Case T‑483/13

(publication by extracts)

Athanassios Oikonomopoulos

v

European Commission

‛Non-contractual liability — Damage caused by the Commission in the context of an OLAF investigation and by OLAF — Actions for damages — Action for a declaration that certain measures taken by OLAF were void and inadmissible for evidentiary purposes before the national authorities — Admissibility — Misuse of powers — Processing of personal data — Rights of the defence’

Summary — Judgment of the General Court (Fourth Chamber), 20 July 2016

Own resources of the European Union — Regulation on protection of the financial interests of the Union — Proceedings relating to irregularities — Limitation period — Act interrupting the period — Act of the competent authority brought to the knowledge of the person concerned and envisaging investigation or prosecution of the irregularity — Concept

Actions for damages — Jurisdiction of the EU judicature — Limits — Jurisdiction to rule on evidence having to be regarded as inadmissible in the context of criminal proceedings before the national courts concerning an investigation of the European Anti-Fraud Office (OLAF) — Exclusion

The action for damages is an autonomous form of action, with a particular purpose to fulfil within the system of actions and subject to conditions on its use dictated by its specific purpose. An application for a declaration that the measures taken by OLAF are legally void amounts, in reality, to asking the Court to invalidate the measures taken by OLAF and to hold they have no legal effect. That goes beyond the mere finding of unlawfulness that the Court may be called upon to make in connection with an action for damages. That declaration of inadmissibility does not constitute breach of the right to effective judicial protection or of the principles of sound administration of justice and procedural economy. Judicial review of compliance with the European Union legal order is ensured, as can be seen from Article 19(1) TEU, by the Court of Justice and the courts and tribunals of the Member States. To that end, the FEU Treaty has established, by Articles 263 and 277 TFEU, on the one hand, and Article 267 TFEU, on the other, a complete system of legal remedies and procedures designed to ensure judicial review of the legality of European Union acts, and has entrusted such review to the European Union judicature. The decisions taken by the national authorities on the basis of the information provided by OLAF must be actionable before the national courts, which, in turn, may refer a question for a preliminary ruling on the interpretation of the provisions of EU law which they deem necessary in order to deliver their judgments. It follows that the mere fact that a head of claim is declared inadmissible is not sufficient to demonstrate a breach of the right to effective judicial protection or of the principles of sound administration of justice and procedural economy. (see paras 26, 27, 29, 31)

Action taken by the national authorities in response to information forwarded to them by OLAF is within their sole and entire responsibility and that it is for those authorities to ascertain whether such information justifies or requires the bringing of criminal proceedings. Consequently, judicial protection against such proceedings must be ensured at national level with all the guarantees provided by domestic law, including those which follow from fundamental rights, and the possibility for the court hearing the action of seeking a preliminary ruling from the Court of Justice under Article 267 TFEU. The national authorities, in the event they decide to open an investigation, would assess the conclusions to be drawn from any possibly unlawful conduct on the part of OLAF and that that assessment could be challenged before the national courts. In the event that criminal proceedings are not brought or are brought to a close by an acquittal, the bringing of an action for damages, before the EU judicature, is sufficient to ensure the protection of the interests of the person concerned by allowing that person to obtain compensation for any loss flowing from OLAF’s unlawful conduct. In that respect, in the context of an action for compensation, a decision by the EU judicature declaring evidence submitted to national authorities to be inadmissible is, evidently, outside the scope of the latter’s jurisdiction. The Court therefore has no jurisdiction to decide that the applicant’s information and data and any relevant evidence sent to the national authorities constitute inadmissible evidence before the national courts. (see paras 33, 34)

A compensation action in respect of loss allegedly suffered through the communication by OLAF of an investigation report concerning the applicant to the national authorities cannot be regarded as premature on the ground that national judicial proceedings are still pending, where the outcome of those proceedings cannot affect the proceedings before the EU judicature. The issue is not to ascertain whether the applicant is responsible for an irregularity or a fraud, but to examine the manner in which OLAF conducted and completed an investigation which refers to the applicant by name and possibly attributes liability to him for the irregularities, and the way in which the Commission conducted itself in the context of that investigation. If the applicant is found not guilty by the national judicial authorities, that finding may not necessarily make good the loss that he would then have suffered. (see para. 37)

The provisions of Regulation No 45/2001, on the protection of individuals with regard to the processing of personal data by the Community institutions and bodies and on the free movement of such data are rules of law intended to confer rights on the data subjects whose personal data are held by the institutions and bodies of the European Union. The very purpose of those rules is to protect such persons from possibly unlawful processing of their personal data. In that regard, in the case of communication by OLAF of an investigation report containing information concerning a natural person to national authorities, it must be held that such information constitutes ‘personal data’ and that ‘processing’ of the latter has taken place within the meaning of Article 2(b) of Regulation No 45/2001 by OLAF. (see paras 51, 53)

In the matter of non-contractual liability of the EU, where Article 25(1) of Regulation No 45/2001 has been infringed since the data were notified after they had been processed, it must be held that the institution concerned has infringed a rule of law whose purpose is to confer rights on the persons concerned by the personal data held by the institutions and bodies of the European Union. However, the question arises whether that infringement may be regarded as sufficiently serious. In that regard, first, it is important to note that, under Regulation No 45/2001, the data protection officer’s role is to ensure that the processing of personal data does not affect the rights and freedoms of the relevant data subjects. In that context, his role is, inter alia, to warn the EDPS against any processing of data which could constitute a risk within the meaning of Article 27 of Regulation No 45/2001. It follows that, if the data protection officer is not informed of that data processing, he will himself not be in a position to notify the EDPS and therefore cannot effectively fulfil the essential task of supervision assigned to him by the European legislature. Moreover, as stated in recital 14 of Regulation No 45/2001, the provisions thereof apply to any processing of personal data carried out by all the institutions. The institutions and bodies of the Union thus have no discretion when applying Regulation No 45/2001. In the light of those elements, the essential character of the data protection officer’s monitoring role and the lack of any discretion on the part of the institutions and bodies of the Union, it must be held that the mere breach of Article 25(1) of Regulation No 45/2001 is sufficient to establish the existence of a sufficiently serious breach of a rule of law intended to confer rights on individuals. (see paras 100-102)

See the text of the decision. (see paras140-142)

It is apparent from the provisions of Regulation No 1073/1999 concerning investigations conducted by the European Anti-Fraud Office (OLAF) that OLAF was given broad competence for the purposes of combating fraud, corruption and any other illegal activity affecting the financial interests of the Union. In order to make the protection of the financial interests of the Union affirmed in Article 325 TFEU effective, it is imperative that the deterrence and combating of fraud and other irregularities occurs at all levels and in respect of all activities as part of which Union interests may be affected by such phenomena. It is in order best to fulfil that objective that the Commission has stated that OLAF should exercise its powers in external administrative investigations. It is also to that effect that, specifically, Article 20 of Regulation No 2321/2002 concerning the rules for the participation of undertakings, research centres and universities in, and for the dissemination of research results for, the implementation of the European Community Sixth Framework Programme provided that the Commission was to ensure that the financial interests of the Union would be protected by the carrying out of effective checks in accordance with Regulation No 1073/1999. Specifically, that regulation provides that OLAF had the power, conferred on the Commission by Regulation No 2185/96 concerning on-the-spot checks and inspections carried out by the Commission in order to protect the European Communities' financial interests against fraud and other irregularities, to carry out spot checks and inspections in the Member States. It is thus apparent that the existence of a contractual relationship between the Union and natural or legal persons suspected of illegal activities has no impact on OLAF’s investigative power. OLAF may conduct investigations in respect of those persons if they are suspected of fraud or illegal activity, notwithstanding the existence of a contractual relationship between those parties. In those circumstances, OLAF’s independence cannot be called into question by raising the suspicion of a conflict of interest on the part of the Commission in the event of a contract concluded by it on behalf of the Union. Recital 12 of Regulation No 1073/1999 highlights the need to ensure that OLAF is independent in carrying out the tasks conferred on it by that regulation, by giving its Director the possibility of opening an investigation on his own initiative. Article 12(3) of that regulation gives effect to that recital. (see paras 144-147, 149)

A decision by OLAF’s Director to open an investigation, like the decision of an institution, body, agency or organ established by, or on the basis of, the Treaties to request that an investigation be opened, may not be taken unless there are sufficiently serious suspicions relating to acts of fraud or corruption or other illegal activities detrimental to the financial interests of the European Union. (see para. 175)

Contrary to what is provided for in Article 4 of Regulation 1073/1999 in respect of internal investigations, no provision expressly provides for the possibility for OLAF to seek oral information as part of external investigations. However, the lack of a specific provision in that regard is not to be interpreted as meaning that OLAF is prohibited from organising interviews as part of external investigations. The power to carry out on-the-spot checks and inspections undeniably entails the power to schedule interviews with people involved in those checks and inspections. Moreover, the interviews conducted by OLAF are not binding, since the relevant persons have the right to refuse to take part or to answer certain questions. Furthermore, Article 7 of Regulation No 2185/1996 and Article 2 of Regulation No 1073/1999, read in conjunction, indicate that OLAF has access under the same conditions as national administrative inspectors and in compliance with national legislation to all the information and documentation on the operations concerned which are required for the proper conduct of the on-the-spot checks and inspections. (see paras 188-190)

No provision of Regulation No 2185/96, concerning on-the-spot checks and inspections carried out by the Commission in order to protect the European Communities’ financial interests against fraud and other irregularities, or, moreover, of any other regulation prevents the Commission or OLAF from carrying out an on-the-spot check or inspection at a subcontractor’s premises without having previously carried out a check or inspection at the premises of the trader suspected of fraud. Provided that it is strictly necessary to establish the existence of an irregularity, OLAF may carry out an on-the-spot check or inspection at the premises of other traders. As for the choice to conduct an inspection at that subcontracting trader’s premises prior to that carried out at the premises of the trader suspected of fraud, it could be justified by the necessity of contriving an element of surprise. In any event, provided the inspections carried out comply with Regulation No 2185/96, the choice of the timing of those inspections is a matter solely for the Commission and OLAF to determine. (see paras 197, 199)

See the text of the decision. (see paras 213-215)

Under the third subparagraph of Article 3(1) of Regulation No 2988/95 on the protection of the European Communities’ financial interests, the limitation period for bringing proceedings against the person in question may be considered to have been interrupted only by an act notified to the latter. Where the person is informed by letter that he is considered a person concerned by an OLAF investigation and he had been in contact with OLAF representatives, since there was a reference to the applicant’s email of 6 July 2011 to OLAF, that letter must be regarded as having interrupted the limitation period and caused a new period of four years to start running from the date of the letter. (see para. 217)

See the text of the decision. (see para. 219)

There is no obligation laid down in any regulation to inform the data subjects as part of OLAF’s external investigations. However, with respect to internal investigations, Article 4 of Commission Decision 1999/396/EC, concerning the terms and conditions for internal investigations in relation to the prevention of fraud, corruption and any illegal activity detrimental to the Communities’ interests, provides that the party concerned is to be informed rapidly where that does not risk undermining the investigation, save in cases necessitating the maintenance of absolute secrecy. Observance of defence rights being sufficiently guaranteed during an internal investigation by OLAF if the latter complies with the said Article 4, the same applies to OLAF’s external investigation procedure. Thus, observance of the rights of the defence is sufficiently guaranteed in such an investigation if, like what is provided for in Article 4 of Decision 1999/396, the person is promptly informed of the possibility of personal involvement in acts of fraud, corruption or illegal activities detrimental to the interests of the Union, where doing so does not interfere with the investigation. (see paras 229-231)