Amended proposal for a Council Regulation concerning investigations conducted by the Fraud Prevention Office
Date: 1999-03-17
Institutions: European Commission
Subjects: Community budget, EU action, fact-finding mission, fraud, fraud against the EU

12.5.1999

EN

Official Journal of the European Communities

C 131/5

II

(Preparatory Acts)

COMMISSION

Amended proposal for a Council Regulation concerning investigations conducted by the Fraud
Prevention Office (1)

(1999/C 131/04)

COM(1999) 140 final (cid:151) 98/0329(CNS)

(Submitted by the Commission pursuant to Article 189a(2) of the EC Treaty on 29 March 1999)

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European
Community, and in particular Article 235 thereof,

Having regard to the Treaty establishing the European Atomic
Energy Community, and in particular Article 203 thereof,

Having regard to the proposal from the Commission,

Having regard to the opinion of the European Parliament,

Having regard to the opinion of the Court of Auditors,

(1) Whereas the institutions and the Member States attach
great importance to the protection of the Communities’
financial interests and to the fight against fraud and any
other illegal activities to the detriment of the Commun-
ities’ financial interests; whereas the importance of action
to that end is confirmed by Article 209a of the EC Treaty
and Article 183a of the Euratom Treaty;

(2) Whereas all available means must be deployed to fully
attain this objective, notably in terms of
investigation
functions devolved to the Community level, while the
current distribution and balance of responsibilities as
between the national and Community levels should be
maintained;

(3) Whereas to reinforce the means available for combating
fraud, the Commission, by Decision 1999/. . ./EC, ECSC,
Euratom (2), established a Fraud Prevention Office (here-
inafter (cid:145)the Office(cid:146)) among its own departments with
responsibility for conducting administrative fraud investi-
gations; whereas it gave this Office full independence to
exercicse the on-the-spot checks and inspections provided
for by Community law;

(4) Whereas Decision 1999/. . ./EC, ECSC, Euratom provides
that, for the purposes of investigations, the Office shall
exercise the powers conferred by Community legislation,
subject to the limits and conditions laid down thereby;

(5) Whereas the Office should be entrusted with the exercise
of the powers conferred on the Commission by Council
Regulation (Euratom, EC) No 2185/96 of 11 November
1996 concerning on-the-spot checks and inspections
carried out by the Commission in order to protect the
European Communities’
interests agains fraud
financial
and other irregularities (3); whereas the Office must also
be allowed to exercise the other powers conferred on the
and
Commission
inspections
the
purpose of detecting irregularities as required by Article
9 of Council Regulation (EC, Euratom) No 2988/95 of 18
the European
December 1995 on the protection of
Communities’ financial interests (4);

in the Member States, notably for

on-the-spot

conduct

checks

to

(6) Whereas, given the need to step up the fight against fraud
and any other illegal activities to the detriment of the
Communities’ financial interests, the Office must be able
to conduct internal investigations in the institutions and
other bodies established by or on the basis of the EC and
Euratom Treaties (hereinafter (cid:145)the institutions and bodies(cid:146));

(7) Whereas

investigations must be conducted with full
respect for human rights and fundamental freedoms, in
particular the principle of fairness, for the right of persons
involved to express their views on the facts concerning
them and for the principle that the conclusions of an
investigation may be based solely on elements which
have evidential value; whereas to that end the institutions
and bodies must lay down the terms and conditions under
which such internal investigations are conducted; whereas
the European
the Staff Regulations of officials of

(1) OJ C 21, 16.1.1999.
(2) See page 11 of this Official Journal.

(3) OJ L 292, 15.11.1996, p. 2.
(4) OJ L 312, 23.12.1995, p. 1.

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Official Journal of the European Communities

12.5.1999

Communities and the conditions of employment of other
servants (hereinafter (cid:145)the Staff Regulations(cid:146)) should be
amended in order to lay down the rights and obligations
of officials and other servants as regards internal investi-
gations;

(8) Whereas such internal

investigations can be conducted
only if the Office is guaranteed access to all premises of
the institutions and bodies and all
information and
documents held by them;

(9) Whereas to ensure that

the Office is independent

in
carrying out the tasks conferred on it by this Regulation,
its Director must be given the power to open an investi-
gation on his own initiative, at the request of a Member
State or, where appropriate, at the request of an insti-
tution or body;

(10) Whereas it is for the competent national authorities or the
institutions and bodies, as the case may be, to decide what
action should be taken on completed investigations on the
basis of the report drawn up by the Office; whereas to
step up the fight against fraud, the Director should be
authorised to send information on investigations
in
progress directly to the relevant
judicial authorities at
any time, if he sees fit;

(11) Whereas the terms on which the Office’s agents will
discharge their duties and the terms governing the
Director’s exercise of his responsibility for the conduct
of investigations by the Office’s officials should be laid
down;

(12) Whereas, for the sake of successful cooperation between
the Office, the Member States and the relevant institutions
and other bodies, the reciprocal exchange of information
to rules of confidentiality
must be organised, subject
secrecy,
subject
where information is
while ensuring that it enjoys the proper data protection;

to professional

Supervisory Committee, made up of independent persons
being experts in the Office’s field of activity;

(15) Whereas administrative investigations are to be conducted
under the authority of the Director of the Office, in full
independence
from the Community institutions and
bodies and from the Supervisory Committee;

interests

financial

(16) Whereas entrusting to the Office the task of conducting
administrative investigations for the protection of
the
should not have the
Communities’
legal protection enjoyed
effect of reducing the level of
by the persons concerned,
in particular as regards the
protection of personal data and respect for confidentiality
of information gathered in the course of investigations;
whereas officials and other servants of the Communities
should be assured of legal protection equivalent to that
provided for by Articles 90 and 91 of the Staff Regu-
lations;

(17) Whereas the activities of the Office should be assessed

after a three-year period;

fraud affecting the Communities’

(18) Whereas this Regulation in no way diminishes the powers
and responsibilities of the Member States to take measures
to combat
financial
interests; whereas entrusting to an independent Office
the task of conducting external administrative investi-
gations in this area is accordingly in full compliance
with the subsidiarity principle laid down by Article 3b
of the EC Treaty; whereas the operation of the Office is
likely to step up the fight against fraud and any other
activities
illegal
the Communities’
to
financial
interests and is therefore compatible with the
proportionality principle;

detrimental

(19) Whereas

the
the EC Treaty confers no powers
adoption of this Regulation other than those provided
for by Article 235, and the Euratom Treaty confers no
powers other than those provided for by Article 203,

for

(13) Whereas,

the results of

to ensure that

the requisite follow-up action is taken,

investigations
conducted ty the Office’s officials are taken into account
and that
the
reports should have the status of admissible evidence in
administrative and judicial proceedings; whereas, to that
end, they should be drawn up in a manner compatible
with the rules governing administrative reports in the
Member States;

(14) Whereas the Office should enjoy independence in the
discharge of
its function; whereas it must nevertheless
be able to draw on the opinion of anti-fraud experts;
whereas, to that end, the Office should be assisted by a

HAS ADOPTED THIS REGULATION:

Article 1

Objective and tasks

In order to step up the fight against fraud and any other illegal
activity detrimental to the financial interests of the European
Community and the European Atomic Energy Community, the
Fraud Prevention Office (hereinafter (cid:145)the Office(cid:146)) shall conduct
administrative investigations in the Member States and within
the institutions and bodies set up by or on the basis of the EC
and Euratom Treaties (hereinafter (cid:145)the institutions and bodies(cid:146)).

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Article 2

Definition

and bodies and, if necessary, confiscate it to ensure there is no
danger or it disappearing.

For the purposes of this Regulation, (cid:145)investigations(cid:146) shall mean
all inspections, checks, and measures undertaken by agents of
the Office in the performance of their duties with a view to
combating fraud and any other illegal activities detrimental to
the financial
interests of the Communities and establishing,
where necessary, the unlawful nature of such activities.

Article 3

External investigations

The Office shall exercice the power to carry out on-the-spot
inspections and checks in the Member States conferred on the
Commission by Regulation (EC, Euratom) No 2185/96.

As part of its investigative function, the Office shall carry out
the inspections and checks referred to in Article 9 of Regu-
lation (EC, Euratom) No 2988/95.

These inspections and checks (hereinafter (cid:145)external
investi-
gations(cid:146)) shall be carried out under the conditions and in
accordance with the procedures provided for by this Regulation
and by the instruments conferring on the Commission the
power to carry out external investigations.

Article 4

Internal investigations

Where it appears that an official or servant may be personally
involved, the institution or body to which he or she belongs
shall be informed if an internal
investigation is opened or
pursued regarding that person.

The conditions and procedures for internal investigations

2.
shall include the following rules:

(a) a duty on the part of officials and servants of the insti-
to cooperate with and supply

and bodies

tutions
information to the Office’s agents;

(b) the obligation for the Office to give prior notice of access
to information and to the premises of the institutions and
bodies, and on the opening or pursuit of an investigation
regarding an official or servant who is personally involved;

(c) the rules of procedure to be observed by the Office’s agents
when conducting internal investigations and guarantees of
investi-
the rights of persons concerned by an internal
gation.

Article 5

Opening of investigations

External investigations shall be opened by a decision of
the Office, acting on his own initiative or

1.
the Director of
following a request from a Member State.

The Office shall carry out administrative investigations
1.
internal to the institutions or bodies, with a view to protecting
the financial interests of the Communities.

Internal investigations shall be opened by a decision of
2.
the Director of
the Office, acting on his own initiative or
following a request from the institution or body in which the
investigation is to be conducted.

These administrative investigations (hereinafter (cid:145)internal inves-
tigations(cid:146)) shall be carried out under the conditions and in
accordance with the procedures provided for by this Regulation
and, until such time as the Staff Regulations of officials of the
Communities and the conditions of employment of other
servants of the Communities (hereinafter (cid:145)the Staff Regulations(cid:146))
are amended, by decisions adopted by each institution and
body. The institutions shall consult each other on the rules
to be laid down by such decisions.

information held by the
The Office shall have access to all
institutions and bodies and to their premises. The institutions
and bodies shall be informed whenever the Office’s agents
carry out an investigation on their premises of consult a
document or information held by them. The Office may take
a copy of any document or information held by the institutions

Article 6

Investigations procedure

The Director of the Office shall be responsible for the

1.
carrying out of the investigations.

The Office’s agents

2.
shall exercise their powers on
production of a written authorisation showing their identity
and their position.

3.
For each action, the Office’ agents shall be equipped with
a document issued by the Director indicating the subject matter
and purpose of the investigation.

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During on-the-spot inspections and checks, the Office’s
4.
agents shall adopt an attitude compatible with the rules and
practices governing officials of the Member State concerned,
and, where appropriate, respect the Staff Regulations and the
decisions referred to in the second subparagraph of Article
4(1).

Investigations shall be conducted continuously over a
5.
period proportional to the circumstances and complexity of
the case. Where an investigation has been in progress for
more than 12 months, the Director shall explain to the Super-
visory Committee referred to in Article 11 why it cannot yet be
concluded and state the estimated time required to complete
the work.

The Member States shall ensure that

6.
their competent
authorities give the necessary support to enable the Office’s
agents to fulfil their task.

Article 7

Exchange of information

The institutions and bodies and, insofar as national law allows,
the Member States shall, at the request of the Office or of their
own initiative, send the Office any document or information
they hold which is necessary for current investigations.

They shall also send the Office any document or information
they hold which they consider useful in a general sense for the
prevention of fraud or any other illegal activity detrimental to
the Communities’ financial interests.

Article 8

Confidentiality and data protection

investigations,

Information obtained in the course of external and
1.
internal
in whatever form, shall be subject to
professional secrecy and shall enjoy the protection given to
similar information by the national law of the Member State
in which it was collected and by the corresponding provisions
applicable to the Community institutions and bodies.

Such information may not be communicated to persons other
than those within the Community institutions and bodies or in
the Member States whose functions require them to know it,
nor may it be used for purposes other than to prevent fraud
and any other illegal activities detrimental
to the financial
interests of the Communities, without the prior consent of
the Member State in which the information was gathered or
the institution or body concerned.

The Director shall ensure that the Office’s agent and the
2.
other persons
the
Community and national provisions on the protection of
personal data,
in particular those provided for by Directive
95/46/EC of the European Parliament and of the Council (1).

acting under his

authority observe

Article 9

Investigation report

On completion of an investigation carried out by the
1.
Office,
the latter shall draw up a final report, under the
authority of the Director, specifying the facts established, the
financial loss, if any, and the findings of the investigation.

2.
In drawing up final reports, account shall be taken of the
procedural requirements laid down in the national law of the
Member State concerned. Reports shall constitute admissible
the
evidence in administrative or
Member State in which their use proves necessary,
in the
same way and under the same conditions as administrative
reports drawn up by national administrative inspectors. They
shall be subject to the same evaluation rules as those applicable
to administrative reports drawn up by national administrative
inspectors and shall be of identical value to such reports.

judicial proceedings of

3.
Reports drawn up following an external investigation and
any useful related documents shall be sent to the competent
authorities of the Member States in question.

Reports drawn up following an internal investigation and
4.
any useful related documents shall be sent to the institution or
body concerned.

Article 10

Follow-up to investigations

if

1. Without prejudice to Articles 8 and 9, the Office may at
it considers it appropriate, send information
any time,
investigations to the
obtained during the course of external
competent authorities in the Member States in question, as
internal
well as information obtained during the course of
investigations to the institution or body concerned.
In the
latter case the Office shall also directly inform the judicial
authorities of the Member State in question if it considers it
necessary in view of
the information
obtained. It shall inform the Supervisory Committee thereof.

the seriousness of

(1) OJ L 281, 23.11.1995, p. 31.

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In the case of an internal investigation, the institution or
2.
body concerned shall decide on the action to be taken on the
basis of the report drawn up by the Office.

external and internal investigations or to the drafting of final
reports following such investigations.

Article 11

Supervisory Committee

The Office shall be assisted by a Supervisory Committee,
1.
composed of five independent persons who possess the qualifi-
cations required for appointment in their respective countries,
to senior judicial or supervisory posts or for the teaching of
law at university level. They shall be
public or criminal
the European Parliament,
appointed by common accord of
the Council and the Commission.

The term of office of members shall be three years. This

2.
term of office shall be renewable.

On expiry of their term of office, members shall remain in
office until their appointments are renewed or until they are
replaced.

3.
In carrying out their duties, members shall neither seek
nor take instructions from any government or any institution
or body.

4.

The Supervisory Committee shall appoint its chairman.

It shall adopt its own rules of procedure.

5.
At the Director’s request or on its own initiative, the
Supervisory Committee shall give its opinion to the Director
interfering with
on the Office’s activities, without, however,
lay
investigations in progress. Every year the Director shall
the annual
investigation programme before the Supervisory
Committee.

The Supervisory Committee shall adopt an annual report

6.
and transmit it to the institutions.

Article 12

Director

The Office shall be headed by a Director, nominated by the
Commission, after consulting the European Parliament and the
Council, for a term of five years, which may be renewed once.
With a view to nominating the Director, the Commission shall,
after a favourable opinion has been given by the Supervisory
suitably qualified
Committee, draw up a list of
if
candidates following a call
appropriate, be published in the Official
the
European Communities.

for applications which shall,

Journal of

several

The Director shall report regularly to the European Parliament
and the Council on the findings of investigations carried out by
the Office, while respecting the confidentiality of those inves-
tigations, the fundamental rights of the persons concerned and,
where judicial proceedings are instituted, respecting all national
provisions applicable to such proceedings.

Article 13

Budget

The appropriations for the Office, the total amount of which
shall be entered under a special budget heading within Part A
the Communities
the general budget of
of
relating to the Commission, shall be set out in detail
in an
annex to that Part.

the section of

The posts allocated to the Office shall be listed in an annex to
the Commission’s establishment plan.

Article 14

Judicial review

Until such time as the Staff Regulations are amended, any
official or other servant of the Communities may submit to
the Director of the Office a complaint against an act adversely
affecting him committed by the Office as part of an internal
investigation, in accordance with the procedures laid down in
Article 90(2) of the Staff Regulations. Article 91 of the Staff
Regulations shall apply to decisions taken with regard to such
complaints.

Article 15

Progress report

During the third year following the entry into force of this
Regulation, the Commission shall transmit to the European
Parliament and the Council a progress report on the Office’s
activities together, where appropriate, with proposals to modify
or extend its tasks.

Article 16

Entry into force

This Regulation shall enter into force on 1 June 1999.

The Director shall neither seek nor take instructions from any
government or any institution or body in the performance of
his duties with regard to the opening and carrying out of

This Regulation shall be binding in its entirety and directly
applicable in all Member States.