Protection of the Communities' financial interests - Fight against fraud - Work programme 1998/1999
Date: 1998-05-06
Institutions: European Commission
Subjects: EU financing, EU programme, financial policy, fraud against the EU, market protection

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 06.05.1998 
COM(1998) 278  final 

PROTECTION OF THE COMMUNITIES' FINANCIAL INTERESTS 

FIGHT AGAINST FRAUD 

WORK PROGRAMME 1998/1999 

(presented by the Commission) 

The protection of Community financial  interests and policies is a constant priority for the 
authorities  of  the  Member  States  and  the  European  institutions.  Since  1989,  the 
Commission  has  rationalised  its  initiatives  within  the  framework  of  its  annual  work 
programme, which takes account of the major  strategy guidelines of its anti-fraud  policy1 
supported by the European Parliament and the Council. 

In  this  context,  the  1998/99  work  programme  will  be  marked  by  a  series  of  new  and 
important initiatives in particular  in the framework  of preparation of accession candidate 
countries,  protection  of  consumers  against  the  risks  of  counterfeiting,  defence  of  the 
single  currency  against  counterfeiting,  laundering  of  the  product  of  fraud  against  the 
Community  budget as well as adaptation  of the Commission's  anti-fraud  structure to the 
demands  of  its  tasks.  At  the  same  time  ,  it  is appropriate  to  continue  preventive  action 
already  commenced,  to  ensure  reinforcement  of  presence  on  the  ground  with  the  task 
groups set up in high risk sectors and to strengthen further  customs cooperation. 

All the actions planned in this programme are split into four priority sectors. 

1. 

Development of operational actions and strategic activities. 

The  1998/99 work programme reiterates in its first section the initiatives already taken in 
previous years to continue action on the ground and intelligence activities so as to  define 
new  guidelines  in  the  fight  against  fraud  on  the  basis  of  a  consolidated  acquis  and 
reinforced  cooperation between the Member States and the Commission. 

Since  1994 work  on the ground  together  with the national  authorities  has brought  about 
significant  results,  particularly  in  sensitive  sectors  involving  organised  trafficking.  It  is 
important to continue this policy, which has moreover  been supported  by the Council  in 
its  work  on  all  types  of  organised  crime.  Reinforcement  of  the  Community  approach, 
which was achieved by working together with specialised  services, including the judicial 
authorities,  will  make  it  possible  to  improve  both  the  detection  of  fraud  and  the 
prosecution  of  fraudsters.  The  development  of  the  Commission's  operational  activities 
with multi-disciplinary teams and the "task group" system is in line with this approach. 

Improvements  to  data-processing  equipment  and  tools  and  to  the  follow  up  to 
notifications  is aimed  at strengthening  the use of intelligence  in risk analysis to enhance 
knowledge of the fraud  phenomenon, in particular where transnational  criminal  networks 
exploit  weaknesses  in  trade,  import  or  export  regimes  to  escape  surveillance  by  the 
authorities  of  considerable  quantities  of  highly  taxed  products2  at  national  and 
Community level or to benefit  unduly from  favourable  commercial policy measures. This 

Protection of financial  interests: anti-fraud strategy. COM(94)92 final of 23.4.1994: 

reinforcing the presence on the ground and support for operations, concentrating on high-risk sectors; 
strengthening  the  partnership  between  the  Commission  and  the  Member  States,  extending  information 
networks and improving the exploitation of intelligence; 
improving the Community legislative framework in every sector of activity. 
securing greater compatibility between national legislation. 

In particular cigarettes and alcohol. 

progress in the analysis of information  will, with the Commission's help, make for better 
targeting of controls and greater effectiveness  in joint surveillance operations. 

2. 

Strengthening institutional structures and the legal framework. 

The results  in  1997 clearly  confirm  the presence  of  criminal  organisations  which  target 
European  finances  by  exploiting  disparities  and  even  incompatibilities  between  the 
different  national  legal  systems.  The  objectives  pursued  by  the  Commission  for  the 
protection  of  Community  interests  contained  in  the  second  section  of  the  work 
programme include this criminological reality of fraud  and major  crime. It is in response 
to these concerns and those expressed by the Council and the European Parliament in the 
discharge  procedure  on  implementation  of  the  budget  that  the  Commission  intends  to 
reinforce  its  internal  organisation  and  to  transform  its  anti-fraud  structure  into  a "Task 
Force" directly answerable to the Secretary General. 

To energise and strengthen the fight against fraud  and illegal activities on the ground and 
reinforce  cooperation  at  every  stage  of the  investigation  and  follow-up  of  inquiries,  the 
Commission  intends  to  consolidate  current  practices  in the  existing  legal framework by 
means  of  agreements,  protocols,  arrangements  or  memoranda  of  understanding  with  all 
the competent  institutions  or authorities. By routinely  going  beyond  the stage of ad hoc 
cooperation, all the authorities concerned and the Commission will succeed  in improving 
the  prevention  of  and  fight  against  economic  and  financial  crime,  organised  crime  and 
certain irregularities in financial management and corruption. 

Following ratification  of the Treaty of Amsterdam, the Community will have a new legal 
base  (Article  280)  for  the  protection  of  financial  interests  and  the  fight  against  fraud, 
which will benefit  the development of a new dynamic and will allow the Council  and the 
European  Parliament,  on  a  proposal  from  the  Commission  "to  take  the  necessary 
measures to afford  effective  and equivalent protection in the Member States". 

It is also  important to continue the "Corpus  Juris" study; this will  enable progress to be 
made  to  strengthen  criminal  law  protection  at  Union  level  and  open  a  path  to  new 
effective  initiatives  to  approximate  national  enforcement  systems  and  combat  more 
effectively  fraud  and other illegal activities harmful  to Community financial interests. 

3. 

Launching  of  targeted  actions  against  certain  types  of  economic  crime 
harmful to specific Community interests. 

Major  organised  crime  does  not  confine  its  attacks  to  European  finances  but  also 
damages  the  Union's  economic  and  commercial  interests  and  may  in  future  damage 
monetary  interests. It is therefore  important to strengthen  the response of authorities and 
raise the level of protection of Community  interests. Specific  action included  in the third 
section of this action plan is in line with this perspective. 

Essentially  this  will  consist  of  mobilising  and  concentrating  the  Community  effort  on 
protection of intellectual property and anti-counterfeiting  action, in particular where there 
are risks to the safety and health of European consumers. The commencement of the third 
stage of Economic and Monetary Union (EMU) and the introduction of the emo currency 
on  1 January  1999 and the putting  into circulation  of euro notes and  coins on  I  January 
2002  represent  essential  deadlines  for  the  Community  and  the  European  Uni OS. to 

'"> .-scquently, it  is  important  to  put  in place  all  the  necessary  legal  instruments  for  the 
x ^I  protection of the single currency in particular for the fight against  counterfeiting. 

In  addition  to  using  instruments  which  are  already  available,3  the  organisation  of 
cooperation  between  the  Commission,  the  future  European  central  bank  (ECB),  the 
national  authorities  concerned  (analysis  units,  police  services)  and  the  other  Union  or 
international  bodies  responsible  for  combating  counterfeiting,  will  require 
the 
establishment  of  an  appropriate  legal  framework  to  lay  down  the  principles  of  mutual 
assistance and cooperation  between these bodies to prevent  and  investigate  offences  and 
combat illegal activities harmful  to the euro. 

4. 

Putting  in  place  conditions  favourable  for  the  protection  of  European 
finances  in the framework  of the enlargement  of the Union  and  cooperation 
with non-member countries. 

The  practical  integration  of  the  anti-fraud  dimension  into  the  pre-accession  strategy 
presupposes a specific reinforcement  of the relations between the different  authorities and 
specialised  services involved  in the fight against fraud  and major economic and financial 
crime so as to anchor cooperation with the Commission (UCLAF) in daily practice. 

Consequently,  the  development  of  specific  cooperation  and  partnership  in  the  area  of 
protection  of  financial  interests  and  the  fight  against  fraud  with  applicant  countries, 
which was launched  in the  1997/98 work programme, must be continued  in the concrete 
actions detailed  in the fourth  section  of this work  programme. The objective  aimed  for 
consists  of  making  available  to  applicant  countries  the  technical  assistance  and  support 
needed  both  to  ensure  better  protection  of  own  resources  and  the  sound  application  of 
commercial  policy  and  to  achieve  an  equivalent  level  of  protection  of  Community 
finances so that enlargement can take place on the necessary sound basis. 

Cooperation with the authorities in non-member countries should also be strengthened  in 
the framework of relations with the Community's partners. 

*  *  * 

1. 

Section  1:  Development  of  operational  actions  and  strategic 
activities 

The Commission  will  concentrate  its activities  on the ground  and  its analytical  work on 
countering major  economic and financial and organised crime. 

1.1 

Strengthening presence on the ground 

1.1.1  On  the-spot-checks  and  inspections:  Council  Regulation  No  2185/96  of  11 

November  1996. 

On the basis of  its  initial  experience  of the  actual  implementation  on the  ground 
of this Regulation, the Commission: 

3  National instruments, EC, EU, international  instruments (Geneva Convention of 20 April  1929). 

will carry out a first  assessment of the Community provisions for  on-the-spoi checks and 
inspections carried out by authorised UCLAF inspectors; 

will  continue,  in partnership  with  the  responsible  national  authorities,  Us approach  to 
make optimal and targeted use of this new instrument. 

1.1.2  Task groups: development of investigations in high risk sectors. 

Stepping  up of action against organised rings and networks  in close cooperation  with the  specialised 
national services,  in particular in sensitive sectors (cigarettes ...alcohol). 

1.1.3  Technical assistance 

Development  of  action  to  coordinate.  in  investment  in  technical  equipment  and  aids  to 
investigations, in particular  to ensure greater compatibility in national systems used (e.g. tools for 
management of databases). 

1.2 

Strengthening  control  mechanisms  and  cooperation  in  the  customs  and  tax 
fields 

1.2.1  Building  on the action plan for  customs transit  in Europe,4 the Commission will 
continue, in partnership with the Member  States and  the partners to the  common 
transit  convention,  to  implement  action  aimed  at  improving  targeted  controls  on 
goods and close and regular cooperation between customs authorities. 

Improvement  in  the  early  warning  system  and  computerisation  of  the  transit 
regime: 

Improve and  apply  the early  warning system for  all countries  which use the  Community transit 
regime until the establishment of the NCTS.5 

Improvement in recovery and guarantee procedures: 

Continuation  of  work  under  way  to  improve  identification  of  debtors  as  well  as  recovery  of 
amounts owed by persons  responsible for  irregularities or offences and only in their absence from 
the principal. 

Adaptation of the guarantee systems with a view to targeted application based on the reliability of 
the operator and the risks involved.. 

1.2.2  Following  on  from  the  Commission's  communication  in the  area  of  preferential 
agreements,6  the  Commission  will  put  forward  proposals  to  close  current 
loopholes. 

Production  of a  horizontal  Community system  to  harmonise recovery action  by  Member States 
(measures to safeguard duties, publication  of information intended to warn importers of specific 
risks regarding irregular  certificates...). 

4 

5 

"An action plan for transit in Europe - a new customs policy". C0M(97)188 final, 30 April  1997. 

New, Computerized Transit System. 

COM(97)402 final, 23  July  1997,  "Communication  from  the  Commission  on  the  management  of  preferential  tariff 
arrangements". 

Reflection  on  the  introduction  into the preferential  arrangements of  the possibility  of  applying 
temporary restrictive or suspensive measures of certain preferences without prejudice  to existing 
objectives  which  have  the  same purpose  while  complying  with  the  Community's international 
commitments. 

1.2.3  Following on from the work of the high-level  group7 on fraud  in the alcohol and 

tobacco sector, the Commission intends : 

to carry out a feasibility  study concerning computerization of the systems for  control and 
movement  of products  subject  to  excise  duties.  In  the  short  term,  dependent  on  the 
resources available, the Commission will work with the Member States  to introduce an 
early warning system for  movements of sensitive products; 

to  organize  FISCALIS  seminars  with  the  Member  States  to  establish  a  code  of  best 
practice for  the  granting  and  withdrawal of  licences for  those  responsible for  excise 
warehouses  and  the  control  of  excise  products  produced  and  stored  in  bonded 
warehouses; 

to work to develop an effective system of excise liaison  offices in the Member States to 
channel the administrative cooperation effort. 

With regard  to the  recovery  of debts, the Commission  will  continue  its work on 
reinforcing  mutual assistance in this area: 

Commission proposal  to  amend  Directive  76/308 (mutual assistance between Member 
States on recovery). 

The  Commission  will  continue  its  efforts 
to  improve  the  application  of 
administrative  mutual  assistance  and  administrative  cooperation  in  the  area  of 
indirect taxation : 

Implementation  of  the FISCALIS programme  (OJ L  126 of  28.4.98)  on administrative 
cooperation  in  indirect  taxation  (computer systems,  exchanges,  seminars, multilateral 
controls, common training initiative); 

Production and follow  up of Commission report on the application of current legislation 
in the area of mutual assistance and administrative cooperation on  V.A.T.  in accordance 
with article 14 of Council Regulation (EEC)  No 218/92. 

1.2.4  The Commission will continue, within available resources, to play its role in joint 
customs  surveillance  operations  (air,  sea,  rail,  road)  carried  out  at  European 
Union  level  and  aimed  at  combating  organised  crime  with  selective,  targeted 
actions, in particular in areas of Community  interest. 

1.3 

Strengthening the exploitation and analysis of intelligence 

1.3.1  Establishment  of  a  customs  intelligence  section  in  the  intelligence,  information 

and evaluation of legislation unit to: 

Improve strategic and operational analysis to support and guide control and investigation activity 
and to improve the quality of legislation from  the point  of view of the vulnerability of regulatory 
mechanisms to illegal activities (ex-ante and ex-post SEM 2000 examination): 

7  Group established on 26 March  1997 by a decision of the directors-general  of customs and indirect taxes. 

use  of  notifications  and  other  data  available.  Risk  analysis.  Making  available 
information to all authorised partners; 

cooperation  with  national  bodies  and  Europol  and  international  bodies  (Interpol). 
Comparative analysis of situations and concrete cases; 

development  of  studies  aimed  at  improved  analysis  of  different  situations,  a  better 
assessment  of  the  extent  and  development  of  the  phenomenon  of  fraud  and  illegal 
activities and study of their causes and consequences; 

development of control or investigation methods or techniques adapted to developments 
in crime; 

Continue  the  analysis  in  the  Fraud  Prevention Sub-committee  (SCAF)  of  serious  V.A. T.  fraud 
cases, particularly those involving intracommunity transactions. 

Make  use  of  the  results  of  cooperation  under  the  interinstitutional agreement  with  the  Joint 
Research  Centre at Ispra  (study on statistical analysis,  "Integrated Intelligence and  Information 
Management"project,  "Intelligence  Tools"project...). 

Implement  the  CIS  database^  to  ensure  the  sound  application  of  customs  and  agricultural 
regulations; 

Present the 2nd evaluation report on the functioning  of the  "black list" regulation 9  and propose 
possible amendments to strengthen the information system. 

1.4 

Cooperation in the framework of the  fight against money-laundering 

In the light of the second evaluation report on Directive 91/308/EEC10 and taking 
account of the provisions contained in the second protocol11 to the Convention on 
criminal protection of the Communities' financial  interests: 

Definition  of  the  Commission's  role  in  combating  counterfeiting  with  regard  to  information 
concerning the laundering of the products of fraud  against the Community budget. 

2 

2.1 

Section  2:  strengthening  institutional  structures  and  the  legal 
framework. 

Following its communication,12 the Council recommendation13  and the  discharge 
decision  of  the  European  Parliament  to  ensure  optimal  protection  against  fraud, 

8 

Following  the entry  into  force  of  Council  Regulation  (EC)  No  515/97  of  13.3.1997  concerning  administrative  mutual 
assistance in the areas covered (OJ L 82,22.3.1997). 

9  Council  Regulation (EC) No* 1469/95 of 22 June  1995 concerning measures to be taken with regard to certain beneficiairies of 

operations financed  by the Guarantee Section of the EAGGF (OJ L 145, 29.6.1995). 

10  Council  Directive of 10 June  1991  concerning prevention of the use of the financial  system  for  the purposes of laundering of 

capital (OJL  166, 28.6.1991) 

11  Council Act of 19 June  1997, OJ C 221,  19.7.1997. 

irregularities  in  financial  management,  corruption  and  organised  crime,14  the 
Commission  intends  to  strengthen  its  anti-fraud  service  and  transform  UCLAF 
into a Task Force directly answerable to the Secretary General. 

The status, procedures,  areas of action and competencies of this  "Task Force"  will be 
defined  so  as  to  confer  on  it greater  independence of  action  both  as  an investigation 
service and as a service combating economic and financial  crime.  These  arrangements 
will take account of the needs relating to legal security and transparency. 

An anti-corruption cell will be set up within the  "Task Force ". This cell will be called to 
act in cases of suspicion of irregularities. 

The liaison and criminal law expertise interface, henceforth more clearly identified,  will 
bring the Commission's technical and operational assistance,  both in legal and practical 
terms, to the responsible national authorities at all stages from the initial inquiry up to 
recovery (contribution to the preparation of investigations,  the submission of cases to the 
judicial  authorities  and  transnational  cooperation  in  the  criminal  law  area  and 
strengthening of recovery procedures). 

A specialised investigation unit for  "external actions " will be established. 

Computer support to exploitation of intelligence and intelligence activities are henceforth 
the responsibility of two separate units. 

2.2 

Consolidation of cooperation practices. 

The Commission will continue with his reflection  in order to : 

On  the  one  hand,  establishment  of  agreements,  arrangements  and  memoranda  of 
understanding  with  national  bodies,  the  European  institutions  and  bodies  and 
intergovernmental bodies. 

On  the  other  hand,  authorising  the  "anti-fraud  coordination  task  force" 
technical advice on investigations in other institutions. 

to  offer 

Without  amending  the  existing  legal  framework,  these  initiatives  will  allow 
practices followed  on a daily basis between services to be better established  over 
time. 

2.3. 

Improvement in prevention 

In the framework of the guidelines retained  for  sound and efficient  management, 
the Commission : 

12  Commission  communication of 19.11.1998 on  sound  and efficient  financial  and administrative  management (C()M(97)2198, 

19.11.1997). 

13  Council  recommendation  of 9  March  1998 on the discharge  to be given to the Commission  on  implementation  of the  general 

budget of the EC for  1996 (SN  2017/98,9.3.98). 

14  Resolution  concerning  the discharge  decision  on  implementation  of the  general  budget of the  European  Union  for  the  1996 

financial year (EP 268.230/29, 31.3.1998). 

8 

will continue to ensure ex-ante and ex-post checks on legislation taking account  of  the 
strategic and operational analysis carried out by the new  "Intelligence, information and 
evaluation of legislation" unit 

will reinforce the continuity of financial follow-up  of regional aid programmes to certain 
non-member countries (framework contract). 

2.4 

Administrative penalties 

A policy  of efficient  detection of cases of fraud and irregularity presupposes the 
strengthening of systems of administrative penalties to achieve an equivalent level 
of deterrence throughout the Community. 

Continuation of actions already begun: 

in  the  area  of  traditional  own  resources, to put  in place  a  system  of administrative 
customs  penalties  in  accordance  with  the  legal framework  laid  down  in  Council 
Regulation (EC)  No 2988/95 J5 

in the area of direct expenditure. 

2.5 

Completion  of the comparative  study  on the  implementation  of  Article  209a of 
the EC Treaty. 

Analysis  of  responses  provided  by  the  Member  States  to  the  Commission 
questionnaire. 

Production  of  a  summary  report, on  checks  carried  out  by  the  Member  States  and  the 
administrative penalties applied;  avenues to be explored in the light of the entry into force  of the 
Amsterdam Treaty (Article 280 EC),  particularly regarding administrative penalties in the area of 
the Structural Funds. 

2.6 

Convention  and protocols  concerning  protection  of  the  Communities'  financial 
interests16 

Follow up of implementation and ratification  of third pillar  instruments by the Member 
States. 

In  application  of  Article  10,  comparative  examination  by  the  Commission  of  the 
communication  from  Member  States  concerning provisions for  the  transposai  of  the 
Convention on protection of financial interests and its protocols. 

2.7 

Follow-up of the "Corpus Juris" 

As  requested  by  the  European  Parliament,  the  Commission  has  undertaken  a 
feasibility study on the "Corpus Juris". The aim is to assess its impact with regard 
to the current  situation  of  national  law so  as to  identify  the extent to which  its 
recommendations are feasible. 

15 

16 

Council  Regulation (EC) No  2988/95 of 18 December  1995  concerning protection of the  financial  interests of the European 
Communities (OJ L 312,23.12.1995). 

Convention on the criminal protection of the European Communities' financial  interests of 26 July  1995; see in particular the 
programme concerning organized crime (recommendation  14) OJ C 251,  15.8.1997. 

Detailed  examination  of  the  themes  covered  in  the  corpus  juris,  interim  report  (2nd  half  of  1998) 
and finalisation  of the  study  by July  1999. 

Exploitation  of  the  results  of  the  study  and  examination  of  the  appropriateness  of  amplifying 
Community  or  Union  legislative 

framework 

the 

3 

Section  3: Launching  of targeted  actions  against  certain  types  of 
economic crime harmful to specific Community interests 

3.1 

Industrial, agricultural and commercial  counterfeiting 

The  Commission  intends  to  strengthen  its  action17  against  infringements  of 
intellectual  property (Community trademarks, product names) as long as there is a 
risk  to  the  health  and  security  of  consumers,  particularly  when  organised 
networks or rings are involved. 

In  the  context  of  the  consolidation  of  the  internal  market, 
publication 
counterfeiting.  On  the  basis  of  the  responses  provided 
examine: 

of  a  green  paper  on  protection  of  intellectual  property  and 

the  Commission  announced 

the 
against 
to  the  green  book,  the  Commission  will 

the  fight 

to 
the  role  which  it  could  play  in  improve  cooperation  from  the  competent  authorities 
counter 
effectively 
on 
(communication  and  exchange  of  information,  setting  up  and  management  of  database, 
establishment  of a central  cell  and  networks  of contact  points); 

in  counterfeit  products 

internal  market  more 

traffic 

the 

the  appropriateness 
support  role  in the  investigation  of  offences. 

of  strengthening 

its  technical  and  operational  assistance  and 

x% 

Protection  of monetary  union  and  the euro 

3.2.1 

Information  systems  and  mechanisms;  cooperation  between  the  competent 
authorities; support and assistance of the Commission. 

The protection  of the  new  European  currency  against  counterfeiting  requires  the 
immediate setting up of a strategic and operational analysis system. 

of  work  started 

Continuation 
Coordination  of  Fraud  Prevention  with  the  aim  of  completing 
and  subsequently 

in  the  expert  group18 

to put forward 

legislative  proposals  at  Community  or  Union  level. 

of  the  Advisory  Committee 

the 
the  evaluation  of  action  required 

for 

On  the  basis  of  work  started  and  the  interim  report  produced  by  the  expert 
group,19 the Commission will continue to examine the conditions, framework  and 
support required: 

17 

Without  prejudice  to reinforcement  of actions  in the framework  of Council  Regulation  (EC) No 3245/94 of 22 December  1994 
on  counterfeiting  (OJ  EC L 341 of 30 December  1994) and Council  Regulation  (EC) No 515/97 of  13 March  1997 (OJ  EC I 
082 of 22 March  1997). 

In  close  cooperation  with  the  future  European  Central  Bank  (ECB),  Europol  and  the  International  Criminal  Police  Office 
(ICPO/Interpol). 

10 

for  the setting up of communication networks and a system of instantaneous exchange of 
information for  strategic and operational purposes; 

to ensure the compatibility of technical (ECU)  and police  databases for  the processing 
and optimal exploitation of information. 

This work will be carried out in full  cooperation with the ECB and the national issuing agencies 
(notes and  coins) to ensure the best operating conditions and  the necessary compatibility  in all 
information systems. 

The Commission will also continue to reflect on: 

the conditions and demands required to put  in place  a framework  of mutual assistance 
and  cooperation for  the  responsible  national  authorities,  involving  them  and  the 
Commission as well as other Union bodies (Europol) or international bodies (Interpol): 

the  initiatives to be taken to provide the means essential for  the protection  of  the euro 
(training, financial  support,  the  Commission's  technical  assistance  t<)  the  initional 
authorities, technical protection and security. 

3.2.2  Regulatory framework  and system  for the protection of EMU 

To  ensure  equivalent  protection  for  the  euro  throughout  the  Economic  and 
Monetary  Union,  it  is  essential  to  design  and  set  up  an  appropriate  legal 
framework20  focusing more particularly on: 

exchange of information and establishment of a database, 

close and regular cooperation and mutual assistance, 

a definition of counterfeiting activities, 

legal protection of the single currency. 

4. 

4.1 

in  place  conditions  favourable  for  the 
Section  4:  Putting 
in  the  framework  of  the 
protection  of  European  finances 
enlargement  of  the  Union  and  cooperation  with  non-member 
countries 

The  effective  implementation  of  the  "partnerships"  in  integrating  the  anti-fraud 
and  anti-corruption  dimension  to  facilitate  the  accession  of  the  European  Union 
candidate  countries  must  take  account  of  the  divergent  situations  in  these 
countries.  The  Commission  will  consequently  adapt  its  approach,  partnership 
methods and programme timetables (road maps). 

19 

20 

S(i/UCLAI;  meeting paper of  17 March  1998 and Commission stall  working document  (SEC(9X)d24, 3 April  I99X). 

The protection  of  (he single  currency  in  the  framework  ol  the  rapid  introduction  of  (he euro  comes  mainly  under  "lust  pillar" 
initiatives.  This  docs  not,  however,  rule  oui  a reduction  on the  possihlity  of  adding  to  the provisions  taken  in  the  Community 
framework  measures  under  the third  pillar  lor the criminal  law  protection of the single  currency. 

11 

Concerning  protection  of  Community  funds 
intended  for  rapprochement  and  cohesion  of 
economies,  it  is essential to draw lessons from the experience of the Community's  fight  against 
fraud policy to: 

establish  with  each  of  the  applicant  countries  the priorities  on  which  efforts  will  be 
focused  to achieve accession objectives; 

integrate  immediately the  anti-fraud  dimension  into  the  short  and  medium  term  pre-
accession strategy initiatives; 

establish  as  a  daily practice  cooperation  between  the  competent  authorities  and  the 
Commission in both the sharing of information and operational action on the ground. 

4.2 

For  this  purpose,  a  series  of  concrete  measures  are  or  will  be  envisaged  and 
planned: 

4.2.1  "Institution building" 

Effectively  taking  on  the  Community  acquis  in  the  area  of  the  protection  of 
financial  interests  will  require  a  special  effort  from  the  applicant  countries,  in 
particular  in  establishing  administrations  which  meet  the  European  Union's 
objectives. 

Initiation of action in applicant countries to raise awareness of Community policy concerning the 
protection  of financial interests in accordance with the guidelines recommended by the European 
Council to achieve an equivalent level of protection (legislative and operational aspects). 

Exchange  of  views  with  the  applicant  countries  on  the  appropriateness  of  setting  up  a  multi-
disciplinary anti-fraud structure at national level for  the protection of the Communities 'financial 
interests. 

Development of the Commission's technical assistance with applicant countries for  the protection 
of the Communities 'financial interests. 

4.2.2  Partnership 

The  establishment  of  a  public  administration  adapted  to  the  Union's  objectives 
requires appropriate assistance from  the Commission  in the areas of protection of 
financial  interests and anti-fraud  policy. Following this approach, the  "Anti-fraud 
coordination  Task  Force" envisages  making  available  experts  to  the  responsible 
authorities of the applicant countries so as to: 

offer  these  countries  the  consultancy  services  necessary  to  integrate  the  Community 
acquis  into their own legal systems and  the assistance needed to facilitate  the practical 
implementation of these provisions by the services responsible; 

to  contribute  to  the  technical  evaluation  and  reflection  linked  to  the  development  of 
specific structures  such as the training of officials in the.  area of  the protection  of the-
Communities 'financial interests; 

to facilitate  operational  cooperation  in  investigation  aimed  at  uncovering  criminal 
networks involved in frauds  committed against the Community 's financial interests. 

12 

In order to prepare officials  in specialised services in applicant countries and raise 
their awareness of the Community dimension of the fight  against fraud  and  major 
economic and financial crime21, the Commission will propose: 

traineeships  in  services  responsible for  protection  of financial  interests  and  the  fight 
against  fraud; 

the establishment of specific partnership  with national bodies responsible for  combating 
counterfeiting to contribute to the protection of the future  European single currency from 
the pre-accession phase. 

4.2.3  Approximation of legislation and taking on the acquis in the area of protection  of 

financial  interests 

Full  acceptance  of  the  Community  acquis  presupposes  a  number  of  progressive 
adaptations during the pre-accession  period  and  in particular the drafting  of anti-
fraud  provisions  (financial  control  protocols)  for 
implementation  of 
regulations concerning pre-accession  funds  with a view to: 

the 

the application by applicant countries of obligations equivalent to those contained in the 
Community regulations concerning notification of irregularities; 

the  application  of  principles  and  detailed  arrangements  of  the  same  type  as  those 
contained in the on the spot checks and inspections regulation. 

Preparation  and  adaptation  of  the  national  legislation  of  candidate  countries  for 
the implementation of the Community and Union acquis with a view to: 

guaranteeing a level of protection in accordance with the EC treaty (Article 280): 

ensuring  criminal  law  protection  in  accordance  with  the  provisions  of  the  legal 
instruments adopted in the framework  off us t ice and home affairs cooperation. 

4.3 

Strengthening of customs cooperation. 

Given  the  future  extension  of  the  Customs  Union  to candidate  countries  and.  in 
particular,  the  Visegrad  countries  (Poland,  Czech  Republic,  Slovakia  and 
Hungary), it is important to consolidate customs cooperation  between  the customs 
administrations and between the latter and the Commission to: 

raise the level of surveillance and cooperation 

carry out monitoring of the transit regime.. 

4.4 

Establishment  of  the  specialist 
coordination Task Force" 

investigation  unit  within 

the  "anti-fraud 

This unit will have the task of carrying out on-the-spot checks and inspections  in partnership  with 
the  responsible authorities  in cases  of  suspicion of fraud  in  the  area  of  direct  expenditure,  in 
particular in the area of the financial support which is expected to grow significantly in the years 
leading up to accession. 

21 

Complementary  initiative  to  the  coiifmuation  of  technical  assistance  action  in  (he  customs  area  in  the  framework  of  the 
PHARE programme. 

13 

4.5 

Cooperation with non-member countries. 

Development  of  agreements  or  arrangements  or  administrative  memoranda  of 
understanding with the bodies concerned. 

Improvement and strengthening of practical cooperation. 

14 

ISSN 0254-1475 

COM(98) 278 final 

DOCUMENTS 

EN 

09  06  01 

Catalogue  number  :  CB-CO-98-3I0-EN-C 

ISBN  92-78-36043-0 

Office  for Official  Publications of  the European  Communities 

1,-2985  Luxembourg