Proposal for a Directive of the European Parliament and of the Council on the criminal-law protection of the Community's financial interests
Date: 2001-05-23
Institutions: European Commission
Subjects: EU financing, financial policy, fraud against the EU, market protection, right to justice

28.8.2001

EN

Official Journal of the European Communities

C 240 E/125

Proposal for a Directive of the European Parliament and of the Council on the criminal-law
protection of the Community’s financial interests

(2001/C 240 E/19)

COM(2001) 272 final (cid:151) 2001/0115(COD)

(Submitted by the Commission on 23 May 2001)

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE
EUROPEAN UNION,

(5) In many cases, fraud involving Community revenue and
expenditure is not restricted to a single country, but is
often the work of organised criminal networks.

Having regard to the Treaty establishing the European
Community, and in particular Article 280(4) thereof,

Having regard to the proposal from the Commission,

Having regard to the opinion of the Court of Auditors,

(6) Since the Community’s financial interests can be damaged
or threatened by acts of fraud, corruption or money laun-
dering, common definitions of
these types of conduct
need to be adopted in order to protect these interests.

Acting in accordance with the procedure referred to in Article
251 of the Treaty,

Whereas:

to the protection of

(1) The institutions and the Member States attach great
importance
the Community’s
financial interests and to the fight against fraud and any
other illegal activities that damage Community financial
interests. The protection of
the Community’s financial
interests concerns not only the management of budget
appropriations, but extends to all measures affecting or
liable to affect its assets. All available means must be
deployed to fully attain these objectives, in view of the
legislative power devolved to the Community level, while
maintaining the current distribution and balance of
responsibilities between the national and Community
levels.

(2) Criminal

law in the Member States needs to make an
effective contribution to protecting the Community’s
financial interests.

(3) The instruments laid down on the basis of Chapter VI of
the Treaty on European Union concerning the protection
of the European Communities’ financial interests, namely
the Convention of 26 July 1995 (1) and the Protocols of
27 September 1996 (2), 29 November 1996 (3) and 19 June
1997 (4), contain several provisions on closer alignment of
criminal
law in the Member States and on improving
cooperation between them. As these instruments have
not been ratified by all Member States, their entry into
force continues to remain uncertain.

(4) Under Article 280 of the Treaty it is possible to include in
these
a Community legislative act any provisions of
instruments
that do not concern the application of
national criminal law or the administration of justice in
the Member States.

(1) OJ C 316, 27.11.1995, p. 48.
(2) OJ C 313, 23.10.1996, p. 1.
(3) OJ C 151, 20.5.1997, p. 1.
(4) OJ C 195, 25.6.1997, p. 1.

(7) Changes need to be made, as appropriate, to national
legislation to make corruption involving Community
a
officials or other Member States’
criminal offence. As regards Community officials, these
changes to national legislation must not be restricted to
acts of active and passive corruption, but must also cover
other offences affecting or liable to affect Community
revenue or expenditure, including offences committed by
or directed towards people with powers at the highest
level.

servants

civil

(8) Acts of fraud, corruption and money laundering need to
be made punishable criminal offences. Member States
determine the criminal penalties applicable to offences
under the national provisions adopted pursuant to this
Directive, without prejudice to the imposition of other
and make
penalties
provision for custodial sentences, at
in cases of
serious fraud. They take whatever measures are required
to ensure that these penalties are applied. The penalties
must be effective, proportionate and dissuasive.

in certain appropriate

cases,
least

(9) Businesses play an important role in areas financed by the
Community and people with decision-making power in
businesses should not avoid criminal
liability in certain
circumstances.

(10) The financial interests of the Community can be damaged
or threatened by acts committed in the name of bodies
corporate.

so that bodies

(11) Changes need to be made, as appropriate, to national
can be held
legislation,
responsible for acts of
fraud, active corruption and
money laundering committed in their name that damage
or
the
Community.

threaten to damage the financial

interests of

corporate

C 240 E/126

EN

Official Journal of the European Communities

28.8.2001

(12) Changes need to be made, as appropriate, to national
legislation to make it possible to confiscate the proceeds
of acts of fraud, corruption and money laundering.

Article 2

Definitions

and in particular

(13) For the purpose of ensuring effective action against fraud,
active and passive corruption and the money laundering
that goes with them damaging or liable to damage the
Community’s financial
interests, there is a need to lay
down measures for cooperation between the Member
States and the Commission. This cooperation involves
processing of personal data
the
exchange of
information between the Member States
and the Commission and between the Commission and
non-member countries. This processing must comply with
the rules on the protection of personal data, notably
Directive 95/46/EC of the European Parliament and of
the Council of 24 October 1995 on the protection of
individuals with regard to the processing of personal
data and on the free movement of such data (1) and Regu-
lation (EC) No 45/2001 of the European Parliament and of
the Council of 18 December 2000 on the protection of
individuals with regard to the processing of personal data
by the Community institutions and bodies and on the free
rules
movement of
concerning the confidentiality of judicial investigations.

such data (2)

and the

relevant

(14) Those Member States who have yet

to ratify the
instruments laid down on the basis of Chapter VI of the
Treaty on European Union concerning the protection of
the European Communities’ financial interests should do
so forthwith, so that the provisions not falling within the
scope of Article 280(4) of the Treaty (namely jurisdiction,
judicial assistance,
transfer and centralisation of pros-
ecutions, extradition and enforcement of judgments) can
also enter into force.

For the purposes of this Directive:

1.

(cid:145)official(cid:146) shall mean any Community or national official,
including any national official of another Member State;

2.

(cid:145)Community official(cid:146) shall mean:

(cid:151) any person who is an official or other contracted
employee within the meaning of the Staff Regulations
the
of officials of
the European Communities or
Conditions of employment of other servants of
the
European Communities,

(cid:151) any person seconded to the European Communities by
the Member States or by any public or private body who
carries out functions equivalent to those performed by
European Community officials or other Community
servants.

Members of bodies set up in accordance with the
Treaties establishing the European Communities and
the staff of such bodies shall be treated as Community
officials, inasmuch as the Staff Regulations of Officials of
the Conditions of
the European Communities or
employment of other
European
Communities do not apply to them;

servants of

the

3.

(cid:145)national official(cid:146) shall mean any person with the status of
(cid:145)official(cid:146) or (cid:145)public officer(cid:146) as defined in the national law of
the Member State for the purposes of the application of that
Member State’s criminal law.

(15) This act, which sets out to align national

legislation as
regards the criminal-law protection of the Community’s
financial
interests, respects the fundamental rights and
observes the principles recognised in particular by the
Charter of Fundamental Rights of the European Union,

Nevertheless, in the case of proceedings involving an official
from one Member State instituted by another Member State,
the latter shall not be bound to apply the definition of
(cid:145)national official(cid:146) except
in so far as that definition is
compatible with its national law;

HAVE ADOPTED THIS DIRECTIVE:

4.

(cid:145)legal person(cid:146) shall mean any entity having such status under
the applicable national
for States and other
law, except
public bodies exercising State authority and public inter-
national organisations.

CHAPTER I

PURPOSE AND DEFINITIONS

Article 1

Purpose

The purpose of this Directive is to bring the Member States’
criminal-law
as
legislation closer
protection of the financial interests of the Community.

together

regards

the

CHAPTER II

OFFENCES

Article 3

Fraud

For the purposes of this Directive, fraud affecting the

1.
Community’s financial interests shall consist of:

(1) OJ L 281, 23.11.1995, p. 31.
(2) OJ L 8, 12.1.2001, p. 1.

(a)

in respect of expenditure, any intentional act or omission
relating to:

28.8.2001

EN

Official Journal of the European Communities

C 240 E/127

(cid:151) the use or presentation of false, incorrect or incomplete
statements or documents, which has as its effect the
misappropriation or wrongful retention of funds from
the general budget of
the Community or budgets
managed by, or on behalf of, the Community,

the type referred to in
offences constituting conduct of
Article 3 of this Directive where committed by their national
officials in the exercise of their duties apply in the same way
where such offences are committed by Community officials in
the exercise of their duties.

(cid:151) non-disclosure of information in violation of a specific

obligation, with the same effect,

(cid:151) the misuse of such funds for purposes other than those

for which they were originally granted;

(b) in respect of revenue, any intentional act or omission

relating to:

(cid:151) the use or presentation of false, incorrect or incomplete
statements or documents, which has
the effect of
the general
unlawfully reducing the
budget of the Community or budgets managed by, or
on behalf of, the Community,

resources of

(cid:151) non-disclosure of information in violation of a specific

obligation, with the same effect,

(cid:151) misuse of a legally obtained benefit, with the same

effect.

2.
For the purposes of this Directive, serious fraud shall
consist of any case of fraud as defined in paragraph 1 and
involving a minimum amount set in each Member State. This
minimum amount may not be more than 50 000 euros.

Article 4

Corruption

For the purposes of

1.
this Directive, passive corruption
shall consist of the deliberate act on the part of an official,
whether directly or through an intermediary, of requesting or
receiving advantages of any kind whatsoever, for themselves or
for a third party, or accepting a promise of such an advantage,
as inducement to breach their official obligations and carry out
or refrain from carrying out an official duty or an act in the
course of their official duties in a way that damages or is likely
to damage the Community’s financial interests.

2.
For the purposes of this Directive, active corruption shall
consist of the deliberate act of promising or giving, directly or
through an intermediary, an advantage of any kind whatsoever
to officials, for themselves or for a third party, as inducement
for them to breach their official obligations and carry out or
refrain from carrying out an official duty or an act in the
course of their official duties in a way that damages or is
likely to damage the Community’s financial interests.

Article 5

Equal treatment

1. Member States shall
ensure that

in their criminal

take the necessary measures to
the
law the descriptions of

in respect of

in their criminal

committed by or

take the necessary measures to
2. Member States shall
the
law the descriptions of
ensure that
this Article and in
offences referred to in paragraph 1 of
Article 4 where
their
government ministers, elected members of their parliamentary
assemblies, members of their highest courts or members of
their national audit body in the exercise of their functions
apply in the same way where such offences are committed
by or in respect of members of
the
European Communities, the European Parliament, the Court
of
the European
the Court of Auditors of
Communities in the exercise of their duties.

the Commission of

Justice or

3. Where a Member State has enacted special
legislation
concerning acts or omissions for which government ministers
are responsible by reason of their special political position in
that Member State, paragraph 2 may not apply to such legis-
lation, provided that the Member State ensures that Members
the European Communities are also
the Commission of
of
covered by the criminal
legislation implementing Article 4
and paragraph 1 of this Article.

This Directive shall apply without prejudice to the
4.
provisions on the lifting of the immunities contained in the
Treaty, the Protocol on the Privileges and Immunities of the
European Communities, the Statutes of the Court of Justice and
the texts implementing them.

Article 6

Money laundering

For the purposes of

1.
this Directive (cid:145)money laundering(cid:146)
shall consist of the types of conduct listed below involving
the proceeds of fraud, at least in serious cases, and of active
and passive corruption as referred to in Articles 3 and 4, where
committed deliberately:

(a) the conversion or transfer of property, knowing that such
property is derived from criminal activity or from an act of
participation in such activity, for the purpose of concealing
or disguising the illicit origin of the property or of assisting
any persons involved in the commission of such activity to
evade the legal consequences of their action,

(b) the concealment or disguise of the true nature, source,
location, disposition, movement, rights with respect to, or
ownership of property, knowing that such property is
derived from criminal activity or from an act of partici-
pation in such activity,

C 240 E/128

EN

Official Journal of the European Communities

28.8.2001

(c)

the acquisition, possession or use of property, knowing, at
the time of receipt, that such property was derived from
criminal activity or from an act of participation in such
activity,

(d) participation in one of the acts listed in the three preceding
indents and association for the purpose of committing the
act.

2. Money laundering shall be regarded as such even where
the activities which generated the property to be laundered
were perpetrated in the territory of another Member State or
in that of a third country.

Article 7

Duty to criminalise

1. Member States shall
take the necessary measures to
transpose the provisions of this Chapter into their national
criminal
the conduct referred to
law in such a way that
therein constitutes criminal offences.

Member States shall take appropriate measures for the purpose
of establishing, on the basis of the objective factual circum-
stances, when such conduct is deliberate.

the intentional preparation or supply of

take the necessary measures to
2. Member States shall
ensure that
false,
incorrect or incomplete statements or documents having the
effect of fraud as referred to in Article 3 constitutes a criminal
offence if it is not already punishable as a principal offence or
as participation in, instigation of, or attempted commission of
such fraud.

CHAPTER III

LIABILITY

Article 8

Criminal liability of heads of businesses

Member States shall take the necessary measures to allow heads
of businesses or any persons having power to take decisions or
exercise control within a business to be declared criminally
liable in accordance with the principles defined by their
national
referred to in
Chapter II on the part of a person under their authority
acting on behalf of the business.

law in the event of conduct as

Article 9

Liability of bodies corporate

1. Member States shall
take the necessary measures to
ensure that bodies corporate can be held liable for fraud,
active corruption and money laundering as referred to in
Chapter II and committed for their benefit by any person
who has a leading position within the body corporate,
whether acting individually or as a member of an organ of
the body corporate, based on:

(cid:151) a power of representation of the body corporate, or

or

(cid:151) an authority to take decisions on behalf of

the body

corporate, or

or

(cid:151) an authority to exercise control within the body corporate,

as well as for involvement as accessories or instigators in such
fraud, active corruption or money laundering or the attempted
commission of such fraud.

2. Without prejudice to paragraph 1, Member States shall
take the necessary measures to ensure that a body corporate
can be held liable where the lack of supervision or control by a
person referred to in paragraph 1 has made possible the
commission of an act of fraud, active corruption or money
that body corporate by a
laundering for
person under its authority.

the benefit of

3.
Liability of a body corporate under paragraphs 1 and 2
shall not exclude criminal proceedings against natural persons
who are perpetrators, instigators or accessories in the fraud,
active corruption or money laundering.

CHAPTER IV

PENALTIES

Article 10

Penalties on natural persons

Without prejudice to the provisions of the second paragraph,
Member States shall take the measures necessary to ensure that
the conduct referred to in Chapter II as well as involvement in
such conduct as an accessory or instigator and, with the
exception of
the
attempted commission of acts involving such conduct are
punishable by effective, proportionate and dissuasive criminal
penalties, including, at least in cases involving serious fraud,
custodial sentences.

referred to in Article 4,

the conduct

However, in cases of minor fraud involving a total amount of
less than 4 000 euros and not involving particularly serious
circumstances under its laws, a Member State may provide
for penalties of a different type from those laid down in the
first paragraph.

Article 11

Penalties on bodies corporate

1. Member States shall
take the necessary measures to
ensure that a body corporate held liable pursuant to Article
9(1) is punishable with effective, proportionate and dissuasive
penalties, which shall
include criminal or non-criminal fines
and may include other penalties such as:

28.8.2001

EN

Official Journal of the European Communities

C 240 E/129

(a) exclusion from entitlement to public benefits or aid;

(b) temporary or permanent disqualification from engaging in

business activities;

(c) placing under judicial supervision;

(d) a judicial winding-up order.

2. Member States shall
take the necessary measures to
ensure that a body corporate held liable pursuant to Article
is punishable by effective, proportionate and dissuasive
9(2)
penalties or measures.

Article 12

Confiscation

Member States shall take the necessary measures to enable the
seizure and, without prejudice to the rights of bona fide third
parties, the confiscation or removal of the instruments and
proceeds of the conduct referred to in Chapter II or property
the value of which corresponds
to such proceeds. Any
instruments, proceeds or other property seized or confiscated
shall be dealt with by the Member State in accordance with its
national law.

individuals with regard to the processing of personal data by
the Community institutions and bodies and on the free
movement of such data.

4.
In order to safeguard the confidentiality of judicial inves-
tigations and in connection with the exchange of information
under paragraphs 1 to 3:

(i) the Member

State

the
supplying
Commission is entitled to lay down specific conditions
for the use of such information by the Commission and
by any other Member State to which this information
might be transmitted;

information

to

(ii) in the event of disclosure to any other Member State of
personal data it has obtained from a Member State, the
Commission shall
inform the Member State which
supplied this information of the disclosure;

(iii) before disclosing to a third country personal data which it
has obtained from a Member State, the Commission shall
obtain an assurance that the Member State which supplied
the information has authorised this disclosure.

Article 14

Domestic law

CHAPTER V

FINAL PROVISIONS

Article 13

Nothing in this Directive shall prevent Member States adopting
or maintaining,
in the field covered by this Directive, more
stringent provisions in their domestic law for the purpose of
effectively protecting the financial interests of the Community.

Cooperation with the European Commission

As part of

the cooperation with the Commission on
1.
fighting fraud, corruption and money laundering as referred
take the necessary
to in Chapter II, Member States shall
measures
the
technical and operational assistance required to facilitate the
coordination of
investigations undertaken by the relevant
national authorities.

to enable the Commission to provide all

2. Member States shall
take the necessary measures to
enable the relevant authorities in their countries to exchange
information with the Commission for the purposes of facili-
tating the establishment of
the facts and ensuring effective
action against
the conduct referred to in Chapter II. Such
measures shall require the Commission and the competent
national authorities to take account, in each specific case, of
the
investigations and
requirements of
protection of personal data.

confidentiality of

Any processing of personal data by the Commission and
3.
to this Directive must be in
the Member States pursuant
compliance with Directive 95/46/EC of
European
Parliament and of the Council of 24 October 1995 on the
protection of
individuals with regard to the processing of
personal data and on the free movement of such data and
with Regulation (EC) No 45/2001 of the European Parliament
and of the Council of 18 December 2000 on the protection of

the

Article 15

Transposition

1.
The Member States shall bring into force the laws, regu-
lations and administrative provisions necessary to comply with
this Directive no later than 31 December 2001.

Such measures adopted by the Member States shall contain a
reference to this Directive or shall be accompanied by such
reference when officially published. The methods of making
such reference shall be laid down by Member States.

2. Member States
Commission the text of
which they adopt in the field governed by this Directive.

shall promptly communicate to the
the provisions of domestic law

Article 16

Entry into force

This Directive shall enter into force on the twentieth day
following that of its publication in the Official Journal of the
European Communities.

Article 17

This Directive is addressed to the Member States.