Opinion No 9/2001 on a proposal for a Directive of the European Parliament and of the Council on the criminal-law protection of the Community's financial interests
Date: 2001-11-08
Institutions: European Court of Auditors
Subjects: EU financing, financial policy, fraud against the EU, market protection, right to justice

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(Information)

COURT OF AUDITORS

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

OPINION No 9/2001

(2001/0115 (COD) — COM(2001) 272 final)

(submitted pursuant to Article 280(4) EC)

(2002/C 14/01)

THE COURT OF AUDITORS OF THE EUROPEAN COMMUNITIES,

establishing the Convention on the Protection of the Communit-
ies’ Financial Interests (observations adopted on 22 February
1995, point 26).

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

Having regard to the proposal for a Directive of the European Par-
liament and of the Council on the criminal-law protection of the
Community’s financial interests,

Having regard to the request for an opinion on the proposal, sent
to the Court of Auditors by the Council on 29 October 2001 and
received at the Court on 5 November 2001,

HAS ADOPTED THE FOLLOWING OPINION:

The Court of Auditors welcomes the Commission’s initiative of a
proposal for a Directive on the criminal-law protection of the
Community’s financial interests, with the aim of replacing and/or
integrating the third-pillar instruments with Community acts
adopted on the new bases provided by the Treaty of Amsterdam.

Article 280 EC calls for effective and equivalent protection in the
Member States against fraud affecting the financial interests of the
Community. In the Court’s view, the adoption of new Commun-
ity legal instruments which aim to implement that requirement
has the same purpose as the Conventions and Protocols that are
in the process of ratification. The latter will, in any case, cover the
same field, albeit on a wider scale.

As it pointed out in the aforementioned observations, the Court
considers that a Directive is an appropriate instrument for insti-
tuting effective protection of the European Community’s financial
interests.

In the Court of Auditors’ opinion more detail must be provided
at certain points, in order to afford the fullest and most effective
protection possible for the Community’s financial interests. The
points in question concern:

— the definition of some of those offences,

— certain aspects of the penalties to be imposed by the Member

States.

The Court notes that this initiative is in line with the recommen-
dation which it made to that effect in its observations on the pro-
posal for a Council Regulation on the protection of the Commu-
nities’ financial interests and on the proposal for a Council act

The Court’s proposals for amending the Commission’s text in that
light are presented in the annexed table, with explanations of the
reasons for them.

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This Opinion was adopted by the Court of Auditors in Luxembourg at the Court meeting of 8 November 2001.

For the Court of Auditors

Jan O. KARLSSON

President

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Commission’s proposal

Court’s modified proposal

Comments

Proposal for a

Proposal for a

DIRECTIVE OF THE EUROPEAN PARLIAMENT
AND OF THE COUNCIL

DIRECTIVE OF THE EUROPEAN PARLIAMENT
AND OF THE COUNCIL

on the criminal-law protection of the
Community’s financial interests

on the criminal-law protection of the
Community’s financial interests

THE EUROPEAN PARLIAMENT AND THE COUNCIL
OF THE EUROPEAN UNION,

THE EUROPEAN PARLIAMENT AND THE COUNCIL
OF THE EUROPEAN UNION,

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

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 proposal from the Commission,

Having regard to the opinion of the Court of Auditors, Having regard to the opinion of the Court of Auditors,

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

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

Whereas:

Whereas:

(1) The institutions and the Member States attach great
importance to the protection of 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 Commun-
ity’s financial interests concerns not only the man-
agement 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 maintain-
ing the current distribution and balance of respon-
sibilities between the national and Community
levels.

(1) The institutions and the Member States attach great
importance to the protection of 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 Commun-
ity’s financial interests concerns not only the man-
agement 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 cur-
rent 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 Commun-
ity’s financial interests.

(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
and the Protocols of 27 September 1996, 29 Novem-
ber 1996 and 19 June 1997, contain several provi-
sions 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.

(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
and the Protocols of 27 September 1996, 29 Novem-
ber 1996 and 19 June 1997, contain several provi-
sions 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 a Community legislative act any provi-
sions of these instruments that do not concern the
application of national criminal law or the adminis-
tration of justice in the Member States.

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

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(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.

(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.

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

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

(7) Changes need to be made, as appropriate, to national
legislation to make corruption involving Commun-
ity officials or other Member States’ civil servants a
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, includ-
ing offences committed by or directed towards people
with powers at the highest level.

(7) Changes need to be made, as appropriate, to national
legislation to make corruption involving Commu-
nity officials or other Member States’ civil servants a
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, includ-
ing offences committed by or directed towards people
with powers at the highest level.

(8) Acts of fraud, corruption and money laundering
need to be made punishable criminal offences. Mem-
ber States determine the criminal penalties applic-
able to offences under the national provisions
adopted pursuant to this Directive, without preju-
dice to the imposition of other penalties in certain
appropriate cases, and make provision for custodial
sentences, at least 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.

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

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

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

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

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

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

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

(12) Changes need to be made, as appropriate, to national
legislation to make it possible to confiscate the pro-
ceeds of acts of fraud, corruption and money laun-
dering.

(12) Changes need to be made, as appropriate, to national
legislation to make it possible to confiscate the pro-
ceeds of acts of fraud, corruption and money laun-
dering.

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(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
interests,
to damage the Community’s financial
there is a need to lay down measures for coopera-
tion between the Member States and the Commis-
sion. This cooperation involves processing of per-
sonal data and in particular the exchange of
information between the Member States and the
Commission and between the Commission and
non-member countries. This processing must com-
ply 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 move-
ment of such data and Regulation (EC) No 45/
2001 of the European Parliament and of the Coun-
cil of 18 December 2000 on the protection of
individuals with regard to the processing of per-
sonal data by the Community institutions and bod-
ies and on the free movement of such data and the
relevant rules concerning the confidentiality of judi-
cial investigations.

(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 and in particular 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 protec-
tion of individuals with regard to the processing of
personal data and on the free movement of such
data and Regulation (EC) No 45/2001 of the Euro-
pean Parliament and of the Council of 18 Decem-
ber 2000 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 and the relevant rules con-
cerning the confidentiality of judicial investigations.

(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 provi-
sions not falling within the scope of Article 280(4)
of the Treaty (namely jurisdiction, judicial assis-
tance, transfer and centralisation of prosecutions,
extradition and enforcement of judgments) can also
enter into force.

(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 pro-
tection of the European Communities’ financial
interests should do so forthwith, so that the provi-
sions not falling within the scope of Article 280(4)
of the Treaty (namely jurisdiction, judicial assis-
tance, transfer and centralisation of prosecutions,
extradition and enforcement of judgments) can also
enter into force.

(15) This act, which sets out to align national legislation
as regards the criminal-law protection of the Com-
munity’s financial interests, respects the fundamen-
tal rights and observes the principles recognised in
particular by the Charter of Fundamental Rights of
the European Union,

(15) This act, which sets out to align national legislation
as regards the criminal-law protection of the Com-
munity’s financial interests, respects the fundamen-
tal rights and observes the principles recognised in
particular by the Charter of Fundamental Rights of
the European Union,

HAVE ADOPTED THIS DIRECTIVE:

HAVE ADOPTED THIS DIRECTIVE:

C h a pte r I

C h a pte r I

Purpose and definitions

Purpose and definitions

Article 1

Purpose

Article 1

Purpose

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

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

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Article 2

Definitions

Article 2

Definitions

For the purposes of this Directive:

For the purposes of this Directive:

1.

‘official’ shall mean any Community or national offi-
cial, including any national official of another Mem-
ber State;

1.

‘official’ shall mean any Community or national offi-
cial, including any national official of another Mem-
ber State;

2.

‘Community official’ shall mean:

2.

‘Community official’ shall mean:

— any person who is an official or other contracted
employee within the meaning of the Staff Regula-
tions of officials of the European Communities or
the Conditions of employment of other servants
of the European Communities,

— any person who is an official or other contracted
employee within the meaning of the Staff Regula-
tions of officials of the European Communities or
the Conditions of employment of other servants
of the European Communities,

— any person seconded to the European Communi-
ties by the Member States or by any public or pri-
vate body who carries out functions equivalent to
those performed by European Community offi-
cials or other Community servants.

— any person seconded to the European Communi-
ties by the Member States or by any public or pri-
vate body who carries out functions equivalent to
those performed by European Community offi-
cials 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 Regu-
lations of Officials of the European Communities
or the Conditions of employment of other ser-
vants of the European Communities do not apply
to them;

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 Regu-
lations of Officials of the European Communities
or the Conditions of employment of other servants
of the European Communities do not apply to
them;

3.

‘national official’ shall mean any person with the sta-
tus of ‘official’ or ‘public officer’ as defined in the
national law of the Member State for the purposes of
the application of that Member State’s criminal law.

3.

‘national official’ shall mean any person with the sta-
tus of ‘official’ or ‘public officer’ as defined in the
national law of the Member State for the purposes of
the application of that Member State’s criminal law.

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 ‘national official’ except in so far as
that definition is compatible with its national law;

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 ‘national official’ except in so far as
that definition is compatible with its national law;

4.

‘legal person’ shall mean any entity having such status
under the applicable national law, except for States
and other public bodies exercising State authority and
public international organisations.

4.

‘legal person’ shall mean any entity having such status
under the applicable national law, except for States
and other public bodies exercising State authority and
public international organisations.

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C h a pte r I I

Offences

Article 3

Fraud

C h a pte r I I

Offences

Article 3

Fraud

1. For the purposes of this Directive, fraud affecting the
Community’s financial interests shall consist of:

1. For the purposes of this Directive, fraud affecting the
Community’s financial interests shall consist of:

(a) in respect of expenditure, any intentional act or omis-

(a) in respect of expenditure, any intentional act or omis-

sion relating to:

sion relating to:

(Translator’s note: the change concerns
the French text only.)

— the use or presentation of false, incorrect or incom-
plete statements or documents, which has as its
effect the misappropriation or wrongful retention
of funds from the general budget of the Commun-
ity or budgets managed by, or on behalf of, the
Community,

— the use or presentation of false, incorrect or incom-
plete statements or documents, which has as its
effect the misappropriation or wrongful retention
of funds from the general budget of the Commun-
ity or budgets managed by, or on behalf of, the
Community,

— non-disclosure of information in violation of a

— non-disclosure of information in violation of a spe-

specific obligation, with the same effect,

cific obligation, with the same effect,

— the misuse of such funds for purposes other than
those for which they were originally granted;

— 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

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

relating to:

relating to:

— the use or presentation of false, incorrect or incom-
plete statements or documents, which has the effect
of unlawfully reducing the resources of the general
budget of the Community or budgets managed by,
or on behalf of, the Community,

— the use or presentation of false, incorrect or incom-
plete statements or documents, which has the effect
of unlawfully reducing the resources of the general
budget of the Community or budgets managed by,
or on behalf of, the Community,

— non-disclosure of information in violation of a

— non-disclosure of information in violation of a spe-

specific obligation, with the same effect,

cific obligation, with the same effect,

— misuse of a legally obtained benefit, with the same

— misuse of a legally obtained benefit, with the same

effect.

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
EUR 50 000.

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 euro.

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Article 4

Corruption

Article 4

Corruption

1. For the purposes of this Directive, passive corruption
shall consist of the deliberate act on the part of an offi-
cial, whether directly or through an intermediary, of
requesting or receiving advantages of any kind whatso-
ever, 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.

1. For the purposes of this Directive, passive corruption
shall consist of the deliberate act on the part of an offi-
cial, whether directly or through an intermediary, of
requesting or receiving advantages of any kind whatso-
ever, 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 to
have in the past carried out an official duty or an act
in the course of their official duties, whether or not
in breach of their official obligations, in a way that
damages or is likely to damage the Community’s
financial interests,

— to refrain from carrying out or in the past to have
refrained from carrying out, or to delay or to have
delayed an official duty or an act in the course of
their official duties, whether or not in breach of their
official obligations, in a way that damages or is likely
to damage the Community’s financial interests.

The current definition of corruption,
both active and passive, is too restrictive:

on the one hand, it does not cover the
act on the part of an official of receiving
advantages as inducement to carry out,
to refrain from carrying out or to delay
an official duty that is NOT in breach
of his or her official duties;

on the other hand, it makes the exist-
ence of the offence depend on damage to
the Community’s financial
interests.
Although this condition may be accept-
able in the case of national civil servants,
it is not acceptable where Community
officials are concerned. Since the latter
are paid from the Community budget,
any case of passive corruption is auto-
matically contrary to the Community’s
financial interests, even if there is no
other actual or eventual damage to the
Community’s financial
interests as a
consequence of the corruption.

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 Com-
munity’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 carry out, delay or
refrain from carrying out the acts mentioned in para-
graph 1 an official duty or an act in the course of their
official duties in a way that damages or is likely to dam-
age the Community’s financial interests.

3. In the case of acts which involve a Community offi-
cial as defined in Article 2 of this Directive the condition
that the act or omission damages or is likely to damage
the Community’s financial interests shall be deemed to
have been fulfilled.

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Article 5

Equal treatment

Article 5

Equal treatment

1. Member States shall take the necessary measures to
ensure that in their criminal law the descriptions of the
offences constituting conduct of the type referred to in
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.

1. Member States shall take the necessary measures to
ensure that in their criminal law the descriptions of the
offences constituting conduct of the type referred to in
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.

2. Member States shall take the necessary measures to
ensure that in their criminal law the descriptions of the
offences referred to in paragraph 1 of this Article and in
Article 4 where committed by or in respect of their gov-
ernment ministers, elected members of their parliamen-
tary 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 Com-
mission of the European Communities, the European
Parliament, the Court of Justice or the Court of Auditors
of the European Communities in the exercise of their
duties.

2. Member States shall take the necessary measures to
ensure that in their criminal law the descriptions of the
offences referred to in paragraph 1 of this Article and in
Article 4 where committed by or in respect of their gov-
ernment ministers, elected members of their parliamen-
tary assemblies, members of their highest courts or mem-
bers 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 Commis-
sion of the European Communities, the European Parlia-
ment, the Court of Justice or the Court of Auditors of the
European Communities in the exercise of their duties.

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

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

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

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

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Commission’s proposal

Article 6

Money laundering

Court’s modified proposal

Comments

Article 6

Money laundering

1. For the purposes of this Directive ‘money laundering’
shall consist of the types of conduct listed below involv-
ing 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:

1. For the purposes of this Directive ‘money laundering’
shall consist of the types of conduct listed below involv-
ing 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;

(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, with the
consequence that the illicit origin of the property is
concealed or disguised or that persons involved in the
commission of such activity are assisted in evading
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 participation in such activity;

(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 participation in such activity;

(c) the acquisition, possession or use of property, know-
ing, at the time of receipt, that such property was
derived from criminal activity or from an act of par-
ticipation in such activity;

(c) the acquisition, possession or use of property, know-
ing, at the time of receipt, that such property was
derived from criminal activity or from an act of par-
ticipation in such activity;

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

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

In the Court’s opinion, making it a con-
dition of money-laundering that the per-
son committing the act knows the deri-
vation of the property is likely to make
it virtually impossible to bring a pro-
secution for such an offence.

Where prosecutions are brought for such
acts, the prosecutor would always be in
the position of having to prove such
knowledge, whereas the accused would
always be able to avoid any penalty by
simply stating that they ‘did not know’.

For this reason the Court considers it
necessary for the offence to be widened
to include cases of serious negligence
(new paragraph 1(a) where, even if the
person committing the act did not know
the derivation of the property, they should
have had doubts about it, because of the
existence of serious grounds for suspi-
cion.

In subparagraph (a) the intentional
aspect of the concealment is, therefore,
to be replaced by a link of cause and
effect.

1a. For the purposes of this Directive ‘money launder-
ing’ also includes the types of conduct listed in para-
graph 1 where as a result of serious negligence they are
committed in ignorance of the fact that the property in
question was derived from criminal activity or from an
act of participation in such activity.

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.

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.

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Commission’s proposal

Article 7

Duty to criminalise

Court’s modified proposal

Comments

Article 7

Duty to criminalise

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

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

Member States shall take appropriate measures for the
purpose of establishing, on the basis of the objective fac-
tual circumstances, when such conduct is deliberate.

Member States shall take appropriate measures for the
purpose of establishing, on the basis of the objective fac-
tual circumstances, when such conduct is deliberate or
when there is serious negligence in the case of money
laundering specified in Article 6 of this Directive.

See comment on Article 6 above.

2. Member States shall take the necessary measures to
ensure that the intentional preparation or supply of false,
incorrect or incomplete statements or documents hav-
ing the effect of fraud as referred to in Article 3 consti-
tutes 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.

2. Member States shall take the necessary measures to
ensure that the intentional preparation or supply of false,
incorrect or incomplete statements or documents hav-
ing the effect of fraud as referred to in Article 3 consti-
tutes 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.

(Translator’s note: the proposed change
to Article 7(2) concerns the French text
only.)

C h a pte r I I I

Liability

Article 8

C h a pte r I I I

Liability

Article 8

Criminal liability of heads of businesses

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 prin-
ciples defined by their national law in the event of con-
duct as referred to in Chapter II on the part of a person
under their authority acting on behalf of the business.

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 prin-
ciples defined by their national law in the event of con-
duct as referred to in Chapter II on the part of a person
under their authority acting on behalf of the business.

Article 9

Article 9

Liabilityof bodies corporate

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:

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:

The Court considers that bodies corpor-
ate can be held liable for acts of passive
corruption as well. It refers, for example,
to the case of a body corporate (techni-
cal assistance bureau or other) carrying
out public tasks.

— a power of representation of the body corporate, or — a power of representation of the body corporate, or

— an authority to take decisions on behalf of the body

— an authority to take decisions on behalf of the body

corporate, or

corporate, or

— an authority to exercise control within the body cor-

— an authority to exercise control within the body cor-

porate,

porate,

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Commission’s proposal

Court’s modified proposal

Comments

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

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 super-
vision or control by a person referred to in paragraph 1
has made possible the commission of an act of fraud,
active corruption or money laundering for the benefit of
that body corporate by a person under its authority.

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 super-
vision or control by a person referred to in paragraph 1
has made possible the commission of an act of fraud,
active corruption or money laundering for the benefit of
that body corporate by a person under its authority.

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.

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.

C h a pte r I V

Penalties

Article 10

C h a pte r I V

Penalties

Article 10

Penalties on natural persons

Penalties on natural persons

Without prejudice to the provisions of the second para-
graph, 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 conduct referred
to in Article 4, the attempted commission of acts involv-
ing such conduct are punishable by effective, propor-
tionate and dissuasive criminal penalties, including, at
least in cases involving serious fraud, custodial sentences.

Without prejudice to the provisions of the second para-
graph, 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 conduct referred
to in Article 4, the attempted commission of acts involv-
ing such conduct are punishable by effective, propor-
tionate and dissuasive criminal penalties, including cus-
todial sentences, at least in cases involving serious fraud,
corruption or intentional money laundering. custodial
sentences.

However, in cases of minor fraud involving a total amount
of less than EUR 4 000 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.

However, in cases of minor fraud involving a total amount
of less than 4 000 euro 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

Article 11

Penalties on bodies corporate

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:

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:

The Court does not see any reason for
limiting custodial sentences to cases of
serious fraud. In its opinion corruption
and intentional money laundering (see
comments on Article 6) are so serious
that such a sentence is justified.

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Commission’s proposal

Court’s modified proposal

Comments

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

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

(b) temporary or permanent disqualification from engag-

(b) temporary or permanent disqualification from engag-

ing in business activities;

ing in business activities;

(c) placing under judicial supervision;

(c) placing under judicial supervision;

(d) a judicial winding-up order.

(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 9(2) is punishable by effective, proportionate and
dissuasive penalties or measures.

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

Article 12

Confiscation

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.

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 prop-
erty seized or confiscated shall be dealt with by the
Member State in accordance with its national law.

C h a pte r V

Final provisions

Article 13

C h a pte r V

Final provisions

Article 13

Cooperation with the European Commission

Cooperation with the European Commission

1. As part of the cooperation with the Commission on
fighting fraud, corruption and money laundering as
referred to in Chapter II, Member States shall take the
necessary measures to enable the Commission to pro-
vide all the technical and operational assistance required
to facilitate the coordination of investigations under-
taken by the relevant national authorities.

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

2. Member States shall take the necessary measures to
enable the relevant authorities in their countries to
exchange information with the Commission for the pur-
poses of facilitating the establishment of the facts and
ensuring effective action against the conduct referred to
in Chapter II. Such measures shall require the Commis-
sion and the competent national authorities to take
account, in each specific case, of the requirements of
confidentiality of investigations and protection of per-
sonal data.

2. Member States shall take the necessary measures to
enable the relevant authorities in their countries to
exchange information with the Commission for the pur-
poses of facilitating the establishment of the facts and
ensuring effective action against the conduct referred to
in Chapter II. Such measures shall require the Commis-
sion and the competent national authorities to take
account, in each specific case, of the requirements of
confidentiality of investigations and protection of per-
sonal data.

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Commission’s proposal

Court’s modified proposal

Comments

3. Any processing of personal data by the Commission
and the Member States pursuant to this Directive must
be in compliance with Directive 95/46/EC of the Euro-
pean Parliament and of the Council of 24 October 1995
on the protection of individuals with regard to the pro-
cessing of personal data and on the free moment of such
data and with Regulation (EC) No 45/2001 of the Euro-
pean 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 institu-
tions and bodies and on the free movement of such data.

3. Any processing of personal data by the Commission
and the Member States pursuant to this Directive must
be in compliance with Directive 95/46/EC of the Euro-
pean Parliament and of the Council of 24 October 1995
on the protection of individuals with regard to the pro-
cessing of personal data and on the free moment of such
data and with Regulation (EC) No 45/2001 of the Euro-
pean 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 institu-
tions and bodies and on the free movement of such data.

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

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

(i) the Member State supplying information to the Com-
mission 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;

(i) the Member State supplying information to the Com-
mission 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;

(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;

(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 Mem-
ber State which supplied the information has author-
ised this 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 Mem-
ber State which supplied the information has author-
ised this disclosure.

Article 14

Domestic law

Article 14

Domestic law

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.

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.

Article 15

Transposition

Article 15

Transposition

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

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

Such measures adopted by the Member States shall con-
tain a reference to this Directive or shall be accompanied
by such reference when officially published. The meth-
ods of making such reference shall be laid down by
Member States.

Such measures adopted by the Member States shall con-
tain a reference to this Directive or shall be accompanied
by such reference when officially published. The meth-
ods of making such reference shall be laid down by
Member States.

2. Member States shall promptly communicate to the
Commission the text of the provisions of domestic law
which they adopt in the field governed by this Directive.

2. Member States shall promptly communicate to the
Commission the text of the provisions of domestic law
which they adopt in the field governed by this Directive.

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Commission’s proposal

Court’s modified proposal

Comments

Article 16

Entry into force

Article 16

Entry into force

This Directive shall enter into force on the 20th day fol-
lowing its publication in the Official Journal of the Euro-
pean Communities.

This Directive shall enter into force on the 20th day fol-
lowing its publication in the Official Journal of the Euro-
pean Communities.

Article 17

Article 17

This Directive is addressed to the Member States.

This Directive is addressed to the Member States.

Done at ...

For the European
Parliament

For the Council

Done at ...

For the European
Parliament

For the Council

The President

The President

The President

The President