WRITTEN QUESTION E-3528/97 by Jaak Vandemeulebroucke (ARE) to the Commission (12 November 1997)

Subject: Combating and eliminating international meat-fraud networks, unauthorized exports of British beef and allocations of export refunds

Throughout the summer the Union has been astounded by revelations of the activities of international networks specializing in fraudulent trading in meat and, since the imposition of the embargo on exports of British beef and beef-products, the illegal import of British beef. These criminal organizations have also succeed in claiming export refunds on the export of the illegal meat to third countries. These activities are undermining the credibility of the whole European meat industry and pose a threat to orderly trading relations with the rest of the world. A number of third countries have moreover already announced that they will stop trading with the EU in the products concerned.

Can the Commission:

1. Confirm that international networks are behind this fraud? Can it also tell me in what Member States these criminal organizations are active?

2. State whether it was aware of the fact that the criminals hiding behind the firm of Targex-Gel, based in Wingene, had been engaging in these practices for many years under different company names (Bero and Van Poucke), and are moreover under suspicion in connection with investigations into illicit dealings in Romanian meat in 1994 and illegal imports of US meat in 1995-1996?

3. Carefully explain and clarify how, if it was aware of the above facts, it is possible for the same persons now to be involved in the illegal importing of British meat? Can the Commission explain what the responsibilities of the national governments concerned are and, if possible, the dysfunctions in international consultations between Member States with each other and between Member States and the Commission?

4. Confirm that a number of criminal organizations are making use of Article 1 of Commission Decision 96/362/EC of 11 June 1996 ((OJ L 139, 12.6.1996, p. 17.)) which amended Article 1 of Commission Decision 96/239/EC (i.e. the embargo decision of 27 March 1996 ((OJ L 78, 28.3.1996, p. 47.))), which puts the UK in a position to export meat products and processed meat products for human consumption provided that these have been obtained from bovine animals which were not slaughtered in the UK and come from establishments in the UK under official veterinary control? Can the Commission confirm that this Article provides a number of criminal organizations with the port of entry for organizing fraudulent shipments?

5. Explain why the original embargo decision was amended to the above effect?

6. Confirm that criminal organizations are making use of the regulations applicable to export refunds to enrich themselves illegally? Can the Commission state what action it will take in such cases?

7. State whether it is prepared to hold a wide-ranging debate on the need to adjust the rules on export refunds and other forms of subsidy that criminal organizations are using to finance their activities?

8. State how it views the prospects of combating this type of international crime and what measures it recommends for so doing?

Answer given by Mrs Gradin on behalf of the Commission (6 January 1998)

1. The Commission is aware that companies of various Member States (i.e. Belgium, Germany, Ireland, the Netherlands and United Kingdom) have been involved in fraudulent trading of beef meat of British origin.

2. The Commission knows that some of those involved have committed similar frauds in the past using different company names. Several infringements have been established by the customs authorities of the Member States, which have carried out investigations under the co-ordination of the Commission. Moreover, some cases are being handled by the Belgian judicial authorities. These cases are still pending. However, these previous cases do not concern unauthorized exports of British meat in contravention of the embargo.

3. Despite the fact that infringements had been established by the authorities as indicated under point 2, some people were able to continue their fraudulent activities. The Commission has established that the Member States concerned did not reinforce their control measures.

4. and 5. Article 1 of Decision 96/239/EC of 27 March 1996 on emergency measures to protect against bovine spongiform encephalopathy prohibited the dispatch from the United Kingdom of meat and products from bovine animals slaughtered in the United Kingdom. Meat and products from bovine animals slaughtered outside the United Kingdom were not prohibited. Decision 96/362/EC of 11 June 1996 amending Decision 96/239/EC on emergency measures to protect against bovine spongiform encephalopathy introduced a new Article 1(a) containing provisions for approval and listing of establishments processing such products, notification of this list to the Commission and other Member States and certification. It also introduced a specific requirement for Community inspections to check on the application of the Decision.

To date the Commission has no indication that Article 1.a. of Commission Decision 96/239/EC, as amended by Commission Decision 96/362/EC, has been abused.

6. The Commission is aware that some operators try to abuse the system of export refunds when exporting their products to third countries. The Commission has asked the Member States to provide the necessary information in the framework of the Council Regulation (EC) No 1469/95 of 22 June 1995 on measures to be taken with regard to certain beneficiaries of operations financed by the guarantee section of the EAGGF ((OJ L 145, 29.6.1995. )) and Commission Regulation (EC) No 745/96 of 24 April 1996 laying down detailed rules for the application of Council Regulation (EC) No 1469/95 on measures to be taken with regard to certain beneficiaries of operations financed by the guarantee section of the EAGGF ((OJ L 102, 25.4.1996. )).

7. As far as export refunds are concerned, Council Regulation (EEC) No 386/90 was adopted on the monitoring carried out at the time of exports of agricultural products receiving refunds or other amounts ((OJ L 42, 16. 2.1990, amended by Regulation (EC) No 163/94, OJ L 24, 29.1.1994. )). On the basis of this Regulation, criteria for risk analysis as regards agricultural products receiving refunds have been laid down in Commission Regulation (EEC) No 3122/94 ((OJ L 330, 21.12.1994. )) and the detailed rules on physical checks carried out at the time of export (Commission Regulation (EEC) No 2030/90 ((OJ L 186, 18. 7.1990. ))) have been re-examined in the light of experience gained and have been improved in 1995 (Commission Regulation (EC) No 2221/95 ((OJ L 224, 21. 9.1995, amended by Regulation (EC) No 1167/97, OJ L 169, 27.6.1997. ))).

Furthermore, a system of sanctions and detailed rules on the recovery of amounts unduly paid has been introduced in the export refund scheme by Commission Regulation (EEC) No 2945/94 ((OJ L 310, 3.12.1994. )) and measures to prevent certain deflections of trade have been taken by Commission Regulation (EC) No 313/97 of 20 February 1997 amending Regulation (EEC) No 3665/87 laying down common detailed rules for the system of export refunds on agricultural products ((OJ L 51, 21.2.1997. )).

The legal basis for the fight against illicit traffic exists and these rules have been and are being strengthened in the process of improvement of the legislation. The effectiveness of these rules depends on their application by Member States and in particular on the inspection carried out by Member States. Accordingly, the Commission does not intend to launch a wide-ranging debate on the need to adjust the rules. But the Commission will obviously follow closely the correct application of the rules by the Member States.

8. It is of the utmost importance for the Commission that Member States reinforce their controls with the operational support of the Commission. In addition, the Commission has an important role to play in the exchange of information and the follow up of the judicial procedures.

The adoption of Council Regulation (EC, Euratom) No 2988/95 ((OJ L 312, 23.12.1995. )) and Council Regulation (Euratom, EC) No 2185/96 in the field of the protection of the European Communities financial interests ((OJ L 292, 15.11.1996. )) strengthens at a general level the legal basis for checks as well as for administrative measures and penalties. The Convention on the protection of the financial interests of the European Communities ((OJ C 316, 27.11.1995. )) and the two Protocols to the Convention ((OJ C 313, 23.10.1996, OJ C 221, 19.7.1997. )) have been agreed by the Council, and there is a political commitment to their ratification before the middle of 1998. These instruments would also help the Commission and the Member States to fight and penalise this kind of international criminality. Moreover, the action plan to combat organised crime adopted by the Council on 28 April 1997 ((OJ C 251, 15. 8.1997. )) contains various measures such as practical co-operation between police, judicial authorities and customs that the Commission strongly supports.