for existing legislation and for new legal instruments. 
In the framework of joint initiatives, qualitative assessment of regulations will be carried out, 
taking account of the results of inquiries (cf. point 1.7), observations of the Court of Auditors and 
the budgetary authority (discharge). This exercise also encompasses a particular follow-up of the 
evolution of texts from the point of view of their vulnerability to fraud including in the course of 
negotiations with the Council and European parliament. 
3.2. Complete the comparative analysis on the position on application of article 
209A (checks) 
In line with the request of the European Council, a supplementary questionnaire was produced. 
The additional information refers to measures taken at national level to combat waste and misuse 
of Community revenue and expenditure and should add to the summary report submitted to the 
Madrid European Council by concentrating on checks and administrative sanctions implemented 
by the member States. 
The summary of the results will give a better picture of the situation in the different Member States 
with regard to the "checks" aspect. On this basis, the provisions required to achieve the objective 
of equivalent protection throughout the Community can be envisaged. The results of this work will 
be submitted to the Council. 
A Commission regulation concerning the financial controls to be made by the member States in the 
area of Structural Funds based on article 23 of regulation 4253/88 will be presented to the 
committees concerned. 
3.3. Reinforcement of transit regimes 
As the Commission set out in its communication entitled "Action plan for customs transit in 
Europe " and with the advantage of recommendations from the Parliamentary Committee of 
Enquiry, the Commission is undertaking a thorough-going reform of the transit regimes. In 
addition to computerisation, which is already in progress, the reform highlights both the legislative 
and operational aspects of preventing and suppressing fraud, in particular by strengthening 
cooperation between customs services, adopting a common approach at European level to the 
management of risks in this area, and developing a partnership with commercial operators. 
Special attention will be paid to effective recovery from the debtors concerned. The Commission 
will ensure that the security of the common/Community transit regimes will be a major concern to 
be taken into account in the context of contacts concerning enlargement (cf. point 1.3). 
3.4. Presentation of a communication on preferential regimes 
Following on from the work which it has undertaken in the fight against fraud and 
irregularities, the Commission has noted that for some time the principle of mutual 
trust on which preferential agreements and autonomous regimes are based is in 
practice being called into question. It is important consequently for the 
Commission's partners to provide a better assurance of their obligations and 
responsibilities. This situation affects own resources and common policies whose 
objectives are not met. Competition between Community operators is also affected. 
The regimes established for the benefit of non-member countries are therefore 
diverted away from their political and economic objectives. 
The Commission will present a communication on the existing situation in the area of preferential 
agreements. This communication aims to raise awareness of economic operators on risks linked to 
trade with non-member countries in the context of these agreements and to draw the attention of 
countries which benefit from Community preferences to the obligations arising from acceptance of 
these agreements. These initiatives will take into consideration certain elements including : 
• the possibility of simplifying Community legislation; 
m improvement of provisions for checks in non-member countries and procedures laid down in 
preferential agreements and arrangements (conventional and autonomous regimes); 
• strengthening in the areas of training, provision of information and follow-up action; 
• putting in place means of raising awareness including the use of appropriate sanctions 
(horizontal legal instrument; see 1996 anti-fraud work programme, point 1.6. 5th indent). 
3.5. Production of a new proposal for amendment and strengthening of provisions 
in EEC, Euratom Council regulation 1552/89 concerning the Community's 
own resources system. 
This proposal will aim strengthen the regulatory mechanism allowing the Commission either to 
grant discharge to the Member States in respect of their management of Community own resources 
or, if necessary, to hold them financially responsible for their lack of diligence in ensuring 
recovery of amounts due. To this end, it is intended to introduce a maximum time limit by which 
the amounts not recovered exceeding a set limit are to be communicated to Commission. 
3.6. Application of articles 23 and 24 of EEC Council regulation 4253/88 
The Commission intends to clarify the respective responsibilities of the Member States and their 
competent authorities in the area of Structural Funds. 
4. REINFORCEMENT OF THE DETERRENCE POLICY : ADMINISTRATIVE SANCTIONS 
A coherent anti-fraud policy requires an organized system of effective sanctions to 
achieve a deterrent effect. It is essential to ensure the greatest possible homogeneity in 
such an effect that measures envisaged in this area take account of the objective of 
10 
equivalence laid down by the European Council. EEC Euratom Council regulation no. 
298//9520 concerning the protection of the Community's financial interests represents an 
important and concrete stage in the global and horizontal approach preferred by the 
Commission. It defines and specifies the categories of person who may be considered 
responsible for acts prejudicial to the sound application of Community financial 
provisions and provides a general framework reference for Community legislation in the 
area of administrative sanctions. On this basis, it is appropriate to develop initiatives in 
all areas. Action will also be continued to approximate national enforcement instruments 
to ensure greater effectiveness and homogeneity in penal sanctions (cf. point 5) 
4.1. Complete the comparative study on the position concerning application of 
article 209A (Sanctions) 
The summary of the results of the comparative analysis (cf point 3.2) will give a better picture of 
the situation in the different Member States with regard to the aspects concerning "administrative 
sanctions". On this basis, the provisions required to achieve the objective of equivalent protection 
throughout the Community can be envisaged. The results of this work will be submitted to the 
Council. 
4.2. Put in place on the basis of the results of the comparative analysis 
mechanisms for administrative sanctions in the area of structural policies 
The results of the comparative analysis (see points 3.2 and 4.1) will enable the Commission to plan 
the production of mechanisms in the framework laid down by EC Euratom regulation no. 2988/95 
for administrative sanctions adapted to the particularities of the structural policies. 
4.3. Design a system of Community administrative sanctions for direct 
expenditure 
// is appropriate in the horizontal legal framework of regulation no. 2988/95 to follow a global 
approach to be put in place together with the updating of the programmes in question in the 
different fields concerned. 
4.4. Continue actions started in the area of traditional own resources to put in 
place a homogeneous system of administrative customs sanctions 
The work undertaken following the "customs sanctions" study will be continued. The Commission 
will produce on the basis of the work of the "customs policy group" measures laying down 
guidelines specified in the general framework of regulation no. 2988/95. 
4.5. Continue activities on a regular and systematic basis in the area of the 
common agricultural policy 
5. TOWARDS A EUROPEAN JUDICIAL AREA IN THE FIELD OF THE PROTECTION OF 
THE UNION'S FINANCIAL INTERESTS 
The particular responsibility of the Community in financial matters necessitates a 
rapprochement of national enforcement systems to achieve, in line with the guidelines of 
the Madrid European Council of 15 and 16 December 1995, an equivalent level of 
20 O.J. L 312 of 23 December 1995. 
11 
protection throughout the Community. This will allow, beyond the principle of 
assimilation contained in EC article 209A : 
• greater homogeneity in checks- and inspections; 
• a more equitable recovery of amounts evaded or unjustly received; 
• the uniform application of Community or national penalties having an effective, proportionate and 
dissuasive effect in all Member States. 
The level of integration of the internal market requires a corresponding development of a 
coherent and integrated area in the criminal law field to allow the judicial authorities to 
confront the challenges posed by organized crime operating on a transnational basis. 
The recommendations of the study requested by the European parliament for a European 
judicial area ("CORPUS JURIS") may help in deciding the approach to be followed on 
this question. The Commission will examine the concrete conclusions to be drawn from 
this initiative in the light of its experience of fraud on the ground in the framework of 
judicial cooperation21. 
5.1. Finalization of the second protocol on penal protection of financial interests 
The debates in Council on the adoption of this protocol (responsibility of legal persons, laundering, 
Commission assistance in criminal prosecutions) will be continued with the active cooperation of 
the Commission so as to reach an agreement during the Dutch Presidency. 
5.2. Setting up of a "liaison and criminal law expertise interface" at Community 
level 
Establishment of an "ad hoc cell" (to follow proceedings/cases) within UCLAF. This cell must 
fulfil the function of coordinating and assisting teams who carry out administrative investigations 
as well as where necessary the national judicial authorities. It should facilitate exchanges of 
information and contacts between competent authorities and provide expertise. 
It will provide expertise and contribute to increased knowledge of the law and the national 
procedures applicable. It will participate in targeted training action for judicial authorities. 
5.3. Finalization of the Convention on corruption 
This Convention, which broadens the scope of the partnership concerning corruption linked with 
protection of financial interests, was signed in September 1996. The mechanisms concerning the 
Court of Justice's competence regarding the Convention must be completed. 
This text will need to take account of the fact that the Court's jurisdiction will have to apply 
equally to actions taken by Community and national officials which, over and above protection of 
financial interests, may prove to be prejudicial to other Community interests. 
21 This need is regularly highlighted by the European parliament. The result of public hearings 
organized by the latter serve to mobilize opinion on these questions. In defining its objectives in this 
area, the parliament starts from the acceptance that instruments of international judicial cooperation 
are not adapted to the needs of combatting major financial crime. Therefore the European 
parliament directs its thoughts towards the estabishment of a Community structure, as a preliminary 
to a European prosecution liaison service, ensuring at the very least functions of coordination, 
consultation and exchange of information on judicial cooperation. 
12 
5.4. Assessment of the need to resume work at the Council on the points which 
featured in the initial Commission proposal 
// is important to identify the follow up action to be taken on certain elements of criminal law 
protection which were withdrawn from the parent Convention and the second protocol. This 
concerns in particular elements regarding mutual recognition of evidence, direct judicial 
cooperation, centralization of proceedings and a fraud register. 
These themes^, as well as the rights and obligations concerning seizure, on land, at sea and on 
the high seas, could be included in a third protocol or other appropriate instrument (cf. points 1.8 
and 5.6). 
5.5. Monitoring of ratification of conventions, in particular the protection of 
financial interests Convention and the additional protocols. 
In this regard, the Commission may provide its assistance in the preparation of acts to transpose 
the Convention in line with the explanatory report, in particular to introduce a criminal offence 
appropriate for the Union context, for the needs of the fight against fraud and for the obligation to 
achieve an equivalent level of enforcement throughout the Community. 
5.6. Optimal exploitation of international Conventions to improve the fight 
against major economic crime 
So as to improve the effectiveness of investigations and prosecutions, existing international 
instruments will be assessed to exploit further this potential; in particular, to stop illicit traffic 
linked with navigation outside territorial waters^* (cfitem 19). 
5.7. Detailed examination of the themes covered in the "CORPUS JURIS"24. 
Selection of themes to be examined in detail: setting up of a common reading grid and preparation 
of precise and oriented terms of reference for the collection of information and data indispensable 
for the inventory; comparative analysis of the inventory in the fifteen Member States; summary 
report for the budgetary authority (Council, European parliament); Commission proposals to the 
Council. 
6. PREPARATION FOR ENLARGEMENT AND RELATIONS WITH NON-MEMBER 
COUNTRIES 
With regard to actions in non-member countries, particular stress will be placed on the 
development of relations with accession candidate countries. These initiatives are fully in 
22 It should be noted that some of these points feature as recommendations in the parliamentary 
committee of inquiry into transit. 
23 see e.g. Convention of 10.12.1982 on maritime law, currently being concluded by the European 
Community, COM (97) 37, 4.2.1997, on the application of Community law for activities on the high 
seas. 
24 Study carried out at the request of the European parliament by researchers from the association of 
European lawyers for the protection of the Communities' financial interests under the aegis of the 
European Commission : Towards a European judicial area. Corpus Juris introducing penal provisions 
for the purpose of the financial interests fo the European Union. 
13 
line with the framework of new guidelines for the PHARE programme in the pre-
accession context25. 
The preparation of candidate countries from central and eastern Europe for accession 
responds to a common concern of the Community and these countries. The pre-accession 
strategy is a major priority of the European Union. It is important to continue the 
reinforcement of the Community acquis and Community anti-fraud provisions in this 
perspective. The process of preparation of the countries of central and eastern Europe for 
membership status will include assistance with putting in place institutions equipped with 
efficient administrative and judicial structures and well trained staff, a pre-requisite for a 
successful accession encouraging mutual trust. The initiatives aim to develop the anti-
fraud services, training of specialized staff (officials, investigators, magistrates) in this 
area and the reinforcement of systems of specific cooperation. In particular, the 
provisions on customs cooperation (technical assistance) in the bilateral agreements 
signed with these countries will be fully exploited and where necessary enhanced 
• to improve exchange of information 
• to reinforce customs cooperation 
• to develop police and judicial cooperation. 
The implementation of major regional development programmes (PHARE, TACIS, 
MEDA) as well as the appropriations of the European Development Fund (EDF)26 
mobilize important Community budget resources for the benefit of non-member 
countries. This expenditure requires specific and appropriate action, given the economic 
and social situation and institutional capacity at administrative and judicial level in non-
member countries, to provide for a degree of protection which is as effective as for 
expenditure within the Union. 
The following initiatives will be taken in close cooperation with the services responsible 
for the programmes including their financing: 
6.1. Setting up of a specialized investigation body within UCLAF for anti-fraud 
checks on major regional programmes. 
Strengthening of the Commission's assistance and operational cooperation on the ground. 
6.2. Establishment of contact points in the countries concerned (cf point 1.3). 
Nomination of liaison officers in certain non-member countries to ensure direct contact with the 
competent authorities and institutions: development of contacts with Commission delegations and 
networks of officials from the Member States working in these non-member countries. 
25 New guidelines for the PHARE programme in the context of pre-accession assistance, 
communication from Mr. VAN DEN BROEK |COM (97) 1121. 
26 Appropriations allocated to humanitarian aid (ECHO) are also concerned. 
14 
6.3. Extension of customs cooperation to improve the protection of financial 
interests and the fight against fraud. 
Customs cooperation will be developed: 
• in the framework of protocols of mutual assistance in the Europe agreements; 
• in the framework of protocols on mutual administrative assistance in commercial agreements 
concluded with non-member countries; 
• on the basis of the "origin of goods" protocols in the same agreements and analogue provisions 
in the autonomous preferential regimes. 
This type of cooperation will have to be extended to all investigation services specialized in the 
fight against economic crime in the countries concerned (cf point 6.6 hereafter). The Commission 
will consider the possibility of setting up for this purpose a network of computerized information 
aimed at developing structured exchanges of information in the framework of these protocols. 
6.4. Targeted training actions for the authorities responsible for the fight against 
fraud (customs, police, justice, ...) in the accession candidate countries. 
Promotion of training activities and exchange of officials involved in the fight against fraud. In the 
context of these actions, the guidelines in the communication on the new PHARE guidelines which 
form part of the pre-accession assistance aimed at training officials of these countries in taking on 
the Community acquis ("institution building") should be taken into account. The training could 
where appropriate be organized together with corresponding actions for the competent authorities 
of the Member States. 
6.5. Technical assistance for the accession candidate countries to help them to 
equip themselves with administrative structures of effective financial and 
judicial protection. 
The development of this assistance will allow the achievement of the objective aimed at organizing 
a fairer share of the financial responsibilities between the Community and the non-member 
countries concerned. This assistance will take the form of technical support in the setting up of the 
computer hardware and software necessary for rapid, operational connection into the mutual 
assistance framework, and the extension of the early warning system (cf. point 1.3). These actions 
will also have to take account of the guidelines of the above mentioned communication so as to set 
up the administrative structures essential for taking on the acquis ("institution building"). 
6.6. In parallel with the reinforcement of the Community acquis, the Commission 
will take initiatives to improve the compatibility of legislation in the non-
member countries concerned with the objectives of legal protection of the 
Communities' financial interests (pre-accession phase). 
Regular consultation on the state of national legislation, the putting in place, functioning and 
experiences of the services responsible for the fight against fraud will be organized in an ad hoc 
institutional framework. These contacts could take place in the appropriate fora provided for 
association agreements where Member States, candidates countries and the Commission meet; (cf 
informal COCOLAF). 
In this context and on the basis of the Europe agreements, the following are to be planned: 
• the possibility of extending to these countries the systems of notification of cases of fraud and 
irregularity against the Community budget which have been the subject of an initial 
administrative or judicial report (anticipated application of notification regulations); 
15 
assistance in the framework of investigations carried out into irregularities or frauds along the 
lines of the "on the spot checks and inspections" Council regulation no. 2185/96 (if necessary 
establishment of a legal base in the framework of these regulations allowing for the possibility 
of negotiation of cooperation protocols with all the competent authorities in the non-member 
countries concerned). 
the need to provide for a legal base for administrative cooperation and mutual assistance 
between authorities in the non-member countries concerned. Where necessary, the Commission 
will present proposals in this direction. 
16 
ISSN 0254-1475 
COM(97) 199 final 
DOCUMENTS 
EN 09 02 10 
Catalogue number : CB-CO-97-206-EN-C 
ISBN 92-78-19619-3 
Office for Official Publications of the European Communities 
L-2985 Luxembourg 
Ir-