EN Official Journal of the European Union C 188/1

Activity Report of OLAF Supervisory Committee

June 2009 – December 2010

2011/C 188/01

Members of the OLAF Supervisory Committee

Peter STRÖMBERG Chairman Director of the Supervisory Board of Public Accountants, Sweden

Kálmán GYÖRGYI General Prosecutor of the Republic of Hungary (retired), Hungary

Luis LÓPEZ SANZ-ARANGUEZ Public Prosecutor at the Supreme Court, Spain

Diemut R. THEATO Former Member of the European Parliament Former Chairman of the Committee of Budgetary Control, Germany

Rosalind WRIGHT Chairman of the Fraud Advisory Panel, United Kingdom

CONTENTS

FOREWORD BY THE CHAIRMAN TO THE SUPERVISORY COMMITTEE’S ACTIVITY REPORT

1. INTRODUCTION

2. SUPERVISORY COMMITTEE WORKING METHODS

2.1. Meetings

2.2. Rapporteurs and Opinions

2.3. Secretariat

3. OLAF’S INVESTIGATIVE FUNCTION

3.1. Monitoring OLAF’S investigative function

3.1.1. Ensuring the independence of the Director-General of OLAF

3.1.2. Monitoring the length of OLAF investigations

3.1.3. Recommendations to Institutions

3.1.4. Cases requiring information to be forwarded to the national judicial authorities: the effect of the judgment of the Court of First Instance in Case T-48/05

3.1.5. New working methods

3.2. Follow-up of SC Opinion No 5/2008 – on the implementation of OLAF de minimis policy

3.3. Regular monitoring at the SC’s initiative

3.3.1. Planning and strategic direction of investigations

3.3.2. Implementing fundamental rights and procedural guarantees in OLAF’s investigations

3.4. OLAF’s procedural investigation rules and OLAF Manual – Operational Procedures

3.5. Administrative organisation, budget and staff policy in relation to OLAF’s investigative function

3.5.1. Administrative organisation and staff policy

3.5.2. Budget

4. RELATIONS WITH OLAF, THE EU INSTITUTIONS, OLAF PARTNERS AND STAKEHOLDERS

4.1. Relations with OLAF

4.2. Relations with EU Institutions

4.2.1. Relations with the European Commission, the European Parliament and the Council of the European Union

4.2.2. Relations with the European Court of Auditors

4.2.3. Contribution to the reflection on the reform of OLAF

4.3. Selection procedure of the OLAF Director-General

CONCLUSIONS AND RECOMMENDATIONS

ANNEX 1 Calendar of Supervisory Committee Meetings

ANNEX 2 Opinion No 1/2010 OLAF’s Preliminary Draft Budget for 2011

ANNEX 3 Opinion No 2/2010 Opinion on the nomination of the Director-General of OLAF

ANNEX 4 Opinion No 3/2010 on the Reflection Paper on the Reform of OLAF

ANNEX 5 Opinion No 4/2010 Investigation Planning

ANNEX 6 Opinion No 5/2010 Respect for fundamental rights and procedural guarantees in investigations by OLAF

FOREWORD BY THE CHAIRMAN TO THE SUPERVISORY COMMITTEE’S ACTIVITY REPORT

This activity report, which is the fourth of this Committee, covers the period from June 2009 to December 2010, a period deeply marked by the death of Mr Franz-Hermann Brüner in early January 2010. When an organisation is unexpectedly deprived of its leader in such sad circumstances, it has a profound impact on its work at all levels. We noted, with satisfaction, that OLAF continued with business as usual, which was the best way to commemorate Mr Brüner’s memory.

During this period, OLAF has been the focus of a number of different initiatives aiming at change. One of these is the procedure leading to the appointment of a new Director-General for OLAF, which was launched in April this year when the formal vacancy notice was published. The Supervisory Committee has been closely associated with this procedure and gave its opinion on 23 September 2010. Mr Giovanni Kessler was finally appointed by the Commission on 14 December. The SC welcomes the appointment of Mr Kessler and looks forward to a close and fruitful collaboration with him.

Another project aiming at change is the proposed reform of Regulation (EC) No 1073/1999. The SC has on several occasions given its opinion on different aspects of the proposal as it has developed over time – most recently in an opinion on the ‘Reflection Paper’ issued by Commissioner Šemeta some months ago. The Supervisory Committee is deeply involved in the debate, particularly since the Committee’s work and status will be directly affected by the outcome; but also, and most importantly, because of the immediate effect it will have on the way OLAF functions. The Committee’s first priority has always been, and will always be, the strengthening of OLAF’s investigative powers and of its independence in investigations.

The Supervisory Committee ensures OLAF’s independence by the regular monitoring of its investigative functions and assisting the Director-General in the discharge of his responsibilities. This Committee has now for a period of over 5 years devoted itself to that task. The Committee represents a collective experience of leadership of state authorities as well as of political bodies within the field of leading, managing and carrying out criminal and administrative investigations. Drawing on that experience the Supervisory Committee bases its formal opinions and its views on three equally important fundamental rules.

The first is always to return to the source of information, i.e. the actual case files, the Case Management System, the various reports prepared by OLAF preparatory to the launch of investigations, and reports drafted by OLAF for the Committee (e.g. the 9-months reports).

The second rule is the absolute independence of the Committee as well as of its individual members.

The third rule, which derives from the members’ own experience, is the respect for OLAF’s independence and a firm commitment not to influence ongoing investigations, even when studying case files and case material related to ongoing investigations.

I wish to extend my own and the Committee’s warm gratitude to the Supervisory Committee Secretariat without whose excellent work no activity in the Committee would have been possible.

1. INTRODUCTION

Regulation (EC) No 1073/1999 of the European Parliament and of the Council of 25 May 1999 (1) states that the role of OLAF Supervisory Committee (SC) is to strengthen and guarantee OLAF’s independence, as well as to assist the Director-General in the discharge of his responsibilities. The SC is required to report to the Institutions on its activities on a yearly basis. During the period of this Report, the SC adopted five Opinions which were sent to the Institutions and to the Director-General of OLAF and which are attached to the Report.

In the period covered by this Report, Mr Luis López Sanz-Aranguez was Chairman of the SC until November 2009, when Mr Peter Strömberg succeeded him. Mr Strömberg’s mandate was extended for a further year in November 2010.

It is important to remember that since Mr Brüner’s death on 9 January 2010, OLAF has functioned without a Director-General appointed in accordance with the ad hoc procedure set out in the Regulation (EC) No 1073/1999.

During 2010, whilst awaiting the appointment of a new Director-General, the presence and the support of the SC were particularly important for the continuity of OLAF’s work.

In April 2010, the European Commission launched the procedure for the recruitment of a new Director-General for the Office. This procedure concluded with the nomination of Mr Kessler on 14 December 2010. The SC looks forward to a close and fruitful cooperation with the future Director-General of OLAF.

In addition to being a summary of last year’s activities, the SC hopes that this Report will be of assistance to the incoming Director-General, both in the analysis of current challenges faced by the Institution, and in the definition of the main direction of OLAF’s policy for protecting the EU’s financial interests.

The incoming Director-General will have to face many challenges to reinforce OLAF’s efficiency and to ensure that OLAF dedicates all its efforts to a more focussed fight against fraud. Among those challenges facing the new OLAF Director-General, the SC wishes to stress the necessity of shortening the length of OLAF investigations and to put in place the necessary changes in the organisation to ensure that the limited resources available are used to best advantage and dedicated to OLAF’s core investigative tasks. One of the aims of the current Report is to give the incoming Director-General some suggestions for improving the focus of and the time taken for investigations.

2. SUPERVISORY COMMITTEE WORKING METHODS

2.1. Meetings

The SC held 16 plenary meetings in Brussels (2). The minutes of these meetings are made available to OLAF and to the European Commission, the European Parliament, and the Council of the European Union for the sake of transparency and in order to provide them with regular information on the SC’s activities.

As it did during the previous reporting period, the SC has continued the practice of inviting the Director-General of OLAF or the acting Director-General and a number of OLAF staff to its meetings. These meetings were the occasion for OLAF to inform the SC of any matters relevant to the SC’s work and also for the SC to inform OLAF about its own work. As well as the regular visits to the SC meetings by the OLAF Judicial and Legal Advice Unit to present cases transmitted to the national judicial authorities, there were a number of broad areas actively discussed during SC meetings with OLAF’s Director-General and management over the period of this Report. The SC focussed, in particular, on the operational aspects of OLAF’s work, notably in relation to follow-up of SC Opinions in the areas of the OLAF’s Annual Management Plan, draft budgets, OLAF’s 9-months reports and OLAF’s staffing policy. There were discussions with OLAF’s Director-General, Mr Brüner, on the Commission’s proposal to externalise OLAF as well as an informal exchange of views on the topic of coordination between OLAF and international organisations. In addition, presentations were made and discussions took place on the day-to-day elements of OLAF’s work: for example the process for registration and storage by Commission services of OLAF documents and on access by OLAF to data held by the EU Institutions. The SC was pleased to have an in-depth presentation from OLAF on a particularly complex and important trans-border fraud case and to note the practical steps which had been taken to adapt OLAF investigatory practices in light of the lessons learned (see infra 3.1.5).

2.2. Rapporteurs and Opinions

Five Opinions were adopted by the SC during the reference period (see annexes). The practice of the appointment of rapporteurs (3) was maintained in order to increase the efficiency of the preparation and follow-up of specific items of interest to the SC. The main areas of the work of the SC in this period covered the preparation of the Opinion on the budget, the Opinion on the Reflection Paper on the reform of Regulation (EC) No 1073/1999, the Opinion on investigation planning, the Opinion on implementation of fundamental rights and procedural guarantees in OLAF investigations, as well as the Opinion on the nomination of OLAF Director-General.

2.3. Secretariat

The responsibilities of the Secretariat of the SC are outlined in the SC Rules of Procedure (4), which specify its role in facilitating and contributing to the performance of all tasks undertaken by the SC and ensuring that the SC is able to fulfil its legal mandate in full independence.

During this period, following the publication of the post of the Head of the Secretariat which became vacant in July 2009, it was agreed with Mr Brüner that no appointment to the post would be made without the approval of the SC. After a selection procedure, the acting Director-General of OLAF, as AIPN, appointed, in agreement with the SC, Ms Isabelle Jegouzo as Head of the SC Secretariat. She took up office on 16 June 2010.

In November 2009 one member left the SC Secretariat and in February 2010 a new official joined the team. Today one post remains vacant and should be filled as soon as possible.

As has been the case up to now, appointments of members of the SC Secretariat staff should always be made in agreement with the SC, thus ensuring the full independence of the SC in the performance of its duties. The necessary involvement of the SC in the recruitment process has been accepted by OLAF and the Commission.

The SC also considers that it should be involved in the annual evaluation exercise of the Secretariat staff given that the Secretariat works under its direct authority.

3. OLAF’S INVESTIGATIVE FUNCTION

3.1. Monitoring OLAF’s investigative function

3.1.1. Ensuring the independence of the Director-General of OLAF

The key function of the SC is to monitor OLAF’s investigative function to ensure that its independence is not compromised. In this context, guaranteeing respect for the status of the Director-General is of the utmost importance.

Following Mr Brüner’s death, the European Commission considered in its Decision of 13 January 2010 that Mr Nicholas Ilett, who had been the deputy Director-General by virtue of a decision taken by the Commission in July 2005, would automatically assume the post of acting Director-General. Following this Decision, an intense debate took place between the European Parliament and the European Commission. In this context, on 14 January 2010, the Chairman of the Committee sent a letter to Vice-President Kallas with copy to the European Parliament and to the Council in which he stated:

‘The Supervisory Committee is of the opinion that for the day-to-day running of OLAF in the interim period and, in particular, the opening, conduct and closing of OLAF investigations, to be carried out in full independence it is very important that the ultimate authority of the Office should not be fettered in the exercise of his or her powers. With this in mind the Supervisory Committee considers that the person carrying out the role of acting Director-General during the interim period should do so with the consensus of the European Parliament, the Council and the Commission. This person should have all necessary legitimate authority and independence status.’

The SC considers that it is important to have at the Head of the Office a person appointed following interinstitutional consensus and backed by all institutions. This is important to support OLAF’s day-to-day work.

3.1.2. Monitoring the length of OLAF investigations

OLAF’s Director-General provides a monthly report to the SC with a summary of every investigation that has been in progress for more than 9 months (‘9-months reports’). The 9-months reports set out the reasons for non-completion of investigations and the expected time for the closure of each case. These reports are the subject of ongoing analysis by the SC and the SC Secretariat.

The SC once again (5) underlines the importance of these reports which not only comply with a legal obligation but should also serve as a useful tool for improving the efficiency of investigations.

During the current reporting period, the SC has paid particular attention to OLAF’s forecasts as to the expected time for completion of investigations that are made in the 9-months reports. The SC examined the forecasted timeframe for the closing of cases in 164 9-months reports received from June 2009 to July 2010. In 14 of the 164 reports no time estimate at all was given for completion. Out of the remaining 150 reports, in 71 cases the delay in closing was several months more than expected (from 4 to 12 months). The SC notes the improvement in relation to the previous reporting period, during which approximately 23 % of the 275 9-months reports examined did not mention the expected time for completion at all. Nevertheless, it considers that the 9-months reports still need to be more precise as to why the initial timeframe was not adhered to.

3.1.3. Recommendations to Institutions

The Director-General of OLAF is obliged to inform the SC of cases where an institution, body or agency concerned has failed to act on the recommendations of OLAF (6).

During this reporting period the SC has not received any reports indicating that an Institution, a body or an agency has failed to act according to OLAF’s recommendations and conclusions.

3.1.4. Cases requiring information to be forwarded to the national judicial authorities: the effect of the judgment of the Court of First Instance in Case T-48/05

During the current reporting period, the SC examined 43 cases referred to it by OLAF, prior to transmission of information to the National Judicial Authorities (hereinafter ‘NJA’).

Following the Franchet and Byk judgement (7), the Court of First Instance ruled that Regulation (EC) No 1073/1999 required OLAF ‘to consult [the SC] before forwarding information to the national judicial authorities’ and that this requirement is ‘unconditional and leaves no margin of discretion’.

New working practices have been established between the SC and OLAF in order to implement the Court’s decision: OLAF informs the SC 5 working days before its transmission to the NJA; the members of the Judicial and Legal Advice Unit provide the SC with a note summarising the handling of fundamental rights and procedural guarantees within the cases transmitted to the NJA. As far as procedural guarantees are concerned this note indicates, whether or not the person concerned has been informed of the opening of the investigation and if he/she has been given the opportunity to express his/her views to OLAF. It also indicates the outcome of the investigation (factual conclusions, legal evaluation, the competent judicial authority, the time-barring considerations and OLAF’s recommendation).

The SC then makes a preliminary analysis of the information received enabling it to discuss with OLAF issues such as the respect for the rights of the persons under investigation, the legal evaluation of the facts, the competence of the addressee NJA, the duration of the investigations and the issue of time barring. Without interfering in ongoing cases, the SC may draw general conclusions from the analysis of these cases and communicate them to the OLAF Director-General with a view to improving the current practice. In particular, the SC drew conclusions relating to the respect for fundamental rights and procedural guarantees within OLAF’s investigations in its Opinion No 5/2010 (8).

Although these summaries drafted by the members of the Judicial and Legal Advice Unit enable the SC to understand the merits and the procedural issues arising from each case, the SC considers that more attention should be paid to the completeness and the accuracy of the information received. Indeed, sometimes the summaries are not comprehensive (the time-barring consideration or the recommendations are missing, the handling of the fundamental rights and procedural guarantees are incomplete or not detailed for each person concerned) or contain material errors (for example, title of investigation or relevant dates). In addition, the SC regrets that the legal control of investigative work does not appear to be carried out in a systematic way at each and every stage. From the cases examined, this lack of a continuous legal examination during investigations has led to failures in the observation of procedural requirements.

In its Opinion No 5/2010, the SC provided OLAF with an analysis grid on the respect for fundamental rights and procedural guarantees at each stage of the investigation. This grid also contains suggestions as to the assessment of the probative value of the evidence on which the conclusions of the investigation are based and the respect of the rules of the Member State concerned.

The SC recommends the revision of the summaries currently drafted by the members of the Judicial and Legal Advice Unit concerning the fundamental rights and procedural guarantees which could be based on the model of this grid.

The SC notes that, in general, the quality of most reports on investigations transmitted to the NJA could be substantially improved, with particular reference to their structure, clarity, analysis of the elements of the criminal offences at stake and also from a linguistic point of view. Moreover, the SC noted that two case reports were transmitted to the NJA respectively 16 months and 24 months after the closure of the investigations. The SC considers that OLAF should consider implementing an electronic alert system to avoid such situations.

3.1.5. New working methods

In May 2010, the SC’s Chairman chaired the ‘Operational Cooperation between OLAF and other European Commission Directorates-General (DGs) – Follow-up of the 2007 Conference’ organised at OLAF’s initiative. The express intention of these conferences was to improve OLAF’s cooperation with Commission Directorates-General (DGs) at an operational level to achieve better results and to reach a common understanding.

The SC believes that OLAF’s leading role on detection, risk analysis and fight against fraud requires a regular exchange of relevant information between the Commission DGs. Particular efforts were made as of 2007 and Joint Fraud Prevention Strategies were developed with some DGs in 2008-09. The result was the creation of a new operational approach to large and more complex cases, involving the DGs more closely in the investigations and introducing a proactive intelligence-led approach.

In the field of Direct Expenditure where OLAF has sole responsibility for conducting investigations, this method was employed with one DG whose internal auditors were closely involved and acted as OLAF’s experts during on-the-spot checks. New intelligence IT tools were also developed jointly by the DG concerned and OLAF, to better identify areas of risk.

The SC welcomes this new working method and would like to see it developed further as it allows OLAF to focus on the more serious and complex cases whilst minor wrongdoings are dealt with by Commission services at another level.

The financial situation of the EU has dramatically changed in the last 2 years. The financial crisis has led the European Commission to adopt measures to increase aid and the flow of money in certain sectors which could also lead to a rise in fraud and financial irregularities. The SC believes that new working methods are required to implement rigorous control mechanisms of fund expenditure and that serious operational cooperation between the Commission DGs and OLAF is now essential.

3.2. Follow-up of SC Opinion No 5/2008 – on the implementation of OLAF de minimis policy

Following the SC’s Opinion on OLAF’s de minimis policy and the prioritisation of casework (9), OLAF de minimis rules have recently been added to the Manual and are now available for the investigators.

The Supervisory Committee welcomes the initiative to clarify the implementation of the de minimis policy through operational guidelines. However these guidelines need to be read and combined with the indicative thresholds for internal and external investigations and for opening of financial follow-up paths as specified in the Annual Management Plan of OLAF.

The SC welcomes the creation of a de minimis annex listing the different criteria to be taken into account by the Board as to whether or not to open an external investigation and as an improvement in the area of the transparency of the decision-making process.

The SC would like to see a full analysis by OLAF of the implementation of the de minimis policy including relations with IDOC, in the year following the introduction of the policy.

3.3. Regular monitoring at the SC’s initiative

3.3.1. Planning and strategic direction of investigations

On 12 October 2010, the SC adopted its Opinion No 4/2010 on Investigation Planning (10).

In its regular analysis of investigations that have been in progress for more than 9 months, the SC noted ‘a lack of investigative methodology and rigour and a need for improvement in the internal levels of management and control of investigations’ (11).

Following close analysis of a sample of cases in Directorate A and Directorate B, the SC was disappointed to note a lack of consistency in approach within the operational directorates towards the planning and management of investigations. The Opinion recommends that a detailed investigation plan be developed at the outset for each investigation, setting out the objectives of the investigation, the likely resources needed for its completion and projected costing. The plan should be dynamic and thorough enough to allow for the forecast of a date for the final decision. Investigation plans should be drafted for the Board and then regularly updated. They should cover every investigative step envisaged and be associated with a preliminary timetable for each step. These plans should be in writing and systematically annexed to the case file, facilitating their review and consultation in the event that investigators are met with demands for postponements or other kinds of delays. The management, at unit level, should examine investigation plans regularly to follow and, where necessary, guide the development of cases.

The SC was pleased to note that, immediately prior to issuing its Opinion, some ideas on improved planning were implemented by OLAF.

In addition to the planning of investigations, for each case, the SC recommends that OLAF management should design and implement procedures better to prioritise open cases, which would be adaptable according to the resources available.

The SC looks forward to a clear response from OLAF on this important matter and would welcome the inclusion of such provisions in an updated Manual.

3.3.2. Implementing fundamental rights and procedural guarantees in OLAF’s investigations

The respect by OLAF for fundamental rights and procedural guarantees in the conduct of investigations is directly linked to the independence and the efficiency of its work. The cases brought before the European Court of Justice pointed to some failures and weaknesses in the conduct of OLAF’s investigations (12). Therefore, the SC decided to assess the way in which OLAF ensures the respect of these rights and guarantees.

The SC issued its Opinion No 5/2010 on Respect for fundamental rights and procedural guarantees in investigations by the European Anti-Fraud Office (13) based on the analysis of 28 cases transmitted to national judicial authorities from December 2009 (14) to October 2010. It carried out an analysis of the current legal framework applicable to OLAF’s investigations (legislation and case-law), as well as of the implementation of the fundamental rights and procedural guarantees.

The SC noted that the persons concerned by internal investigations are protected by a set of rules laid down in various legal instruments. The situation is different in the area of external investigations, where there are no specific rules and the protection guaranteed by the national legislation applicable to the on-the-spot checks can vary from Member State to Member State.

The SC considered that OLAF generally respects fundamental rights and procedural guarantees of the persons concerned. Where it identified specific problems, the SC made recommendations to OLAF aimed at improving the current practice. In particular, the SC recommended that OLAF amend the Manual and ensure that its provisions are applied.

The SC noted also that the lack of clear rules of procedure, especially concerning external investigations, leads to a variation in practices within OLAF. The reform of Regulation (EC) No 1073/1999 should be the occasion for clarification of the legal framework, particularly with regard to external investigations. OLAF’s powers of investigation need to be reinforced, especially with regard to the need to carry out interviews. The SC pointed out that this clarification should not lead to overregulation. The legislator must take into account the specific nature of OLAF’s investigations which are administrative and represent only a preliminary stage of a larger procedure, in which respect for the rights of defence of the persons concerned is guaranteed during the follow-up procedures. Imposing on OLAF procedural obligations without taking into account this specific nature as well as the diversity of internal and external investigations would limit the effectiveness of the fight against fraud without necessarily improving the respect for fundamental rights.

The SC listed the general principles governing the conduct of investigations, as well as of the fundamental rights and procedural guarantees to be respected by OLAF. The SC recommended the reinforcement of the mechanisms of control of the impartiality and the confidentiality of investigations, as well as of their duration. In addition, the SC suggested measures that should be taken by OLAF to reinforce the respect of fundamental rights and procedural guarantees at each stage of an investigation. Finally, the SC provided OLAF with a grid analysis of the method of implementation of fundamental rights and procedural guarantees to be used by the investigators during investigations and by the management team when controlling the legality of the investigations.

The SC also regrets that its previous recommendations (see in particular recommendation XI of the 2008-09 Activity Report) regarding the need for a better and earlier involvement of the members of the Judicial and Legal Advice Unit in the investigation process, have not been sufficiently taken into account by OLAF. The SC reiterates that the members of this unit should be in a position to provide legal advice at all stages and in all the cases where it is required, in particular in matters concerning the respect of fundamental rights and procedural guarantees of parties to an investigation. Provisions meeting these recommendations should be clearly set out in the new OLAF Manual – Operational Procedures as was the case previously.

In its recommendation X of its report 2008-09, the SC expressed the wish ‘to be informed of all complaints that OLAF has received or has examined from parties to an investigation where fundamental rights and procedural guarantees appear to have been compromised’. The request includes not only cases transmitted to judicial authorities but all cases. The SC received two notifications from OLAF during the time period covered by this report. It also received one direct notification from the parties involved in one case.

3.4. OLAF’s procedural investigation rules and OLAF Manual – Operational Procedures

The SC has followed with interest successive developments with regard to the OLAF Manual and has communicated to OLAF a significant number of written remarks during the drafting process.

The SC appreciates the improvements in the form and content of the new Manual. However, as far as operational procedures are concerned, this latest version does not meet the expectations of the SC in that it is not a set of hard and fast rules intended to guide investigators at every stage of their investigations.

The SC has repeatedly said that it was important that case procedures clearly indicate for each type of investigation which are the different procedural actions from the outset to the conclusion. The SC has also expressed concerns as regards ‘assessment of initial information’ due to the absence of clear deadlines prior to the decision to open a case. The aim of this stage was to determine the existence of sufficiently serious suspicions and close attention was to be paid not to conduct any operational activity within this stage. In line with this idea the SC required further clarification as to the so-called preparatory fact-finding mission which should not overlap with and anticipate the actual investigation. The SC regrets that these comments addressed to OLAF were not integrated in the OLAF Manual eventually adopted.

In addition, the SC believes that the Manual should be a dynamic document, capable of being updated at any time, which should serve as a vademecum for use by investigators to which they can refer during their investigations. In particular, the SC considers that its recommendations with regard to the planning of investigations, the protection of fundamental rights and the respect for procedural guarantees should be incorporated into the Manual.

In-depth training on the Manual should continue to take place on a regular basis.

In addition to an improvement of the legislative framework, the SC believes that OLAF should draft a simple set of rules focussing mainly on the different steps of investigations but also taking into account the rights of individuals, the data protection requirements, and the requirements for on-the-spot checks. The Manual should then be adapted and draw on this set of rules in order to give clear instructions to the investigators.

The Manual should also include examples of good practice developed in the various types of investigations including templates validated by the management of OLAF to which each new investigator could refer.

3.5. Administrative organisation, budget and staff policy in relation to OLAF’s investigative function

3.5.1. Administrative organisation and staff policy

Well-qualified staff is key to a successful investigation policy. In the framework of its monitoring mission of OLAF’s investigative function, the SC considers that it is its duty to ensure that OLAF’s human resources policy allows OLAF to carry out its mission effectively (15).

The SC considers that the definition of a comprehensive Human Resources strategy should be one of the first priorities of the new Director-General.

Determination of internal priorities

In order to draft a human resource strategy adapted to its needs, OLAF should perform an in-depth analysis of its own internal priorities. In this regard, the SC would once again emphasise the need for OLAF to focus on its core business and to reinforce its investigative capacity. The SC would recommend that the new Director-General give due consideration to the allocation of resources within OLAF to address the question of staffing balance between operational Directorates A and B combined and Directorate D which should act primarily in support of the investigative activities of OLAF.

Moreover, the SC considers that within the area of OLAF investigative work, priorities should be set having in mind the possible synergies with other parts of the Commission or with Member States. The SC welcomes OLAF’s recent policy of focussing on the larger and more complex fraud cases to be investigated in close collaboration with the Directorate-General concerned and supported by IT intelligence.

Building a comprehensive Human Resources (HR) policy

Based on an analysis and definition of OLAF’s core business such as that set out above, resources should be adapted and concentrated to allow for a focus on priorities. In defining its HR policy OLAF should, in particular, take into consideration:

(i) the suitability of the qualifications of the staff whose main tasks fall within the responsibility of OLAF. OLAF currently benefits from a wide diversity of professional qualifications amongst its staff (legal professionals, investigators, customs officers, forensic specialists and IT specialists, amongst others). This body of knowledge represents a particularly valuable and rich source of expertise whose synergies should be better exploited;

(ii) the importance of developing a policy of mobility allowing OLAF’s staff to develop their careers within all the Institutions and allowing OLAF to benefit from the diverse experience available inside and outside the Institutions. In this regard, the SC would support an initiative to promote and increase the mobility of OLAF staff;

(iii) the importance of a comprehensive training policy, taking particular note of the characteristics of OLAF’s investigative duties. This policy should be adapted to a regular turnover of staff in order to avoid any loss of competences, in particular with regard to the investigative function;

(iv) the need to design a clear policy regarding the recruitment of temporary agents with extensive and specific experience in the Member States in the field of investigations.

The SC also recommends that OLAF should make the best use of the recruitment possibilities opened up by recent competitions. The SC welcomes the recent extension of the date of validity of the list of candidates but regrets the length of the recruitment procedures for candidates.

Furthermore, the SC points out the need to clarify OLAF’s policy regarding temporary staff. All members of staff should benefit from a clear vision of their status and potential career development. The SC regrets the lack of clarity in this regard which, over the past few years, has sometimes led to serious personal difficulties for members of OLAF staff.

During the first half of 2010, the President of the SC visited the various units and directorates within OLAF. These visits flagged up, inter alia, the heavy administrative burden on OLAF investigators. This is something that requires further reflection, to allow investigators the maximum time possible to concentrate on their investigative function.

3.5.2. Budget

The SC takes note of some level of improvement in the management of missions and travel expenditures. It recommends that this policy be further extended and that an assessment of the need for missions in order to carry out investigations be systematically carried out. Due consideration should also be given to the options provided by information technologies such as video conferencing to avoid the need for complex and costly travel.

4. RELATIONS WITH OLAF, THE EU INSTITUTIONS, OLAF PARTNERS AND STAKEHOLDERS

4.1. Relations with OLAF

The SC has continued to develop a constructive relationship with the OLAF management team and officials during the period of this Report. Numerous formal and informal meetings have been the occasion for valuable exchanges of views and sharing of information.

On separate occasions in February, March, April, May and June 2010 the SC Chairman met members of staff of the OLAF Investigations and Operations units and of the Operational and Policy Support units. The aim of those meetings was to maintain its close connection with the operational areas of OLAF and to listen to comments and suggestions on how to improve the investigative function.

During his visit, the Chairman met most of the team members of the thirteen units together with all the Heads of Unit. The items discussed included:

(i) the limitations of the legal basis for OLAF’s work in some sectors and the reform of Regulation (EC) No 1073/1999;

(ii) the heavy administrative burdens and bureaucratic workload for investigators;

(iii) the need for a proactive investigation policy;

(iv) the obstacles in working relations between OLAF and the Institutions, the Member States and third countries.

A memorandum on the visit will be discussed with the new Director-General of OLAF.

Members of OLAF staff, including, on several occasions, the Director-General himself and later the acting Director-General, attended SC meetings in the period covered by this Report.

In September and November 2010, OLAF outlined for the SC the difficulties it had encountered in achieving what it regards as a reasonable level of access to sections of some Commission databases. This issue has been ongoing since 2007. OLAF considers that this difficulty in accessing Commission databases could potentially reduce its capacity to carry out investigations effectively and independently and in November 2010, asked the SC to deliver a formal opinion. A rapporteur was appointed within the SC to start working on this file.

All five Members of the SC attended OLAF’s 10th Anniversary Conference on 12 October 2009 where the Chairman and a member of the Committee delivered speeches.

The SC participated in the conference on the perspectives for a European Public Prosecutor ‘Protecting the financial and fundamental interests of the Union’, at the Court of Cassation in Paris on 11 February 2010, in the 10th OAFCN seminar in Budapest on 13-15 October 2010 and in the fraud prosecutors’ conference in Paris on 18 and 19 November.

4.2. Relations with EU Institutions

4.2.1. Relations with the European Commission, the European Parliament and the Council of the European Union

Being an interinstitutional body, the SC is particularly committed to sustaining a close working relationship with the Commission, the Parliament and the Council.

The renewal of the Parliament in Spring 2009 and the appointment of the new Commission in February 2010 allowed the SC to start building new and closer ties with newly appointed institutional partners.

The SC welcomes the commitment of Commissioner Šemeta, as the new Commissioner in charge of OLAF, to develop a fruitful relationship with the SC. He attended the SC meetings in March and July 2010 and a member of his cabinet attended the SC meetings in September, October and November. These meetings were of mutual benefit with regard to those projects concerning the reform of OLAF. The SC very much appreciates the support given by Commissioner Šemeta and his cabinet to OLAF and to its own work.

During the reporting period, the SC also met with the Deputy Secretary General of the Commission, Mr Alexander Italianer on 21 October 2009 and the Chairman of the Committee on Budgetary Control of the European Parliament (COCOBU) Mr Luigi de Magistris on 17 November 2009. The SC made a presentation of its 2008-09 Activity Report to the Working Group for the Fight against Fraud of the Council during the Swedish Presidency on 25 November 2009 and to the Committee on Budgetary Control of the European Parliament (COCOBU) on 3 December. The SC also sent a written answer to questions asked by the European Parliament on this occasion. The SC is gratified by the positive feedback and support it received. On 15 December 2010, the SC received Ms Catherine Day, Secretary General of the Commission where, inter alia, issues relating to OLAF’s access to Commission databases and human resources were discussed.

4.2.2. Relations with the European Court of Auditors

The SC rapporteur met with the Court of Auditors in Luxembourg on 21 September 2009 to discuss matters of common interest and the involvement of the SC in the planned audit of OLAF.

In February 2010, representatives from the Court of Auditors attended the SC meeting to discuss and present the scope of their follow-up to the Special Report 1/2005 on OLAF. In June of the same year the SC Secretariat was visited by the auditors in charge who requested copies of the minutes of the SC meetings together with the most recent SC Opinions. Further documents were also handed over in October 2010 at their request.

4.2.3. Contribution to the reflection on the reform of OLAF

Following his nomination, Commissioner Šemeta took the decision to relaunch the reform of Regulation (EC) No 1073/1999, at that time still pending before the Council and Parliament. In order to unblock discussions between the Institutions, the Commission adopted a Reflection Paper (16) on 7 July 2010 which would serve as a basis for further progress in the reform process.

On 14 July 2010 Commissioner Šemeta attended the SC’s meeting where he presented the document and the SC welcomed the Commissioner’s gesture to invite contributions from the SC to the ongoing debate and the Commission’s document. Accordingly, the SC adopted its Opinion No 3/2010 on the Reflection Paper on the Reform of the European Anti-Fraud Office (OLAF) (17) on 23 September 2010

In its Opinion, the SC welcomed the Commission’s determination to progress with the reform of OLAF to reinforce the protection of the EU’s financial interests, particularly in the context of the current economic and financial crisis. It noted the Commission’s approach to defer to a later stage the consolidation of the anti-fraud legislation into a single legal framework, in order to await, in particular, the debate on the creation of a European Public Prosecutor’s Office.

The SC agreed that there was a need to reform the governance of OLAF in order to improve its efficiency but regretted that the Reflection Paper did not put more emphasis on the investigative competence of OLAF, despite the new opportunities opened up by the Treaty of Lisbon. Furthermore, the SC also stressed the need to reinforce the responsibility of OLAF management in the area of the conduct and control of investigations, principally with the intention of shortening the duration of investigations and improving OLAF’s efficiency.

Regarding the proposal to develop an interinstitutional dialogue, the SC conceded that such dialogue could improve institutional support for OLAF’s fight against fraud but stressed that this dialogue should, under no circumstances, lead to political interference in investigations. As guardian of OLAF’s independence, the SC proposed to take the lead in managing this dialogue.

The SC expressed strong concerns with regard to the proposal to create the post of Review Adviser which could have the effect of increasing the administrative burden on OLAF as well as duplicating or even undermining the core functions of the SC. The SC did, however, support the creation of the post of an internal Complaints Officer, within OLAF, to act as a first contact dealing with complaints from those under investigation regarding the way in which their investigation has been handled.

The SC welcomed the will, as expressed by all EU Institutions, to strengthen its role, but strongly disagreed with the proposal as set out in the Reflection Paper, whereby the SC would receive only statistical data in order to carry out its work. The SC fully shares the views that it should not interfere with OLAF’s operational work but considers that full access to case files is essential to safeguard OLAF’s independence by monitoring the efficiency and effectiveness of its investigatory procedures.

The SC attended two meetings at the Council to present its Opinion. The SC strongly supports the Commission’s intention to move forward with this reform, with a view to strengthening the effectiveness and independence of OLAF’s investigative function, and will be pleased to make further contributions to the later stages of the debates.

4.3. Selection procedure of the OLAF Director-General

Article 12(2) of Regulation (EC) No 1073/1999 stipulates that the European Commission shall draw up a list of the candidates having the necessary qualifications following a favourable opinion of the SC.

In order to fulfil this requirement, the SC was closely associated with the first stages of the selection procedure. It analysed the CVs of the candidates and one member of the Committee attended the pre-selection panel which met at the beginning of July 2010 and the Consultative Committee of the Appointments which met on 10 September 2010 as an observer. At its meeting of 23 September 2010, the SC delivered its Opinion No 2/2010 (18) on the six candidates whose names had been communicated by the European Commission. This Opinion was communicated to the Commission and to the other Institutions.

CONCLUSIONS AND RECOMMENDATIONS

I. The SC has examined the time frame for closure of the investigations in 164 cases and is disappointed to note that, despite its previous recommendations, OLAF is still not applying systematic and effective working methods and internal checks to avoid unjustified delays in its investigations. Although there has been a reduction, with respect to the previous period, in the number of cases in which there is no mention of the expected date for completion of the investigation, OLAF has still not given precise explanations of the reasons for these delays.

II. The SC reiterates the need for: (i) greater supervision of reports on cases that last longer than 9 months; (ii) introduction of a system for informing the SC regularly, after an investigation has been in progress for 9 months, that the expected time for completion has been exceeded; (iii) introduction of an alert system in the Case Management System (CMS) to review the reasons for periods of inactivity exceeding 3 months. Strict control of the length of investigations is also necessary in order to dispel doubts as to their independence, and this is an essential matter for the SC.

III. The SC has examined 40 cases conducted by OLAF’s two Investigations and Operations Directorates and has repeatedly found a lack of proper planning of investigations, which has a negative impact on the effectiveness of OLAF’s work and the length of its investigations. OLAF’s Manual of Operational Procedures provides guidelines for drawing up an initial work plan at the assessment stage, but lacks provision for a full investigation plan once the investigation starts.

IV. The SC has recommended that OLAF implement a policy of full planning of all stages of investigations, with regular checks, realistic timetables and periodic updates to ensure compliance. As a result of the SC’s work in this field, OLAF has become aware of the need to adopt a common approach to the strategic planning of cases, and has begun to draw up detailed work plans once a case is opened. The SC is currently assessing the effectiveness of the measures taken by OLAF.

V. The SC considers that OLAF should apply a clear prioritisation policy for casework. On this point, the SC welcomes OLAF’s willingness to refer minor cases which might be adequately resolved by disciplinary measures to other competent bodies (the Investigation and Disciplinary Office of the Commission – IDOC). However, the SC recommends that further work be done on objectively establishing the criteria for such referral. The Manual should be amended in order to set out clearly OLAF’s de minimis policy.

VI. The SC supports OLAF’s initiatives in detecting and analysing risks in the fight against fraud on the basis of a regular exchange of information with other Directorates General of the European Commission. This working practice makes it possible to implement a pro-active investigation policy and focus on the most serious and complex cases. The SC therefore urges that these mechanisms be developed as soon as possible owing to the current economic situation in the European Union.

VII. The SC considers that some amendments to the OLAF operational Manual are needed in order to incorporate current practices, as well as specific requirements deriving from established case-law or current legislation. In particular: (i) better definition of each stage of the investigation in order to ensure full respect for fundamental rights and procedural guarantees and provide useful guidance to the investigators; (ii) precise definition of the initial assessment period and its length. In-depth training on the Manual should continue to take place on a regular basis.

VIII. The SC considers that respect for fundamental rights and procedural guarantees is essential for OLAF’s independence. The SC has examined 43 investigations before OLAF sent information on them to the national judicial authorities and has conducted an analysis of respect for fundamental rights and procedural guarantees in every single case. The SC considers that in general OLAF respects these rights and guarantees. However, it has drawn up specific recommendations for reinforcing the current mechanisms for monitoring procedural principles, in particular the principles of impartiality, confidentiality and reasonable length of investigations.

IX. The SC considers that the difference between OLAF’s internal and external investigations must be taken into account when addressing the issue of fundamental rights and procedural guarantees. Respect for these rights must be proportional to the nature, objectives and effectiveness of the investigation. In addition to analysing the procedural guarantees applicable to OLAF’s investigations in the light of current legislation and case-law, the SC has produced a form which is intended to provide a useful guide for investigators at each stage of the investigation.

X. The SC insists that in order to ensure effective respect for fundamental rights and procedural guarantees it is necessary to establish checks on the legality of the investigations, based on greater and continuous involvement of the Judicial and Legal Assistance Unit. Throughout its mandate, the SC has recommended to reinforce this Unit and involve it at a much earlier stage in the investigative process. The SC regrets that the legal control of investigative work is not carried out in a systematic way at each and every stage. This lack of a continuous legal examination during investigations has led to failures in the observation of procedural requirements. The SC also recommends that the new Director-General give thought to the structure and organisation of this unit.

XI. The SC recommends that a comprehensive Human Resources strategy be devised following an in-depth analysis of OLAF’s priorities and working methods. This strategy should allow for: (i) better allocation of resources within OLAF in order to better focus on the main investigative tasks; (ii) better use of synergies within OLAF, in particular by building on the diverse qualifications of OLAF staff; (iii) adequate administrative support for investigation activities; (iv) increased mobility within OLAF and the Commission; (v) better development of the training policy to enable mobility to be developed without detriment to the quality of the investigations.

XII. The SC recommends that the Institutions take advantage of the reform of Regulation (EC) No 1073/1999 to regulate the interim situation concerning the post of Director-General of OLAF, so that where there is a period in time between the leaving of office for any reason of one Director-General and the appointment of another, the acting Director-General’s powers should be clearly defined. This rule would respect the agreement among all the Institutions to guarantee OLAF’s legitimacy and independence in these transitory periods.

XIII. The SC recommends that the Institutions take advantage of the reform of Regulation (EC) No 1073/1999 to clarify the legal framework in which OLAF operates, reinforce its powers of investigation and independence and provide it with precise procedural rules. The SC stresses that it is essential for OLAF to be operationally independent and reiterates its willingness to make its experience available in this reform process.

(1) OJ L 136, 31.5.1999, p. 1.

(2) See Annex 1: Calendar of Supervisory Committee Meetings.

(3) Article 8 of the Rules of Procedure of the OLAF Supervisory Committee (OJ L 33, 7.2.2007, p. 7).

(4) The Rules were adopted by the SC in August 2006 and published in February 2007 (Rules of Procedure of the OLAF Supervisory Committee (OJ L 33, 7.2.2007, p. 7)).

(5) See in particular Opinion No 4/2010 on investigation planning (Annex 5) and Opinion No 5/2010 on respect of fundamental rights and procedural guaranties (Annex 6).

(6) Article 11(7) of Regulation (EC) No 1073/1999.

(7) Franchet and Byk v Commission, case T-48/05, paras 168-170.

(8) See Annex 6.

(9) See Opinion No 5/2008 (OJ C 314, 22.12.2009, p. 15).

(10) See Annex 5.

(11) See in particular Opinion No 2/2009 (OJ C 314, 22.12.2009, p. 22).

(12) See Camos Grau v Commission, 6 April 2006, case T-309/03; Nikolaou v Commission, 12 September 2007, case T-259/03; Franchet and Byk v Commission, 8 July 2008, case T-48/05.

(13) See Annex 6.

(14) The new OLAF Manual entered into force on 1 December 2009.

(15) See Annex 2: Opinion No 1/2010 OLAF's Preliminary Draft Budget for 2011.

(16) SEC (2010)859.

(17) See Annex 4.

(18) See Annex 3.

ANNEX 1 CALENDAR OF SUPERVISORY COMMITTEE MEETINGS 2009 Month Meeting date JUNE Tuesday, 9th – Wednesday, 10th JULY Tuesday, 7th – Wednesday, 8th SEPTEMBER Wednesday, 23rd – Thursday, 24th OCTOBER Tuesday, 20th – Wednesday, 21st NOVEMBER Tuesday, 17th – Wednesday, 18th DECEMBER Tuesday, 15th – Wednesday, 16th

2010 Month Meeting date JANUARY Tuesday, 12th – Wednesday, 13th FEBRUARY Tuesday, 9th – Wednesday, 10th MARCH Tuesday, 16th – Wednesday, 17th APRIL Tuesday, 27th – Wednesday, 28th JUNE Tuesday, 1st – Wednesday, 2nd JULY Tuesday, 13th – Wednesday, 14th SEPTEMBER Thursday, 2nd (all day) SEPTEMBER Thursday, 23rd (all day) OCTOBER Tuesday, 12th – Wednesday, 13th NOVEMBER Tuesday, 9th – Wednesday, 10th DECEMBER Tuesday, 14th – Wednesday, 15th

ANNEX 2 OPINION No 1/2010 OLAF’s Preliminary Draft Budget for 2011 Brussels, 30 June 2010 At the meetings of 27 and 28 April and 1 and 2 June 2010, OLAF’s Supervisory Committee examined OLAF’s preliminary budget for 2011 and adopted the following Opinion. I. Presentation of the provisional budget for 2011 As it does every year, OLAF presented the main points of the provisional budget for the following year to the Committee. For 2011, the Committee notes that this is a transitional budget relating to the current interim period that followed the death in January 2010 of OLAF’s Director-General, Franz-Herman Brüner. Given that the powers of acting Director-General were limited to dealing with current issues, the acting Director-General has been unable to take decisions or carry out engagements leading to commitments for the future Director-General after his or her election by the Institutions. The Committee notes that the overall provisional budget was 3,19 % higher than that of 2010. The Committee wishes OLAF to place greater emphasis on the training of its entire staff. The Committee notes that the budget for overseas missions has increased proportionately in line with the increase in the cost of living and expresses the wish that this area be always subject to effective monitoring by the heads of unit and directors of OLAF. The amount of the budget line granted to the Committee remains stable in relation to the 2009 and 2010 figures. The Committee notes that OLAF staff numbers have remained stable at 384 agents and expenses have not increased disproportionately. Provisional appropriations for salaries and payments to staff have increased by 4,13 % in total, including the salary adjustments. II. Allocation and management of OLAF’s human resources The Committee notes that the number of vacant posts has dropped. In 2010 it was 24 and in 2011 it should be eighteen. The Committee welcomes this positive trend which helps to improve OLAF’s capacity to handle its activities. With regard to temporary staff, the Supervisory Committee welcomes a series of positive developments in 2008, 2009, and 2010, in particular the launch and publication of the results of external and internal competitions in the field of combating fraud. This has already enabled OLAF to recruit in January 2010, as officials, 11 former temporary agents (nine for an indefinite period and two for a fixed period), who passed external competitions. This was made possible following an amendment to the establishment plan and the negotiation of a rectifying budget with the budgetary authority. Following the recent publication of the results of internal competitions, a similar exercise should be carried out by OLAF to offer posts as officials to those having passed the competitions. This should enable OLAF to recruit 13 temporary agents for an indefinite period and two for a fixed period in 2010. In addition, three former temporary agents having passed external competitions passed an internal competition at a higher level. Although organising these competitions was a significant undertaking and fulfilled OLAF’s commitments, the overall impact on the 92 temporary agents involved in the exercise is limited in so far as only 21 of them have passed one of the competitions. A further four temporary agents on fixed-term contracts have also been able to benefit from the competitions. To date therefore 63 temporary agents affected by the 2007 negotiation have been unable to benefit from the competitions, either because they did not pass or because they could not, or declined to take part. An even larger number have been prevented from registering for the competitions because of the grades for which the competitions were open, the qualifications required and the length of time since they obtained their qualifications. The Supervisory Committee points out that it would be highly desirable for these temporary agents to continue to contribute their skills and knowledge to OLAF and that it would make sense to offer them, at the earliest opportunity, genuine prospects for career development. It should not be overlooked that the oldest temporary agents have been working at OLAF for over 10 years. It would be appropriate to allow them to enjoy the benefits of reclassification. It would also be useful for OLAF to ask EPSO to organise competitions allowing recruitment of the highly specialised people needed by OLAF. It would be extremely harmful to OLAF’s future effectiveness, and indeed its independence, if it were unable to retain such specialists. It would be very time-consuming and expensive to train new specialists were the absence of genuine prospects to lead some staff to leave OLAF. The Committee notes that there are still some fixed-term temporary agents at OLAF whose contracts it has not been and certainly will not be possible to renew in the future. Such situations are difficult to sustain, on a human level, in so far as the people concerned know that the period of work will inevitably come to an end. Once again the Committee requests that OLAF draw up and quickly implement an appropriate, consolidated recruitment policy offering standard lengths of contract to Member States’ candidates who are investigative specialists. Such recruitment would have the merit of allowing OLAF to try and attract the best candidates from national services. It would also make it possible to update the knowledge of investigators already working for OLAF and, most importantly, to enable them to make adjustments and improvements to their investigation technique. The Commission’s proposed spread of 80 % officials and 20 % temporary agents should be considered merely an aspiration, rather than a target set in stone. OLAF should never restrict or altogether dispense with the recruitment of specialists in the fight against fraud. Its independence in investigations does not rest on the ratio of officials to temporary agents but, rather, on investigation skills and a desire to implement the best investigative techniques. The recruitment of temporary agents should also enable OLAF to work more effectively and to improve cooperation with the Member States’ authorities. The Committee notes that OLAF’s organisational structure, as at 1 April 2010, comprised only one head of unit post held by a temporary agent. It would also clearly be worthwhile analysing, at some stage, the necessary balance to be struck in this area between officials and temporary agents. The Committee expresses its disappointment that OLAF has yet to define a proper human resources policy and this despite its recommendations as set out in its Opinions on previous budgets (Opinion No 2/2007 – Opinion No 3/2008 – Opinion No 3/2009). Similarly, the Committee stresses, as in previous years, the need for careful reflection as to the appropriateness of the allocation of resources to OLAF’s core business. The Committee has noted OLAF’s comments as to the indivisible nature of its work and with regard to the contribution of all areas of the Office to its duties; it nevertheless considers that particular consideration is needed with regard to the relative proportion of staff dedicated directly to investigative activities. As in its earlier opinion, the Committee believes that an overall evaluation and determination of priorities should be carried out with regard to OLAF’s various areas of activity as well as to their respective importance. Recommendations: The Committee urges OLAF to establish, as soon as possible, a human resources strategy based on an analysis of work priorities and the appropriate allocation of resources to same. This strategy should offer realistic job prospects in the short and medium term. The Committee recommends that OLAF pay particular attention to the different categories of temporary agents currently working in OLAF and to try as far as possible to find appropriate solutions adapted to these groups, in particular with regard to the opportunities for reclassification. III. The secretariat of the Supervisory Committee The notional number of staff within the Supervisory Committee secretariat is eight. On 1 February 2010 a new administrator joined its ranks and was allocated to a vacant post. A temporary AST agent post has been vacant since November 2009 and should be replaced by an official post. In addition, a vacancy notice for the post of head of the secretariat was published in June 2009, ahead of the retirement of the former head at the end of July 2009. The new head of the Supervisory Committee secretariat was recruited on 16 June 2010. The existing staffing level of the secretariat will be satisfactory in terms of the tasks for which the Committee is currently responsible when all posts have been filled. However, if changes to the applicable regulations – in particular changes of the kind voted for by the European Parliament on 20 November 2008 as part of the revision of Regulation (EC) No 1073/1999 – were to enter into force, the Committee’s remit would be broadened and that would necessitate a significant expansion of the secretariat’s workforce. Only such an increase in the number of staff within the Supervisory Committee secretariat would guarantee the Committee’s genuine independence, which in turn is a crucial factor in safeguarding OLAF’s independence. Recommendation: OLAF should organise for the definite allocation of eight posts to the Supervisory Committee Secretariat. If, as part of the revision of the regulation applicable to OLAF, the tasks assigned to the Supervisory Committee were to expand, it would be essential for the secretariat’s resources to be increased accordingly in order that the Committee could continue to work effectively and efficiently. IV. Conclusion The Committee accepts the idea that the current provisional budget should be a reflection of the current transitional period. However, the Committee expressly wishes that immediately following his entry into office, the new Director-General of OLAF request from the budgetary authority the necessary means, in particular with regard to the management, investigation policy and staff recruitment policy of OLAF. The Supervisory Committee supports OLAF’s budget proposal for 2011 and trusts that the above recommendations will be taken into consideration.

ANNEX 3 OPINION No 2/2010 for the attention of the European Commission (delivered in accordance with Article 12(2) of Regulation (EC) No 1073/1999 concerning investigations conducted by the European Anti-Fraud Office) Brussels, 23 September 2010 Legal framework: Article 12(2) of Regulation (EC) No 1073/1999 (referred infra as Regulation 1073/1999), concerning investigations conducted by the European Anti-Fraud Office (OLAF), provides that the Supervisory Committee shall deliver a favourable opinion on the list of candidates for the position of Director of OLAF transmitted by the Commission for consultation with the Council and the European Parliament. Article 15 of the Rules of Procedure of the OLAF Supervisory Committee provides that ‘after examining the applications for the post of Director-General of OLAF, the Supervisory Committee shall issue an opinion containing an explanatory statement setting out the criteria used to assess the candidates’ merits’ and that ‘it shall also contain the opinion of the Committee on the candidates […]’. Procedure: By decision of 17 March 2010, the Commission decided to advertise the post of OLAF General Director internally (pursuant to Article 29(1)(a)(i) and (iii) of the Staff Regulations) as well as externally (pursuant to Article 29(2) of the Staff Regulations). The post was accordingly advertised internally (under vacancy notice COM/2010/842 published on 9 April 2010) and externally (under vacancy notice COM/2010/10255, published, inter alia, in OJ C 91 A of 9 April 2010). In both cases, the deadline for submitting the application was set as 7 May 2010. The post was advertised as a position of ‘Director-General’ since the grade of publication corresponds to that grade. On 12 May 2010, the Commission decided to adopt the procedure to be followed for the selection of the post of OLAF’s Director-General. A member of the Supervisory Committee attended the pre-selection panel and the CCA as an observer. On 21 September 2010, the Commission transmitted a list of six names to the Supervisory Committee. According to Article 12(2) of Regulations (EC) No 1073/1999 and (Euratom) No 1074/1999, ‘the Commission shall […] after a favourable opinion has been given by the Supervisory Committee, draw up a list of suitable qualified candidates’. Therefore, the Supervisory Committee considers that its main role in the procedure is to ensure that the selected candidates have the necessary qualifications to fulfil the position of Director-General. Opinion of the Supervisory Committee The Supervisory Committee considers that the Director-General of OLAF should have the ability and determination to lead a complex, multi-task organisation in a multinational context in order to deliver concrete results in the fight against fraud and corruption in Europe. He or she should have sufficient background in this field in order to command the loyalty and the respect of a highly specialised team, and in order to ensure credibility both within and outside OLAF. He or she should show proof of outstanding management capacities in order to confront the current challenges of OLAF which have often been described by the Supervisory Committee in its various opinions. He or she should have sufficient experience of the work in an international and multicultural context in order to quickly address the specific challenges of such a complex institutional environment. Moreover, as guardian of the independence of OLAF, the Supervisory Committee attaches a particular importance to the commitments of the candidates to the independence of the organisation as well as to their vision as regards the specific role of OLAF within the European institutions. All these requirements are appropriately listed in the vacancy notice. Following examination of the applications submitted by the persons concerned, and the reports of the pre-selection panel and of the CCA, the OLAF Supervisory Committee unanimously adopts a favourable opinion on the candidature of three candidates and adopts on a majority basis a favourable opinion on the three remaining candidates. For the OLAF Supervisory Committee The President

ANNEX 4 OPINION No 3/2010 on the Reflection Paper on the Reform of the European Anti-Fraud Office (OLAF) Brussels, 23 September 2010 INTRODUCTION The Supervisory Committee (SC) thanks the Commission for the Reflection Paper (henceforth RP) of 6 July 2010 and supports its wish to relaunch the reform of Regulation (EC) No 1073/1999. The SC would like to stress the importance of defining new ambitions for the European Anti-Fraud Office (OLAF) and the necessity to reform it in the context of the dramatic changes in the area of European public financing in the last 2 years. The financial crisis has prompted the European Institutions and the Commission in particular, to adopt measures to increase financial resources in certain sectors. This policy must be accompanied now by measures to monitor the commitment and use of European public expenditure. European citizens must be certain that OLAF has the necessary means to combat any increase in fraud, corruption or any other illegal activity likely to undermine the EU’s financial interests. The SC notes that the consolidation of the anti-fraud legislation into a single legal framework will be considered at a later stage and be linked to the debates on the creation of a European Public Prosecutor’s Office. The SC takes note of the proposal to enhance interinstitutional dialogue and considers that it could represent an instrument to ensure broad political support for OLAF’s fight against fraud. However, this dialogue cannot imply political guidance of investigations. As guardian of OLAF’s independence, the SC is prepared to take the lead in the organisation of this dialogue. The SC notes that the RP lays emphasis on questions relating to governance of OLAF and agrees with the necessity to find remedies in order to improve OLAF’s efficiency and reduce the duration of procedures. Nevertheless, such remedies cannot only consist of changes to organisational structure and the SC regrets that the RP does not make any proposals with regard to the competence of OLAF in investigations both internal and external. In this context, the SC would like to stress the new opportunities opened up by Article 325 TFEU which calls for an ‘effective and equivalent protection in the Member States and all the Union’s Institutions, bodies, offices and agencies.’ The SC emphasises that the planned reform should, under no circumstances, reduce OLAF’s operational independence. It maintains strongly that the current institutional architecture must be retained: integration of OLAF into the Commission, independence of the Director-General in his/her investigative function and the monitoring of OLAF’s independence by a SC composed of experts from outside the Institutions are all essential features which must be preserved. On the other hand, the SC is concerned that the proposal to create a Review Adviser could increase the administrative burden on OLAF and could undermine the essential functions of the SC. The status of this new body is unclear. Whilst the SC appreciates the will expressed by all EU Institutions to strengthen its role, it nevertheless wishes to stress that the proposal as set out in the RP, whereby the SC would receive only statistical data in order to carry out its work, would deprive it of any means to exercise appropriate monitoring of OLAF. It is essential that the SC has full access to case files in order to safeguard OLAF’s independence by monitoring the efficiency and effectiveness of its investigatory procedures. In the context of the reform process, the SC also warns of the risk of ‘overregulation’, which would deprive OLAF of the necessary room for manoeuvre in its work. Moreover, any additional legal obligation in the regulation could, at a later stage, give rise to judicial review. The SC shares the concerns raised by the Commission with regard to the length of investigations and the necessity to better ensure the protection of fundamental rights. As explored below, the SC considers that it is the responsibility of the leadership of OLAF to manage investigations in such a way that swift handling and full respect of procedural rights are maintained and guaranteed, while the SC plays a monitoring role in this regard. The SC also considers that the next Director-General of OLAF should be consulted on this reform. The present document is a contribution from the SC to the debate. It takes into account the interinstitutional discussions which have already taken place and aims to express the SC’s views on the main points of the RP. Based on an analysis of how the efficiency of investigations could be improved (Part I), it will make proposals regarding the organisational aspects of OLAF (Part II). 1. STRENGTHENING THE EFFICIENCY OF OLAF’S INVESTIGATIVE FUNCTION 1.1. Reinforcing OLAF’s powers of investigation The SC considers it essential to the reform that provisions concerning external and internal investigations be reinforced. The three Institutions have made alternative proposals to deal with this key matter which should be carefully studied. In particular, further clarification is required regarding OLAF’s powers to carry out on-the-spot checks and inspections as provided by Regulation (EC) No 2185/96 in cases of fraud, corruption or illegal activities linked to contracts, grant agreements and decisions concerning EU funding. The SC favours a clear definition of OLAF’s powers at each stage of its investigations. The progress made in the Reform outlining the details of these stages is noteworthy but could be further improved. — Explicit reference should be made to intelligence analysis. — Regarding the ‘opening of investigations’ the SC would welcome a differentiation between internal and external investigations. — In order to allow OLAF to concentrate on the most serious cases, a de minimis policy should be included in the future Regulation. — The ‘investigation procedure’ stage requires a more structured legal approach and the related provisions could be revisited. The SC also points out that Article 325 TFEU provides an effective and equivalent level of protection of the EU’s financial interests in all Member States and all the EU’s Institutions, bodies, offices and agencies. Furthermore, contrary to former Article 280 TEC, Article 325 TFEU no longer excludes the adoption of measures that concern the application of national criminal law or the national administration of justice. The new options made available by the Lisbon Treaty should be used to introduce provisions which would allow enhancement and improvement in cooperation between OLAF and the national judicial authorities. For example, in order to better ensure the equivalent level of protection of financial interests within the entire EU, consideration should be given to further assess the legal value of OLAF evidences within the EU. Moreover the new Regulation should guarantee, with regard to internal investigations, that the same procedures apply to all Institutions, bodies, offices and agencies. 1.2. Duration of investigations The SC has regularly stressed the excessive duration of investigations and welcomes all measures which could improve the situation. The SC considers that direct control of the duration of investigations should first be carried out internally by those primarily responsible i.e. OLAF management and the Director-General. The SC should regularly monitor this aspect of OLAF’s activities and support the control of OLAF’s Director-General over deadlines. Overall, the SC agrees with the mechanisms proposed by the RP with regard to the regular transmission of information at the various stages of the procedure. This transmission is of the utmost importance for the SC to ensure the respect of OLAF’s independence by excluding external interference in the impartial conduct of investigations and ensuring that delays do not prevent the intended result of an investigation, for example, by running up against any time barring issues. The SC also welcomes the introduction of a deadline for the assessment period and considers that, as a general rule, this first part of the investigation should also fall within its monitoring responsibilities, thus providing an added guarantee of OLAF’s operational independence with regard to the opening of investigations. In this regard, the Regulation should provide for transmission to the SC of the following information. (1) Reports on investigations which have not been closed in 12 months (including the assessment period); the report will explain why the investigation has not been concluded and estimate the timeframe needed for its completion. Sufficient follow-up mechanisms should be ensured. (2) For cases lasting more than 30 months, OLAF shall submit every 6 months an overall progress report on the investigations to the SC containing the measures taken to close the cases. (3) Statistical reports on OLAF’s operational activities, including performance indicators based on qualitative parameters, which can be used by the SC as an additional tool for its monitoring. 1.3. Strengthening defence rights The RP rightly outlines the need to strengthen the monitoring of OLAF’s investigations, in particular with regard to the respect of fundamental rights and procedural guarantees. In this regard, the SC considers that, on the one hand, the rules governing OLAF’s investigations should be clarified concerning defence rights and, on the other, the accountability of OLAF should be increased with regard to the internal procedures in place for the implementation of these rights. 1.3.1. Clarifying the rules The SC welcomes the will of the Institutions to clarify the rights and obligations of persons under investigation, the rights and obligations of OLAF, the Institutions and the Member States before, during and after an investigation. The SC will make further proposals in its forthcoming opinion on this subject. 1.3.2. Enhancing the procedures The SC considers that it is first and foremost the responsibility of the Director-General of OLAF and of the management team to decide whether or not to open an investigation and to ensure the respect of the fundamental rights of persons under investigation. It falls within the remit of the Director-General of OLAF to put in place adequate internal controls and monitoring mechanisms. In this regard the SC wishes to express its serious concerns with regard to the creation of a Review Adviser. The SC considers the status and competence of the Review Adviser to be unclear. As an official designated by OLAF DG, he/she cannot be independent. In addition, the creation of a Review Adviser could raise the following problems: — a shift in the institutional balance of OLAF since the addition of a Review Adviser could both impede the role of the SC whilst at the same time depriving it of access to essential information for its monitoring role, — a risk of increased delays in already over-lengthy investigations, — a significant risk of loss of ownership and responsibility for OLAF management team of the control of respect of fundamental rights, — duplication of other existing mechanisms (the Ombudsman, the a posteriori judicial review, etc.), — potential additional cost to the EU budget. Bearing in mind the importance of ensuring appropriate respect for fundamental rights within OLAF, the SC is prepared to consider the creation of the role of a Complaints Officer who would analyze complaints against OLAF and advise OLAF’s Director-General in this regard. Such a function exists in many national administrations and OLAF could follow some already existing best practices. A ‘review panel’ as proposed in the RP could also be a possibility. In any event, the creation of this function should not overlap with the powers and responsibilities of the SC and the SC should in all cases be notified of all complaints. Whilst the SC appreciates the Commission’s desire to put in place independent and external control mechanisms, it nevertheless believes that within the general architecture governing the organisation of OLAF, the SC is the only body which meets this requirement. Therefore, the SC suggests that its role in the monitoring of procedures, particularly with regard to the respect for fundamental rights and with regard to delays in investigations, should be strengthened in the following way: — The Regulation could provide that the SC would deliver, on an annual basis (possibly in the framework of its annual report), an analysis of OLAF’s compliance with respect for fundamental rights in its investigations. This report would be based on the information sent to the SC by OLAF concerning the actions it has taken to ensure full respect for fundamental rights and on the SC’s own monitoring activities. — Where necessary and in exceptional circumstances, the Director-General could invite the SC to carry out special checks when serious shortcomings are brought to his/her attention during an investigation. The results of this checking would be disclosed only to the Director-General of OLAF. 1.4. Cooperation between OLAF and the Institutions, bodies, offices and agencies on its investigative function The SC favours clarification within the Regulation of those rights and obligations which apply to OLAF and the Institutions in the context of the fight against fraud. This is of particular importance as the Commission could be held responsible for OLAF’s activities. 1.4.1. Information to the Institutions and bodies concerned OLAF has a duty to communicate to the Institutions, bodies, offices and agencies as soon as possible, at the beginning of its investigations, any necessary information concerning fraudulent behaviour by persons subject to the statutes, persons working for an institution or a delegation. Such an obligation to inform the Institution could also be considered to apply to economic operators receiving grants or contracts paid directly or indirectly out of the EU budget. Communication of this information could be subject to confidentiality measures to protect the investigation. These communications aim at allowing the Institution to manage as far as possible the financial and administrative consequences of such behaviour in order to limit the financial consequences. In the course of an investigation, OLAF could still communicate additional information which would be useful for the Institution concerned. At the conclusion of its investigations, OLAF communicates to the Institution concerned its findings and recommendations. The SC welcomes the idea of enlarging its role with regard to the supervision of exchange of information between OLAF and the Institutions as set out in the RP. In order to allow the SC to play this role, OLAF should notify the SC on a regular basis (every 3 or 6 months for example) as to what information has been transmitted to the Institutions in open cases. At the same time, the SC should also be alerted of any cases where appropriate confidentiality has been ignored. OLAF should also set up a regular reporting system to the SC for cases where an institution, body, office or agency has failed to act on OLAF’s recommendations. OLAF should also transmit all final reports on investigations and on closure of follow-up and an annual report summarising the follow-up given by the administrative authorities and the judicial authorities of the Member States and, if necessary, of the third countries to the transmissions they receive. 1.4.2. Access by OLAF to information held by EU Institutions, offices, bodies and agencies Since its creation, OLAF has encountered difficulties in obtaining access to information from certain Institutions and, in particular, access to certain databases. It causes problems for the intelligence aspect of OLAF’s activities. The SC considers that further attention should be given to this issue which could create real threats to OLAF’s independence. OLAF should systematically send to the SC any information concerning delays in reporting or the failure to report fraud cases, as well as failure by an institution, body, office or agency, to provide access to information held by them. 1.5. Cooperation between OLAF and the Member States The SC endorses the reinforcement of cooperation by imposing on the MS the obligation to assist and support OLAF in the conduct of investigations, to send any document that could be useful to an investigation and to report to OLAF on the action taken following receipt of its investigation report. The SC welcomes the regular reporting on the progress made by the MS authorities to OLAF and OLAF should systematically inform the SC of cases where there is a lack of cooperation from MS authorities. The SC is conscious that OLAF has often encountered difficulties relating to the identification of competent contact persons to assist with its investigators in the MS (e.g. on-the-spot checks on direct expenditure) and confirms the need for every MS to name appropriate contact points for OLAF within their national administrations. MS should inform OLAF of the particulars of the national contact persons for OLAF. It is for OLAF to inform and, where appropriate and depending on OLAF’s capacities, train the staff of those national administrations in order to promote better understanding of EU procedures and OLAF’s needs. This will create a better synergy between services and make OLAF’s investigations more effective. It should be remembered that, given its limited resources, OLAF cannot handle all the fraud cases brought to its notice and therefore it should be possible for some of them to be transferred to national administrations, taking account in particular of the thresholds put in place by OLAF for the opening of investigations in the fields concerned. 1.6. Cooperation between OLAF and EUROJUST, EUROPOL, international organisations and third countries OLAF should have the legal means, under the general umbrella of the Commission, to conclude cooperation agreements with agencies, Member State administrations, third country services and international organisations in order to accelerate its proceedings and make the fight against fraud more effective. Clauses providing for checks by the Commission (or institution, body, office or agency concerned) and OLAF must be included in all financing contracts even when the EU budget is not the sole financing body. 1.7. Enhancing the statute and role of OLAF management 1.7.1. Status, nomination and powers of OLAF Director-General As previously stated in the current Opinion, the SC believes that the best way to improve the functioning of OLAF is to grant its Director-General sufficient powers and authority to ensure the efficient functioning of investigations together with full respect for fundamental rights. This can only be achieved if the Director-General of OLAF is granted on the one hand full membership of the Commission’s senior staff and, on the other, broader autonomy, functional independence and responsibility. — Title: The SC therefore proposes that the current title of OLAF’s Director be replaced by the title of Director-General which would place him or her at the same hierarchical level as his/her peers in the other Directorates-General. — Term of mandate: The SC is in favour of a non-renewable mandate in order to reinforce the OLAF Director-General’s independence. — Appointment procedure: — The SC considers that the appointment procedure currently set out in the Regulation should be retained. — The SC agrees with the EP with regard to the necessity of avoiding delays in the appointment procedure. Given that the SC is thoroughly versed in the functioning and needs of OLAF, the binding nature of the SC’s Opinion on the candidates should be retained. The SC’s knowledge is unique and valuable when it comes to appointing a new Director-General; its involvement is an important element ensuring the independence of the Director-General. — Intervention by OLAF in proceedings before national judicial authorities: The SC considers that the potential involvement of OLAF in proceedings before national judicial authorities, as a recognised investigative expert, as is already the case in some Member States, should be possible in all EU countries. It would increase the visibility of OLAF and ensure that national judicial authorities have a better understanding of the results of its investigations. — Intervention by the Director-General in proceedings before the European Court of Justice (ECJ): The procedure laid down in Article 12(3) must be retained. OLAF does not have locus standi and cannot therefore participate in EU court proceedings. However, where an OLAF investigation or the results of an investigation are challenged before an EU court, it would be important to ensure that the Court is properly informed, and to allow OLAF to put forward its arguments or statements of grounds, at the preliminary stage of the proceedings and during the hearing before the ECJ. 1.7.2. Nomination and status of OLAF senior management The Regulation should provide for specific rules ensuring the continuity of OLAF’s activities, in case of the absence or unavailability of the Director-General. These rules should also ensure that in such cases the operational independence of OLAF is preserved and that there is some degree of interinstitutional consensus behind the procedure for the replacement of the Director-General. Such replacement may take place by allowing, in accordance with the applicable rules for delegation within the Commission, the Director-General to delegate powers whilst taking into account OLAF’s particular profile, namely independence in the investigative function and the necessity to have some degree of interinstitutional consensus. It is also possible to provide for a specific position of deputy Director-General, whose appointment procedure would, to some extent, be comparable with that of the appointment of the Director-General. This would ensure independence and respect the involvement of the three Institutions, whilst taking into account the opinion of the Director-General to avoid any possible conflicts between them. 2. POLITICAL GOVERNANCE AND DIALOGUE WITH THE INSTITUTIONS: REINFORCEMENT OF INDEPENDENCE 2.1. Interinstitutional dialogue The SC could agree to the introduction of a regular interinstitutional dialogue covering the fight against fraud and corruption. The SC believes that this could be the occasion to reach a strong political consensus regarding the protection of the financial interests of the EU and that such regular exchanges could support OLAF’s activities. In any case, the SC considers that this dialogue should under no circumstances be an occasion to undermine the operational independence of OLAF. It is for this reason that, as principal guardian of OLAF’s independence, the SC proposes to manage this dialogue. It should allow the Institutions to meet regularly at the invitation of the SC and to debate the priorities in the fight against fraud. It should replace neither the existing bilateral relations between DG OLAF and the Institutions nor those between the SC and the Institutions. 2.2. The Supervisory Committee The SC welcomes the statement that all the European Institutions agree that the SC plays an important role and that its powers must be strengthened. 2.2.1. The role of the SC It approves the statement of the RP to the effect that the SC must be given additional tasks. Given its experience, the SC considers that its role is to ensure respect for OLAF’s independence by monitoring OLAF’s operational activities, the effectiveness of its work, compliance with investigation rules and with fundamental rights and thus provide support to the Director-General of OLAF. The SC will issue opinions at its own initiative or at the request of the OLAF DG concerning, in particular, the length and effectiveness of investigations, procedural guarantees and compliance with pre-established standardised criteria concerning the initiation of or refusal to initiate an investigation, or concerning operational instructions, in particular those set out in the OLAF Manual. The Supervisory Committee is aware, and confirms, that it must not interfere in ongoing investigations. However, should it identify in a case report or file a serious or potentially serious procedural irregularity or malpractice likely to have negative implications for OLAF and/or the European Institutions, the SC Chairman must inform the OLAF DG immediately. 2.2.2. Composition and appointment procedure The SC agrees with the idea of appointing and renewing its members in stages to ensure the continuity of its work and to preserve expertise. 2.2.3. The SC’s resources Transmission of Information by OLAF to the SC and access to data The SC is extremely concerned with regard to the views expressed in the RP concerning access by the SC to documents, in particular the idea of confining access to ‘statistical data’. There appears to be a contradiction in the RP which considers that the role of the SC should be enhanced, while at the same time limiting its access to information. As a result the SC would be unable to exercise effective control over OLAF’s activities. The proposal as expressed in the RP would deprive the SC of its main task and tool for action: to maintain OLAF’s independence through the regular monitoring of its investigations. Limiting the SC’s access to data, as proposed in the RP, appears to be motivated partly by the fear that the SC would interfere in OLAF’s conduct of investigations and partly by the requirements set out in data protection legislation. On the first point, the SC would like to stress that no such interference has occurred during its mandate and that it has always strictly fulfilled its obligations in this regard. Regarding data protection, the SC agrees in general with the idea of access on a ‘need to know’ basis. It nevertheless considers that it would be unable to perform its monitoring function if it were deprived of access to the appropriate information. This monitoring function cannot be performed on the basis of statistics alone. The SC regularly receives statistics supplied by OLAF which can support its analysis but would under no circumstances be sufficient to allow the SC to fulfil its tasks. Effective monitoring can only be carried out on the basis of examination of documents forming part of the investigation. This monitoring is a guarantee of the independent conduct of investigations and also for the persons involved (in particular as regards the length of investigations and the potential protection of their fundamental rights) and for the European Institutions. Regular monitoring by the SC of the implementation of the investigative function guarantees the OLAF’s independence and the respect for the fundamental rights of persons involved. Moreover, given the intention of the European Institutions to establish an interinstitutional dialogue on the functioning of OLAF and the fight against fraud, a dialogue which could be chaired by the SC, there is a contradiction in asking it for its opinion while at the same time depriving it of all means of forming an opinion. The SC therefore considers that the future Regulation should clarify the rules of access to information relevant to monitoring of investigations. The new Regulation should specify more clearly the type of information to be transmitted to the SC: — In addition to the reports and information described in points 1.2, 1.4 and 1.5, OLAF should transmit to the SC all cases intended for transmission to national judicial authorities and all cases where it is suspected that a criminal offence may have been committed but which are not transmitted due to time-barring restrictions under the applicable national legislation. — The SC should also have access, upon written request, to any case files, giving reasons where appropriate. Secretariat Services Support services for the SC Secretariat are provided by OLAF and the members of the secretariat are appointed by the Appointing Authority in agreement with the SC. The secretariat should be adequately staffed to allow it to perform all the tasks entrusted to it. Annex to the SC Opinion on the reflection paper on the reform of OLAF This paper is based on the opinion of the SC and summarises the SC’s response to the questions put forward in Annex 1 of the RP. Main points of the Reflection Paper Position of the SC 1. Governance and dialogue with the Institutions (see point 2.1 of the SC’s Opinion) Type of dialogue and participants — The SC could agree with the introduction of an interinstitutional dialogue, providing that it does not, under any circumstances, interfere wi